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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): February 10, 2025

Prospect Capital Corporation
(Exact name of registrant as specified in its charter)

Maryland814-0065943-2048643
(State or other jurisdiction(Commission File Number)(IRS Employer
of incorporation)Identification No.)

10 East 40th Street, 42nd Floor, New York, New York 10016
(Address of principal executive offices, including zip code)

(212) 448-0702

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbolName of each exchange on which registered
Common Stock, $0.001 par valuePSECNASDAQ Global Select Market
5.35% Series A Fixed Rate Cumulative Perpetual Preferred Stock, par value $0.001PSEC PRANew York Stock Exchange


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o





Item 2.02.   Results of Operations and Financial Condition.

On February 10, 2025, the registrant issued a press release announcing its financial results for its fiscal quarter ended December 31, 2024. The text of the press release is included as Exhibit 99.1 to this Form 8-K.

The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

Item 7.01. Regulation FD Disclosure.

On February 10, 2025, the registrant issued a press release, included herewith as Exhibit 99.1, and by this reference incorporated herein, announcing the declaration of monthly cash distributions to common shareholders in the following amounts and with the following record and payment dates:
Monthly Cash Common Shareholder DistributionRecord DatePayment DateAmount ($ per share)
February 20252/26/20253/20/2025$0.0450
March 20253/27/20254/17/2025$0.0450
April 20254/28/20255/20/2025$0.0450

On February 10, 2025, the registrant is hereby announcing the declaration of monthly dividends for the registrant’s Floating Rate Preferred Stock for holders of record on the following dates based on an annualized rate equal to 6.50% of the stated value of $25.00 per share as set forth in the Articles Supplementary for the Preferred Stock, from the date of issuance or, if later from the most recent dividend payment date (the first business day of the month, with no additional dividend accruing in June as a result), authorized on February 6, 2025, as follows:
Monthly Cash Floating Rate Preferred Shareholder DistributionRecord DatePayment DateMonthly Amount ($ per share), before pro ration for partial periods
March 20253/19/20254/1/2025$0.135417
April 20254/18/20255/1/2025$0.135417
May 20255/21/20256/2/2025$0.135417
On February 10, 2025, the registrant is hereby announcing the declaration of monthly dividends for the registrant’s 7.50% Preferred Stock for holders of record on the following dates based on an annual rate equal to 7.50% of the Stated Value of $25.00 per share as set forth in the Articles Supplementary for the Preferred Stock, from the date of issuance or, if later from the most recent dividend payment date (the first business day of the month, with no additional dividend accruing in June as a result), as follows:
Monthly Cash 7.50% Preferred Shareholder DistributionRecord DatePayment DateMonthly Amount ($ per share), before pro ration for partial periods
March 20253/19/20254/1/2025$0.156250
April 20254/18/20255/1/2025$0.156250
May 20255/21/20256/2/2025$0.156250

3
 
 


On February 10, 2025, the registrant is hereby announcing the declaration of monthly dividends for the registrant’s 5.50% Preferred Stock for holders of record on the following dates based on an annual rate equal to 5.50% of the Stated Value of $25.00 per share as set forth in the Articles Supplementary for the Preferred Stock, from the date of issuance or, if later from the most recent dividend payment date (the first business day of the month, with no additional dividend accruing in June as a result), as follows:
Monthly Cash 5.50% Preferred Shareholder DistributionRecord DatePayment DateMonthly Amount ($ per share), before pro ration for partial periods
March 20253/19/20254/1/2025$0.114583
April 20254/18/20255/1/2025$0.114583
May 20255/21/20256/2/2025$0.114583
On February 10, 2025, the registrant is hereby announcing the declaration of monthly dividends for the registrant’s 6.50% Preferred Stock for holders of record on the following dates based on an annual rate equal to 6.50% of the Stated Value of $25.00 per share as set forth in the Articles Supplementary for the Preferred Stock, from the date of issuance or, if later from the most recent dividend payment date (the first business day of the month, with no additional dividend accruing in June as a result), as follows:
Monthly Cash 6.50% Preferred Shareholder DistributionRecord DatePayment DateMonthly Amount ($ per share), before pro ration for partial periods
March 20253/19/20254/1/2025$0.135417
April 20254/18/20255/1/2025$0.135417
May 20255/21/20256/2/2025$0.135417
On February 10, 2025, the registrant is hereby announcing the declaration of quarterly dividends for the registrant’s 5.35% Preferred Stock for holders of record on the following dates based on an annual rate equal to 5.35% of the Stated Value of $25.00 per share as set forth in the Articles Supplementary for the 5.35% Preferred Stock, from the date of issuance or, if later from the most recent dividend payment date, as follows:
Quarterly Cash 5.35% Preferred Shareholder DistributionRecord DatePayment DateAmount ($ per share)
February 2025 - April 20254/18/20255/1/2025$0.334375



4
 
 


Item 9.01. Financial Statements and Exhibits
(d) Exhibits

99.1    Press Release, dated February 10, 2025


5
 
 



SIGNATURE

    Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.

