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  • BDC Risk Profiles: An Introduction
    Today, 6:20 AM ACAS, AINV, ARCC 34 Comments

    Summary

    • This series of articles will discuss the risk profiles of BDC investments.
    • BDCs invest in smaller private companies with minimal reporting requirements making risk assessment difficult.
    • Many BDCs do not disclose relevant metrics for indicating portfolio credit quality and this series will attempt to provide investors with this information.
  • The High-Yield BDC Portfolio For Q3 2014
    Mon, Aug. 18 AINV, BDCL, BKCC 39 Comments

    Summary

    • This is a short series of articles to find solid investments for a higher yield BDC portfolio.
    • I have chosen five BDC investments with an average dividend yield of 12% annually for this portfolio.
    • Higher yield BDCs usually come with higher amounts of risk making diversification more important.
  • Highlights From FS Investment's Q2 2014 Results
    Fri, Aug. 15 FSIC 54 Comments

    Summary

    • FS investment Corp released its financial results earlier than announced and this article will walk through some of the highlights.
    • Using adjusted core net investment income the company covered dividends by 115%.
    • Fee income of $18.5 million helped to offset a slightly reduced portfolio yield from higher quality investments.
    • This article will also discuss some of the key variances between my optimal leverage analysis and actual results for Q2.
  • High-Yield BDCs For Q3 2014: Part 3
    Wed, Aug. 13 ACAS, AINV, ARCC 49 Comments

    Summary

    • This is a short series of articles to find solid investments for a higher yield BDC portfolio.
    • I have also included the actual total returns for each BDC and suggested portfolios.
    • BDCL is an easy way to invest in the BDC market with higher than average yields.
    • Higher yield BDCs usually come with higher amounts of risk making diversification more important.
  • Is Prospect Capital Ready For Rising Rates?
    Wed, Aug. 13 TICC, PSEC 56 Comments

    Summary

    • 75.2% of PSEC's portfolio are loans with floating rates, but 99.3% of those loans have LIBOR floors over 125 basis points.
    • More importantly is the potential for reduced income from its CLO Residual Interests if interest rates only rise by 100 basis points.
    • This is a follow-up to a short series of articles to identify which BDCs are better positioned for rising interest rates.
  • Rising Interest Rates And BDCs: Part 2
    Wed, Aug. 6 AINV, ARCC, BKCC 124 Comments

    Summary

    • This is a short series of articles to identify which BDCs are better positioned for rising interest rates.
    • This article discusses how BDCs have different weighted average interest rate floors for portfolio investments.
    • These floors are more important than the amount of variable rate loans in each portfolio.
    • Most BDCs will have breakeven or slightly lower net investment income if interest rates only rise by 100 basis points.
  • Rising Interest Rates And BDCs: Part 1
    Mon, Aug. 4 AINV, ARCC, FSC 83 Comments

    Summary

    • This is a short series of articles to identify which BDCs are better positioned for rising interest rates.
    • More mature BDCs have been shifting investments toward floating rates while borrowing capital using more fixed rates.
    • Younger BDCs are following this path and should be watched in the coming quarters.
  • TCP Capital Is Poised For Growth
    Fri, Aug. 1 ARCC, FSC, TCPC 33 Comments

    Summary

    • This article discusses the recent equity offering for TCP Capital.
    • Various BDCs have taken advantage of the recent rise in BDC stocks to raise growth capital at a premium to book value.
    • TCP Capital has positioned its capital structure to grow its dividend and take advantage of rising interest rates.
  • High-Yield BDCs For Q3 2014: Part 2
    Wed, Jul. 30 AINV, BDCL, BKCC 32 Comments

    Summary

    • This is a short series of articles to find solid BDCs for a higher yield portfolio.
    • This article discusses project vs. expected returns for each BDC to help investors get the best ‘bang for their buck’.
    • I have also included a relative valuation that only uses multiples from higher yield BDCs.
    • Higher yield BDCs usually come with higher amounts of risk making diversification more important.
  • High-Yield BDCs For Q3 2014: Part 1
    Tue, Jul. 29 AINV, BKCC, FSC 33 Comments

    Summary

    • This is a short series of articles to find solid BDCs for a higher yield portfolio.
    • This article discusses historical dividend coverage and compares the results from my ‘optimal leverage’ analysis and projected EPS by analysts.
    • Higher yield BDCs usually come with higher amounts of risk making diversification more important.
  • Total Return BDC Portfolios For Q3 2014
    Thu, Jul. 24 AINV, ARCC, BKCC 137 Comments

    Summary

    • This article will update my lower risk and higher total return portfolios for Q3 2014.
    • This article discusses projected vs. expected returns applied to relative valuations to identify which BDCs should be included in these portfolios.
    • This is a series of articles that will uncover the best of breed BDCs for investors that want dependable dividends and long-term capital appreciation.
  • Total Return BDCs For Q3 2014: Part 7
    Wed, Jul. 23 AINV, ARCC, BKCC 33 Comments

