Were there any significant changes in credit quality or default rates within the portfolio?

The Q2‑2025 release from Chicago Atlantic BDC does not highlight any material shift in the credit quality of its loan portfolio or an uptick in default rates. In the brief filing the company only disclosed its earnings, net asset value and capital‑raising activities; there is no mention of a rise in non‑performing assets, a change in the weighted‑average rating, or a rise in charge‑offs. When a BDC’s management does see a material deterioration in credit quality, it is typically flagged in the MD&A and accompanied by revised guidance or an increase in the allowance for loan losses. The absence of such commentary suggests that the portfolio’s credit metrics remain broadly in line with prior quarters, and the firm has not experienced a material spike in defaults that would merit a disclosure.

Trading implication: With no reported deterioration in credit quality, the stock’s valuation still hinges primarily on the company’s earnings momentum and its BDC‑specific yield profile. Investors should watch for any upcoming detailed quarterly filings (10‑Q) where credit‑quality metrics are disclosed, but for now the risk‑adjusted outlook remains unchanged. In the short term, the stock’s price action is likely driven more by broader market sentiment toward high‑yield BDCs and the recent 10‑point “sentiment” rating than by any hidden credit‑risk concerns. If you are already long, maintain the position but keep an eye on the upcoming 10‑Q for concrete default‑rate data. If you’re considering entry, the current price may still be attractive given the stable credit profile, but be mindful of broader BDC valuation compressions and rising interest‑rate expectations that could affect financing costs.