BDC loans on non-accrual, share of investments at fair value

## What this measures

The debt business development companies have stopped accruing interest on (non-accrual status) as a share of their total investments at fair value: 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 fair value.

## How to read it

Higher means more loans have stopped paying. At fair value the share is lower than at cost, because loans on non-accrual are marked well below cost. The series starts in Q1 2023 at 0.53%. The reading for Q2 2026 is 1.01%, from 96 BDCs. Over the series the high is 1.24% (Q3 2025) and the low 0.50% (Q1 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).