Core Insights - The article discusses strategies for transforming a portfolio into a cash-flow machine, particularly through investments in shares of investment and financier companies [1] Group 1: Investment Strategies - Holding shares of investment/financier companies is highlighted as a viable strategy for generating cash flow [1]

Group 1: Investment Opportunities in Dividend Stocks - Three high-yield monthly income stocks offer yields ranging from 5.3% to 14.2% [1] - Dividend stocks have historically outperformed non-payers, with annualized returns of 9.2% compared to 4.31% over a 51-year period [4] - Monthly dividend payments provide immediate income, with select companies capable of sustaining high payouts [5] Group 2: AGNC Investment - AGNC Investment offers a yield of 14.15%, maintaining a double-digit yield for 14 of the last 15 years [6][9] - The company operates as a mortgage REIT, borrowing at lower short-term rates to invest in higher-yielding mortgage-backed securities [7] - A declining interest rate environment positively impacts AGNC's net interest margin and book value, suggesting potential for share price appreciation [8][9] - 99% of AGNC's $82.3 billion investment portfolio is in ultra-safe agency mortgage-backed securities, providing a buffer against defaults [10] Group 3: Realty Income - Realty Income has a yield of 5.31% and has increased its dividend 132 times since its IPO in 1994 [12] - The company focuses on resilient commercial properties, with approximately 90% of its rent shielded from economic downturns [14] - Realty Income's lease structure includes a weighted average lease term of nine years and a high occupancy rate, ensuring stable cash flow [15] - The stock is currently valued at 13.2 times forecast cash flow in 2026, representing a 17% discount to its historical average [16] Group 4: PennantPark Floating Rate Capital - PennantPark Floating Rate Capital offers a yield of 12.11% and primarily focuses on debt investments in small- and micro-cap companies [17][18] - The company oversees a portfolio exceeding $2.4 billion, with over $2.15 billion in first lien secured debt, enhancing yield potential [18][20] - 99% of PennantPark's loan portfolio features variable rates, allowing it to benefit from rising interest rates [19]

Company Overview - PennantPark Floating Rate Capital Ltd. has acquired a portfolio of approximately $250 million of assets from TSO Puma SPV, LLC, an affiliate of Towerbrook Capital Partners [1] - The acquisition is part of the winding down of PennantPark-TSO Senior Loan Fund, LP, and includes assets familiar to the Company's investment adviser [1] - The average spread and credit statistics of the acquired assets are generally in line with the existing portfolio of PennantPark Floating Rate Capital Ltd. [1] Financial Impact - The acquisition is expected to optimize the portfolio and be accretive to net investment income by approximately two cents per share per quarter [2] Investment Strategy - PennantPark Floating Rate Capital Ltd. primarily invests in U.S. middle-market private companies through floating rate senior secured loans, including first lien secured debt, second lien secured debt, and subordinated debt [2] - The Company may also invest in equity investments from time to time [2] Management Background - PennantPark Investment Advisers, LLC manages approximately $10 billion of investable capital, including potential leverage, and has been operational since 2007 [3] - The firm provides a comprehensive range of financing solutions to private equity firms, their portfolio companies, and other middle-market borrowers [3]

Group 1 - The article emphasizes the importance of a diversified investment strategy that combines classic dividend growth stocks with Business Development Companies, REITs, and Closed End Funds to enhance investment income while achieving total returns comparable to traditional index funds [1] - The author highlights a hybrid investment system that balances growth and income, aiming for a total return that aligns with the performance of the S&P 500 [1]

