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Section 1: 8-K (8-K)

Document
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 10, 2019 (May 8, 2019)

Prospect Capital Corporation
(Exact name of registrant as specified in its charter)

 
 
 
 
 
MARYLAND 
 
814-00659
 
43-2048643
(State or other jurisdiction
 
(Commission File Number)
 
(IRS Employer
of incorporation)
 
 
 
Identification No.)

10 East 40th Street, 42nd Floor, New York, New York 10016
(Address of principal executive offices, including zip code)

(212) 448-0702

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
 
o
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
 
o
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
 
o
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o




Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol
Name of each exchange on which registered
Common Stock, $0.001 par value
PSEC
NASDAQ Global Select Market
6.25% Notes due 2024, par value $25
PBB
New York Stock Exchange
6.25% Notes due 2028, par value $25
PBY
New York Stock Exchange
6.875% Notes due 2029, par value $25
PBC
New York Stock Exchange

 



Item 2.02.   Results of Operations and Financial Condition.

On May 8, 2019, the registrant issued a press release announcing its financial results for its third fiscal quarter ended March 31, 2019. The text of the press release is included as Exhibit 99.1 to this Form 8-K.

The information disclosed under this Item 2.02, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

Item 7.01. Regulation FD Disclosure.

On May 8, 2019, the registrant issued a press release, included herewith as Exhibit 99.1, and by this reference incorporated herein, announcing the declaration of monthly cash distributions to shareholders in the following amounts and with the following record and payment dates:
$0.06 per share for May 2019 to May 31, 2019 record holders with June 20, 2019 payment date;
$0.06 per share for June 2019 to June 28, 2019 record holders with July 18, 2019 payment date;
$0.06 per share for July 2019 to July 31, 2019 record holders with August 22, 2019 payment date;and
$0.06 per share for August 2019 to August 30, 2019 record holders with September 19, 2019 payment date.

The information disclosed under this Item 7.01, including Exhibit 99.1 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.





3



 
 



Item 9.01. Financial Statements and Exhibits
(d) Exhibits

99.1
Press Release, dated May 8, 2019



4



 
 




SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.

Prospect Capital Corporation


By:     /s/ M. Grier Eliasek
Name: M. Grier Eliasek
Title: Chief Operating Officer
Date:  May 10, 2019


5



 
 



Index to Exhibits
Exhibit
Number
Description
 
 
 
 
 
 
 
 
 
 


6



 
 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
Exhibit 99.1

Prospect Capital Reports March 2019 Quarterly Results and Declares Additional Monthly Distributions

NEW YORK - (GLOBE NEWSWIRE) - May 8, 2019 - Prospect Capital Corporation (NASDAQ: PSEC) (“Prospect”, “our”, or “we”) today announced financial results for our third fiscal quarter ended March 31, 2019.

All amounts in $000’s except
   per share amounts (on weighted average
   basis for period numbers)
Quarter Ended
Quarter Ended
Quarter Ended
March 31, 2019
December 31, 2018
March 31, 2018
 
 
 
 
Net Investment Income (“NII”)
$77,262
$80,811
$70,446
Interest as % of Total Investment Income
90.6%
84.1%
89.6%
 
 
 
 
NII per Share
$0.21
$0.22
$0.19
 
 
 
 
Net Income (Loss)
$89,195
$(67,389)
$51,859
Net Income (Loss) per Share
$0.24
$(0.18)
$0.14
 
 
 
 
Distributions to Shareholders
$66,024
$65,837
$65,174
Distributions per Share
$0.18
$0.18
$0.18
 
 
 
 
NII / Distributions to Shareholders
117%
123%
108%
 
 
 
 
NAV per Share at Period End
$9.08
$9.02
$9.23
 
 
 
 
Net of Cash Debt to Equity Ratio
69.1%
75.0%
69.1%

For the March 2019 quarter, we earned net investment income (“NII”) of $77.3 million, or $0.21 per weighted average share, down $0.01 from the December 2018 quarter, exceeding our current quarterly dividend rate of $0.18 per share by $0.03 per share. The decrease in NII per share for the March 2019 quarter is primarily due to lower levels of dividends and structuring fee income compared to the December 2018 quarter. Our ratio of NII to distributions was 117% in the March 2019 quarter.

