Prospect Capital Reports Decrease in NAV to $6.45, Total Investment Income of $157.62 Million

Prospect Capital Corp. (PSEC) reported a net asset value (NAV) per common share of $6.45 as of September 30, 2025, a decrease from $6.56 as of June 30, 2025. The company's total assets stood at $6.64 billion, while total liabilities were $2.01 billion. Net assets applicable to common shares amounted to $3.00 billion. The decrease in NAV was primarily due to dilution related to conversions of Preferred Stock at then-current market prices and discounted common share issuances through our common stock dividend reinvestment plan.

For the three months ended September 30, 2025, Prospect Capital reported total investment income of $157.62 million, compared to $196.31 million for the same period in 2024. Net investment income was $79.35 million, a decrease from $89.88 million in the prior year. The company experienced a net realized loss of $1.89 million on investments, compared to a net realized loss of $100.37 million in the prior year. There was a net change in unrealized gains of $0.60 million, compared to a net change in unrealized losses of $123.77 million in the prior year. The net increase in net assets resulting from operations applicable to common stockholders was $48.09 million, or $0.10 per share, compared to a net decrease of $165.07 million, or $0.38 loss per share, in the prior year. The decrease in investment income was primarily due to a $28.04 million reduction in interest income recognized on our portfolio company investments, excluding Subordinated Structured Notes, as a result of repayments and declines in SOFR rates.

Prospect Capital's investment portfolio, at fair value, was comprised of 57.0% control investments, 0.5% affiliate investments, and 42.6% non-control/non-affiliate investments. The company's investment strategy focuses on secured lending to non-control investments, with a significant portion of the portfolio in first lien and second lien loans. As of September 30, 2025, approximately 0.7% of the company's total assets at fair value were in non-accrual status. The company's annualized current yield was 11.8% across all performing interest-bearing investments, excluding equity investments and non-accrual loans.

During the quarter, Prospect Capital issued $7.87 million in Prospect Capital InterNotes® with stated interest rates ranging from 6.25% to 8.00%. The company also repaid $3.26 million in Prospect Capital InterNotes® at par. The company issued 577,233 shares of Series A5 Preferred Stock for net proceeds of $12.99 million, and 133,736 shares of Series M5 Preferred Stock for net proceeds of $3.25 million. The company also issued 2,362,606 shares of common stock in connection with the dividend reinvestment plan. The company also converted 966,719 shares of the 5.50% Preferred Stock and 6.50% Preferred Stock to common shares via Holder Optional Redemptions and Optional Redemptions Upon Death of Holder.

Looking ahead, Prospect Capital's performance will be influenced by factors such as prevailing interest rates, credit spreads, and the overall economic environment. The company's management team will continue to monitor market conditions and adjust its investment strategy accordingly. The company's ability to generate both current income and long-term capital appreciation will depend on its ability to identify and execute attractive investment opportunities while effectively managing risk.