Toggle SGML Header (+)


Section 1: 10-Q (10-Q)

Document

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 March 31, 2017
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 organization)
(I.R.S. Employer
Identification No.)
10 East 40th Street, 42nd Floor
 
New York, New York
10016
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (212) 448-0702

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes o    No o
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ý
Accelerated filer o
Non-accelerated filer o
Smaller reporting company o
 (Do not check if a smaller reporting company)
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o    No ý
Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date.
Class of Common Stock
 
Outstanding at May 9, 2017
$0.001 par value
 
359,939,220





Table of Contents
 
 
Page
 
PART I
FINANCIAL INFORMATION
 
 
 
 
 
 
 
 
PART II
OTHER INFORMATION
 
 
 



FORWARD-LOOKING STATEMENTS
This report contains information that may constitute “forward-looking statements.” Generally, the words “believe,” “expect,”
“intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future—including statements relating to volume growth, share of sales and earnings per share growth, and statements expressing general views about future operating results—are forward-looking statements. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in Part II, “Item 1A. Risk Factors” and elsewhere in this report and in our Annual Report on Form 10-K for the year ended June 30, 2016, and those described from time to time in our future reports filed with the Securities and Exchange Commission.


1


PART I
Item 1. Financial Statements
PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except share and per share data)
 
March 31, 2017
 
June 30, 2016
 
 
 
(Unaudited)
 
(Audited)
Assets
 
 
 

Investments at fair value:
 

 
 

Control investments (amortized cost of $1,939,427 and $1,768,220, respectively)
$
1,892,719

 
$
1,752,449

Affiliate investments (amortized cost of $8,530 and $10,758, respectively)
7,239

 
11,320

Non-control/non-affiliate investments (amortized cost of $4,305,472 and $4,312,122, respectively)
4,124,808

 
4,133,939

Total investments at fair value (amortized cost of $6,253,429 and $6,091,100, respectively)
6,024,766

 
5,897,708

Cash
111,804

 
317,798

Receivables for:
 
 
 
Interest, net
10,255

 
12,127

Other
100

 
168

Prepaid expenses
716

 
855

Deferred financing costs on Revolving Credit Facility (Note 4)
5,463

 
7,525

Total Assets 
6,153,104

 
6,236,181

 
 
 
 
Liabilities 
 

 
 

Revolving Credit Facility (Notes 4 and 8)

 

Prospect Capital InterNotes® (Notes 7 and 8)
991,345

 
893,210

Convertible Notes (Notes 5 and 8)
910,782

 
1,074,361

Public Notes (Notes 6 and 8)
737,802

 
699,368

Due to Prospect Capital Management (Note 13)
49,098

 
54,149

Interest payable
33,763

 
40,804

Dividends payable
29,989

 
29,758

Due to Prospect Administration (Note 13)
1,847

 
1,765

Accrued expenses
4,292

 
2,259

Other liabilities
2,018

 
3,633

Due to broker

 
957

Total Liabilities 
2,760,936

 
2,800,264

Commitments and Contingencies (Note 3)

 

Net Assets 
$
3,392,168

 
$
3,435,917

 
 
 
 
Components of Net Assets 
 

 
 

Common stock, par value $0.001 per share (1,000,000,000 common shares authorized; 359,885,703 and 357,107,231 issued and outstanding, respectively) (Note 9)
$
360

 
$
357

Paid-in capital in excess of par (Note 9)
3,989,703

 
3,967,397

Accumulated overdistributed net investment income
(33,719
)
 
(3,623
)
Accumulated net realized loss
(335,513
)
 
(334,822
)
Net unrealized loss
(228,663
)
 
(193,392
)
Net Assets 
$
3,392,168

 
$
3,435,917

 
 
 
 
Net Asset Value Per Share (Note 16) 
$
9.43

 
$
9.62



See notes to consolidated financial statements.
2


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(Unaudited)

 
Three Months Ended March 31,
 
Nine Months Ended March 31,
 
2017
 
2016
 
2017
 
2016
Investment Income
 
 
 
 
 
 
 
Interest income:
 
 
 
 
 
 
 
Control investments
$
41,353

 
$
50,762

 
$
135,543

 
$
154,135

Affiliate investments

 

 

 
896

Non-control/non-affiliate investments
83,794

 
83,986

 
257,919

 
265,855

Structured credit securities
36,564

 
44,244

 
114,690

 
135,912

Total interest income
161,711

 
178,992

 
508,152

 
556,798

Dividend income:
 
 
 
 
 
 
 
Control investments
728

 
8,288

 
4,250

 
25,046

Non-control/non-affiliate investments
89

 
13

 
330

 
16

Total dividend income
817

 
8,301

 
4,580

 
25,062

Other income:
 
 
 
 
 
 
 
Control investments
2,953

 
1,758

 
9,749

 
7,436

Non-control/non-affiliate investments
5,551

 
442

 
11,863

 
9,639

Total other income (Note 10)
8,504

 
2,200

 
21,612

 
17,075

Total Investment Income
171,032

 
189,493

 
534,344

 
598,935

Operating Expenses
 
 
 
 
 
 
 
Base management fee (Note 13)
30,549

 
30,977

 
92,227

 
95,712

Income incentive fee (Note 13)
18,270

 
21,906

 
59,101

 
69,940

Interest and credit facility expenses
41,464

 
41,719

 
123,981

 
125,881

Allocation of overhead from Prospect Administration (Note 13)
3,581

 
2,936

 
9,771

 
9,114

Audit, compliance and tax related fees
1,223

 
1,596

 
3,676

 
4,665

Directors’ fees
113

 
94

 
338

 
282

Excise Tax

 
400

 
(1,100
)
 
