PennantPark Investment Corp. Q3 2024 10-Q Filing

TL;DR

PNNT Q3 10-Q: Portfolio shows 184.3% in non-controlled investments, including debt with 13.95% coupon.

AI Summary

PennantPark Investment Corp. (PNNT) filed its 10-Q for the quarter ended December 31, 2024. The company reported investments in non-controlled, non-affiliated portfolio companies totaling 184.3%, including preferred equity/partnership interests and second lien secured debt. A specific investment in Best Practice Associates LLC has a maturity date of June 29, 2027, and a current coupon of 13.95%.

Why It Matters

This filing provides insight into PennantPark's investment portfolio and its exposure to various debt and equity instruments, which can impact its financial performance and dividend payouts.

Risk Assessment

Risk Level: medium — The company's investment strategy involves significant exposure to non-controlled and potentially less liquid portfolio companies, which carries inherent risks.

Key Numbers

• 184.3% — Investments in Non-Controlled, Non-Affiliated Portfolio Companies (Represents a significant portion of the company's investment focus.)
• 13.6% — Second Lien Secured Debt (Specific type of investment within non-controlled companies.)
• 13.95% — Current Coupon (Interest rate on debt investment in Best Practice Associates LLC.)

Key Players & Entities

• PennantPark Investment Corp. (company) — Filer of the 10-Q
• 2024-12-31 (date) — End of reporting period
• Magnolia Topco LP (company) — Portfolio company with preferred equity
• Cascade Environmental Holdings, LLC (company) — Portfolio company with preferred equity
• Best Practice Associates LLC (company) — Portfolio company with second lien secured debt
• 06/29/2027 (date) — Maturity date for Best Practice Associates LLC debt
• 13.95% (dollar_amount) — Current coupon for Best Practice Associates LLC debt

FAQ

Key Financial Figures

• $0.001 — ch Registered Common Stock, par value $0.001 per share PNNT The New York Stock E

Filing Documents

• pnnt-20241231.htm (10-Q) — 19105KB
• pnnt-ex10_1.htm (EX-10.1) — 10KB
• pnnt-ex31_1.htm (EX-31.1) — 15KB
• pnnt-ex31_2.htm (EX-31.2) — 14KB
• pnnt-ex32_1.htm (EX-32.1) — 8KB
• pnnt-ex32_2.htm (EX-32.2) — 7KB
• 0000950170-25-017048.txt ( ) — 61638KB
• pnnt-20241231.xsd (EX-101.SCH) — 1661KB
• pnnt-20241231_htm.xml (XML) — 16142KB

CONSOLIDATED FINANCIAL INFORMATION

PART I. CONSOLIDATED FINANCIAL INFORMATION

Consolidated Financial Statements

Item 1. Consolidated Financial Statements Consolidated Statements of Assets and Liabilities as of December 31, 2024 (unaudited) and September 30, 2024 4 Consolidated Statements of Operations for the three months ended December 31, 2024 and 2023 (unaudited) 5 Consolidated Statements of Changes in Net Assets for the three months ended December 31, 2024 and 2023 (unaudited) 6 Consolidated Statements of Cash Flows for the three months ended December 31, 2024 and 2023 (unaudited) 7 Consolidated Schedules of Investments as of December 31, 2024 (unaudited) and September 30, 2024 8

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 28 Report of Independent Registered Public Accounting Firm (PCAOB ID 49) 48

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 50

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 66

Controls and Procedures

Item 4. Controls and Procedures 67

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 68

Risk Factors

Item 1A. Risk Factors 68

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 68

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 68

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 68

Other Information

Item 5. Other Information 68

Exhibits

Item 6. Exhibits 69

—CONSOLIDATED F INANCIAL INFORMATION

PART I—CONSOLIDATED F INANCIAL INFORMATION We are filing this Quarterly Report on Form 10-Q (the "Report"), in compliance with Rule 13a-13 as promulgated by the Securities and Exchange Commission, or the SEC, under the Securities Exchange Act of 1934, as amended, or the Exchange Act. In this Report, except where context suggest otherwise, the terms "Company," "we," "our" or "us" refers to PennantPark Investment Corporation and its consolidated subsidiaries; "PennantPark Investment" refers to only PennantPark Investment Corporation; "our SBIC Fund" refers collectively to our consolidated subsidiaries, PennantPark SBIC II LP, or SBIC II, and its general partner, PennantPark SBIC GP II, LLC; "Funding I" refers to PennantPark Investment Funding I, LLC, a wholly-owned subsidiary prior to deconsolidation on July 31, 2020; "Taxable Subsidiary" refers collectively to our consolidated subsidiaries, PNNT Investment Holdings II, LLC and PNNT Investment Holdings, LLC; "PSLF" refers to PennantPark Senior Loan Fund, LLC, an unconsolidated joint venture; "PTSF II" refers to PennantPark-TSO Senior Loan Fund II, LP, an unconsolidated limited partnership; "PennantPark Investment Advisers" or "Investment Adviser" refers to PennantPark Investment Advisers, LLC; "PennantPark Investment Administration" or "Administrator" refers to PennantPark Investment Administration, LLC; "SBA" refers to the Small Business Administration; "SBIC" refers to a small business investment company under the Small Business Investment Act of 1958, as amended; "BNP Credit Facility" refers to our revolving credit facility with BNP Paribas prior to deconsolidation of Funding I; "Truist Credit Facility" refers to our multi-currency, senior secured revolving credit facility with Truist Bank, as amended and restated; "2026 Notes" refers to our 4.50% Notes due May 2026; "2026 Notes-2" refers to our 4.00% Notes due November 2026; "BDC" refers to a business development company under the Investment Company Act of 1940,

Consolidated Financial Statements

Item 1. Consolidated Financial Statements PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS O F ASSETS AND LIABILITIES (In thousands, except share and per share data) December 31, 2024 September 30, 2024 (unaudited) Assets Investments at fair value Non-controlled, non-affiliated investments (amortized cost—$ 856,406 and $ 916,168 , respectively) $ 845,829 $ 910,323 Non-controlled, affiliated investments (amortized cost—$ 57,109 and $ 56,734 , respectively) 11,032 33,423 Controlled, affiliated investments (amortized cost—$ 370,967 and $ 343,970 , respectively) 441,205 384,304 Total investments (amortized cost—$ 1,284,482 and $ 1,316,872 , respectively) 1,298,066 1,328,050 Cash and cash equivalents (cost—$ 55,868 and $ 49,833 , respectively) 55,851 49,861 Interest receivable 5,227 5,261 Receivable for investments sold 47,230 — Distribution receivable 5,359 5,417 Due from affiliates 144 228 Prepaid expenses and other assets 214 269 Total assets 1,412,091 1,389,086 Liabilities Truist Credit Facility payable, at fair value (cost—$ 464,456 and $ 461,456 , respectively) 460,033 460,361 2026 Notes payable, net (par— $ 150,000 ) 148,796 148,571 2026 Notes-2 payable, net (par— $ 165,000 ) 163,293 163,080 Payable for investment purchased 125,050 100,096 Distributions payable 5,224 5,224 Base management fee payable 4,268 4,297 Incentive fee payable 2,756 3,057 Accounts payable and accrued expenses 5,500 4,053 Interest payable on debt 2,850 6,406 Due to affiliates — 33 Total liabilities 917,770 895,178 C ommitments and contingencies (See Note 11) Net assets Common stock, 65,296,094 and 65,296,094 shares issued and outstanding, respectively Par value $ 0.001 per share and 200,000,000 shares authorized 65 65 Paid-in capital in excess of par value 743,968 743,968 Accumulated deficit (

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