    Summary

    • This article will combine the rankings from the previous articles in this series including special dividends, NAV and regular dividend growth potential.
    • This article discusses the total return potential for each BDC.
    • This is a series of articles that will uncover the best of breed BDCs to update my total return portfolios for investors that want dependable dividends and long-term capital appreciation.
  • Special Dividend BDCs For Q3 2014: Total Return Part 6
    Fri, Jul. 18 AINV, ARCC, BKCC 53 Comments

    Summary

    • This article discusses the special dividend potential for each BDC.
    • BDCs that pay special dividends are more likely not to cut regular dividends due to higher coverage from net investment income.
    • This is a series of articles that will uncover the best of breed BDCs to update my total return portfolios for investors that want dependable dividends and long-term capital appreciation.
  • Ares Capital: Is It A Buy?
    Wed, Jul. 16 ARCC 47 Comments

    Summary

    • This article discusses the recent equity offering for Ares Capital.
    • Last quarter Ares Capital grew its NAV per share and this offering will be accretive to current shareholders.
    • The company disclosed around $250 million in net new commitments for the most recent quarter.
  • Dividend Growth BDCs For Q3 2014: Total Return Part 5
    Tue, Jul. 15 ARCC, BKCC, FDUS 37 Comments

    Summary

    • This article discusses the amount of dividend growth potential for each BDC.
    • This is a series of articles that will try to find the best of breed BDCs to update my total return BDC portfolios.
    • The total return portfolio is for investors that want dependable dividends as well as long-term capital appreciation.
  • Total Return BDCs For Q3 2014: Part 4
    Mon, Jul. 14 ACAS, AINV, FDUS 27 Comments

    Summary

    • This article discusses net asset value per share growth potential for each BDC.
    • This is a series of articles that will try to find the best of breed BDCs to update my total return BDC portfolios.
    • The total return portfolio is for investors that want dependable dividends as well as long-term capital appreciation.
  • Total Return BDCs For Q3 2014: Part 3
    Thu, Jul. 10 ARCC, FDUS, FSC 25 Comments

    Summary

    • This article discusses portfolio growth potential for BDCs without the need to issue additional shares.
    • I will also identify which BDCs are likely to issue share in the coming quarters based on lower amounts of growth capital.
    • This is a series of articles that will try to find the best of breed BDCs to update my total return BDC portfolios.
  • Prospect Capital Vs. Fifth Street Finance
    Editors' Pick • Tue, Jul. 8 PSEC, FSC 128 Comments

    Summary

    • This article takes into account the recently reported dividend increase for Fifth Street Finance and compares it to Prospect Capital as a potential investment.
    • Fifth Street Finance has improved the quality of its portfolio resulting in lower yields.
    • This article uses my "optimal leverage" analysis to assess dividend coverage for Fifth Street Finance and Prospect Capital.
  • Total Return BDCs For Q3 2014: Part 2
    Mon, Jul. 7 AINV, ARCC, BKCC 18 Comments

    Summary

    • This article discusses historical dividend coverage for BDCs and compares the results from my "optimal leverage" analysis.
    • This is a series of articles that will try to find the best-of-breed BDCs to update my total return BDC portfolios.
    • The total return portfolio is for investors that want dependable dividends, as well as long-term capital appreciation.
  • Total Return BDCs For Q3 2014: Part 1
    Sun, Jul. 6 AINV, ARCC, FSIC 47 Comments

    Summary

    • This is a series of articles that will try to find the best of breed BDCs.
    • The total return portfolio is for investors that want dependable dividends as well as long-term capital appreciation.
    • I will be incorporating the results from my series of articles that discussed dividend coverage potential.
  • Prospect Capital: BDC Dividend Coverage Part 18
    Thu, Jun. 26 PSEC 101 Comments

    Summary

    • Prospect Capital has not covered dividends with quarterly net investment income over the last three quarters.
    • I believe Prospect Capital could cover dividends with increased amounts of leverage or fee income.
    • This article uses my "optimal leverage" analysis to assess dividend coverage for Prospect Capital and potential issues with declining portfolio yields.
    • The BDC industry is experiencing yield compression and 7 out of the 26 BDCs that I cover have recently cut dividends.
  • Main Street Capital: BDC Dividend Coverage Part 17
    Wed, Jun. 25 BKCC, FULL, MCGC 34 Comments

    Summary

    • This article uses my ‘optimal leverage’ analysis to assess dividend coverage for Main Street Capital.
    • Main Street Capital has the lowest cost structure compared to other BDCs giving it the ability to continue to increase its dividend.
    • The BDC industry is experiencing yield compression and 7 out of the 26 BDCs that I cover have recently cut dividends.
  • BDC Pricing And The Russell Indices: Part 4
    Tue, Jun. 24 ACAS, AINV, ARCC 36 Comments

