Prospect Capital Corporation (NASDAQ:PSEC) (“Prospect”, “our”, or
“we”) today announced financial results for our second fiscal
quarter ended December 31, 2016.
All amounts in $000’s except per share amounts |
Quarter Ended December
31, 2016 |
Quarter Ended September
30, 2016 |
Quarter Ended December
31, 2015 |
|
|
|
|
Net Investment Income (“NII”) |
$84,405 |
$78,919 |
$100,893 |
NII per Share |
$0.24 |
$0.22 |
$0.28 |
|
|
|
|
Net Income (“NI”) |
$100,880 |
$81,366 |
$(95,120) |
NI per Share |
$0.28 |
$0.23 |
$(0.27) |
|
|
|
|
Distributions to Shareholders |
$89,668 |
$89,428 |
$88,827 |
Distributions per Share |
$0.25 |
$0.25 |
$0.25 |
|
|
|
|
NAV per Share at Period End |
$9.62 |
$9.60 |
$9.65 |
|
|
|
|
Debt to Equity Ratio |
76.2% |
77.4% |
80.2% |
|
|
|
|
For the December 2016 quarter, we earned net
investment income ("NII") of $84.4 million, or $0.24 per weighted
average share, up $0.02 per share from the September 2016 quarter,
primarily from an increase in interest and other income from new
investments made during the September and December 2016 quarters
and a decrease in operating expenses partially due to a reversal of
excise tax previously accrued.
For the December 2016 quarter, our net
income (“NI”) was $100.9 million or $0.28 per weighted average
share, an increase of $0.05 per share from $81.4 million, or $0.23
per weighted average share, in the September 2016 quarter,
primarily due to unrealized appreciation on our investments. For
the December 2015 quarter, our NI was $(95.1) million or $(0.27)
per weighted average share. NI increased year-over-year in the
December 2016 quarter primarily due to a favorable decrease in
unrealized losses that occurred primarily due to volatility in the
capital markets in the December 2015 quarter.
All amounts in $000’s except per share amounts |
Six Months Ended December
31, 2016 |
Six Months Ended December
31, 2015 |
|
|
|
Net Investment Income (“NII”) |
$163,324 |
$192,135 |
NII per Share |
$0.46 |
$0.54 |
|
|
|
Net Income (“NI”) |
$182,246 |
$(67,303) |
NI per Share |
$0.51 |
$(0.19) |
|
|
|
Distributions to Shareholders |
$179,097 |
$177,942 |
Distributions per Share |
$0.50 |
$0.50 |
|
|
|
|
|
For the six months ended December 31, 2016, we
earned NII of $163.3 million, or $0.46 per weighted average share.
For the six months ended December 31, 2015, our NII was $192.1
million, or $0.54 per weighted average share. NII decreased by
$28.8 million, or $0.08 per weighted average share, year-over-year
primarily as a result of a decrease in non-recurring dividend
income from NPRC, a decrease in interest income from energy-related
loans, and a reduced interest earning asset base. These income
declines were partially offset by a decrease in advisory fees.
For the six months ended December 31, 2016, our
NI was $182.2 million, or $0.51 per weighted average share. For the
six months ended December 31, 2015, our NI was $(67.3) million, or
$(0.19) per weighted average share. NI increased by $249.5 million,
or $0.70 per weighted average share, year-over-year primarily due
to unrealized appreciation of our investments.
With the Harbortouch sale and other significant
repayments, we were underinvested during the first half of fiscal
2017, carrying an average cash balance of $167.7 million. If we had
booked another $460 million of 10% annualized coupon earning assets
July 1, 2016, utilizing our uninvested cash and financing the
remainder (approximately $300 million) from our
revolving credit facility, our fiscal year to date NII would
have increased by $14.5 million, before any structuring fee income
earned in connection with such originations.
As of December 31, 2016, our reported net
asset value (“NAV”) per share was $9.62, up $0.02 from September
30, 2016.
