- 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.