Private Credit: Business Development Company (BDC) Ratings Compendium: Second-Quarter 2025

BDC Comparisons

Perpetual Non-Traded BDC Comparisons

Quarterly BDC Compendium Commentary

In this quarter’s Compendium, KBRA reviews the financial performance of KBRA-rated BDCs in a competitive environment characterized by tighter spreads, elevated repayment activity in the upper middle market—driven by strength in the broadly syndicated loan (BSL) market—solid but slowing capital formation, and a modest pickup in mergers and acquisitions (M&A) activity. Adding to these headwinds is the prospect of lower base rates starting in September, which could weigh on sector-wide net investment income (NII). Among KBRA-rated BDCs, payment-in-kind interest remains a meaningful element of direct lending; however, its prevalence as a share of interest and dividend income has not materially changed year-over-year, underscoring consistent origination practices despite heightened competition.

Performance across KBRA-rated BDCs remained steady in 2Q25 with core credit metrics—including solid…