Our debt to equity ratio was 76.2% at
December 31, 2016, down 400 bps from 80.2% at December 2015.
Our balance sheet as of December 31, 2016 comprised 90.4%
floating rate interest earning assets and 99.9% fixed rate
liabilities, positioning us to benefit from potential increases in
short-term interest rates.
Our recurring income as measured by our
percentage of total investment income from interest income was 95%
in the December 2016 quarter.
PORTFOLIO AND INVESTMENT
ACTIVITY
We continue to prioritize secured lending. As of
December 31, 2016, our portfolio at fair value consisted of
45.9% first lien, 23.6% second lien, 18.3% structured credit (with
underlying first lien), 11.2% equity investments, 0.8% unsecured
debt, and 0.2% small business whole loan. As of December 31,
2016, our control investments at fair value were 31.5% of our
portfolio.
Our portfolio’s annualized current yield stood
at 13.2% across all performing interest bearing investments as of
December 31, 2016, up 0.4% from 12.8% as of September 30, 2016.
At December 31, 2016, our portfolio
consisted of 123 long-term investments with a fair value of $5.937
billion, spanning a diversified range of industries with no one
industry (excluding our underlying industry-diversified structured
credit portfolio) representing more than 9.3% of the portfolio at
fair value, and energy representing 2.6%. The fair value of our
loans on non-accrual as a percentage of total assets was
approximately 1.5% at December 31, 2016, with 0.4% in the
energy industry. For a listing of transactions completed during the
quarter, please see the section titled “Portfolio Investment
Activity” in our form 10-Q for the quarter ended December 31,
2016.
As of December 31, 2016, our weighted average
portfolio net leverage stood at 4.77 times earnings before
interest, taxes, depreciation, and amortization (“EBITDA”). As of
December 31, 2016, our weighted average EBITDA per portfolio
company was $51.6 million.
During the December 2016 quarter, we completed
new and follow-on investments aggregating $469.5 million and
received full repayments on nine investments. Our sales,
repayments, and scheduled amortization payments in the December
2016 quarter were $645.0 million, resulting in net repayments of
$175.5 million.
During the December 2016 quarter, our
originations comprised 54% syndicated debt (including early look
anchoring investments and club investments), 15% third party
sponsor deals, 15% online lending, 7% structured credit, 4%
aircraft leasing, 3% real estate, and 2% operating buyouts.
In addition to a substantial investment in real
estate, we and NPRC continued our investment in the online lending
industry with a focus on super-prime, prime, and near-prime
consumer and small business borrowers. We and NPRC currently have
exposure to $846.6 million of loans directly and through
securitization interests, across multiple origination and
underwriting platforms. Our online business is currently delivering
a yield on our invested capital exceeding 14% (net of all incurred
costs and expected losses). NPRC currently has five bank credit
facilities supporting its online business, and an NPRC subsidiary
closed a consumer securitization during the December 2016
quarter.
As of December 31, 2016 we were invested in
41 structured credit investments with a fair value of $1.09 billion
with individual standalone financings non-recourse to Prospect and
with our risk capped at our net investment amount. The underlying
structured credit portfolios comprise over 2,800 loans and a total
asset base of over $20.0 billion. As of December 31, 2016, our
structured credit portfolio experienced a trailing twelve month
default rate of 1.16%, or 42 basis points less than the broadly
syndicated market trailing twelve month default rate of 1.58%. In
the December 2016 quarter, our structured credit equity portfolio
generated an annualized cash yield of 21.5% and an annualized GAAP
yield of 14.8% based on December 31, 2016 fair value. As of
December 31, 2016, our existing structured credit portfolio
has generated $812.9 million in cumulative cash distributions to
us, representing 61.9% of our original investment. In addition, we
have exited seven structured credit investments totaling $153.6
million with an average realized IRR of 16.8% and cash on cash
multiple of 1.42 times.
