Q4 2024 Prospect Capital Corp Earnings Call Transcript
Key Points
- Prospect Capital Corp (PSEC) reported a net investment income (NII) of $102.9 million or $0.25 per common share for the June quarter.
- The company announced monthly common shareholder distributions of $0.06 per share for September and October, marking the 86th consecutive distribution.
- PSEC's portfolio at fair value comprises 60.3% first-lien debt, reflecting a 3.8% increase from the prior year, indicating a strategic shift towards lower-risk investments.
- The company's structured credit business has delivered attractive cash yields, with a GAAP yield of 4.1% and a cash yield of 22.3% for the June quarter.
- PSEC has successfully completed and amended an extended credit facility with a new five-year maturity, increasing commitments to $2.12 billion from 48 banks, demonstrating strong support from the lender community.
- The company's net debt to total assets ratio stands at 30.5%, which may be a concern for some investors.
- PSEC's concentration in the energy industry is at 1.6%, which, although low, still exposes the company to sector-specific risks.
- The company's weighted average cost of unsecured debt financing increased to 4.25%, up 0.11% from the previous quarter and 0.18% from the prior year.
- Non-accruals as a percentage of total assets stood at approximately 0.3%, which, while low, still represents a risk of non-performing assets.
- The company's structured credit portfolio, although generating high yields, comprises less than 7% of the investment portfolio and is expected to continue decreasing, potentially impacting future income.
Good day and welcome to the Prospect Capital fourth-quarter fiscal year 2024 earnings release and conference call. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to Mr. John Barry, Chairman and CEO. Please go ahead, sir.
Thank you, Chuck. Joining me on the call today are Grier Eliasek, our President and Chief Operating Officer; and Kristin Van Dask, our Chief Financial Officer. Kristin?
Thanks, John. This call contains forward-looking statements that are intended to be subject to Safe Harbor protection. Future results are highly likely to vary materially. We do not undertake to update our forward-looking statements. For additional disclosure, see our earnings press release and 10-K filed previously and available on our website, prospectstreet.com.
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