BDC markdowns nearly doubled at the March 2026 quarter end, then reversed by June

• 642 of 8,555 continuing borrowers (7.5%) were marked down 5 cents or more at 31 March 2026; the four quarter ends before ranged from 277 of 7,432 (3.7%) to 386 of 8,197 (4.7%).
• At 30 June 2026, 317 of 8,366 (3.8%) were marked down and 356 were marked up, the first quarter end of the six where recoveries outnumbered markdowns.
• The median markdown was about 10.6 cents on the dollar at March 2026, in line with 9.4 to 10.8 cents at the other five quarter ends, so the spike was in how many borrowers moved, not how far.
• Ares Strategic Income Fund held 125 of the 642 borrowers marked down at March 2026 and Blackstone Private Credit Fund held 98; no other BDC held more than 44.
• New non-accruals did not spike with the marks: 67 borrowers at both December 2025 and March 2026, and 64 at June 2026.

Interpretation, not observation: read it as our reading of the figures above.

• The pattern reads as a one-quarter repricing of many credits at once rather than a run of defaults, because non-accruals stayed flat and most of the marks came back the next quarter. The data cannot say why the marks moved.

• Each BDC position is read from the schedule of investments in the BDC's quarterly or annual report and resolved to one borrower record, so a borrower lent to by several BDCs counts once.
• A borrower's mark is its fair value divided by its cost, combined across every BDC that holds it. A markdown is a fall of at least 5 cents on the dollar of cost between two consecutive quarter ends, to a mark below 95 cents; a recovery is the same rise.
• The share is taken over borrowers held at both quarter ends (the only ones whose mark can move), so a growing number of BDCs filing is not read as more markdowns.
• The median markdown is the median fall in the combined mark among the borrowers marked down at that quarter end.

• Filings for the September 2026 quarter end are still arriving (most are due in November), so that quarter is not shown.
• A BDC that changes how it values a position, or a borrower that refinances between quarter ends, can produce a mark change that is not a change in credit quality.
• This covers BDCs only: private credit funds that do not file schedules of investments are not in it.

• Ares Strategic Income Fund held 125 marked-down borrowers
• Blackstone Private Credit Fund held 98 marked-down borrowers
• Barings Private Credit Corp held 44 marked-down borrowers
• Blue Owl Credit Income Corp. held 39 marked-down borrowers
• Palmer Square Capital BDC Inc. held 36 marked-down borrowers

• Business development companies
• BDC portfolio companies
• How many BDCs DFX tracks

• SEC EDGAR: Form 10-Q and Form 10-K schedules of investments filed by 148 to 164 business development companies for each quarter end from March 2025 to June 2026

Figures from a query of DFX's published data tables run on 10 October 2026. The sources and their rights are listed on the sources page.

DFX Intelligence. "BDC markdowns nearly doubled at the March 2026 quarter end, then reversed by June." Published 10 October 2026. https://dfxintel.com/research/bdc-markdowns-spiked-in-q1-2026-then-reversed