Financial Data and Key Metrics Changes - For the quarter ended June 30, core net investment income was $0.27 per share, while GAAP net investment income was $0.25 per share [5][17] - As of June 30, net asset value (NAV) was $10.96 per share, down 1% from $11.07 per share in the prior quarter [17] - The debt to equity ratio was 1.3 times, indicating a diversified capital structure across multiple funding sources [17] Business Line Data and Key Metrics Changes - The portfolio grew to $2.4 billion, up from $2.3 billion in the prior quarter, with a weighted average yield on debt investments of 10.4% [12][18] - The portfolio comprised 90% first lien senior secured debt, with only 1% in subordinated debt and 2% in equity of PSSL [18] - The weighted average debt to EBITDA for new platform investments was 3.8 times, with an interest coverage ratio of 2.6 times [8][19] Market Data and Key Metrics Changes - The company noted a rebound in deal activity, which is expected to lead to increased loan originations in the second half of 2025 [4][6] - The pricing on high-quality first lien term loans in the core middle market is over plus $4.75 to $5.25, with meaningful covenant protections [7][10] Company Strategy and Development Direction - The company formed a new joint venture with Hamilton Lane, committing $200 million in capital, with an expected total portfolio of $500 million [6][14] - The focus remains on capital preservation and finding investment opportunities in growing middle market companies with high free cash flow conversion [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong outlook for the remainder of the year, anticipating continued net investment income growth and full dividend coverage [6][36] - Credit quality remains strong, with a low nonaccrual rate of 1% at cost and 0.5% at market value [8][18] Other Important Information - The company raised $32 million from the issuance of 2.8 million shares at an average price of $11.31 per share during the quarter [13] - The PSSL joint venture portfolio totaled $1.1 billion, with plans to grow to $1.4 billion [14] Q&A Session Summary Question: How much of the $500 million could be deployed over the next few quarters? - Management anticipates a ramp-up period of 12 to 18 months for deploying the capital, with potential for growth beyond the initial amount [23][24] Question: What are the long-term growth plans for PFLT and PNNT? - Management emphasized that growth will be organic based on market opportunities, with the potential for future mergers always on the table [28][30] Question: What is the timing for net investment income to fully cover the dividend? - Management identified three levers for NII growth: increasing leverage to target ratios, filling out the PSSL joint venture, and ramping up the new Hamilton Lane JV [33][35] Question: What is the current state of EBITDA growth at the portfolio company level? - EBITDA growth is generally in the mid to upper single digits, with low nonaccruals and maintained leverage levels [36][38] Question: Will the high level of unrestricted cash be directed towards the JV? - Some of the unrestricted cash will be used for the JV, but it also reflects timing from cash management [41] Question: Is there expected to be improved loan pricing power? - Management hopes to maintain or expand loan spreads due to increased supply, while prioritizing credit quality [42][44] Question: Is there a mix shift in the pipeline regarding industries or borrowers? - Recently, there has been an increase in new platforms coming to the company, with a focus on incumbency and add-on loans [48][51]

Financial Performance - For the quarter ended June 2025, PennantPark (PFLT) reported revenue of $63.5 million, reflecting a year-over-year increase of 30.9% [1] - The earnings per share (EPS) for the quarter was $0.25, down from $0.31 in the same quarter last year [1] - The reported revenue was below the Zacks Consensus Estimate of $65.19 million, resulting in a surprise of -2.59% [1] - The company experienced an EPS surprise of -10.71%, with the consensus EPS estimate being $0.28 [1] Key Metrics - Non-controlled, non-affiliated investments generated other income of $0.79 million, which was below the two-analyst average estimate of $1.08 million [4] - Interest from non-controlled, non-affiliated investments was reported at $50.86 million, slightly below the average estimate of $50.87 million, but represented a year-over-year increase of 47.6% [4] - Dividend income from non-controlled, non-affiliated investments was $0.55 million, exceeding the average estimate of $0.37 million, but showed a year-over-year decline of 28.5% [4] Stock Performance - Shares of PennantPark have returned -2.2% over the past month, contrasting with the Zacks S&P 500 composite's increase of +2.