Spoke to Investor Relations- no uptick on defaults, fall in NAV is due to mark to market functions related to these loans being a bit out of favor at the moment and that effects the liquidation value of the loans in the short term, even though the loans are performing well. Plans are to start returning capital in addition to distribution in 2017 consistent with the 2020 wind-down of this fund. Fund should revert toward NAV in time.
I understand why the share value of BSL is falling, high yield has taken a hit recently, but why is the NAV falling just as quickly?? Are they experiencing accelerated defaults?? They haven't been returning capital via distributions- the distributions have been predominantly interest income. Makes little sense to me. What am I missing? Is it a mark to market issue based on presumed future defaults??