Crescent Capital: SOFR Decrease and 2026 Debt Wall Raise Dividend Coverage Concerns

Crescent Capital, a Business Development Company (BDC), is a mid-market direct lender to sponsors executing leveraged buyouts (LBOs). The company's borrowers have been disproportionately affected by rising interest rates. Lower SOFR rates and the impending 2026 debt wall may increase dividend coverage risk for Crescent Capital. As a BDC, Crescent Capital is required to distribute at least 90% of its taxable income to shareholders each year, making dividend coverage a critical concern.