Aggregate BDC PIK Loans Represent 13% of Total Debt Investments in Q4’25; Industrials, Information Technology and Consumer Discretionary Sectors Top the List

Octus BDC Data Team Relevant Items: Q4’25 PIK Report Octus’ BDC Database Q4’25 Nonaccrual Report Q4’25 Fair Value Decline Report Q4’25 Non-PIK to PIK Report BDC PIK Loans Landscape In a universe of 171 business development companies, or BDCs, Octus identified a total of $63.15 billion of debt at cost and $59.8 billion at fair value that paid at least part of their interest in kind. The aggregate loans with a PIK component represented 12.9% of total aggregate BDC reported debt investments at cost and 12.3% at fair value in the fourth quarter. Valuation, implied by fair market divided by cost for loans with a PIK component, was 95%. The average exposure to loans with a PIK component across BDCs at cost for the universe of 171 BDCs was 13% in the fourth quarter. For the 49 public (traded) BDCs tracked, the average PIK exposure was 18.7% in the fourth quarter. While half of the traded BDCs had 10% to 20% of PIK exposure at cost value, almost a third of them had over 20% of PIK exposure. Nontraded BDCs recorded an average exposure to loans with a PIK component of 10.8% in the fourth quarter. In this segment, the[...]