Prospect Capital Corporation


By:     /s/ M. Grier Eliasek
Name:    M. Grier Eliasek
Title:     Chief Operating Officer
Date: February 10, 2025

6
 
 


Index to Exhibits


7
 
 

Exhibit 99.1
    
Prospect Capital Announces Financial Results for Fiscal December 2024 Quarter

NEW YORK, February 10, 2025 (GLOBE NEWSWIRE) – Prospect Capital Corporation (NASDAQ: PSEC) (“Prospect”, “our”, or “we”) today announced financial results for our fiscal quarter ended December 31, 2024.

FINANCIAL RESULTS


All amounts in $000’s except
per share amounts (on weighted average
   basis for period numbers)
Quarter EndedQuarter EndedQuarter Ended
December 31, 2024September 30, 2024December 31, 2023
Net Investment Income (“NII”)$86,431$89,877$96,927
NII per Common Share$0.20$0.21$0.24
Interest as % of Total Investment Income91.0%94.0%92.3%
Net Income (Loss) Applicable to Common Shareholders$(30,993)$(165,069)$(51,436)
Net Income (Loss) per Common Share$(0.07)$(0.38)$(0.13)
Distributions to Common Shareholders$65,554$77,358$74,056
Distributions per Common Share$0.15$0.18$0.18
Cumulative Paid and Declared Distributions to Common Shareholders(1)
$4,445,060$4,384,924$4,162,509
Cumulative Paid and Declared Distributions per Common Share(1)
$21.39$21.25$20.76
Multiple of Net Asset Value (“NAV”) per Common Share(1)
2.7x2.6x2.3x
Total Assets$7,234,855$7,592,705$7,781,214
Total Liabilities
$2,164,305$2,469,590$2,596,824
Preferred Stock$1,630,514$1,612,302$1,500,741
Net Asset Value (“NAV”) to Common Shareholders$3,440,036$3,510,813$3,683,649
NAV per Common Share$7.84$8.10$8.92
Balance Sheet Cash + Undrawn Revolving Credit Facility Commitments$1,879,738$1,631,291$1,187,740
Net of Cash Debt to Total Assets
28.1%29.7%31.2%
Net of Cash Debt to Equity Ratio(2)
39.8%43.7%46.2%
Net of Cash Asset Coverage of Debt Ratio(2)
351%329%316%
Unsecured Debt + Preferred Equity as % of Total Debt + Preferred Equity91.9%86.0%78.4%
Unsecured and Non-Recourse Debt as % of Total Debt100.0%100.0%100.0%

(1)Declared dividends are through the April 2025 distribution. February through April 2025 distributions are estimated based on shares outstanding as of 2/7/2025.
(2)Including our preferred stock as equity.


CASH COMMON SHAREHOLDER DISTRIBUTION DECLARATION

Prospect is declaring distributions to common shareholders as follows:

Monthly Cash Common Shareholder DistributionRecord DatePayment DateAmount ($ per share)
February 20252/26/20253/20/2025$0.0450
March 20253/27/20254/17/2025$0.0450
April 20254/28/20255/20/2025$0.0450

Prospect expects to declare May 2025, June 2025, July 2025, and August 2025 distributions to common shareholders in May 2025.

Taking into account past distributions and our current share count for declared distributions, since inception through our April 2025 declared distribution, Prospect will have distributed $21.39 per share to original common shareholders, representing 2.7 times December 2024 common NAV per share, aggregating $4.4 billion in cumulative distributions to all common shareholders.

Since Prospect’s initial public offering in July 2004 through December 31, 2024, Prospect has invested over $21 billion across over 400 investments, exiting over 300 of these investments.

Drivers focused on optimizing our business include: (1) rotation of assets into and increased focus on our core business of first lien senior secured middle market loans, including sometimes with selected equity investments, (2) continued amortization of our subordinated structured notes portfolio, (3) prudent exits of equity linked assets (including real estate properties and corporate investments), (4) enhancement of portfolio company operating performance, and (5) greater utilization of our cost efficient revolving floating rate credit facility.

In our middle market lending strategy, we recently provided a first lien senior secured term loan, a first lien senior secured convertible term loan, and a preferred equity investment to Taos Footwear Holdings, LLC ("Taos Footwear"), aggregating $65 million, in collaboration with Taos Footwear's founder and leadership team. Taos Footwear is a leading, innovative footwear brand providing customers with stylish and supportive footwear products. Taos Footwear is renowned for its supportive footbed that has reshaped the lifestyle footwear industry over the past 20 years.