1,700

Other general and administrative expenses
2,752

 
2,239

 
9,946

 
11,880

Total Operating Expenses
97,952

 
101,867

 
297,940

 
319,174

Net Investment Income
73,080

 
87,626

 
236,404

 
279,761

Net Realized and Change in Unrealized Gains (Losses) from Investments
 
 
 
 
 
 
Net realized gains (losses)
 
 
 
 
 
 
 
Control investments
1

 
16

 
184

 
7

Affiliate investments

 
(14,194
)
 
137

 
(14,194
)
Non-control/non-affiliate investments
177

 
3,394

 
489

 
(4,050
)
Net realized gains (losses)
178

 
(10,784
)
 
810

 
(18,237
)
Net change in unrealized (losses) gains
 
 
 
 
 
 
 
Control investments
(33,235
)
 
36,508

 
(30,937
)
 
(40,779
)
Affiliate investments
(581
)
 
189

 
(1,854
)
 
535

Non-control/non-affiliate investments
(19,930
)
 
(38,008
)
 
(2,480
)
 
(212,989
)
Net change in unrealized losses
(53,746
)
 
(1,311
)
 
(35,271
)
 
(253,233
)
Net Realized and Change in Unrealized Losses from Investments
(53,568
)
 
(12,095
)
 
(34,461
)
 
(271,470
)
Net realized losses on extinguishment of debt
(20
)
 
(23
)
 
(205
)
 
(86
)
Net Increase in Net Assets Resulting from Operations
$
19,492

 
$
75,508

 
$
201,738

 
$
8,205

Net increase in net assets resulting from operations per share
$
0.05

 
$
0.21

 
$
0.56

 
$
0.02

Dividends declared per share
$
(0.25
)
 
$
(0.25
)
 
$
(0.75
)
 
$
(0.75
)

See notes to consolidated financial statements.
3


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(in thousands, except share data)
(Unaudited)

 
Nine Months Ended March 31,
 

2017
 
2016
Operations
 

 
 

Net investment income
$
236,404

 
$
279,761

Net realized gains (losses)
605

 
(18,323
)
Net change in unrealized losses
(35,271
)
 
(253,233
)
Net Increase in Net Assets Resulting from Operations 
201,738

 
8,205

 
 
 
 
Distributions to Shareholders
 
 
 
Distribution from net investment income
(268,989
)
 
(266,920
)
Net Decrease in Net Assets Resulting from Distributions to Shareholders
(268,989
)
 
(266,920
)
 
 
 
 
Common Stock Transactions 
 
 
 
Offering costs from issuance of common stock

 
118

Repurchase of common stock under stock repurchase program

 
(34,140
)
Value of shares issued through reinvestment of dividends
23,502

 
12,104

Net Increase (Decrease) in Net Assets Resulting from Common Stock Transactions 
23,502

 
(21,918
)
 
 
 
 
Total Decrease in Net Assets 
(43,749
)
 
(280,633
)
Net assets at beginning of period
3,435,917

 
3,703,049

Net Assets at End of Period (Accumulated Overdistributed Net Investment Income of $33,719 and $3,623, respectively)
$
3,392,168

 
$
3,422,416

 
 
 
 
Common Stock Activity
 
 
 
Shares repurchased under stock repurchase program

 
(4,708,750
)
Shares issued through reinvestment of dividends
2,778,472

 
1,731,768

Net shares issued (repurchased) due to common stock activity
2,778,472

 
(2,976,982
)
Shares issued and outstanding at beginning of period
357,107,231

 
359,090,759

Shares Issued and Outstanding at End of Period
359,885,703

 
356,113,777

 


See notes to consolidated financial statements.
4


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except share data)
(Unaudited)

 
Nine Months Ended March 31,
 
2017
 
2016
Operating Activities
 
 
 
Net increase in net assets resulting from operations
$
201,738

 
$
8,205

Net realized losses on extinguishment of debt
205

 
86

Net realized (gains) losses from investments
(810
)
 
18,237

Net change in unrealized losses on investments
35,271

 
253,233

Amortization of discounts and premiums, net
42,937

 
62,631

Accretion of discount on Public Notes (Note 6)
200

 
148

Amortization of deferred financing costs
10,128

 
10,156

Payment-in-kind interest
(14,326
)
 
(7,475
)
Structuring fees
(11,674
)
 
(6,932
)
Change in operating assets and liabilities:
 
 
 
Payments for purchases of investments
(1,240,294
)
 
(670,657
)
Proceeds from sale of investments and collection of investment principal
1,061,839

 
955,415

Decrease in interest receivable, net
1,872

 
1,529

Decrease in other receivables
68

 
1,958

Decrease (increase) in prepaid expenses
139

 
(511
)
Decrease in due to broker
(957
)
 
(26,778
)
Decrease in interest payable
(7,041
)
 
(5,935
)
Increase (decrease) in due to Prospect Administration
82

 
(2,339
)
(Decrease) increase in due to Prospect Capital Management
(5,051
)
 
52,471

Increase (decrease) in accrued expenses
2,033

 
(255
)
Decrease in other liabilities
(1,615
)
 
(50
)
Net Cash Provided by Operating Activities 
74,744

 
643,137

Financing Activities
 
 
 
Borrowings under Revolving Credit Facility (Note 4)
557,000

 
615,000

Principal payments under Revolving Credit Facility (Note 4)
(557,000
)
 
(983,700
)
Issuances of Public Notes, net of original issue discount (Note 6)
37,466

 
160,000

Redemptions of Convertible Notes (Note 5)
(167,500
)
 
