U.S. Private Credit Lenders Face Deepening Losses
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: Newsfilter
- Deepening Unrealized Losses: In Q1 2026, U.S. private credit lenders reported unrealized losses of 2.35% of net asset value, marking the worst quarterly performance since Q2 2022, indicating increased strain on middle-market companies due to higher borrowing costs.
- Pressure on Cash Income: Payment-in-kind (PIK) interest income remained elevated at approximately $477 million, a 2% increase from the previous quarter but below the early 2025 peak of $633 million, highlighting investor concerns over non-cash income.
- Liquidity Risk Warning: Fitch has cautioned that rising exposure to loans with deferrable interest could pressure BDC liquidity if cash earnings are insufficient to cover dividend payments, increasing market uncertainty.
- Market Cycle Shift: Howard Mason from Renaissance Macro Research noted that private credit is entering its first real credit cycle since the Global Financial Crisis, with rising borrowing costs and AI-related pressures on software valuations particularly impacting highly leveraged deals from 2021.
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Analyst Views on ICMB
About ICMB
Investcorp Credit Management BDC, Inc. is an externally managed, closed-end, non-diversified management investment company. The Company’s investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation through debt and related equity investments by targeting investment opportunities with favorable risk-adjusted returns. It seeks to invest primarily in middle-market companies that have annual revenues of at least 50 million dollars and earnings before interest, taxes, depreciation, and amortization of at least 15 million dollars. It invests in standalone first and second lien loans and unitranche loans, with an emphasis on floating rate debt. It also invests in mezzanine loans/structured equity and in the equity of portfolio companies through warrants and other instruments. It invests in various industry sectors, such as chemicals, software, and others. The Company’s investment advisor is CM Investment Partners LLC.
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.
U.S. Private Credit Lenders Face Deepening Losses
- Deepening Unrealized Losses: In Q1 2026, U.S. private credit lenders reported unrealized losses of 2.35% of net asset value, marking the worst quarterly performance since Q2 2022, indicating increased strain on middle-market companies due to higher borrowing costs.
- Pressure on Cash Income: Payment-in-kind (PIK) interest income remained elevated at approximately $477 million, a 2% increase from the previous quarter but below the early 2025 peak of $633 million, highlighting investor concerns over non-cash income.
- Liquidity Risk Warning: Fitch has cautioned that rising exposure to loans with deferrable interest could pressure BDC liquidity if cash earnings are insufficient to cover dividend payments, increasing market uncertainty.
- Market Cycle Shift: Howard Mason from Renaissance Macro Research noted that private credit is entering its first real credit cycle since the Global Financial Crisis, with rising borrowing costs and AI-related pressures on software valuations particularly impacting highly leveraged deals from 2021.
See More
Calls for Accountability from Investcorp Amid ICMB's Share Collapse
- Dramatic Share Decline: ICMB's share price plummeted from $10.51 in 2019 to approximately $1.40, resulting in a market capitalization of just $20 million, highlighting severe mismanagement by Investcorp and eroding investor confidence.
- Dividend Suspension: The unprecedented cessation of dividends by ICMB indicates a deteriorating financial condition, exacerbating investor concerns about the company's future viability and management effectiveness.
- Excessive Fees: Investcorp has collected over $43.5 million in fees from ICMB, more than double its current market cap, raising serious questions about the justification of such fees amidst poor performance and mismanagement.
- Acquisition Proposal: Bulldog Investors is urging Investcorp to acquire all publicly held shares of ICMB at $5.04 each, viewing this as a necessary step to address management failures; failure to act could severely damage Investcorp's reputation with current and potential clients.
See More
Investcorp Accused of Causing ICMB Share Price Collapse
- Shareholder Accountability Call: Bulldog Investors, LLP, a significant shareholder holding 596,780 shares of ICMB, demands that Investcorp take responsibility for the share price plummet from $10.51 in 2019 to $1.40, indicating strong dissatisfaction with management and potentially impacting Investcorp's reputation and future investor confidence.
- Fee and Performance Imbalance: Since 2019, Investcorp has collected approximately $43.5 million in fees from ICMB, exceeding the current market cap of $20 million, reflecting a severe imbalance between high fees and shareholder interests, which may lead investors to question management's capabilities.
- Strategic Review Committee Formation: ICMB's board has established a special committee and hired Houlihan Lokey as a financial advisor to rectify management's mistakes, indicating a search for external assistance amid financial crisis, which could influence the company's future strategic direction.