Examples of similar recent investments in our middle market lending strategy with both first lien senior secured debt and equity linked investments include Druid City Infusion, LLC (an infusion therapy services company with multiple locations across the South and Mountain West regions of the United States), Discovery Point Retreat, LLC (a rapidly growing detox and rehabilitation provider in North Texas), The RK Logistics Group, Inc. (a logistics service provider of turnkey inventory management and transportation services focused on technology and other sectors), and iQor Holdings, Inc. (a provider of customer experience services and business process outsourcing services).

Our subordinated structured notes portfolio as of December 31, 2024 represented 5.8% of our investment portfolio, a reduction of 210 basis points from 7.9% as of December 31, 2023. Since the inception of this strategy in 2011 and through December 31, 2024, we have exited 15 subordinated structured note investments that have earned an unlevered investment level gross cash internal rate of return (“IRR”) of 12.1% and cash on cash multiple of 1.3 times. The remaining subordinated structured notes portfolio had a trailing twelve month average cash yield of 24.4% and an annualized GAAP yield of 3.9% (in each case as of December 31, 2024, based on fair value, and excluding investments being redeemed), with the difference between cash yield and GAAP yield representing amortization of our cost basis.

In our real estate property portfolio at National Property REIT Corp. (“NPRC”), since the inception of this strategy in 2012 and through December 31, 2024, we have exited 51 property investments (including two exits in the December 2024 quarter) that have earned an unlevered investment-level gross cash IRR of 24.3% and cash on cash multiple of 2.5 times. The remaining real estate property portfolio included 59 properties and paid us an income yield of 6.9% for the quarter ended December 31, 2024. Our aggregate investments in the related portfolio company had a $522 million unrealized gain as of December 31, 2024.

Our senior management team and employees own 28.7% of all common shares outstanding (an increase of 240 basis points since June 30, 2024) or approximately $1.0 billion of our common equity as measured at NAV.



PORTFOLIO UPDATE AND INVESTMENT ACTIVITY

All amounts in $000’s except
   per unit amounts		As ofAs ofAs of
December 31, 2024September 30, 2024December 31, 2023
Total Investments (at fair value)$7,132,928$7,476,641$7,631,846
Number of Portfolio Companies114117126
Number of Industries333336
First Lien Debt64.9%64.9%58.7%
Second Lien Debt10.2%11.1%15.5%
Subordinated Structured Notes5.8%6.2%7.9%
Unsecured Debt0.1%0.1%0.1%
Equity Investments19.0%17.7%17.8%
Mix of Investments with Underlying Collateral Security80.9%82.2%82.1%
Annualized Current Yield – All Investments9.1%9.7%10.1%
Annualized Current Yield – Performing Interest Bearing Investments11.2%11.8%12.3%
Non-Accrual Loans as % of Total Assets (1)
0.4%0.5%0.2%
Middle-Market Loan Portfolio Company Weighted Average EBITDA(2)
$101,644$104,682$109,719
Middle-Market Loan Portfolio Company Weighted Average Net Leverage Ratio(2)
6.1x5.7x5.4x

(1)Calculated at fair value.
(2)For additional disclosure see “Middle-Market Loan Portfolio Company Weighted Average EBITDA and Net Leverage” at the end of the release.


During the March 2025 (to date), December 2024, and September 2024 quarters, investment originations (including follow on investments in existing portfolio companies) and repayments were as follows:

All amounts in $000’sQuarter EndedQuarter EndedQuarter Ended
March 31, 2025
(to date)		December 31, 2024September 30, 2024
Total Originations
$110,724$134,956$290,639
Middle-Market Lending86.4%67.7%85.8%
Middle-Market Lending / Buyouts—%14.5%6.1%
Real Estate13.6%17.8%7.8%
Subordinated Structured Notes—%—%—%
Total Repayments and Sales$19,480$383,363$282,328
Originations, Net of Repayments and Sales$91,244$(248,407)$8,311


For additional disclosure see “Primary Origination Strategies” at the end of this release.



CAPITAL AND LIQUIDITY

Our multi-year, long-term laddered and diversified historical funding profile has included a $2.1 billion revolving credit facility (aggregate commitments with 48 current lenders), program notes, institutional bonds, convertible bonds, listed preferred stock, and program preferred stock. We have retired multiple upcoming maturities and, after we retire our upcoming $156.2M convertible bond maturity due March 2025 (utilizing existing liquidity on hand), will have just $3.9M remaining of debt maturing during calendar year 2025.
On June 28, 2024, we completed an extension and upsizing of our Revolving Credit Facility (the "Revolving Credit Facility"), which extended the term of the Facility five years and the revolving period to four years from such date. The Facility includes a revolving period that extends through June 28, 2028, followed by an additional one-year amortization period. The interest rate for amounts drawn under the Facility remained unchanged from prior to the extension and upsizing and is one-month SOFR plus 2.05%.

