- As a business Development Company, PNNT must distribute at least 90% of its income to investors.
- High distributions and management fees leave little to compensate for write-offs and defaults, pushing PNNT to raise capital through debt and equity.
- Repeated capital raises increase leverage and dilute NAV, hindering the viability of PNNT as a long-term, passive-income investment.
- Contrary to popular opinion, the best way to invest in BDCs is to strategically buy low and sell high rather than holding shares for the long run.
- PNNT shares increased in the past months as investors gained more clarity on the extent of COVID's economic disruptions, creating an attractive exit opportunity.
For further details see:
The Broken Safety-In-Dividend Promise Of PennantPark Investment