Prospect Capital Corporation Q3 FY2026 earnings call

John mentioned financials in March quarter, including NII, NAV, debt ratio, and dividends. Progressed strategic priorities: rotating assets to focus on core business of first lien, senior secured, middle market loans with first lien mix increasing. Focus on new investments in companies with less than $50 million of EBITDA. Reduced second lien, subordinated structured notes, and targeted equity linked assets. Enhance portfolio company operating performance and profitability via AI and automation. Utilize cost-effective floating rate revolver. Greer talked about past 20-year investments, exit investments in middle market lending with certain IRR, portfolio industry distribution, software investment percentage, focus on senior and secured debt. Middle market lending strategy as primary focus with increased percentage. Subordinated structured notes portfolio nearly exited. Real estate portfolio situation, interest income, non-accruals, March quarter investment originations and repayments. Kristen highlighted balance sheet strengths like prudent leverage, diversified matched book funding, substantial majority of unencumbered assets, locked-in long-term liabilities, successful bond issuances, unfunded eligible commitments, cash and undrawn revolving credit facility commitments, unencumbered assets percentage, bank commitments, and weighted average cost of unsecured debt financing.

In the March quarter, net investment income (NII) was $78 million, or 16 cents for common share. NAV was approximately $3 billion, or $6.05 for common share. Net debt to total assets ratio was 27% at March 31st. Unsecured debt plus unsecured perpetual preferred was 88% of total debt plus preferred. Announced monthly common shareholder distributions of 3.5 cents per share for May, June, July, and August. Since IPO nearly 22 years ago, approximately $4.8 billion or $22.07 per common share distributed. First lien mix increased 790 basis points to 72% since June 2024. Second lien mix decreased 404 basis points to 12.4% since June 2024. Subordinated structured notes mix decreased 837 basis points to near zero since June 2024. Sold five additional real estate properties and exited Echelon Transportation in February 2026. Focus on enhancing portfolio company operating performance and profitability via AI and automation. Utilize cost-effective floating rate revolver matching floating rate assets. As of March 2026, held 89 portfolio companies across 31 industries with aggregate fair value of $6.3 billion. Software investments 2.5% vs BDCs average 23%. Primarily focus on senior and secured debt, 84% of portfolio at cost. Middle market lending strategy 85% of investments at cost, increase of 875 basis points from June 2024. Middle market lending comprised 94% of originations in March quarter. Subordinated structured notes portfolio nearly 0% of investment portfolio cost. Real estate property portfolio at NPRC 14% of investments at cost, exited 57 property investments since 2012 with unlevered investment-level gross cash IRR of 24% and cash-on-cash multiple of 2.4 times. Exited five property investments in current fiscal year with unlevered investment-level gross cash IRR of 18% and cash-on-cash multiple of 2.3 times. Remaining real estate property portfolio 53 properties with income yield of 5.2% in March quarter. Interest income 92% of total investment income for 12-month period ending March 2026. Payment in kind interest income reduced 41% from prior 12-month period, 11% of total investment income for quarter. Non-accruals as percentage of total assets at around 0.7% as of March. Investment originations in March quarter aggregated $115 million, 94% middle market investments. Had $222 million in repayments and exits, resulting in net repayments of $107 million.

Thank you, sir. We will now begin the question and answer session. To ask a question, you may press star, then 1, on your telephone keypad. If you're using a speakerphone please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question please press star then 2. Again it is star then 1 to ask a question. At this time we will pause momentarily to assemble our roster. This concludes our question and answer session. I would like to turn the conference back over to John Berry, Chairman and CEO, for any closing remarks. Okay. Well, thank you, everyone. Have a wonderful day and a wonderful weekend. Bye now. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.