Investment bankers who serve as the tip of the spear and a sell-side buyout have indicated they are sitting on record backlogs of new transaction opportunities. The messaging has been consistent for the past 12-months as more and more opportunities are being added to the backlog. However, sponsors appear reticent to bridge the valuation gap between 2021 purchase price multiples and today’s range based on financing costs. The deluge of opportunities is being held up by the dam that is buttressed by a resetting of the cost of capital and general economic unease. We have seen an increase in the number of early-stage opportunities within the platform, but unfortunately, conversion rates to closed deals are trending towards historic lows. Sponsors continue to execute on add-ons for companies already within their portfolios, which makes sense as add-on multiples are below the original platform purchase price, in effect enabling sponsors to reduce their cost bases and hedge against any compression and exit multiples.
Investors in Barings BDC benefit by having a seasoned portfolio that provides opportunities to deploy capital into issuers we already know well. We are not in a position to call the bottom. There is a logical reason to believe transaction volumes improve in the months to come, namely a record backlog of sell-side mandates among the investment banking community and a need for private equity managers to show distributions to their LPs. Counter to those facts is a high level of uncertainty created by two armed conflicts, persistently high inflation, a rapid increase in interest rates, and the forthcoming political cycle. When opportunities ultimately do convert into an increase in closed transactions, we will continue to use our disciplined, underwriting strategy to invest capital in the most compelling opportunities.
Turning to our current portfolio, 74% consists of secured investments, with approximately 67% of investments constituting first-lien securities. Interest coverage within the portfolio stood at 2.3 times, a modest decline from 2.5 times a quarter earlier. We are forecasting that steady-state weighted average interest coverage for the portfolio will ultimately fall between 2 times and 2.25 times, as the full impact of higher rates is reflected in issuers financials and performance. Our avoidance of various industries prone to economic volatility, oil & gas, restaurants, retail, metals among them, has proven to be a sound strategy against a backdrop of less economic predictability. One of the benefits to a predominantly sponsored-backed strategy has proven out over the past several quarters.
Combined with what we believe were reasonable going in leverage multiples, the median gross margin in the North American global private finance portfolio, similar to the BDC portfolio, stood at 49% up from 44% one year earlier and gives us confidence that our issues are successfully pushing through price increases to combat inflationary pressures in their businesses. Adjusted EBITDA margins for the same sample were — set were 21% flat from a year earlier, believed to be a reflection of the fact that wage gains have consumed some degree of gross margin expansion previously noted. While not a perfectly comparable metric period-to-period as the volume of transaction activity in the past five quarters will skew these metrics somewhat. We believe we have reason to feel comfortable with the performance of the portfolio.
The portfolio composition remains highly diversified. The top 10 issuers accounting for 21% of fair market value. Recall that the two top positions within the portfolio, Eclipse Business Capital and Rocade Holdings, are platform investments originating middle market loans. These positions have a number of underlying issuers. Assets included in the other classification include structured positions and certain acquired positions that will not be originated on a new issue basis going forward. We anticipate rolling out of these positions as market conditions allow the quarters to come. In addition to the new formatting, we are publishing a risk rating schedule for our shareholders. Risk ratings exhibit minimal movement during the quarter, as our issuers exhibiting the most stress classified as risk ratings 4% and 5% were unchanged at 6% on a combined basis quarter-over-quarter.