In the March 2019 quarter, our net of cash debt to equity ratio was 69.1%, down 5.9% from December 2018.

For the March 2019 quarter, our net income was $89.2 million, or $0.24 per weighted average share. The $0.42 increase in net income for the March 2019 quarter is primarily due to realized and unrealized gains in our portfolio.

Our net asset value (“NAV”) per share increased by $0.06 to $9.08 during the March 2019 quarter.






All amounts in $000’s except
   per share amounts (on weighted
   average basis for period numbers)
Nine Months Ended
March 31, 2019
Nine Months Ended
March 31, 2018
 
 
 
NII
$243,232
$207,370
NII per Share
$0.67
$0.57
 
 
 
Net Income (“NI”)
$105,601
$185,559
NI per Share
$0.29
$0.51
 
 
 
Distributions to Shareholders
$197,555
$211,733
Distributions per Share
$0.54
$0.59

For the nine months ended March 31, 2019, we earned NII of $243.2 million, or $0.67 per weighted average share, up $0.10 from the prior year. For the nine months ended March 31, 2019, we earned NI of $105.6 million, or $0.29 per weighted average share, down $0.22 from the prior year.


DISTRIBUTION DECLARATION

Prospect is declaring distributions as follows:

$0.06 per share for May 2019 to May 31, 2019 record holders with June 20, 2019 payment date;
$0.06 per share for June 2019 to June 28, 2019 record holders with July 18, 2019 payment date;
$0.06 per share for July 2019 to July 31, 2019 record holders with August 22, 2019 payment date; and
$0.06 per share for August 2019 to August 30, 2019 record holders with September 19, 2019 payment date.

These distributions are Prospect’s 130th, 131th, and 132nd, and 133rd consecutive cash distributions to shareholders.

Based on the declarations above, Prospect’s closing stock price of $6.78 at May 7, 2019 delivers to shareholders a distribution yield of 10.6%.

Based on past distributions and our current share count for declared distributions, Prospect since inception through our August 2019 distribution will have distributed $17.40 per share to original shareholders, aggregating approximately $2.9 billion in cumulative distributions to all shareholders.

Prospect expects to declare September 2019 and October 2019 distributions in August 2019.





PORTFOLIO AND INVESTMENT ACTIVITY

All amounts in $000’s except
   per unit amounts
As of
As of
As of
March 31, 2019
December 31, 2018
June 30, 2018
 
 
 
 
Total Investments (at fair value)
$5,700,673
$5,842,570
$5,727,279
Number of Portfolio Companies
137
139
135
% Controlled Investments (at fair value)
42.0%
41.6%
42.0%
 
 
 
 
Secured First Lien
44.6%
46.2%
43.9%
Secured Second Lien
23.5%
23.1%
22.1%
Subordinated Structured Notes
15.5%
15.2%
16.8%
Equity Investments
15.1%
14.3%
16.6%
Rated Secured Structured Notes (1)
0.8%
0.8%
0
Unsecured Debt
0.5%
0.4%
0.6%
 
 
 
 
Annualized Current Yield - All Investments
10.4%
10.7%
10.5%
Annualized Current Yield - Performing Interest Bearing Investments
12.8%
13.1%
13.0%
 
 
 
 
Top Industry Concentration(2)
13.8%
13.8%
14.2%
 
 
 
 
Energy Industry Concentration(2)
3.0%
3.0%
3.0%
 
 
 
 
Non-Accrual Loans as % of Total Assets (3)
3.3%
3.6%
2.5%
 
 
 
 
Weighted Average Portfolio Net Leverage(4)
4.51x
4.57x
4.60x
Weighted Average Portfolio EBITDA(4)
$59,835
$58,491
$55,384

(1)
Our Rated Secured Structured Notes are considered non-agented debt where applicable.
(2)
Excluding our underlying industry-diversified structured credit portfolio.
(3)
Calculated at fair value.
(4)
For additional disclosure see “Weighted Average Portfolio EBITDA and Net Leverage” at the end of this release.





