Dotty's BDC Research
BDC Sector & Credit Assets (General) Corporate credit (BDCs, loans, HY bonds) should be viewed as cash-flow bets , not capital-gain bets. The priority is predictable income streams rather than price speculation. Current market discounts seem to imply unrealistic default assumptions — essentially pricing in a “1930s-level depression.” Most BDC portfolios consist of secured loans with 60–70 % recovery rates. Defaults would need to reach 30–40 % to justify 15–20 % NAV losses — highly improbable. Overall, sector valuations appear to offer large downside cushions. Bain Capital Specialty Finance (BCSF) Noted a mismatch between a “Hidden Gem” headline and a downgrade — inconsistent messaging. No specific valuation stance, but a skeptical tone toward the mixed narrative. FS KKR Capital (FSK) Current pricing looks like a strong opportunity. A dividend adjustment is already priced in. Even with a cut to $2.00 annually, the yield would still be around 12.5 %. The existing discoun...