Golub Capital BDC faces rising risks and tight dividend coverage amid software sector concerns.

Golub Capital BDC's portfolio shows increasing weaknesses, with 2.2% of investments underperforming and spreads compressing, raising concerns about dividend sustainability. The net investment income (NII) barely covers dividend payouts, suggesting a potential dividend cut if current trends continue. Despite trading at a discount to book value, the author prefers to hold rather than add shares now, expecting better entry points later. The management's strong track record, especially in software lending, remains a key reason for cautious optimism.