BDC non-accrual share, chemicals, materials and packaging

## What this measures

The debt business development companies have stopped accruing interest on (non-accrual status), for chemicals, materials and packaging borrowers, as a share of their total investments at amortized cost: the way BDCs report it in their 10-Ks and 10-Qs.

## Why it matters

A loan goes on non-accrual when the lender no longer expects to collect its interest. It is the most direct credit-loss signal in private credit, and BDCs disclose it loan by loan.

## 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. A loan is on non-accrual when an XBRL footnote on its row says so ("Loan was on non-accrual status as of …"), read from each filing's own XBRL instance on EDGAR. A footnote dated to another balance-sheet date does not count, and generic or negative footnotes ("no investments on non-accrual") do not flag a row. The series uses the BDCs whose footnotes speak to accrual status and divides their non-accrual debt by all their investments (debt and equity, cash left out) at cost. 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 chemicals, materials and packaging group. A quarter shows only when the group holds at least $5 billion of debt at cost and 300 loans.

## How to read it

Higher means more loans have stopped paying. At cost it shows how much of the money lent is in trouble. The series starts in Q2 2024 at 0.21%. The reading for Q2 2026 is 1.17%, from 71 BDCs. Over the series the high is 3.20% (Q1 2025) and the low 0.20% (Q4 2024).

## 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. BDCs that mark non-accruals some other way (a symbol in a row label, or only in the MD&A) are left out of this series. Non-accrual is the lender's call, and lenders decide at different speeds; restructured loans that pay in kind may stay off it.

## 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).