Solid BDC Performance Continued Through 4Q21, But Market Volatility and Geopolitical Instability Increases Potential Risks
This commentary reviews the 4Q21 results for business development companies (BDCs).Key highlights include:
• BDCs in DBRS Morningstar's coverage universe saw continuing solid performance in 4Q21, as originations remained strong and visible investment pipelines continue to be robust entering 2022.
• Net asset values (NAVs) remained stable quarter-over-quarter for 4Q21 with an average increase of 0.5% in our public peer group. However, increased market volatility from geopolitical concerns may put some negative pressure on portfolio valuations in 1Q22.
• While our ratings universe appears to have no major direct investment exposures to the Russia - Ukraine conflict, secondary exposure through European investments or price inputs (i.e., oil) of portfolio companies may appear as 2022 progresses.
“Our ratings are all in the BBB-range, and have Stable trends. While there are some increased potential risks from market volatility, geopolitical instability, and the macroeconomic environment, we believe the ample dry powder in private equity and a robust M&A market will continue to push demand for private credit as financial sponsors seek certainty of execution.” said Watson Tanlamai, CFA, Vice President - Global FIG.
DBRS Morningstar is a global credit ratings business with 700 employees in eight offices globally. DBRS and Morningstar Credit Ratings are committed to empowering investor success, serving the market through leading-edge technology and raising the bar for the industry.
Together, we are the world’s fourth largest credit ratings agency and a market leader in Canada, the U.S. and Europe in multiple asset classes. We rate more than 2,600 issuers and 54,000 securities worldwide and are driven to bring more clarity, diversity and responsiveness to the ratings process. Our approach and size provide the agility to respond to customers’ needs, while being large enough to provide the necessary expertise and resources. For more details visit us at dbrs.com.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.