Our total unfunded eligible commitments to portfolio companies totals approximately $62 million, of which $29 million are considered at our sole discretion, representing 0.9% and 0.4% of our total assets as of December 31, 2024, respectively.
As ofAs of
All amounts in $000’sDecember 31, 2024September 30, 2024
Net of Cash Debt to Total Assets Ratio
28.1%29.7%
Net of Cash Debt to Equity Ratio(1)
39.8%43.7%
% of Interest-Bearing Assets at Floating Rates79.8%81.0%
Unsecured Debt + Preferred Equity as % of Total Debt + Preferred Equity91.9%86.0%
Balance Sheet Cash + Undrawn Revolving Credit Facility Commitments$1,879,738$1,631,291
Unencumbered Assets$4,763,601$4,852,971
% of Total Assets65.8%63.9%

(1)Including our preferred stock as equity.


The below table summarizes our December 2024 quarter term debt issuance and repurchase/repayment activity:
All amounts in $000’sPrincipalCouponMaturity
Debt Issuances
Prospect Capital InterNotes®$41,7596.625% - 7.75%January 2027 – December 2034
Total Debt Issuances$41,759
Debt Repurchases/Repayments
Prospect Capital InterNotes®$1,1872.25% - 6.63%May 2026 – December 2051
2026 Notes$11,4433.706%January 2026
Total Debt Repurchases/Repayments$12,630
Net Debt Repurchases/Repayments$29,129

We currently have four separate unsecured debt issuances aggregating approximately $1.1 billion outstanding, not including our program notes, with laddered maturities extending through October 2028. At December 31, 2024, $644 million of program notes were outstanding with laddered maturities through March 2052.
At December 31, 2024 our weighted average cost of unsecured debt financing was 4.49%, an increase of 0.07% from September 30, 2024, and an increase of 0.34% from December 31, 2023.

We have raised significant capital from our existing $2.25 billion perpetual preferred stock offering programs. The preferred stock provides Prospect with a diversified source of programmatic capital without creating scheduled maturity risk due to the perpetual term of multiple preferred tranches.





















DIVIDEND REINVESTMENT PLAN

We have adopted a dividend reinvestment plan (also known as our “DRIP”) that provides for reinvestment of our distributions on behalf of our shareholders, unless a shareholder elects to receive cash. On April 17, 2020, our board of directors approved amendments to the Company’s DRIP, effective May 21, 2020. These amendments principally provide for the number of newly-issued shares pursuant to the DRIP to be determined by dividing (i) the total dollar amount of the distribution payable by (ii) 95% of the closing market price per share of our stock on the valuation date of the distribution (providing a 5% discount to the market price of our common stock), a benefit to shareholders who participate.HOW TO PARTICIPATE IN OUR DIVIDEND REINVESTMENT PLAN
Shares held with a broker or financial institution
Many shareholders have been automatically “opted out” of our DRIP by their brokers. Even if you have elected to automatically reinvest your PSEC stock with your broker, your broker may have “opted out” of our DRIP (which utilizes DTC’s dividend reinvestment service), and you may therefore not be receiving the 5% pricing discount. Shareholders interested in participating in our DRIP to receive the 5% discount should contact their brokers to make sure each such DRIP participation election has been made through DTC. In making such DRIP election, each shareholder should specify to one’s broker the desire to participate in the "Prospect Capital Corporation DRIP through DTC" that issues shares based on 95% of the market price (a 5% discount to the market price) and not the broker's own "synthetic DRIP” plan (if any) that offers no such discount. Each shareholder should not assume one’s broker will automatically place such shareholder in our DRIP through DTC. Each shareholder will need to make this election proactively with one’s broker or risk not receiving the 5% discount. Each shareholder may also consult with a representative of such shareholder’s broker to request that the number of shares the shareholder wishes to enroll in our DRIP be re-registered by the broker in the shareholder’s own name as record owner in order to participate directly in our DRIP.
Shares registered directly with our transfer agent
If a shareholder holds shares registered in the shareholder’s own name with our transfer agent (less than 0.1% of our shareholders hold shares this way) and wants to make a change to how the shareholder receives dividends, please contact our plan administrator, Equiniti Trust Company, LLC by calling (888) 888-0313 or by mailing Equiniti Trust Company LLC, PO Box 10027, Newark, New Jersey 07101.
EARNINGS CONFERENCE CALL
Prospect will host an earnings call on Tuesday, February 11, 2025 at 9:00 a.m. Eastern Time. Dial 888-338-7333. For a replay after February 11, 2025 visit www.prospectstreet.com or call 877-344-7529 with passcode 2146236.



PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except share and per share data)

December 31, 2024June 30, 2024
(Unaudited)(Audited)
Assets 
Investments at fair value:  
Control investments (amortized cost of $3,323,998 and $3,280,415, respectively)
$3,772,329 $3,872,575 
Affiliate investments (amortized cost of $11,735 and $11,594, respectively)
20,212 18,069 
Non-control/non-affiliate investments (amortized cost of $3,689,972 and $4,155,165, respectively)
3,340,387 3,827,599 
Total investments at fair value (amortized cost of $7,025,705 and $7,447,174, respectively)
7,132,928 7,718,243 
Cash and cash equivalents (restricted cash of $1,508 and $3,974, respectively)
59,760 85,872 
Receivables for:
Interest, net18,428 26,936 
Other1,914 1,091 
Deferred financing costs on Revolving Credit Facility21,180 22,975 
Prepaid expenses641 1,162 
Due from broker— 734 
Due from Affiliate4 79 
Total Assets 
7,234,855 7,857,092 
Liabilities 
  
Revolving Credit Facility301,522 794,796 
Public Notes (less unamortized discount and debt issuance costs of $10,075 and $12,433, respectively)
966,197 987,567 
Prospect Capital InterNotes® (less unamortized debt issuance costs of $9,299 and $7,999, respectively) 
634,535 496,029 
Convertible Notes (less unamortized debt issuance costs of $166 and $649, respectively)
156,002 155,519 
Due to Prospect Capital Management50,700 58,624 
Interest payable23,214 21,294 
Dividends payable20,076 25,804 
Due to Prospect Administration5,070 5,433 
Accrued expenses4,028 3,591 
Due to broker2,762 10,272 
Other liabilities199 242 
Total Liabilities 
2,164,305 2,559,171 
Commitments and Contingencies
Preferred Stock, par value $0.001 per share (847,900,000 and 647,900,000 shares of preferred stock authorized, with 80,000,000 and 80,000,000 as Series A1, 80,000,000 and 80,000,000 as Series M1, 80,000,000 and 80,000,000 as Series M2, 20,000,000 and 20,000,000 as Series AA1, 20,000,000 and 20,000,000 as Series MM1, 1,000,000 and 1,000,000 as Series A2, 6,900,000 and 6,900,000 as Series A, 80,000,000 and 80,000,000 as Series A3, 80,000,000 and 80,000,000 as Series M3, 90,000,000 and 80,000,000 as Series A4, 90,000,000 and 80,000,000 as Series M4, 20,000,000 and 20,000,000 as Series AA2, 20,000,000 and 20,000,000 as Series MM2, 90,000,000 and 0 as Series A5, and 90,000,000 and 0 as Series M5, each as of December 31, 2024 and June 30, 2024; 27,968,443 and 28,932,457 Series A1 shares issued and outstanding, 1,309,907 and 1,788,851 Series M1 shares issued and outstanding, 0 and 0 Series M2 shares issued and outstanding, 0 and 0 Series AA1 shares issued and outstanding, 0 and 0 Series MM1 shares issued and outstanding, 163,000 and 164,000 Series A2 shares issued and outstanding, 5,251,157 and 5,251,157 Series A shares issued and outstanding, 24,476,826 and 24,810,648 Series A3 shares issued and outstanding, 2,732,317 and 3,351,101 Series M3 shares issued and outstanding, 2,192,884 and 1,401,747 Series M4 shares issued and outstanding, 7,012,458 and 3,766,166 Series A4 issued and outstanding, 0 and 0 Series AA2 shares issued and outstanding, 0 and 0 Series MM2 shares issued and outstanding, 0 and 0 Series A5 issued and outstanding, and 0 and 0 Series M5 issued and outstanding as of December 31, 2024 and June 30, 2024, respectively) at carrying value plus cumulative accrued and unpaid dividends
1,630,514 1,586,188 
Net Assets Applicable to Common Shares$3,440,036 $3,711,733 
Components of Net Assets Applicable to Common Shares and Net Assets, respectively  
Common stock, par value $0.001 per share (1,152,100,000 and 1,352,100,000 common shares authorized; 438,851,578 and 424,846,963 issued and outstanding, respectively)
439 425 
Paid-in capital in excess of par4,267,636 4,208,607 
Total distributable (loss)(828,039)(497,299)
Net Assets Applicable to Common Shares$3,440,036 $3,711,733 
Net Asset Value Per Common Share$7.84 $8.74 



PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(Unaudited)

Three Months Ended December 31,Six Months Ended December 31,
 2024202320242023
Investment Income
Interest income (excluding payment-in-kind (“PIK”) interest income):
Control investments$57,386 $41,690 $109,768 $90,816 
Non-control/non-affiliate investments87,159 105,749 182,069 212,105 
Structured credit securities4,054 8,882 8,233 25,569 
Total interest income (excluding PIK interest income)148,599 156,321 300,070 328,490 
PIK interest income:
Control investments13,884 26,834 33,594 50,951 
Non-control/non-affiliate investments6,315 11,476 19,749 17,637 
Total PIK Interest Income20,199 38,310 53,343 68,588 
Total interest income168,798 194,631 353,413 397,078 
Dividend income:
Control investments4,387 — 4,387 227 
Affiliate investments— — 141 1,307 
Non-control/non-affiliate investments2,574 1,340 4,843 2,865 
Total dividend income6,961 1,340 9,371 4,399 
Other income:
Control investments8,416 11,616 15,383 41,361 
Non-control/non-affiliate investments1,291 3,355 3,607 4,349 
Total other income9,707 14,971 18,990 45,710 
Total Investment Income185,466 210,942 381,774 447,187 
Operating Expenses
Base management fee37,069 39,087 75,675 78,376 
Income incentive fee13,632 18,325 29,312 43,942 
Interest and credit facility expenses37,979 40,044 77,739 80,637 
Allocation of overhead from Prospect Administration5,708 12,252 11,416 14,365 
Audit, compliance and tax related fees80 479 1,800 1,496 
Directors’ fees150 131 300 266 
Other general and administrative expenses4,417 3,697 9,224 5,566 
Total Operating Expenses99,035 114,015 205,466 224,648 
Net Investment Income86,431 96,927 176,308 222,539 
Net Realized and Net Change in Unrealized Gains (Losses) from Investments
Net realized gains (losses)
Control investments3 — 6,370 (147)
Non-control/non-affiliate investments(46,656)123 (153,393)(207,219)
Net realized gains (losses)(46,653)123 (147,023)(207,366)
Net change in unrealized gains (losses)
Control investments30,419 (99,441)(143,829)(117,235)
Affiliate investments(1,446)1,751 2,002 2,588 
Non-control/non-affiliate investments(69,053)(27,051)(22,020)188,535 
Net change in unrealized gains (losses)(40,080)(124,741)(163,847)73,888 
Net Realized and Net Change in Unrealized Gains (Losses) from Investments(86,733)(124,618)(310,870)(133,478)
Net realized gains (losses) on extinguishment of debt236 (53)484 (144)
Net Increase (Decrease) in Net Assets Resulting from Operations(66)(27,744)(134,078)88,917 
Preferred Stock dividends(26,228)(24,070)(53,385)(47,221)
Net gain (loss) on redemptions of Preferred Stock(906)378 1,398 879 
Gain (loss) on Accretion to Redemption Value of Preferred Stock(3,793)— (9,997)— 
Net Increase (Decrease) in Net Assets Resulting from Operations applicable to Common Stockholders$(30,993)$(51,436)$(196,062)$42,575 


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
ROLLFORWARD OF NET ASSET VALUE PER COMMON SHARE
(in actual dollars)

Three Months Ended December 31,Six Months Ended December 31,
2024202320242023
Per Share Data
Net asset value per common share at beginning of period$8.10 $9.25 $8.74 $9.24 
Net investment income(1)
0.200.240.410.54
Net realized and change in unrealized gains (losses)(1)
(0.21)(0.30)(0.74)(0.33)
Net increase (decrease) from operations
(0.01)(0.06)(0.33)0.21 
Distributions of net investment income to preferred stockholders(0.06)
(4)
(0.07)
(3)
(0.12)
(4)
(0.12)
(3)
Distributions of capital gains to preferred stockholders— 
(4)
— 
(3)
— 
(4)
— 
(3)
Total distributions to preferred stockholders(0.06)

(0.07)(0.12)(0.12)
Net increase (decrease) from operations applicable to common stockholders(0.07)(0.13)(0.45)0.10 
(7)
Distributions of net investment income to common stockholders(0.15)
(4)
(0.18)
(3)
(0.33)
(4)
(0.34)
(3)
Return of capital to common stockholders— 
(4)
— 
(3)
— 
(4)
(0.02)
(3)(6)
Total distributions to common stockholders(0.15)(0.18)(0.33)(0.36)
Common stock transactions(2)
(0.04)(0.02)(0.13)(0.06)
Net asset value per common share at end of period$7.84 $8.92 $7.84 
(7)
$8.92 
(7)

(1)Per share data amount is based on the basic weighted average number of common shares outstanding for the year/period presented (except for dividends to stockholders which is based on actual rate per share). Realized gains (losses) is inclusive of net realized losses (gains) on investments, realized losses (gains) from extinguishment of debt and realized gains (losses) from the repurchases and redemptions of preferred stock.

