Crescent Capital BDC

CCAP

Market cap $549M

Most BDC investors are value investors, who focus on income. The higher the multiple, the lower the yield - i.e., a mechanic that leads "bargain hunters" underemphasizing high P/NAV BDCs. In the article I detail why this kind of approach might be suboptimal.

I focus on business development companies, or BDCs, with durable dividends, strong downside protection, and resilience to rate and credit risk shifts. However, there is also a merit of including BDCs, which would qualify for tactical investment bucket - i.e., high risk, high return. In the article I outline the rationale of having such exposures and provide two practical examples, which carry high potential to beef up the total return component.

Crescent Capital's 27% NAV discount overstates upside; the BDC's yield looks attractive, but NII pressures and refinancing risks cap total returns. Portfolio risk and unitranche exposure are manageable, but mid-market sponsor lending is a crowded, commoditised space with no moat. Falling SOFR reduces net interest income, while 2026 debt maturities at higher rates further squeeze earnings and dividend coverage.

The rebound that began in April on stock markets around the world is leading to a positive double-digit year-end close for Wall Street. This increase has been partially reflected in my portfolio, which focuses on high-dividend securities, showing a gain of more than 6% against the cost basis. In addition, there has been a recent flurry of positive news regarding various special year-end distributions announced by several funds in my portfolio.

This Is How I'm Harvesting BDC Cash Flows For My Retirement. The double-digit yields, term 'private credit,' cases like First Brands and Tricolor are just some examples that introduce a high degree of skepticism. However, if done right, BDCs can bring a lot of value to the table for safe passive income investors.

The market seems to question the true fair value of BDC portfolios. There is a fear that the BDCs will start to report elevated non-accruals, which would make their life more difficult (as they have already a lower interest rate problem at hand). For durable and high-yield income investors this has created a truly enticing and timely opportunity, which simply has to be explored given the direction of overall asset yields.

Crescent Capital BDC faces macro uncertainty and falling interest rates, making the BDC sector risky despite attractive income yields. CCAP trades at a discount to NAV, but I see limited upside and a higher risk of further downside due to expected lower base rates. Recent earnings show sequential declines in total and net investment income, increased non-accruals, and a drop in NAV, signaling economic weakness for CCAP.

Crescent Capital BDC offers a compelling 12.6% regular dividend yield and trades at a 31% discount to book value. CCAP maintains a conservatively managed, diversified portfolio with strong dividend coverage and an improving non-accrual rate. The BDC's focus on sponsor-backed companies, solid balance sheet, and potential for increased non-interest income support its investment case.

Crescent Capital BDC, Inc. ( CCAP ) Q3 2025 Earnings Call November 13, 2025 12:00 PM EST Company Participants Daniel McMahon - Senior VP & Head of Public Investor Relations Jason Breaux - Chief Executive Officer Henry Chung - President Gerhard Lombard - Chief Financial Officer Conference Call Participants Robert Dodd - Raymond James & Associates, Inc., Research Division Mickey Schleien - Clear Street LLC Christopher Nolan - Ladenburg Thalmann & Co. Inc., Research Division Presentation Operator Good morning, and welcome to the Crescent Capital BDC, Inc.'s Third Quarter ended September 30, 2025 Earnings Conference Call. [Operator Instructions] Please note that Crescent Capital BDC, Inc. may be referred to as CCAP, Crescent BDC or The Company throughout the call.

Crescent Capital BDC (CCAP) came out with quarterly earnings of $0.46 per share, missing the Zacks Consensus Estimate of $0.47 per share. This compares to earnings of $0.64 per share a year ago.