My Tactical Income Buys for October 2025: NCDL and PTMV

My Tactical Income Buys for October 2025: NCDL and PTMV

October 2025 is a time for cautious but targeted moves in income investing. After reviewing the data and portfolio fit, I’m buying Nuveen Churchill Direct Lending Corp. (NCDL) and PennyMac’s baby bond PTMV. Below, I explain why I believe these are the right additions this month.

Market Context

The Federal Reserve continues to keep interest rates elevated, which supports floating-rate loans like those inside NCDL. Inflation is easing but uncertainty remains, so steady, sustainable income is critical.

BDC stocks have sold off roughly 14% recently, while their net asset values have barely changed—a possible opportunity to buy quality income plays at attractive prices.

Floating-rate loans benefit from these rate levels, while fixed coupon baby bonds like PTMV provide steady, reliable cash flow, making this a complementary pair.

Why NCDL Is a Solid Income Play

NCDL focuses on senior secured, floating-rate loans to mid-sized companies, mainly in healthcare and technology. The senior secured status reduces default risk, while floating rates adjust for changes in interest rates, preserving income.

Important metrics:

  • Dividend yield: about 13.5%

  • Dividend coverage: net investment income covers dividends by 102%

  • Non-accrual loans: below 1%, signaling strong credit quality

  • Moderate leverage: around 4.5x debt-to-equity

  • Trades about 7% below NAV, offering valuation safety

This solid mix of strong income, sustainable dividends, credit quality, and valuation margin makes NCDL a valuable addition to my portfolio.

Why PTMV Complements NCDL

PTMV is a baby bond paying an 8.5% fixed coupon, trading near par. As a senior bond, it has a higher priority in the capital structure than equity, reducing risk of capital loss.

The stable, fixed coupon cash flows provide steady income, which helps temper volatility when paired with floating-rate loan exposure in NCDL.

Adding PTMV gives the portfolio a defensive income anchor, balancing the higher-volatility BDC shares.

How They Fit My Current Portfolio

Currently, I own:

  • BXSL, a BDC I’m already heavily invested in

  • EIC, with high exposure to CLOs

  • BIZD, another direct lending BDC similar to NCDL

  • Preferred shares and fixed income ETFs providing steady but lower yield

NCDL fills an important gap by adding senior secured floating-rate loans, increasing diversification and balancing credit risk away from CLOs.

PTMV adds fixed income stability and lowers portfolio volatility.

Why I’m Passing on Others for Now

  • MFA: High yield but dividend coverage is weak, and credit risk is higher.

  • CIM: Overlaps current credit exposure with some transition risk.

  • BXSL: Already a major position, so no diversification benefit from adding more.

  • ECC: High yield but low coverage and risk concentration I’m avoiding.

Final Thoughts

For October, NCDL and PTMV together offer a high-quality, diversified income stream that balances yield and risk. NCDL gives me good income growth potential and credit quality, while PTMV provides dependable, stable cash flow and defensive ballast.


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