The middle-market lender posted $163.9 million in net investment income as rising debt costs and portfolio restructurings weighed on overall returns.

March 17, 2026

Franklin BSP Capital Reports $4.1B Portfolio, Expands Borrowing Capacity in 2025

The middle-market lender posted $163.9 million in net investment income as rising debt costs and portfolio restructurings weighed on overall returns.

Full-Year Financial Overview

Franklin BSP Capital Corporation, a non-diversified closed-end investment company regulated as a business development company, disclosed its annual financial results for the fiscal year ending December 31, 2025, revealing a portfolio valued at approximately $4.07 billion across 149 portfolio companies.

The company, managed by Franklin BSP Capital Adviser L.L.C., an affiliate of Benefit Street Partners, reported net investment income of $163.9 million for 2025, down from $188.4 million in the prior year. The decline came despite a modest increase in total investment income, which rose to $418.5 million from $413.3 million in 2024, as higher operating expenses weighed on the bottom line.

Net asset value per share attributable to common stock stood at $13.58 as of year-end, compared to $14.10 at the end of 2024. The company had approximately 135.5 million shares of common stock outstanding along with 77,500 shares of Series A Preferred Stock.

Portfolio Activity and Composition

During the fiscal year, FBCC deployed approximately $1.09 billion in new investments while recording $965.8 million in sales, repayments, and other exits, resulting in net new investments of roughly $128.7 million. The portfolio remained heavily weighted toward senior secured first lien debt, which comprised 77.1 percent of total holdings at fair value, followed by equity and other investments at 7.2 percent, subordinated debt at 6.4 percent, and the company’s stake in the FBLC Senior Loan Fund joint venture at 5.5 percent.

The weighted average current yield across the total portfolio was 9.6 percent, down from 10.5 percent a year earlier. Variable rate instruments made up 94 percent of debt investments at fair value, positioning the portfolio to benefit from higher interest rate environments but also exposing it to potential income compression as rates decline.

Rising Costs and Realized Losses

Operating expenses climbed to $251.2 million from $223.9 million in 2024. Management fees increased to $61.1 million from $54.1 million due to a larger average asset base, while interest and debt fees surged to $140.7 million from $117.4 million, driven by higher average daily debt outstanding of $2.2 billion compared to $1.6 billion in the prior year. The weighted average annualized interest cost on borrowings decreased to 6.17 percent from 6.72 percent, partially offsetting the impact of increased leverage.

The company recorded net realized and unrealized losses totaling $59.6 million during 2025. Net realized losses of $32.9 million were largely attributed to restructurings at two portfolio companies — Coronis Health LLC and BCPE Oceandrive Buyer, Inc. — which together accounted for roughly $38.1 million in realized losses, partially offset by corresponding reversals in unrealized depreciation.

Credit Quality and Non-Accruals

FBCC’s credit quality metrics showed slight improvement, with the weighted average risk rating improving to 2.1 from 2.2 on the company’s internal five-point scale. Investments rated a 1, indicating performance exceeding expectations, grew to 9.6 percent of the portfolio from 5.4 percent. However, eight portfolio companies remained on non-accrual status at year-end, carrying a fair value of $46.5 million, or 1.1 percent of total portfolio fair value.

Significant Expansion of Borrowing Capacity

The company meaningfully expanded its borrowing infrastructure during the year. In January 2025, the JPM Revolver Facility was amended and restated, increasing commitments to $780 million and extending the maturity to January 2030. The JPM Credit Facility was also amended twice, with total commitments increasing to $1.05 billion and the applicable margin decreasing to 2.15 percent. In October 2025, the company issued $300 million in 6.00 percent notes due 2030, entering into an interest rate swap to convert the fixed rate obligation into a floating rate that better matches its predominantly variable-rate asset base.

Total debt outstanding at year-end was approximately $2.26 billion, with asset coverage at 179 percent — well above the 150 percent regulatory minimum. Available borrowing capacity across all facilities stood at $864.8 million, up substantially from $240.1 million at the end of 2024.

Distributions and Shareholder Activity

Common stockholder distributions totaled $167.7 million for the year, with $132.1 million paid in cash and $35.7 million reinvested through the distribution reinvestment plan. The company declared regular quarterly distributions of $0.29 per common share along with special distributions of $0.04 per share in the first two quarters. Preferred stockholders received $6.3 million in distributions.

Under its share repurchase program, FBCC repurchased approximately 2.5 million shares at $14.10 per share in May 2025, totaling roughly $34.9 million. The most recent tender offer was oversubscribed, indicating strong demand from shareholders seeking liquidity in the absence of a public trading market.

Looking Ahead

Franklin BSP Capital Corporation continues to operate as an emerging growth company with no established public trading market for its shares. The company has stated its intention to pursue a liquidity event for stockholders, though no specific timeline has been committed to. Backed by the broader Franklin Templeton platform, which manages approximately $1.7 trillion in assets globally, FBCC remains focused on generating current income and capital appreciation through its middle-market lending strategy.