Assertion Supported AI assessment confidence: 90% certainty 4/5 debate potential 3/5

Public BDCs show massive valuation discrepancies on identical syndicated club loans

Kieran Goodwin · Kieran Goodwin – Private Credit Concerns (EP.494) · Mar 30, 2026 · at 28:25

Kieran Goodwin of Saba Capital discusses valuation inconsistencies and inaccurate marks across business development companies (BDCs) with Ted Seides.

0:00 / 0:40exact quote · 40.8s

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“There's some obvious ones where you see, let's just say public BDCs that own the same club deal, the same loan. One BDC versus another, or two or three versus a fourth BDC, there's a massive variance, in a second lien especially, where you're like, wait, the first lien we know is stressed a bit, so maybe it's worth 90 or 85. Not that it's impaired, but we'll throw it out a bad sector. It's a stressed SAS loan, and it has a second lien. The second lien's gotta be below 85. Then you have one Where a bunch of guys are marking at 60, and then there's a fourth one marking 85.”

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The claim, plainly

Public business development companies holding the same syndicated club loans exhibit massive valuation discrepancies on stressed second-lien loans, with some marking debt at 60 while another marks it at 85.

a quote alone can be ambiguous, so this restates it with the references and context of the conversation around it resolved. AI-written; the tape below the player is the source.

Assessment

The claim asserted that public Business Development Companies (BDCs) sharing syndicated or club loan exposures exhibit large valuation discrepancies on stressed or junior debt, citing hypothetical or illustrative mark spreads around 25 points (such as 60 versus 85). SEC Form 10-Q and 10-K Schedule of Investments analyses confirmed multiple documented instances of this phenomenon on identical borrower tranches on the same measurement dates. Specifically, filings analyzed by CreditSights and MELD Valuation documented a 27-point spread on shared debt of Khoros/Lithium Technologies (Goldman Sachs BDC marking at 50, Hercules Capital at 53, and Sixth Street Specialty Lending at 77) and a 22-point spread on Auven Therapeutics (Oaktree at 100 vs. Barings at 78). Academic and industry studies from Moody's and Valuation Research Corporation further corroborated that mark spreads of 10 to 25+ points regularly occur across BDCs on stressed junior credits.

Cross-BDC valuation analyses of SEC filings revealed a 27-point fair value mark discrepancy for Khoros, LLC / Lithium Technologies, with Goldman Sachs BDC at 50, Hercules Capital at 53, and Sixth Street Specialty Lending at 77 on the same measurement date.
Filings for Auven Therapeutics showed a 22-point mark divergence between Oaktree Specialty Lending (100 / par) and Barings BDC (78).
Analyses by Moody's (June 2026) and Valuation Research Corporation (October 2024) confirmed that Level 3 fair value models on stressed syndicated BDC credits routinely produce 10 to 20+ point valuation spreads across co-lenders.

Checked against

[1] meldvaluation.com [2] creditsights.com [3] valuationresearch.com [4] researchgate.net [5] moodys.com [6] moodys.com

BDC valuation discrepancies second lien 60 85 BDC same loan different marks valuation discrepancy 60 85 BDC valuation discrepancies second lien syndicated loan marks

assessed as of 2026-09-02

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Mentioned

BDC private credit loans

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