    Summary

    • Most BDC are headed higher after hitting recent lows.
    • Later this week index-tracking fund managers will be required to sell shares of BDCs.
    • This article will discuss which companies are likely to be impacted the most.
    • Investors should be ready to purchase top tier BDCs that will most likely rebound further next month.
  • Fifth Street Finance: BDC Dividend Coverage Part 16
    Tue, Jun. 24 TCPC, FSC 17 Comments

    Summary

    • This article uses my "optimal leverage" analysis to assess dividend coverage for Fifth Street Finance.
    • The BDC industry is experiencing yield compression, and 7 out of the 26 BDCs that I cover have recently cut dividends.
    • Fifth Street Finance was one of the BDCs to cut its dividend, and I will use this series to project which BDCs are more likely to increase or cut dividends.
  • Apollo Investment: BDC Dividend Coverage Part 15
    Fri, Jun. 20 AINV 3 Comments

    Summary

    • This article uses my ‘optimal leverage’ analysis to assess dividend coverage for Apollo Investment.
    • I have recently upgraded my outlook for Apollo Investment due to its continued focus on higher quality investments and the waiving of certain management and incentive fees.
    • The BDC industry is experiencing yield compression, and 7 out of the 26 BDCs that I cover have recently cut dividends.
    • I will use this series to project which BDCs are more likely to increase or cut dividends in the future.
  • TICC Capital: BDC Dividend Coverage Part 14
    Wed, Jun. 18 PSEC, TICC 28 Comments

    Summary

    • This article uses my ‘optimal leverage’ analysis to assess dividend coverage for TICC Capital.
    • Investors benefit from a much lower incentive fee structure than BDCs such as Prospect Capital.
    • My key concern for the company is the declining yield on its CLO investments that now account for over 50% of total income.
    • The BDC industry is experiencing yield compression and 7 out of the 26 BDCs that I cover have recently cut dividends.
    • I will use this series to project which BDCs are more likely to increase or cut dividends in the future.
  • Triangle Capital: BDC Dividend Coverage Part 13
    Mon, Jun. 16 TCAP 23 Comments

    Summary

    • This article uses my ‘optimal leverage’ analysis to assess dividend coverage for Triangle Capital.
    • The BDC industry is experiencing yield compression and 7 out of the 26 BDCs that I cover have recently cut dividends.
    • I will use this series to project which BDCs are more likely to increase or cut dividends in the future.
  • Fidus Investment: BDC Dividend Coverage Part 12
    Sun, Jun. 15 ARCC, FSIC, GBDC 11 Comments

    Summary

    • This article uses my ‘optimal leverage’ analysis to assess dividend coverage for Fidus Investment.
    • The BDC industry is experiencing yield compression and 7 out of the 26 BDCs that I cover have recently cut dividends.
    • I will use this series to project which BDCs are more likely to increase or cut dividends in the future.
  • Prospect Capital Is Ready For A Rebound
    Wed, Jun. 11 PSEC 67 Comments

    Summary

    • This article will discuss various price points that I believe Prospect Capital investors will see over the coming weeks and months.
    • Prospect Capital has not rebounded as much as the average BDC due to concerns over having to potentially restate its financials.
    • The company is currently trading at an 8% discount to NAV but has already rebounded in extended hours.
    • This article will also discuss my longer term pricing expectations for Prospect Capital.
  • PennantPark Floating Rate Capital: BDC Dividend Coverage Part 11
    Tue, Jun. 10 PFLT 3 Comments

    Summary

    • This article uses my "optimal leverage" analysis to assess dividend coverage for PennantPark Floating Rate Capital.
    • The BDC industry is experiencing yield compression and 7 out of the 26 BDCs that I cover have recently cut dividends.
    • I will use this series to project which BDCs are more likely to increase or cut dividends in the future.
  • Gladstone Capital: BDC Dividend Coverage Part 10
    Mon, Jun. 9 GLAD, ARCC Comment!

    Summary

    • This article uses my "optimal leverage" analysis to assess dividend coverage for Gladstone Capital.
    • The BDC industry is experiencing yield compression and 7 out of the 26 BDCs that I cover have recently cut dividends.
    • I will use this series to project which BDCs are more likely to increase or cut dividends in the future.
  • Golub Capital: BDC Dividend Coverage Part 9
    Sun, Jun. 8 TCPC, HTGC, FSIC 2 Comments

    Summary

    • This article uses my ‘optimal leverage’ analysis to assess dividend coverage for Golub Capital BDC.
    • The BDC industry is experiencing yield compression and 7 out of the 26 BDCs that I cover have recently cut dividends.
    • I will use this series to project which BDCs are more likely to increase or cut dividends in the future.