Prospect’s structured credit portfolio has paid
to Prospect an average 24.4% cash yield (based on December 2016
fair value) in the twelve months ended December 31, 2016.
Since August 29, 2016 (the date of our June 2016 earnings release),
five of our structured credit investments completed refinancings to
reduce the cost of liabilities (three of which occurred after
December 2016) and three additional structured credit investments
completed multi-year extensions of the reinvestment period of such
investments. We are working on identifying for our independent
management teams further structured credit investment refinancings
and extensions in the portfolio to enhance value.
To date during the March 2017 quarter, we have
completed new and follow-on investments of $273.1 million, and
received repayments of $26.3 million, resulting in net investments
of $246.8 million. Our originations in the March 2017 quarter have
comprised 66% third party sponsor deals, 15% real estate, 8% online
lending, 6% operating buyout, and 5% syndicated debt.
LIQUIDITY AND FINANCIAL
RESULTS
Our debt to equity ratio was 76.2% at
December 31, 2016. We repaid our $167.5 million August 2016
convertible note issue at maturity. For the remainder of fiscal
year 2017, our liability maturities do not exceed $5 million.
On August 29, 2014, we renegotiated and closed
an expanded five and a half year revolving credit facility (the
“Facility”). The Facility lenders have extended commitments of
$885.0 million under the Facility as of December 31, 2016. The
Facility includes an accordion feature which allows commitments to
be increased to $1.5 billion in the aggregate. On August 22, 2016,
the 2014 Facility was amended to eliminate some of the restrictions
in the definition of an eligible loan for pledging to the facility
and increase our overall borrowing base. Interest on borrowings
under the Facility is one-month LIBOR plus 225 basis points,
with no minimum LIBOR floor. The Facility continues to carry an
investment-grade Moody’s rating of Aa3.
We have diversified our counterparty risk. As of
December 31, 2016, 21 institutional lenders committed to the
Facility compared to five lenders at June 30, 2010, one of the most
diversified bank groups in our industry. The revolving period of
the Facility extends through March 2019, with an additional
one-year amortization period to March 2020, with distributions
allowed after the completion of the revolving period. We currently
have no borrowing drawn under our Facility.
We have seven separate unsecured debt issuances
aggregating $1.7 billion outstanding, not including our program
notes, with maturities ranging from October 15, 2017 to June 15,
2024. As of December 31, 2016, $962.1 million of program notes were
outstanding with staggered maturities through October 2043.
As of December 31, 2016, we held
approximately $4.8 billion of unencumbered assets on our balance
sheet, representing approximately 77.8% of our total assets.
TAXABLE INCOME
All amounts in $000’s except per share amounts |
Quarter Ended December
31, 2016 |
Quarter Ended September
30, 2016 |
Quarter Ended December
31, 2015 |
|
|
|
|
Estimated Distributable Income (“DI”)* |
$73,344 |
$73,151 |
$88,804 |
Estimated DI per Share* |
$0.20 |
$0.20 |
$0.25 |
|
|
|
|
Estimate of Amount Available for Spillback (“Spillback”)*
|
$34,392 |
$50,637 |
$93,071 |
Estimated Spillback per Share* |
$0.10 |
$0.14 |
$0.26 |
|
|
|
|
|
|
|
* We have adjusted DI and Spillback for prior periods to reflect
updated structured credit tax results. DI is estimated to have
decreased by $3.8 million and $12.1 million for the quarters ended
September 30, 2016 and December 31, 2015, respectively. Spillback
is estimated to have decreased by $46.0 million and $15.5 million
as of September 30, 2016 and December 31, 2015, respectively.
All amounts in $000’s except per share amounts |
Six Months Ended December
31, 2016 |
Six Months Ended December
31, 2015 |
|
|
|
Estimated Distributable Income (“DI”)* |
$146,495 |
$184,839 |
Estimated DI per Share* |
$0.41 |
$0.52 |
|
|
|
|
|
* We have adjusted DI to reflect updated structured credit tax
reporting data. DI is estimated to have decreased by $3.8 million
and $15.5 million for the six months ended December 31, 2016 and
December 31, 2015, respectively.
