Fidus Investment Corporation Stock News

The BDC sector has been hammered. The discounts have become deep almost across the board. The question is whether to enter now, or is the risk still too high that it will end up being a 'catching a falling knife' moment?

EVANSTON, Ill., Oct. 01, 2025 (GLOBE NEWSWIRE) -- Fidus Investment Corporation (NASDAQ: FDUS) (“Fidus” or the “Company”) today announced that it has priced an underwritten public offering of an additional $100 million aggregate principal amount of 6.750% notes due 2030 (the “Notes”).

BDCs are in trouble. It is not only interest rates but also other factors such as tight dividend coverage levels, debt-saturated balance sheets, and spread compression that introduce risks. In my view, many BDCs will very likely cut dividends and burn NAV. In the article, I elaborate on two BDCs, which are headed in the opposite (positive) direction.

FDUS has one of the best 11% yields in the market. We discuss what makes it a premier BDC. I discuss what it would take for me to add it to my portfolio.

BDCs have already experienced a notable correction. The sector median P/NAV metric indicates ~12% discount to NAV. Many players are priced even below that.

Fidus Investment is a 'Buy' for income investors, offering a near-11% dividend yield and strong portfolio fundamentals. FDUS specializes in first-lien debt within the lower middle market, providing attractive yields above industry peers. Q2 results showed solid NII coverage, a special dividend, low nonaccruals, and a strong balance sheet with low leverage and high spillover income.

14 BDCs have base dividend coverage levels between 100% and 105%. 16 BDCs have them already below 100%. Given the unfavorable future earnings outlook, a system-wide BDC dividend cutting process is very likely to start quite soon.