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - PennantPark (PFLT) reported quarterly earnings of $0.25 per share, missing the Zacks Consensus Estimate of $0.28 per share, and showing a decline from $0.31 per share a year ago, indicating a -10.71% earnings surprise [1] Financial Performance - The company posted revenues of $63.5 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 2.59%, compared to $48.51 million in the same quarter last year [2] - Over the last four quarters, PennantPark has surpassed consensus EPS estimates only once and topped consensus revenue estimates two times [2] Stock Performance - PennantPark shares have declined approximately 3.9% since the beginning of the year, while the S&P 500 has gained 8.6% [3] - The current Zacks Rank for PennantPark is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.29 on revenues of $66.19 million, and for the current fiscal year, it is $1.18 on revenues of $260.33 million [7] - The trend of estimate revisions for PennantPark was mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The Financial - Investment Management industry, to which PennantPark belongs, is currently in the top 28% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

PART I. CONSOLIDATED FINANCIAL INFORMATION [Item 1. Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) Financial statements detail the company's position, operations, and cash flows, showing asset growth, increased income, and a lower NAV per share [Consolidated Statements of Assets and Liabilities](index=4&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) Total assets increased to $2.52 billion, but Net Asset Value per share decreased to $10.96 from $11.31 Consolidated Statements of Assets and Liabilities Highlights (in thousands, except per share data) | Metric | June 30, 2025 (unaudited) | September 30, 2024 | | :--- | :--- | :--- | | Total Investments at Fair Value | $2,403,515 | $1,983,504 | | Total Assets | $2,521,602 | $2,108,845 | | Total Liabilities | $1,434,089 | $1,231,551 | | Total Net Assets | $1,087,513 | $877,294 | | Net Asset Value per share | $10.96 | $11.31 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Investment income increased for both three and nine-month periods, but net unrealized losses led to lower net asset growth Key Operational Results (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Investment Income | $63,502 | $48,505 | $192,449 | $130,831 | | Total Expenses | $38,877 | $27,295 | $112,827 | $71,085 | | Net Investment Income | $24,625 | $21,210 | $79,622 | $59,746 | | Net Increase in Net Assets | $19,298 | $16,920 | $48,852 | $70,499 | | Net Investment Income per Share | $0.25 | $0.31 | $0.88 | $0.95 | | Net Increase in Net Assets per Share | $0.19 | $0.25 | $0.54 | $1.12 | [Consolidated Statements of Changes in Net Assets](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Net%20Assets) Net assets increased by $210.2 million to $1.09 billion, primarily from operations and capital transactions, offset by distributions - Net assets grew from **$877.3 million** at the beginning of the period to **$1,087.5 million** at the end[16](index=16&type=chunk) Changes in Net Assets for the Nine Months Ended June 30, 2025 (in thousands) | Description | Amount | | :--- | :--- | | Net Increase from Operations | $48,852 | | Distributions to Stockholders | $(83,389) | | Net Increase from Capital Transactions | $244,756 | | **Net Increase in Net Assets** | **$210,219** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating activities used $386.1 million cash, largely offset by $376.7 million from financing, leading to a $9.3 million net cash decrease Cash Flow Summary for the Nine Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(386,052) | $(509,641) | | Net Cash Provided by Financing Activities | $376,732 | $493,675 | | **Net (Decrease) in Cash** | **$(9,320)** | **$(15,966)** | [Consolidated Schedules of Investments](index=8&type=section&id=Consolidated%20Schedules%20of%20Investments) The investment portfolio expanded to $2.40 billion, predominantly in first lien secured debt, with