Seeking Alpha

BDC Buzz

 
View as an RSS Feed
View BDC Buzz's Articles BY TICKER:
  • Prospect Capital: What Comes Next? Part 6
    Mon, Oct. 20 PSEC 80 Comments

    Summary

    • This article discusses pricing for Prospect Capital.
    • Prospect Capital will most likely cut dividends by 10% to 20% in early 2015.
    • If the upcoming financial results indicate continued declines in portfolio yield and inadequate amounts of non-interest income, I believe the stock price will continue to fall.
  • BDC Pricing For Q4 2014: Part 4
    Sun, Oct. 19 AINV, FSC, FSIC 41 Comments

    Summary

    • This is an ongoing series of articles discussing BDC valuations and overall market update.
    • Over the last two months investors have sold shares in small caps, especially with riskier BDCs, leaving many companies undervalued.
    • At this point investors should be considering purchases of higher quality BDCs or waiting to see if prices continue lower after the recent bounce.
  • BDC Pricing For Q4 2014: Part 3
    Mon, Oct. 6 BKCC, FDUS, FSC 33 Comments

    Summary

    • This is a short series of articles that will discuss various methodologies to value BDCs.
    • Over the last two months BDC investors have retreated to safety leaving many companies undervalued.
    • This article focuses on which higher-yield BDCs are the most attractively priced.
  • BDC Earnings Preview For Q3 2014: Part 1
    Sun, Oct. 5 AINV, ARCC, BKCC 30 Comments

    Summary

    • BDCs will begin to report financial results later this month.
    • Many BDCs have become heavily reliant on non-interest income to cover dividends.
    • Non-interest income for BDCs can be lumpy and usually drives most of the earnings surprises each quarter.
  • BDC Pricing For Q4 2014: Part 2
    Thu, Oct. 2 ARCC, BKCC, FSC 26 Comments

    Summary

    • This is a short series of articles that will discuss various methodologies to value BDCs.
    • This article focuses on pricing related to the core earnings for each BDC.
    • Investors pay higher multiples for BDCs with lower operating cost structures and perceived safety of the portfolio.
  • BDC Pricing For Q4 2014: Part 1
    Wed, Oct. 1 AINV, ARCC, BKCC 30 Comments

    Summary

    • This is a short series of articles that will discuss various methodologies to value BDCs.
    • This article will focus on current price-to-NAV multiples related to recent company performance.
    • Two metrics that are used to assign multiples for BDCs are expected NAV growth or stability and the health of the current dividend.
  • Prospect Capital Vs. Hercules Technology
    Fri, Sep. 26 PSEC, HTGC 108 Comments

    Summary

    • This article compares expected, projected and actual returns for PSEC and HTGC.
    • Both companies have had recent stock declines and could potentially be undervalued.
    • PSEC and HTGC have management teams with meaningful amounts of ‘skin in the game’ but one is clearly more invested in the company.
  • TPG Specialty Lending: BDC Risk Profiles
    Wed, Sep. 24 TSLX 23 Comments

    Summary

    • This article discusses risk indicators for investing in TPG Specialty Lending.
    • I consider TSLX to have a safer than average risk profile and it is a contender for my risk averse BDC portfolio.
    • This article compares TSLX to FSIC both of which I consider to be relatively ‘safer’ BDCs for the reasons discussed in this article.
  • FS Investment Corp.: BDC Risk Profiles
    Tue, Sep. 23 FSIC 37 Comments

    Summary

    • This article discusses risk indicators for investing in FS Investment Corp.
    • I consider FSIC to have a safer than average risk profile.
    • This article compares FSIC to NMFC both of which I consider to be relatively ‘safer’ BDCs for the reasons discussed in this article.
  • Solar Senior Capital: BDC Risk Profiles
    Sun, Sep. 21 SUNS 9 Comments

    Summary

    • This article discusses risk indicators for investing in Solar Senior Capital.
    • I consider SUNS to have a much safer than average risk profile.
    • This article compares SUNS to PFLT and HTGC that I now consider to be relatively ‘safer’ BDCs for the reasons discussed in this article.
  • BlackRock Kelso Capital: BDC Risk Profiles
    Fri, Sep. 19 BKCC 16 Comments

    Summary

    • This article discusses risk indicators for investing in BlackRock Kelso Capital.
    • I consider BlackRock Kelso Capital to have a safer risk profile than my previous rankings for the reasons discussed in this article.
    • This article compares BlackRock Kelso Capital to Prospect Capital; both have taken different paths toward dividend coverage.
    • Many BDCs do not disclose relevant metrics for indicating portfolio credit quality, and this series will attempt to provide investors with this information.
  • Fifth Street Finance: BDC Risk Profiles
    Thu, Sep. 18 FSC 50 Comments

    Summary

    • This article discusses risk indicators for investing in Fifth Street Finance.
    • I consider Fifth Street Finance to have a riskier profile than my previous rankings for the reasons discussed in this article.
    • This article compares Fifth Street Finance to Medley Capital which have historically had similar risk profiles.
    • Many BDCs do not disclose relevant metrics for indicating portfolio credit quality and this series will attempt to provide investors with this information.
  • Prospect Capital: What Comes Next? Part 5
    Editors' Pick • Fri, Sep. 12 PSEC 187 Comments

