BDC sector dips as PSEC cuts dividend; Apollo may sell MFIC amid private credit shifts

Business Development Companies (BDCs) saw a decline in the third week of May, notably with PSEC cutting its dividend and OTF recovering from prior losses. Q1 results showed no major systemic issues, though performance varied widely among BDCs. Apollo's potential sale of MFIC suggests a strategic move towards in-house private credit management amid a 14% shrink in private credit lending, while bank lending rose 13%, benefiting lower middle-market BDCs. These shifts highlight changing capital flows in the sector.