•]`
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
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(Registrant’s Telephone Number, Including Area Code)
None
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding as of February 7, 2024 was
PENNANTPARK INVESTMENT CORPORATION
FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 2023
TABLE OF CONTENTS
2
PART I—CONSOLIDATED FINANCIAL INFORMATION
We are filing this Quarterly Report on Form 10-Q, or the Report, in compliance with Rule 13a-13 as promulgated by the Securities and Exchange Commission, or the SEC, under the Securities Exchange Act of 1934, as amended, or the Exchange Act. In this Report, except where context suggest otherwise, the terms “Company,” “we,” “our” or “us” refers to PennantPark Investment Corporation and its consolidated subsidiaries; “PennantPark Investment” refers to only PennantPark Investment Corporation; “our SBIC Fund” refers collectively to our consolidated subsidiaries, PennantPark SBIC II LP, or SBIC II, and its general partner, PennantPark SBIC GP II, LLC; “Funding I” refers to PennantPark Investment Funding I, LLC, a wholly-owned subsidiary prior to deconsolidation on July 31, 2020; “Taxable Subsidiary” refers to PNNT Investment Holdings, LLC; “PSLF” refers to PennantPark Senior Loan Fund, LLC, an unconsolidated joint venture; “PTSF II” refers to PennantPark-TSO Senior Loan Fund II, LP, an unconsolidated limited partnership; “PennantPark Investment Advisers” or “Investment Adviser” refers to PennantPark Investment Advisers, LLC; “PennantPark Investment Administration” or “Administrator” refers to PennantPark Investment Administration, LLC; “SBA” refers to the Small Business Administration; “SBIC” refers to a small business investment company under the Small Business Investment Act of 1958, as amended; “BNP Credit Facility” refers to our revolving credit facility with BNP Paribas prior to deconsolidation of Funding I; “Truist Credit Facility” refers to our multi-currency, senior secured revolving credit facility with Truist Bank, as amended and restated; “2026 Notes” refers to our 4.50% Notes due May 2026; “2026 Notes-2” refers to our 4.00% Notes due November 2026; “BDC” refers to a business development company under the Investment Company Act of 1940, as amended, or the “1940 Act”; “SBCAA” refers to the Small Business Credit Availability Act; “Code” refers to the Internal Revenue Code of 1986, as amended; and “RIC” refers to a regulated investment company under the Code. References to our portfolio, our investments and our business include investments we make through SBIC II and other consolidated subsidiaries.
3
Item 1. Consolidated Financial Statements
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(In thousands, except share and per share data)
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December 31, 2023 |
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September 30, 2023 |
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(unaudited) |
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Assets |
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Investments at fair value |
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Non-controlled, non-affiliated investments (amortized cost—$ |
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$ |
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$ |
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Non-controlled, affiliated investments (amortized cost—$ |
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Controlled, affiliated investments (amortized cost—$ |
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Total investments (amortized cost—$ |
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Cash and cash equivalents (cost—$ |
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Interest receivable |
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Distribution receivable |
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Due from affiliates |
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Prepaid expenses and other assets |
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Total assets |
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Liabilities |
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Truist Credit Facility payable, at fair value (cost—$ |
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2026 Notes payable, net (par— $ |
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2026 Notes-2 payable, net (par— $ |
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Payable for investment purchased |
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Distributions payable |
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Accounts payable and accrued expenses |
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Base management fee payable |
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Incentive fee payable |
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Interest payable on debt |
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Due to affiliates |
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Total liabilities |
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(See Note 11) |
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Net assets |
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Common stock, |
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Paid-in capital in excess of par value |
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Accumulated deficit |
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Total net assets |
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$ |
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$ |
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Total liabilities and net assets |
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$ |
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$ |
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Net asset value per share |
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$ |
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$ |
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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
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Three Months Ended December 31, |
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2023 |
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2022 |
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Investment income: |
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From non-controlled, non-affiliated investments: |
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Interest |
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$ |
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$ |
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Payment-in-kind |
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Dividend income |
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Other income |
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From non-controlled, affiliated investments: |
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Payment-in-kind |
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From controlled, affiliated investments: |
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Interest |
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Payment-in-kind |
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Dividend income |
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Total investment income |
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Expenses: |
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Interest and expenses on debt |
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Base management fee |
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Incentive fee |
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General and administrative expenses |
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Administrative services expenses |
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Expenses before provision for taxes |
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Provision for taxes on net investment income |
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Net expenses |
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Net investment income |
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Realized and unrealized gain (loss) on investments and debt: |
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Net realized gain (loss) on investments and debt: |
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Non-controlled, non-affiliated investments |
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Non-controlled and controlled, affiliated investments |
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( |
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Net realized gain (loss) on investments and debt |
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Net change in unrealized appreciation (depreciation) on: |
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Non-controlled, non-affiliated investments |
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Non-controlled and controlled, affiliated investments |
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Provision for taxes on unrealized appreciation (depreciation) on investments |
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Debt appreciation (depreciation) |
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Net change in unrealized appreciation (depreciation) on investments and debt |
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Net realized and unrealized gain (loss) from investments and debt |
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Net increase (decrease) in net assets resulting from operations |
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Net increase (decrease) in net assets resulting from operations per common share |
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$ |
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$ |
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Net investment income per common share |
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$ |
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$ |
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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)
(In thousands)
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Three Months Ended December 31, |
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2023 |
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2022 |
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Net increase (decrease) in net assets resulting from operations: |
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Net investment income |
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$ |
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$ |
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Net realized gain (loss) on investments and debt |
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Net change in unrealized appreciation (depreciation) on investments |
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( |
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Net change in provision for taxes on unrealized appreciation (depreciation) on investments |
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Net change in unrealized (appreciation) depreciation on debt |
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( |
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Net increase (decrease) in net assets resulting from operations |
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( |
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Distributions to stockholders: |
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Distribution of net investment income |
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Total distributios to stockholders |
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( |
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( |
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Net increase (decrease) in net assets |
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( |
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Net assets: |
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Beginning of period |
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End of period |
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$ |
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$ |
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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
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Three Months Ended December 31, |
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2023 |
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2022 |
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Cash flows from operating activities: |
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Net increase (decrease) in net assets resulting from operations |
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$ |
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$ |
( |
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Adjustments to reconcile net increase (decrease) in net assets resulting from |
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Net change in net unrealized (appreciation) depreciation on investments |
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Net change in unrealized appreciation (depreciation) on debt |
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( |
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Net realized (gain) loss on investments and cash equivalents |
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( |
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Net accretion of discount and amortization of premium |
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( |
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( |
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Purchases of investments |
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( |
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Payment-in-kind income |
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( |
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Proceeds from dispositions of investments |
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Amortization of deferred financing costs |
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(Increase) decrease in: |
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Interest receivable |
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( |
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Receivables from investments sold |
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Distribution receivable |
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( |
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( |
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Due from affiliate |
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( |
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Prepaid expenses and other assets |
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( |
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— |
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Increase (decrease) in: |
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Due to affiliate |
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( |
) |
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Payable for investments purchased |
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( |
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Interest payable on debt |
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( |
) |
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( |
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Base management fee payable, net |
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( |
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Incentive fee payable |
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Deferred tax liability |
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Accounts payable and accrued expenses |
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( |
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( |
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Net cash provided by (used in) operating activities |
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( |
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( |
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Cash flows from financing activities: |
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Distributions paid to stockholders |
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( |
) |
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( |
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Borrowings under Truist Credit Facility |
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Repayments under Truist Credit Facility |
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( |
) |
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( |
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Net cash provided by (used in) financing activities |
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( |
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Net increase (decrease) in cash equivalents |
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( |
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( |
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Effect of exchange rate changes on cash |
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Cash and cash equivalents, beginning of period |
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Cash and cash equivalents, end of period |
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$ |
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$ |
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Supplemental disclosure of cash flow information: |
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Interest paid |
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$ |
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$ |
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Taxes paid |
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$ |
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$ |
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SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited)
DECEMBER 31, 2023
(In thousands, except share data)
Issuer Name |
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Maturity / Expiration |
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Industry |
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Current |
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Basis Point |
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Par / |
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Cost |
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Fair Value (3) |
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Investments in Non-Controlled, Non-Affiliated Portfolio Companies— |
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First Lien Secured Debt— |
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A1 Garage Merger Sub, LLC |
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% |
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$ |
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$ |
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A1 Garage Merger Sub, LLC - Unfunded Term Loan |
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— |
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— |
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— |
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A1 Garage Merger Sub, LLC - Revolver (7) |
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— |
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— |
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— |
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( |
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ACP Avenu Buyer, LLC |
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% |
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ACP Avenu Buyer, LLC - Unfunded Term Loan (7) |
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— |
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— |
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— |
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( |
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ACP Avenu Buyer, LLC - Revolver (7) |
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— |
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— |
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— |
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ACP Falcon Buyer, Inc. - Revolver (7) |
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— |
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— |
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— |
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( |
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Ad.net Acquisition, LLC - Revolver |
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% |
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Ad.net Acquisition, LLC - Revolver (7) |
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— |
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— |
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— |
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( |
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Aeronix, Inc. |
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% |
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Aeronix, Inc. - Revolver (7) |
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— |
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— |
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— |
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— |
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AFC Dell Holding Corp. |
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% |
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AFC Dell Holding Corp. - Unfunded Term Loan |
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— |
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— |
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— |
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— |
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Anteriad, LLC (f/k/a MeritDirect, LLC) |
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% |
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Anteriad, LLC (f/k/a MeritDirect, LLC) - Revolver (7) |
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— |
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— |
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— |
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( |
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Any Hour Services |
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% |
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Any Hour Services - Revolver (7) |
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— |
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— |
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— |
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( |
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Applied Technical Services, LLC |
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% |
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Applied Technical Services, LLC - Revolver |
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% |
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Applied Technical Services, LLC - Revolver (7) |
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— |
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— |
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— |
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( |
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Arcfield Acquisition Corp. - Revolver (7) |
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— |
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— |
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— |
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( |
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Berwick Industrial Park |
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% |
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— |
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Beta Plus Technologies, Inc. |
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% |
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BioDerm, Inc. - Revolver |
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% |
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BioDerm, Inc. - Revolver (7) |
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— |
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— |
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— |
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( |
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Blackhawk Industrial Distribution, Inc. |
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% |
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|
||||||||
Blackhawk Industrial Distribution, Inc.(7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Blackhawk Industrial Distribution, Inc. - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Blackhawk Industrial Distribution, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
BlueHalo Financing Holdings, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Broder Bros., Co. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Carisk Buyer, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Carisk Buyer, Inc. - Unfunded Term Loan (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Carisk Buyer, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Cartessa Aesthetics, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cartessa Aesthetics, LLC - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cartessa Aesthetics, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
CF512, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
CF512, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Compex Legal Services, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Compex Legal Services, Inc. - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Compex Legal Services, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Confluent Health, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Connatix Buyer, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Crane 1 Services, Inc. - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Crane 1 Services, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Dr. Squatch, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Dr. Squatch, LLC (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Dr. Squatch, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
DRS Holdings III, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
DRS Holdings III, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
EDS Buyer, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
EDS Buyer, LLC - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
EDS Buyer, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
ETE Intermediate II, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Exigo Intermediate II, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Exigo Intermediate II, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Five Star Buyer, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Five Star Buyer, Inc. - Unfunded Term Loan (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Five Star Buyer, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Gauge ETE Blocker, LLC - Promissory Note |
|
|
|
|
% |
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||||
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited) —(Continued)
DECEMBER 31, 2023
(In thousands, except share data)
Issuer Name |
|
Maturity / Expiration |
|
Industry |
|
Current |
|
|
Basis Point |
|
|
Par / |
|
|
Cost |
|
|
Fair Value (3) |
|
|||||
Graffiti Buyer, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
$ |
|
|
$ |
|
||||||||
Graffiti Buyer, Inc. - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Graffiti Buyer, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Hancock Roofing and Construction L.L.C. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Hancock Roofing and Construction L.L.C. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Holdco Sands Intermediate, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Holdco Sands Intermediate, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
HV Watterson Holdings, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
HV Watterson Holdings, LLC (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
HV Watterson Holdings, LLC - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
HV Watterson Holdings, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
HW Holdco, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
HW Holdco, LLC - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
HW Holdco, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
IG Investments Holdings, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Imagine Acquisitionco, LLC (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Imagine Acquisitionco, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Inception Fertility Ventures, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Infinity Home Services Holdco, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Infinity Home Services Holdco, Inc. (10) |
|
|
|
|
% |
|
|
|
|
CAD |
|
|
|
|
|
|
|
|||||||
Infinity Home Services Holdco, Inc. - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Infinity Home Services Holdco, Inc. - 1st Amendment Unfunded Term Loan (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Infinity Home Services Holdco, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Infolinks Media Buyco, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Integrity Marketing Acquisition, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Integrity Marketing Acquisition, LLC - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Integrity Marketing Acquisition, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Inventus Power, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
ITI Holdings, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
ITI Holdings, Inc. - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
ITI Holdings, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
K2 Pure Solutions NoCal, L.P. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
K2 Pure Solutions NoCal, L.P. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Kinetic Purchaser, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Kinetic Purchaser, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Lash OpCo, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Lash OpCo, LLC - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Lash OpCo, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
LAV Gear Holdings, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
(PIK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Ledge Lounger, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ledge Lounger, Inc. - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ledge Lounger, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Lightspeed Buyer Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Lightspeed Buyer Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
LJ Avalon Holdings, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
LJ Avalon Holdings, LLC - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
LJ Avalon Holdings, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
LSF9 Atlantis Holdings, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loving Tan Intermediate II, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loving Tan Intermediate II, Inc. - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loving Tan Intermediate II, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Mars Acquisition Holdings Corp. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mars Acquisition Holdings Corp. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
MBS Holdings, Inc. - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
MBS Holdings, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
MDI Buyer, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
MDI Buyer, Inc. - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
MDI Buyer, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
- |
|
|
|
( |
) |
|||
Meadowlark Acquirer, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Meadowlark Acquirer, LLC Term Loan II |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Meadowlark Acquirer, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Medina Health, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Medina Health, LLC - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Medina Health, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited)—(Continued)
DECEMBER 31, 2023
(In thousands, except share data)
Issuer Name |
|
Maturity / Expiration |
|
Industry |
|
Current |
|
|
Basis Point |
|
|
Par / |
|
|
Cost |
|
|
Fair Value (3) |
|
|||||
Municipal Emergency Services, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
$ |
|
|
$ |
|
||||||||
Municipal Emergency Services, Inc. - Unfunded Term Loan A |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Municipal Emergency Services, Inc. - Unfunded Term Loan B |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Municipal Emergency Services, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
NBH Group LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Neptune Flood Incorporated - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
NORA Acquisition, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
NORA Acquisition, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Omnia Exterior Solutions, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Omnia Exterior Solutions, LLC - Unfunded Term Loan (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Omnia Exterior Solutions, LLC - Unfunded Term Loan 2 (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Omnia Exterior Solutions, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
ORL Acquisition, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
ORL Acquisition, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
OSP Embedded Purchaser, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
OSP Embedded Purchaser, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Ox Two, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ox Two, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Pacific Purchaser, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pacific Purchaser, LLC - Unfunded Term Loan (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Pacific Purchaser, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Pequod Merger Sub, Inc. - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Pequod Merger Sub, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
PL Acquisitionco, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Pragmatic Institute, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pragmatic Institute, LLC Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Pragmatic Institute, LLC - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Quantic Electronics, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Quantic Electronics, LLC - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Questex, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Questex, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Radius Aerospace, Inc. - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Radius Aerospace, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Rancho Health MSO, Inc. (7) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Rancho Health MSO, Inc. - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Rancho Health MSO, Inc. - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Rancho Health MSO, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Reception Purchaser, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Recteq, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Research Now Group, Inc. and Dynata, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Riverpoint Medical, LLC - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Riverpoint Medical, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Riverside Assessments, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Rural Sourcing Holdings, Inc. - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Rural Sourcing Holdings, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
S101 Holdings, Inc. - Unfunded Term Loan (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
S101 Holdings, Inc. - Unfunded Term Loan 2 (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Sales Benchmark Index LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Sargent & Greenleaf Inc. - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sargent & Greenleaf Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Schlesinger Global, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Schlesinger Global, Inc. - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
(PIK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Schlesinger Global, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Seaway Buyer, LLC - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Seaway Buyer, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Seaway Buyer, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Shiftkey, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sigma Defense Systems, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sigma Defense Systems, LLC - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sigma Defense Systems, LLC - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Signature Systems Holding Company - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Solutionreach, Inc. - Revolver (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Spendmend Holdings LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Spendmend Holdings LLC - Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Spendmend Holdings LLC (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Cas
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited) —(Continued)
DECEMBER 31, 2023
(In thousands, except share data)
Issuer Name |
|
Maturity / Expiration |
|
|
Industry |
|
Current |
|
|
Basis Point |
|
|
Par / |
|
|
Cost |
|
|
Fair Value (3) |
|
||||||
Spendmend Holdings LLC - Revolver (7) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
$ |
- |
|
|
$ |
( |
) |
||||
System Planning and Analysis, Inc. - Revolver (7) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||||
The Bluebird Group LLC |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
The Bluebird Group LLC - Revolver (7) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||||
The Plimpton & Hills Corporation |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
The Plimpton & Hills Corporation - Unfunded Term Loan (7) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||||
The Vertex Companies, LLC |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
The Vertex Companies, LLC - Revolver |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
The Vertex Companies, LLC - Revolver (7) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||||
TransGo, LLC |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
TransGo, LLC - Revolver (7) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||||
TWS Acquisition Corporation - Revolver (7) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||||
Tyto Athene, LLC (New Issue) - Revolver |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tyto Athene, LLC - Revolver (7) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||||
Urology Management Holdings, Inc. |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Urology Management Holdings, Inc. - Unfunded Term Loan |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||||
Watchtower Intermediate, LLC |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Watchtower Intermediate, LLC. - Unfunded Term Loan (7) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||||
Watchtower Intermediate, LLC. - Revolver |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Watchtower Intermediate, LLC. - Revolver (7) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||||
Wildcat Buyerco, Inc. |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Wildcat Buyerco, Inc. - Unfunded Term Loan (7) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||||
Wildcat Buyerco, Inc. - Revolver (7) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||||
Zips Car Wash, LLC |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total First Lien Secured Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Second Lien Secured Debt— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ascensus Holdings, Inc. |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Atlas Purchaser, Inc |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Best Practice Associates LLC |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Burgess Point Purchaser Corporation |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
ENC Parent Corporation |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Halo Buyer, Inc. |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
QuantiTech LLC |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Second Lien Secured Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Subordinated Debt/Corporate Notes— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Express Wash Acquisition Company, LLC |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Flock Financial, LLC |
|
|
|
|
|
% |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||||||
Total Subordinated Debt/Corporate Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Preferred Equity/Partnership Interests— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ad.net Holdings, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
AH Newco Equityholdings, LLC |
|
|
— |
|
|
|
|
% |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||||
Anteriad Holdings, LP (f/k/a MeritDirect Holdings, LP) (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Cartessa Aesthetics, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Gauge Lash Coinvest, LLC - Preferred Equity |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Gauge Schlesinger Coinvest, LLC - Class A-2 Preferred Equity |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Imagine Topco, LP Preferred |
|
|
— |
|
|
|
|
% |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||||
Mars Intermediate Holdings II, Inc (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Magnolia Topco LP - Class A Preferred Equity (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Magnolia Topco LP - Class B Preferred Equity (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
NXOF Holdings, Inc. (Tyto Athene, LLC) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
ORL Holdco, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
PL Acquisitionco, LLC - Preferred Equity |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Signature CR Intermediate Holdco, Inc. |
|
|
— |
|
|
|
|
% |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||||
TPC Holding Company, LP (8),(11) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
TWD Parent Holdings, LLC Preferred |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(The Vertex Companies, LLC) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Preferred Equity/Partnership Interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Common Equity/Partnership Interests/Warrants— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
A1 Garage Equity, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Ad.net Holdings, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
AFC Acquisitions, Inc. (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Affinion Group Holdings, Inc. (Warrants) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||||
Aftermarket Drivetrain Products Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
AG Investco LP (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
AG Investco LP (7), (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
11
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited) —(Continued)
DECEMBER 31, 2023
(In thousands, except share data)
Issuer Name |
|
Maturity / Expiration |
|
|
Industry |
|
Current |
|
|
Basis Point |
|
|
Par / |
|
|
Cost |
|
|
Fair Value (3) |
|
||||||
Altamira Intermediate Company II, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
$ |
|
|
$ |
|
||||
AMCSI Crash Co-Invest, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
AMCSI Crash Co-Invest, LP (7) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Anteriad Holdings, LP (f/k/a MeritDirect Holdings, LP) (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Athletico Holdings, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Atlas Investment Aggregator, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
BioDerm, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Burgess Point Holdings, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Carisk Parent, L.P. - Common Equity |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Connatix Parent, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Consello Pacific Aggregator, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Cowboy Parent LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Blackhawk Industrial Distribution, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Crane 1 Acquisition Parent Holdings, L.P. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Delta InvestCo LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Sigma Defense Systems, LLC) (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Delta InvestCo LP (7) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
(Sigma Defense Systems, LLC) (7), (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
eCommission Holding Corporation (11) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
EDS Topco, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Exigo, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
FedHC InvestCo LP (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
FedHC InvestCo LP (7),(9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
FedHC InvestCo II LP (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Five Star Parent Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Gauge ETE Blocker, LLC - Common Equity |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Gauge Lash Coinvest LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Gauge Loving Tan, LP - Common Equity |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Gauge Schlesinger Coinvest, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(TVC Enterprises, LLC) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
GCOM InvestCo LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
GMP Hills, LP - Common Equity |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Go Dawgs Capital III, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(American Insulated Glass, LLC) (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Hancock Claims Consultants Investors, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
HPA SPQ Aggregator LP- Common Equity |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
