Private credit funds mark down investment values
Major business development companies reported a decline in their fair value-to-cost ratios during the first quarter as market spread-widening and borrower stress impacted portfolios. The aggregate fair value fell to 98.55% of cost across 14 reviewed firms while net asset values also dropped.
Fourteen major business development companies cut the aggregate fair value of their private loans by $1.2 billion through late March. The fair value-to-cost ratio fell 103 basis points to 98.55% as artificial intelligence and debt burdens pressured mid-sized borrowers. Investors face shrinking net asset values and rising non-accruals in a $3.5 trillion market testing its first major downturn.
CION Investment Corp saw its fair value-to-cost ratio fall 176 basis points to 91.59% from 93.35%. Ares Capital Corp reported a 131-basis-point decline to 99.50% during the same period. Blackstone Secured Lending Fund dropped 122 basis points to 97.52%. Goldman Sachs BDC Inc fell 119 basis points to 94.88%.