(150,500
)
Issuances of Prospect Capital InterNotes® (Note 7)
109,221

 
74,862

Redemptions of Prospect Capital InterNotes®, net (Note 7)
(12,170
)
 
(3,769
)
Financing costs paid and deferred
(2,500
)
 
(6,759
)
Cost of shares repurchased under stock repurchase program

 
(34,140
)
Offering costs from issuance of common stock

 
118

Dividends paid
(245,255
)
 
(255,063
)
Net Cash Used in Financing Activities
(280,738
)
 
(583,951
)
 
 
 
 
Net (Decrease) Increase in Cash
(205,994
)
 
59,186

Cash at beginning of period
317,798

 
110,026

Cash at End of period
$
111,804

 
$
169,212

 
 
 
 
Supplemental Disclosures
 
 
 
Cash paid for interest
$
120,694

 
$
121,512

Non-Cash Financing Activities
 
 
 
Value of shares issued through reinvestment of dividends
$
23,502

 
$
12,104

Cost basis of investments written off as worthless
$
2,535

 
$
22,407


See notes to consolidated financial statements.
5


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS
(in thousands, except share data)


 
 
 
March 31, 2017 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(45)
 
 
 
 
 
 
 
 
 
 
 
Arctic Energy Services, LLC(17)
Wyoming / Energy Equipment & Services
Class D Units (32,915 units)(15)
 
$
31,640

$
15,258

0.4%
Class E Units (21,080 units)(15)
 
20,230


—%
Class A Units (700 units)(15)
 
9,006


—%
Class C Units (10 units)(15)
 


—%
 
 
 
 
60,876

15,258

0.4%
CCPI Inc.(18)
Ohio / Electronic Equipment, Instruments & Components
Senior Secured Term Loan A (10.00%, due 12/31/2017)(3)
11,975

11,975

11,975

0.4%
Senior Secured Term Loan B (12.00% plus 7.00% PIK, due 12/31/2017)(3)(44)
9,320

9,320

9,320

0.3%
Common Stock (14,857 shares)
 
6,759

20,703

0.5%
 
 
 
 
28,054

41,998

1.2%
CP Energy Services Inc.(19)
Oklahoma / Energy Equipment & Services
Series B Convertible Preferred Stock (1,043 shares)(15)
 
98,273

71,205

2.1%
Common Stock (2,924 shares)(15)
 
15,227


—%
 
 
 
 
113,500

71,205

2.1%
Credit Central Loan Company, LLC(20)
South Carolina / Consumer Finance
Subordinated Term Loan (10.00% plus 10.00% PIK, due 6/26/2019)(13)(44)
51,855

44,897

51,855

1.5%
Class A Units (10,640,642 units)(13)(15)
 
13,731

8,342

0.2%
Net Revenues Interest (25% of Net Revenues)(13)(15)
 

2,775

0.2%
 
 
 
 
58,628

62,972

1.9%
Echelon Aviation LLC
New York / Aerospace & Defense
Senior Secured Term Loan (11.75% (LIBOR + 9.75% with 2.00% LIBOR floor) plus 2.25% PIK, due 3/31/2022)(10)(12)(44)
31,055

31,055

31,055

0.9%
Senior Secured Term Loan (11.00% (LIBOR + 9.00% with 2.00% LIBOR floor) plus 1.00% PIK, due 12/7/2024)(10)(12)(44)
16,044

16,044

16,044

0.5%
Membership Interest (99%)
 
22,738

31,676

0.9%
 
 
 
 
69,837

78,775

2.3%
Edmentum Ultimate Holdings, LLC(21)
Minnesota / Diversified Consumer Services
Second Lien Revolving Credit Facility to Edmentum, Inc. – $7,834 Commitment (5.00%, due 6/9/2020)(8)(14)
4,896

4,896

4,896

0.1%
Unsecured Senior PIK Note (8.50% PIK, due 6/9/2020)(8)(44)
6,763

6,763

6,763

0.2%
Unsecured Junior PIK Note (10.00% PIK, in non-accrual status effective 1/1/2017, due 6/9/2020)(8)
31,102

23,829

29,701

0.9%
Class A Units (370,964 units)(15)
 
6,577


—%
 
 
 
 
42,065

41,360

1.2%
First Tower Finance Company LLC(22)
Mississippi / Consumer Finance
Subordinated Term Loan to First Tower, LLC (10.00% plus 7.00% PIK, due 6/24/2019)(13)(44)
258,869

258,869

258,869

7.6%
Class A Units (93,997,533 units)(13)(15)
 
78,481

90,556

2.7%
 
 
 
 
337,350

349,425

10.3%
Freedom Marine Solutions, LLC(23)
Louisiana / Energy Equipment & Services
Membership Interest (100%)(15)
 
41,811

23,994

0.7%
 
 
 
 
41,811

23,994

0.7%

See notes to consolidated financial statements.
6


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
March 31, 2017 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(45)
 
 
 
 
 
 
 
 
 
 
 
Gulf Coast Machine & Supply Company
Texas / Energy Equipment & Services
Senior Secured Term Loan (10.50% (LIBOR + 8.50% with 2.00% LIBOR floor), in non-accrual status effective 1/1/2015, due 10/12/2017)(10)(11)
$
47,163

$
39,403

$
7,144

0.2%
Series A Convertible Preferred Stock (99,900 shares)(15)
 
25,950


—%
Common Stock (100 shares)(15)
 


—%
 
 
 
 
65,353

7,144

0.2%
MITY, Inc.(24)
Utah / Commercial Services & Supplies
Senior Secured Note A (10.00% (LIBOR + 7.00% with 3.00% LIBOR floor), due 1/30/2020)(3)(10)(11)
26,250

