Prospect Capital(PSEC)2025-02-11 15:35Financial Data and Key Metrics Changes - For the December quarter, the company's net investment income (NII) was 0.20 per common share, with a net asset value (NAV) of 7.84 per common share [5] - The net debt to total assets ratio stood at 28.1% as of December 31 [5] - The company announced monthly common shareholder distributions of 7.1 billion [9] - Investment originations in the December quarter totaled 120 million in first lien senior secured loans, representing close to 90% of total originations [19] Market Data and Key Metrics Changes - The weighted average EBITDA per portfolio company was 20 million, down 39% from the prior quarter and nearly 50% from the June 2024 quarter [18] - Non-accruals as a percentage of total assets stood at approximately 0.4% in December [18] Company Strategy and Development Direction - The company continues to rotate assets into first lien senior secured middle market loans and exit from equity-linked assets, including real estate [6] - The strategy focuses on generating attractive risk-adjusted yields, with performing interest-bearing investments yielding an annualized 11.2% as of December [17] - The company plans to redeploy future asset sale proceeds primarily into property value capital expenditures and first lien senior secured middle market loans [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's diversified access to funding and strong bank relationships, which provide substantial liquidity to capitalize on attractive opportunities [21] - The company has a well-diversified set of strong bank relationships and plans to continue tapping into various bond markets [33] - Management noted that the credit spread versus treasuries is tighter than in July 2024, reflecting a strong credit profile [34] Other Important Information - The company has distributed over 21.39 per share since inception, with a focus on maintaining a strong balance sheet and liquidity [6][21] - As of December, the company had $2.12 billion of commitments from 48 banks, demonstrating strong lender support [23] Q&A Session Summary Question: Impact of rating changes on unsecured debt strategy - Management does not anticipate significant changes in financing strategy and plans to utilize a diversified array of markets for funding [32][33] Question: Participation in preferred exchange offer - Management expects strong participation in exchange offers and confirmed the coupon rate for new preferred securities [36][37]