    Summary

    • This article discusses dividend coverage for Prospect Capital.
    • The company has a few initiatives to increase returns and improve dividend coverage over the coming quarters.
    • Most likely Prospect Capital will cut dividends by 10% to 20% once its spillover is used up.
  • Hercules Technology: BDC Risk Profiles
    Editors' Pick • Thu, Sep. 11 HTGC 56 Comments

    Summary

    • This article discusses risk indicators for investing in Hercules Technology Growth Capital.
    • I consider Hercules Technology Growth Capital to have a much safer profile than other BDCs due to having 100% of debt investments in ‘true’ first lien senior loans.
    • Kroll has reaffirmed its corporate rating of HTGC as a BBB+ with a stable outlook.
    • Many BDCs do not disclose relevant metrics for indicating portfolio credit quality and this series will attempt to provide investors with this information.
  • KCAP Financial: BDC Risk Profiles
    Wed, Sep. 10 KCAP 13 Comments

    Summary

    • This article discusses risk indicators for investing in KCAP Financial.
    • I consider KCAP Financial to have a riskier profile than other BDCs due to significant risks related to the Asset Manager Affiliates and direct CLO fund investments.
    • Many BDCs do not disclose relevant metrics for indicating portfolio credit quality and this series will attempt to provide investors with this information.
  • Medley Capital: BDC Risk Profiles
    Tue, Sep. 9 MCC 101 Comments

    Summary

    • This article discusses risk indicators for investing in Medley Capital.
    • For higher yield BDC investors I believe Medley Capital is a much safer alternative to Prospect Capital.
    • I consider Medley Capital to have a safer profile than most BDCs due to its portfolio mix and lower concentrations of its top investments.
    • Many BDCs do not disclose relevant metrics for indicating portfolio credit quality and this series will attempt to provide investors with this information.
  • Gladstone Capital: BDC Risk Profiles
    Mon, Sep. 8 GLAD 10 Comments

    Summary

    • This article discusses risk indicators for investing in Gladstone Capital.
    • I consider Gladstone Capital to have a riskier profile than most BDCs due to its portfolio mix and historical NAV declines.
    • 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.
  • TICC Capital: BDC Risk Profiles
    Thu, Sep. 4 TICC 23 Comments

    Summary

    • This article discusses risk indicators for investing in TICC Capital.
    • The analysis in this article will most likely result in a negative change to my relative risk rank for TICC Capital, mostly related to its CLO investments.
    • CLO investments could be negatively impacted from rising interest rates or an economic downturn.
    • Many BDCs do not disclose relevant metrics for indicating portfolio credit quality and this series will attempt to provide investors with this information.
  • New Mountain Finance: BDC Risk Profiles
    Wed, Sep. 3 NMFC 29 Comments

    Summary

    • This article discusses risk indicators for investing in New Mountain Finance.
    • The analysis in this article will most likely result in a positive change to my relative risk rank for New Mountain Finance.
    • BDCs invest in smaller private companies with minimal reporting requirements making risk assessment difficult.
    • New Mountain Finance discloses more than the average BDC, including relevant metrics for indicating portfolio credit quality.
  • Fidus Investment: BDC Risk Profiles
    Tue, Sep. 2 FDUS 5 Comments

    Summary

    • This article discusses risk indicators for investing in Fidus Investment.
    • The analysis in this article will most likely result in a change to my relative risk rank for Fidus Investment.
    • 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.
  • THL Credit: BDC Risk Profiles
    Mon, Sep. 1 TCRD 15 Comments

    Summary

    • This article discusses risk indicators for investing in THL Credit.
    • THL Credit has been slowly improving the investment mix of its portfolio.
    • 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.
  • PennantPark Floating Rate Capital: BDC Risk Profiles
    Thu, Aug. 28 PFLT 22 Comments

    Summary

    • This article discusses risk indicators for investing in PennantPark Floating Rate Capital.
    • PFLT is a solid component in my suggested risk averse portfolio.
    • 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.
  • Apollo Investment: BDC Risk Profiles
    Editors' Pick • Wed, Aug. 27 AINV 23 Comments

    Summary

    • This article discusses items related to risks for investing in Apollo Investment.
    • Apollo Investment has been consistently improving its quality of portfolio investments since 2012.
    • 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.
  • Prospect Capital: What Comes Next? Part 4
    Editors' Pick • Tue, Aug. 26 PSEC 148 Comments

    Summary

    • Prospect Capital has become heavily reliant on fee income to cover dividends due to its declining portfolio yield.
    • Prospect Capital was 25% short of covering dividends for FQ4 2014.
    • The lower than projected NII was mostly due to lower amounts of dividend and fee income.
  • Prospect Capital: What Comes Next? Part 3
    Fri, Aug. 22 PSEC 73 Comments

    Summary

    • This article provides a side-by-side comparison of the projected NII for fiscal Q4 2014 for Prospect Capital.
    • I have included my personal NII projections along with other industry analysts.
    • This article also identifies some of the key items investors should be looking for when the company reports results early next week.
  • BDC Risk Profiles: An Introduction
    Wed, Aug. 20 ACAS, AINV, ARCC 57 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 54 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 63 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 62 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 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.