DBRS Publishes “DBRS: Business Development Companies – Who Are They and What Do They Do?”

DBRS, Inc. (DBRS) published a commentary titled “DBRS: Business Development Companies – Who Are They and What Do They Do?”

BDCs growing presence in direct lending, focusing on middle market businesses, has increased investor awareness. DBRS sees BDCs as expanding where they see a growth opportunity. BDCs are generally formed as affiliates of larger asset managers, which have significant sourcing and servicing capabilities across the entire platform.

Summary highlights of the commentary include:

• BDCs, shorthand for Business Development Companies, have a growing presence in direct lending to middle market businesses. This focus on midsized businesses reflects BDCs’ legal and regulatory foundations.
• BDCs have a number of regulatory requirements, restricting their investments, capital retention, and leverage.
• BDCs are generally formed as affiliates of larger institutions, allowing access to greater sourcing of investment opportunities, and resources for servicing capabilities.

This commentary is available at www.dbrs.com.