UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2021 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 814-00659 PROSPECT CAPITAL CORPORATION (Exact name of Registrant as specified in its charter) | Maryland | | 43-2048643 | | --- | --- | --- | | (State or other jurisdiction of | | (I.R. ...

Investment Activity - During the three months ended March 31, 2021, the company acquired $176,762 in new investments and completed follow-on investments totaling approximately $58,731, resulting in gross investment originations of $258,419[504]. - The company received full repayments totaling $128,699 and net repayments amounted to $182,458 during the same period[504]. - New portfolio company investments for the nine months ended March 31, 2021, totaled $459,277, down from $565,521 in the same period of 2020[527]. - Total acquisitions for the nine months ended March 31, 2021, were $781,138, compared to $823,546 in 2020, indicating a decrease of approximately 5.2%[527]. - Total dispositions for the nine months ended March 31, 2021, were $665,878, down from $943,460 in 2020, reflecting a decrease of approximately 29.4%[527]. Debt and Financing - The company issued $28,095 in Prospect Capital InterNotes® with a weighted average interest rate of 3.48%, generating net proceeds of $27,627[506]. - The company repaid $1,333 of Prospect Capital InterNotes® at par and redeemed $112,489 of these notes at a weighted average interest rate of 5.45%, resulting in a net loss of $1,031[505]. - The company issued $325,000 in unsecured notes maturing on January 22, 2026, with total proceeds of $317,720 after underwriting discounts[509]. - The total outstanding principal amount of the Revolving Credit Facility is $343.54 million, with an effective interest rate of 1ML + 2.20%[566]. - The total contractual obligations amount to $2.19 billion, with $489.52 million due in the next year and $1.14 billion due in 1-3 years[569]. Investment Portfolio - On March 31, 2021, the company had $5,883,328 in net assets invested in 123 long-term portfolio investments and CLOs, representing 158.9% of its net assets[518]. - The investment portfolio composition by level of control showed Control Investments at $2,425,409 (41.0% of the portfolio) and Non-Control/Non-Affiliate Investments at $3,321,382 (56.2% of the portfolio)[522]. - The investment portfolio as of March 31, 2021, included $3,052,416 in Senior Secured Debt, representing 51.6% of the total investments[522]. - The portfolio composition as of March 31, 2021, included 80% in traditional investments and 20% in structured finance[525]. - As of March 31, 2021, the fair value of NPRC's real estate portfolio was $982,585, comprising forty-seven multi-family properties, eight student housing properties, and three commercial properties[554]. Performance Metrics - The annualized current yield across all performing interest-bearing investments was 11.8% as of March 31, 2021, compared to 11.4% as of June 30, 2020[519]. - The net investment income for the nine months ended March 31, 2021, was $212,508, or $0.56 per basic weighted average common share, exceeding distributions of $206,734[631]. - The net change in unrealized gains from investments was $184,960 for the three months ended March 31, 2021, compared to a loss of $256,997 in 2020, indicating a significant recovery[633]. - Net realized gains from investments for the three months ended March 31, 2021 were $881, compared to $26 for the same period in 2020, indicating a significant increase[656]. - The company recorded a net realized gain from the extinguishment of debt of $12,835 for the three months ended March 31, 2021, compared to a gain of $2,796 for the same period in 2020[656]. Losses and Write-downs - The company recognized a loss of $2,225 from the tender offers for the 2022 Notes during the three months ended March 31, 2021[507]. - The company recognized a loss of $234 during the three months ended March 31, 2021, from the tender offers for the 2023 Notes[512]. - The company recognized a loss of $806 during the three months ended March 31, 2021, from the tender offers for the 6.375% 2024 Notes[514]. - The company recognized a loss of $3,391 during the three months ended March 31, 2021, following the redemption of $233,788 of the 2024 Notes[608]. - The company recorded a net loss of $1,100 on the extinguishment of Prospect Capital InterNotes® during the nine months ended March 31, 2021[625]. Shareholder Information - As of March 31, 2021, the company issued 2,105,677 shares of its 5.50% Series A1 Preferred Stock for net proceeds of $48,888[516]. - The company issued a total of 483,282 shares of 5.50% Series A1 Preferred Stock and 63,626 shares of 5.50% Series M1 Preferred Stock for net proceeds of $12,539 on April 8 and April 22, 2021[684]. - The estimated value of the Preferred Stock as of March 31, 2021, was determined to be $25.00 per share, based on a third-party valuation service[675]. - The company did not repurchase any shares of common stock for the nine months ended March 31, 2021, or March 31, 2020[677]. - The company incurred $29,754 of fees related to the issuance of Prospect Capital InterNotes®, with $12,307 remaining to be amortized as of March 31, 2021[629]. Operational Insights - The company anticipates that the transition from LIBOR to alternative reference rates may impact its financial condition and results of operations, although the specific effects remain uncertain[660]. - For the nine months ended March 31, 2021, operating activities provided $131,008 in cash, a decrease from $343,368 in the same period of 2020[662]. - Financing activities used $74,580 in cash during the nine months ended March 31, 2021, compared to $403,820 in the prior year, including dividend payments of $132,676 and $194,024 respectively[662]. - The company guaranteed $2,737 in standby letters of credit and $3,494 of equipment lease obligations for InterDent, Inc. as of March 31, 2021, with no recorded liability due to a remote likelihood of default[666]. - The company completed an extension of the Revolving Credit Facility on April 28, 2021, with $1,082,500 of commitments closed to date and a maturity date of April 27, 2026, achieving a 15 basis point reduction in the interest rate[686].

