Welcome to our dedicated page for Prospect Capital news (Ticker: PSEC), a resource for investors and traders seeking the latest updates and insights on Prospect Capital stock.
Overview of Prospect Capital Corporation (PSEC)
Prospect Capital Corporation is a publicly-traded, closed-end investment company that operates as a business development company (BDC) under the Investment Company Act of 1940. Specializing in providing flexible private debt and equity capital solutions, the company serves sponsor-owned and non-sponsor-owned middle market companies throughout the United States and Canada. As an entity focused on balancing current income with long-term capital appreciation, Prospect Capital leverages its extensive expertise in middle market lending, private debt, and equity investments to create a resilient portfolio built on established cash flow histories and asset-backed financing structures.
Core Business and Investment Strategy
At its core, Prospect Capital invests in a diversified range of financing opportunities. The company frequently undertakes investments in senior and subordinated debt, structuring transactions such as mezzanine financing, growth capital, acquisition financing, recapitalizations, and development financing. Its investment approach especially prioritizes first lien and senior secured loans, which provide a lower-risk profile due to historical and contractual cash flows and asset collateral. Additionally, the company selectively integrates equity co-investments to capture potential upside, making it a unique instrument within the private capital markets.
Business Model and Operational Framework
Prospect Capital’s business model revolves around its yield-oriented investment philosophy. The company places a strong emphasis on originating non-syndicated first lien senior secured loans for middle market companies, thereby ensuring multiple layers of protection for its portfolio. Furthermore, by rotating its credit portfolio with structured credit, CLO equity and real estate investments, Prospect seeks to enhance yield while maintaining a stable income stream. The operational framework is supported by an experienced team that manages deal sourcing, underwriting, and ongoing portfolio monitoring through a comprehensive due diligence process. This structured approach ensures that each investment is carefully assessed and aligned with the firm’s overall strategy of generating stable income and achieving capital preservation.
Prospect Capital announced financial results for Q3 2024, highlighting a strategic shift in its investment focus. The company is rotating from structured credit CLO equity and real estate investments toward first lien senior secured middle market loans, which now comprise 65% of total investments. Interest income reached 94% of total income, an increase of over 800 basis points year-over-year. Net Investment Income was $89,877,000 ($0.21 per share), and the company declared monthly distributions of $0.0450 per share for November 2024 through January 2025.
Prospect Capital (PSEC) announced it will file its Form 10-Q report for the fiscal quarter ended September 30, 2024, on November 8, 2024. The company will release its earnings before market opening on the same day and host a conference call at 9:00 a.m. Eastern Time. Investors can join via phone at 888-338-7333 or through a live webcast on the company's website. A replay will be available for approximately 30 days by calling 877-344-7529 with passcode 3863672.
Prospect Capital (NASDAQ: PSEC) has announced an upsize to its preferred stock offering, which has seen strong demand from various investor channels. The offering has reached $1.8 billion in aggregate liquidation preference issuances since its initial closing in Q4 2020. Prospect is currently the leading issuer of non-traded preferred stock in 2023 and 2024 year-to-date.
The company's A4/M4 preferred stock series offers a 7.28% annualized floating rate dividend structure with a 6.50% dividend rate floor, which Prospect believes is attractive for income-oriented investors, especially with declining interest rates. The ongoing offering is being made through Preferred Capital Securities (PCS), which has raised $5.0 billion of capital since 2011.
Prospect Capital (NASDAQ: PSEC) has provided first lien senior secured term and convertible loans to support the acquisition of Druid City Infusion by Inlet Road Capital Management. Druid City, a leading ownership group within the Vital Care Infusion Services franchise system, operates nine territories across the South and Mountain West regions of the United States. Vital Care is a national home infusion platform with over 160 infusion pharmacy locations in 35 states.
The acquisition aims to enhance Druid City's commitment to patient care and service delivery. Inlet Road partners highlighted Prospect's ability to create a comprehensive financing solution and its collaborative approach as key factors in choosing them for the transaction. Prospect expressed optimism about Druid City's future performance and its value proposition in delivering pharmacy and infusion services.