significant PSSL holdings Investment Portfolio Composition (in thousands) | Investment Classification | Fair Value at June 30, 2025 | Fair Value at Sept 30, 2024 | | :--- | :--- | :--- | | **Non-Controlled, Non-Affiliated** | | | | First Lien Secured Debt | $1,912,951 | $1,472,064 | | Subordinate Debt | $12,506 | $2,693 | | Preferred Equity | $18,801 | $18,305 | | Common Equity/Warrants | $168,318 | $139,207 | | **Subtotal** | **$2,112,576** | **$1,632,269** | | **Controlled, Affiliated (PSSL)** | | | | First Lien Secured Debt | $237,650 | $274,634 | | Equity Interests | $53,289 | $76,601 | | **Subtotal** | **$290,939** | **$351,235** | | **Total Investments** | **$2,403,515** | **$1,983,504** | - As of June 30, 2025, two portfolio companies were on non-accrual status, representing **1.0%** of the portfolio at cost and **0.5%** at fair value[88](index=88&type=chunk) [Notes to Consolidated Financial Statements](index=27&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the company's BDC structure, investment strategy, fee arrangements, debt facilities, and PSSL joint venture - The company's investment objective is to generate current income and capital appreciation by investing primarily in floating rate loans to U.S. middle-market private companies[61](index=61&type=chunk) - In February 2025, the company completed a new **$474.6 million** term debt securitization (2037 Debt Securitization), retaining **$113.6 million** of the subordinated and Class D notes[72](index=72&type=chunk) - The company's asset coverage ratio was **177%** as of June 30, 2025, above the regulatory minimum of **150%**[185](index=185&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=52&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, portfolio growth to $2.4 billion, 10.4% yield, and financing, confirming sufficient liquidity Portfolio Summary as of June 30, 2025 | Metric | Value | | :--- | :--- | | Total Portfolio Value | $2,403.5 million | | Number of Portfolio Companies | 155 | | Average Investment Size | $15.5 million | | Weighted Average Yield on Debt | 10.4% | | % First Lien Secured Debt | 89% | | % Subordinated Debt | <1% | | % Preferred & Common Equity | 10% | - For the nine months ended June 30, 2025, the company invested **$1.1 billion** in 18 new and 112 existing portfolio companies, with sales and repayments totaling **$669.5 million**[242](index=242&type=chunk) - The company established a new **$500 million** at-the-market (ATM) offering program in July 2024, raising **$244.8 million** in net proceeds by issuing **21.6 million shares** through its ATM programs during the nine months ended June 30, 2025[78](index=78&type=chunk)[79](index=79&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk, with 99% variable-rate debt; a 1% rate increase boosts net interest income by $9.5 million Annualized Impact of Hypothetical Interest Rate Changes | Change in Interest Rates | Change in Net Interest Income (in thousands) | Change in Net Interest Income Per Share | | :--- | :--- | :--- | | Down 1% | $(9,453) | $(0.10) | | Up 1% | $9,453 | $0.10 | | Up 2% | $18,905 | $0.19 | | Up 3% | $28,358 | $0.29 | [Item 4. Controls and Procedures](index=71&type=section&id=Item%204.%20Controls%20and%20Procedures) CEO and CFO confirmed effective disclosure controls as of June 30, 2025, with no material internal control changes - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[346](index=346&type=chunk) - There were no material changes in internal control over financial reporting during the quarter ended June 30, 2025[347](index=347&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=71&type=section&id=Item%201.%20Legal%20Proceedings) The company, its Investment Adviser, and Administrator are not subject to any material legal proceedings - The company is not currently subject to any material legal proceedings[348](index=348&type=chunk) [Item 1A. Risk Factors](index=71&type=section&id=Item%201A.