- Acquisition Proposal Raises Concerns: Bulldog Investors proposes that Investcorp acquire all publicly held shares of ICMB at $5.04 per share, and failure to act could lead to long-term damage to client trust in Investcorp, further exacerbating market skepticism regarding its management effectiveness.
See More
Investcorp Credit Management BDC Q1 2026 Earnings Insights
- Strategic Review Committee Formed: Investcorp Credit Management BDC's board has established a special committee of independent directors to evaluate strategic alternatives aimed at maximizing shareholder value, indicating the company's focus on future direction and caution.
- Fee Waivers and Liquidity Management: The investment adviser voluntarily waived 56% of base management fees, saving approximately $456,000, while reducing the revolving credit facility from $100 million to $50 million, which is expected to save $401,000 annually in undrawn commitment fees, enhancing the company's liquidity.
- Investment Income and NAV Decline: For the quarter ended March 31, 2026, net investment income was $0.3 million ($0.02 per share), but net assets declined approximately 14% sequentially, with net asset value per share dropping to $3.65, reflecting financial pressures faced by the company.
- Muted Investment Activity: New investment activity remained subdued during the quarter, with only $79,000 funded under the first lien term loan C of American Nuts, indicating the company's prioritization of capital preservation and liquidity management strategies.
See More
Investcorp Credit Management BDC Q1 Financial Results
- Decline in Net Investment Income: Investcorp Credit Management BDC reported a Q1 GAAP net investment income of $0.02, indicating pressure on earnings and reflecting challenges in the market environment.
- Decrease in Total Investment Income: The total investment income was $3.55 million, down 18.8% year-over-year, suggesting difficulties in revenue generation that could impact future dividend capabilities.
- Drop in Net Asset Value: The net asset value per share decreased by $0.60 to $3.65, compared to $4.25 as of December 31, 2025, indicating asset depreciation that may affect investor confidence.
- Negative Earnings Per Share: The GAAP earnings per share for Q3 was -$0.61, with total investment income of $17.4 million, highlighting ongoing challenges in profitability that could raise concerns among shareholders regarding future performance.
See More
Investcorp Credit Management BDC Reports Q1 2026 Financial Results
- Investment Recovery: In Q1 2026, Investcorp fully realized investments in three portfolio companies, totaling $12.7 million with an internal rate of return of 10.67%, demonstrating effective capital recovery, although the overall decline in net assets may impact future investment capabilities.
- Net Asset Decline: As of March 31, 2026, the company's net asset value per share decreased by $0.60 to $3.65, with total net assets dropping by $8.6 million, or 14.07%, indicating challenges in liquidity management and capital preservation.
- Debt Management Strategy: On March 30, 2026, the company successfully refinanced its existing 4.875% notes into new unsecured notes with a floating interest rate of SOFR plus 5.5%, maturing on July 1, 2029, aimed at reducing financing costs and optimizing capital structure.
- Liquidity Support Measures: To enhance liquidity, the company's investment adviser waived $456,000 in management fees, and the Capital One credit facility commitment was reduced from $100 million to $50 million, expected to save approximately $401,000 in undrawn commitment fees annually.
See More
U.S. Private Credit Lenders Face Deepening Losses
- Deepening Unrealized Losses: In Q1 2026, U.S. private credit lenders reported unrealized losses of 2.35% of net asset value, marking the worst quarterly performance since Q2 2022, indicating increased strain on middle-market companies due to higher borrowing costs.
- Pressure on Cash Income: Payment-in-kind (PIK) interest income remained elevated at approximately $477 million, a 2% increase from the previous quarter but below the early 2025 peak of $633 million, highlighting investor concerns over non-cash income.
- Liquidity Risk Warning: Fitch has cautioned that rising exposure to loans with deferrable interest could pressure BDC liquidity if cash earnings are insufficient to cover dividend payments, increasing market uncertainty.
- Market Cycle Shift: Howard Mason from Renaissance Macro Research noted that private credit is entering its first real credit cycle since the Global Financial Crisis, with rising borrowing costs and AI-related pressures on software valuations particularly impacting highly leveraged deals from 2021.
See More
Calls for Accountability from Investcorp Amid ICMB's Share Collapse
- Dramatic Share Decline: ICMB's share price plummeted from $10.51 in 2019 to approximately $1.40, resulting in a market capitalization of just $20 million, highlighting severe mismanagement by Investcorp and eroding investor confidence.
- Dividend Suspension: The unprecedented cessation of dividends by ICMB indicates a deteriorating financial condition, exacerbating investor concerns about the company's future viability and management effectiveness.