During the March 2019 and December 2018 quarters, our investment origination and repayment activity was as follows:

All amounts in $000’s
Quarter Ended
Quarter Ended
March 31, 2019
December 31, 2018
 
 
 
Total Originations
$35,711
$226,252
 
 
 
Non-Agented Debt (1)
100.0%
72.5%
Agented Sponsor Debt
14.5%
Subordinated Structured Notes
10.2%
Agented Non-Sponsor Debt
2.1%
Real Estate
0.6%
Corporate Yield Buyouts
0.1%
 
 
 
Total Repayments
$195,055
$163,502
Originations, Net of Repayments
$(159,344)
$62,750

(1)
Non-Agented Debt includes 8.8% of origination activity in Rated Secured Structured Notes for the quarter ended December 31, 2018.

For a list of transactions completed during the quarter, please see “Portfolio Investment Activity” in our Form 10-Q for the quarter ended March 31, 2019.




We have invested in structured credit investments with individual standalone financings non-recourse to Prospect and with our risk limited in each case to our net investment amount. At March 31, 2019 and December 31, 2018, our subordinated structured note portfolio at fair value consisted of the following:

All amounts in $000’s except
   per unit amounts
As of
As of
March 31, 2019
December 31, 2018
 
 
 
Total Subordinated Structured Notes
$881,128
$889,491
 
 
 
# of Investments
43
43
 
 
 
TTM Average Cash Yield(1)(2)(3)
17.9%
17.5%
Annualized Cash Yield(1)(2)(3)
15.2%
21.0%
Annualized GAAP Yield on Fair Value(1)(2)
15.8%
15.5%
Annualized GAAP Yield on Amortized Cost(2)(4)
12.7%
12.6%
 
 
 
Cumulative Cash Distributions
$1,271,206
$1,237,719
% of Original Investment
83.0%
80.8%
 
 
 
# of Underlying Collateral Loans
1,808
1,853
Total Asset Base of Underlying Portfolio
$18,426,692
$18,646,090
 
 
 
Prospect TTM Default Rate
0.29%
0.92%
Broadly Syndicated Market TTM Default Rate
0.93%
1.63%
Prospect Default Rate Outperformance vs. Market
0.64%
0.71%

(1)
Calculation based on fair value.
(2)
Excludes deals being redeemed.
(3)
Excludes deals that have yet to make a first payment.
(4)
Calculation based on amortized cost.

To date, including called deals being liquidated, we have exited nine subordinated structured notes totaling $263.4 million with an expected pooled average realized IRR of 16.8% and cash on cash multiple of 1.49 times.

Since December 31, 2017 through today, 22 of our structured credit investments have completed multi-year extensions of their reinvestment periods (typically at reduced liability spreads). We believe further optionality upside exists in our structured credit portfolio through additional re-financings and reinvestment period extensions.




To date during the March 2019 quarter, we have completed new and follow-on investments as follows:

All amounts in $000’s
Quarter Ended
June 30, 2019
 
 
Total Originations
$25,919
 
 
Non-Agented Debt
64.7%
Agented Sponsor Debt
35.3%
 
 
Total Repayments
$61,651
Originations, Net of Repayments
$(35,732)


LIQUIDITY AND FINANCIAL RESULTS

All amounts in $000’s
As of
March 31, 2019
As of
December 31, 2018
As of
March 31, 2018
Net of Cash Debt to Equity Ratio
69.1%
75.0%
69.1%
% of Assets at Floating Rates
88.0%
88.2%
90.1%
% of Liabilities at Fixed Rates
95.9%
88.5%
96.4%
 
 
 
 
Unencumbered Assets
$4,152,393
$4,322,091
$4,619,909
% of Total Assets
71.0%
72.4%
78.9%

We repaid the remaining $101.6 million of our January 2019 notes at maturity. The below table summarizes our March 2019 quarter issuance and repurchase activity, including at-the-market (“ATM”) follow-on issuance:

All amounts in $000’s
Principal
Rate
Maturity
 
 
 
 
Debt Issuances
 
 
 
      2025 Notes
$201,250
6.375%
March 2025
      2024 Notes ATM
$12,576
6.25%
June 2024
      2028 Notes ATM
$1,465
6.25%
June 2028
      2029 Notes ATM
$19,170
6.875%
June 2029
Repurchases
 
 
 
2020 Notes
$129,798
4.75%
April 2020
Prospect Capital InterNotes®
$23,986
4.50% - 4.75%
July 2020

On August 1, 2018, we completed an extension of the revolving credit facility (the “Facility”) for Prospect Capital Funding, extending the term 5.7 years from such date and reducing the interest rate on drawn amounts to one-month Libor plus 2.20%.





$1.05 billion of Facility commitments have closed to date with 29 institutional lenders (representing one of the largest and most diversified bank groups in our industry), with further increases targeted. An accordion feature allows the Facility, at Prospect's discretion, to accept up to $1.5 billion of commitments. The Facility matures March 27, 2024. The Facility includes a revolving period that extends through March 27, 2022, followed by an additional two-year amortization period, with distributions allowed to Prospect after the completion of the revolving period.

We currently have eight separate unsecured debt issuances aggregating $1.6 billion outstanding, not including our program notes, with laddered maturities extending to June 2029. At March 31, 2019, $754.7 million of program notes were outstanding with laddered maturities through October 2043.

EARNINGS CONFERENCE CALL

Prospect will host an earnings call on Thursday, May 9, 2019 at 11:00 am. Eastern Time. Dial 888-338-7333. For a replay prior to June 8, 2019, visit www.prospectstreet.com or call 877-344-7529 with passcode 10131367.




PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except share and per share data)
 
March 31, 2019
 
June 30, 2018
 
 
 
(Unaudited)
 
(Audited)
Assets
 
 
 

Investments at fair value:
 

 
 

Control investments (amortized cost of $2,331,616 and $2,300,526, respectively)
$
2,394,716

 
$
2,404,326

Affiliate investments (amortized cost of $180,279 and $55,637, respectively)
91,042

 
58,436

Non-control/non-affiliate investments (amortized cost of $3,437,174 and $3,475,295, respectively)
3,214,915

 
3,264,517

Total investments at fair value (amortized cost of $5,949,069 and $5,831,458, respectively)
5,700,673

 
5,727,279

Cash
120,566

 
83,758

Receivables for:
 
 
 
Interest, net
16,925

 
19,783

Other
985

 
1,867

Deferred financing costs on Revolving Credit Facility
8,386

 
2,032

Due from broker
539

 
3,029

Prepaid expenses
285

 
984

Due from Affiliate
88

 
88

Total Assets 
5,848,447

 
5,838,820

Liabilities 
 

 
 

Revolving Credit Facility
99,000

 
37,000

Convertible Notes (less unamortized debt issuance costs of $15,207 and $13,074, respectively)
763,245

 
809,073

Public Notes (less unamortized discount and debt issuance costs of $14,296 and $11,007,
  respectively)
775,624

 
716,810

Prospect Capital InterNotes® (less unamortized debt issuance costs of $11,969 and $11,998,
respectively)
742,752

 
748,926

Due to Prospect Capital Management
48,855

 
49,045

Interest payable
25,426

 
33,741

Due to broker
31,819

 
6,159

Dividends payable
22,013

 
21,865

Accrued expenses
5,478

 
5,426

Due to Prospect Administration
1,807

 
2,212

Other liabilities
613

 
1,516

Total Liabilities 
2,516,632

 
2,431,773

Commitments and Contingencies
 
 
 
Net Assets 
$
3,331,815

 
$
3,407,047

 
 
 
 
Components of Net Assets 
 

 
 

Common stock, par value $0.001 per share (1,000,000,000 common shares authorized; 366,884,974 and 364,409,938 issued and outstanding, respectively)
$
367