HV Watterson Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Icon Partners V C, L.P. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Icon Partners V C, L.P. (7) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||
IHS Parent Holdngs, L.P. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Imagine Topco, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Infogroup Parent Holdings, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Data Axle, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ironclad Holdco, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Applied Technical Services, LLC) (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
ITC Infusion Co-invest, LP(9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
ITC Rumba, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Cano Health, LLC) (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Kentucky Racing Holdco, LLC (Warrants)(9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Kinetic Purchaser, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
KL Stockton Co-Invest LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Any Hour Services) (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Lariat ecoserv Co-Invest Holdings, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
LEP Pequod Holdings, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Lightspeed Investment Holdco LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
LJ Avalon, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Lorient Peregrine Investments, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Magnolia Topco LP - Class A (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Magnolia Topco LP - Class B (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Mars Intermidiate Holdings II, Inc. (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
MDI Aggregator, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Meadowlark Title, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
Municipal Emergency Services, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
NEPRT Parent Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Recteq, LLC) (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
New Medina Health, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
NORA Parent Holdings, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
North Haven Saints Equity Holdings, LP(9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
NXOF Holdings, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
(Tyto Athene, LLC) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
OceanSound Discovery Equity, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Holdco Sands Intermediate, LLC) (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
OHCP V BC COI, L.P. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
OHCP V BC COI, L.P. (7) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||
ORL Holdco, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
OSP Embedded Aggregator, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
PennantPark-TSO Senior Loan Fund II, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Pink Lily Holdco, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited) —(Continued)
DECEMBER 31, 2023
(In thousands, except share data)
Issuer Name |
|
Maturity / Expiration |
|
|
Industry |
|
Current |
|
|
Basis Point |
|
|
Par / |
|
|
Cost |
|
|
Fair Value (3) |
|
||||||
Pragmatic Institute, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
$ |
|
|
$ |
|
||||
Quad (U.S.) Co-Invest, L.P. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
QuantiTech InvestCo LP (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
QuantiTech InvestCo LP (7),(9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
QuantiTech InvestCo II LP (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
RFMG Parent, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Rancho Health MSO, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
SBI Holdings Investments LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Sales Benchmark Index LLC) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Seaway Topco, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Signature CR Intermediate Holdco, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
SP L2 Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
SSC Dominion Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Class B (US Dominion, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||||
StellPen Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(CF512, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||||
SV Aero Holdings, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
TAC LifePort Holdings, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Tower Arch Infolinks Media, LP (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Tower Arch Infolinks Media, LP (7), (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
TPC Holding Company, LP (8). (11) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
TWD Parent Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(The Vertex Companies, LLC) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
UniVista Insurance (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Urology Partners Co., L.P. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Watchtower Holdings, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
WCP Ivyrehab QP CF Feeder, LP (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
WCP Ivyrehab QP CF Feeder, LP - Unfunded (7), (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Wildcat Parent, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Wildcat Buyerco, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Common Equity/Partnership Interests/Warrants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
US Government Securities— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. Treasury Bill (5) |
|
|
|
|
|
% |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||||||
Total Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Investments in Non-Controlled, Non-Affiliated Portfolio Companies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Investments in Non-Controlled, Affiliated Portfolio Companies— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
First Lien Secured Debt— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Walker Edison Furniture Company LLC |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Walker Edison Furniture Company, LLC - Unfunded Term Loan |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||||
Walker Edison Furniture Company LLC - Junior Revolver |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total First Lien Secured Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Preferred Equity/Partnership Interests— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cascade Environmental Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Cascade Environmental Holdings, LLC - Series B |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Total Preferred Equity/Partnership Interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Common Equity/Partnership Interests/Warrants— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cascade Environmental Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
Walker Edison Furniture |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
Total Common Equity/Partnership Interests/Warrants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||||
Total Investments in Non-Controlled, Affiliated Portfolio Companies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited) —(Continued)
DECEMBER 31, 2023
(In thousands, except share data)
Issuer Name |
|
Maturity / Expiration |
|
|
Industry |
|
Current |
|
|
Basis Point |
|
|
Par / |
|
|
Cost |
|
|
Fair Value (3) |
|
||||||
Investments in Controlled, Affiliated Portfolio Companies— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
First Lien Secured Debt— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
AKW Holdings Limited (8), (10), (11) |
|
|
|
|
|
% |
|
|
|
£ |
|
|
$ |
|
|
$ |
|
|||||||||
MidOcean JF Holdings Corp. |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total First Lien Secured Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Second Lien Secured Debt— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Mailsouth Inc. (6) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||||
Total Second Lien Secured Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||||
Subordinated Debt— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
PennantPark Senior Loan Fund, LLC |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Subordinated Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Common Equity— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
AKW Holdings Limited (8), (10), (11) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
£ |
|
|
|
|
|
|
|
||||
JF Intermediate, LLC |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
MSpark, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
PennantPark Senior Loan Fund, LLC (11) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Total Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Investments in Controlled, Affiliated Portfolio Companies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Investments— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and Cash Equivalents— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
BlackRock Federal FD Institutional 30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Non-Money Market Cash |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Investments and Cash Equivalents— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||||
Liabilities in Excess of Other Assets—( |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||||
Net Assets— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
||||||
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
14
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS
September 30, 2023
(In thousands, except share data)
Issuer Name |
|
Maturity / Expiration |
|
Industry |
|
Current |
|
|
Basis Point |
|
|
Par / |
|
|
Cost |
|
|
Fair Value (3) |
|
|||||
Investments in Non-Controlled, Non-Affiliated Portfolio Companies— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
First Lien Secured Debt— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
A1 Garage Merger Sub, LLC |
|
|
|
|
% |
|
|
|
|
|
|
$ |
|
|
$ |
|
||||||||
A1 Garage Merger Sub, LLC - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
A1 Garage Merger Sub, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Ad.net Acquisition, LLC (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ad.net Acquisition, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Anteriad, LLC (f/k/a MeritDirect, LLC) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Anteriad, LLC (f/k/a MeritDirect, LLC) (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Any Hour Services |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Any Hour Services (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Apex Service Partners, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Apex Service Partners, LLC Term Loan C |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Apex Service Partners, LLC (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Apex Service Partners, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Applied Technical Services, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Applied Technical Services, LLC (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Applied Technical Services, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Arcfield Acquisition Corp. (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Arcfield Acquisition Corp. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Berwick Industrial Park |
|
|
|
|
% |
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||||
Beta Plus Technologies, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
BioDerm, Inc. (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
BioDerm, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Blackhawk Industrial Distribution, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Blackhawk Industrial Distribution, Inc.(7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Blackhawk Industrial Distribution, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Blackhawk Industrial Distribution, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Broder Bros., Co. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cartessa Aesthetics, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cartessa Aesthetics, LLC - (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cartessa Aesthetics, LLC - (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
CF512, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
CF512, Inc.(Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Compex Legal Services, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Compex Legal Services, Inc. (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Compex Legal Services, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Connatix Buyer, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Confluent Health, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Crane 1 Services, Inc. (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Crane 1 Services, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Dr. Squatch, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Dr. Squatch, LLC (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Dr. Squatch, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
DRS Holdings III, Inc. |
|
11/03/2025 |
|
Consumer Products |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||
DRS Holdings III, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
EDS Buyer, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
EDS Buyer, LLC - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
EDS Buyer, LLC - (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
ETE Intermediate II, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Exigo Intermediate II, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Exigo Intermediate II, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
15
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)
September 30, 2023
(In thousands, except share data)
Issuer Name |
|
Maturity / Expiration |
|
Industry |
|
Current |
|
|
Basis Point |
|
|
Par / |
|
|
Cost |
|
|
Fair Value (3) |
|
|||||
Five Star Buyer, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
$ |
|
|
$ |
|
||||||||
Five Star Buyer, Inc. - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Five Star Buyer, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Gauge ETE Blocker, LLC - Promissory Note |
|
|
|
|
% |
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||||
Graffiti Buyer, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Graffiti Buyer, Inc. (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Graffiti Buyer, Inc. (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Graffiti Buyer, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Hancock Roofing and Construction L.L.C. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Hancock Roofing and Construction L.L.C. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Holdco Sands Intermediate, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Holdco Sands Intermediate, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
HV Watterson Holdings, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
HV Watterson Holdings, LLC (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
HV Watterson Holdings, LLC - (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
HV Watterson Holdings, LLC - (Revolver)(7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
HW Holdco, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
HW Holdco, LLC (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
HW Holdco, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
IG Investments Holdings, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Imagine Acquisitionco, LLC (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Imagine Acquisitionco, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Inception Fertility Ventures, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Infinity Home Services Holdco, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Infinity Home Services Holdco, Inc. - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Infinity Home Services Holdco, Inc.(Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Infolinks Media Buyco, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Infolinks Media Buyco, LLC (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Integrated Data Services - Term Loan |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Integrated Data Services - (Revolver) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Integrity Marketing Acquisition, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Integrity Marketing Acquisition, LLC - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Integrity Marketing Acquisition, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Inventus Power, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Inventus Power, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
ITI Holdings, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
ITI Holdings, Inc. (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
ITI Holdings, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
K2 Pure Solutions NoCal, L.P. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
K2 Pure Solutions NoCal, L.P. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Kinetic Purchaser, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Kinetic Purchaser, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Lash OpCo, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Lash OpCo, LLC (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Lash OpCo, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
LAV Gear Holdings, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
(PIK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Ledge Lounger, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ledge Lounger, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Lightspeed Buyer Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Lightspeed Buyer Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
LJ Avalon Holdings, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
LJ Avalon Holdings, LLC - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
LJ Avalon Holdings, LLC (Revolver)(7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
LSF9 Atlantis Holdings, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loving Tan Intermediate II, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loving Tan Intermediate II, Inc. (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loving Tan Intermediate II, Inc. (Revolver)(7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Mars Acquisition Holdings Corp. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Mars Acquisition Holdings Corp. (Revolver)(7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
MBS Holdings, Inc. (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
MBS Holdings, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
MDI Buyer, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
MDI Buyer, Inc. (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
MDI Buyer, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Meadowlark Acquirer, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Meadowlark Acquirer, LLC Term Loan I |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Meadowlark Acquirer, LLC Term Loan II |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Meadowlark Acquirer, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)
September 30, 2023
(In thousands, except share data)
Issuer Name |
|
Maturity / Expiration |
|
Industry |
|
Current |
|
|
Basis Point |
|
|
Par / |
|
|
Cost |
|
|
Fair Value (3) |
|
|||||
Municipal Emergency Services, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
$ |
|
|
$ |
|
||||||||
Municipal Emergency Services, Inc. - Unfunded Term Loan A |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Municipal Emergency Services, Inc. - Unfunded Term Loan B |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Municipal Emergency Services, Inc. (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Municipal Emergency Services, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
NBH Group LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Neptune Flood Incorporated (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
NORA Acquisition, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
NORA Acquisition, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
ORL Acquisition, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
ORL Acquisition, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Ox Two, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Ox Two, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Pequod Merger Sub, Inc. - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Pequod Merger Sub, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
PL Acquisitionco, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Pragmatic Institute, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Pragmatic Institute, LLC Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Pragmatic Institute, LL (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Quantic Electronics, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Quantic Electronics, LLC (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Questex, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Questex, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Radius Aerospace, Inc. (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Radius Aerospace, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Rancho Health MSO, Inc. (7) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Rancho Health MSO, Inc. - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Rancho Health MSO, Inc. (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Rancho Health MSO, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Reception Purchaser, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Recteq, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Research Now Group, Inc. and Dynata, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Riverpoint Medical, LLC (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Riverpoint Medical, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Riverside Assessments, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Rural Sourcing Holdings, Inc. - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Rural Sourcing Holdings, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Sales Benchmark Index LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Sargent & Greenleaf Inc. (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sargent & Greenleaf Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Schlesinger Global, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Schlesinger Global, Inc. (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
(PIK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Schlesinger Global, Inc. (Revolver)(7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Seaway Buyer, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Seaway Buyer, LLC (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Seaway Buyer, LLC (Revolver)(7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Shiftkey, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sigma Defense Systems, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sigma Defense Systems, LLC (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Sigma Defense Systems, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Signature Systems Holding Company (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Solutionreach, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Spendmend Holdings LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Spendmend Holdings LLC (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Spendmend Holdings LLC - Funded Revolver |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Spendmend Holdings LLC - (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
System Planning and Analysis, Inc. - (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
The Aegis Technologies Group, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
The Bluebird Group LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
The Bluebird Group LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
The Vertex Companies, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
The Vertex Companies, LLC (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
The Vertex Companies, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
TWS Acquisition Corporation (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|||
Tyto Athene, LLC (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Urology Management Holdings, Inc. - Unfunded Term Loan |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Wildcat Buyerco, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Wildcat Buyerco, Inc. (Revolver) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Wildcat Buyerco, Inc. (Revolver) (7) |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
|||
Zips Car Wash, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total First Lien Secured Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Government Securities— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Treasury Bill (5) |
|
|
|
|
% |
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||||
Total U.S. Government Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)
September 30, 2023
(In thousands, except share data)
Issuer Name |
|
Maturity / Expiration |
|
|
Industry |
|
Current |
|
|
Basis Point |
|
|
Par / |
|
|
Cost |
|
|
Fair Value (3) |
|
||||||
Second Lien Secured Debt— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ascensus Holdings, Inc. |
|
|
|
|
|
% |
|
|
|
|
|
|
$ |
|
|
$ |
|
|||||||||
Atlas Purchaser, Inc |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Best Practice Associates LLC |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Burgess Point Purchaser Corporation |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
ENC Parent Corporation |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Halo Buyer, Inc. |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
QuantiTech LLC |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Second Lien Secured Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Subordinated Debt/Corporate Notes— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Express Wash Acquisition Company, LLC |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Flock Financial, LLC |
|
|
|
|
|
% |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||||||
Total Subordinated Debt/Corporate Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Preferred Equity/Partnership Interests— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ad.net Holdings, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
AH Newco Equityholdings, LLC |
|
|
— |
|
|
|
|
% |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||||
Anteriad Holdings, LP (f/k/a MeritDirect Holdings, LP) (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Cartessa Aesthetics, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Gauge Lash Coinvest, LLC - Preferred Equity |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Gauge Schlesinger Coinvest, LLC - Class A-2 Preferred Equity |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Imagine Topco, LP |
|
|
— |
|
|
|
|
% |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||||
Magnolia Topco LP - Class A Preferred Equity (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Magnolia Topco LP - Class B Preferred Equity (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Mars Intermediate Holdings II, Inc |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
NXOF Holdings, Inc. (Tyto Athene, LLC) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
ORL Holdco, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
PL Acquisitionco, LLC - Preferred Equity |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Signature CR Intermediate Holdco, Inc. |
|
|
— |
|
|
|
|
% |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||||
TPC Holding Company, LP (8),(11) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
TWD Parent Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(The Vertex Companies, LLC) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Preferred Equity/Partnership Interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Common Equity/Partnership Interests/Warrants— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
A1 Garage Equity, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Ad.net Holdings, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
Affinion Group Holdings, Inc. (Warrants) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||||
AG Investco LP (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
AG Investco LP (7), (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Altamira Intermediate Company II, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
AMCSI Crash Co-Invest, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
AMCSI Crash Co-Invest, LP (7) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Anteriad Holdings, LP (f/k/a MeritDirect Holdings, LP) (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Athletico Holdings, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Atlas Investment Aggregator, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
BioDerm, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Burgess Point Holdings, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Connatix Parent, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Cowboy Parent LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Blackhawk Industrial Distribution, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Crane 1 Acquisition Parent Holdings, L.P. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Delta InvestCo LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Sigma Defense Systems, LLC) (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Delta InvestCo LP (7) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
(Sigma Defense Systems, LLC) (7), (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
eCommission Holding Corporation (11) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
EDS Topco, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Exigo, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
FedHC InvestCo LP (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
FedHC InvestCo LP (7),(9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
FedHC InvestCo II LP (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Five Star Parent Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Gauge ETE Blocker, LLC - Common Equity |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Gauge Lash Coinvest LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Gauge Loving Tan, LP - Common Equity |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Gauge Schlesinger Coinvest, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Gauge TVC Coinvest, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
(TVC Enterprises, LLC) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
18
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)
September 30, 2023
(In thousands, except share data)
Issuer Name |
|
Maturity / Expiration |
|
|
Industry |
|
Current |
|
|
Basis Point |
|
|
Par / |
|
|
Cost |
|
|
Fair Value (3) |
|
||||||
GCOM InvestCo LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
$ |
|
|
$ |
401 |
|
|||
Go Dawgs Capital III, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(American Insulated Glass, LLC) (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Hancock Claims Consultants Investors, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
HPA SPQ Aggregator LP- Common Equity |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
HV Watterson Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Icon Partners V C, L.P. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Icon Partners V C, L.P. (7) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||
IHS Parent Holdngs, L.P. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Imagine Topco, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Infogroup Parent Holdings, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Data Axle, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ironclad Holdco, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Applied Technical Services, LLC) (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
ITC Infusion Co-invest, LP(9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
ITC Rumba, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Cano Health, LLC) (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Kentucky Racing Holdco, LLC (Warrants)(9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Kinetic Purchaser, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
KL Stockton Co-Invest LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Any Hour Services) (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Lariat ecoserv Co-Invest Holdings, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
LEP Pequod Holdings, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Lightspeed Investment Holdco LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
LJ Avalon, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Lorient Peregrine Investments, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Magnolia Topco LP - Class A Common Equity (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Magnolia Topco LP - Class B Common Equity (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Mars Intermidiate Holdings II, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
MDI Aggregator, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Meadowlark Title, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
Municipal Emergency Services, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
NEPRT Parent Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Recteq, LLC) (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
NORA Parent Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
North Haven Saints Equity Holdings, LP(9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
NXOF Holdings, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
(Tyto Athene, LLC) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
OceanSound Discovery Equity, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Holdco Sands Intermediate, LLC) (9) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
OHCP V BC COI, L.P. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
OHCP V BC COI, L.P. (7) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
( |
) |
||
ORL Holdco, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
PennantPark-TSO Senior Loan Fund II, LP (11) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Pink Lily Holdco, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Pragmatic Institute, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Quad (U.S.) Co-Invest, L.P. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
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|
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|
|
|
|
||||
QuantiTech InvestCo LP (9) |
|
|
— |
|
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|
— |
|
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— |
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|
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|
||||
QuantiTech InvestCo LP (7),(9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
QuantiTech InvestCo II LP (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
RFMG Parent, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
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|
|
|
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|
||||
(Rancho Health MSO, Inc.) |
|
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|
|
|
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|
||||||
SBI Holdings Investments LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
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|
||||
(Sales Benchmark Index LLC) |
|
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|
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|
||||||
Seaway Topco, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
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|
|
|
|
|
||||
Signature CR Intermediate Holdco, Inc. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
SP L2 Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
SSC Dominion Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Class B (US Dominion, Inc.) |
|
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|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
||||||
StellPen Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(CF512, Inc.) |
|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
||||||
TAC LifePort Holdings, LLC (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Tower Arch Infolinks Media, LP (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Tower Arch Infolinks Media, LP (7), (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
TPC Holding Company, LP (8). (11) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
TWD Parent Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(The Vertex Companies, LLC) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
19
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULE OF INVESTMENTS – (Continued)
September 30, 2023
(In thousands, except share data)
Issuer Name |
|
Maturity / Expiration |
|
|
Industry |
|
Current |
|
|
Basis Point |
|
|
Par / |
|
|
Cost |
|
|
Fair Value (3) |
|
||||||
UniVista Insurance (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
400 |
|
|
$ |
362 |
|
|
$ |
555 |
|
|
Urology Partners Co., L.P. |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
WCP Ivyrehab (QP) CF Feeder, LP (9) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
WCP Ivyrehab QP CF Feeder, LP - Unfunded (7) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Wildcat Parent, LP |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
(Wildcat Buyerco, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Common Equity/Partnership Interests/Warrants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Investments in Non-Controlled, Non-Affiliated Portfolio Companies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Investments in Non-Controlled, Affiliated Portfolio Companies— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
First Lien Secured Debt— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Walker Edison Furniture Company LLC |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Walker Edison Furniture Company, LLC - Unfunded Term Loan |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||||
Walker Edison Furniture Company LLC - Junior Revolver |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total First Lien Secured Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Preferred Equity/Partnership Interests— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cascade Environmental Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Cascade Environmental Holdings, LLC - Series B |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Total Preferred Equity/Partnership Interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Common Equity/Partnership Interests/Warrants— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cascade Environmental Holdings, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
JF Intermediate, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Walker Edison Furniture |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Total Common Equity/Partnership Interests/Warrants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Investments in Non-Controlled, Affiliated Portfolio Companies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Investments in Controlled, Affiliated Portfolio Companies— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
First Lien Secured Debt— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
AKW Holdings Limited (8), (10), (11) |
|
|
|
|
|
% |
|
|
|
£ |
|
|
|
|
|
|
|
|||||||||
Total First Lien Secured Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Second Lien Secured Debt— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Mailsouth Inc. (6) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||||
Total Second Lien Secured Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||||
Subordinated Debt— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
PennantPark Senior Loan Fund, LLC (11) |
|
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total Subordinated Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Common Equity— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
AKW Holdings Limited (8), (10), (11) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
£ |
|
|
|
|
|
|
|
||||
MSpark, LLC |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|||
PennantPark Senior Loan Fund, LLC (11) |
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Total Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Investments in Controlled, Affiliated Portfolio Companies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Investments— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and Cash Equivalents— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
BlackRock Federal FD Institutional 30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Non-Money Market Cash |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Investments and Cash Equivalents— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||||
Liabilities in Excess of Other Assets—( |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||||
Net Assets— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
||||||
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
20
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
DECEMBER 31, 2023
1. ORGANIZATION
PennantPark Investment Corporation was organized as a Maryland corporation in January 2007. We are a closed-end, externally managed, non-diversified investment company that has elected to be treated as a BDC under the 1940 Act. Our investment objective is to generate both current income and capital appreciation while seeking to preserve capital through debt and equity investments. We invest primarily in U.S. middle-market companies in the form of first lien secured debt, second lien secured debt, subordinated debt and, to a lesser extent, equity investments. On April 24, 2007, we closed our initial public offering. On April 14, 2022, trading of the Company's common stock commenced on the New York Stock Exchange after the Company voluntarily withdrew the principal listing of its common stock from the Nasdaq Stock Market LLC effective at market close on April 13, 2022. Our common stock trades on the New York Stock Exchange under the symbol “PNNT.”
We have entered into an investment management agreement, (the "Investment Management Agreement"), with PennantPark Investment Advisors, LLC (the "Investment Adviser"), an external adviser that manages our day-to-day operations. We have also entered into an administration agreement, (the "Administration Agreement"), with PennantPark Investment Administrator LLC (the "Administrator"), which provides the administrative services necessary for us to operate. PennantPark Investment, through the Administrator, also provides similar services to SBIC II under a separate administration agreement.
On July 31, 2020, we and certain entities and managed accounts of the private credit investment manager of Pantheon Ventures (UK) LLP, or Pantheon, entered into a limited liability company agreement to co-manage PSLF, a newly-formed unconsolidated joint venture. In connection with this transaction, we contributed in-kind our formerly wholly-owned subsidiary, Funding I. As a result of this transaction, Funding I became a wholly-owned subsidiary of PSLF and was deconsolidated from our financial statements. PSLF invests primarily in middle-market and other corporate debt securities consistent with our strategy. PSLF was formed as a Delaware limited liability company. See Note 4.
In April 2021, we issued $
paid
be redeemed in whole or in part at our option subject to a make-whole premium if redeemed more than three months prior to maturity. The 2026 Notes are general,
unsecured obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness. The 2026 Notes are effectively subordinated to all of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, financing vehicles, or similar facilities. We do not intend to list the 2026 Notes on any securities exchange or automated dealer quotation system.
In October 2021, we issued $
Notes is paid
general, unsecured obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness. The 2026 Notes-2 are effectively
subordinated to all of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, financing vehicles, or similar facilities. We do not intend to list the 2026 Notes-2 on any securities exchange or automated dealer quotation system.
We have formed the Taxable Subsidiary, which is subject to tax as a corporation. The Taxable Subsidiary allows us to hold equity securities of certain portfolio companies treated as pass-through entities for federal income tax purposes while facilitating our ability to qualify as a RIC under the Code.
In January 2022, we formed PennantPark-TSO Senior Loan Fund II LP, ("PTSF II"), an unconsolidated limited partnership, organized as a Delaware limited partnership. We sold $
We are operated by a person who has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act of 1936, as amended, or the Commodity Exchange Act, and therefore, is not subject to registration or regulation as a commodity pool operator under the Commodity Exchange Act.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of our consolidated financial statements, in conformity with U.S. generally accepted accounting principles, or GAAP requires management to make estimates and assumptions that affect the reported amount of our assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reported periods. In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair presentation of financial statements have been included. Changes in the economic and regulatory environment, financial markets, the credit worthiness of our portfolio companies and any other parameters used in determining these estimates and assumptions could cause actual results to differ from such estimates and assumptions. We may reclassify certain prior period amounts to conform to the current period presentation. We have eliminated all intercompany balances and transactions in consolidation. References to the Financial Accounting Standards Board’s, or FASB’s, Accounting Standards Codification, as amended, or ASC, serve as a single source of accounting literature. Subsequent events are evaluated and disclosed as appropriate for events occurring through the date the consolidated financial statements are issued.
Our consolidated financial statements are prepared in accordance with GAAP, consistent with ASC Topic 946, Financial Services – Investment Companies, and pursuant to the requirements for reporting on Form 10-K/Q and Articles 6, 10 and 12 of Regulation S-X, as appropriate. In accordance with Article 6-09 of Regulation S-X, we have provided a consolidated statement of changes in net assets in lieu of a consolidated statement of changes in stockholders’ equity.
