MRCC - Monroe Capital: The Risks Are Still Too Excessive To Go Long
2024-06-06 13:10:11 ET
Summary
- Monroe Capital (MRCC) has outperformed the BDC market despite my previous concerns about its risk profile.
- Yet, Q1 2024 earnings show a decrease in underlying NAV and a decline in adjusted net investment income, raising questions about dividend sustainability.
- The leverage has increased, making it the fourth most leveraged BDC, and a significant portion of the borrowings are based on cheap fixed rate financing which will inevitably increase the borrowing costs.
- The overall fundamentals of MRCC have worsened. My recommendation is to still avoid going long on MRCC.
In December last year, I wrote an article on Monroe Capital ( MRCC ) outlining three specific reasons why investors should, in my opinion, avoid investing in this BDC....
Monroe Capital: The Risks Are Still Too Excessive To Go Long