Financial Data and Key Metrics Changes - In the December quarter, net investment income (NII) was $81.6 million or $0.21 per common share, an increase of $0.06 from the prior quarter [5] - Net income was $306 million or $0.80 per common share, up $0.35 from the prior quarter [5] - Net asset value (NAV) stood at $8.96 per common share in December, up $0.56 and 7% from the prior quarter, marking the third consecutive quarter of NAV growth [5] - The net debt-to-equity ratio was 61.1%, down 13% from March and down 7% from September [5] Business Line Data and Key Metrics Changes - The portfolio at fair value comprised over 47% secured first lien, 21% other senior secured debt, 13% subordinated structured notes, and 18% equity investments, resulting in 82% of investments being secured debt [8] - Originations in the December quarter totaled $346 million, with $338 million in repayments and exits, resulting in net originations of $8 million [12] - The weighted average middle market portfolio net leverage stood at 4.97x EBITDA, down 0.31 from the prior quarter [11] Market Data and Key Metrics Changes - The structured credit portfolio generated an annualized cash yield of 17.2% and a GAAP yield of 16.8% as of December [15] - The trailing 12-month default rate for the structured credit portfolio was 206 basis points, down 14 from the prior quarter [14] Company Strategy and Development Direction - The company focuses on a diversified investment strategy that includes third-party private equity sponsor-related lending, direct non-sponsor lending, and real estate yield investing [7] - The company aims to maintain a balance between liquidity and efficient financing, with a target net debt-to-equity ratio of 0.7 to 0.85 [5][28] - The company has a significant pipeline of deals to deploy capital, indicating a proactive approach to investment opportunities [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the loan space, citing a decline in default rates and improvements in loan prices [25] - The company highlighted the importance of having a strong management team at portfolio companies, particularly in overcoming challenges [47] - Management noted that the real estate business is highly profitable and generates significant cash flows, contributing positively to overall performance [52] Other Important Information - The company announced monthly cash common shareholder distributions of $0.06 per share for February, March, and April, marking the 42nd, 43rd, and 44th consecutive dividends [5] - The company has a combined balance sheet cash and undrawn revolving credit facility commitments of approximately $845 million [17][29] Q&A Session Summary Question: Insights on CLO portfolio yields - Management noted a rebound in yields for the CLO portfolio, with cash yields up to 17.2%, and a decline in default rates, indicating optimism for the loan space [24][25] Question: Utilization of the revolver and borrowing base - Management indicated an increase in revolver utilization from 15% to 35% and mentioned approximately $430 million available on the current borrowing base [26][29] Question: NAV performance and asset concentration - Management acknowledged that a significant portion of NAV came from two assets, InterDent and the REIT, and discussed the diversification within the real estate portfolio [31][36] Question: Cash flow disclosures for the REIT - Management agreed to review disclosures regarding cash flows and the mechanics of IRR for the REIT, emphasizing that it is a profitable business [40][41]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2020 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 814-00659 PROSPECT CAPITAL CORPORATION (Exact name of registrant as specified in its charter) Maryland 43-2048643 (State or other jurisdiction of incorporation or organizati ...

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