Restatement of Previously Issued Financial Statement
As noted in the Annual Report on Form 10-K for the year ended September 30, 2023, during the preparation of the financial statements as of and for the year ended September 30, 2023, Management identified an error in the classification and presentation of cash pertaining to the Company’s affiliates – PSLF and PTSF II in the September 30, 2022 financial statements. The Company recorded cash activity and due to affiliates pertaining to their investments as a reduction of the cash account instead of presenting the related cash and cash equivalents as an asset and a due to affiliates as a liability. This misclassification also existed at December 31, 2022, and the impact of the error correction is reflected on the consolidated statement of cash flows for the three months ended December 31, 2022 as an increase to cash and cash equivalents, beginning of period totaling $
21
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
December 31, 2023
There was no impact from the error correction to total net assets and net asset value per share as reported on the consolidated statement of assets and liabilities as of December 31, 2022. In addition, there was no impact from the error correction on net investment income or net increase (decrease) in net assets resulting from operations in total or on a per common share basis as reported on the consolidated statements of operations for the three months ended December 31, 2022. The corrections related to the prior year comparative cash flow statement amounts were reported in the quarter ended December 31, 2023.
Our significant accounting policies consistently applied are as follows:
We expect that there may not be readily available market values for many of the investments which are or will be in our portfolio, and we value such investments at fair value as determined in good faith by or under the direction of our board of directors using a documented valuation policy and a consistently applied valuation process, as described in this Report. With respect to investments for which there is no readily available market value, the factors that our board of directors may take into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate or revise our valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and the difference may be material. See Note 5.
Our portfolio generally consists of illiquid securities, including debt and equity investments. With respect to investments for which market quotations are not readily available, or for which market quotations are deemed not reflective of the fair value, our board of directors undertakes a multi-step valuation process each quarter, as described below:
Our board of directors generally uses market quotations to assess the value of our investments for which market quotations are readily available. We obtain these market values from independent pricing services or at the bid prices obtained from at least two brokers or dealers, if available, or otherwise from a principal market maker or a primary market dealer. The Investment Adviser assesses the source and reliability of bids from brokers or dealers. If our board of directors has a bona fide reason to believe any such market quote does not reflect the fair value of an investment, it may independently value such investments by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available.
Security transactions are recorded on a trade-date basis. We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, using the specific identification method, without regard to unrealized appreciation or depreciation previously recognized, but considering prepayment penalties. Net change in unrealized appreciation or depreciation reflects, as applicable, the change in the fair values of our portfolio investments and the Credit Facility during the reporting period, including the reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.
We record interest income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt investments with contractual PIK interest, which represents interest accrued and added to the loan balance that generally becomes due at maturity, we will generally not accrue PIK interest when the portfolio company valuation indicates that such PIK interest is not collectable. We do not accrue as a receivable interest on loans and debt investments if we have reason to doubt our ability to collect such interest. Loan origination fees, original issue discount, or OID, market discount or premium and deferred financing costs on liabilities, which we do not fair value, are capitalized and then accreted or amortized using the effective interest method as interest income or, in the case of deferred financing costs, as interest expense. We record prepayment penalties earned on loans and debt investments as income. Dividend income, if any, is recognized on an accrual basis on the ex-dividend date to the extent that we expect to collect such amounts. From time to time, the Company receives certain fees from portfolio companies, which may or may not be recurring in nature. Such fees include loan prepayment penalties, structuring fees, amendment fees, and agency fees and are recorded as other investment income when earned.
Loans are placed on non-accrual status when principal or interest payments are past due 30 days or more and/or if there is reasonable doubt that principal or interest will be collected. Accrued interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current. As of December 31, 2023, we had
We have complied with the requirements of Subchapter M of the Code and have qualified to be treated as a RIC for federal income tax purposes. In this regard, we account for income taxes using the asset and liability method prescribed by ASC Topic 740, Income Taxes, or ASC 740. Under this method, income taxes are provided for amounts currently payable and for amounts deferred as tax assets and liabilities based on differences between the financial statement carrying amounts and the tax basis of
22
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
December 31, 2023
existing assets and liabilities. Based upon our qualification and election to be treated as a RIC for U.S. federal income tax purposes, we typically do not incur material federal income taxes. However, we may choose to retain a portion of our calendar year income, which may result in the imposition of an excise tax. Additionally, certain of the Company’s consolidated subsidiaries are subject to federal, state and local income taxes. For the three months ended December 31, 2023 and 2022, we recorded a provision for taxes on net investment income of $
We recognize the effect of a tax position in our Consolidated Financial Statements in accordance with ASC 740 when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by the applicable tax authority. Tax positions not considered to satisfy the “more-likely-than-not” threshold would be recorded as a tax expense or benefit. Penalties or interest, if applicable, that may be assessed relating to income taxes would be classified as other operating expenses in the financial statements. There were no tax accruals relating to uncertain tax positions and no amounts accrued for any related interest or penalties with respect to the periods presented herein. The Company’s determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors including, but not limited to, an on-going analysis of tax laws, regulations and interpretations thereof. Although the Company files both federal and state income tax returns, the Company’s major tax jurisdiction is federal.
The Taxable Subsidiary (PNNT Investment Holdings, LLC, a wholly-owned subsidiary of the Company) is subject to U.S. federal, state and local corporate income taxes. The income tax expense and related tax liabilities of the Taxable Subsidiary are reflected in the Company’s consolidated financial statements.
For the three months ended December 31, 2023 and 2022, the Company recognized a provision for taxes of
During the three months ended December 31, 2023 and 2022, the Company paid
We operate in a manner to maintain our election to be subject to tax as a RIC and to eliminate corporate-level U.S. federal income tax (other than the
Because federal income tax regulations differ from GAAP, distributions characterized in accordance with tax regulations may differ from net investment income and net realized gains recognized for financial reporting purposes. Differences between tax regulations and GAAP may be permanent or temporary. Permanent differences are reclassified among capital accounts in the Consolidated Financial Statements to reflect their tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.
Distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid, if any, as a distribution is determined by our board of directors each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, are distributed at least annually. The tax attributes for distributions will generally include ordinary income and capital gains but may also include certain tax-qualified dividends and/or a return of capital.
Capital transactions, in connection with our dividend reinvestment plan or through offerings of our common stock, are recorded when issued and offering costs are charged as a reduction of capital upon issuance of our common stock.
Our books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:
Although net assets and fair values are presented based on the applicable foreign exchange rates described above, we do not isolate that portion of the results of operations due to changes in foreign exchange rates on investments, other assets and debt from the fluctuations arising from changes in fair values of investments and liabilities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments and liabilities.
Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices to be more volatile than those of comparable U.S. companies or U.S. government securities.
As permitted under Regulation S-X and as explained by ASC paragraph 946-810-45-3, PennantPark Investment will generally not consolidate its investment in a company other than an investment company subsidiary or a controlled operating company whose business consists of providing services to us. Accordingly, we have consolidated the results of our SBIC Funds and our Taxable Subsidiary in our Consolidated Financial Statements. We do not consolidate our non-controlling interests in PSLF or PTSF II. See further description of our investment in PSLF in Note 4.
23
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
December 31, 2023
Asset transfers that do not meet ASC Topic 860, Transfers and Servicing, requirements for sale accounting treatment are reflected in the Consolidated Statements of Assets and Liabilities and the Consolidated Schedules of Investments as investments.
(h) Recent Accounting Pronouncements
In March 2020, the FASB issued Accounting Standards Update, or ASU, No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. ASU 2020-04 is effective for all entities as of March 12, 2020 through June 30, 2023. The FASB approved an (optional) two year extension to December 31, 2024, for transitioning away from LIBOR. The Company utilized the optional expedients and exceptions provided by ASU 2020-04 during the three months ended December 31, 2023, the effect of which was not material to the consolidated financial statements and the notes thereto.
In March 2022, the FASB issued ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326)”, which is intended to address issues identified during the post-implementation review of ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendment, among other things, eliminates the accounting guidance for troubled debt restructurings by creditors in Subtopic 310-40, “Receivables - Troubled Debt Restructurings by Creditors”, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The new guidance is effective for interim and annual periods beginning after December 15, 2022. The Company has adopted the new accounting standard implementing appropriate controls and procedures, the effect of which was not material to the consolidated financial statements and the notes thereto.
In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, or ASU 2022-03, which changed the fair value measurement disclosure requirements of ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820. The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods therein. Early application is permitted. The Company is currently evaluating the impact the adoption of this new accounting standard will have on its consolidated financial statements, but the impact of the adoption is not expected to be material.
3. AGREEMENTS AND RELATED PARTY TRANSACTIONS
(a) Investment Management Agreement
The Investment Management Agreement with the Investment Adviser was reapproved by our board of directors, including a majority of our directors who are not interested persons of us or the Investment Adviser, in February 2024. Under the Investment Management Agreement, the Investment Adviser, subject to the overall supervision of our board of directors, manages the day-to-day operations of and provides investment advisory services to, us. The Investment Adviser serves as the servicer to Funding I and has irrevocably directed that the management fee owed to it with respect to such services be paid to the Company so long as the Investment Adviser remains the servicer. SBIC II’s investment management agreement does not affect the management or incentive fees that we pay to the Investment Adviser on a consolidated basis. For providing these services, the Investment Adviser receives a fee from us, consisting of two components— a base management fee and an incentive fee or, collectively, Management Fees.
Base Management Fee
The base management fee is calculated at an annual rate of
Incentive Fee
The incentive fee has two parts, as follows:
One part is calculated and payable quarterly in arrears based on our Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter. For this purpose, Pre-Incentive Fee Net Investment Income means interest income, dividend income and any other income, including any other fees (other than fees for providing managerial assistance), such as amendment, commitment, origination, prepayment penalties, structuring, diligence and consulting fees or other fees received from portfolio companies, accrued during the calendar quarter, minus our operating expenses for the quarter (including the base management fee, any expenses payable under the Administration Agreement and any interest expense or amendment fees under any credit facility and distribution paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero-coupon securities), accrued income not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, computed net of all realized capital losses or unrealized capital appreciation or depreciation. Pre-Incentive Fee Net Investment Income, expressed as a percentage of the value of our net assets at the end of the immediately preceding calendar quarter, is compared to the hurdle rate of
24
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
December 31, 2023
For the three months ended December 31, 2023 and 2022, the Investment Adviser earned $
The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Management Agreement, as of the termination date) and, effective January 1, 2018, equals
Under GAAP, we are required to accrue a capital gains incentive fee based upon net realized capital gains and net unrealized capital appreciation and depreciation on investments held at the end of each period. In calculating the capital gains incentive fee accrual, we considered the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Management Agreement. This accrual is calculated using the aggregate cumulative realized capital gains and losses and cumulative unrealized capital appreciation or depreciation. If such amount is positive at the end of a period, then we record a capital gains incentive fee equal to
(b) Administration Agreement
The Administration Agreement with the Administrator was reapproved by our board of directors, including a majority of our directors who are not interested persons of us, in February 2023. Under the Administration Agreement, the Administrator provides administrative services and office facilities to us. For providing these services, facilities and personnel, we have agreed to reimburse the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including rent and our allocable portion of the costs of compensation and related expenses of our Chief Financial Officer, Chief Compliance Officer, Corporate Counsel and their respective staffs. The amount billed by the Administrator may include credits related to its administrative agreement with PSLF. The Administrator also offers, on our behalf, significant managerial assistance to portfolio companies to which we are required to offer such assistance. Reimbursement for certain of these costs is included in administrative services expenses in the Consolidated Statements of Operations. For the three months ended December 31, 2023 and 2022, we recorded $
On July 1, 2022, the Administration Agreement with the Administrator was amended to clarify that the Administrator may be reimbursed by the Company for certain (i) tax and general legal advice and/or services provided to the Company by in-house professionals of the Administrator related to ongoing operations of the Company; and (ii) transactional legal advice and/or services provided to the Company or portfolio companies by in-house professionals of the Administrator or its affiliates on matters related to potential or actual investments and transactions, including tax structuring and/or due diligence.
(c) Other Related Party Transactions
There were no transactions subject to Rule 17a-7 under the 1940 Act during each of the three months ended December 31, 2023 and 2022.
For the three months ended December 31, 2023 and 2022 we sold $
For the three months ended December 31, 2023 and 2022, we sold
As of December 31, 2023 and September 30, 2023, PNNT had a payable to PSLF and PTSF II of $
As of December 31, 2023 and September 30, 2023, PNNT had a receivable from Administrator of $
4. INVESTMENTS
Purchases of investments, including PIK interest, for the three months ended December 31, 2023 and 2022 totaled $
Investments and cash and cash equivalents consisted of the following:
|
|
December 31, 2023 |
|
|
September 30, 2023 |
|
||||||||||
Investment Classification ($ in thousands) |
|
Cost |
|
|
Fair Value |
|
|
Cost |
|
|
Fair Value |
|
||||
First lien |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
U.S. Government Securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Second lien |
|
|
|
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|
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|
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|
||||
Subordinated debt / corporate notes |
|
|
|
|
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|
|
|
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|
|
|
||||
Subordinated notes in PSLF |
|
|
|
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|
|
|
|
|
|
|
||||
Equity |
|
|
|
|
|
|
|
|
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|
|
|
||||
Equity in PSLF |
|
|
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|
|
|
|
|
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|
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|
||||
Total investments |
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|
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|
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|
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|
||||
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total investments and cash and cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
25
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
December 31, 2023
The table below describes investments by industry classification and enumerates the percentage, by fair value, of the total portfolio assets (excluding cash and cash equivalents) in such industries as of:
Industry Classification |
|
December 31, 2023 (1) |
|
|
|
September 30, 2023 (1) |
|
|
||
Business Services |
|
|
|
% |
|
|
|
% |
||
Distribution |
|
|
|
|
|
|
|
|
||
Healthcare, Education and Childcare |
|
|
|
|
|
|
|
|
||
Consumer Products |
|
|
|
|
|
|
|
|
||
Aerospace and Defense |
|
|
|
|
|
|
|
|
||
Short-Term U.S. Government Securities |
|
|
|
|
|
|
|
|
||
Media |
|
|
|
|
|
|
|
|
||
Financial Services |
|
|
|
|
|
|
|
|
||
Chemicals, Plastics and Rubber |
|
|
|
|
|
|
|
|
||
Telecommunications |
|
|
|
|
|
|
|
|
||
Auto Sector |
|
|
|
|
|
|
|
|
||
Environmental Services |
|
|
|
|
|
|
|
|
||
Electronics |
|
|
|
|
|
|
|
|
||
Machinery |
|
|
|
|
|
|
|
|
||
Personal, Food and Miscellaneous Services |
|
|
|
|
|
|
|
|
||
Building Materials |
|
|
|
|
|
|
|
|
||
Education |
|
|
|
|
|
|
|
|
||
Home and Office Furnishings |
|
|
|
|
|
|
|
|
||
Insurance |
|
|
|
|
|
|
|
|
||
Personal and Non-Durable Consumer Products |
|
|
|
|
|
|
|
|
||
Transportation |
|
|
|
|
|
|
|
|
||
Retail |
|
|
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
|
|
||
Total |
|
|
|
% |
|
|
|
% |
||
PennantPark Senior Loan Fund, LLC
In July 2020, we and Pantheon formed PSLF, an unconsolidated joint venture. PSLF invests primarily in middle-market and other corporate debt securities consistent with its strategy. PSLF was formed as a Delaware limited liability company. As of December 31, 2023 and September 30, 2023, PSLF had total assets of $
We provide capital to PSLF in the form of subordinated notes and equity interests. As of December 31, 2023 and September 30, 2023, we and Pantheon owned
We and Pantheon each appointed two members to PSLF’s four-person Member Designees’ Committee, or the Member Designees’ Committee. All material decisions with respect to PSLF, including those involving its investment portfolio, require unanimous approval of a quorum of the Member Designees’ Committee. Quorum is defined as (i) the presence of two members of the Member Designees’ Committee; provided that at least one individual is present that was elected, designated or appointed by each of us and Pantheon; (ii) the presence of three members of the Member Designees’ Committee, provided that the individual that was elected, designated or appointed by each of us or Pantheon, as the case may be, with only one individual present shall be entitled to cast two votes on each matter; and (iii) the presence of four members of the Member Designees’ Committee shall constitute a quorum, provided that two individuals are present that were elected, designated or appointed by each of us and Pantheon.
Additionally, PSLF, through its wholly-owned subsidiary, or PSLF Subsidiary, has entered into a $
In March 2022, PSLF completed a $
On July 26, 2023, CLO VII , LLC ("CLO VII") completed a $
26
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
December 31, 2023
Below is a summary of PSLF’s portfolio at fair value:
($ in thousands) |
|
December 31, 2023 (Unaudited) |
|
|
September 30, 2023 |
|
||
Total investments |
|
$ |
|
|
$ |
|
||
Weighted average cost yield on income producing investments |
|
|
% |
|
|
% |
||
Number of portfolio companies in PSLF |
|
|
|
|
|
|
||
Largest portfolio company investment at fair value |
|
$ |
|
|
$ |
|
||
Total of five largest portfolio company investments at fair value |
|
$ |
|
|
$ |
|
||
Below is a listing of PSLF’s individual investments as of December 31, 2023 ($ in thousands)
Issuer Name |
|
Maturity |
|
Industry |
|
Current |
|
|
Basis Point |
|
Par |
|
|
Cost |
|
|
Fair Value (2) |
|
||||
First Lien Secured Debt - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
A1 Garage Merger Sub, LLC |
|
|
|
|
% |
|
|
|
|
|
$ |
|
|
$ |
|
|||||||
ACP Falcon Buyer, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Ad.net Acquisition, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Alpine Acquisition Corp II |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Amsive Holding Corporation (f/k/a Vision Purchaser Corporation) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Anteriad, LLC (f/k/a MeritDirect, LLC) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Any Hour Services |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Applied Technical Services, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Arcfield Acquisition Corp. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Beta Plus Technologies, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Bioderm, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Blackhawk Industrial Distribution, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
BlueHalo Financing Holdings, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Broder Bros., Co. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Burgess Point Purchaser Corporation |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Cartessa Aesthetics, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
CF512, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Connatix Buyer, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Crane 1 Services, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Dr. Squatch, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
DRI Holding Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
DRS Holdings III, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Duraco Specialty Tapes LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
EDS Buyer, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
ETE Intermediate II, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Exigo Intermediate II, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Fairbanks Morse Defense |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Five Star Buyer, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Global Holdings InterCo LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Graffiti Buyer, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Hancock Roofing and Construction L.L.C. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Holdco Sands Intermediate, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
HV Watterson Holdings, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
HW Holdco, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
IG Investments Holdings, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Imagine Acquisitionco, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Inception Fertility Ventures, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Infinity Home Services Holdco, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Infolinks Media Buyco, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Integrity Marketing Acquisition, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Inventus Power, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
K2 Pure Solutions NoCal, L.P. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Kinetic Purchaser, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
LAV Gear Holdings, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Lash OpCo, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Lightspeed Buyer Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
LJ Avalon Holdings, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
MAG DS Corp. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Magenta Buyer, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Mars Acquisition Holdings Corp. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
MBS Holdings, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Meadowlark Acquirer, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Municipal Emergency Services, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
NBH Group LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Neptune Flood Incorporated |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
NORA Acquisition, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
One Stop Mailing, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Owl Acquisition, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Ox Two, LLC (New Issue) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Pequod Merger Sub, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
PL Acquisitionco, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
PlayPower, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Quantic Electronics, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
27
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
December 31, 2023
Issuer Name |
|
Maturity |
|
Industry |
|
Current |
|
|
Basis Point |
|
Par |
|
|
Cost |
|
|
Fair Value (2) |
|
||||
Radius Aerospace, Inc. |
|
|
|
|
% |
|
|
|
|
|
$ |
|
|
$ |
|
|||||||
Rancho Health MSO, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Reception Purchaser, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Recteq, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Research Now Group, LLC and Dynata, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Riverpoint Medical, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Riverside Assessments, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Rural Sourcing Holdings, Inc. (HPA SPQ Merger Sub, Inc.) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
S101 Holdings Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Sales Benchmark Index LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Sargent & Greenleaf Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Seaway Buyer, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Sigma Defense Systems, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Signature Systems Holding Company |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Skopima Consilio Parent, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Solutionreach, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
SpendMend Holdings, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
STV Group Incorporated |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Summit Behavioral Healthcare, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
System Planning and Analysis, Inc. (f/k/a Management Consulting & Research, LLC) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Team Services Group, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Teneo Holdings LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
The Bluebird Group LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
The Vertex Companies, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
TPC Canada Parent, Inc. and TPC US Parent, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
TWS Acquisition Corporation |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Tyto Athene, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Urology Management Holdings, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Wildcat Buyerco, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Zips Car Wash, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total First Lien Secured Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Investments - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and Cash Equivalents - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
BlackRock Federal FD Institutional 30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Investments and Cash Equivalents - |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||
Liabilities in Excess of Other Assets — ( |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Members' Equity— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
||||
28
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
December 31, 2023
Below is a listing of PSLF’s individual investments as of September 30, 2023 ($ in thousands):
Issuer Name |
|
Maturity |
|
Industry |
|
Current |
|
|
Basis Point |
|
Par |
|
|
Cost |
|
|
Fair Value (2) |
|
||||
First Lien Secured Debt - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
A1 Garage Merger Sub, LLC |
|
|
|
|
% |
|
|
|
|
|
$ |
|
|
$ |
|
|||||||
Ad.net Acquisition, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Alpine Acquisition Corp II |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Amsive Holding Corporation (f/k/a Vision Purchaser Corporation) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Anteriad, LLC (f/k/a MeritDirect, LLC) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Any Hour Services |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Apex Service Partners, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Apex Service Partners, LLC Term Loan B |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Apex Service Partners, LLC - Term Loan C |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Applied Technical Services, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Applied Technical Services, LLC - Unfunded Term Loan (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||||
Arcfield Acquisition Corp. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Beta Plus Technologies, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Bioderm, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Blackhawk Industrial Distribution, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Broder Bros., Co. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Burgess Point Purchaser Corporation |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Cartessa Aesthetics, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
CF512, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Connatix Buyer, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Crane 1 Services, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Dr. Squatch, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
DRI Holding Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
DRS Holdings III, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Duraco Specialty Tapes LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
EDS Buyer, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Electro Rent Corporation |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
ETE Intermediate II, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Exigo Intermediate II, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Fairbanks Morse Defense |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Five Star Buyer, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Global Holdings InterCo LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Graffiti Buyer, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Hancock Roofing and Construction L.L.C. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Holdco Sands Intermediate, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
HV Watterson Holdings, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
HW Holdco, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
IG Investments Holdings, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Imagine Acquisitionco, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Inception Fertility Ventures, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Infinity Home Services Holdco, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Infolinks Media Buyco, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Integrity Marketing Acquisition, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
K2 Pure Solutions NoCal, L.P. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Kinetic Purchaser, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
LAV Gear Holdings, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Lash OpCo, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Lightspeed Buyer Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
LJ Avalon Holdings, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
MAG DS Corp. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Magenta Buyer, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Mars Acquisition Holdings Corp. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
MBS Holdings, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Meadowlark Acquirer, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Municipal Emergency Services, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
NBH Group LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Neptune Flood Incorporated |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
One Stop Mailing, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Owl Acquisition, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Ox Two, LLC (New Issue) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Pequod Merger Sub, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
PL Acquisitionco, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
PlayPower, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Quantic Electronics, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Radius Aerospace, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Rancho Health MSO, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Reception Purchaser, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Recteq, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Research Now Group, LLC and Dynata, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Riverpoint Medical, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Riverside Assessments, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Rural Sourcing Holdings, Inc. (HPA SPQ Merger Sub, Inc.) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
29
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
December 31, 2023
Issuer Name |
|
Maturity |
|
Industry |
|
Current |
|
|
Basis Point |
|
Par |
|
|
Cost |
|
|
Fair Value (2) |
|
||||
Sales Benchmark Index LLC |
|
|
|
|
% |
|
|
|
|
|
$ |
|
|
$ |
|
|||||||
Sargent & Greenleaf Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Seaway Buyer, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Signature Systems Holding Company |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Skopima Consilio Parent, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Solutionreach, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
SpendMend Holdings, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
STV Group Incorporated |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Summit Behavioral Healthcare, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
System Planning and Analysis, Inc. (f/k/a Management Consulting & Research, LLC) |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Team Services Group, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Teneo Holdings LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
The Aegis Technologies Group, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
The Bluebird Group LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
The Vertex Companies, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
TPC Canada Parent, Inc. and TPC US Parent, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
TWS Acquisition Corporation |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Tyto Athene, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Urology Management Holdings, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Wildcat Buyerco, Inc. |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Zips Car Wash, LLC |
|
|
|
|
% |
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total First Lien Secured Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Investments - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and Cash Equivalents - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
BlackRock Federal FD Institutional 30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Investments and Cash Equivalents - |
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
||||||||
Liabilities in Excess of Other Assets — ( |
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||||||
Members' Equity— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
||||
Below are the consolidated statements of assets and liabilities for PSLF ($ in thousands):
|
|
December 31, 2023 (Unaudited) |
|
|
September 30, 2023 |
|
||
Assets |
|
|
|
|
|
|
||
Investments at fair value (amortized cost—$ |
|
$ |
|
|
$ |
|
||
Cash and cash equivalents (cost—$ |
|
|
|
|
|
|
||
Interest receivable |
|
|
|
|
|
|
||
Due from affiliate |
|
|
|
|
|
|
||
Prepaid expenses and other assets |
|
|
|
|
|
|
||
Total assets |
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
|
||
2034 Asset-backed debt, net (par—$ |
|
|
|
|
|
|
||
2035 Asset-backed debt, net (par—$ |
|
|
|
|
|
|
||
Notes payable to members |
|
|
|
|
|
|
||
Credit facility payable |
|
|
|
|
|
|
||
Interest payable on credit facility and asset backed debt |
|
|
|
|
|
|
||
Distribution payable to members |
|
|
|
|
|
|
||
Interest payable on notes to members |
|
|
|
|
|
|
||
Accounts payable and accrued expenses |
|
|
|
|
|
|
||
Payable for investments purchased |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
Members' equity |
|
|
|
|
|
|
||
Total liabilities and members' equity |
|
$ |
|
|
$ |
|
||
———————————
30
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
December 31, 2023
Below are the consolidated statements of operations for PSLF ($ in thousands):
|
|
|
Three Months Ended December 31, |
|
|||||
|
|
|
2023 |
|
|
2022 |
|
||
Investment income: |
|
|
|
|
|
|
|
||
Interest |
|
|
$ |
|
|
$ |
|
||
Other income |
|
|
|
|
|
|
|
||
Total investment income |
|
|
|
|
|
|
|
||
Expenses: (1) |
|
|
|
|
|
|
|
||
Interest expense on credit facility and asset-backed debt |
|
|
|
|
|
|
|
||
Interest expense on notes to members |
|
|
|
|
|
|
|
||
Administration fees |
|
|
|
|
|
|
|
||
General and administrative expenses |
|
|
|
|
|
|
|
||
Total expenses |
|
|
|
|
|
|
|
||
Net investment income |
|
|
|
|
|
|
|
||
Realized and unrealized gain (loss) on investments: |
|
|
|
|
|
|
|
||
Net realized gain (loss) on investments |
|
|
|
|
|
|
( |
) |
|
Net change in unrealized appreciation (depreciation) on investments |
|
|
|
|
|
|
( |
) |
|
Net realized and unrealized gain (loss) on investments |
|
|
|
|
|
|
( |
) |
|
Net increase (decrease) in members' equity resulting from operations |
|
|
$ |
|
|
$ |
|
||
———————————
(1)
5. FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value, as defined under ASC 820, is the price that we would receive upon selling an investment or pay to transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment or liability. ASC 820 emphasizes that valuation techniques maximize the use of observable market inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing an asset or liability based on market data obtained from sources independent of us. Unobservable inputs reflect the assumptions market participants would use in pricing an asset or liability based on the best information available to us on the reporting period date.
