NEW YORK, Aug. 29, 2023 (GLOBE NEWSWIRE) -- Prospect Capital Corporation (NASDAQ:PSEC) ("Prospect", "our", or "we") today announced financial results for our fiscal quarter and year ended June 30, 2023.
FINANCIAL RESULTS
All amounts in $000's except per share amounts (on weighted average basis for period numbers) | Quarter Ended June 30, 2023 | Quarter Ended March 31, 2023 | Quarter Ended June 30, 2022 |
Net Investment Income ("NII") | $112,779 | $102,180 | $89,969 |
Basic NII per Common Share(1) | $0.23 | $0.21 | $0.21 |
Interest as % of Total Investment Income | 89.1% | 92.1% | 83.3% |
Basic NII Coverage of Distributions to Common Shareholders | 128% | 117% | 117% |
Annualized Basic NII Return on Common NAV | 10.0% | 8.9% | 8.0% |
Net Income (Loss) Applicable to Common Shareholders | $(13,950) | $(108,947) | $(56,643) |
Basic Net Income (Loss) per Common Share(2) | $(0.03) | $(0.27) | $(0.14) |
Distributions to Common Shareholders | $72,490 | $72,009 | $70,672 |
Distributions per Common Share | $0.18 | $0.18 | $0.18 |
Since Oct 2017 Basic NII per Common Share(1) | $4.63 | $4.40 | $3.75 |
Since Oct 2017 Distributions per Common Share | $4.14 | $3.96 | $3.42 |
Since Oct 2017 Basic NII Less Distributions per Common Share | $0.49 | $0.44 | $0.33 |
Since Oct 2017 Basic NII Coverage of Distributions to Common Shareholders | 112% | 111% | 110% |
Net Asset Value ("NAV") to Common Shareholders | $3,732,665 | $3,799,294 | $4,119,123 |
NAV per Common Share | $9.24 | $9.48 | $10.48 |
Balance Sheet Cash + Undrawn Revolving Credit Facility Commitments | $993,443 | $954,187 | $695,899 |
Net of Cash Debt to Equity Ratio(3) | 48.8% | 47.1% | 56.8% |
Net of Cash Asset Coverage of Debt Ratio(3) | 304% | 311% | 275% |
Unsecured Debt + Preferred Equity as % of Total Debt + Preferred Equity | 74.8% | 76.7% | 75.7% |
Unsecured or Non-Recourse Debt as % of Total Debt | 100.0% | 100.0% | 100.0% |
All amounts in $000's except per share amounts | Year Ended June 30, 2023 | Year Ended June 30, 2022 |
NII | $420,929 | $343,900 |
Basic NII per Common Share(1) | $0.89 | $0.81 |
Net Income (Loss) Applicable to Common Shareholders | $(172,473) | $556,649 |
Basic Net Income (Loss) per Common Share(2) | $(0.43) | $1.43 |
Distributions to Common Shareholders | $287,241 | $281,394 |
Distributions per Common Share | $0.72 | $0.72 |
(1) Basic NII is calculated by dividing NII, less preferred dividends, by the weighted average number of common shares outstanding.
(2) Basic Net Income (Loss) is calculated by dividing Net Income (Loss) by the weighted average number of common shares outstanding.
(3) Including our preferred stock as equity.
CASH COMMON SHAREHOLDER DISTRIBUTION DECLARATION
Prospect is declaring distributions to common shareholders as follows:
Monthly Cash Common Shareholder Distribution | Record Date | Payment Date | Amount ($ per share) |
September 2023 | 9/27/2023 | 10/19/2023 | $0.0600 |
October 2023 | 10/27/2023 | 11/20/2023 | $0.0600 |
These monthly cash distributions are the 73rd and 74th consecutive $0.06 per share distributions to common shareholders.
Prospect expects to declare November 2023, December 2023, and January 2024 distributions to common shareholders in November 2023.
Based on the declarations above, Prospect's closing stock price of $6.01 at August 28, 2023 delivers to our common shareholders an annualized distribution yield of 12.0% and an annualized basic NII yield of 15.3%, representing 128% basic NII coverage of common distributions.
Taking into account past distributions and our current share count for declared distributions, since inception through our October 2023 declared distribution, Prospect will have distributed $20.40 per share to original common shareholders, representing 2.2 times June 2023 common NAV per share, aggregating over $4.01 billion in cumulative distributions to all common shareholders.
Since inception in 2004, Prospect has invested $20.2 billion across 418 investments, exiting 279 of these investments.
Since October 2017, our NII per common share has aggregated $4.63 while our common shareholder and preferred shareholder distributions per common share have aggregated $4.14, with our NII exceeding common and preferred distributions during this period by $0.49 per common share and representing 112% coverage.
