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April 22, 2026 · 3 min read

Asset Coverage in Non-Traded BDCs: Reading the Numbers

The 150% statutory minimum is a floor, not a target. A cross-fund look at where the major non-traded BDCs sit today — and what the spread between 177% and 255% actually implies.

Private Credit

Under the Investment Company Act of 1940, a BDC must maintain a minimum asset coverage ratio of 150% — meaning total assets must be at least 1.5x total borrowings. This is the statutory floor. Operating below it triggers restrictions on new borrowing and, in some cases, dividend payments. It is not the target. Where a fund actually operates within the range above 150% reflects its leverage strategy, portfolio composition, and management's view of headroom they need to manage the portfolio.

Where the Major Non-Traded BDCs Sit

Based on most recent available filings (FY2025 10-K or Q4 2025 equivalent), asset coverage ratios across the six major non-traded BDCs covered on AltHarbor are as follows: Ares Capital (ADS) 255.2%, Blue Owl Capital (OCIC) 223.0%, Oaktree Tactical Credit (OTIC) 223.4%, Goldman Sachs Private Credit (GSPCC) 222.0%, Blackstone Secured Lending (BCRED) 235.7%, Ares Strategic Income (ASIF) 191.0%, and Blackstone Secured Lending Fund (BXSL) 177.1%.

The spread is notable. ADS at 255.2% has the most cushion above the floor — over 100 percentage points of headroom. BXSL at 177.1% operates closest to the minimum, with approximately 27 percentage points of headroom before hitting the 150% floor. That does not make BXSL riskier in absolute terms. BXSL's portfolio is predominantly first-lien senior secured (97.6%), and the fund has operated at relatively tight coverage levels consistently. Context matters.

What the Spread Implies

High coverage ratios indicate conservative leverage. Funds far above the floor have more room to absorb portfolio markdowns without breaching covenants or restricting dividends. They also have more flexibility to add leverage opportunistically. The tradeoff is that funds with very high coverage may be leaving return on the table if they are not deploying available leverage capacity.

Funds near the floor face tighter operating margins. A portfolio mark-down event that reduces asset values by 10-15% would meaningfully compress BXSL's coverage ratio and could constrain new borrowing. Whether that is a concern depends on portfolio composition and the macroeconomic environment. At the moment, non-accrual rates across the peer group remain low — BCRED at 0.7%, OCIC at 0.6%, BXSL at 0.5% — which limits the near-term downside scenario.

What to Monitor

The direction of travel matters more than a point-in-time reading. A fund moving from 235% to 200% over three consecutive quarters is deploying leverage — which is not inherently negative, but worth understanding. A fund stable at 177% with consistent earnings and low non-accruals is a different risk profile than one that recently compressed from 210%. AltHarbor will update coverage ratio data each quarter as fund filings are released.