(2)Common stock transactions include the effect of our issuance of common stock in public offerings (net of underwriting and offering costs), shares issued in connection with our common stock dividend reinvestment plan, common shares issued to acquire investments, common shares repurchased below net asset value pursuant to our Repurchase Program, and common shares issued pursuant to the Holder Optional Conversion of our 5.50% Preferred Stock and 6.50% Preferred Stock.

(3)Tax character of distributions is not yet finalized for the respective fiscal period and will not be finalized until we file our tax return for our tax year ending August 31, 2024.

(4)Tax character of distributions is not yet finalized for the respective fiscal period and will not be finalized until we file our tax return for our tax year ending August 31, 2025.

(5)Diluted net decrease from operations applicable to common stockholders was $0.07 for the three months ended December 31, 2024. Diluted net decrease from operations applicable to common stockholders was $0.13 for the three months ended December 31, 2023. Diluted net decrease from operations applicable to common stockholders was $0.45 for the six months ended December 31, 2024. Diluted net increase from operations applicable to common stockholders was $0.10 for the six months ended December 31, 2023.

(6)The amounts reflected for the respective fiscal periods were updated based on tax information received subsequent to our Form 10-K filing for the year ended June 30, 2023 and our Form 10-Q filing for December 31, 2023. Certain reclassifications have been made in the presentation of prior period amounts.

(7)Does not foot due to rounding.

.




MIDDLE-MARKET LOAN PORTFOLIO COMPANY WEIGHTED AVERAGE EBITDA, NET LEVERAGE AND INTERNAL RATE OF RETURN

Middle-Market Loan Portfolio Company Weighted Average Net Leverage (“Middle-Market Portfolio Net Leverage”) and Middle-Market Loan Portfolio Company Weighted Average EBITDA (“Middle-Market Portfolio EBITDA”) provide clarity into the underlying capital structure of PSEC’s middle-market loan portfolio investments and the likelihood that such portfolio will make interest payments and repay principal.

Middle-Market Portfolio Net Leverage reflects the net leverage of each of PSEC’s middle-market loan portfolio company debt investments, weighted based on the current fair market value of such debt investments. The net leverage for each middle-market loan portfolio company is calculated based on PSEC’s investment in the capital structure of such portfolio company, with a maximum limit of 10.0x adjusted EBITDA. This calculation excludes debt subordinate to PSEC’s position within the capital structure because PSEC’s exposure to interest payment and principal repayment risk is limited beyond that point. Additionally, subordinated structured notes, rated secured structured notes, real estate investments, investments for which EBITDA is not available, and equity investments, for which principal repayment is not fixed, are also not included in the calculation. The calculation does not exceed 10.0x adjusted EBITDA for any individual investment because 10.0x captures the highest level of risk to PSEC. Middle-Market Portfolio Net Leverage provides PSEC with some guidance as to PSEC’s exposure to the interest payment and principal repayment risk of PSEC’s middle-market loan portfolio. PSEC monitors its Middle-Market Portfolio Net Leverage on a quarterly basis.

Middle-Market Portfolio EBITDA is used by PSEC to supplement Middle-Market Portfolio Net Leverage and generally indicates a portfolio company’s ability to make interest payments and repay principal. Middle-Market Portfolio EBITDA is calculated using the EBITDA of each of PSEC’s middle-market loan portfolio companies, weighted based on the current fair market value of the related investments. The calculation provides PSEC with insight into profitability and scale of the portfolio companies within PSEC's middle-market loan portfolio.

These calculations include addbacks that are typically negotiated and documented in the applicable investment documents, including but not limited to transaction costs, share-based compensation, management fees, foreign currency translation adjustments, and other nonrecurring transaction expenses.

Together, Middle-Market Portfolio Net Leverage and Middle-Market Portfolio EBITDA assist PSEC in assessing the likelihood that PSEC will timely receive interest and principal payments. However, these calculations are not meant to substitute for an analysis of PSEC’s underlying portfolio company debt investments, but to supplement such analysis.

