Crescent Capital BDC is a Los Angeles-based business development company externally managed by Crescent Cap Advisors that invests in first-lien, unitranche, and second-lien debt securities of middle-market companies in the U.S. upper middle-market segment, and the company is in the middle of a fiscal second quarter that demonstrates the kind of NAV-discount and dividend-coverage pivot the BDC cohort has been waiting for. Q2 2026 net investment income of $0.36 per share was below the $0.34 per share regular dividend, Q2 2026 net loss of $0.09 per share reflected $17.7 million of net realized losses and a small $1.3 million of net unrealized gains, and the Q2 2026 net asset value per share of $17.82 was 2.5 percent below the Q1 2026 NAV per share of $18.27. The combination of the 192 portfolio companies, the $1,570.7 million of investments at fair value, the 9.6 percent weighted average yield on income producing securities, the 98.4 percent floating rate exposure, the 11.4 percent NAV discount to the $17.82 NAV per share, and the $0.34 per share Q3 2026 base dividend plus the $0.03 per share special dividend is the cleanest single-sentence read on what the BDC business model is producing, and the combination is the source of the operating profile the equity offers the buy-side.
The numbers tell the story with the kind of operational detail the BDC equity has been waiting for. The Q2 2026 total investment income of $36.3 million was 4.2 percent below the Q1 2026 level of $37.9 million and 15.6 percent below the prior-year quarter's $43.0 million. The Q2 2026 net investment income of $13.1 million was 15.5 percent below the Q1 2026 level of $15.5 million and 22.5 percent below the prior-year quarter's $16.9 million. The Q2 2026 net investment income per share of $0.36 was 14.3 percent below the Q1 2026 level of $0.42 and 21.7 percent below the prior-year quarter's $0.46.
The Q2 2026 net realized losses of $17.7 million were 52.6 percent above the Q1 2026 level of $11.6 million and a clean increase from the prior-year quarter's $2.9 million, with the realized losses reflecting the credit dynamics in the middle-market segment. The Q2 2026 net change in unrealized gains of $1.3 million was a clean improvement from the Q1 2026 net change in unrealized losses of $19.4 million. The Q2 2026 net decrease in net assets resulting from operations of $3.3 million was a clean improvement from the Q1 2026 net decrease of $15.5 million and the prior-year quarter's net increase of $15.0 million.
The Q2 2026 portfolio composition included $373.9 million (23.8 percent) of senior secured first lien, $1,039.2 million (66.2 percent) of unitranche first lien, $18.6 million (1.2 percent) of unitranche first lien last out, $14.7 million (0.9 percent) of senior secured second lien, $25.2 million (1.6 percent) of unsecured debt, $69.2 million (4.4 percent) of equity & other, and $29.9 million (1.9 percent) of LLC/LP equity interests, for a total of $1,570.7 million at fair value.
The Q2 2026 investment activity included $57.0 million invested across 3 new portfolio companies and several follow-on revolver and delayed draw fundings, and $36.1 million in aggregate exits, sales, and repayments. The investment activity is the cleanest single read on the portfolio-management execution the company is producing.
The Q3 2026 regular cash dividend of $0.34 per share, payable October 15, 2026, to stockholders of record as of September 30, 2026, and the second of three previously announced $0.03 per share special dividends to be paid on September 15, 2026 to stockholders of record as of August 31, 2026, are the cleanest single read on the dividend profile the equity offers the buy-side. The total Q3 2026 dividend of $0.37 per share is the cleanest single read on the dividend yield the equity offers the buy-side.
The question the next four quarters resolve is whether the company can stabilize the NAV per share at the $17.82 level, and whether the dividend coverage can return to the dividend level. A Q3 2026 print that shows the NAV per share stabilizing and the NII recovering would confirm the operating profile is sustainable. A Q3 2026 print that shows NAV per share declining or NII continuing to decline would force the market to reprice the equity for a more modest terminal value.