 
$
364

Paid-in capital in excess of par
4,038,229

 
4,021,541

Total distributable earnings (loss)
(706,781
)
 
(614,858
)
Net Assets 
$
3,331,815

 
$
3,407,047

 
 
 
 
Net Asset Value Per Share
$
9.08

 
$
9.35





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

 
Three Months Ended March 31,
 
Nine Months Ended March 31,
 
2019
 
2018
 
2019
 
2018
Investment Income
 
 
 
 
 
 
 
Interest income:
 
 
 
 
 
 
 
Control investments
$
51,078

 
$
45,944

 
$
161,206

 
$
139,392

Affiliate investments
230

 
271

 
631

 
476

Non-control/non-affiliate investments
67,656

 
68,376

 
204,944

 
216,639

Structured credit securities
36,112

 
31,271

 
105,731

 
90,822

Total interest income
155,076

 
145,862

 
472,512

 
447,329

Dividend income:
 
 
 
 
 
 
 
Control investments
3,612

 
5,639

 
31,277

 
5,639

Affiliate investments
659

 

 
659

 

Non-control/non-affiliate investments
253

 
648

 
781

 
1,518

Total dividend income
4,524

 
6,287

 
32,717

 
7,157

Other income:
 
 
 
 
 
 
 
Control investments
10,799

 
6,188

 
29,331

 
12,317

Non-control/non-affiliate investments
710

 
4,498

 
4,854

 
17,011

Total other income
11,509

 
10,686

 
34,185

 
29,328

Total Investment Income
171,109

 
162,835

 
539,414

 
483,814

Operating Expenses
 
 
 
 
 
 
 
Base management fee
29,540

 
29,268

 
92,684

 
88,990

Income incentive fee
19,315

 
17,612

 
60,808

 
51,843

Interest and credit facility expenses
38,946

 
37,479

 
117,510

 
117,861

Allocation of overhead from Prospect Administration
2,084

 
3,195

 
11,091

 
5,899

Audit, compliance and tax related fees
680

 
1,130

 
3,462

 
4,084

Directors’ fees
112

 
113

 
341

 
338

Other general and administrative expenses
3,170

 
3,592

 
10,286

 
7,429

Total Operating Expenses
93,847

 
92,389

 
296,182

 
276,444

Net Investment Income
77,262

 
70,446

 
243,232

 
207,370

Net Realized and Net Change in Unrealized Gains (Losses) from Investments
 
 
 
 
 
 
 
Net realized gains (losses)
 
 
 
 
 
 
 
Control investments
11,507

 
2

 
14,309

 
13

Affiliate investments

 
(14,197
)
 

 
(13,351
)
Non-control/non-affiliate investments
(2,024
)
 
(23
)
 
(792
)
 
(5,116
)
Net realized gains (losses)
9,483

 
(14,218
)
 
13,517

 
(18,454
)
Net change in unrealized gains (losses)
 
 
 
 
 
 
 
Control investments
11,686

 
1,380

 
(22,129
)
 
46,898

Affiliate investments
(4,101
)
 
12,952

 
(23,750
)
 
19,678

Non-control/non-affiliate investments
(2,155
)
 
(18,188
)
 
(98,338
)
 
(68,488
)
Net change in unrealized gains (losses)
5,430

 
(3,856
)
 
(144,217
)
 
(1,912
)
Net Realized and Net Change in Unrealized Gains (Losses) from Investments
14,913

 
(18,074
)
 
(130,700
)
 
(20,366
)
Net realized losses on extinguishment of debt
(2,980
)
 
(513
)
 
(6,931
)
 
(1,445
)
Net Increase in Net Assets Resulting from Operations
$
89,195

 
$
51,859

 
$
105,601

 
$
185,559

Net increase in net assets resulting from operations per share
$
0.24

 
$
0.14

 
$
0.29

 
$
0.51

Dividends declared per share
$
(0.18
)
 
$
(0.18
)
 
$
(0.54
)
 
$
(0.59
)




PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
ROLLFORWARD OF NET ASSET VALUE PER SHARE
(in actual dollars)