ASC 820 classifies the inputs used to measure these fair values into the following hierarchies:
Level 1: |
Inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities, accessible by us at the measurement date.
|
|
Level 2: |
Inputs that are quoted prices for similar assets or liabilities in active markets, or that are quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term, if applicable, of the financial instrument.
|
|
Level 3: |
Inputs that are unobservable for an asset or liability because they are based on our own assumptions about how market participants would price the asset or liability.
|
|
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Generally, most of our investments and our Truist Credit Facility are classified as Level 3. Our 2026 Notes and 2026 Notes-2 are classified as Level 2, as they are financial instruments with readily observable market inputs. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and those differences may be material.
The inputs into the determination of fair value may require significant management judgment or estimation. Even if observable market data is available, such information may be the result of consensus pricing information, disorderly transactions or broker quotes which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence were available. Corroborating evidence that would result in classifying these non-binding broker/dealer bids as a Level 2 asset includes observable orderly market-based transactions for the same or similar assets or other relevant observable market-based inputs that may be used in pricing an asset.
Our investments are generally structured as debt and equity investments in the form of first lien secured debt, second lien secured debt, subordinated debt and equity investments. The transaction price, excluding transaction costs, is typically the best estimate of fair value at inception. Ongoing reviews by our Investment Adviser and independent valuation firms are based on an assessment of each underlying investment, incorporating valuations that consider the evaluation of financing and sale transactions with third parties, expected cash flows and market-based information including comparable transactions, performance multiples and yields, among other factors. These non-public investments valued using unobservable inputs are included in Level 3 of the fair value hierarchy.
A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in our ability to observe valuation inputs may result in a reclassification for certain financial assets or liabilities.
In addition to using the above inputs to value cash equivalents, investments, our 2026 Notes, our 2026 Notes -2 and our Truist Credit Facility, we employ the valuation policy approved by our board of directors that is consistent with ASC 820. Consistent with our valuation policy, we evaluate the source of inputs, including any markets in which our investments are trading, in determining fair value. See Note 2.
31
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
December 31, 2023
As outlined in the table below, some of our Level 3 investments using a market approach valuation technique are valued using the average of the bids from brokers or dealers. The bids include a disclaimer, may not have corroborating evidence, may be the result of a disorderly transaction and may be the result of consensus pricing. The Investment Adviser assesses the source and reliability of bids from brokers or dealers. If the board of directors has a bona fide reason to believe any such bids do not reflect the fair value of an investment, it may independently value such investment by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available. In accordance with ASC 820, we do not categorize any investments for which fair value is measured using the net asset value per share within the fair value hierarchy.
The remainder of our investment portfolio and our long-term Truist Credit Facility are valued using a market comparable or an enterprise market value technique. With respect to investments for which there is no readily available market value, the factors that our board of directors may take into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the pricing indicated by the external event, excluding transaction costs, is used to corroborate the valuation. When using earnings multiples to value a portfolio company, the multiple used requires the use of judgment and estimates in determining how a market participant would price such an asset. These non-public investments using unobservable inputs are included in Level 3 of the fair value hierarchy. Generally, the sensitivity of unobservable inputs or combination of inputs such as industry comparable companies, market outlook, consistency, discount rates and reliability of earnings and prospects for growth, or lack thereof, affects the multiple used in pricing an investment. As a result, any change in any one of those factors may have a significant impact on the valuation of an investment. Generally, an increase in a market yield will result in a decrease in the valuation of a debt investment, while a decrease in a market yield will have the opposite effect. Generally, an increase in an earnings before interest, taxes, depreciation and amortization, or EBITDA, multiple will result in an increase in the valuation of an investment, while a decrease in an EBITDA multiple will have the opposite effect.
Our Level 3 valuation techniques, unobservable inputs and ranges were categorized as follows for ASC 820 purposes:
Asset Category ($ in thousands) |
|
Fair value at |
|
|
Valuation Technique |
|
Unobservable Input |
|
Range of Input |
|
First lien |
|
$ |
|
|
Market Comparable |
|
Broker/Dealer bids or quotes |
|
N/A |
|
First lien |
|
|
|
|
Market Comparable |
|
Market yield |
|
||
Second lien |
|
|
|
|
Market Comparable |
|
Broker/Dealer bids or quotes |
|
N/A |
|
Second lien |
|
|
|
|
Enterprise Market Value |
|
EBITDA multiple |
|
||
Second lien |
|
|
|
|
Market Comparable |
|
Market yield |
|
||
Subordinated debt / corporate notes |
|
|
|
|
Market Comparable |
|
Market yield |
|
||
Equity |
|
|
|
|
Enterprise Market Value |
|
EBITDA multiple |
|
||
Equity |
|
|
|
|
Enterprise Market Value |
|
DLOM(2) |
|
||
Total Level 3 investments |
|
$ |
|
|
|
|
|
|
|
|
Debt Category ($ in thousands) |
|
|
|
|
|
|
|
|
|
|
Truist Credit Facility |
|
$ |
|
|
Market Comparable |
|
Market yield |
|
||
Asset Category ($ in thousands) |
|
Fair value at |
|
|
Valuation Technique |
|
Unobservable Input |
|
Range of Input |
|
First lien |
|
$ |
|
|
Market Comparable |
|
Broker/Dealer bids or quotes |
|
N/A |
|
First lien |
|
|
|
|
Market Comparable |
|
Market yield |
|
||
Second lien |
|
|
|
|
Market Comparable |
|
Broker/Dealer bids or quotes |
|
N/A |
|
Second lien |
|
|
|
|
Market Comparable |
|
Market yield |
|
||
Subordinated debt / corporate notes |
|
|
|
|
Market Comparable |
|
Market yield |
|
||
Equity |
|
|
|
|
Enterprise Market Value |
|
EBITDA multiple |
|
||
Equity |
|
|
|
|
Enterprise Market Value |
|
DLOM(2) |
|
||
Total Level 3 investments |
|
$ |
|
|
|
|
|
|
|
|
Debt Category ($ in thousands) |
|
|
|
|
|
|
|
|
|
|
Truist Credit Facility |
|
$ |
|
|
Market Comparable |
|
Market yield |
|
||
32
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
December 31, 2023
Our investments, cash and cash equivalents, Truist Credit Facility, 2026 Notes and 2026 Notes-2 were categorized as follows in the fair value hierarchy:
|
|
Fair value at |
|
|||||||||||||||||
Description ($ in thousands) |
|
Fair Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Measured at Net Asset Value (1) |
|
|||||
Debt investments |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
U.S. Government Securities(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total investments and cash and cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Truist Credit Facility |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
2026 Notes(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
2026 Notes-2(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total debt |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
Fair Value at September 30, 2023 |
|
|||||||||||||||||
Description ($ in thousands) |
|
Fair Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Measured at Net Asset Value (1) |
|
|||||
Debt investments |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
U.S. Government Securities(3) |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Equity investments |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
Total investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
Total investments and cash and cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Truist Credit Facility |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
2026 Notes(2) |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
2026 Notes-2(2) |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Total debt |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|||
The tables below show a reconciliation of the beginning and ending balances for investments measured at fair value using significant unobservable inputs (Level 3):
|
|
Three Months Ended December 31, 2023 |
|
|||||||||
Description ($ in thousands) |
|
Debt |
|
|
Equity |
|
|
Totals |
|
|||
Beginning balance |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Net realized gain (loss) |
|
|
( |
) |
|
|
|
|
|
|
||
Net change in unrealized appreciation (depreciation) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Purchases, PIK interest, net discount accretion and non-cash exchanges |
|
|
|
|
|
|
|
|
|
|||
Sales, repayments and non-cash exchanges |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Transfers in/out of Level 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Ending balance |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Net change in unrealized appreciation reported within the net change in |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
|
|
Three Months Ended December 31, 2022 |
|
|||||||||
Description ($ in thousands) |
|
Debt |
|
|
Equity |
|
|
Totals |
|
|||
Beginning balance |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Net realized gain (loss) |
|
|
|
|
|
|
|
|
|
|||
Net change in unrealized appreciation (depreciation) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Purchases, PIK interest, net discount accretion and non-cash exchanges |
|
|
|
|
|
|
|
|
|
|||
Sales, repayments and non-cash exchanges |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Transfers in/out of Level 3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Ending balance |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Net change in unrealized appreciation reported within the net change in |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
33
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
December 31, 2023
The table below shows a reconciliation of the beginning and ending balances for liabilities measured at fair value using significant unobservable inputs (Level 3):
|
|
Three months ended December 31, |
|
|||||
Long-Term Credit Facility |
|
2023 |
|
|
2022 |
|
||
Beginning balance (cost – $ |
|
$ |
|
|
$ |
|
||
Net change in unrealized appreciation (depreciation) included in earnings |
|
|
|
|
|
( |
) |
|
Borrowings (1) |
|
|
|
|
|
|
||
Repayments (1) |
|
|
( |
) |
|
|
( |
) |
Transfers in and/or out of Level 3 |
|
|
— |
|
|
|
— |
|
Ending balance (cost – $ |
|
$ |
|
|
$ |
|
||
Temporary draws outstanding, at cost |
|
|
— |
|
|
|
— |
|
Ending balance (cost – $ |
|
$ |
|
|
$ |
|
||
As of December 31, 2023, we had outstanding non-U.S. dollar borrowings on our Credit Facility. Net change in fair value on foreign currency translation on outstanding borrowings is listed below ($ in thousands):
Foreign Currency |
|
Amount Borrowed |
|
|
Borrowing Cost |
|
|
Current Value |
|
|
Reset Date |
|
Change in Fair Value |
|
||||
British Pound |
|
£ |
|
|
$ |
|
|
$ |
|
|
|
$ |
( |
) |
||||
Canadian dollar |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
$ |
|
|||||
As of September 30, 2023, we had outstanding non-U.S. dollar borrowings on our Truist Credit Facility. Net change in fair value on foreign currency translation on outstanding borrowings is listed below ($ in thousands):
Foreign Currency |
|
Amount Borrowed |
|
|
Borrowing Cost |
|
|
Current Value |
|
|
Reset Date |
|
Change in Fair Value |
|
||||
British Pound |
|
£ |
|
|
$ |
|
|
$ |
|
|
|
$ |
( |
) |
||||
Generally, the carrying value of our consolidated financial liabilities approximates fair value. We have adopted the principles under ASC Subtopic 825-10, Financial Instruments, or ASC 825-10, which provides companies with an option to report selected financial assets and liabilities at fair value, and made an irrevocable election to apply ASC 825-10 to our Truist Credit Facility. We elected to use the fair value option for the Truist Credit Facility to align the measurement attributes of both our assets and liabilities while mitigating volatility in earnings from using different measurement attributes. Due to that election and in accordance with GAAP, we did
For the three months ended December 31, 2023 and 2022, the Truist Credit Facility had a net change in unrealized (appreciation) depreciation of $(
34
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
December 31, 2023
6. TRANSACTIONS WITH AFFILIATED COMPANIES
An affiliated portfolio company is a company in which we have ownership of
Name of Investment |
|
Fair Value at |
|
|
Gross |
|
|
Gross |
|
|
Net Change in |
|
|
Fair Value at December 31, 2023 |
|
|
Interest |
|
|
PIK |
|
|
Dividend Income |
|
|
Net Realized |
|
|||||||||
Controlled Affiliates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
AKW Holdings Limited |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||||||
JF Intermediate, LLC (MidOcean JF Holdings Corp.) (2) |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|||||
Mailsouth Inc. |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
PennantPark Senior Loan Fund, LLC (3) |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||||||
RAM Energy LLC (4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Total Controlled Affiliates |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|||||||
Non-Controlled Affiliates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cascade Environmental Holdings, LLC |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|||
Walker Edison Furniture Company LLC |
|
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
||||
Total Non-Controlled Affiliates |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||||
Total Controlled and |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|||||||
7. CHANGE IN NET ASSETS FROM OPERATIONS PER COMMON SHARE
The following information sets forth the computation of basic and diluted per share net increase in net assets resulting from operations ($ in thousands, except per share data):
|
|
Three Months Ended December 31, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
Numerator for net increase (decrease) in net assets resulting from operations |
|
$ |
|
|
$ |
( |
) |
|
Denominator for basic and diluted weighted average shares |
|
|
|
|
|
|
||
Basic and diluted net increase (decrease) in net assets per share resulting from operations |
|
$ |
|
|
$ |
( |
) |
|
8. CASH AND CASH EQUIVALENTS
Cash equivalents represent cash in money market funds pending investment in longer-term portfolio holdings and for other general corporate purposes. Our portfolio may consist of temporary investments in U.S. Treasury Bills (of varying maturities), repurchase agreements, money market funds or repurchase agreement-like treasury securities. These temporary investments with original maturities of 90 days or less are deemed cash equivalents and are included in the Consolidated Schedule of Investments. At the end of each fiscal quarter, we may take proactive steps to preserve investment flexibility for the next quarter by investing in cash equivalents, which is dependent upon the composition of our total assets at quarter-end. We may accomplish this in several ways, including purchasing U.S. Treasury Bills and closing out positions on a net cash basis after quarter-end, temporarily drawing down on the Credit Facility, or utilizing repurchase agreements or other balance sheet transactions as are deemed appropriate for this purpose. These amounts are excluded from average adjusted gross assets for purposes of computing the Investment Adviser’s management fee. U.S. Treasury Bills with maturities greater than 60 days from the time of purchase are valued consistent with our valuation policy. As of December 31, 2023 and September 30, 2023, cash and cash equivalents consisted of money market funds, and non-money market in the amounts of $
35
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
December 31, 2023
9. FINANCIAL HIGHLIGHTS
Below are the financial highlights ($ in thousands, except share and per share data):
|
|
Three Months Ended December 31, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
Per Share Data: |
|
|
|
|
|
|
||
Net asset value, beginning of period |
|
$ |
|
|
$ |
|
||
Net investment income (1) |
|
|
|
|
|
|
||
Net change in realized and unrealized gain (loss) (1) |
|
|
( |
) |
|
|
( |
) |
Net increase (decrease) in net assets resulting from operations (1) |
|
|
|
|
|
( |
) |
|
Distributions to stockholders (1), (2) |
|
|
( |
) |
|
|
( |
) |
Repurchase of common stock (1) |
|
|
— |
|
|
|
— |
|
Net asset value, end of period |
|
$ |
|
|
$ |
|
||
Per share market value, end of period |
|
$ |
|
|
$ |
|
||
Total return* (3) |
|
|
% |
|
|
% |
||
Shares outstanding at end of period |
|
|
|
|
|
|
||
Ratios** / Supplemental Data: |
|
|
|
|
|
|
||
Ratio of operating expenses to average net assets (4) |
|
|
% |
|
|
% |
||
Ratio of debt related expenses to average net assets (5) |
|
|
% |
|
|
% |
||
Ratio of total expenses to average net assets (5) |
|
|
% |
|
|
% |
||
Ratio of net investment income to average net assets (5) |
|
|
% |
|
|
% |
||
Net assets at end of period |
|
$ |
|
|
$ |
|
||
Weighted average debt outstanding |
|
$ |
|
|
$ |
|
||
Weighted average debt per share (1) |
|
$ |
|
|
$ |
|
||
Asset coverage per unit (6) |
|
$ |
|
|
$ |
|
||
Portfolio turnover ratio* (7) |
|
|
% |
|
|
% |
||
* Not annualized for periods less than one year.
**Re-occurring investment income and expenses included in these ratios are annualized for periods less than one year.
***The expense and investment income ratios do not reflect the Company's proportionate share of income and expenses of PSLF and PTSF II.
10. DEBT
The annualized weighted average cost of debt for the three months ended December 31, 2023 and 2022, inclusive of the fee on the undrawn commitment and amendment costs on the Truist Credit Facility and amortized upfront fees on SBA debentures, 2026 Notes and 2026 Notes-2, was
On February 5, 2019, our stockholders approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the Consolidated Appropriations Act of 2018 (which includes the Small Business Credit Availability Act, or SBCAA) as approved by our board of directors on November 13, 2018. As a result, the asset coverage requirement applicable to us for senior securities was reduced from
Truist Credit Facility
As of December 31, 2023, we had the multi-currency Truist Credit Facility for up to $
36
PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - (Continued)
December 31, 2023
SBA Debentures
SBIC II was historically able to borrow funds from the SBA against regulatory capital (which approximates equity capital) that is paid-in and is subject to customary regulatory requirements including an examination by the SBA. We previously funded SBIC II with $
2026 Notes
In April 2021, we issued $
2026 Notes-2
In October 2021, we issued $
11. COMMITMENTS AND CONTINGENCIES
From time to time, we, may be a party to legal proceedings, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.
Unfunded debt and equity investments, if any, are disclosed in the Consolidated Schedules of Investments. Under these arrangements, we may be required to supply a letter of credit to a third party if the portfolio company were to request a letter of credit. As of December 31, 2023 and September 30, 2023, we had $
12. UNCONSOLIDATED SIGNIFICANT SUBSIDIARIES
We must determine which, if any, of our unconsolidated controlled portfolio companies is a "significant subsidiary" within the meaning of Regulation S-X. We have determined that, as of September 30, 2023, PennantPark Senior Loan Fund, LLC triggered at least one of the significance tests. As a result and in accordance with Rule 3-09 of Regulation S-X, separate audited financial statements of PSLF, LLC for the years ended September 30, 2023, 2022, and 2021 were filed as exhibits to our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.
37
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of PennantPark Investment Corporation and its Subsidiaries
Results of Review of Interim Financial Statements
We have reviewed the accompanying consolidated statement of assets and liabilities of PennantPark Investment Corporation and its subsidiaries (the Company), including the consolidated schedules of investments, as of December 31, 2023, the related consolidated statements of operations and changes in net assets for the three-month periods ended December 31, 2023 and 2022, and cash flows for the three-month periods ended December 31, 2023 and 2022, and the related notes to the consolidated financial statements (collectively, the interim financial information or financial statements). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for them to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statement of assets and liabilities of the Company, including the consolidated schedule of investments, as of September 30, 2023, and the related consolidated statements of operations, changes in net assets, and cash flows for the year then ended (not presented herein); and in our report dated December 7, 2023, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated statement of assets and liabilities, including the consolidated schedule of investments, as of September 30, 2023, is fairly stated, in all material respects, in relation to the consolidated statement of assets and liabilities, including the consolidated schedule of investments, from which it has been derived.
Emphasis of Matter
As discussed in Note 2 of the consolidated financial statements, the consolidated statement of cash flows for the three months ended December 31, 2022 has been restated to reclassify certain amounts presented within.
Basis for Review Results
These interim financial statements are the responsibility of the Company’s management. We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
/s/ RSM US LLP
New York, New York
February 7, 2024
38
Awareness Letter of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of PennantPark Investment Corporation and its Subsidiaries
We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim financial information of PennantPark Investment Corporation for the periods ended December 31, 2023 and 2022, as indicated in our report dated February 7, 2024; because we did not perform an audit, we expressed no opinion on that information.
We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended December 31, 2023, is incorporated by reference in Registration Statement No. 333-263564 on Form N-2.
We are also aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ RSM US LLP
New York, New York
February 7, 2024
39
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This Report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains statements that constitute forward-looking statements, which relate to us and our consolidated subsidiaries regarding future events or our future performance or future financial condition. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about our Company, our industry, our beliefs and our assumptions. The forward-looking statements contained in this Report involve risks and uncertainties, including statements as to:
We use words such as “anticipates,” “believes,” “expects,” “intends,” “seeks,” “plans,” “estimates” and similar expressions to identify forward-looking statements. You should not place undue influence on the forward-looking statements as our actual results could differ materially from those projected in the forward-looking statements for any reason, including the factors in “Risk Factors” and elsewhere in this Report.
Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions also could be inaccurate. Important assumptions include our ability to originate new loans and investments, certain margins and levels of profitability and the availability of additional capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Report should not be regarded as a representation by us that our plans and objectives will be achieved.
