• Thu. Feb 22nd, 2024

    The Solid Performance of Prospect Capital Corporation in Q2 2024

    ByEmma Wolukau-Wanambwa

    Feb 10, 2024
    The Solid Performance of Prospect Capital Corporation in Q2 2024

    Prospect Capital Corporation recently released its Q2 2024 earnings report, showcasing its solid performance in the current economic environment. With $8.9 billion of assets and undrawn credit, the company continues to deliver impressive results.

    One of the highlights of the report was the net investment income (NII) of $96.9 million or $0.24 per common share in the December quarter. Additionally, the company’s net asset value (NAV) stood at $3.68 billion or $8.92 per common share.

    Since its inception in 2004, Prospect Capital Corporation has invested $20.6 billion across 420 investments, with a focus on diverse investment strategies. This includes sponsor-related lending, direct non-sponsor lending, operating and financial buyouts, structured credit, and real estate yield investing.

    The company’s disciplined approach to selecting investment opportunities has allowed them to maintain a low single-digit percentage of investments each year. Their portfolio at fair value comprised primarily of first-lien debt (58.7%), followed by second-lien debt (15.5%), subordinated structured notes (7.9%), and unsecured debt and equity investments (17.8%).

    To protect against downside risk, Prospect Capital Corporation prioritizes senior and secured debt in their originations. This strategy has helped them achieve attractive risk-adjusted yields, with performing interest-bearing investments generating an annualized yield of 12.3% as of December 2023.

    Furthermore, the company’s non-accruals as a percentage of total assets remained stable at approximately 0.2% in December. They also maintain a diversified investment approach across various industries, with no significant concentration in any one sector.

    Looking ahead, Prospect Capital Corporation remains well-positioned to capitalize on attractive investment opportunities amid a potential downturn. The company has maintained significant dry powder and balance sheet flexibility to take advantage of secondary and primary opportunities as they arise.

    With its solid financial performance and strategic investment approach, Prospect Capital Corporation continues to be a reliable player in the market, generating value for its shareholders.

    FAQ Section:

    Q: What were Prospect Capital Corporation’s net investment income and net asset value in the December quarter?
    A: Prospect Capital Corporation reported net investment income of $96.9 million or $0.24 per common share in the December quarter. The company’s net asset value stood at $3.68 billion or $8.92 per common share.

    Q: How much has Prospect Capital Corporation invested since its inception and what are its investment strategies?
    A: Prospect Capital Corporation has invested $20.6 billion across 420 investments since its inception in 2004. The company focuses on diverse investment strategies, including sponsor-related lending, direct non-sponsor lending, operating and financial buyouts, structured credit, and real estate yield investing.

    Q: What is the composition of Prospect Capital Corporation’s portfolio at fair value?
    A: Prospect Capital Corporation’s portfolio at fair value is primarily comprised of first-lien debt (58.7%), followed by second-lien debt (15.5%), subordinated structured notes (7.9%), and unsecured debt and equity investments (17.8%).

    Q: What is Prospect Capital Corporation’s approach to managing investment risk?
    A: Prospect Capital Corporation prioritizes senior and secured debt in their originations to protect against downside risk. This strategy has helped them achieve attractive risk-adjusted yields.

    Q: How has Prospect Capital Corporation performed in terms of non-accruals and diversification?
    A: Prospect Capital Corporation maintained stable non-accruals as a percentage of total assets at approximately 0.2% in December. They also maintain a diversified investment approach across various industries, with no significant concentration in any one sector.

    Links:
    Prospect Capital Corporation Official Website