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Two popular BDCs offer sky-high yields and deep discounts to NAV after the recent sector-wide sell-off. One is a very attractive "Buy," while I am avoiding the other one. I detail how to sort the wheat from the chaff when analyzing deep value BDC opportunities like GBDC and FSK.

I see compelling value in floating-rate preferred shares and baby bonds, especially as credit spreads widen and many now trade at discounts to call value. Recent market volatility and higher interest rates have created attractive entry points in select REITs, BDCs, preferred shares, and baby bonds. I've allocated a significant portion of my portfolio to preferred shares and baby bonds in March 2026.

I see recent credit risk repricing as excessively aggressive and overblown, creating potential opportunity. Market reactions often swing violently when sentiment shifts, lacking balanced or rational repricing. Current drawdowns are being fueled by any available argument, logical or not, amplifying volatility.

Part 2 of this article compares Blackstone Secured Lending Fund's recent dividend per share rates, yield percentages, and several other highly detailed (and useful) dividend sustainability metrics to 11 other BDC peers. BXSL remains cautious regarding 2026 dividend sustainability (along with most peers). Two covered peers already reduced dividends during Q1 2026. A couple more will likely announce cuts during Q2-Q4 2026. A BXSL dividend cut during calendar Q2 2026 is not a foregone conclusion, but the probability of a reduction during 2026 remains likely (analyzing the forward yield curve).

Blackstone Secured Lending Fund and VICI Properties present high-yield, discounted opportunities amid market fear, with strong downside protection and dividend coverage. BXSL offers a 13% yield, 12% discount to NAV, 97.6% first-lien debt, and resilient software sector exposure, with disciplined underwriting and low non-accruals. VICI offers a 6.7% yield, 65% payout ratio, long-term triple-net leases, and inflation protection.

Many BDCs already have cut their dividends by an average of 20%. Some of those that are still holding their dividend untouched could likely preserve such levels going forward. However, there are several high-quality names out there, which I doubt would be able to sustain the current dividends going forward.

Discover the essential 'two qualifiers' that determine if a high-yield strategy is the right fit for your retirement goals. Learn the four-pillar framework for identifying sustainable dividends and avoiding common yield traps that lead to capital loss. Explore a diversified selection of high-income opportunities across numerous sectors of individual stocks, ETFs, and CEFs to bolster your monthly cash flow.