Prospect Capital(US:PSEC)2021-11-08 12:01Investment Activity - During the three months ended September 30, 2021, the company acquired $315,156 in new investments and completed follow-on investments totaling approximately $86,722, resulting in gross investment originations of $424,668[478]. - The company made new portfolio investments totaling $315,156 during the three months ended September 30, 2021, compared to $101,411 in the same period of 2020, reflecting a 210% increase[496]. - Total acquisitions for the same period reached $424,668, significantly higher than $177,141 in 2020, indicating a 140% growth[496]. - The company holds controlling interests in 14 portfolio companies, including CP Energy Services Inc. and InterDent, Inc.[490]. - The company has four primary strategies guiding its investment opportunities, including lending to companies and investing in structured credit, with historical allocations of 40%-60%, 15%-25%, 10%-20%, and 10%-20% respectively[470][472][474]. Portfolio Composition - As of September 30, 2021, the company had $6,430,707, or 163.1% of its net assets applicable to common shares, invested in 124 long-term portfolio investments and CLOs[487]. - As of September 30, 2021, the total investments amounted to $6,150,333, with a fair value of $6,430,707[491]. - Control investments represented 40.4% of the portfolio cost at $2,486,474, while their fair value was $3,046,090, accounting for 47.4%[491]. - Affiliate investments were valued at $219,229, making up 3.6% of the portfolio cost, with a fair value of $379,057, or 5.9%[491]. - Non-Control/Non-Affiliate investments totaled $3,444,630, representing 56.0% of the portfolio cost, with a fair value of $3,005,560, or 46.7%[491]. Investment Performance - The annualized current yield across all performing interest-bearing investments was 11.6% as of September 30, 2021, compared to 11.7% as of June 30, 2021[488]. - The weighted average interest rate for new 1st Lien Term Loans was 8.10% in 2021, down from 9.54% in 2020, while Subordinated Secured Debt increased to 11.47% from 8.61%[496]. - The fair value of the Equity Real Estate Investment Trusts (REITs) increased to $1,146,696, representing 17.9% of the portfolio as of September 30, 2021, up from 17.7%[494]. - The company’s portfolio companies are generally lower middle-market firms with less than $100,000 in annual EBITDA, contributing to lower volatility in the investment portfolio[503]. - The net change in unrealized gains increased significantly from $107,844 in Q3 2020 to $136,720 in Q3 2021, with control investments contributing $122,330 to the gains[615]. Debt and Financing - Total outstanding debt as of September 30, 2021 is $2,118,148, with a net carrying value of $2,078,550[525]. - The company’s debt includes Revolving Credit Facility, Convertible Notes, Public Notes, and Prospect Capital InterNotes®[524]. - The maximum draw amount of the Revolving Credit Facility as of September 30, 2021 is $1,277,500[526]. - The company issued $300,000 in unsecured notes that mature on October 15, 2028, with total proceeds of $291,798 after underwriting discounts and offering costs[482]. - The company incurred $15,978 in new fees related to the Revolving Credit Facility, which are being amortized over the term of the facility[539]. Income and Expenses - For the three months ended September 30, 2021, investment income increased to $169,474 million, up from $142,880 million in the same period of 2020, representing an 18.5% year-over-year growth[597]. - Net investment income for the three months ended September 30, 2021, was $81,369 million, compared to $57,545 million for the same period in 2020, reflecting a 41.3% increase[597]. - Total operating expenses for the three months ended September 30, 2021, were $88,105 million, slightly higher than $85,335 million in the same period of 2020[605]. - Interest costs and amortization of financing costs on the Prospect Capital InterNotes® were $5,302 million for the three months ended September 30, 2021[594]. - Income incentive fees increased from $14,386 in Q3 2020 to $19,740 in Q3 2021, driven by a rise in pre-incentive fee net investment income from $71,931 to $101,109[606]. Preferred Stock - The company has entered into a Dealer Manager Agreement for the offering of up to 40,000,000 shares of preferred stock with a liquidation preference of $25.00 per share[626]. - The Series A Preferred Stock offering included 6,000,000 shares with an aggregate liquidation preference of $150,000, settling at a public offering price of $25.00 per share[634]. - The Series A Preferred Stock can be redeemed at the company's option at a price of $25.00 per share plus unpaid dividends after July 19, 2026[636]. - Holders of Series A Preferred Stock have the right to convert their shares into common stock at a conversion rate based on the lesser of the liquidation preference plus unpaid dividends divided by the common stock price or 6.03865[640]. - The company has filed Articles Supplementary to designate additional shares of common stock into preferred stock as Convertible Preferred Stock[628].