MRCC Update: PIK Income Is A Red Flag

Summary

• During Q4 2020, there was a meaningful increase in the amount of PIK income from 12.8% to 33.4% of interest income.

• This is typically a sign that portfolio companies are not able to pay interest expense in cash and could imply potential credit issues over the coming quarters.

• Q4 2020 earnings would have been around $0.196 per share without the bene…