We have based the forward-looking statements included in this Report on information available to us on the date of this Report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements in this Report, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including reports on Form 10-Q/K and current reports on Form 8-K.
You should understand that under Section 27A(b)(2)(B) of the Securities Act and Section 21E(b)(2)(B) of the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act.
The following analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and the related notes thereto contained elsewhere in this Report.
40
Overview
PennantPark Investment Corporation is a BDC whose objectives are to generate both current income and capital appreciation while seeking to preserve capital through debt and equity investments primarily made to U.S. middle-market companies in the form of first lien secured debt, second lien secured debt, subordinated debt and equity investments.
We believe middle-market companies offer attractive risk-reward to investors due to a limited amount of capital available for such companies. We seek to create a diversified portfolio that includes first lien secured debt, second lien secured debt, subordinated debt and equity investments by investing approximately $10 million to $50 million of capital, on average, in the securities of middle-market companies. We expect this investment size to vary proportionately with the size of our capital base. We use the term “middle-market” to refer to companies with annual revenues between $50 million and $1 billion. The companies in which we invest are typically highly leveraged, and, in most cases, are not rated by national rating agencies. If such companies were rated, we believe that they would typically receive a rating below investment grade (between BB and CCC under the Standard & Poor’s system) from the national rating agencies. Securities rated below investment grade are often referred to as “leveraged loans” or “high yield” securities or “junk bonds” and are often higher risk compared to debt instruments that are rated above investment grade and have speculative characteristics. Our debt investments may generally range in maturity from three to ten years and are made to U.S. and, to a limited extent, non-U.S. corporations, partnerships and other business entities which operate in various industries and geographical regions.
Our investment activity depends on many factors, including the amount of debt and equity capital available to middle-market companies, the level of merger and acquisition activity for such companies, the general economic environment and the competitive environment for the types of investments we make. We have used, and expect to continue to use, our debt capital, proceeds from the rotation of our portfolio and proceeds from public and private offerings of securities to finance our investment objectives.
Organization and Structure of PennantPark Investment Corporation
PennantPark Investment Corporation, a Maryland corporation organized in January 2007, is a closed-end, externally managed, non-diversified investment company that has elected to be treated as a BDC under the 1940 Act. In addition, for federal income tax purposes we have elected to be treated, and intend to qualify annually, as a RIC under the Code.
Our investment activities are managed by the Investment Adviser. Under our Investment Management Agreement, we have agreed to pay our Investment Adviser an annual base management fee based on our average adjusted gross assets as well as an incentive fee based on our investment performance. PennantPark Investment, through the Investment Adviser, provides similar services to SBIC II under its investment management agreement. SBIC II’s investment management agreement does not affect the management and incentive fees on a consolidated basis. We have also entered into an Administration Agreement with the Administrator. Under our Administration Agreement, we have agreed to reimburse the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under our Administration Agreement, including rent and our allocable portion of the costs of compensation and related expenses of our Chief Financial Officer, Chief Compliance Officer, Corporate Counsel and their respective staffs. PennantPark Investment, through the Administrator, provides similar services to SBIC II under its administration agreement with us. Our board of directors, a majority of whom are independent of us, provides overall supervision of our activities, and the Investment Adviser supervises our day-to-day activities.
Revenues
We generate revenue in the form of interest income on the debt securities we hold and capital gains and dividends, if any, on investment securities that we may acquire in portfolio companies. Our debt investments, whether in the form of first lien secured debt, second lien secured debt or subordinated debt, typically have a term of three to ten years and bear interest at a fixed or a floating rate. Interest on debt securities is generally payable quarterly or semiannually. In some cases, our investments provide for deferred interest payments and PIK interest. The principal amount of the debt securities and any accrued but unpaid interest generally becomes due at the maturity date. In addition, we may generate revenue in the form of amendment, commitment, origination, structuring or diligence fees, fees for providing significant managerial assistance and possibly consulting fees. Loan origination fees, OID and market discount or premium and deferred financing costs on liabilities, which we do not fair value, are capitalized and accreted or amortized using the effective interest method as interest income or, in the case of deferred financing costs, as interest expense. Dividend income, if any, is recognized on an accrual basis on the ex-dividend date to the extent that we expect to collect such amounts. From time to time, the Company receives certain fees from portfolio companies, which may or may not be non-recurring in nature. Such fees include loan prepayment penalties, structuring fees, amendment fees, and agency fees and are recorded as other investment income when earned.
Expenses
Our primary operating expenses include interest expense on the outstanding debt and unused commitment fees on undrawn amounts, under our various debt facilities, the payment of a management fee and the payment of an incentive fee to our Investment Adviser, if any, our allocable portion of overhead under our Administration Agreement and other operating costs as detailed below. Our management fee compensates our Investment Adviser for its work in identifying, evaluating, negotiating, consummating and monitoring our investments. We bear all other direct or indirect costs and expenses of our operations and transactions, including:
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Generally, during periods of asset growth, we expect our general and administrative expenses to be relatively stable or to decline as a percentage of total assets and increase during periods of asset declines. Incentive fees, interest expense and costs relating to future offerings of securities would be additive to the expenses described above.
Restatement of Previously Issued Financial Statement
As noted in the Annual Report on Form 10-K for the year ended September 30, 2023, during the preparation of the financial statements as of and for the year ended September 30, 2023, Management identified an error in the classification and presentation of cash pertaining to the Company’s affiliates – PSLF and PTSF II in the September 30, 2022 financial statements. The Company recorded cash activity and due to affiliates pertaining to their investments as a reduction of the cash account instead of presenting the related cash and cash equivalents as an asset and a due to affiliates as a liability. This misclassification also existed at December 31, 2022, and the impact of the error correction is reflected on the consolidated statement of cash flows for the three months ended December 31, 2022 as an increase to cash and cash equivalents, beginning of period totaling $2.1 million, an increase to cash and cash equivalents, end of period totaling $2.2 million, and increase in due to affiliates of $0.04 million.
There was no impact from the error correction to total net assets and net asset value per share as reported on the consolidated statement of assets and liabilities as of December 31, 2022. In addition, there was no impact from the error correction on net investment income or net increase (decrease) in net assets resulting from operations in total or on a per common share basis as reported on the consolidated statements of operations for the three months ended December 31, 2022. The corrections related to the prior year comparative cash flow statement amounts were reported in the quarter ended December 31, 2023.
As a result of the error in the classification and presentation of cash described above, we conducted an analysis to determine whether incentive-based compensation was erroneously awarded, thereby necessitating recovery under the Clawback Policy we adopted effective December 1, 2023. Because we do not pay or otherwise award incentive-based compensation to the Company’s executives, we concluded that the error did not result in erroneously-awarded incentive-based compensation, and therefore no compensation recovery is required.
PORTFOLIO AND INVESTMENT ACTIVITY
As of December 31, 2023, our portfolio totaled $1,210.8 million and consisted of $677.7 million or 56% of first lien secured debt, $49.8 million or 4% of U.S. Government Securities, $78.4 million or 7% of second lien secured debt, $151.1 million or12% of subordinated debt (including $102.3 million or 8% in PSLF) and $253.7 million or 21% of preferred and common equity (including $62.8 million or 5% in PSLF). Our interest bearing debt portfolio consisted of 96% variable-rate investments and 4% fixed-rate investments. As of December 31, 2023, we had one portfolio company on non-accrual, representing 1.0% and zero percent of our overall portfolio on a cost and fair value basis, respectively. Overall, the portfolio had net unrealized depreciation of $(21.3) million as of December 31, 2023. Our overall portfolio consisted of 139 companies with an average investment size of $8.4 million, had a weighted average yield on interest bearing debt investments of 12.6%.
As of September 30, 2023, our portfolio totaled $1,101.7 million and consisted of $527.7 million or 48% of first lien secured debt, $99.8 million or 9% of U.S. Government Securities, $80.4 million or 7% of second lien secured debt, $156.2 million or 14% of subordinated debt (including $102.3 million or 9% in PSLF) and $237.6 million or 22% of preferred and common equity (including $62.1 million or 6% in PSLF). Our interest bearing debt portfolio consisted of 95% variable-rate investments and 5% fixed-rate investments. As of September 30, 2023, we had one portfolio company on non-accrual, representing 1.2% and zero percent of our overall portfolio on a cost and fair value basis, respectively. Overall, the portfolio had net unrealized depreciation of $(16.3) million as of September 30, 2023. Our overall portfolio consisted of 129 companies with an average investment size of $7.8 million, had a weighted average yield on interest bearing debt investments of 13.0%.
For the three months ended December 31, 2023, we invested $231.1 million in 12 new and 32 existing portfolio companies with a weighted average yield on debt investments of 11.9% (excluding U.S. Government Securities). For the three months ended December 31, 2023, sales and repayments of investments totaled $71.0 million (excluding U.S. Government Securities).
For the three months ended December 31, 2022, we invested $86.2 million in six new and 29 existing portfolio companies with a weighted average yield on debt investments of 11.2%. For the three months ended December 31, 2022, sales and repayments of investments totaled $30.6 million
PennantPark Senior Loan Fund, LLC
As of December 31, 2023, PSLF’s portfolio totaled $857.9 million, consisted of 93 companies with an average investment size of $9.2 million and had a weighted average yield interest bearing debt investments of 12.1 %.
As of September 30, 2023, PSLF’s portfolio totaled $804.2 million, consisted of 90 companies with an average investment size of $8.9 million and had a weighted average yield interest bearing debt investments of 12.1 %.
For the three months ended December 31, 2023, PSLF invested $81.0 million (including $50.8 million were purchased from the Company) in five new and seven existing portfolio companies at weighted average yield interest bearing debt investments of 12.7%. PSLF’s sales and repayments of investments for the same period totaled $29.1 million.
For the three months ended December 31, 2022, PSLF invested $16.8 million (of which none was purchased from the Company) in four new and four existing portfolio companies at weighted average yield on interest bearing debt investments of 11.4%. PSLF’s sales and repayments of investments for the same period totaled $9.0 million.
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of our Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of our assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of income and expenses during the reported periods In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair presentation of financial statements have been included. Actual results could differ from these estimates due to changes in the economic and regulatory environment, financial markets and any other parameters used in determining such estimates and assumptions, including the credit worthiness of our portfolio companies. We may reclassify certain prior period amounts to conform to the current period presentation. We have eliminated all intercompany balances and transactions. References to ASC serve as a single source of accounting literature. Subsequent events are evaluated and disclosed as appropriate for events occurring through the date the Consolidated Financial Statements are issued. In addition to the discussion below, we
describe our critical accounting policies in the notes to our Consolidated Financial Statements. We discuss our critical accounting estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on Form 10-K. There have been no significant changes in our critical accounting estimates during the nine months from those disclosed in our 2022 Annual Report on Form 10-K.
Investment Valuations
We expect that there may not be readily available market values for many of the investments which are or will be in our portfolio, and we value such investments at fair value as determined in good faith by or under the direction of our board of directors using a documented valuation policy and a consistently applied valuation process, as described in this Report. With respect to investments for which there is no readily available market value, the factors that our board of directors may take into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate or revise our valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and the difference may be material.
Our portfolio generally consists of illiquid securities, including debt and equity investments. With respect to investments for which market quotations are not readily available, or for which market quotations are deemed not reflective of the fair value, our board of directors undertakes a multi-step valuation process each quarter, as described below:
Our board of directors generally uses market quotations to assess the value of our investments for which market quotations are readily available. We obtain these market values from independent pricing services or at the bid prices obtained from at least two brokers or dealers, if available, or otherwise from a principal market maker or a primary market dealer. The Investment Adviser assesses the source and reliability of bids from brokers or dealers. If our board of directors has a bona fide reason to believe any such market quote does not reflect the fair value of an investment, it may independently value such investments by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available.
Fair value, as defined under ASC 820, is the price that we would receive upon selling an investment or pay to transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment or liability. ASC 820 emphasizes that valuation techniques maximize the use of observable market inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing an asset or liability based on market data obtained from sources independent of us. Unobservable inputs reflect the assumptions market participants would use in pricing an asset or liability based on the best information available to us on the reporting period date.
ASC 820 classifies the inputs used to measure these fair values into the following hierarchies:
Level 1: |
Inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities, accessible by us at the measurement date.
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Level 2: |
Inputs that are quoted prices for similar assets or liabilities in active markets, or that are quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term, if applicable, of the financial instrument.
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Level 3: |
Inputs that are unobservable for an asset or liability because they are based on our own assumptions about how market participants would price the asset or liability. |
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A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Generally, most of our investments, and our are classified as Level 3. Our 2026 Notes and 2026 Notes-2 are classified as Level 2, as they are financial instruments with readily observable market inputs. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and those differences may be material.
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On December 3, 2020, the SEC adopted Rule 2a-5 under the 1940 Act, which establishes an updated regulatory framework for determining fair value in good faith for purposes of the 1940 Act. The new rule clarifies how fund boards of directors can satisfy their valuation obligations and requires, among other things, the board of directors to periodically assess material valuation risks and take steps to manage those risks. The rule also permits boards of directors, subject to board oversight and certain other conditions, to designate the fund’s investment adviser to perform fair value determinations. The new rule went into effect on March 8, 2021 and had a compliance date of September 8, 2022. We came into compliance with Rule 2a-5 under the 1940 Act before the compliance date. While our board of directors has not elected to designate the Investment Adviser as the valuation designee at this time, we have adopted certain revisions to our valuation policies and procedures in order comply with the applicable requirements of Rule 2a-5 under the 1940 Act.
In addition to using the above inputs to value cash equivalents, investments, our 2026 Notes, 2026 Notes-2 and our Truist Credit Facility valuations, we employ the valuation policy approved by our board of directors that is consistent with ASC 820. Consistent with our valuation policy, we evaluate the source of inputs, including any markets in which our investments are trading, in determining fair value.
Generally, the carrying value of our consolidated financial liabilities approximates fair value. We have adopted the principles under ASC Subtopic 825-10, Financial Instruments, or ASC 825-10, which provides companies with an option to report selected financial assets and liabilities at fair value, and made an irrevocable election to apply ASC 825-10 to our Truist Credit Facility. We elected to use the fair value option for the Truist Credit Facility to align the measurement attributes of both our assets and liabilities while mitigating volatility in earnings from using different measurement attributes. Due to that election and in accordance with GAAP, we did not incur any expenses relating to amendment costs on the Truist Credit Facility for both the three months ended December 31, 2023. ASC 825-10 establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities and to more easily understand the effect on earnings of a company’s choice to use fair value. ASC 825-10 also requires entities to display the fair value of the selected assets and liabilities on the face of the Consolidated Statements of Assets and Liabilities and changes in fair value of the Truist Credit Facility is reported in our Consolidated Statements of Operations. We elect not to apply ASC 825-10 to any other financial assets or liabilities, including the 2026 Notes, and 2026 Notes-2.
For the three months ended December 31, 2023 and 2022, the Truist Credit Facility had a net change in unrealized (appreciation) depreciation of $(2.0) million and $4.4 million, respectively. As of December 31, 2023 and September 30, 2023, the net unrealized depreciation on the Truist Credit Facility totaled $3.4 million and $5.5 million, respectively. We use a nationally recognized independent valuation service to measure the fair value of our Truist Credit Facility in a manner consistent with the valuation process that the board of directors uses to value our investments.
Revenue Recognition
We record interest income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt investments with contractual PIK interest, which represents interest accrued and added to the loan balance that generally becomes due at maturity, we will generally not accrue PIK interest when the portfolio company valuation indicates that such PIK interest is not collectable. We do not accrue as a receivable interest on loans and debt investments if we have reason to doubt our ability to collect such interest. Loan origination fees, OID, market discount or premium and deferred financing costs on liabilities, which we do not fair value, are capitalized and then accreted or amortized using the effective interest method as interest income or, in the case of deferred financing costs, as interest expense. We record prepayment penalties on loans and debt investments as income. Dividend income, if any, is recognized on an accrual basis on the ex-dividend date to the extent that we expect to collect such amounts. From time to time, the Company receives certain fees from portfolio companies, which may or may not be non-recurring in nature. Such fees include loan prepayment penalties, structuring fees, amendment fees, and agency fees and are recorded as other investment income when earned.
Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation
We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, using the specific identification method, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in fair values of our portfolio investments and our Truist Credit Facility, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.
Foreign Currency Translation
Our books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:
Although net assets and fair values are presented based on the applicable foreign exchange rates described above, we do not isolate that portion of the results of operations due to changes in foreign exchange rates on investments, other assets and debt from the fluctuations arising from changes in fair values of investments and liabilities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments and liabilities.
Payment-in-Kind, or PIK Interest
We have investments in our portfolio which contain a PIK interest provision. PIK interest is added to the principal balance of the investment and is recorded as income. In order for us to maintain our ability to be subject to tax as a RIC, substantially all of this income must be paid out to stockholders in the form of dividends for U.S. federal income tax purposes, even though we may not have collected any cash with respect to interest on PIK securities.
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Federal Income Taxes
We have elected to be treated, and intend to qualify annually to maintain our election to be treated, as a RIC under Subchapter M of the Code. To maintain our RIC tax election, we must, among other requirements, meet certain annual source-of-income and quarterly asset diversification requirements. We also must annually distribute dividends for U.S. federal income tax purposes to our stockholders out of the assets legally available for distribution of an amount generally at least equal to 90% of the sum of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, or investment company taxable income, determined without regard to any deduction for dividends paid.
Although not required for us to maintain our RIC tax status, in order to preclude the imposition of a 4% nondeductible U.S. federal excise tax imposed on RICs, we must distribute dividends for federal income tax purposes to our stockholders in respect of each calendar year of an amount at least equal to the sum of (1) 98% of our net ordinary income (subject to certain deferrals and elections) for the calendar year, (2) 98.2% of the excess, if any, of our capital gains over our capital losses, or capital gain net income (adjusted for certain ordinary losses) for the one-year period ending on October 31 of the calendar year plus (3) the sum of any net ordinary income plus capital gain net income for preceding years that was realized but not distributed during such years and on which we did not incur any U.S. federal income tax, or the Excise Tax Avoidance Requirement. In addition, although we may distribute realized net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually, out of the assets legally available for such distributions in the manner described above, we have retained and may continue to retain such net capital gains or investment company taxable income, contingent on maintaining our ability to be subject to tax as a RIC, in order to provide us with additional liquidity.
Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and net realized gain recognized for financial reporting purposes. Differences between tax regulations and GAAP may be permanent or temporary. Permanent differences are reclassified among capital accounts in the Consolidated Financial Statements to reflect their appropriate tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.
For the three months ended December 31, 2023 and 2022 we recorded a provision for taxes on net investment income of $0.4 million and $2.0 million respectively, pertaining to federal excise tax.
The Taxable Subsidiary (PNNT Investment Holdings, LLC, wholly-owned subsidiary of the Company,) is subject to U.S. federal, state and local corporate income taxes. The income tax expense and related tax liabilities of the Taxable Subsidiary are reflected in the Company’s consolidated financial statements.
For the three months ended December 31, 2023 and 2022, the Company recognized a provision for taxes of zero, respectively, on net realized gain (loss) on investments by the Taxable Subsidiary. For the three months ended December 31, 2023 and 2022, the Company recognized a provision for taxes of $(0.2) million and $(0.9) million, respectively, on net unrealized gain (loss) on investments by the Taxable Subsidiary. The provision for taxes on net realized and unrealized gains on investments is the result of netting (i) the expected tax liability on the gains from the sales of investments which is likely to be realized and unrealized during fiscal year ending September 30, 2024 and (ii) the expected tax benefit resulting from the use of loss carryforwards to offset such gains. As of December 31, 2023 and September 30, 2023, the Company recognized a provision for taxes of $0.2 million and $3.4 million, respectively, on net realized and unrealized gains on investments by the Taxable Subsidiary.
During the three months ended December 31, 2023 and 2022, the Company paid zero, respectively, in federal taxes on realized gains on the sale of investments held by the Taxable Subsidiary. The state and local tax liability is zero as of December 31, 2023 is included under accrued other expenses in the consolidated statement of assets and liabilities.
We operate in a manner to maintain our election to be subject to tax as a RIC and to eliminate corporate-level U.S. federal income tax (other than the 4% excise tax) by distributing sufficient investment company taxable income and capital gain net income (if any). As a result, we will have an effective tax rate equal to 0% before the excise tax and income taxes incurred by the Taxable Subsidiary. As such, a reconciliation of the differences between our reported income tax expense and its tax expense at the federal statutory rate of 21% is not meaningful.
The Taxable Subsidiary, which is subject to tax as a corporation, allows us to hold equity securities of certain portfolio companies treated as pass-through entities for U.S. federal income tax purposes while facilitating our ability to qualify as a RIC under the Code.
RESULTS OF OPERATIONS
Set forth below are the results of operations for the three months ended December 31, 2023 and 2022
Investment Income
For the three months ended December 31, 2023, investment income was $34.3 million, which was attributable to $25.1 million from first lien secured debt, $2.6 million from second lien secured debt, $1.3 million from subordinated debt and $5.3 million from preferred and common equity, respectively. For the three months ended December 31, 2022, investment income was $30.0 million, which was attributable to $21.8 million from first lien secured debt, $3.8 million from second lien secured debt, $1.1 million from subordinated debt and $3.3 million from preferred and common equity, respectively. The increase in investment income compared to the same period in the prior year was primarily due to the increase in the cost of yield of our debt portfolio.
Expenses
For the three months ended December 31, 2023, expenses totaled $18.7 million and were comprised of; $9.6 million of debt related interest and expenses, $4.0 million of base management fees, $3.3 million of performance based $1.4 million of general and administrative expenses and $0.4 million of provision for excise taxes. For the three months ended December 31, 2022, expenses totaled $19.6 million and were comprised of; $9.7 million of debt-related interest and expenses, $4.6 million of base management fees, $2.2 million of performance based, incentive fees, $1.1 million of general and administrative expenses and $2.0 million of provision for excise taxes, respectively. The decrease in net expense was primarily due to the provision for excise taxes compared to the same period in the prior year.
Net Investment Income
For the three months ended December 31, 2023 and 2022, net investment income totaled $15.7 million, or $0.24 per share, and $10.3 million, or $0.16 per share, respectively. The increase in net investment income compared to the same period in the prior year was primarily due to an increase in the cost of yield our debt portfolio.
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Net Realized Gains or Losses
For the three months ended December 31, 2023 and 2022, net realized gains (losses) totaled $1.8 million and $4.1 million, respectively. The change in realized gains (losses) was primarily due to changes in the market conditions of our investments and the values at which they were realized.
Unrealized Appreciation or Depreciation on Investments and Debt
For the three months ended December 31, 2023 and 2022, we reported net change in unrealized appreciation (depreciation) on investments of $(5.0) million and $(91.6) million, respectively. As of December 31, 2023 and September 30, 2023, the net unrealized appreciation (depreciation) on investments totaled $(21.3) million and $(16.3) million, respectively. The net change in unrealized depreciation on our investments compared to the same period in the prior year was primarily due to changes in the capital market conditions of our investments and the values at which they were realized.
For the three months ended December 31, 2023 and 2022, the Truist Credit Facility had a net change in unrealized (appreciation) depreciation of $(2.0) million and $4.4 million, respectively. As of December 31, 2023 and September 30, 2023, the net unrealized depreciation on the Truist Credit Facility totaled $3.4 million and $5.5 million, respectively. Net change in unrealized appreciation compared to the same periods in the prior period was primarily due to changes in the capital markets.
Net Change in Net Assets Resulting from Operations
For the three months ended December 31, 2023 and 2022, net increase (decrease) in net assets resulting from operations totaled $10.7 million, or $0.16 per share and $(71.9) million, or $(1.10) per share, respectively. The increase in net assets from operations for the three months ended December 31, 2023 compared to prior year was primarily due to a decrease in the net unrealized depreciation in the portfolio primarily driven by changes in market conditions.
