The Julia La Roche Show · Saturday, July 4, 2026
Chris Whalen discusses the challenges facing public Business Development Companies (BDCs), noting that many have become unprofitable due to rising interest rates. He explains that BDCs are struggling to hide their leverage and some are resorting to 'picking,' where debt is paid with equity, signaling distress.
“What you're seeing now is since interest rates have gone up, even though the Fed hasn't done anything yet, rates have gone up over a point. It's putting a lot of pressure on private companies. And the BCBCs that invest in the debt of these companies are doing everything and anything they can to kind of hide the ball.”
“You're hearing that terrible three-letter word, pick, which means that companies are starting to pay debt holders by giving them equity, which means that they're busted.”
“And all of these companies really should be in bankruptcy now. So the sector is going to get fixed, Julia. It's only a question of when.”