- Excessive Fees: Investcorp has collected over $43.5 million in fees from ICMB, more than double its current market cap, raising serious questions about the justification of such fees amidst poor performance and mismanagement.
- Acquisition Proposal: Bulldog Investors is urging Investcorp to acquire all publicly held shares of ICMB at $5.04 each, viewing this as a necessary step to address management failures; failure to act could severely damage Investcorp's reputation with current and potential clients.
See More
Investcorp Accused of Causing ICMB Share Price Collapse
- Shareholder Accountability Call: Bulldog Investors, LLP, a significant shareholder holding 596,780 shares of ICMB, demands that Investcorp take responsibility for the share price plummet from $10.51 in 2019 to $1.40, indicating strong dissatisfaction with management and potentially impacting Investcorp's reputation and future investor confidence.
- Fee and Performance Imbalance: Since 2019, Investcorp has collected approximately $43.5 million in fees from ICMB, exceeding the current market cap of $20 million, reflecting a severe imbalance between high fees and shareholder interests, which may lead investors to question management's capabilities.
- Strategic Review Committee Formation: ICMB's board has established a special committee and hired Houlihan Lokey as a financial advisor to rectify management's mistakes, indicating a search for external assistance amid financial crisis, which could influence the company's future strategic direction.
- Acquisition Proposal Raises Concerns: Bulldog Investors proposes that Investcorp acquire all publicly held shares of ICMB at $5.04 per share, and failure to act could lead to long-term damage to client trust in Investcorp, further exacerbating market skepticism regarding its management effectiveness.
See More
Investcorp Credit Management BDC Q1 2026 Earnings Insights
- Strategic Review Committee Formed: Investcorp Credit Management BDC's board has established a special committee of independent directors to evaluate strategic alternatives aimed at maximizing shareholder value, indicating the company's focus on future direction and caution.
- Fee Waivers and Liquidity Management: The investment adviser voluntarily waived 56% of base management fees, saving approximately $456,000, while reducing the revolving credit facility from $100 million to $50 million, which is expected to save $401,000 annually in undrawn commitment fees, enhancing the company's liquidity.
- Investment Income and NAV Decline: For the quarter ended March 31, 2026, net investment income was $0.3 million ($0.02 per share), but net assets declined approximately 14% sequentially, with net asset value per share dropping to $3.65, reflecting financial pressures faced by the company.
- Muted Investment Activity: New investment activity remained subdued during the quarter, with only $79,000 funded under the first lien term loan C of American Nuts, indicating the company's prioritization of capital preservation and liquidity management strategies.
See More
Investcorp Credit Management BDC Q1 Financial Results
- Decline in Net Investment Income: Investcorp Credit Management BDC reported a Q1 GAAP net investment income of $0.02, indicating pressure on earnings and reflecting challenges in the market environment.
- Decrease in Total Investment Income: The total investment income was $3.55 million, down 18.8% year-over-year, suggesting difficulties in revenue generation that could impact future dividend capabilities.
- Drop in Net Asset Value: The net asset value per share decreased by $0.60 to $3.65, compared to $4.25 as of December 31, 2025, indicating asset depreciation that may affect investor confidence.
- Negative Earnings Per Share: The GAAP earnings per share for Q3 was -$0.61, with total investment income of $17.4 million, highlighting ongoing challenges in profitability that could raise concerns among shareholders regarding future performance.
See More
Investcorp Credit Management BDC Reports Q1 2026 Financial Results
- Investment Recovery: In Q1 2026, Investcorp fully realized investments in three portfolio companies, totaling $12.7 million with an internal rate of return of 10.67%, demonstrating effective capital recovery, although the overall decline in net assets may impact future investment capabilities.
- Net Asset Decline: As of March 31, 2026, the company's net asset value per share decreased by $0.60 to $3.65, with total net assets dropping by $8.6 million, or 14.07%, indicating challenges in liquidity management and capital preservation.
- Debt Management Strategy: On March 30, 2026, the company successfully refinanced its existing 4.875% notes into new unsecured notes with a floating interest rate of SOFR plus 5.5%, maturing on July 1, 2029, aimed at reducing financing costs and optimizing capital structure.
- Liquidity Support Measures: To enhance liquidity, the company's investment adviser waived $456,000 in management fees, and the Capital One credit facility commitment was reduced from $100 million to $50 million, expected to save approximately $401,000 in undrawn commitment fees annually.
See More