26,250

26,250

0.8%
Senior Secured Note B (10.00% (LIBOR + 7.00% with 3.00% LIBOR floor) plus 10.00% PIK, due 1/30/2020)(3)(10)(11)(44)
24,442

24,442

24,442

0.7%
Subordinated Unsecured Note to Broda Enterprises ULC (10.00%, due on demand)(13)
5,531

7,200

5,531

0.2%
Common Stock (42,053 shares)
 
6,849

19,441

0.5%
 
 
 
 
64,741

75,664

2.2%
National Property REIT Corp.(25)
Various / Equity Real Estate Investment Trusts (REITs) / Online Lending
Senior Secured Term Loan A (6.00% (LIBOR + 4.00% with 2.00% LIBOR floor) plus 5.50% PIK, due 4/1/2019)(10)(11)(44)
297,065

297,065

297,065

8.8%
Senior Secured Term Loan E (11.00% (LIBOR + 9.00% with 2.00% LIBOR floor) plus 5.00% PIK, due 4/1/2019)(10)(11)(44)
132,741

132,741

132,741

3.9%
Senior Secured Term Loan C to ACL Loan Holdings, Inc. (11.00% (LIBOR + 9.00% with 2.00% LIBOR floor) plus 5.00% PIK, due 4/1/2019)(10)(11)(13)(44)
99,934

99,934

99,934

2.9%
Senior Secured Term Loan C to American Consumer Lending Limited (11.00% (LIBOR + 9.00% with 2.00% LIBOR floor) plus 5.00% PIK, due 12/15/2020)(10)(11)(13)(44)
46,918

46,918

46,918

1.4%
Common Stock (2,266,143 shares)(15)
 
244,044

292,221

8.6%
Net Operating Income Interest (5% of Net Operating Income)(15)
 

90,738

2.7%
 
 
 
 
820,702

959,617

28.3%
Nationwide Loan Company LLC(26)
Illinois / Consumer Finance
Senior Subordinated Term Loan to Nationwide Acceptance LLC (10.00% plus 10.00% PIK, due 6/18/2019)(13)(44)
16,819

16,819

16,819

0.5%
Class A Units (29,559,899 units)(13)
 
16,293

19,285

0.6%
 
 
 
 
33,112

36,104

1.1%
NMMB, Inc.(27)
New York / Media
Senior Secured Note (14.00%, due 5/6/2021)
3,714

3,714

3,714

0.1%
Senior Secured Note to Armed Forces Communications, Inc. (14.00%, due 5/6/2021)
7,000

7,000

7,000

0.2%
Series A Preferred Stock (7,200 shares)(15)
 
7,200

3,598

0.1%
Series B Preferred Stock (5,669 shares)(15)
 
5,669

2,833

0.1%
 
 
 
 
23,583

17,145

0.5%
R-V Industries, Inc.
Pennsylvania / Machinery
Senior Subordinated Note (10.15% (LIBOR + 9.00% with 1.00% LIBOR floor), due 3/31/2022)(3)(10)(11)
28,622

28,622

28,622

0.8%
Common Stock (745,107 shares)
 
6,866

8,601

0.3%
 
 
 
 
35,488

37,223

1.1%

See notes to consolidated financial statements.
7


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
March 31, 2017 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(45)
 
 
 
 
 
 
 
 
 
 
 
USES Corp.(28)
Texas / Commercial Services & Supplies
Senior Secured Term Loan A (9.00% PIK, in non-accrual status effective 4/1/2016, due 3/31/2019)
$
29,433

$
27,658

$
23,458

0.7%
Senior Secured Term Loan B (15.50% PIK, in non-accrual status effective 4/1/2016, due 3/31/2019)
39,892

35,568


—%
Common Stock (268,962 shares)(15)
 


—%
 
 
 
 
63,226

23,458

0.7%
Valley Electric Company, Inc.(29)
Washington / Construction & Engineering
Senior Secured Note to Valley Electric Co. of Mt. Vernon, Inc. (8.00% (LIBOR + 5.00% with 3.00% LIBOR floor) plus 2.50% PIK, due 12/31/2019)(3)(10)(11)(44)
10,430

10,430

10,430

0.3%
Senior Secured Note (10.00% plus 8.50% PIK, due 6/23/2019)(44)
25,091

25,091

22,367

0.7%
Common Stock (50,000 shares)(15)
 
26,204


—%
 
 
 
 
61,725

32,797

1.0%
Wolf Energy, LLC(30)
Kansas / Energy Equipment & Services
Senior Secured Promissory Note secured by assets formerly owned by H&M (18.00%, in non-accrual status effective 4/15/2013, due 4/15/2018)
41,757


93

0.1%
Membership Interest (100%)(15)
 


—%
Membership Interest in Wolf Energy Services Company, LLC (100%)(15)

19,376

18,472

0.5%
Net Profits Interest (8% of Equity Distributions)(4)(15)
 

15

—%
 
 
 
 
19,376

18,580

0.6%
 
$
1,939,427

$
1,892,719

55.8%

Affiliate Investments (5.00% to 24.99% voting control)(46)
 
 
 
 
 
 
 
 
 
 
 
Targus International, LLC(31)
California / Textiles, Apparel & Luxury Goods
Senior Secured Term Loan A (15.00% PIK, in non-accrual status effective 10/1/15, due 12/31/2019)(8)
$
1,474

$
1,263

$
1,474

—%
Senior Secured Term Loan B (15.00% PIK, in non-accrual status effective 10/1/15, due 12/31/2019)(8)
4,423

3,788

4,423

0.2%
Common Stock (1,262,737 shares)(15)
 
3,479

1,342

—%
 
 
 
