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Headlines have intensified scrutiny of private credit after a long stretch of strong inflows. BDCs benefited from that enthusiasm, but sentiment has shifted toward redemption and credit-quality worries.

This primer explains what BDCs are and why they matter within private credit. It also reviews how they show up across primary and secondary credit markets.

BDCs are closed-end specialty finance vehicles that broaden access to private credit. They often invest in floating-rate senior loans, plus select junior debt or equity exposure.

Unlike many drawdown funds, BDCs operate under a shared regulatory framework. Required disclosures can improve transparency, though portfolio values still rely on models.

Historically, BDC yields have stood out versus other credit benchmarks; however, results vary by cycle. Over time, BDC bonds have shown competitive returns relative to comparable investment-grade cohorts.