BlackRock’s private credit middle‑market lending fund has lost its investment grade status following a series of portfolio write‑downs.
Kroll Bond Rating Agency (KBRA) has lowered the credit rating for BlackRock TCP Capital Corp from BBB‑ to BB+, revising the outlook from stable to negative. The ratings agency defines investment grade rated securities from BBB- and higher, which makes the fund’s downgrade significant as it is now considered speculative.
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KBRA said the downgrade reflects a significant 19 per cent decline in net asset value (NAV) in the fourth quarter of 2025. The ratings agency added that the negative outlook reflects expectations that credit risks will remain elevated, amid continued asset quality pressure, with potential for further valuation adjustments and sustained leverage above target levels in a volatile operating environment.
The NAV decline was revealed in a recent Securities and Exchange Commission (SEC) filing detailing the fund’s preliminary fourth quarter results. BlackRock reported that NAV per share had fallen from $8.71 (£6.33) at 30 September 2025 to approximately $7.05–$7.09.
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The drop was attributed to problems at several portfolio companies, including educational software firm Edmentum, Amazon aggregators Razor and SellerX, residential contractor HomeRenew, infrastructure services provider Hylan, and mobile advertising firm InMobi.
Following the filing, shares in BlackRock TCP Capital slumped 15 per cent at the start of the week. The fund’s share price is currently down 11.2 per cent over the past five days.
Despite these challenges, KBRA noted that the fund maintains adequate liquidity, supported by secured credit facilities.
