Prospect Capital Corp. Files 10-Q for Period Ending December 31, 2023

TL;DR

<b>Prospect Capital Corp. has filed its Q2 2024 10-Q report, detailing its financial position as of December 31, 2023.</b>

AI Summary

PROSPECT CAPITAL CORP (PSEC-PA) filed a Quarterly Report (10-Q) with the SEC on February 8, 2024. Prospect Capital Corp. filed its 10-Q report for the period ending December 31, 2023. The filing covers the second quarter of fiscal year 2024. The company's fiscal year ends on June 30. The filing includes data on various investment categories, including affiliated and unaffiliated issuers. The report details different series of preferred stock and public notes held by the company.

Why It Matters

For investors and stakeholders tracking PROSPECT CAPITAL CORP, this filing contains several important signals. The 10-Q filing provides a detailed look at Prospect Capital Corp.'s investment portfolio and financial structure as of the end of the second quarter of fiscal year 2024. Investors can use this report to assess the company's performance, asset allocation, and debt structure, which are crucial for understanding its current financial health and future prospects.

Risk Assessment

Risk Level: — PROSPECT CAPITAL CORP shows moderate risk based on this filing. The filing is a standard quarterly report (10-Q) which provides a snapshot of financial health but does not contain significant new strategic information or performance indicators that would suggest a dramatic shift in risk.

Analyst Insight

Review the detailed investment portfolio and debt structure within the 10-Q to understand Prospect Capital Corp.'s current financial standing and identify any potential shifts in risk or opportunity.

Key Numbers

• 2023-12-31 — Period End Date (CONFORMED PERIOD OF REPORT)
• 2024-02-08 — Filing Date (FILED AS OF DATE)
• 06/30 — Fiscal Year End (FISCAL YEAR END)
• 2024 — Fiscal Quarter (Q2)

Key Players & Entities

• PROSPECT CAPITAL CORP (company) — COMPANY CONFORMED NAME
• 20231231 (date) — CONFORMED PERIOD OF REPORT
• 20240208 (date) — FILED AS OF DATE
• 10 EAST 40TH STREET 44TH FL (address) — BUSINESS ADDRESS
• NEW YORK (location) — BUSINESS ADDRESS CITY
• 10016 (postal_code) — BUSINESS ADDRESS ZIP
• 212-448-0702 (phone_number) — BUSINESS PHONE

Forward-Looking Statements

• Prospect Capital Corp's net asset value per share will remain relatively stable or see a slight decline in the next quarter due to the minor decrease in its investment portfolio. (Prospect Capital Corp) — medium confidence, target: 2024-03-31
• The company will continue to manage its significant debt load, potentially through refinancing or strategic asset sales, to maintain its dividend policy. (Prospect Capital Corp) — medium confidence, target: 2024-06-30

FAQ

Industry Context

Prospect Capital Corp. operates as a business development company (BDC), investing in debt and equity of private U.S. middle-market companies.

Regulatory Implications

The company is subject to regulations governing BDCs, including asset coverage requirements and dividend distribution rules.

What Investors Should Do

1. Analyze the detailed breakdown of investments by issuer type (affiliated, unaffiliated) and by industry.
2. Examine the company's debt structure, including public notes and inter-notes, to assess leverage and interest rate sensitivity.
3. Review any disclosures related to fair value of investments and potential impairments.

Key Dates

• 2023-12-31: Quarterly Period End — Financial data as of this date.
• 2024-02-08: Filing Date — Date the 10-Q was officially filed with the SEC.

Year-Over-Year Comparison

This is the 10-Q filing for the second quarter of fiscal year 2024, providing updated financial information compared to the previous quarter and year-to-date.

Key Financial Figures

• $0.001 — ange on which registered Common Stock, $0.001 par value PSEC NASDAQ Global Select Mar

Filing Documents

• psec-20231231.htm (10-Q) — 11551KB
• psec10-qq22024ex311.htm (EX-31.1) — 10KB
• psec10-qq22024ex312.htm (EX-31.2) — 10KB
• psec10-qq22024ex321.htm (EX-32.1) — 6KB
• psec10-qq22024ex322.htm (EX-32.2) — 6KB
• 0001287032-24-000043.txt (&nbsp;) — 55333KB
• psec-20231231.xsd (EX-101.SCH) — 188KB
• psec-20231231_cal.xml (EX-101.CAL) — 91KB
• psec-20231231_def.xml (EX-101.DEF) — 1360KB
• psec-20231231_lab.xml (EX-101.LAB) — 1500KB
• psec-20231231_pre.xml (EX-101.PRE) — 1355KB
• psec-20231231_htm.xml (XML) — 11193KB

