Business Development Companies (BDCs): Earnings Summary: Week 1

Research evidence excerpt

Business Development Companies (BDCs): Earnings Summary: Week 1

Global Research

31 July 2026ab

Business Development Companies (BDCs) Equities

AmericasEarnings Summary: Week 1

Diversified Financial

Melissa Wedel, CFA

Top Takeaways Analyst

Core Yields Stable, though Sizable Repayment Activity from Higher melissa.wedel@ubs.com

Yielding Vintages Could Have an Impact: Core yields were relatively stable +1-201-352 0526

even as the full impact from 4Q25 rate cuts were fully realized in 2Q26. The Cory Johnson

backdrop for yields does remain constructive with a relatively stable forward curve Associate Analyst

and higher spreads compared to the the start of the year. However, BDC dividends cory.johnson@ubs.com

may remain pressured as higher yielding debt from prior vintages is replaced by +1-212-882 0078

new originations at lower yields.

Credit Continues to Normalize Gradually: ARCC believes non-accruals will

normalize towards historic levels, but does not see weakness in any particular

sector or broad based weakness. HTGC has reported seeing more requests for

funds from weaker credit borrowers, but remains committed to selectively

deploying capital even as they see more aggressiveness (in pricing and structure)

from banks to win deals.

Gross Originations Impacted by Geopolitical Uncertainty, while

Repayments were Elevated: While 2Q originations appeared light due to macro

and geopolitical uncertainties, funding requests appeared to have picked up as the

quarter progressed. 3Q is generally the slowest month for originations but there is

optimism for a strong 2H26 in regards to originations and repayments.

NAVs/sh Show Divergence: This quarter we saw divergence in NAVs with

middle market BDC, ARCC, reporting a 1.2% decline in NAV/sh while venture

BDC, HTGC, reported a 2.1% gain.