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BDC Common Stocks

Two Weeks Forward. One Week Back

The BDC common stock winter “rally” took some time off this week, after two weeks of upward momentum.

Repricings at Avantor and MRO to reduce yield on credits held by CCT, BDVC, OCSI, BBDC, CION and Flat Rock

Editor’s note: Due to the Thanksgiving holiday, LFI BDC Portfolio News will not publish on Monday, Nov. 26. The report will resume publication on Monday, Dec. 3.

Download: LFI BDC Portfolio News 11-19-18 

The tone in the broader leveraged loan market deteriorated as last week progressed, complicated by a handful of high-profile earnings misses that came in as the traditional 45-day reporting period trailed off and the jumbo LifePoint Health deal that quickly faded in the secondary loan and bond markets despite a host of investor-friendly revisions. In many cases, price talk and structure are deeply in flux, and investors are increasingly skittish amid poor secondary performance as the list of recently issued loans bid below their OIDs grows.

Popular BDC holdings Global Tel Link, Sorenson aim to widen 1L margins; several credits up for add-ons appear in Barings BDC’s portfolio

A deluge of earnings took center stage last week and while results inevitably spurred a number of notable downside movers, the tone in the broader leveraged finance market slowly improved over the course of the week, opening the door for new opportunistic business such as Bausch Health’s latest refinancing effort. Among the week’s biggest earnings-related standouts were Air Methods, Akorn and Revlon.

MARKET RALLY MARCHES ON ? : The BDC sector – as measured by the BDC Wells Fargo Index – was up 2.7% last week, reflecting a broad based rally across the 45 public companies tracked. That was the second week in a row that the BDC sector headed up in price, following 5 consecutive weeks of descent that ended the prior rally which had begun in March 2018.