%20Risk%20Factors) Key risks include U.S. trade policy changes affecting portfolio companies and significant cybersecurity vulnerabilities - Changes in U.S. trade policies and tariffs could increase costs or reduce demand for portfolio companies' products, adversely affecting their operations[350](index=350&type=chunk) - The company is subject to significant cybersecurity risks, including data breaches and system failures, which could lead to financial losses, regulatory intervention, and reputational damage[351](index=351&type=chunk)[352](index=352&type=chunk)[353](index=353&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=72&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the reporting period - None[355](index=355&type=chunk) [Item 3. Defaults Upon Senior Securities](index=72&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - None[356](index=356&type=chunk) [Item 4. Mine Safety Disclosures](index=72&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This disclosure item is not applicable to the company's operations - Not applicable[357](index=357&type=chunk) [Item 5. Other Information](index=72&type=section&id=Item%205.%20Other%20Information) This item is not applicable, and no Rule 10b5-1 trading arrangements were adopted or terminated - Not applicable[358](index=358&type=chunk) [Item 6. Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including credit agreement amendments and certifications

[Financial Results and Highlights](index=1&type=section&id=Financial%20Results%20and%20Highlights) [Third Quarter 2025 Financial Highlights](index=1&type=section&id=Third%20Quarter%202025%20Financial%20Highlights) PFLT reported a Q3 2025 NAV per share of **$10.96**, a 1.0% decrease, with net investment income at **$0.25 per share** and a **$2.4 billion** investment portfolio Q3 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | **Assets and Liabilities** | | | Investment Portfolio | $2,403.5 million | | Net Assets | $1,087.5 million | | Net Asset Value (NAV) per Share | $10.96 | | Quarterly Change in NAV per Share | (1.0)% | | Regulatory Debt to Equity | 1.29x | | **Operating Results** | | | Net Investment Income per Share | $0.25 | | Core Net Investment Income per Share | $0.27 | | Distributions Declared per Share | $0.31 | | **Portfolio Activity** | | | Purchases of Investments | $208.1 million | | Sales and Repayments | $145.8 million | - Core Net Investment Income (Core NII) is a non-GAAP measure that excludes **$2.9 million** of credit facility amendment costs and a **$1.2 million** incentive fee expense offset for the quarter[2](index=2&type=chunk) [Portfolio and Investment Activity](index=2&type=section&id=Portfolio%20and%20Investment%20Activity) [Overall Portfolio Review](index=2&type=section&id=Overall%20Portfolio%20Review) The portfolio grew to **$2.4 billion** as of June 30, 2025, with 99% first lien secured debt and a 10.4% weighted average yield - Management anticipates continued net investment income growth driven by recent capital raises and the formation of a new joint venture with Hamilton Lane to invest in middle-market senior secured loans[5](index=5&type=chunk) Portfolio Composition Comparison | Metric | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Total Portfolio | $2,403.5 M | $1,983.5 M | | First Lien Secured Debt | $2,150.6 M | $1,746.7 M | | Number of Companies | 155 | 158 | | Avg. Investment Size | $15.5 M | $12.6 M | | Weighted Avg. Yield on Debt | 10.4% | 11.5% | | Non-Accruals (at fair value) | 0.5% | 0.2% | [Investment Activity Details](index=2&type=section&id=Investment%20Activity%20Details) Q3 2025 investments totaled **$208.1 million**, a decrease from prior year, with nine-month investments reaching **$1.1 billion** Investment Activity (Three Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Investments | $208.1 M | $320.9 M | | Weighted Avg. Yield on New Debt | 10.1% | 11.5% | | Sales and Repayments | $145.8 M | $137.6 M | Investment Activity (Nine Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Investments | $1,108.3 M | $961.8 M | | Weighted Avg. Yield on New Debt | 10.2% | 11.7% | | Sales and Repayments | $669.5 M | $386.3 M | [PennantPark Senior Secured Loan Fund I LLC (PSSL)](index=2&type=section&id=PennantPark%20Senior%20Secured%20Loan%20Fund%20I%20LLC%20(PSSL)) PSSL's portfolio grew to **$1.06 billion** as of June 30, 2025, with a 10.4% weighted average yield on debt investments PSSL Portfolio Overview | Metric | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Total Portfolio | $1,055.6 M | $913.3 M | | Number of Companies | 117 | 109 | | Avg. Investment Size | $9.0 M | $8.4 M | | Weighted Avg. Yield on Debt | 10.4% | 11.4% | - For the three months ended June 30, 2025, PSSL invested **$52.3 million** and had sales/repayments of **$53.8 million**[10](index=10&type=chunk)[11](index=11&type=chunk) [Results of Operations](index=3&type=section&id=Results%20of%20Operations) [Investment Income](index=3&type=section&id=Investment%20Income) Q3 2025 total investment income increased to **$63.5 million**, driven by the growing size of the debt portfolio Investment Income Comparison (in millions) | Period | 2025 | 2024 | Change Driver | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $63.5 | $48.5 | Increase in size of debt portfolio | | Nine Months Ended June 30 | $192.4 | $130.8 | Increase in size of debt portfolio | [Expenses](index=3&type=section&id=Expenses) Q3 2025 expenses rose to **$38.9 million**, primarily due to higher interest, management fees, and credit facility amendment costs Expenses Comparison (in millions) | Period | 2025 | 2024 | Change Driver | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $38.9 | $27.3 | Higher interest expense, management fees, and amendment costs | | Nine Months Ended June 30 | $112.8 | $71.1 | Higher interest expense and management fees | [Net Investment Income (NII)](index=3&type=section&id=Net%20Investment%20Income%20(NII)) Q3 2025 net investment income was **$24.6 million** or **$0.25 per share**, with per-share NII decreasing due to higher share count Net Investment Income Comparison | Period | 2025 | 2024 | | :--- | :--- | :--- | | **Three Months Ended June 30** | | | | NII (in millions) | $24.6 | $21.2 | | NII per Share | $0.25 | $0.31 | | **Nine Months Ended June 30** | | | | NII (in millions) | $79.6 | $59.7 | | NII per Share | $0.88 | $0.95 | [Realized and Unrealized Gains/Losses](index=3&type=section&id=Realized%20and%20Unrealized%20Gains%2FLosses) Q3 2025 saw a net realized loss of **$14.8 million** and a net unrealized appreciation of **$9.9 million** on investments - For the three months ended June 30, 2025, the company experienced net realized losses of **$(14.8) million**, a significant change from the **$(0.4) million** loss in the same period of 2024[17](index=17&type=chunk) - The net change in unrealized appreciation on investments was **$9.9 million** for the quarter, compared to a depreciation of **$(4.0) million** in Q3 2024, driven by portfolio performance and capital market conditions[19](index=19&type=chunk) [Net Change in Net Assets](index=4&type=section&id=Net%20Change%20in%20Net%20Assets) Q3 2025 net increase in net assets from operations was **$19.3 million**, or **$0.19 per share**, influenced by portfolio and market conditions Net Increase in Net Assets from Operations | Period | 2025 | 2024 | | :--- | :--- | :--- | | **Three Months Ended June 30** | | | | Net Increase (in millions) | $19.3 | $16.9 | | Per Share | $0.19 | $0.25 | | **Nine Months Ended June 30** | | | | Net Increase (in millions) | $48.9 | $70.5 | | Per Share | $0.54 | $1.12 | [Liquidity and Capital Resources](index=4&type=section&id=Liquidity%20and%20Capital%20Resources) [Capital Structure and Debt Facilities](index=4&type=section&id=Capital%20Structure%20and%20Debt%20Facilities) The company amended its credit facility in April 2025, reducing pricing and extending maturity, and PSSL closed a new **$301 million** CLO - The annualized weighted average cost of debt decreased to **7.0%** for the nine months ended June 30, 2025, from **7.3%** in the prior year period[23](index=23&type=chunk) - In April 2025, the credit facility was amended, reducing pricing to SOFR + **200 bps** and extending the maturity to August 2030[24](index=24&type=chunk) - PSSL closed a new **$301 million** CLO in April 2025 and refinanced its 2035 Asset-Backed Debt in May 2025, extending maturities to 2037[25](index=25&type=chunk)[26](index=26&type=chunk) [Cash Flow and Equity Issuances](index=5&type=section&id=Cash%20Flow%20and%20Equity%20Issuances) As of June 30, 2025, the company held **$102.7 million** in cash, with **$244.8 million** raised through its ATM program - The company held cash and cash equivalents of **$102.7 million** as of June 30, 2025[27](index=27&type=chunk) ATM Program Issuances (Nine Months Ended June 30) | Period | Shares Issued | Avg. Price | Net Proceeds | | :--- | :--- | :--- | :--- | | 2025 | 21,638,000 | $11.34 | $244.8 M | | 2024 | 13,263,436 | $11.39 | $150.6 M | - For the nine months ended June 30, 