As a tax-efficient regulated investment company,
our 90% minimum shareholder dividend payout requirement is based on
taxable income (“distributable income” or “DI”) rather than GAAP
NII. DI occasionally decouples from NII. For the December 2016
quarter, our distributable income was $73.3 million or $0.20 per
weighted average share, unchanged from $0.20 per weighted average
share in the September 2016 quarter and down $0.05 per weighted
average share from the December 2015 quarter. The decrease from the
December 2015 quarter was due to a decline in taxable income from
structured credit investments.
Regulated investment companies may utilize
dividends from the subsequent tax year to increase the amount of
taxable distributions to match taxable income for the prior year.
As of December 31, 2016, we estimate that we have available to us
$34.4 million, or $0.10 per weighted average share, in spillback
dividends.
In the prior quarter, we estimated that our
available spillback income was $96.6 million, $62.2 million more
than the $34.4 million reported this quarter. Realized gains and
losses on underlying individual loans in our structured credit
investments are reported as taxable events when calculating our
taxable income, and losses on sales of such assets reduce our
taxable income. Many of the taxable differences from GAAP income
are not reported until the final tax returns for the structured
credit investments are issued. Such tax returns can be
delayed as long as nine months after the tax year end of the
structured credit investment. During portions of calendar years
2015 and 2016, the broadly syndicated loan market sold off
significantly, and the independent management teams of most of our
structured credit investments took advantage of the volatility in
the loan market to both sell certain loans and purchase new loans
at discounted prices. While the sales and purchases of such loans
at similarly discounted prices did not have an economic impact on
our NII for financial statement purposes, the sales at discounted
prices resulted in immediate harvesting of taxable losses, but
corresponding purchases at discounted prices do not generate
immediate taxable gains. We expect the underlying loans purchased
at a discount in our structured credit investments will generate
taxable income in the future as such loans amortize to par over the
holding period (with taxable income acceleration if loans are sold
or refinanced at a profit before maturity), reversing prior recent
negative taxable income into positive future taxable income in our
structured credit investments. Taxable income is subject to
revision as additional information is received and is subject to
change.
EARNINGS CONFERENCE CALL
Prospect will host an earnings conference call
on Thursday, February 9, 2017, at 11:00
am. Eastern Time. The conference call dial-in number will
be 888-338-7333. A recording of the conference
call will be available for approximately 30 days. To hear a replay,
call 877-344-7529 and use passcode 10100513. The updated Prospect
corporate presentation is available on the Investor Relations tab
at www.prospectstreet.com. For copies of our corporate
presentation, our recent shareholder letter, and our performance
data please see http://shareholder.prospectstreet.com.
The conference call will also be available via a
live listen-only webcast on Prospect’s website,
www.prospectstreet.com. Please allow extra time prior to the call
to visit the site and download any necessary software that may be
needed to listen to the Internet broadcast. A replay of the audio
webcast will be available on Prospect’s website for approximately
30 days following the conference call.