Prospect Capital (NASDAQ: PSEC) closed $764 million of new investments during its fiscal year ended June 30, 2024, investing in 38 new and existing portfolio companies. Notably, 91% of PSEC's originations were first lien, senior secured loans. Key investments included:
- $56 million in clinical trial services
- $60 million in business process outsourcing
- $26 million in healthcare services
- $30 million in direct-to-consumer marketing
- $37 million in logistics services
- $13 million in furniture provision
- $10 million in home-based infusion pharmacy services
- $20 million in branded jewelry design
As of October 14, 2024, Prospect is processing an investment pipeline of over $350 million, with transactions still under due diligence and analysis.
Prospect Capital (NASDAQ: PSEC) has successfully extended and increased its revolving credit facility for Prospect Capital Funding , a GAAP consolidated subsidiary. The facility's total commitments now stand at $2.1215 billion, with participation from 48 banks boasting a combined asset base exceeding $7.5 trillion. This marks the largest number of lenders for any business development company's credit facility.
Key features of the facility include:
- An accordion feature allowing commitments to increase up to $2.25 billion
- A five-year term with maturity on June 28, 2029
- A four-year revolving period through June 28, 2028
- An additional one-year amortization period
Grier Eliasek, President and COO of Prospect, expressed satisfaction with the longstanding support from relationship banks, some dating back to 2009. He emphasized that this industry-leading facility provides Prospect with efficient capital to meet investment and financing needs for their business and portfolio companies.
Prospect Capital (NASDAQ: PSEC) celebrates its 20th anniversary as a leading provider of private debt and equity to U.S. middle-market companies. With over $20 billion invested and more than 300 portfolio company exits, Prospect has established itself as one of the largest and longest-running publicly traded business development companies (BDCs).
Founded in 2004, Prospect has $7.9 billion in total assets as of the recent fiscal year-end. The company is managed by Prospect Capital Management, which has a nearly 37-year history spanning three major business cycles. Prospect has been a BDC industry innovator, achieving several firsts, including:
- First BDC to achieve an investment grade rating post-Global Financial Crisis
- First BDC to acquire another BDC
- First BDC to complete at-market issuance programs for common stock and listed senior unsecured notes
- First BDC to issue convertible bonds, medium-term program notes, and non-traded perpetual preferred stock
Prospect Capital (NASDAQ: PSEC) announced financial results for the fiscal quarter and year ended June 30, 2024. Key highlights include:
- Net Investment Income (NII) of $102.9 million ($0.25 per share) for Q4 2024
- Declared 86th consecutive $0.06 monthly dividend
- Total assets of $7.86 billion as of June 30, 2024
- NAV per common share of $8.74 as of June 30, 2024
- Successful completion of amended and extended $2.1 billion credit facility
- 81% of portfolio in first lien, secured, or underlying secured assets
- Annualized current yield on all investments of 9.8%
- Non-accrual loans at 0.3% of total assets
Prospect continues to focus on downside protection and maintaining a diversified investment portfolio across multiple strategies. The company has distributed $21.12 per share since inception, representing 2.4 times June 2024 NAV.
Prospect Capital (NASDAQ: PSEC) has announced its schedule for releasing fiscal year earnings and hosting a conference call. The company expects to file its Form 10-K report and issue an earnings press release on August 28, 2024, after market close. A conference call is scheduled for August 29, 2024, at 9:00 a.m. Eastern Time.
Investors can dial 888-338-7333 to join the call. A replay will be available for approximately 30 days by calling 877-344-7529 with passcode 2929037. Additionally, a live listen-only webcast will be accessible on the company's website at www.prospectstreet.com.
NewStar Exchange, a subsidiary of NEWSTAR, has fully subscribed its NewStar 6 Tranquil Gardens BTR, DST offering, raising $19.1 million from Section 1031 exchange investors. This marks the company's third successful 1031 exchange Delaware Statutory Trust offering, bringing their total equity raised to approximately $50 million since launching two years ago.
The Tranquil Gardens project comprises 73 newly constructed three-bedroom and four-bedroom homes for rent in northwest Atlanta, Georgia. The community has been performing well, meeting investment projections and achieving a 6% annualized increase in in-place rents. Notably, it's commanding a 25% rent premium compared to its competitive set.
Preferred Capital Securities (PCS) served as the managing broker-dealer for this offering. PCS has a strong track record, having raised over $3 billion in retail capital across 8 offerings since 2011.
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