PennantPark Floating Rate Capital Ltd. reported significant financial performance for the quarter ending December 31, 2024, with total investment income reaching $67.0 million, a substantial increase from $37.9 million in the same period last year. This growth was primarily driven by a rise in interest income from first lien secured debt, which accounted for $61.0 million of the total. The company’s net investment income also rose to $30.0 million, or $0.37 per share, compared to $19.4 million, or $0.33 per share, in the prior year. The net increase in net assets resulting from operations was $28.3 million, reflecting a slight decrease in per-share performance from $0.38 in the previous year.
In terms of operational changes, PennantPark's total assets increased to $2.34 billion as of December 31, 2024, up from $2.11 billion at the end of September 2024. The company’s investment portfolio expanded, with total investments valued at $2.19 billion, including $1.96 billion in first lien secured debt. The number of shares outstanding rose to 87.96 million, following the issuance of 7.28 million shares under an at-the-market offering program, which generated $82.2 million in net proceeds. This capital infusion is expected to enhance the company’s investment capabilities.
The company also experienced a notable increase in expenses, which totaled $37.0 million for the quarter, compared to $18.5 million in the same period last year. This rise was attributed to higher interest expenses related to increased borrowings and a larger base management fee due to the growth of the investment portfolio. The performance-based incentive fee also increased to $7.5 million from $4.9 million, reflecting the improved investment income.
Looking ahead, PennantPark Floating Rate Capital Ltd. remains focused on its strategy of investing primarily in floating rate loans to U.S. middle-market companies. The company anticipates that at least 80% of its managed assets will continue to be invested in floating rate loans, with a target of 65% in first lien secured debt. The management expressed confidence in the company’s ability to navigate market conditions and capitalize on investment opportunities, despite potential challenges posed by economic fluctuations and interest rate changes.
Overall, the financial results and strategic developments indicate a positive trajectory for PennantPark Floating Rate Capital Ltd., with a strong emphasis on growth and capital preservation in its investment approach.
About PennantPark Floating Rate Capital Ltd.
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