Forward-Looking Statements

Forward-Looking Statements 3

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements Consolidated Statements of Assets and Liabilities as of December 31 , 2023 (unaudited) and June 30, 2023 4 Consolidated Statements of Operations for the three and six months ended December 3 1 , 2023 and December 31 , 2022 (unaudited) 5 Consolidated Statements of Changes in Net Assets and Temporary Equity for the three and six months ended December 31 , 2023 and December 31 , 2022 (unaudited) 6 Consolidated Statements of Cash Flows for the six months ended December 3 1 , 2023 and December 3 1 , 2022 (unaudited) 8 Consolidated Schedules of Investments as of December 31 , 2023 (unaudited) and June 30, 2023 9

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 47 Item 2.

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

Management's Discussion and Analysis of Financial Condition and Results of Operations 111 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 143 Item 4.

Controls and Procedures

Controls and Procedures 145

OTHER INFORMATION

PART II OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 146 Item 1A.

Risk Factors

Risk Factors 146 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 148 Item 3. Defaults Upon Senior Securities 149 Item 4. Mine Safety Disclosures 149 Item 5. Other Information 150 Item 6. Exhibits 155

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This report contains information that may constitute "forward-looking statements." Generally, the words "believe," "expect," "intend," "estimate," "anticipate," "project," "will," "should," "could," "may," "plan" and similar expressions identify forward-looking statements, which generally are not historical in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future—including statements relating to volume growth, share of sales and earnings per share growth, and statements expressing general views about future operating results—are forward-looking statements. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in Part II, "Item 1A. Risk Factors" and elsewhere in this report and in our Annual Report on Form 10-K for the year ended June 30, 2023, and those described from time to time in reports that we have filed or in the future may file with the Securities and Exchange Commission. The forward-looking statements contained in this report involve a number of risks and uncertainties, including statements concerning: our, or our portfolio companies', future operating results; our busi

Financial Statements

Item 1. Financial Statements PROSPECT CAPITAL CORPORATION CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (in thousands, except share and per share data) December 31, 2023 June 30, 2023 (Unaudited) (Audited) Assets Investments at fair value: Control investments (amortized cost of $ 3,115,009 and $ 2,988,496 , respectively) $ 3,580,975 $ 3,571,697 Affiliate investments (amortized cost of $ 10,162 and $ 8,855 , respectively) 14,292 10,397 Non-control/non-affiliate invest ments (amortized cost of $ 4,508,452 and $ 4,803,245 , respectively) 4,036,579 4,142,837 Total investments at fair value (a mortized cost of $ 7,633,623 and $ 7,800,596 , respectively)(Note 3) 7,631,846 7,724,931 Cash an d cash equivalents (restricted cash of $ 4,320 and $ 5,074 , respectively) 97,289 95,646 Receivables for: Interest, net 32,594 22,701 Other 4,597 1,051 Deferred financing costs on Revolving Credit Facility (Note 4) 13,957 15,569 Due from broker 142 617 Prepaid expenses 771 1,149 Due from Affiliate (Note 13) 18 2 Total Assets 7,781,214 7,861,666 Liabilities Revolving Credit Facility (Notes 4 and 8) 864,049 1,014,703 Public Notes (less unamortized discount and debt issuance costs of $ 14,744 and $ 17,103 , respectively) (Notes 6 and 8) 1,066,496 1,064,137 Prospect Capital InterNotes (less unamortized debt issuance costs of $ 6,900 and $ 6,688 , respectively) (Notes 7 and 8) 384,107 351,417 Convertible Notes (less unamortized debt issuance costs of $ 1,119 and $ 1,577 , respectively) (Notes 5 and 8) 155,049 154,591 Due to Prospect Capital Management (Note 13) 57,413 61,651 Dividends payable 32,233 31,033 Interest payable 22,779 22,684 Accrued expenses 3,873 4,926 Due to Prospect Administration (Note 13) 10,233 4,066 Due to broker — 94 Due to Affiliate (Note 13) — 161 Other liabilities 592 1,524 Total Liabilities 2,596,824 2,710,987 Commitments and Contingencies (Note 3 and Note 15) Preferred Stock, par value $ 0.001 per share ( 647,900

View Full Filing

View this 10-Q filing on SEC EDGAR