The selloff in BDCs (BDCS -1.9%) in response to higher rates should not be "uniform across the...

|By:, SA News Editor

The selloff in BDCs (BDCS -1.9%) in response to higher rates should not be "uniform across the sector," says Fifth Street Finance (FSC -1.9%) in its June 2013 newsletter. As of March 31, 74% of FSC investments were floating and 90% of capital was not tied to rate movements. A small bump in rates should make the portfolio more profitable, but - because floors will be breached - a large rise would "dramatically" boost profits. Other BDCs today: Prospect - which claims to be in the same position as FSC - (PSEC -0.4%), Ares (ARCC -1.7%), BlackRock Kelso (BKCC -1.9%), Main Street (MAIN -3.2%), Solar (SLRC -1.4%), TICC (TICC -1.8%).