BIZD Borrow Demand Jumps on Private Credit Jitters
Equilend data shows borrow demand building in business development company (BDC) focused ETF BIZD as a bond selloff fuels bearish bets across private credit.
Equilend Borrow Quantity in VanEck BDC Income ETF (BIZD), has climbed about 280%, from 1.94 million shares on September 4th to 7.38 million on October 12th. At the same time, Equilend Cost to Borrow has risen 58% to more than 420 bps, peaking near 590 bps on October 5th, while Equilend Utilization has reached nearly 99%. Borrow Quantity had already reached 5.76 million shares by September 11th, ahead of FINRA short interest for September 15th, which jumped 135% to 5.90 million shares when published on September 24th.
A prolonged bond selloff is raising doubts about the private credit market, with Bloomberg reporting that bearish bets are nearing March’s peak. Investors are struggling to exit non-traded funds, with Q3 redemption requests averaging about 13% against 5% caps, leaving listed BDCs as the liquid alternative. Equilend data showed borrow demand building for weeks in BIZD, whose holdings include BDCs such as Ares Capital and Blue Owl, with Borrow Quantity already up about 250% by September 30th. This preceded the ETF’s price falling by around 6%, including a 3% drop on October 1st, with Equilend data indicating that short sellers were using BIZD to position against private credit lenders as a group before the price reacted.
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