|
PROSPECT CAPITAL CORPORATION AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF ASSETS AND
LIABILITIES |
(in thousands, except share and per share
data) |
|
December 31,
2016 |
|
June 30, 2016 |
|
|
|
(Unaudited) |
|
(Audited) |
Assets |
|
|
|
Investments at fair
value: |
|
|
|
Control
investments (amortized cost of $1,880,883 and $1,768,220,
respectively) |
$ |
1,867,410 |
|
|
$ |
1,752,449 |
|
Affiliate
investments (amortized cost of $8,530 and $10,758,
respectively) |
7,819 |
|
|
11,320 |
|
Non-control/non-affiliate investments (amortized cost of $4,222,503
and $4,312,122, respectively) |
4,061,770 |
|
|
4,133,939 |
|
Total
investments at fair value (amortized cost of $6,111,916 and
$6,091,100, respectively) |
5,936,999 |
|
|
5,897,708 |
|
Cash |
203,911 |
|
|
317,798 |
|
Receivables for: |
|
|
|
Interest,
net |
23,943 |
|
|
12,127 |
|
Other |
6,484 |
|
|
168 |
|
Prepaid expenses |
670 |
|
|
855 |
|
Deferred financing
costs on Revolving Credit Facility |
6,141 |
|
|
7,525 |
|
Total Assets |
6,178,148 |
|
|
6,236,181 |
|
|
|
|
|
Liabilities |
|
|
|
Revolving Credit
Facility |
— |
|
|
— |
|
Prospect Capital
InterNotes® |
947,172 |
|
|
893,210 |
|
Convertible Notes |
909,505 |
|
|
1,074,361 |
|
Public Notes |
737,311 |
|
|
699,368 |
|
Due to Prospect Capital
Management |
52,212 |
|
|
54,149 |
|
Interest payable |
38,419 |
|
|
40,804 |
|
Dividends payable |
29,915 |
|
|
29,758 |
|
Due to Prospect
Administration |
3,010 |
|
|
1,765 |
|
Accrued expenses |
2,885 |
|
|
2,259 |
|
Other liabilities |
3,123 |
|
|
3,633 |
|
Due to broker |
— |
|
|
957 |
|
Total Liabilities |
2,723,552 |
|
|
2,800,264 |
|
Commitments and
Contingencies |
— |
|
|
— |
|
Net Assets |
$ |
3,454,596 |
|
|
$ |
3,435,917 |
|
|
|
|
|
Components of
Net Assets |
|
|
|
Common stock, par value
$0.001 per share (1,000,000,000 common shares authorized;
359,000,280 and 357,107,231 issued and outstanding, respectively)
|
$ |
359 |
|
|
$ |
357 |
|
Paid-in capital in
excess of par |
3,981,732 |
|
|
3,967,397 |
|
Accumulated
overdistributed net investment income |
(16,907 |
) |
|
(3,623 |
) |
Accumulated net
realized loss |
(335,671 |
) |
|
(334,822 |
) |
Net unrealized
loss |
(174,917 |
) |
|
(193,392 |
) |
Net Assets |
$ |
3,454,596 |
|
|
$ |
3,435,917 |
|
|
|
|
|
Net Asset Value
Per Share |
$ |
9.62 |
|
|
$ |
9.62 |
|
|
|
|
|
|
|
|
|
|
PROSPECT CAPITAL CORPORATION AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(in thousands, except share and per share
data) |
(Unaudited) |
|
|
Three Months Ended December
31, |
|
Six Months Ended December
31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Investment
Income |
|
|
|
|
|
|
|
Interest income: |
|
|
|
|
|
|
|
Control
investments |
$ |
48,281 |
|
|
$ |
51,429 |
|
|
$ |
94,190 |
|
|
$ |
103,373 |
|
Affiliate
investments |
— |
|
|
11 |
|
|
— |
|
|
896 |
|
Non-control/non-affiliate investments |
87,465 |
|
|
88,161 |
|
|
174,125 |
|
|
181,869 |
|
Structured credit securities |
39,045 |
|
|
46,902 |
|
|
78,126 |
|
|
91,668 |
|
Total
interest income |
174,791 |
|
|
186,503 |
|
|
346,441 |
|
|
377,806 |
|
Dividend income: |
|
|
|
|
|
|
|
Control
investments |
1,282 |
|
|
13,545 |
|
|
3,522 |
|
|
16,758 |
|
Non-control/non-affiliate investments |
97 |
|
|
1 |
|
