Octus BDC Weekly Roundup: Private Credit’s Cash-to-PIK Shift; Medallia Nears Debt-for-Equity Swap; RIA Sector Trends

Relevant Items:
Octus’ BDC Database
Private Credit Dashboard

Editor’s Note: A weekly roundup of business development company, or BDC, articles available to Private Credit and Deal Origination subscribers is below. To get access to any of the below, please reach out to [email protected]. Octus’ BDC Analyst team has published a series of articles covering BDC quarterly earnings, sector-level stressed watchlists and proprietary analysis built on top of the BDC data that Octus extracts from more than 170 private and public BDCs. Octus’ full Private Credit product suite includes deal origination and private credit coverage, BDC and Private Credit Data, Private Credit Fundamentals, Deal Term Analytics and Covenants analysis. Contact [email protected] or your account manager for a demo.

For year-to-date and prior-week coverage highlights, please see our roundups HERE, HERE and HERE.

Quarterly PIK Changes: Octus identified 27 borrowers that switched a portion or all of the interest paid to lenders to PIK in the fourth quarter of 2025 after paying all-cash interest in the third quarter. Borrowers paying interest in kind could be an early indication of stress, as discussed in our private credit restructuring webinar. It is unclear whether in any of these cases borrowers had the contractual right to pay all or part of their interest in kind or whether the switch to PIK interest was a result of an amendment to the original credit agreement.

Medallia: The private credit-backed customer experience company is being advised by Kirkland & Ellis and lenders are represented by Latham & Watkins as the two sides are close to a transaction for lenders to equitize a portion of their debt, according to sources. Earlier in the week, Blackstone Private Credit Fund reported placing the loans on nonaccrual status.

BDC and Private Credit Exposure to Registered Investment Advisors: Octus identified 28 private credit-backed and BDC-owned registered investment advisors that have been a popular strategy among private equity firms and therefore have significant concentration in private credit portfolios. Business models with contractual, non-assets-under-management revenue (workplace retirement platforms with employer contracts and per-participant fees) have consistently outperformed models dependent on AUM-linked advisory fees that move in lockstep with equity markets. Based on BDC fair-value marks, we have seen only minor and isolated fair-value pricing pressure.

Octus has been tracking redemption requests by shareholders of non-traded BDCs. Although many funds have limited quarterly tenders to 5% of total shares outstanding, redemption requests have far exceeded the 5% max. For results by BDC for a sample of the largest funds, along with results dating back to the first quarter of 2025, please email [email protected]