LIQUIDITY AND CAPITAL RESOURCES
Our liquidity and capital resources are derived primarily from cash flows from operations, including investment sales and repayments, and income earned, proceeds of securities offerings and debt financings. Our primary use of funds from operations includes investments in portfolio companies and payments of interest expense, fees and other operating expenses we incur. We have used, and expect to continue to use, our debt capital, proceeds from the rotation of our portfolio and proceeds from public and private offerings of securities to finance our investment objectives and operations. As of December 31, 2023, in accordance with the 1940 Act, with certain limited exceptions, we are only allowed to borrow amounts such that we are in compliance with a 150% asset coverage ratio requirement after such borrowing, excluding SBA debentures pursuant to exemptive relief from the SEC received in June 2011. This “Liquidity and Capital Resources” section should be read in conjunction with the "Forward-Looking Statements" section above.
On February 5, 2019, our stockholders approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the Consolidated Appropriations Act of 2018 (which includes the SBCAA) as approved by our board of directors on November 13, 2018. As a result, the asset coverage requirement applicable to us for senior securities was reduced from 200% (i.e., $1 of debt outstanding for each $1 of equity) to 150% (i.e., $2 of debt outstanding for each $1 of equity), subject to compliance with certain disclosure requirements.
As of December 31, 2023 and September 30, 2023, our asset coverage ratio, as computed in accordance with the 1940 Act was 171%% and 195%, respectively.
For the three months ended December 31, 2023 and 2022, the annualized weighted average cost of debt inclusive of the fee on the undrawn commitment and amendment costs on the Truist Credit Facility, and amortized upfront fees on SBA debentures, 2026 Notes and 2026 Notes-2, was 6.4% and 5.5%, respectively.
As of December 31, 2023, we had the multi-currency Truist Credit Facility for up to $475.0 million (decreased from $500.0 million in September 2023), which may be further increased up to $750.0 million in borrowings with certain lenders and Truist Bank, acting as administrative agent, Regions Bank, acting as an additional multicurrency lender, and JPMorgan Chase Bank, N.A., acting as syndication agent for the lenders. As of December 31, 2023 and September 30, 2023, we had $388.5 million and $212.4 million, respectively, in outstanding borrowings under the Truist Credit Facility. The Truist Credit Facility had a weighted average interest rate of 7.7% and 7.7%, respectively, exclusive of the fee on undrawn commitment, as of December 31, 2023 and September 30, 2023. The Truist Credit Facility is a revolving facility with a stated maturity date of July 29, 2027 and pricing set at 235 basis points over SOFR (or an alternative risk-free floating interest rate index). As of December 31, 2023 and September 30, 2023, we had $86.5 million and $262.6 million of unused borrowing capacity under the Truist Credit Facility, respectively, subject to leverage and borrowing base restrictions. The Truist Credit Facility is secured by substantially all of our assets. As of December 31, 2023, we were in compliance with the terms of the Truist Credit Facility.
As of December 31, 2023, we had $
As of December 31, 2023, we had $
We may raise additional equity or debt capital through both registered offerings off our shelf registration statement and private offerings of securities, by securitizing a portion of our investments, among other sources. Any future additional debt capital we incur, to the extent it is available, may be issued at a higher cost and on less favorable terms and conditions than the Truist Credit Facility, 2026 Notes, 2026 Notes-2 and SBA debentures. Furthermore, the Truist Credit Facility availability depends on various covenants and restrictions. The primary use of existing funds and any funds raised in the future is expected to be for repayment of indebtedness, investments in portfolio companies, cash distributions to our stockholders or for other general corporate or strategic purposes such as a stock repurchase program.
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We have entered into certain contracts under which we have material future commitments. Under our Investment Management Agreement, which was reapproved by our board of directors (including a majority of our directors who are not interested persons of us or the Investment Adviser) in February 2023 PennantPark Investment Advisers serves as our investment adviser. Payments under our Investment Management Agreement in each reporting period are equal to (1) a management fee equal to a percentage of the value of our average adjusted gross assets and (2) an incentive fee based on our performance.
Under our Administration Agreement, which was most recently reapproved by our board of directors, including a majority of our directors who are not interested persons of us, in February 2024 the Administrator furnishes us with office facilities and administrative services necessary to conduct our day-to-day operations. The Administration Agreement was amended on July 1, 2022. If requested to provide significant managerial assistance to our portfolio companies, we or the Administrator will be paid an additional amount based on the services provided. Payment under our Administration Agreement is based upon our allocable portion of the Administrator’s overhead in performing its obligations under our Administration Agreement, including rent and our allocable portion of the costs of our Chief Compliance Officer, Chief Financial Officer, Corporate Counsel and their respective staffs.
If any of our contractual obligations discussed above are terminated, our costs under new agreements that we enter into may increase. In addition, we will likely incur significant time and expense in locating alternative parties to provide the services we expect to receive under our Investment Management Agreement and our Administration Agreement. Any new investment management agreement would also be subject to approval by our stockholders.
In accordance with the 1940 Act, with certain limited exceptions, PennantPark Investment is only allowed to borrow amounts such that our required 150% asset coverage ratio is met after such borrowing. As of December 31, 2023 and September 30, 2023, we excluded the principal amounts of our SBA debentures from our asset coverage ratio pursuant to SEC exemptive relief. In 2011, we received exemptive relief from the SEC allowing us to modify the asset coverage ratio requirement to exclude the SBA debentures from the calculation. Accordingly, our ratio of total assets on a consolidated basis to outstanding indebtedness may be less than 150% which, while providing increased investment flexibility, also increases our exposure to risks associated with leverage.
As of December 31, 2023 and September 30, 2023, we had cash and cash equivalents of $36.9 million and $38.8 million, respectively, available for investing and general corporate purposes. We believe our liquidity and capital resources are sufficient to allows us to effectively operate our business.
For the three months ended December 31, 2023, our operating activities used cash of $155.1 million and our financing activities provided cash of $153.2 million. Our operating activities used cash primarily due to our investment activities and our financing activities provided cash primarily from borrowings under the Truist Credit Facility.
For the three months ended December 31, 2022, our operating activities used cash of $9.6 million and our financing activities used cash of $14.8 million. Our operating activities used cash primarily due to our investment activities and our financing activities used cash primarily due to repayments under the Truist Credit Facility.
PennantPark Senior Loan Fund, LLC
In July 2020, we and Pantheon formed PSLF, an unconsolidated joint venture. PSLF invests primarily in middle-market and other corporate debt securities consistent with its strategy. PSLF was formed as a Delaware limited liability company. As of December 31, 2023 and September 30, 2023, PSLF had total assets of $920.7 million and $872.8 million, respectively and its investment portfolio consisted of debt investments in 93 and 90 portfolio companies, respectively. As of the same dates, we and Pantheon had remaining commitments to fund first lien secured debt of $22.4 million and $22.4 million, respectively, and equity interest of $14.5 million and $14.5 million, respectively, in PSLF. As of December 31, 2023, at fair value, the largest investment in a single portfolio company in PSLF was $21.5 million and the five largest investments totaled $99.7 million. As of September 30, 2023, at fair value, the largest investment in a single portfolio company in PSLF was $19.7 million and the five largest investments totaled $97.5 million. PSLF invests in portfolio companies in the same industries in which we may directly invest.
We provide capital to PSLF in the form of subordinated notes and equity interests. As of December 31, 2023 and September 30, 2023, we and Pantheon owned 60.5% and 39.5%, respectively, of each of the outstanding subordinated notes and equity interests of PSLF. As of December 31, 2023 and September 30, 2023, our investment in PSLF consisted of subordinated notes of $102.3 million and $102.3 million, respectively, and equity interests of $58.6 million and $58.6 million, respectively.
We and Pantheon each appointed two members to PSLF’s four-person Member Designees’ Committee, or the Member Designees’ Committee. All material decisions with respect to PSLF, including those involving its investment portfolio, require unanimous approval of a quorum of the Member Designees’ Committee. Quorum is defined as (i) the presence of two members of the Member Designees’ Committee; provided that at least one individual is present that was elected, designated or appointed by each of us and Pantheon; (ii) the presence of three members of the Member Designees’ Committee, provided that the individual that was elected, designated or appointed by each of us or Pantheon, as the case may be, with only one individual present shall be entitled to cast two votes on each matter; and (iii) the presence of four members of the Member Designees’ Committee shall constitute a quorum, provided that two individuals are present that were elected, designated or appointed by each of us and Pantheon.
Additionally, PSLF, through its wholly-owned subsidiary, or PSLF Subsidiary, has entered into a $325.0 million (increased from $225.0 million on September 2, 2022) senior secured revolving credit facility, or the PSLF Credit Facility, with BNP Paribas, which bears interest at SOFR (or an alternative risk-free interest rate index) plus 260 basis points during the investment period and is subject to leverage and borrowing base restrictions.
In March 2022, PSLF completed a $304.0 million debt securitization in the form of a collateralized loan obligation, or the “2034 Asset-Backed Debt”. The 2034 Asset-Backed Debt is secured by a diversified portfolio of PennantPark CLO IV, LLC., a wholly-owned and consolidated subsidiary of PSLF, consisting primarily of middle market loans and participation interests in middle market loans. The 2034 Asset-Backed Debt is scheduled to mature in April 2034. On the closing date of the transaction, in consideration of PSLF’s transfer to PennantPark CLO IV, LLC. of the initial closing date loan portfolio, which included loans distributed to PSLF by certain of its wholly owned subsidiaries and us, PennantPark CLO IV, LLC. transferred to PSLF 100% of the Preferred Shares of PennantPark CLO IV, LLC. and 100% of the Subordinated Notes issued by PennantPark CLO IV, LLC.
On July 26, 2023, CLO VII , LLC ("CLO VII") completed a $300 million debt securitization in the form of a collateralized loan obligation (the "2035 Debt Securitization" or "2035 Asset-Backed Debt"). The 2035 Asset-Backed Debt is secured by a diversified portfolio consisting primarily of middle market loans. The 2035 Debt Securitization was executed through a private placement of: (i) $151.0 million Class A-1a Notes maturing 2035, which bear interest at the three-month SOFR plus 2.7%, (ii) $20.0 million Class A-1b Loans 2035, which bear interest at 6.5%, (iii) $12.0 million Class A-2 Senior Secured Floating Rate Notes due 2035, which bear interest at the three-month SOFR plus 3.2%, (iv) $21.0 million Class B Senior Secured Floating Rate Notes due 2035, which bear interest at the three-month SOFR plus 4.1%, (v) $24.0 million Class C Secured Deferrable Floating Rate Notes due 2035, which bear interest at the three-month SOFR plus 4.7%, (vi) $18.0 million Class D Secured Deferrable Floating Rate Notes due 2035, which bear interest at the three-month SOFR plus 7.0%. As of December 31, 2023 there was $246.0 million of external 2035 Asset-Backed Debt.
47
Below is a summary of PSLF’s portfolio at fair value:
($ in thousands) |
|
December 31, 2023 (Unaudited) |
|
|
September 30, 2023 |
|
||
Total investments |
|
$ |
857,885 |
|
|
$ |
804,187 |
|
Weighted average cost yield on income producing investments |
|
|
12.1 |
% |
|
|
12.1 |
% |
Number of portfolio companies in PSLF |
|
|
93 |
|
|
|
90 |
|
Largest portfolio company investment at fair value |
|
$ |
21,491 |
|
|
$ |
19,737 |
|
Total of five largest portfolio company investments at fair value |
|
$ |
99,724 |
|
|
$ |
97,526 |
|
Below is a listing of PSLF’s individual investments as of December 31, 2023 ($ in thousands):
Issuer Name |
|
Maturity |
|
Industry |
|
Current |
|
|
Basis Point |
|
Par |
|
|
Cost |
|
|
Fair Value (2) |
|
||||
First Lien Secured Debt - 826.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
A1 Garage Merger Sub, LLC |
|
12/22/28 |
|
Personal, Food and Miscellaneous Services |
|
|
11.96 |
% |
|
SOFR+660 |
|
|
14,888 |
|
|
$ |
14,636 |
|
|
$ |
14,813 |
|
ACP Falcon Buyer, Inc. |
|
08/01/29 |
|
Business Services |
|
|
11.85 |
% |
|
SOFR+650 |
|
|
15,467 |
|
|
|
15,151 |
|
|
|
15,297 |
|
Ad.net Acquisition, LLC |
|
05/07/26 |
|
Media |
|
|
11.61 |
% |
|
SOFR+600 |
|
|
4,875 |
|
|
|
4,875 |
|
|
|
4,851 |
|
Alpine Acquisition Corp II |
|
11/30/26 |
|
Containers, Packaging and Glass |
|
|
11.45 |
% |
|
SOFR+610 |
|
|
14,800 |
|
|
|
14,509 |
|
|
|
14,208 |
|
Amsive Holding Corporation (f/k/a Vision Purchaser Corporation) |
|
06/10/25 |
|
Media |
|
|
11.75 |
% |
|
SOFR+640 |
|
|
13,922 |
|
|
|
13,846 |
|
|
|
13,713 |
|
Anteriad, LLC (f/k/a MeritDirect, LLC) |
|
05/23/24 |
|
Media |
|
|
11.00 |
% |
|
SOFR+565 |
|
|
14,151 |
|
|
|
14,125 |
|
|
|
14,009 |
|
Any Hour Services |
|
07/21/27 |
|
Personal, Food and Miscellaneous Services |
|
|
11.23 |
% |
|
SOFR+575 |
|
|
10,854 |
|
|
|
10,821 |
|
|
|
10,746 |
|
Applied Technical Services, LLC |
|
12/29/26 |
|
Environmental Services |
|
|
11.42 |
% |
|
SOFR+615 |
|
|
11,876 |
|
|
|
11,758 |
|
|
|
11,639 |
|
Arcfield Acquisition Corp. |
|
08/03/29 |
|
Aerospace and Defense |
|
|
11.64 |
% |
|
SOFR+635 |
|
|
21,708 |
|
|
|
21,389 |
|
|
|
21,491 |
|
Beta Plus Technologies, Inc. |
|
07/01/29 |
|
Business Services |
|
|
11.10 |
% |
|
SOFR+575 |
|
|
14,813 |
|
|
|
14,572 |
|
|
|
14,220 |
|
Bioderm, Inc. |
|
01/31/28 |
|
Healthcare, Education and Childcare |
|
|
11.84 |
% |
|
SOFR+650 |
|
|
8,955 |
|
|
|
8,851 |
|
|
|
8,865 |
|
Blackhawk Industrial Distribution, Inc. |
|
09/17/26 |
|
Distribution |
|
|
11.75 |
% |
|
SOFR+640 |
|
|
19,748 |
|
|
|
19,484 |
|
|
|
19,501 |
|
BlueHalo Financing Holdings, LLC |
|
10/31/25 |
|
Aerospace and Defense |
|
|
12.00 |
% |
|
SOFR+665 |
|
|
11,067 |
|
|
|
10,988 |
|
|
|
10,845 |
|
Broder Bros., Co. |
|
12/04/25 |
|
Personal and Non-Durable Consumer Products |
|
|
11.65 |
% |
|
SOFR+600 |
|
|
9,619 |
|
|
|
9,619 |
|
|
|
9,619 |
|
Burgess Point Purchaser Corporation |
|
09/26/29 |
|
Auto Sector |
|
|
10.71 |
% |
|
SOFR+535 |
|
|
891 |
|
|
|
835 |
|
|
|
838 |
|
Cartessa Aesthetics, LLC |
|
06/14/28 |
|
Distribution |
|
|
11.10 |
% |
|
SOFR+575 |
|
|
17,238 |
|
|
|
16,978 |
|
|
|
17,238 |
|
CF512, Inc. |
|
08/20/26 |
|
Media |
|
|
11.57 |
% |
|
SOFR+619 |
|
|
2,913 |
|
|
|
2,895 |
|
|
|
2,855 |
|
Connatix Buyer, Inc. |
|
07/13/27 |
|
Media |
|
|
11.14 |
% |
|
SOFR+576 |
|
|
8,785 |
|
|
|
8,768 |
|
|
|
8,390 |
|
Crane 1 Services, Inc. |
|
08/16/27 |
|
Personal, Food and Miscellaneous Services |
|
|
10.36 |
% |
|
SOFR+501 |
|
|
2,568 |
|
|
|
2,545 |
|
|
|
2,556 |
|
Dr. Squatch, LLC |
|
08/31/27 |
|
Personal and Non-Durable Consumer Products |
|
|
11.20 |
% |
|
SOFR+575 |
|
|
10,671 |
|
|
|
10,628 |
|
|
|
10,671 |
|
DRI Holding Inc. |
|
12/21/28 |
|
Media |
|
|
10.71 |
% |
|
SOFR+525 |
|
|
4,371 |
|
|
|
3,962 |
|
|
|
3,977 |
|
DRS Holdings III, Inc. |
|
11/03/25 |
|
Consumer Products |
|
|
11.77 |
% |
|
SOFR+640 |
|
|
14,157 |
|
|
|
14,115 |
|
|
|
14,002 |
|
Duraco Specialty Tapes LLC |
|
06/30/24 |
|
Manufacturing / Basic Industries |
|
|
11.96 |
% |
|
SOFR+650 |
|
|
8,613 |
|
|
|
8,561 |
|
|
|
8,475 |
|
EDS Buyer, LLC |
|
01/10/29 |
|
Aerospace and Defense |
|
|
11.62 |
% |
|
SOFR+625 |
|
|
6,203 |
|
|
|
6,135 |
|
|
|
6,141 |
|
ETE Intermediate II, LLC |
|
05/29/29 |
|
Personal, Food and Miscellaneous Services |
|
|
11.89 |
% |
|
SOFR+650 |
|
|
12,342 |
|
|
|
12,122 |
|
|
|
12,342 |
|
Exigo Intermediate II, LLC |
|
03/15/27 |
|
Business Services |
|
|
11.46 |
% |
|
SOFR+575 |
|
|
9,725 |
|
|
|
9,616 |
|
|
|
9,579 |
|
Fairbanks Morse Defense |
|
06/17/28 |
|
Aerospace and Defense |
|
|
10.54 |
% |
|
SOFR+551 |
|
|
3,514 |
|
|
|
3,429 |
|
|
|
3,511 |
|
Five Star Buyer, Inc. |
|
02/23/28 |
|
Hotels, Motels, Inns and Gaming |
|
|
12.46 |
% |
|
SOFR+700 |
|
|
4,340 |
|
|
|
4,261 |
|
|
|
4,275 |
|
Global Holdings InterCo LLC |
|
03/16/26 |
|
Banking, Finance, Insurance & Real Estate |
|
|
11.46 |
% |
|
SOFR+610 |
|
|
7,008 |
|
|
|
6,990 |
|
|
|
6,658 |
|
Graffiti Buyer, Inc. |
|
08/10/27 |
|
Distribution |
|
|
10.95 |
% |
|
SOFR+575 |
|
|
1,949 |
|
|
|
1,921 |
|
|
|
1,930 |
|
Hancock Roofing and Construction L.L.C. |
|
12/31/26 |
|
Insurance |
|
|
10.95 |
% |
|
SOFR+550 |
|
|
6,423 |
|
|
|
6,423 |
|
|
|
6,166 |
|
Holdco Sands Intermediate, LLC |
|
11/23/28 |
|
Aerospace and Defense |
|
|
11.57 |
% |
|
SOFR+600 |
|
|
19,666 |
|
|
|
19,348 |
|
|
|
19,470 |
|
HV Watterson Holdings, LLC |
|
12/17/26 |
|
Business Services |
|
|
11.50 |
% |
|
SOFR+615 |
|
|
15,064 |
|
|
|
14,910 |
|
|
|
15,064 |
|
HW Holdco, LLC |
|
12/10/24 |
|
Media |
|
|
11.83 |
% |
|
SOFR+650 |
|
|
14,250 |
|
|
|
14,186 |
|
|
|
14,036 |
|
IG Investments Holdings, LLC |
|
09/22/28 |
|
Business Services |
|
|
11.45 |
% |
|
SOFR+600 |
|
|
4,417 |
|
|
|
4,346 |
|
|
|
4,350 |
|
Imagine Acquisitionco, LLC |
|
11/15/27 |
|
Business Services |
|
|
10.74 |
% |
|
SOFR+550 |
|
|
5,551 |
|
|
|
5,471 |
|
|
|
5,468 |
|
Inception Fertility Ventures, LLC |
|
12/31/24 |
|
Healthcare, Education and Childcare |
|
|
12.64 |
% |
|
SOFR+715 |
|
|
19,687 |
|
|
|
19,420 |
|
|
|
19,687 |
|
Infinity Home Services Holdco, Inc. |
|
12/28/28 |
|
Personal, Food and Miscellaneous Services |
|
|
12.20 |
% |
|
SOFR+685 |
|
|
11,025 |
|
|
|
10,847 |
|
|
|
11,025 |
|
Infolinks Media Buyco, LLC |
|
11/01/26 |
|
Media |
|
|
11.21 |
% |
|
SOFR+585 |
|
|
5,785 |
|
|
|
5,785 |
|
|
|
5,785 |
|
Integrity Marketing Acquisition, LLC |
|
08/27/26 |
|
