BDC loan marks, media, entertainment and telecom

## What this measures

The fair value business development companies put on their debt to media, entertainment and telecom borrowers, as a percentage of what that debt cost them (amortized cost), across the BDCs in the panel.

## Why it matters

BDCs are the public window on U.S. direct lending to mid-sized private companies. When lenders mark loans below cost, they expect to recover less or would sell for less: it is the first place private-credit stress shows, before loans stop paying.

## How it is made

Palanor reads every BDC 10-K and 10-Q in the SEC's BDC data sets (inline XBRL, periods from August 2022) and turns the tagged schedule of investments into one row per holding: borrower, holding type, lien, base rate, spread, PIK rate, maturity, principal, cost, fair value. Some filers also tag subtotals on the same rows, so rows are pruned in steps and a filing counts only when its rows add up to between 85% and 120% of the total investments it reports. Amended filings replace the original. A quarter is the calendar quarter the balance-sheet date falls in, and it publishes once at least 60 BDCs pass the check and 80 days have passed since it ended. Debt is every loan and bond with a positive cost: first lien, unitranche, second lien, subordinated and unsecured. Equity, warrants, structured products (CLO and ABS tranches), fund and joint-venture interests and cash are left out. The reading is the sum of fair value over the sum of cost, times 100. Industry is the lender's own label where it gives one, else the industry other lenders give the same borrower, mapped to 13 groups; this series is the media, entertainment and telecom group. A quarter shows only when the group holds at least $5 billion of debt at cost and 300 loans.

## How to read it

Near 100 means the book is carried at about what it cost. Below 100 the lenders mark it down; a fall of one point is about one cent on the dollar across the book. The series starts in Q2 2023 at 96.48%. The reading for Q2 2026 is 96.95%, from 120 BDCs. Over the series the high is 99.53% (Q2 2024) and the low 96.48% (Q2 2023).

## What it does not say

The panel changes as BDCs start and stop filing, and as new funds launch, so a move can come from who is in it as well as from credit. Marks are each lender's own fair values, set by its valuation process each quarter; they move with market spreads as well as with the borrowers. Holdings a BDC owns through a joint venture are counted where the BDC tags them on its own schedule. It is not a default rate, and a loan can be marked down without missing a payment.

## 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).