Prospect Capital(US:PSEC)2022-02-09 20:04Financial Data and Key Metrics Changes - In the December quarter, the company's Net Investment Income (NII) was $85.6 million or $0.22 per common share, exceeding the distribution rate by $0.04 [3] - Basic net income attributable to common stockholders was $246.4 million or $0.63 per common share, with the net asset value (NAV) increasing to $10.60 per common share, up $0.48 or 4.7% from the prior quarter [3][4] - The net debt-to-equity ratio was 51.3%, down 22.8 percentage points from March 2020, but up 3.1 percentage points from the September quarter [4] Business Line Data and Key Metrics Changes - The portfolio at fair value comprised 46.7% secured first-lien debt, 19.5% other senior secured debt, and 10.6% subordinated structured notes, with 76.8% of investments backed by secured debt [17][19] - Originations in December totaled $855 million, with net originations of $411 million after $444 million in repayments [23] - The company held 127 portfolio companies, an increase of three from the prior quarter, with a fair value of $7.0 billion, up $572 million [20] Market Data and Key Metrics Changes - The company's asset concentration in the energy industry was 1.3%, with 0.3% in the hotel, restaurant, and leisure sector, and 0% in retail [21] - Non-accruals as a percentage of total assets stood at approximately 0.4%, down 0.1% from the prior quarter [21] Company Strategy and Development Direction - The company focuses on a diversified investment strategy, including third-party private equity sponsor-related lending, direct non-sponsor lending, and structured credit [14] - The management emphasized maintaining a conservative leverage strategy, with no plans to increase drawn debt leverage beyond the historical target of 0.70 to 0.85 debt-to-equity [6][4] - The company aims to provide low volatility stability to shareholders amidst a volatile macro market backdrop [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in capitalizing on attractive opportunities during the next downturn, expecting an increase in secondary opportunities [15] - The company highlighted its strong liquidity position, with zero debt maturing until July 2022 and a total unfunded eligible commitment of approximately $38 million [33] Other Important Information - The company declared monthly cash common shareholder distributions of $0.06 per share for February, March, and April, marking nearly five years of stable monthly distributions [8][9] - The management team owns approximately 28% of shares outstanding, demonstrating alignment with shareholders [13] Q&A Session Summary - The call concluded without any questions being raised, indicating a smooth presentation of the financial results and strategic outlook [46]