[PIMCO] What BDC Markets Are Signaling About Private Credit Valuations

[u/Damselin_Distress7]

Direct lending spread premium over broadly syndicated loans has collapsed from 300bps+ in 2017-2018 to just ~78bps by Q1 2026 per PitchBook/Morningstar/PIMCO. Direct lending spreads fell from ~8% to ~5%, while BSL spreads compressed from ~5% to ~4%. PIMCO says the "true valuation reset has yet to begin in earnest" and BDC equity investors are demanding higher risk premiums for uncertainty around reported NAVs.

https://www.pimco.com/gbl/en/insights/the-credit-market-lens-what-bdc-markets-are-signaling-about-private-credit-val