Scan to Download Gate App
qrCode
More Download Options
Don't remind me again today

Looks like business development companies trading publicly are heading into a squeeze next year. Word is, payment-in-kind arrangements are about to climb—think more debt serviced through equity or additional notes rather than cold hard cash. Why? Spreads keep getting tighter, margins narrower.



When lenders can't charge fat premiums anymore, borrowers start shifting toward PIK structures to ease immediate cash pressure. Classic cycle. For BDCs, that means portfolio stress could tick up—PIK accruals look fine on paper until they don't convert to actual liquidity.

Anyone tracking these firms should watch dividend coverage ratios closely. Tighter spreads plus rising PIK volume usually doesn't end with champagne toasts.
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
  • Reward
  • 7
  • Repost
  • Share
Comment
0/400
AirdropHunterXiaovip
· 4h ago
The era of explosive growth has arrived, and BDCs will probably have to tighten their belts next year. This wave of traps is an old story, looking good on paper but actually poor in reality.
View OriginalReply0
AirdropHunter420vip
· 9h ago
The signal for the pik explosion has arrived... BDC might be facing a downturn this time. What’s the point of a good-looking balance sheet if the liquidity is cut off? It’s all over.
View OriginalReply0
DAOdreamervip
· 14h ago
Oh my, I've seen this trap before... Just because the numbers on the books look good doesn't mean the real money is in place. Next year will indeed be tough for bdc.
View OriginalReply0
MoneyBurnerSocietyvip
· 14h ago
The pik structure is coming together, and the paper ledger has started to lie... Next year, the Dividend coverage rate of bdc has to be closely monitored.
View OriginalReply0
CompoundPersonalityvip
· 14h ago
If the pik goes off the charts, the Dividends for the bdc are likely to shrink... This cycle is tough for anyone.
View OriginalReply0
DeepRabbitHolevip
· 14h ago
The pik explosion this time... the BDC dividends are really in jeopardy, the paper ledger is all a lie.
View OriginalReply0
gas_fee_therapistvip
· 14h ago
The surge of pik is really a dangerous signal; the paper accounts are all deceptive. When it comes time to cash out, you'll realize how tragic it is.
View OriginalReply0
Trade Crypto Anywhere Anytime
qrCode
Scan to download Gate App
Community
English
  • 简体中文
  • English
  • Tiếng Việt
  • 繁體中文
  • Español
  • Русский
  • Français (Afrique)
  • Português (Portugal)
  • Bahasa Indonesia
  • 日本語
  • بالعربية
  • Українська
  • Português (Brasil)