...BDC Energy Stress Manageable: Fitch Ratings' latest update of stress tests on energy exposures of 10 rated business development companies (BDCs) found that most ratings appear positioned to weather an energy stress in isolation, but other industry challenges support our negative outlook for the group. Sector headwinds include competition, declining asset yields, unsustainable asset quality, increased leverage, an inability to access the equity markets and expanded investment strategies. Testing for Additional Writedowns: Fitch updated its partial and full writedown stress tests on BDC energy exposures to assess the impact of valuation writedowns or realized losses on balance sheet leverage ratios, given a continuation of low absolute oil prices. The results of the stress tests remain manageable from ratings and leverage perspectives, with leverage ratios increasing 4.0 basis points (bps) for the sector, on average, and 12 bps, at most, for an individual firm. Oil and Gas Exposure Moderate:...
