PS PSEC Prospect Capital Corporation Loading... : Bullish and Bearish Analyst Opinions

O'Donnell highlights "jitters around BDCs and private credit disruption" and notes that "private credit has the highest exposure to software." If the software sector is cracking (as evidenced by public loan performance), the Private Credit and BDC (Business Development Company) sectors—which aggressively lent to software buyouts—are sitting on unrealized losses. As these defaults materialize, BDC book values could be impaired. WATCH or AVOID BDCs with heavy technology exposure; monitor for signs of distress spilling over from private valuations. Private credit managers may "extend and pretend," delaying the mark-to-market pain.