 
8,530

7,239

0.2%
 
$
8,530

$
7,239

0.2%


See notes to consolidated financial statements.
8


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
March 31, 2017 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
AFI Shareholder, LLC
(f/k/a Aircraft Fasteners International, LLC)
California / Trading Companies & Distributors
Class A Units (32,500 units)(15)
 
$
272

$
1,081

—%
 
 
 
 
272

1,081

—%
American Gilsonite Company(32)
Utah / Chemicals
Membership Interest (1.93%)(15)
 


—%
 
 
 
 


—%
Apidos CLO IX
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 0.00%, due 7/15/2023)(5)(13)(16)
23,525

18,659

15,659

0.5%
 
 
 
 
18,659

15,659

0.5%
Apidos CLO XI
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 11.38%, due 10/17/28)(5)(13)
40,500

30,085

25,879

0.8%
 
 
 
 
30,085

25,879

0.8%
Apidos CLO XII
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 10.11%, due 4/15/2025)(5)(13)
44,063

31,781

28,485

0.8%
 
 
 
 
31,781

28,485

0.8%
Apidos CLO XV
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 12.18%, due 10/20/2025)(5)(13)
36,515

29,352

25,307

0.7%
 
 
 
 
29,352

25,307

0.7%
Apidos CLO XXII
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 16.20%, due 10/20/2027)(5)(6)(13)
31,350

27,083

26,695

0.8%
 
 
 
 
27,083

26,695

0.8%
Ark-La-Tex Wireline Services, LLC
Louisiana / Energy Equipment & Services
Senior Secured Term Loan B (12.50% (LIBOR + 11.50% with 1.00% LIBOR floor), in non-accrual status effective 4/1/2016, due 4/8/2019)(10)(12)
26,080

21,447

1,450

—%
 
 
 
 
21,447

1,450

—%
Armor Holding II LLC
New York / Commercial Services & Supplies
Second Lien Term Loan (10.25% (LIBOR + 9.00% with 1.25% LIBOR floor), due 12/26/2020)(3)(8)(10)(11)
7,000

6,923

6,923

0.2%
 
 
 
 
6,923

6,923

0.2%
Atlantis Health Care Group (Puerto Rico), Inc.
Puerto Rico / Health Care Providers & Services
Revolving Line of Credit – $7,000 Commitment (9.50% (LIBOR + 8.00% with 1.50% LIBOR floor), due 8/21/2018)(10)(11)(14)
2,350

2,350

2,350

0.1%
Senior Term Loan (9.50% (LIBOR + 8.00% with 1.50% LIBOR floor), due 2/21/2020)(3)(10)(11)
79,764

79,764

79,764

2.3%
 
 
 
 
82,114

82,114

2.4%
Babson CLO Ltd. 2014-III
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.02%, due 1/15/2026)(5)(6)(13)
52,250

42,815

39,221

1.2%
 
 
 
 
42,815

39,221

1.2%
Broder Bros., Co.
Pennsylvania / Textiles, Apparel & Luxury Goods
Senior Secured Term Loan A (7.00% (LIBOR + 5.75% with 1.25% LIBOR floor), due 6/03/2021)(3)(10)(12)
118,524

118,524

118,524

3.5%
Senior Secured Term Loan B (13.50% (LIBOR + 12.25% with 1.25% LIBOR floor), due 6/03/2021)(10)(12)
119,999

119,999

119,999

3.5%
 
 
 
 
238,523

238,523

7.0%
Brookside Mill CLO Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 7.49%, due 4/17/2025)(5)(13)
26,000

18,235

16,243

0.5%
 
 
 
 
18,235

16,243

0.5%

See notes to consolidated financial statements.
9


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
March 31, 2017 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
California Street CLO IX Ltd. (f/k/a Symphony CLO IX Ltd.)
Cayman Islands / Structured Finance
Preference Shares (Residual Interest, current yield 13.98%, due 10/16/2028)(5)(13)
$
58,915

$
41,073

$
36,024

1.1%
 
 
 
 
41,073

36,024

1.1%
Capstone Logistics Acquisition, Inc.
Georgia / Commercial Services & Supplies
Second Lien Term Loan (9.25% (LIBOR + 8.25% with 1.00% LIBOR floor), due 10/7/2022)(3)(8)(10)(11)
101,828

101,362

100,741

3.0%
 
 
 
 
101,362

100,741

3.0%
Carlyle Global Market Strategies CLO 2016-3, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 16.49%, due 10/20/2029)(5)(6)(13)
32,200

32,520

28,924

0.9%
 
 
 
 
32,520

28,924

0.9%
Cent CLO 17 Limited
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 7.39%, due 1/30/2025)(5)(13)
24,870

18,168

15,487

0.5%
 
 
 
 
18,168

15,487

0.5%
Cent CLO 20 Limited
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 6.51%, due 1/25/2026)(5)(13)
40,275

31,502

24,797

0.7%
 
 
 
 
31,502

24,797

0.7%
Cent CLO 21 Limited
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 10.68%, due 7/27/2026)(5)(6)(13)
48,528

35,952

30,947

0.9%
 
 
 
 
35,952

30,947

0.9%
Centerfield Media Holding Company(33)
California / Internet Software and Services
Senior Secured Term Loan A (8.15% (LIBOR + 7.00% with 1.00% LIBOR floor), due 1/17/2022)(3)(8)(10)(11)
67,660

67,660

67,660

2.0%
Senior Secured Term Loan B (13.65% (LIBOR + 12.50% with 1.00% LIBOR floor), due 1/17/2022)(8)(10)(11)
68,000

68,000

68,000

2.0%
 
 
 
 
135,660

135,660

4.0%
CIFC Funding 2013-III, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 16.68%, due 10/24/2025)(5)(13)
44,100

