PennantPark Floating Rate Capital Reports $61.9 Million Investment Income for Q1 2025

PennantPark Floating Rate Capital Ltd. reported its financial results for the quarter ending March 31, 2025, revealing a total investment income of $61.9 million, a significant increase from $44.4 million in the same quarter of the previous year. The rise in income was primarily driven by a larger debt portfolio, which generated $56.2 million from first lien secured debt. For the six months ended March 31, 2025, total investment income reached $128.9 million, compared to $82.3 million for the same period in 2024. The company’s net investment income for the quarter was $25.0 million, or $0.28 per share, up from $19.1 million, or $0.31 per share, in the prior year.

The company’s total assets increased to $2.47 billion as of March 31, 2025, compared to $2.11 billion at the end of September 2024. This growth was attributed to a rise in investments at fair value, which reached $2.34 billion, up from $1.98 billion in the previous period. The net asset value per share decreased slightly to $11.07 from $11.31, reflecting a net unrealized depreciation of $61.2 million in the portfolio. The company also reported a net increase in net assets resulting from operations of $1.2 million for the quarter, down from $31.1 million in the same quarter of 2024.

In terms of strategic developments, PennantPark completed a $474.6 million term debt securitization in February 2025, which is expected to enhance its capital structure. The company also established a new at-the-market offering program in July 2024, raising $213.2 million through the issuance of 18.8 million shares in the first half of 2025. This program aims to provide additional liquidity for investment opportunities and operational needs.

Operationally, the company’s portfolio consisted of 159 companies with an average investment size of $14.7 million, and it maintained a focus on first lien secured debt, which represented 90% of its investments. The weighted average yield on debt investments was reported at 10.5%. As of March 31, 2025, four portfolio companies were on non-accrual status, representing 2.2% of the overall portfolio on a cost basis. The company’s leverage ratio remained compliant with the 150% asset coverage requirement under the 1940 Act, with an asset coverage ratio of 178%.

Looking ahead, PennantPark remains focused on generating current income and capital appreciation through its investment strategy, which primarily targets floating rate loans to U.S. middle-market companies. The company anticipates that market conditions, including interest rates and economic factors, will continue to influence its investment performance and operational results. Management expressed confidence in the company’s ability to navigate these challenges while pursuing growth opportunities in the middle-market lending space.