Internal Rate of Return (“IRR”) is the discount rate that makes the net present value of all cash flows related to a particular investment equal to zero. IRR is gross of general expenses not related to specific investments as these expenses are not allocable to specific investments. Investments are considered to be exited when the original investment objective has been achieved through the receipt of cash and/or non-cash consideration upon the repayment of a debt investment or sale of an investment or through the determination that no further consideration was collectible and, thus, a loss may have been realized. Prospect’s gross IRR calculations are unaudited. Information regarding internal rates of return are historical results relating to Prospect’s past performance and are not necessarily indicative of future results, the achievement of which cannot be assured.


PRIMARY ORIGINATION STRATEGIES


Lending to Companies - We make directly-originated, agented loans to companies, including companies which are controlled by private equity sponsors and companies that are not controlled by private equity sponsors (such as companies that are controlled by the management team, the founder, a family or public shareholders). This debt can take the form of first lien, second lien, unitranche or unsecured loans. These loans typically have equity subordinate to our loan position. We may also purchase selected equity investments in such companies. In addition to directly-originated, agented loans, we also invest in senior and secured loans syndicated loans and high yield bonds that have been sold to a club or syndicate of buyers, both in the primary and secondary markets. These investments are often purchased with a long term, buy-and-hold outlook, and we often look to provide significant input to the transaction by providing anchoring orders.

Lending to Companies and Purchasing Controlling Equity Positions in Such Companies - This strategy involves purchasing senior and secured yield-producing debt and controlling equity positions in operating companies across various industries. We believe this strategy provides enhanced certainty of closing to sellers and the opportunity for management to continue on in their current roles. These investments are often structured in tax-efficient partnerships, enhancing returns.

Purchasing Controlling Equity Positions and Lending to Real Estate Companies - We purchase debt and controlling equity positions in tax-efficient real estate investment trusts (“REIT” or “REITs”). The real estate investments of National Property REIT Corp. (“NPRC”) are in various classes of developed and occupied real estate properties that generate current yields, including multi-family properties, student housing and senior living. NPRC seeks to identify properties that have historically significant occupancy rates and recurring cash flow generation. NPRC generally co-invests with established and experienced property management teams that manage such properties after acquisition. Additionally, NPRC makes investments in rated secured structured notes (primarily debt of structured credit). NPRC also purchases loans originated by certain consumer loan facilitators. It purchases each loan in its entirety (i.e., a “whole loan”). The borrowers are consumers, and the loans are typically serviced by the facilitators of the loans.

Investing in Structured Credit - We make investments in structured credit, often taking a significant position in subordinated structured notes (equity). The underlying portfolio of each structured credit investment is diversified across approximately 100 to 200 broadly syndicated loans and does not have direct exposure to real estate, mortgages, or consumer-based credit assets. The structured credit portfolios in which we invest are managed by established collateral management teams with many years of experience in the industry.




































About Prospect Capital Corporation

Prospect is a business development company lending to and investing in private businesses. Prospect’s investment objective is to generate both current income and long-term capital appreciation through debt and equity investments.

Prospect has elected to be treated as a business development company under the Investment Company Act of 1940. We have elected to be treated as a regulated investment company under the Internal Revenue Code of 1986.

Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, whose safe harbor for forward-looking statements does not apply to business development companies. Any such statements, other than statements of historical fact, are highly likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under our control, and that we may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from any forward-looking statements. Such statements speak only as of the time when made, and we undertake no obligation to update any such statement now or in the future.

For additional information, contact:
Grier Eliasek, President and Chief Operating Officer
grier@prospectcap.com
Telephone (212) 448-0702


v3.25.0.1
Cover
Feb. 10, 2025
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Feb. 10, 2025
Entity Registrant Name Prospect Capital Corporation
Securities Act File Number 814-00659
Entity Address, Address Line One 10 East 40th Street
Entity Tax Identification Number 43-2048643
Entity Address, Address Line Two 42nd Floor
Entity Address, City or Town New York
Entity Address, State or Province NY
Entity Address, Postal Zip Code 10016
Local Phone Number 448-0702
City Area Code (212)
Pre-commencement Issuer Tender Offer false
Pre-commencement Tender Offer false
Soliciting Material false
Written Communications false
Entity Emerging Growth Company false
Entity Incorporation, State or Country Code MD
Entity Central Index Key 0001287032
Amendment Flag false
Common Stock  
Document Information [Line Items]  
Security Exchange Name NASDAQ
Trading Symbol PSEC
Title of 12(b) Security Common Stock, $0.001 par value
5.35% Series A Fixed Rate Cumulative Perpetual Preferred Stock  
Document Information [Line Items]  
Security Exchange Name NYSE
Trading Symbol PSEC PRA
Title of 12(b) Security 5.35% Series A Fixed Rate Cumulative Perpetual Preferred Stock, par value $0.001
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