Crescent Capital's Credit Deterioration, Weak Earnings Outlook Support Cautious View, BofA Securities Says

11:24 AM EDT, 09/10/2026 (MT Newswires) -- Crescent Capital's (CCAP) credit deterioration, weak earnings outlook and limited ability to close its discount to net asset value support a more cautious view on the stock, BofA Securities said in a note Thursday. Credit concerns center on the legacy FCRD portfolio, which represents about 8% of the company's portfolio at cost but accounts for roughly 27% of nonaccruals, the investment firm said. Losses in the FCRD book have exceeded those in the company-originated investments, while overall nonaccrual levels have remained above the peer average for about two years, according to the note. Weak credit performance has pressured profitability and NAV per share, the firm said. The company's average return on equity over the past two years was about 2.7%, compared with 4.3% for peers, while NAV per share declined 12%, slightly more than the peer-group decline, according to the note. The firm lowered its 2026 and 2027 earnings per share estimates to $1.48 and $1.39 from $1.57 and $1.51, respectively, citing lower spread income and deleveraging. A more constructive view would require sustained credit improvement, NAV stabilization and lower leverage, the note said. BofA Securities downgraded Crescent Capital to neutral from buy, and cut its price target to $10.25 from $13. Shares of Crescent Capital were down 3.1% in Thursday trading. Price: 9.91, Change: -0.32, Percent Change: -3.13