2025, cash used in operations was **$386.1 million**, while cash provided by financing was **$376.7 million**[29](index=29&type=chunk) [Shareholder Distributions and Recent Developments](index=5&type=section&id=Shareholder%20Distributions%20and%20Recent%20Developments) [Distributions](index=5&type=section&id=Distributions) The company declared distributions of **$0.3075 per share** for Q3 2025, totaling **$83.4 million** for the nine-month period Distributions Declared | Period | Per Share | Total (in millions) | | :--- | :--- | :--- | | **Three Months Ended June 30, 2025** | $0.3075 | $30.5 | | **Nine Months Ended June 30, 2025** | $0.9225 | $83.4 | [Recent Developments](index=5&type=section&id=Recent%20Developments) A new joint venture, PSSL II, was formed with Hamilton Lane in August 2025, targeting an initial **$500 million** portfolio - A new joint venture, PSSL II, was formed in August 2025 with Hamilton Lane (HL) to invest in middle-market loans[32](index=32&type=chunk) - PFLT and HL have committed a combined **$200 million** (**$150 million** from PFLT, **$50 million** from HL) and intend to add a **$300 million** financing facility, targeting an initial portfolio size of **$500 million**[33](index=33&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statements of Assets and Liabilities](index=6&type=section&id=Consolidated%20Statements%20of%20Assets%20and%20Liabilities) As of June 30, 2025, total assets reached **$2.52 billion**, with net assets growing to **$1.09 billion**, though NAV per share decreased to **$10.96** Balance Sheet Summary (in thousands) | Account | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Total Investments, at fair value | $2,403,515 | $1,983,504 | | Total Assets | $2,521,602 | $2,108,845 | | Total Liabilities | $1,434,089 | $1,231,551 | | Total Net Assets | $1,087,513 | $877,294 | | Net Asset Value per Share | $10.96 | $11.31 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Q3 2025 total investment income was **$63.5 million**, resulting in net investment income of **$24.6 million** and a net increase in net assets of **$19.3 million** Income Statement Summary (Three Months Ended June 30, in thousands) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Total Investment Income | $63,502 | $48,505 | | Total Expenses | $38,877 | $27,295 | | Net Investment Income | $24,625 | $21,210 | | Net Realized/Unrealized Loss | $(5,327) | $(4,290) | | **Net Increase in Net Assets** | **$19,298** | **$16,920** | Per Share Data (Three Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net Investment Income per Share | $0.25 | $0.31 | | Net Increase in Net Assets per Share | $0.19 | $0.25 |

Core Viewpoint - PennantPark Floating Rate Capital Ltd. has formed a joint venture, PennantPark Senior Secured Loan Fund II, LLC, with Hamilton Lane to invest primarily in middle market loans, enhancing its position as a direct lender in this sector [1][3]. Company Overview - PennantPark Floating Rate Capital Ltd. is a business development company that primarily invests in U.S. middle-market private companies through floating rate senior secured loans, including first lien, second lien, and subordinated debt [4]. - The company is managed by PennantPark Investment Advisers, LLC, which has approximately $10 billion of investable capital [5]. Joint Venture Details - The joint venture, PSSL II, will have a combined commitment of $200 million, with PennantPark contributing $150 million and Hamilton Lane contributing $50 million [2]. - PSSL II plans to establish a financing facility of $300 million, allowing the portfolio to grow to an initial size of $500 million [2]. - Investments in PSSL II's portfolio are expected to commence in late September or early October [2]. Strategic Importance - The joint venture is seen as a strategic move to broaden the impact of PennantPark as a core middle market direct lender, aiming to provide senior loan solutions to middle market sponsors and borrowers [3]. - The CEO of PennantPark anticipates that growing PSSL II will lead to higher returns on equity and net investment income per share [3]. Hamilton Lane Overview - Hamilton Lane is a leading private markets investment firm with approximately $986 billion in assets under management, specializing in providing access to a wide range of private market strategies [6].