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Private Credit Spreads vs Corporate Bond Spreads

Cost-weighted BDC loan spread over the base rate, and the Fed's GZ corporate bond spread, quarterly, %

BDC loans: spread over SOFR/base rate: 5.14% in Q2 2026−1.01 pp since Q1 2023

Plays the chart through its history. Pauses are where the data set a record or moved most.

Palanor calculation from SEC schedules of investments filed by business development companies (SEC BDC data sets and EDGAR XBRL; public domain). The panel is every BDC whose tagged holdings add up to its reported total; it grows as new funds file. Debt only: loans and bonds at cost. GZ spread: Gilchrist and Zakrajšek corporate bond spread, Federal Reserve Board, quarterly mean of monthly values.

What private lenders charge over the base rate, next to what public bond investors demand. Loan spreads are set at origination and reset slowly, so the BDC line moves as old loans repay and new ones are written.

What this chart reads

Sources

BDC loan spread over the base rate, cost-weighted. Source: Palanor calculation from SEC filings: the SEC Business Development Company (BDC) data sets and each filing's XBRL on EDGAR (U.S. Securities and Exchange Commission; public domain).

GZ Corporate Credit Spread. Source: Federal Reserve Board staff, updating Gilchrist & Zakrajšek (2012), "Credit Spreads and Business Cycle Fluctuations," *American Economic Review* 102(4). A US government work, public domain. It replaces Moody's Baa–10y spread, whose terms do not allow storage or redistribution.

Charts are drawn from Palanor's signal library and recomputed from source data on every view. Transformations (changes, indexing, year-on-year rates) are Palanor's.

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