Insurance |
|
|
11.54 |
% |
|
SOFR+575 |
|
|
19,651 |
|
|
|
19,596 |
|
|
|
19,455 |
|
Inventus Power, Inc. |
|
06/30/25 |
|
Consumer Products |
|
|
12.97 |
% |
|
SOFR+761 |
|
|
13,201 |
|
|
|
12,970 |
|
|
|
12,937 |
|
K2 Pure Solutions NoCal, L.P. |
|
01/31/24 |
|
Chemicals, Plastics and Rubber |
|
|
15.46 |
% |
|
SOFR+1010 |
|
|
10,952 |
|
|
|
10,951 |
|
|
|
10,952 |
|
Kinetic Purchaser, LLC |
|
11/10/27 |
|
Consumer Products |
|
|
11.50 |
% |
|
SOFR+615 |
|
|
16,877 |
|
|
|
16,611 |
|
|
|
16,793 |
|
LAV Gear Holdings, Inc. |
|
10/31/25 |
|
Leisure, Amusement, Motion Pictures, Entertainment |
|
|
11.80 |
% |
|
SOFR+640 |
|
|
4,647 |
|
|
|
4,626 |
|
|
|
4,545 |
|
Lash OpCo, LLC |
|
02/18/27 |
|
Consumer Products |
|
|
12.48 |
% |
|
SOFR+700 |
|
|
19,673 |
|
|
|
19,525 |
|
|
|
19,575 |
|
Lightspeed Buyer Inc. |
|
02/03/26 |
|
Healthcare, Education and Childcare |
|
|
10.71 |
% |
|
SOFR+535 |
|
|
12,187 |
|
|
|
12,039 |
|
|
|
12,126 |
|
LJ Avalon Holdings, LLC |
|
01/31/30 |
|
Environmental Services |
|
|
12.04 |
% |
|
SOFR+665 |
|
|
6,302 |
|
|
|
6,192 |
|
|
|
6,176 |
|
MAG DS Corp. |
|
04/01/27 |
|
Aerospace and Defense |
|
|
10.95 |
% |
|
SOFR+550 |
|
|
7,581 |
|
|
|
7,158 |
|
|
|
7,239 |
|
Magenta Buyer, LLC |
|
07/31/28 |
|
Software |
|
|
10.64 |
% |
|
SOFR+526 |
|
|
3,775 |
|
|
|
3,550 |
|
|
|
2,652 |
|
Mars Acquisition Holdings Corp. |
|
05/14/26 |
|
Media |
|
|
11.00 |
% |
|
SOFR+565 |
|
|
10,857 |
|
|
|
10,788 |
|
|
|
10,857 |
|
MBS Holdings, Inc. |
|
04/16/27 |
|
Telecommunications |
|
|
11.29 |
% |
|
SOFR+585 |
|
|
8,395 |
|
|
|
8,307 |
|
|
|
8,282 |
|
Meadowlark Acquirer, LLC |
|
12/10/27 |
|
Business Services |
|
|
11.04 |
% |
|
SOFR+550 |
|
|
2,945 |
|
|
|
2,900 |
|
|
|
2,857 |
|
Municipal Emergency Services, Inc. |
|
10/01/27 |
|
Distribution |
|
|
10.50 |
% |
|
SOFR+515 |
|
|
5,958 |
|
|
|
5,850 |
|
|
|
5,952 |
|
NBH Group LLC |
|
08/19/26 |
|
Healthcare, Education and Childcare |
|
|
11.19 |
% |
|
SOFR+525 |
|
|
7,410 |
|
|
|
7,353 |
|
|
|
6,966 |
|
Neptune Flood Incorporated |
|
05/09/29 |
|
Financial Services |
|
|
11.72 |
% |
|
SOFR+635 |
|
|
7,845 |
|
|
|
7,740 |
|
|
|
7,845 |
|
NORA Acquisition, LLC |
|
08/31/29 |
|
Healthcare, Education and Childcare |
|
|
11.70 |
% |
|
SOFR+635 |
|
|
14,963 |
|
|
|
14,681 |
|
|
|
14,738 |
|
One Stop Mailing, LLC |
|
05/07/27 |
|
Transportation |
|
|
11.72 |
% |
|
SOFR+636 |
|
|
8,447 |
|
|
|
8,296 |
|
|
|
8,447 |
|
Owl Acquisition, LLC |
|
02/04/28 |
|
Education |
|
|
10.75 |
% |
|
SOFR+575 |
|
|
3,893 |
|
|
|
3,798 |
|
|
|
3,834 |
|
Ox Two, LLC (New Issue) |
|
05/18/26 |
|
Distribution |
|
|
12.86 |
% |
|
SOFR+751 |
|
|
4,378 |
|
|
|
4,333 |
|
|
|
4,323 |
|
Pequod Merger Sub, Inc. |
|
12/02/26 |
|
Banking, Finance, Insurance & Real Estate |
|
|
11.75 |
% |
|
SOFR+640 |
|
|
11,445 |
|
|
|
11,253 |
|
|
|
11,216 |
|
PL Acquisitionco, LLC |
|
11/09/27 |
|
Retail |
|
|
12.46 |
% |
|
SOFR+710 |
|
|
8,000 |
|
|
|
7,892 |
|
|
|
7,080 |
|
PlayPower, Inc. |
|
05/08/26 |
|
Consumer Products |
|
|
11.06 |
% |
|
SOFR+565 |
|
|
2,544 |
|
|
|
2,479 |
|
|
|
2,467 |
|
Quantic Electronics, LLC |
|
11/19/26 |
|
Aerospace and Defense |
|
|
11.70 |
% |
|
SOFR+635 |
|
|
3,305 |
|
|
|
3,261 |
|
|
|
3,239 |
|
48
Issuer Name |
|
Maturity |
|
Industry |
|
Current |
|
|
Basis Point |
|
Par |
|
|
Cost |
|
|
Fair Value (2) |
|
||||
Radius Aerospace, Inc. |
|
03/31/25 |
|
Aerospace and Defense |
|
|
11.25 |
% |
|
SOFR+575 |
|
|
12,669 |
|
|
$ |
12,614 |
|
|
$ |
12,542 |
|
Rancho Health MSO, Inc. |
|
12/18/25 |
|
Healthcare, Education and Childcare |
|
|
11.24 |
% |
|
SOFR+550 |
|
|
5,589 |
|
|
|
5,589 |
|
|
|
5,589 |
|
Reception Purchaser, LLC |
|
04/28/28 |
|
Transportation |
|
|
11.50 |
% |
|
SOFR+615 |
|
|
4,987 |
|
|
|
4,928 |
|
|
|
4,838 |
|
Recteq, LLC |
|
01/29/26 |
|
Consumer Products |
|
|
12.50 |
% |
|
SOFR+715 |
|
|
9,725 |
|
|
|
9,638 |
|
|
|
9,385 |
|
Research Now Group, LLC and Dynata, LLC |
|
12/20/24 |
|
Business Services |
|
|
11.14 |
% |
|
SOFR+576 |
|
|
14,351 |
|
|
|
14,305 |
|
|
|
12,701 |
|
Riverpoint Medical, LLC |
|
06/20/25 |
|
Healthcare, Education and Childcare |
|
|
10.50 |
% |
|
SOFR+500 |
|
|
3,168 |
|
|
|
3,156 |
|
|
|
3,142 |
|
Riverside Assessments, LLC |
|
03/09/25 |
|
Education |
|
|
11.25 |
% |
|
SOFR+625 |
|
|
10,867 |
|
|
|
10,816 |
|
|
|
10,758 |
|
Rural Sourcing Holdings, Inc. (HPA SPQ Merger Sub, Inc.) |
|
06/16/29 |
|
Professional Services |
|
|
11.43 |
% |
|
SOFR+625 |
|
|
3,739 |
|
|
|
3,672 |
|
|
|
3,683 |
|
S101 Holdings Inc. |
|
12/29/26 |
|
Electronics |
|
|
11.54 |
% |
|
SOFR+615 |
|
|
4,239 |
|
|
|
4,176 |
|
|
|
4,176 |
|
Sales Benchmark Index LLC |
|
01/03/25 |
|
Business Services |
|
|
11.55 |
% |
|
SOFR+620 |
|
|
6,676 |
|
|
|
6,641 |
|
|
|
6,643 |
|
Sargent & Greenleaf Inc. |
|
12/20/24 |
|
Electronics |
|
|
12.96 |
% |
|
SOFR+750 |
|
|
4,830 |
|
|
|
4,830 |
|
|
|
4,806 |
|
Seaway Buyer, LLC |
|
06/13/29 |
|
Chemicals, Plastics and Rubber |
|
|
11.50 |
% |
|
SOFR+615 |
|
|
14,813 |
|
|
|
14,603 |
|
|
|
14,294 |
|
Sigma Defense Systems, LLC |
|
12/18/27 |
|
Telecommunications |
|
|
12.50 |
% |
|
SOFR+715 |
|
|
6,434 |
|
|
|
6,395 |
|
|
|
6,370 |
|
Signature Systems Holding Company |
|
05/03/24 |
|
Chemicals, Plastics and Rubber |
|
|
12.00 |
% |
|
SOFR+665 |
|
|
9,401 |
|
|
|
9,386 |
|
|
|
9,401 |
|
Skopima Consilio Parent, LLC |
|
05/17/28 |
|
Business Services |
|
|
9.97 |
% |
|
SOFR+450 |
|
|
1,300 |
|
|
|
1,275 |
|
|
|
1,290 |
|
Solutionreach, Inc. |
|
07/17/25 |
|
Communications |
|
|
12.53 |
% |
|
SOFR+700 |
|
|
9,239 |
|
|
|
9,206 |
|
|
|
9,211 |
|
SpendMend Holdings, LLC |
|
03/01/28 |
|
Business Services |
|
|
11.01 |
% |
|
SOFR+565 |
|
|
9,583 |
|
|
|
9,340 |
|
|
|
9,477 |
|
STV Group Incorporated |
|
12/11/26 |
|
Transportation |
|
|
10.71 |
% |
|
SOFR+535 |
|
|
12,099 |
|
|
|
12,047 |
|
|
|
11,978 |
|
Summit Behavioral Healthcare, LLC |
|
11/24/28 |
|
Healthcare, Education and Childcare |
|
|
10.40 |
% |
|
SOFR+475 |
|
|
3,563 |
|
|
|
3,387 |
|
|
|
3,554 |
|
System Planning and Analysis, Inc. (f/k/a Management Consulting & Research, LLC) |
|
08/16/27 |
|
Aerospace and Defense |
|
|
11.33 |
% |
|
SOFR+600 |
|
|
15,925 |
|
|
|
15,669 |
|
|
|
15,829 |
|
Team Services Group, LLC |
|
11/24/28 |
|
Healthcare, Education and Childcare |
|
|
10.75 |
% |
|
SOFR+515 |
|
|
2,681 |
|
|
|
2,583 |
|
|
|
2,656 |
|
Teneo Holdings LLC |
|
07/18/25 |
|
Financial Services |
|
|
10.71 |
% |
|
SOFR+525 |
|
|
2,928 |
|
|
|
2,920 |
|
|
|
2,921 |
|
The Bluebird Group LLC |
|
07/27/26 |
|
Business Services |
|
|
12.00 |
% |
|
SOFR+665 |
|
|
11,978 |
|
|
|
11,924 |
|
|
|
11,846 |
|
The Vertex Companies, LLC |
|
08/31/27 |
|
Business Services |
|
|
11.49 |
% |
|
SOFR+635 |
|
|
7,673 |
|
|
|
7,583 |
|
|
|
7,658 |
|
TPC Canada Parent, Inc. and TPC US Parent, LLC |
|
11/24/25 |
|
Food |
|
|
11.04 |
% |
|
SOFR+550 |
|
|
5,465 |
|
|
|
5,373 |
|
|
|
5,410 |
|
TWS Acquisition Corporation |
|
06/06/25 |
|
Education |
|
|
11.78 |
% |
|
SOFR+625 |
|
|
6,219 |
|
|
|
6,208 |
|
|
|
6,219 |
|
Tyto Athene, LLC |
|
04/03/28 |
|
Aerospace and Defense |
|
|
11.04 |
% |
|
SOFR+550 |
|
|
11,393 |
|
|
|
11,290 |
|
|
|
10,527 |
|
Urology Management Holdings, Inc. |
|
06/15/26 |
|
Healthcare, Education and Childcare |
|
|
11.93 |
% |
|
SOFR+625 |
|
|
3,850 |
|
|
|
3,788 |
|
|
|
3,770 |
|
Wildcat Buyerco, Inc. |
|
02/27/27 |
|
Electronics |
|
|
11.12 |
% |
|
SOFR+575 |
|
|
19,404 |
|
|
|
19,230 |
|
|
|
19,113 |
|
Zips Car Wash, LLC |
|
03/01/24 |
|
Business Services |
|
|
12.70 |
% |
|
SOFR+725 |
|
|
19,682 |
|
|
|
19,636 |
|
|
|
19,239 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total First Lien Secured Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
863,478 |
|
|
|
857,885 |
|
||
Total Investments - 826.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash and Cash Equivalents - 53.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
BlackRock Federal FD Institutional 30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,996 |
|
|
|
54,996 |
|
||
Total Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,996 |
|
|
|
54,996 |
|
||
Total Investments and Cash Equivalents - 879.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
918,474 |
|
|
$ |
912,881 |
|
||
Liabilities in Excess of Other Assets — (779.4)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(809,072 |
) |
|||
Members' Equity—100.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
103,809 |
|
|||
49
Below is a listing of PSLF’s individual investments as of September 30, 2023 ($ in thousands):
Issuer Name |
|
Maturity |
|
Industry |
|
Current |
|
|
Basis Point |
|
Par |
|
|
Cost |
|
|
Fair Value (2) |
|
||||
First Lien Secured Debt - 783.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
A1 Garage Merger Sub, LLC |
|
12/22/28 |
|
Personal, Food and Miscellaneous Services |
|
|
11.84 |
% |
|
SOFR+650 |
|
|
14,925 |
|
|
$ |
14,668 |
|
|
$ |
14,850 |
|
Ad.net Acquisition, LLC |
|
05/07/26 |
|
Media |
|
|
11.65 |
% |
|
SOFR+600 |
|
|
4,888 |
|
|
|
4,888 |
|
|
|
4,863 |
|
Alpine Acquisition Corp II |
|
11/30/26 |
|
Containers, Packaging and Glass |
|
|
11.26 |
% |
|
SOFR+600 |
|
|
14,837 |
|
|
|
14,528 |
|
|
|
14,244 |
|
Amsive Holding Corporation (f/k/a Vision Purchaser Corporation) |
|
06/10/25 |
|
Media |
|
|
11.79 |
% |
|
SOFR+675 |
|
|
13,958 |
|
|
|
13,869 |
|
|
|
13,749 |
|
Anteriad, LLC (f/k/a MeritDirect, LLC) |
|
05/23/24 |
|
Media |
|
|
12.04 |
% |
|
SOFR+650 |
|
|
14,354 |
|
|
|
14,319 |
|
|
|
14,103 |
|
Any Hour Services |
|
07/21/27 |
|
Personal, Food and Miscellaneous Services |
|
|
11.22 |
% |
|
SOFR+575 |
|
|
10,882 |
|
|
|
10,847 |
|
|
|
10,665 |
|
Apex Service Partners, LLC |
|
07/31/25 |
|
Personal, Food and Miscellaneous Services |
|
|
10.52 |
% |
|
SOFR+525 |
|
|
6,424 |
|
|
|
6,380 |
|
|
|
6,408 |
|
Apex Service Partners, LLC Term Loan B |
|
07/31/25 |
|
Personal, Food and Miscellaneous Services |
|
|
11.11 |
% |
|
SOFR+550 |
|
|
3,316 |
|
|
|
3,299 |
|
|
|
3,308 |
|
Apex Service Partners, LLC - Term Loan C |
|
07/31/25 |
|
Personal, Food and Miscellaneous Services |
|
|
10.76 |
% |
|
SOFR+525 |
|
|
7,531 |
|
|
|
7,531 |
|
|
|
7,512 |
|
Applied Technical Services, LLC |
|
12/29/26 |
|
Environmental Services |
|
|
11.51 |
% |
|
SOFR+575 |
|
|
11,394 |
|
|
|
11,271 |
|
|
|
11,166 |
|
Applied Technical Services, LLC - Unfunded Term Loan (3) |
|
12/29/26 |
|
Environmental Services |
|
|
|
|
|
|
|
513 |
|
|
|
- |
|
|
|
(5 |
) |
|
Arcfield Acquisition Corp. |
|
08/03/29 |
|
Aerospace and Defense |
|
|
11.62 |
% |
|
SOFR+625 |
|
|
11,820 |
|
|
|
11,642 |
|
|
|
11,702 |
|
Beta Plus Technologies, Inc. |
|
07/01/29 |
|
Business Services |
|
|
11.14 |
% |
|
SOFR+575 |
|
|
14,850 |
|
|
|
14,604 |
|
|
|
13,811 |
|
Bioderm, Inc. |
|
01/31/28 |
|
Healthcare, Education and Childcare |
|
|
11.83 |
% |
|
SOFR+650 |
|
|
8,978 |
|
|
|
8,874 |
|
|
|
8,933 |
|
Blackhawk Industrial Distribution, Inc. |
|
09/17/24 |
|
Distribution |
|
|
11.79 |
% |
|
SOFR+625 |
|
|
17,823 |
|
|
|
17,588 |
|
|
|
17,556 |
|
Broder Bros., Co. |
|
12/04/25 |
|
Personal and Non-Durable Consumer Products |
|
|
11.50 |
% |
|
SOFR+600 |
|
|
9,683 |
|
|
|
9,683 |
|
|
|
9,683 |
|
Burgess Point Purchaser Corporation |
|
09/26/29 |
|
Auto Sector |
|
|
10.67 |
% |
|
SOFR+525 |
|
|
893 |
|
|
|
836 |
|
|
|
841 |
|
Cartessa Aesthetics, LLC |
|
06/14/28 |
|
Distribution |
|
|
11.39 |
% |
|
SOFR+600 |
|
|
17,281 |
|
|
|
17,013 |
|
|
|
17,281 |
|
CF512, Inc. |
|
08/20/26 |
|
Media |
|
|
11.60 |
% |
|
SOFR+600 |
|
|
2,921 |
|
|
|
2,901 |
|
|
|
2,862 |
|
Connatix Buyer, Inc. |
|
07/13/27 |
|
Media |
|
|
11.16 |
% |
|
SOFR+550 |
|
|
8,808 |
|
|
|
8,792 |
|
|
|
8,500 |
|
Crane 1 Services, Inc. |
|
08/16/27 |
|
Personal, Food and Miscellaneous Services |
|
|
10.90 |
% |
|
SOFR+575 |
|
|
2,575 |
|
|
|
2,550 |
|
|
|
2,562 |
|
Dr. Squatch, LLC |
|
08/31/27 |
|
Personal and Non-Durable Consumer Products |
|
|
11.24 |
% |
|
SOFR+575 |
|
|
10,882 |
|
|
|
10,834 |
|
|
|
10,882 |
|
DRI Holding Inc. |
|
12/21/28 |
|
Media |
|
|
10.67 |
% |
|
SOFR+525 |
|
|
4,382 |
|
|
|
3,959 |
|
|
|
3,993 |
|
DRS Holdings III, Inc. |
|
11/03/25 |
|
Consumer Products |
|
|
11.77 |
% |
|
SOFR+640 |
|
|
14,395 |
|
|
|
14,345 |
|
|
|
14,222 |
|
Duraco Specialty Tapes LLC |
|
06/30/24 |
|
Manufacturing / Basic Industries |
|
|
11.93 |
% |
|
SOFR+650 |
|
|
8,635 |
|
|
|
8,561 |
|
|
|
8,505 |
|
EDS Buyer, LLC |
|
01/10/29 |
|
Aerospace and Defense |
|
|
11.64 |
% |
|
SOFR+625 |
|
|
6,219 |
|
|
|
6,148 |
|
|
|
6,125 |
|
Electro Rent Corporation |
|
01/17/24 |
|
Electronics |
|
|
10.93 |
% |
|
SOFR+550 |
|
|
3,712 |
|
|
|
3,665 |
|
|
|
3,632 |
|
ETE Intermediate II, LLC |
|
05/29/29 |
|
Personal, Food and Miscellaneous Services |
|
|
11.89 |
% |
|
SOFR+650 |
|
|
12,404 |
|
|
|
12,171 |
|
|
|
12,193 |
|
Exigo Intermediate II, LLC |
|
03/15/27 |
|
Business Services |
|
|
11.17 |
% |
|
SOFR+575 |
|
|
9,750 |
|
|
|
9,637 |
|
|
|
9,555 |
|
Fairbanks Morse Defense |
|
06/17/28 |
|
Aerospace and Defense |
|
|
10.40 |
% |
|
SOFR+475 |
|
|
1,518 |
|
|
|
1,470 |
|
|
|
1,506 |
|
Five Star Buyer, Inc. |
|
02/23/28 |
|
Hotels, Motels, Inns and Gaming |
|
|
12.43 |
% |
|
SOFR+700 |
|
|
4,373 |
|
|
|
4,291 |
|
|
|
4,307 |
|
Global Holdings InterCo LLC |
|
03/16/26 |
|
Banking, Finance, Insurance & Real Estate |
|
|
11.96 |
% |
|
SOFR+650 |
|
|
7,027 |
|
|
|
7,008 |
|
|
|
6,676 |
|
Graffiti Buyer, Inc. |
|
08/10/27 |
|
Distribution |
|
|
10.99 |
% |
|
SOFR+575 |
|
|
1,954 |
|
|
|
1,925 |
|
|
|
1,935 |
|
Hancock Roofing and Construction L.L.C. |
|
12/31/26 |
|
Insurance |
|
|
10.93 |
% |
|
SOFR+550 |
|
|
6,423 |
|
|
|
6,423 |
|
|
|
6,262 |
|
Holdco Sands Intermediate, LLC |
|
11/23/28 |
|
Aerospace and Defense |
|
|
11.32 |
% |
|
SOFR+600 |
|
|
19,717 |
|
|
|
19,388 |
|
|
|
19,717 |
|
HV Watterson Holdings, LLC |
|
12/17/26 |
|
Business Services |
|
|
11.79 |
% |
|
SOFR+600 |
|
|
15,140 |
|
|
|
14,974 |
|
|
|
15,110 |
|
HW Holdco, LLC |
|
12/10/24 |
|
Media |
|
|
11.70 |
% |
|
SOFR+625 |
|
|
14,250 |
|
|
|
14,171 |
|
|
|
14,036 |
|
IG Investments Holdings, LLC |
|
09/22/28 |
|
Business Services |
|
|
11.45 |
% |
|
SOFR+600 |
|
|
4,428 |
|
|
|
4,355 |
|
|
|
4,362 |
|
Imagine Acquisitionco, LLC |
|
11/15/27 |
|
Business Services |
|
|
10.72 |
% |
|
SOFR+550 |
|
|
5,565 |
|
|
|
5,481 |
|
|
|
5,482 |
|
Inception Fertility Ventures, LLC |
|
12/31/24 |
|
Healthcare, Education and Childcare |
|
|
12.50 |
% |
|
SOFR+715 |
|
|
19,737 |
|
|
|
19,410 |
|
|
|
19,737 |
|
Infinity Home Services Holdco, Inc. |
|
12/28/28 |
|
Personal, Food and Miscellaneous Services |
|
|
12.24 |
% |
|
SOFR+685 |
|
|
11,053 |
|
|
|
10,867 |
|
|
|
11,053 |
|
Infolinks Media Buyco, LLC |
|
11/01/26 |
|
Media |
|
|
11.17 |
% |
|
SOFR+575 |
|
|
6,364 |
|
|
|
6,364 |
|
|
|
6,364 |
|
Integrity Marketing Acquisition, LLC |
|
08/27/26 |
|
Insurance |
|
|
11.57 |
% |
|
SOFR+575 |
|
|
19,701 |
|
|
|
19,639 |
|
|
|
19,504 |
|
K2 Pure Solutions NoCal, L.P. |
|
12/20/23 |
|
Chemicals, Plastics and Rubber |
|
|
13.42 |
% |
|
SOFR+800 |
|
|
12,061 |
|
|
|
12,040 |
|
|
|
12,061 |
|
Kinetic Purchaser, LLC |
|
11/10/27 |
|
Consumer Products |
|
|
11.54 |
% |
|
SOFR+615 |
|
|
16,920 |
|
|
|
16,641 |
|
|
|
16,666 |
|
LAV Gear Holdings, Inc. |
|
10/31/24 |
|
Leisure, Amusement, Motion Pictures, Entertainment |
|
|
11.46 |
% |
|
SOFR+565 |
|
|
4,658 |
|
|
|
4,631 |
|
|
|
4,603 |
|
Lash OpCo, LLC |
|
02/18/27 |
|
Consumer Products |
|
|
12.13 |
% |
|
SOFR+700 |
|
|
19,723 |
|
|
|
19,565 |
|
|
|
19,526 |
|
Lightspeed Buyer Inc. |
|
02/03/26 |
|
Healthcare, Education and Childcare |
|
|
10.67 |
% |
|
SOFR+575 |
|
|
12,218 |
|
|
|
12,056 |
|
|
|
12,096 |
|
LJ Avalon Holdings, LLC |
|
01/31/30 |
|
Environmental Services |
|
|
11.77 |
% |
|
SOFR+665 |
|
|
6,318 |
|
|
|
6,206 |
|
|
|
6,192 |
|
MAG DS Corp. |
|
04/01/27 |
|
Aerospace and Defense |
|
|
10.99 |
% |
|
SOFR+550 |
|
|
7,601 |
|
|
|
7,153 |
|
|
|
7,202 |
|
Magenta Buyer, LLC |
|
07/31/28 |
|
Software |
|
|
10.63 |
% |
|
SOFR+500 |
|
|
3,785 |
|
|
|
3,550 |
|
|
|
2,805 |
|
Mars Acquisition Holdings Corp. |
|
05/14/26 |
|
Media |
|
|
11.04 |
% |
|
SOFR+550 |
|
|
10,885 |
|
|
|
10,811 |
|
|
|
10,776 |
|
MBS Holdings, Inc. |
|
04/16/27 |
|
Telecommunications |
|
|
11.22 |
% |
|
SOFR+575 |
|
|
7,859 |
|
|
|
7,780 |
|
|
|
7,749 |
|
Meadowlark Acquirer, LLC |
|
12/10/27 |
|
Business Services |
|
|
10.58 |
% |
|
SOFR+550 |
|
|
2,958 |
|
|
|
2,911 |
|
|
|
2,884 |
|
Municipal Emergency Services, Inc. |
|
10/01/27 |
|
Distribution |
|
|
11.04 |
% |
|
SOFR+550 |
|
|
5,975 |
|
|
|
5,860 |
|
|
|
5,843 |
|
NBH Group LLC |
|
08/19/26 |
|
Healthcare, Education and Childcare |
|
|
10.93 |
% |
|
SOFR+525 |
|
|
7,429 |
|
|
|
7,369 |
|
|
|
7,280 |
|
Neptune Flood Incorporated |
|
05/09/29 |
|
Financial Services |
|
|
11.97 |
% |
|
SOFR+660 |
|
|
8,020 |
|
|
|
7,910 |
|
|
|
8,020 |
|
One Stop Mailing, LLC |
|
05/07/27 |
|
Transportation |
|
|
11.68 |
% |
|
SOFR+625 |
|
|
8,470 |
|
|
|
8,311 |
|
|
|
8,470 |
|
Owl Acquisition, LLC |
|
02/04/28 |
|
Education |
|
|
10.80 |
% |
|
SOFR+575 |
|
|
3,893 |
|
|
|
3,794 |
|
|
|
3,834 |
|
Ox Two, LLC (New Issue) |
|
05/18/26 |
|
Distribution |
|
|
12.90 |
% |
|
SOFR+725 |
|
|
4,378 |
|
|
|
4,343 |
|
|
|
4,301 |
|
Pequod Merger Sub, Inc. |
|
12/02/26 |
|
Banking, Finance, Insurance & Real Estate |
|
|
11.79 |
% |
|
SOFR+640 |
|
|
11,474 |
|
|
|
11,267 |
|
|
|
11,244 |
|
PL Acquisitionco, LLC |
|
11/09/27 |
|
Retail |
|
|
12.42 |
% |
|
SOFR+700 |
|
|
7,930 |
|
|
|
7,818 |
|
|
|
7,137 |
|
PlayPower, Inc. |
|
05/08/26 |
|
Consumer Products |
|
|
10.92 |
% |
|
SOFR+565 |
|
|
2,551 |
|
|
|
2,481 |
|
|
|
2,436 |
|
Quantic Electronics, LLC |
|
11/19/26 |
|
Aerospace and Defense |
|
|
11.74 |
% |
|
SOFR+625 |
|
|
3,314 |
|
|
|
3,267 |
|
|
|
3,264 |
|
Radius Aerospace, Inc. |
|
03/31/25 |
|
Aerospace and Defense |
|
|
11.29 |
% |
|
SOFR+575 |
|
|
12,703 |
|
|
|
12,641 |
|
|
|
12,576 |
|
Rancho Health MSO, Inc. |
|
12/18/25 |
|
Healthcare, Education and Childcare |
|
|
11.22 |
% |
|
SOFR+550 |
|
|
5,603 |
|
|
|
5,603 |
|
|
|
5,603 |
|
Reception Purchaser, LLC |
|
4/28/2028 |
|
Transportation |
|
|
11.54 |
% |
|
SOFR+600 |
|
|
5,000 |
|
|
|
4,937 |
|
|
|
4,800 |
|
Recteq, LLC |
|
1/29/2026 |
|
Consumer Products |
|
|
12.54 |
% |
|
SOFR+700 |
|
|
9,750 |
|
|
|
9,655 |
|
|
|
9,458 |
|
Research Now Group, LLC and Dynata, LLC |
|
12/20/2024 |
|
Business Services |
|
|
11.13 |
% |
|
SOFR+550 |
|
|
14,389 |
|
|
|
14,332 |
|
|
|
12,591 |
|
Riverpoint Medical, LLC |
|
6/20/2025 |
|
Healthcare, Education and Childcare |
|
|
10.54 |
% |
|
SOFR+575 |
|
|
3,176 |
|
|
|
3,162 |
|
|
|
3,131 |
|
Riverside Assessments, LLC |
|
3/10/2025 |
|
Education |
|
|
11.29 |
% |
|
SOFR+625 |
|
|
10,895 |
|
|
|
10,834 |
|
|
|
10,786 |
|
Rural Sourcing Holdings, Inc. (HPA SPQ Merger Sub, Inc.) |
|
6/16/2029 |
|
Professional Services |
|
|
11.52 |
% |
|
SOFR+625 |
|
|
3,749 |
|
|
|
3,678 |
|
|
|
3,692 |
|
50
Issuer Name |
|
Maturity |
|
Industry |
|
Current |
|
|
Basis Point |
|
Par |
|
|
Cost |
|
|
Fair Value (2) |
|
||||
Sales Benchmark Index LLC |
|
1/3/2025 |
|
Business Services |
|
|
11.59 |
% |
|
SOFR+600 |
|
|
6,859 |
|
|
$ |
6,815 |
|
|
$ |
6,825 |
|
Sargent & Greenleaf Inc. |
|
12/20/2024 |
|
Electronics |
|
|
12.92 |
% |
|
SOFR+750 |
|
|
4,872 |
|
|
|
4,872 |
|
|
|
4,823 |
|
Seaway Buyer, LLC |
|
6/13/2029 |
|
Chemicals, Plastics and Rubber |
|
|
11.54 |
% |
|
SOFR+605 |
|
|
14,850 |
|
|
|
14,633 |
|
|
|
14,405 |
|
Signature Systems Holding Company |
|
5/3/2024 |
|
Chemicals, Plastics and Rubber |
|
|
12.04 |
% |
|
SOFR+650 |
|
|
11,201 |
|
|
|
11,173 |
|
|
|
11,201 |
|
Skopima Consilio Parent, LLC |
|
5/17/2028 |
|