|
241 |
|
|
3 |
|
Total
dividend income |
1,379 |
|
|
13,546 |
|
|
3,763 |
|
|
16,761 |
|
Other income: |
|
|
|
|
|
|
|
Control
investments |
3,856 |
|
|
3,270 |
|
|
6,796 |
|
|
5,679 |
|
Non-control/non-affiliate investments |
3,454 |
|
|
5,872 |
|
|
6,312 |
|
|
9,196 |
|
Total
other income |
7,310 |
|
|
9,142 |
|
|
13,108 |
|
|
14,875 |
|
Total Investment Income |
183,480 |
|
|
209,191 |
|
|
363,312 |
|
|
409,442 |
|
Operating
Expenses |
|
|
|
|
|
|
|
Base management
fee |
30,886 |
|
|
31,781 |
|
|
61,678 |
|
|
64,735 |
|
Income incentive
fee |
21,101 |
|
|
25,224 |
|
|
40,831 |
|
|
48,034 |
|
Interest and credit
facility expenses |
40,848 |
|
|
42,205 |
|
|
82,517 |
|
|
84,162 |
|
Allocation of overhead
from Prospect Administration |
2,657 |
|
|
2,000 |
|
|
6,190 |
|
|
6,178 |
|
Audit, compliance and
tax related fees |
1,058 |
|
|
1,192 |
|
|
2,453 |
|
|
3,069 |
|
Directors’ fees |
112 |
|
|
94 |
|
|
225 |
|
|
188 |
|
Other general and
administrative expenses |
2,413 |
|
|
5,802 |
|
|
6,094 |
|
|
10,941 |
|
Total Operating Expenses |
99,075 |
|
|
108,298 |
|
|
199,988 |
|
|
217,307 |
|
Net Investment Income |
84,405 |
|
|
100,893 |
|
|
163,324 |
|
|
192,135 |
|
Net Realized
and Change in Unrealized Gains (Losses) from
Investments |
|
|
|
|
|
|
|
Net realized (losses)
gains |
|
|
|
|
|
|
|
Control
investments |
178 |
|
|
(8 |
) |
|
183 |
|
|
(9 |
) |
Affiliate
investments |
— |
|
|
— |
|
|
137 |
|
|
— |
|
Non-control/non-affiliate investments |
(260 |
) |
|
(5,310 |
) |
|
312 |
|
|
(7,444 |
) |
Net
realized (losses) gains |
(82 |
) |
|
(5,318 |
) |
|
632 |
|
|
(7,453 |
) |
Net change in
unrealized gains (losses) |
|
|
|
|
|
|
|
Control
investments |
(11,068 |
) |
|
(37,104 |
) |
|
2,298 |
|
|
(77,287 |
) |
Affiliate
investments |
853 |
|
|
241 |
|
|
(1,273 |
) |
|
346 |
|
Non-control/non-affiliate investments |
26,896 |
|
|
(153,784 |
) |
|
17,450 |
|
|
(174,981 |
) |
Net
change in unrealized gains (losses) |
16,681 |
|
|
(190,647 |
) |
|
18,475 |
|
|
(251,922 |
) |
Net Realized and Change in Unrealized Gains (Losses) from
Investments |
16,599 |
|
|
(195,965 |
) |
|
19,107 |
|
|
(259,375 |
) |
Net
realized losses on extinguishment of debt |
(124 |
) |
|
(48 |
) |
|
(185 |
) |
|
(63 |
) |
Net Increase (Decrease) in Net Assets Resulting from
Operations |
$ |
100,880 |
|
|
$ |
(95,120 |
) |
|
$ |
182,246 |
|
|
$ |
(67,303 |
) |
Net increase (decrease)
in net assets resulting from operations per share |
$ |
0.28 |
|
|
$ |
(0.27 |
) |
|
$ |
0.51 |
|
|
$ |
(0.19 |
) |
Dividends declared per
share |
$ |
(0.25 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.50 |
) |
|
$ |
(0.50 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROSPECT CAPITAL CORPORATION AND
SUBSIDIARIES |
ROLLFORWARD OF NET ASSET VALUE PER
SHARE |
(in actual dollars) |
(Unaudited) |
|
|
Three Months Ended December
31, |
|
Six Months Ended December
31, |
|
2016 |
|
2015 |
|
|
2016 |
|
2015 |
|
Per Share
Data |
|
|
|
|
|
|
|
|
Net asset value at
beginning of period |
$ |
9.60 |
|
|
$ |
10.17 |
|
|
|
$ |
9.62 |
|
|
$ |
10.31 |
|
|
Net investment
income(1) |
0.24 |
|
|
0.28 |
|
|
0.46 |
|
|
0.54 |
|
|
Net realized losses on
investments(1) |
— |
|
(4 |
) |
(0.01 |
) |
|
— |
|
(4 |
) |
(0.02 |
) |
|