Drivers focused on enhancing accretive NII per share growth include (1) our $2.05 billion targeted 6.50% perpetual preferred stock offerings (which could potentially be increased in capacity in an accretive fashion), (2) greater utilization of our cost efficient revolving floating rate credit facility, (3) increase of short-term Libor and SOFR rates based on Fed tightening to boost asset yields, and (4) increased primary and secondary originations of senior secured debt and selected equity investments targeting attractive risk-adjusted yields and total returns as we deploy dry powder from our underleveraged balance sheet.
Our senior management team and employees own over 27% of all common shares outstanding, over $1.0 billion of our common equity as measured at NAV.
CASH PREFERRED SHAREHOLDER DISTRIBUTION DECLARATION
Prospect is declaring monthly distributions to 5.50% preferred shareholders at an annual rate of 5.50% of the stated value of $25.00 per share, from the date of issuance or, if later, from the most recent dividend payment date (the first business day of the month, with no additional dividend accruing in October as a result), as follows:
Monthly Cash 5.50% Preferred Shareholder Distribution | Record Date | Payment Date | Monthly Amount ($ per share), before pro ration for partial periods |
September 2023 | 9/20/2023 | 10/2/2023 | $0.114583 |
October 2023 | 10/18/2023 | 11/1/2023 | $0.114583 |
November 2023 | 11/15/2023 | 12/1/2023 | $0.114583 |
Prospect is declaring monthly distributions to 6.50% preferred shareholders at an annual rate of 6.50% of the stated value of $25.00 per share, from the date of issuance or, if later, from the most recent dividend payment date (the first business day of the month, with no additional dividend accruing in October as a result), as follows:
Monthly Cash 6.50% Preferred Shareholder Distribution | Record Date | Payment Date | Monthly Amount ($ per share), before pro ration for partial periods |
September 2023 | 9/20/2023 | 10/2/2023 | $0.135417 |
October 2023 | 10/18/2023 | 11/1/2023 | $0.135417 |
November 2023 | 11/15/2023 | 12/1/2023 | $0.135417 |
Prospect is declaring our second quarterly distribution to Series A preferred shareholders at an annual rate of 5.35% of the stated value of $25.00 per share, from the date of issuance or, if later, from the most recent dividend payment date, as follows:
Quarterly Cash 5.35% Preferred Shareholder Distribution | Record Date | Payment Date | Amount ($ per share) |
August 2023 - October 2023 | 10/18/2023 | 11/1/2023 | $0.334375 |
PORTFOLIO UPDATE AND INVESTMENT ACTIVITY
All amounts in $000's except per unit amounts | As of | As of | As of |
June 30, 2023 | March 31, 2023 | June 30, 2022 | |
Total Investments (at fair value) | $7,724,931 | $7,592,777 | $7,602,510 |
Number of Portfolio Companies | 130 | 127 | 129 |
First Lien Debt | 56.5% | 54.4% | 49.9% |
Second Lien Debt | 16.4% | 17.6% | 19.4% |
Subordinated Structured Notes | 8.6% | 9.2% | 9.4% |
Unsecured Debt | 0.1% | 0.2% | 0.1% |
Equity Investments | 18.4% | 18.6% | 21.2% |
Mix of Investments with Underlying Collateral Security | 81.5% | 81.2% | 78.7% |
Annualized Current Yield – All Investments | 10.7% | 10.9% | 8.7% |
Annualized Current Yield – Performing Interest Bearing Investments | 13.3% | 13.4% | 11.1% |
Top Industry Concentration(1) | 18.6% | 18.1% | 18.3% |
Retail Industry Concentration(1) | 0.3% | 0.4% | 0.1% |
Energy Industry Concentration(1) | 1.6% | 1.7% | 1.7% |
Hotels, Restaurants & Leisure Concentration(1) | 0.3% | 0.3% | 0.3% |
Non-Accrual Loans as % of Total Assets (2) | 1.1% | 0.2% | 0.4% |
Middle-Market Loan Portfolio Company Weighted Average EBITDA(3) | $113,071 | $113,841 | $110,764 |
Middle-Market Loan Portfolio Company Weighted Average Net Leverage Ratio(3) | 5.2x | 5.3x | 5.3x |
(1) Excluding our underlying industry-diversified structured credit portfolio.
(2) Calculated at fair value.
(3) For additional disclosure see "Middle-Market Loan Portfolio Company Weighted Average EBITDA and Net Leverage" at the end of this release.
During the September 2023 (to date), June 2023, and March 2023 quarters, investment originations and repayments were as follows:
All amounts in $000's | Quarter Ended September 30, 2023 (to date) | Quarter Ended June 30, 2023 | Quarter Ended March 31, 2023 |
Total Originations | $53,156 | $372,236 | $91,698 |
Real Estate | 58.9% | 18.1% |