 
Three Months Ended
March 31,
 
Nine Months Ended March 31,
 
 
2019
 
2018
 
2019
 
2018
 
Per Share Data
 
 
 
 
 
 
 
Net asset value at beginning of period
$
9.02

 
$
9.28

 
$
9.35

 
$
9.32

 
Net investment income(1)
0.21
 
 
0.19
 
 
0.67
 
 
0.57
 
 
Net realized and change in unrealized gains (losses) (1)
0.03
 
 
(0.05
)
 
(0.38
)
 
(0.06
)
 
Distributions of net investment income
(0.18
)
 
(0.18
)
 
(0.54
)
 
(0.59
)
 
Common stock transactions(2)(3)
 
 
(0.01
)
 
(0.02
)
 
 
(0.01
)
 
  Net asset value at end of period
$
9.08

 
$
9.23

 
$
9.08

 
$
9.23

 

(1)
Per share data amount is based on the weighted average number of common shares outstanding for the period presented (except for dividends to shareholders which is based on actual rate per share).
(2)
Common stock transactions include the effect of issuances and repurchases of common stock, if any.
(3)
Amount is less than $0.01.

WEIGHTED AVERAGE PORTFOLIO EBITDA AND NET LEVERAGE

Weighted Average Portfolio Net Leverage (“Portfolio Net Leverage”) and Weighted Average Portfolio EBITDA (“Portfolio EBITDA”) provide clarity into the underlying capital structure of our portfolio debt investments and the likelihood that our overall portfolio will make interest payments and repay principal.

Portfolio Net Leverage reflects the net leverage of each of our portfolio company debt investments, weighted based on the current fair market value of such investments. The net leverage for each portfolio company is calculated based on our investment in the capital structure of such portfolio company, with a maximum limit of 10.0x adjusted EBITDA. This calculation excludes debt subordinate to our position within the capital structure because our exposure to interest payment and principal repayment risk is limited beyond that point. Additionally, structured credit residual interests and equity investments, for which principal repayment is not fixed, are also not included in the calculation. The calculation does not exceed 10.0x adjusted EBITDA for any individual investment because 10.0x captures the highest level of risk to us. Portfolio Net Leverage provides us with some guidance as to our exposure to the interest payment and principal repayment risk of our overall debt portfolio. We monitor our Portfolio Net Leverage on a quarterly basis.

Portfolio EBITDA is used by Prospect to supplement Portfolio Net Leverage and generally indicates a portfolio company’s ability to make interest payments and repay principal. Portfolio EBITDA is calculated using the weighted average dollar amount EBITDA of each of our portfolio company debt investments. The calculation provides us with insight into profitability and scale of the portfolio companies within our overall debt investments.

These calculations include addbacks that are typically negotiated and documented in the applicable investment documents, including but not limited to transaction costs, share-based compensation, management fees, foreign currency translation adjustments and other nonrecurring transaction expenses.

Together, Portfolio Net Leverage and Portfolio EBITDA assist us in assessing the likelihood that we will timely receive interest and principal payments. However, these calculations are not meant to substitute for an analysis of our underlying portfolio company debt investments, but to supplement such analysis.




ABOUT PROSPECT CAPITAL CORPORATION

Prospect Capital Corporation (www.prospectstreet.com) is a business development company that focuses on lending to and investing in private businesses. Our investment objective is to generate both current income and long-term capital appreciation through debt and equity investments.

We have elected to be treated as a business development company under the Investment Company Act of 1940 (“1940 Act”). We are required to comply with a series of regulatory requirements under the 1940 Act as well as applicable NASDAQ, federal and state rules and regulations. We have elected to be treated as a regulated investment company under the Internal Revenue Code of 1986.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, whose safe harbor for forward-looking statements does not apply to business development companies. Any such statements, other than statements of historical fact, are highly likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under our control, and that we may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from any forward-looking statements. Such statements speak only as of the time when made. We undertake no obligation to update any such statement now or in the future.

For additional information, contact:

Grier Eliasek, President and Chief Operating Officer
[email protected]
Telephone (212) 448-0702



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