31,118

30,495

0.9%
 
 
 
 
31,118

30,495

0.9%
CIFC Funding 2013-IV, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 18.72%, due 11/27/2024)(5)(13)
45,500

33,065

34,293

1.0%
 
 
 
 
33,065

34,293

1.0%
CIFC Funding 2014-IV Investor, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 16.37%, due 10/17/2026)(5)(6)(13)
41,500

30,538

31,185

0.9%
 
 
 
 
30,538

31,185

0.9%
CIFC Funding 2016-I, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 17.50%, due 10/21/2028)(5)(6)(13)
34,000

31,369

29,896

0.9%
 
 
 
 
31,369

29,896

0.9%
Cinedigm DC Holdings, LLC
New York / Media
Senior Secured Term Loan (11.00% (LIBOR + 9.00% with 2.00% LIBOR floor) plus 2.50% PIK, due 3/31/2021)(10)(11)(44)
54,656

54,606

54,656

1.6%
 
 
 
 
54,606

54,656

1.6%
Coverall North America, Inc.
Florida / Commercial Services & Supplies
Senior Secured Term Loan A (7.15% (LIBOR + 6.00% with 1.00% LIBOR floor), due 11/02/2020)(3)(10)(11)
23,500

23,500

23,500

0.7%
Senior Secured Term Loan B (12.15% (LIBOR + 11.00% with 1.00% LIBOR floor), due 11/02/2020)(3)(10)(11)
25,000

25,000

25,000

0.7%
 
 
 
 
48,500

48,500

1.4%

See notes to consolidated financial statements.
10


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
March 31, 2017 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
Crosman Corporation
New York / Leisure Products
Senior Secured Term Loan A (9.68% (LIBOR + 8.70% with .30% LIBOR floor) plus 4.00% PIK, due 8/5/2020)(3)(10)(12)(44)
$
55,652

$
55,652

$
55,652

1.6%
Senior Secured Term Loan B (16.68% (LIBOR + 15.70% with .30% LIBOR floor) plus 4.00% PIK, due 8/5/2020)(10)(12)(44)
42,402

42,402

42,402

1.3%
 
 
 
 
98,054

98,054

2.9%
CURO Financial Technologies Corp.
Canada / Consumer Finance
Senior Secured Notes (12.00%, due 3/1/2022)(8)(13)
10,000

9,822

10,000

0.3%
 
 
 
 
9,822

10,000

0.3%
Digital Room LLC
California / Commercial Services & Supplies
Second Lien Term Loan (11.00% (LIBOR + 10.00% with 1.00% LIBOR floor), due 5/21/2023)(3)(8)(10)(12)
34,000

33,363

33,363

1.0%
 
 
 
 
33,363

33,363

1.0%
Dunn Paper, Inc.
Georgia / Paper & Forest Products
Second Lien Term Loan (9.75% (LIBOR + 8.75% with 1.00% LIBOR floor), due 8/26/2023)(3)(8)(10)(11)
11,500

11,287

11,313

0.3%
 
 
 
 
11,287

11,313

0.3%
Easy Gardener Products, Inc.
Texas / Household Durables
Senior Secured Term Loan (11.15% (LIBOR + 10.00% with .25% LIBOR floor), due 09/30/2020)(3)(10)(11)
17,238

17,238

17,238

0.5%
 
 
 
 
17,238

17,238

0.5%
EZShield Parent, Inc.
Maryland / Internet Software & Services
Senior Secured Term Loan A (7.75% (LIBOR + 6.75% with 1.00% LIBOR floor), due 2/26/2021)(10)(12)
15,000

15,000

15,000

0.4%
Senior Secured Term Loan B (12.75% (LIBOR + 11.75% with 1.00% LIBOR floor), due 2/26/2021)(10)(12)
15,000

15,000

15,000

0.4%
 
 
 
 
30,000

30,000

0.8%
Fleetwash, Inc.
New Jersey / Commercial Services & Supplies
Senior Secured Term Loan B (10.65% (LIBOR + 9.50% with 1.00% LIBOR floor), due 4/30/2019)(3)(10)(11)
23,402

23,402

23,402

0.7%
Delayed Draw Term Loan – $15,000 Commitment (9.65% (LIBOR + 8.50% with 1.00% LIBOR floor)expires 4/30/2019)(10)(14)



—%
 
 
 
 
23,402

23,402

0.7%
Galaxy XV CLO, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 16.81%, due 4/15/2025)(5)(13)
50,525

34,526

37,277

1.1%
 
 
 
 
34,526

37,277

1.1%
Galaxy XVI CLO, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 13.80%, due 11/16/2025)(5)(13)
24,575

18,253

17,448

0.5%
 
 
 
 
18,253

17,448

0.5%
Galaxy XVII CLO, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 12.72%, due 7/15/2026)(5)(6)(13)
39,905

30,210

28,854

0.9%
 
 
 
 
30,210

28,854

0.9%
Global Employment Solutions, Inc.
Colorado / Professional Services
Senior Secured Term Loan (9.00% (LIBOR + 8.00% with 1.00% LIBOR floor), due 6/26/2020)(3)(10)(12)
49,125

49,125

49,125

1.4%
 
 
 
 
49,125

49,125

1.4%
Halcyon Loan Advisors Funding 2012-1 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 0.00%, due 8/15/2023)(5)(13)(16)
23,188

15,774

13,141

0.4%
 
 
 
 
15,774

13,141

0.4%
Halcyon Loan Advisors Funding 2013-1 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 12.90%, due 4/15/2025)(5)(13)
40,400

28,538

28,011

0.8%
 
 
 
