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Fitch affirms 8 business development companies following peer review

Fitch Ratings has affirmed the long-term issuer default ratings of eight companies as part of its periodic review of business development companies, or BDCs.

The rating agency has affirmed the long-term issuer default ratings of Apollo Investment Corp., BlackRock Capital Investment Corp., FS Investment Corp., PennantPark Investment Corp., Solar Capital Ltd. and TPG Specialty Lending Inc. at BBB-. The rating agency has also affirmed the long-term issuer default ratings of Ares Capital Corp. at BBB and Corporate Capital Trust Inc. at BB+.

Fitch has maintained stable outlooks for Ares Capital, FS Investment and Solar Capital. The outlook has been maintained at positive for Corporate Capital Trust and at negative for PennantPark Investment.

Additionally, the rating agency has revised the outlooks to stable from negative for Apollo Investment and BlackRock Capital Investment and to positive from stable for TPG Specialty Lending.

Fitch has revised the outlook for ratings in the BDC sector to stable from negative, saying that it expects relative rating stability in 2018. However, the rating agency's outlook for the sector remains negative in 2018, reflecting competitive underwriting conditions driven by unattractive supply and demand dynamics in the middle market, earnings pressure, unsustainable asset quality metrics, limited access to growth capital and analysis of management alignment.