Looking through the PDS more, I found that the first lien...

Looking through the PDS more, I found that the first lien portion of the portfolio is geared and they pay interest equal to LIBOR + 1.75%. The PGG trust itself is not geared. The borrowings are managed internally, therefore, it's not coming up on the financial reports. The first lien portion of the portfolio aims to create loans based on LIBOR + 3.0 to 5.0% - so about 4.0% above LIBOR.

As we all know, leverage is a double-edged sword. During recessions, the first lien portion of the portfolio will almost certainly be exposed to losses of capital, losses that will be magnified due to the leverage. Based on my calculations, KKC generates loans based on LIBOR + 6.35% (on average), so riskier, but not leveraged like PGG.

Given the non-trivial leverage associated with PGG, I'm not sure it's easy to say whether holding PGG is any less risky than KKC, even though there is a difference in first lien loan percentages.