Publicly Traded Lending Funds Are Inexpensive: Reasons Behind the Decline in BDC Earnings.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 14 2026
0mins
Source: Barron's
Decline in BDC Valuations: Business development companies (BDCs) have seen their stock valuations drop significantly over the past year, from 103% of book value to 85%.
Concerns Over Loan Defaults: The primary reason for the decline in BDC shares is growing worries about potential loan defaults among borrowers.
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Analyst Views on RWAY
Wall Street analysts forecast RWAY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for RWAY is 10.57 USD with a low forecast of 9.00 USD and a high forecast of 12.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
7 Analyst Rating
2 Buy
5 Hold
0 Sell
Moderate Buy
Current: 9.270
Low
9.00
Averages
10.57
High
12.00
Current: 9.270
Low
9.00
Averages
10.57
High
12.00
About RWAY
Runway Growth Finance Corp. is a specialty finance company. The Company is focused on providing senior secured loans to high growth-potential companies in technology, healthcare, business services, financial services, select consumer services and products and other high-growth industries. Its investment objective is to maximize its total return to its stockholders primarily through current income on the Company's loan portfolio and secondarily through capital gain (loss) on its warrants and other equity positions. The Company invests in senior secured term loans and other senior debt obligations, and it also invests in second lien loans issued by high growth-potential companies. The Company originates its investments through two strategies: Sponsored Growth Lending and Non-Sponsored Growth Lending. It also invests in secured loans, and acquires equity securities as well, including warrants. The Company is externally managed by Runway Growth Capital LLC (RGC).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Runway Growth Finance Prices $100M Public Offering of Notes
- Offering Size: Runway Growth Finance has priced a public offering of $100 million in notes, expected to close on February 3, 2026, demonstrating the company's ability to access capital markets and confidence in future growth.
- Interest Rate and Term: The notes carry a 7.25% annual interest rate, payable quarterly starting March 1, 2026, maturing on February 3, 2031, indicating the company's strategic management of financing costs in the current interest rate environment.
- Use of Proceeds: The expected net proceeds of $97 million will be used to repay existing debt, including $51.75 million of 8.00% notes and part of $80.5 million of 7.50% notes, aimed at optimizing the capital structure and reducing financial risk.
- Overallotment Option: Underwriters have a 30-day option to purchase an additional $15 million in notes to cover overallotments, reflecting strong market demand for the offering and investor confidence.
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Runway Growth Finance Launches Unsecured Notes Offering
- Bond Offering Initiative: Runway Growth Finance (RWAY) has commenced an underwritten offering of unsecured notes intended for listing on the Nasdaq Global Select Market, with potential trading starting within 30 days post-approval, reflecting the company's proactive stance towards capital markets.
- Clear Use of Proceeds: The net proceeds from this offering will be utilized to repay outstanding debt, including up to $51.75 million of 8.00% notes due in December 2027, aimed at improving financial structure and reducing interest burdens.
- Acquisition Financing Support: Funds will also support the prior acquisition of SWK Holdings, further enhancing its investment portfolio in healthcare, with expectations to boost healthcare exposure to 31%.
- Market Reaction Potential: Given the current market conditions, RWAY's 14% dividend yield and 30% discount to NAV may attract investor interest, although analysts remain cautious about its future performance.
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