Prospect Capital(US:PSEC)2025-05-08 20:19Investment Activity - For the three months ended March 31, 2025, the company acquired new investments totaling $83,577 and completed follow-on investments of approximately $78,481, resulting in gross investment originations of $196,144[525]. - The company received full repayments totaling $38,760 and recorded repayments of approximately $191,656 during the same period[525]. - As of March 31, 2025, the company had $6,901,364 invested in 114 long-term portfolio investments and CLOs, representing 212.7% of net assets applicable to common shares[535]. - The company recorded PIK interest of $19,143 during the three months ended March 31, 2025[525]. - Investments in new portfolio companies for the nine months ended March 31, 2025, amounted to $342,327 million, significantly up from $105,574 million in the same period of 2024[546]. - Total investments in portfolio companies for the nine months ended March 31, 2025, were $621,739 million, compared to $522,316 million in 2024, reflecting a growth of approximately 19%[546]. - The company has controlling interests in 15 portfolio companies, including CP Energy Services and InterDent, as of March 31, 2025[538]. Investment Valuation - The total valuation of the company's investments was $6,901,364 as of March 31, 2025, based on various valuation techniques[554]. - The fair value of the investment in Belnick, LLC was $70,206, reflecting a discount of $11,906 to its amortized cost basis[559]. - The fair value of the investment in CP Energy increased to $117,567, with a discount of $201,685 from its amortized cost[562]. - The fair value of the investment in First Tower was $709,846, representing a premium of $244,115 to its amortized cost[564]. - The fair value of the investment in InterDent was $367,052, showing a discount of $14,928 to its amortized cost[566]. - The fair value of the investment in NPRC was $1,428,607 as of March 31, 2025, a premium of $459,528 from its amortized cost basis[573]. - The fair value of investments may fluctuate significantly due to the lack of readily available market values, potentially leading to realizable values that differ materially from recorded values[708]. Debt and Financing - The company's debt as of March 31, 2025 consists of a Revolving Credit Facility, Public Notes issued in 2021, and Prospect Capital InterNotes®[582]. - As of March 31, 2025, the total outstanding debt was $2,045,808, with a net carrying value of $2,027,992[583]. - The Revolving Credit Facility had outstanding borrowings of $459,963 and an effective interest rate of 2.05%[583]. - The 2026 Notes had an outstanding principal amount of $342,947, with an effective interest rate of 3.99%[596]. - The Prospect Capital InterNotes® outstanding principal was $642,898, with an effective interest rate of 5.53%[602]. - The company may seek to cancel or purchase outstanding debt through various means, subject to market conditions and liquidity requirements[583]. Income and Expenses - Net investment income for the three months ended March 31, 2025, was $83,489, a decrease from $94,375 in the same period of 2024, representing a decline of 9.4%[605]. - Total investment income for the nine months ended March 31, 2025, was $552,490, down from $649,402 in 2024, reflecting a decrease of 14.9%[605]. - Total operating expenses for the three months ended March 31, 2025, were $87,227, down from $107,840 in 2024[616]. - Interest and credit facility expenses for the three months ended March 31, 2025, were $36,151, compared to $39,841 in 2024, reflecting changes in leveraging capacity and levels of indebtedness[620]. - Preferred stock dividends for the nine months ended March 31, 2025, totaled $(80,083), up from $(72,033) in 2024, indicating an increase of 11.1%[605]. Preferred Stock - The company is no longer offering certain series of preferred stock, focusing on the issuance of 7.50% Preferred Stock[647]. - The company entered into a Dealer Manager Agreement with InspereX LLC for the offering of up to 10,000,000 shares of preferred stock with a liquidation preference of $25.00 per share[648]. - The company has adopted a preferred stock dividend reinvestment plan allowing holders to reinvest dividends at a price of $23.75 per share for certain preferred stocks[649]. - The Series A Preferred Stock has a liquidation preference of $25.00 per share, plus any unpaid dividends accumulated up to the redemption date[672]. - The company may redeem the Series A Preferred Stock at any time after July 19, 2026, at the liquidation preference price plus unpaid dividends[672]. - Holders of the 7.50% Preferred Stock are subject to similar redemption limits, with no more than 2% redeemable per month[654]. Market Risks - The company is exposed to financial market risks due to heightened interest rates and geopolitical uncertainties, which may introduce significant volatility in financial markets[711]. - Interest rate sensitivity indicates that changes in interest rates could materially affect net investment income, particularly for loans with floating interest rates[712]. - Changes in market yields, discount rates, capitalization rates, or EBITDA multiples may negatively impact the fair value measurement of certain investments[704].