Oct. 15 at 8:22 PM
$GLAD trimmed their dividend by 9% today. Can't say I'm surprised, as they have to account for lower rates on their floating instruments. I expect
$SCM $PNNT $PFLT $CSWC and others will all do the same.
This is the nature of BDC stocks amid a falling interest rate environment and not a cause for alarm, rather par for the course as they are doing what they need to do. After all, the portfolios are strong, if not stronger as default risk lessens as rates drop on variable loans. What will likely happen towards year end is money will move back in to BDC stocks (as well as REITs, high-div blue chips, and preferreds) as investors reposition their portfolios and flee cash and treasuries to seek out higher yields elsewhere.
The drop in income will hurt in the short term, but higher stock prices will assuage the pain down the line.