Business Services |
|
|
9.93 |
% |
|
SOFR+450 |
|
|
1,300 |
|
|
|
1,274 |
|
|
|
1,272 |
|
Solutionreach, Inc. |
|
7/17/2025 |
|
Communications |
|
|
12.37 |
% |
|
SOFR+700 |
|
|
9,239 |
|
|
|
9,206 |
|
|
|
9,202 |
|
SpendMend Holdings, LLC |
|
3/1/2028 |
|
Business Services |
|
|
11.04 |
% |
|
SOFR+575 |
|
|
9,607 |
|
|
|
9,352 |
|
|
|
9,396 |
|
STV Group Incorporated |
|
12/11/2026 |
|
Transportation |
|
|
10.67 |
% |
|
SOFR+525 |
|
|
12,099 |
|
|
|
12,045 |
|
|
|
11,857 |
|
Summit Behavioral Healthcare, LLC |
|
11/24/2028 |
|
Healthcare, Education and Childcare |
|
|
10.43 |
% |
|
SOFR+475 |
|
|
3,572 |
|
|
|
3,389 |
|
|
|
3,559 |
|
System Planning and Analysis, Inc. (f/k/a Management Consulting & Research, LLC) |
|
8/16/2027 |
|
Aerospace and Defense |
|
|
11.49 |
% |
|
SOFR+600 |
|
|
15,966 |
|
|
|
15,695 |
|
|
|
15,790 |
|
Team Services Group, LLC |
|
11/24/2028 |
|
Healthcare, Education and Childcare |
|
|
10.75 |
% |
|
SOFR+515 |
|
|
2,688 |
|
|
|
2,584 |
|
|
|
2,627 |
|
Teneo Holdings LLC |
|
7/18/2025 |
|
Financial Services |
|
|
10.67 |
% |
|
SOFR+525 |
|
|
2,936 |
|
|
|
2,927 |
|
|
|
2,931 |
|
The Aegis Technologies Group, LLC |
|
10/31/2025 |
|
Aerospace and Defense |
|
|
12.04 |
% |
|
SOFR+650 |
|
|
11,095 |
|
|
|
11,008 |
|
|
|
10,929 |
|
The Bluebird Group LLC |
|
7/27/2026 |
|
Business Services |
|
|
12.79 |
% |
|
SOFR+725 |
|
|
7,855 |
|
|
|
7,872 |
|
|
|
7,823 |
|
The Vertex Companies, LLC |
|
8/31/2027 |
|
Business Services |
|
|
11.70 |
% |
|
SOFR+635 |
|
|
7,690 |
|
|
|
7,596 |
|
|
|
7,628 |
|
TPC Canada Parent, Inc. and TPC US Parent, LLC |
|
11/24/2025 |
|
Food |
|
|
10.68 |
% |
|
SOFR+550 |
|
|
5,479 |
|
|
|
5,378 |
|
|
|
5,479 |
|
TWS Acquisition Corporation |
|
6/6/2025 |
|
Education |
|
|
11.80 |
% |
|
SOFR+625 |
|
|
7,177 |
|
|
|
7,161 |
|
|
|
7,177 |
|
Tyto Athene, LLC |
|
4/3/2028 |
|
Aerospace and Defense |
|
|
10.90 |
% |
|
SOFR+550 |
|
|
11,393 |
|
|
|
11,285 |
|
|
|
10,391 |
|
Urology Management Holdings, Inc. |
|
6/15/2026 |
|
Healthcare, Education and Childcare |
|
|
11.79 |
% |
|
SOFR+625 |
|
|
3,860 |
|
|
|
3,792 |
|
|
|
3,780 |
|
Wildcat Buyerco, Inc. |
|
2/27/2026 |
|
Electronics |
|
|
10.54 |
% |
|
SOFR+515 |
|
|
11,386 |
|
|
|
11,323 |
|
|
|
11,272 |
|
Zips Car Wash, LLC |
|
3/1/2024 |
|
Business Services |
|
|
12.67 |
% |
|
SOFR+725 |
|
|
19,682 |
|
|
|
19,582 |
|
|
|
19,042 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total First Lien Secured Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
810,737 |
|
|
|
804,187 |
|
||
Total Investments - 783.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and Cash Equivalents - 57.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
BlackRock Federal FD Institutional 30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,096 |
|
|
|
59,096 |
|
||
Total Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,096 |
|
|
|
59,096 |
|
||
Total Investments and Cash Equivalents - 841.3% |
|
|
|
|
|
|
|
|
|
$ |
869,833 |
|
|
$ |
863,283 |
|
||||||
Liabilities in Excess of Other Assets — (741.3)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(760,665 |
) |
|||||||
Members' Equity—100.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
102,618 |
|
|||
Below are the consolidated statements of assets and liabilities for PSLF,($ in thousands):
|
|
December 31, 2023 (Unaudited) |
|
|
September 30, 2023 |
|
||
Assets |
|
|
|
|
|
|
||
Investments at fair value (amortized cost—$863,478 and $810,737, respectively) |
|
$ |
857,885 |
|
|
$ |
804,187 |
|
Cash and cash equivalents (cost—$54,996 and $59,096, respectively) |
|
|
54,996 |
|
|
|
59,096 |
|
Interest receivable |
|
|
5,738 |
|
|
|
5,248 |
|
Due from affiliate |
|
|
1,358 |
|
|
|
3,296 |
|
Prepaid expenses and other assets |
|
|
710 |
|
|
|
936 |
|
Total assets |
|
|
920,687 |
|
|
|
872,763 |
|
Liabilities |
|
|
|
|
|
|
||
2034 Asset-backed debt, net (par—$246,000) |
|
|
244,381 |
|
|
|
244,284 |
|
2035 Asset-backed debt, net (par—$246,000) |
|
|
243,825 |
|
|
|
243,727 |
|
Notes payable to members |
|
|
169,131 |
|
|
|
169,131 |
|
Credit facility payable |
|
|
131,600 |
|
|
|
88,600 |
|
Interest payable on credit facility and asset backed debt |
|
|
15,495 |
|
|
|
10,421 |
|
Distribution payable to members |
|
|
7,750 |
|
|
|
7,250 |
|
Interest payable on notes to members |
|
|
3,959 |
|
|
|
3,895 |
|
Accounts payable and accrued expenses |
|
|
737 |
|
|
|
835 |
|
Payable for investments purchased |
|
|
— |
|
|
|
2,002 |
|
Total liabilities |
|
|
816,878 |
|
|
|
770,145 |
|
Commitments and contingencies |
|
|
|
|
|
|
||
Members' equity |
|
|
103,809 |
|
|
|
102,618 |
|
Total liabilities and members' equity |
|
$ |
920,687 |
|
|
$ |
872,763 |
|
51
Below are the consolidated statements of operations for PSLF, ($ in thousands):
|
|
|
Three Months Ended December 31, |
|
|||||
|
|
|
2023 |
|
|
2022 |
|
||
Investment income: |
|
|
|
|
|
|
|
||
Interest |
|
|
$ |
27,107 |
|
|
$ |
18,845 |
|
Other income |
|
|
|
140 |
|
|
|
97 |
|
Total investment income |
|
|
|
27,247 |
|
|
|
18,942 |
|
Expenses: (1) |
|
|
|
|
|
|
|
||
Interest expense on credit facility and asset-backed debt |
|
|
|
12,640 |
|
|
|
7,815 |
|
Interest expense on notes to members |
|
|
|
5,844 |
|
|
|
4,723 |
|
Administration fees |
|
|
|
568 |
|
|
|
727 |
|
General and administrative expenses |
|
|
|
197 |
|
|
|
114 |
|
Total expenses |
|
|
|
19,249 |
|
|
|
13,379 |
|
Net investment income |
|
|
|
7,998 |
|
|
|
5,563 |
|
Realized and unrealized gain (loss) on investments: |
|
|
|
|
|
|
|
||
Net realized gain (loss) on investments |
|
|
|
— |
|
|
|
(33 |
) |
Net change in unrealized appreciation (depreciation) on investments |
|
|
|
943 |
|
|
|
(3,922 |
) |
Net realized and unrealized gain (loss) on investments |
|
|
|
943 |
|
|
|
(3,955 |
) |
Net increase (decrease) in members' equity resulting from operations |
|
|
$ |
8,941 |
|
|
$ |
1,608 |
|
(1) No management or incentive fees are payable by PSLF.
Distributions
In order to be treated as a RIC for federal income tax purposes and to not be subject to corporate-level tax on undistributed income or gains, we are required, under Subchapter M of the Code, to annually distribute dividends for U.S. federal income tax purposes to our stockholders out of the assets legally available for distribution of an amount generally at least equal to 90% of our investment company taxable income, determined without regard to any deduction for dividends paid.
Although not required for us to maintain our RIC tax status, in order to preclude the imposition of a 4% nondeductible federal excise tax imposed on RICs, we must distribute dividends for U.S. federal income tax purposes to our stockholders in respect of each calendar year of an amount at least equal to the Excise Tax Avoidance Requirement. In addition, although we may distribute realized net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually, out of the assets legally available for such distributions in the manner described above, we have retained and may continue to retain such net capital gains or investment company taxable income, contingent on our ability to be subject to tax as a RIC, in order to provide us with additional liquidity.
During the three months ended December 31, 2023, we declared distributions of $0.21 per share, for total distributions of $13.7 million. For the same periods in the prior year, we declared distributions of $0.17 per share, for total distributions of $10.8 million. We monitor available net investment income to determine if a return of capital for tax purposes may occur for the fiscal year. To the extent our taxable earnings fall below the total amount of our distributions for any given fiscal year, stockholders will be notified of the portion of those distributions deemed to be a tax return of capital. Tax characteristics of all distributions will be reported to stockholders subject to information reporting on Form 1099-DIV after the end of each calendar year and in our periodic reports filed with the SEC.
Effective October 2023, we changed from a quarterly distribution to a monthly distribution. We intend to continue to make monthly distributions to our stockholders. Our monthly distributions, if any, are determined by our board of directors.
We maintain an “opt out” dividend reinvestment plan for our common stockholders. As a result, if we declare a distribution, then stockholders’ cash distributions will be automatically reinvested in additional shares of our common stock, unless they specifically “opt out” of the dividend reinvestment plan so as to receive cash distributions.
We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage ratio for borrowings applicable to us as a BDC under the 1940 Act and/or due to provisions in future credit facilities. If we do not distribute at least a certain percentage of our income annually, we could suffer adverse tax consequences, including possible loss of our ability to be subject to tax as a RIC. We cannot assure stockholders that they will receive any distributions at a particular level.
Recent Accounting Pronouncements
In March 2020, the FASB issued Accounting Standards Update, or ASU, No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. ASU 2020-04 is effective for all entities as of March 12, 2020 through June 30, 2023. The FASB approved an (optional) two year extension to December 31, 2024, for transitioning away from LIBOR. The Company utilized the optional expedients and exceptions provided by ASU 2020-04 during the three months ended December 31, 2023, the effect of which was not material to the consolidated financial statements and the notes thereto.
In March 2022, the FASB issued ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326)”, which is intended to address issues identified during the post-implementation review of ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendment, among other things, eliminates the accounting guidance for troubled debt restructurings by creditors in Subtopic 310-40, “Receivables - Troubled Debt Restructurings by Creditors”, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The new guidance is effective for interim and annual periods beginning after December 15, 2022. The Company has adopted the new accounting standard implementing appropriate controls and procedures, the effect of which was not material to the consolidated financial statements and the notes thereto.
In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, or ASU 2022-03, which changed the fair value measurement disclosure requirements of ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820. The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods therein. Early application is permitted. The Company is currently evaluating the impact the adoption of this new accounting standard will have on its consolidated financial statements, but the impact of the adoption is not expected to be material.
52
Share Repurchase Program
On February 9, 2022, we announced a share repurchase program which allows us to repurchase up to $25 million of our outstanding common shares in the open market at prices below our net asset value as reported in our then most recently published consolidated financial statements. During the three months ended December 31, 2022, we did not make any repurchases of our common shares. The program expired on March 31, 2023.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are subject to financial market risks, including changes in interest rates. As of December 31, 2023, our debt portfolio consisted of 96% variable-rate investments and 4% fixed rate investments. The variable-rate loans are usually based on a SOFR (or an alternative risk-free floating interest rate index) rate and typically have durations of three months after which they reset to current market interest rates. Variable-rate investments subject to a floor generally reset by reference to the current market index after one to nine months only if the index exceeds the floor. In regards to variable-rate instruments with a floor, we do not benefit from increases in interest rates until such rates exceed the floor and thereafter benefit from market rates above any such floor. In contrast, our cost of funds, to the extent it is not fixed, will fluctuate with changes in interest rates since it has no floor.
Assuming that the most recent Consolidated Statements of Assets and Liabilities was to remain constant, and no actions were taken to alter the interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates:
Change in Interest Rates |
|
Change in Interest Income, |
|
|
Change in Interest Income, |
|
||
Down 1% |
|
$ |
(5,112 |
) |
|
$ |
(0.08 |
) |
Up 1% |
|
|
5,112 |
|
|
|
0.08 |
|
Up 2% |
|
|
10,225 |
|
|
|
0.16 |
|
Up 3% |
|
|
15,337 |
|
|
|
0.24 |
|
Up 4% |
|
|
20,465 |
|
|
|
0.31 |
|
Although management believes that this measure is indicative of our sensitivity to interest rate changes, it does not adjust for potential changes in the credit market, credit quality, size and composition of the assets on the Consolidated Statements of Assets and Liabilities and other business developments that could affect net increase in net assets resulting from operations, or net investment income. Accordingly, no assurances can be given that actual results would not differ materially from those shown above.
Because we borrow money to make investments, our net investment income is dependent upon the difference between the rate at which we borrow funds and the rate at which we invest these funds as well as our level of leverage. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income or net assets.
We may hedge against interest rate and foreign currency fluctuations by using standard hedging instruments such as futures, options and forward contracts or our Truist Credit Facility subject to the requirements of the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in interest rates and foreign currencies, they may also limit our ability to participate in the benefits of lower interest rates or higher exchange rates with respect to our portfolio of investments with fixed interest rates or investments denominated in foreign currencies. During the periods covered by this Report, we did not engage in interest rate hedging activities or foreign currency derivatives hedging activities.
Item 4. Controls and Procedures
As of the quarter ended December 31, 2023, we, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). As disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, a material weakness was previously identified in connection with our internal control over financial reporting relating to the review of quarterly cash and investment reconciliations. Additionally, a material weakness was identified in the operation of our internal controls over financial reporting relating to our review of interest income and non-accrual classification of investments. We have taken steps to remediate these material weaknesses, which steps have included (i) enhancing existing controls to ensure the appropriate review of the quarterly cash and investment reconciliation and that it is adequately documented so as to provide evidence that the controls are operating effectively (ii) enhancing existing controls to ensure that our internal controls over financial reporting relating to our analysis of interest income and assessment of investments for classification as non-accrual investments are operating effectively and (iii) enhancing policies and procedures to demonstrate a commitment to improving our overall control environment.
Taking the above efforts into consideration, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures for the quarter ended December 31, 2023 were effective and provided reasonable assurance that information required to be disclosed in our periodic filings with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.
Other than disclosed in this Item 4, there have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
53
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
None of us, our Investment Adviser or our Administrator, is currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us, or against our Investment Adviser or Administrator. From time to time, we, our Investment Adviser or Administrator may be a party to certain legal proceedings, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.
Item 1A. Risk Factors
In addition to the other information set forth in this Report, you should consider carefully the factors discussed below, as well as in Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, filed on December 8, 2023, which could materially affect our business, financial condition and/or operating results. The risks as in our Annual Report on Form 10-K, are not the only risks facing PennantPark Investment Corp. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
No unregistered securities were sold in the quarter ended December 31, 2023.
Issuer Purchases of Equity Securities
Repurchases of our common stock under our share repurchase program are as follows:
Period |
|
Total Number of Shares Purchased |
|
|
Average Price per Share |
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) |
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) |
|
||||
January 1, 2022 through March 31, 2022 |
|
|
913,454 |
|
|
$ |
7.72 |
|
|
|
913,454 |
|
|
$ |
17,944 |
|
April 1, 2022 through June 30, 2022 |
|
|
717,709 |
|
|
$ |
6.91 |
|
|
|
1,631,163 |
|
|
$ |
12,986 |
|
July 1, 2022 through September 30, 2022 |
|
|
189,442 |
|
|
$ |
6.52 |
|
|
|
1,820,605 |
|
|
$ |
11,751 |
|
October 1, 2022 through December 31, 2022 |
|
|
— |
|
|
$ |
- |
|
|
|
1,820,605 |
|
|
$ |
11,751 |
|
January 1, 2023 through March 31, 2023 |
|
|
— |
|
|
$ |
- |
|
|
|
1,820,605 |
|
|
$ |
- |
|
Total investments |
|
|
1,820,605 |
|
|
$ |
7.28 |
|
|
|
|
|
|
|
||
—————————
(1) |
The program expired on March 31, 2023 and we purchased $1.8 million shares of our common stock in open market transaction while the program was in effect for an aggregate cost (including transaction costs) of $13.2 million. |
54
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
10b5-1 Disclosure
None of the officers or directors of the Company have
55
Item 6. Exhibits
Unless specifically indicated otherwise, the following exhibits are incorporated by reference to exhibits previously filed with the SEC:
3.1 |
|
|
|
3.2 |
|
|
|
4.1 |
|
|
|
31.1* |
|
|
|
31.2* |
|
|
|
32.1* |
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
32.2* |
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
99.1 |
|
|
|
101.INS* |
Inline XBRL Instance Document-the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document |
|
|
101.SCH* |
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
|
|
101.CAL* |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
101.DEF* |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
101.LAB* |
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
101.PRE* |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
104 |
Cover Page formatted as Inline XBRL and contained in Exhibit 101 |
* Filed herewith.
56
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
PENNANTPARK INVESTMENT CORPORATION |
||
|
|
|
||
Date: February 7, 2024 |
|
By: |
|
/s/ Arthur H. Penn |
|
|
|
|
Arthur H. Penn |
|
|
|
|
Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer) |
|
|
|
||
Date: February 7, 2024 |
|
By: |
|
/s/ Richard T. Allorto, Jr. |
|
|
|
|
Richard T. Allorto, Jr. |
|
|
|
|
Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) |
57