 
28,538

28,011

0.8%

See notes to consolidated financial statements.
11


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
March 31, 2017 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
Halcyon Loan Advisors Funding 2014-1 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 13.38%, due 4/18/2026)(5)(13)
$
24,500

$
16,713

$
16,213

0.5%
 
 
 
 
16,713

16,213

0.5%
Halcyon Loan Advisors Funding 2014-2 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.73%, due 4/28/2025)(5)(6)(13)
41,164

28,035

28,193

0.8%
 
 
 
 
28,035

28,193

0.8%
Halcyon Loan Advisors Funding 2015-3 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 16.12%, due 10/18/2027)(5)(6)(13)
39,598

34,900

36,256

1.1%
 
 
 
 
34,900

36,256

1.1%
Harbortouch Payments, LLC
Pennsylvania / Commercial Services & Supplies
Escrow Receivable(15)
 

2,209

0.1%
 
 
 
 

2,209

0.1%
HarbourView CLO VII, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 20.66%, due 11/18/2026)(5)(6)(13)
19,025

15,003

14,413

0.4%
 
 
 
 
15,003

14,413

0.4%
Harley Marine Services, Inc.
Washington / Marine
Second Lien Term Loan (10.50% (LIBOR + 9.25% with 1.25% LIBOR floor), due 12/20/2019)(3)(8)(10)(11)
9,000

8,910

8,813

0.3%
 
 
 
 
8,910

8,813

0.3%
Hollander Sleep Products, LLC
Florida / Textiles, Apparel & Luxury Goods
Senior Secured Term Loan (9.00% (LIBOR + 8.00% with 1.00% LIBOR floor), due 10/21/2020)(3)(10)(11)
21,860

21,860

21,639

0.6%
 
 
 
 
21,860

21,639

0.6%
Inpatient Care Management Company, LLC
Florida / Health Care Providers & Services
Senior Secured Term Loan (11.65% (LIBOR + 10.50% with 1.00% LIBOR floor), due 6/8/2021(10)(12)
26,023

26,023

26,023

0.8%
 
 
 
 
26,023

26,023

0.8%
Instant Web, LLC
Minnesota / Media
Senior Secured Term Loan A (5.65% (LIBOR + 4.50% with 1.00% LIBOR floor), due 3/28/2019)(10)(11)
121,447

121,447

121,447

3.6%
Senior Secured Term Loan B (12.15% (LIBOR + 11.00% with 1.00% LIBOR floor), due 3/28/2019)(3)(10)(11)
158,100

158,100

158,100

4.7%
Senior Secured Term Loan C-1 (12.90% (LIBOR + 11.75% with 1.00% LIBOR floor), due 3/28/2019)(10)(11)
27,000

27,000

27,000

0.8%
Senior Secured Term Loan C-2 (13.65% (LIBOR + 12.50% with 1.00% LIBOR floor), due 3/28/2019)(10)(11)
25,000

25,000

25,000

0.7%
 
 
 
 
331,547

331,547

9.8%
InterDent, Inc.
California / Health Care Providers & Services
Senior Secured Term Loan A (6.48% (LIBOR + 5.50% with 0.75% LIBOR floor), due 8/3/2017)(10)(12)
78,876

78,876

78,876

2.3%
Senior Secured Term Loan B (11.48% (LIBOR + 10.50% with 0.75% LIBOR floor), due 8/3/2017)(3)(10)(12)
131,125

131,125

131,125

3.9%
 
 
 
 
210,001

210,001

6.2%
JD Power and Associates
California / Capital Markets
Second Lien Term Loan (9.50% (LIBOR + 8.50% with 1.00% LIBOR floor), due 9/7/2024)(3)(8)(10)(11)
15,000

14,790

15,000

0.4%
 
 
 
 
14,790

15,000

0.4%
Jefferson Mill CLO Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 11.42%, due 7/20/2027)(5)(6)(13)
19,500

16,919

14,213

0.4%
 
 
 
 
16,919

14,213

0.4%

See notes to consolidated financial statements.
12


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
March 31, 2017 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
K&N Parent, Inc.
California / Auto Components
Second Lien Term Loan (9.75% (LIBOR + 8.75% with 1.00% LIBOR floor), due 10/20/2024)(8)(10)(11)
$
13,000

$
12,754

$
13,000

0.4%
 
 
 
 
12,754

13,000

0.4%
Keystone Peer Review Organization Holdings, Inc.
Pennsylvania / Health Care Providers & Services
Second Lien Term Loan (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 7/28/2023)(3)(8)(10)
45,000

45,000

45,000

1.3%
 
 
 
 
45,000

45,000

1.3%
LaserShip, Inc.
Virginia / Air Freight & Logistics
Senior Secured Term Loan A (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor), due 3/18/2019)(3)(10)(12)
33,955

33,955

33,955

1.0%
Senior Secured Term Loan B (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor), due 3/18/2019)(3)(10)(12)
20,851

20,851

20,851

0.6%
 
 
 
 
54,806

54,806

1.6%
LCM XIV Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 16.15%, due 7/15/2025)(5)(13)
30,500

21,752

22,344

0.7%
 
 
 
 
21,752

22,344

0.7%
Madison Park Funding IX, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 0.11%, due 8/15/2022)(5)(13)
43,110

28,613

27,895

0.8%
 
 
 
 
28,613

27,895

0.8%
Matrixx Initiatives, Inc.
New Jersey / Pharmaceuticals
Senior Secured Term Loan A (7.65% (LIBOR + 6.50% with 1.00% LIBOR floor), due 2/24/2020)(3)(10)(11)
66,802