Net change in
unrealized appreciation (depreciation) on investments(1)
|
0.04 |
|
|
(0.54 |
) |
|
0.05 |
|
|
(0.71 |
) |
|
Net realized losses on
extinguishment of debt(1) |
— |
|
(4 |
) |
— |
|
(4 |
) |
— |
|
(4 |
) |
— |
|
(4 |
) |
Dividends to
shareholders |
(0.25 |
) |
|
(0.25 |
) |
|
(0.50 |
) |
|
(0.50 |
) |
|
Common stock
transactions(2) |
(0.01 |
) |
|
— |
|
(4 |
) |
|
(0.01 |
) |
|
0.03 |
|
|
Net asset value at end
of period |
$ |
9.62 |
|
|
$ |
9.65 |
|
|
|
$ |
9.62 |
|
|
$ |
9.65 |
|
|
(1) Per share data amount is based on the weighted average
number of common shares outstanding for the year/period presented
(except for dividends to shareholders which is based on actual rate
per share).
(2) Common stock transactions include the effect of our issuance
of common stock in public offerings (net of underwriting and
offering costs), shares issued in connection with our dividend
reinvestment plan, shares issued to acquire investments and shares
repurchased below net asset value pursuant to our Repurchase
Program.
(3) Total return based on market value is based on the change in
market price per share between the opening and ending market prices
per share in each period and assumes that dividends are reinvested
in accordance with our dividend reinvestment plan. Total return
based on net asset value is based upon the change in net asset
value per share between the opening and ending net asset values per
share in each period and assumes that dividends are reinvested in
accordance with our dividend reinvestment plan. For periods less
than a year, the return is not annualized.
(4) Amount is less than $0.01.
RECONCILIATION OF GAAP NET INVESTMENT
INCOME TO DISTRIBUTABLE INCOME
Below is a reconciliation of our NII to
distributable income for the three months and six months ended
December 31, 2016 (in thousands of dollars, except share and per
share data, with all distributable income numbers as current
estimates not to be finally determined and announced until after we
file our tax returns for our August 31, 2016 and August 31, 2017
tax year):
GAAP Net Investment Income to Distributable
Income |
Three Months Ended December 31,
2016 |
|
Six Months Ended December 31,
2016 |
GAAP Net
Investment Income |
$ |
84,405 |
|
|
$ |
163,324 |
|
(Book income in excess
of taxable income) taxable income in excess of book income from CLO
investments |
(8,863 |
) |
|
(15,372 |
) |
Non-deductible federal
excise tax expense |
(1,100 |
) |
|
(1,100 |
) |
Taxable gain from
pass-through controlled companies |
(1,119 |
) |
|
(435 |
) |
Other net additions to
distributable income |
21 |
|
|
78 |
|
Distributable
Income |
$ |
73,344 |
|
|
$ |
146,495 |
|
Weighted average shares
of common stock outstanding |
358,494,783 |
|
|
358,011,031 |
|
Distributable
Income per Share |
$ |
0.20 |
|
|
$ |
0.41 |
|
|
|
|
|
|
|
|
|
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. Failure to comply with any of the laws and
regulations that apply to us could have an adverse effect on us and
our shareholders.
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,
and 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
grier@prospectstreet.com
Telephone (212) 448-0702
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