Golub Capital BDC Inc

Non-accrual debt across US-registered business development companies jumped to 1.9% of total debt at cost in Q1 2026, up 52 basis points from the prior quarter, signaling growing borrower distress in private credit. Adjusted non-accrual exposure, counting all debt owed by borrowers with at least one non-accrual tranche, rose to 3.3% of total debt at cost, up 116 basis points from Q4 2025. Among the ten largest publicly traded BDCs, reported non-accrual debt reached 3.95% of total debt at cost in Q2, up 20 basis points, while adjusted exposure rose 54 basis points to 5.95%. The number of borrowers with at least one non-accrual instrument climbed to 356 in Q1 2026, representing 4.69% of all borrowers, up from 4.26% a year earlier. Two borrowers, Medallia and Inovalon, accounted for $4.4 billion of the Q1 2026 non-accrual total.

Analysts have trimmed the fair value estimate for Golub Capital BDC from US$15.00 to US$13.75, an 8% reduction driven by updated model inputs including a wider revenue decline forecast of 5.49%, a higher profit margin assumption of 59.25%, a lower future P/E of 10.93 times, and an increased discount rate of 10.80%. Oppenheimer cut its price target by US$2 to US$13.75, signaling tighter expectations, while RBC Capital initiated coverage with a constructive view. Separately, the company completed a share repurchase of 2,889,604 shares for US$36.2 million between January 1 and May 4, 2026, bringing total buybacks under its August 2025 authorization to 8,413,710 shares for US$112.75 million.