66,802

66,802

2.0%
Senior Secured Term Loan B (12.65% (LIBOR + 11.50% with 1.00% LIBOR floor), due 2/24/2020)(3)(10)(11)
52,562

52,562

52,562

1.5%
 
 
 
 
119,364

119,364

3.5%
Maverick Healthcare Equity, LLC
Arizona / Health Care Providers & Services
Preferred Units (1,250,000 units)(15)
 
1,252

751

—%
Class A Common Units (1,250,000 units)(15)
 


—%
 
 
 
 
1,252

751

—%
Memorial MRI & Diagnostic, LLC
Texas / Health Care Providers & Services
Senior Secured Term Loan (9.65% (LIBOR + 8.50% with 1.00% LIBOR floor), due 3/16/2022)(10)(11)
38,000

38,000

38,000

1.1%
 
 
 
 
38,000

38,000

1.1%
Mineral Fusion Natural Brands(34)
Colorado / Personal Products
Membership Interest (1.43%)(15)
 

157

—%
 
 
 
 

157

—%
Mountain View CLO 2013-I Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.48%, due 4/12/2024)(5)(13)
43,650

29,920

29,395

0.9%
 
 
 
 
29,920

29,395

0.9%
Mountain View CLO IX Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.27%, due 7/15/2027)(5)(6)(13)
47,830

41,480

40,635

1.2%
 
 
 
 
41,480

40,635

1.2%
National Home Healthcare Corp.
Michigan / Health Care Providers & Services
Second Lien Term Loan (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 12/8/2022)(3)(8)(10)
15,407

15,189

15,189

0.4%
 
 
 
 
15,189

15,189

0.4%

See notes to consolidated financial statements.
13


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
March 31, 2017 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
NCP Finance Limited Partnership(35)
Ohio / Consumer Finance
Subordinated Secured Term Loan (11.00% (LIBOR + 9.75% with 1.25% LIBOR floor), due 9/30/2018)(3)(8)(10)(12)(13)
$
26,960

$
26,471

$
25,751

0.8%
 
 
 
 
26,471

25,751

0.8%
Nixon, Inc.
California / Textiles, Apparel & Luxury Goods
Senior Secured Term Loan (9.50% plus 3.00% PIK, plus 2.00% default interest, in non-accrual status effective 7/1/2016, due 4/16/2018)(8)
15,978

14,197

1,552

—%
 
 
 
 
14,197

1,552

—%
Octagon Investment Partners XV, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 6.57%, due 1/19/2025)(5)(13)
32,921

24,385

19,764

0.6%
 
 
 
 
24,385

19,764

0.6%
Octagon Investment Partners XVIII, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 18.45%, due 12/16/2024)(5)(6)(13)
28,200

18,473

18,234

0.5%
 
 
 
 
18,473

18,234

0.5%
Outerwall Inc.
Washington / Specialty Retail
Senior Secured Term Loan B (9.75% (LIBOR + 8.75% with 1.00% LIBOR floor), due 9/27/2024)(3)(8)(10)(11)
40,000

39,443

40,000

1.2%
 
 
 
 
39,443

40,000

1.2%
Pacific World Corporation
California / Personal Products
Revolving Line of Credit – $15,000 Commitment (8.00% (LIBOR + 7.00% with 1.00% LIBOR floor), due 9/26/2020)(10)(12)(14)
13,225

13,225

13,225

0.4%
Senior Secured Term Loan A (6.00% (LIBOR + 5.00% with 1.00% LIBOR floor), due 9/26/2020)(3)(10)(12)
97,500

97,500

93,915

2.8%
Senior Secured Term Loan B (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 9/26/2020)(3)(10)(12)
97,500

97,500

70,296

2.1%
 
 
 
 
208,225

177,436

5.3%
Pelican Products, Inc.
California / Chemicals
Second Lien Term Loan (9.40% (LIBOR + 8.25% with 1.00% LIBOR floor), due 4/9/2021)(3)(8)(10)(12)
17,500

17,488

17,073

0.5%
 
 
 
 
17,488

17,073

0.5%
PeopleConnect Intermediate, LLC (f/k/a Intelius, Inc.)
Washington / Internet Software & Services
Revolving Line of Credit – $1,000 Commitment (9.65% (LIBOR + 8.50% with 1.00% LIBOR floor), due 8/11/17)(10)(11)(14)



—%
Senior Secured Term Loan A (6.65% (LIBOR + 5.50% with 1.00% LIBOR floor), due 7/1/2020)(3)(10)(11)
19,841

19,841

19,730

0.6%
Senior Secured Term Loan B (12.65% (LIBOR + 11.50% with 1.00% LIBOR floor), due 7/1/2020)(3)(10)(11)
20,670

20,670

20,496

0.6%
 
 
 
 
40,511

40,226

1.2%
PGX Holdings, Inc.(37)
Utah / Diversified Consumer Services
Second Lien Term Loan (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 9/29/2021)(3)(10)(12)
143,767

143,767

143,767

4.2%
 
 
 
 
143,767

143,767

4.2%
Photonis Technologies SAS
France / Aerospace & Defense
First Lien Term Loan (8.65% (LIBOR + 7.50% with 1.00% LIBOR floor), due 9/18/2019)(8)(10)(11)(13)
9,927

9,796

9,186

0.3%
 
 
 
 
9,796

9,186

0.3%
Pinnacle (US) Acquisition Co. Limited
Texas / Electronic Equipment, Instruments & Components
Second Lien Term Loan (10.50% (LIBOR + 9.25% with 1.25% LIBOR floor), due 8/3/2020)(8)(10)(11)
7,037

6,940

5,259

0.2%
 
 
 
 
6,940

5,259

0.2%

See notes to consolidated financial statements.
14


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
March 31, 2017 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS