10-Q 1 psec10-qq32022.htm 10-Q Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number: 814-00659 
PROSPECT CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Maryland43-2048643
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
10 East 40th Street, 42nd Floor 
New York, New York10016
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (212) 448-0702
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbolsName of each exchange on which registered
Common Stock, $0.001 par valuePSECNASDAQ Global Select Market
5.35% Series A Fixed Rate Cumulative Perpetual Preferred Stock, par value $0.001PSEC PRANew York Stock Exchange
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. Yes ý    No o
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). Yes o    No o
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 ý
Accelerated filer o
Non-accelerated filer o
Smaller reporting company o
Emerging growth company o
 (Do not check if a smaller reporting company)
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. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o    No ý
As of May 6, 2022, there were 392,150,844 shares of the registrant’s common stock, $0.001 par value per share, outstanding.




Table of Contents
  Page
PART IFINANCIAL INFORMATION
Item 1.
Financial Statements
PART IIOTHER INFORMATION




FORWARD-LOOKING STATEMENTS
This report contains information that may constitute “forward-looking statements.” Generally, the words “believe,” “expect,”
“intend,” “estimate,” “anticipate,” “project,” “will,” “should,” “could,” “may,” “plan” and similar expressions identify forward-looking statements, which generally are not historical in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future—including statements relating to volume growth, share of sales and earnings per share growth, and statements expressing general views about future operating results—are forward-looking statements. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in Part II, “Item 1A. Risk Factors” and elsewhere in this report and in our Annual Report on Form 10-K for the year ended June 30, 2021, and those described from time to time in reports that we have filed or in the future may file with the Securities and Exchange Commission.

The forward-looking statements contained in this report involve a number of risks and uncertainties, including statements concerning:

our future operating results;
our business prospects and the prospects of our portfolio companies;
the impact of investments that we expect to make;
our contractual arrangements and relationships with third parties;
the dependence of our future success on the general economy and its impact on the industries in which we invest;
the impact of global health epidemics, including, but not limited to, the recent and ongoing novel coronavirus pandemic, on our and our portfolio companies’ business and the global economy;
uncertainty surrounding the financial stability of the United States, Europe, and China;
the ability of our portfolio companies to achieve their objectives;
difficulty in obtaining financing or raising capital, especially in the current credit and equity environment, and the impact of a protracted decline in the liquidity of credit markets on our and our portfolio companies’ business;
the level and volatility of prevailing interest rates and credit spreads, magnified by the current turmoil in the credit markets;
the impact of changes in the London Interbank Offered Rate (“LIBOR”), the cessation of publication of certain LIBOR rates as of March 31, 2022 and in the future and the new use of the Secured Overnight Financing Rate (“SOFR”) on our operating results;
adverse developments in the availability of desirable loan and investment opportunities whether they are due to competition, regulation or otherwise;
a compression of the yield on our investments and the cost of our liabilities, as well as the level of leverage available to us;
our regulatory structure and tax treatment, including our ability to operate as a business development company and a regulated investment company;
the adequacy of our cash resources and working capital;
the timing of cash flows, if any, from the operations of our portfolio companies;
the ability of our investment adviser to locate suitable investments for us and to monitor and administer our investments;
authoritative generally accepted accounting principles or policy changes from such standard-setting bodies as the Financial Accounting Standards Board, the Securities and Exchange Commission, Internal Revenue Service, the NASDAQ Global Select Market, the New York Stock Exchange LLC, and other authorities that we are subject to, as well as their counterparts in any foreign jurisdictions where we might do business; and
any of the other risks, uncertainties and other factors we identify herein or in our Annual Report on Form 10-K for the year ended June 30, 2021.

3


PART I
Item 1. Financial Statements
PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except share and per share data)
March 31, 2022June 30, 2021
(Unaudited)(Audited)
Assets 
Investments at fair value:  
Control investments (amortized cost of $2,588,661 and $2,482,431, respectively)$3,378,505 $2,919,717 
Affiliate investments (amortized cost of $237,845 and $202,943, respectively)417,652 356,734 
Non-control/non-affiliate investments (amortized cost of $4,061,431 and $3,372,750, respectively)3,633,774 2,925,327 
Total investments at fair value (amortized cost of $6,887,937 and $6,058,124, respectively)7,429,931 6,201,778 
Cash36,402 63,610 
Receivables for:
Interest, net12,969 12,575 
Other525 365 
Deferred financing costs on Revolving Credit Facility (Note 4)11,504 11,141 
Due from broker4,055 12,551 
Prepaid expenses299 1,072 
Total Assets 
7,495,685 6,303,092 
Liabilities 
  
Revolving Credit Facility (Notes 4 and 8)699,440 356,937 
Public Notes (less unamortized discount and debt issuance costs of $23,601 and $20,061,
  respectively) (Notes 6 and 8)
1,341,858 1,114,717 
Prospect Capital InterNotes® (less unamortized debt issuance costs of $7,196 and $10,496,
   respectively) (Notes 7 and 8)
333,578 498,215 
Convertible Notes (less unamortized debt issuance costs of $2,794 and $4,123, respectively) (Notes 5 and 8)213,875 263,100 
Due to Prospect Capital Management (Note 13)56,399 48,612 
Dividends payable23,529 23,313 
Interest payable19,501 27,359 
Due to broker— 14,854 
Accrued expenses3,417 5,151 
Due to Prospect Administration (Note 13)2,855 4,835 
Other liabilities338 482 
Total Liabilities 
2,694,790 2,357,575 
Commitments and Contingencies (Note 3)
Preferred Stock, par value $0.001 per share (167,900,000 shares authorized, with 40,000,000 shares of preferred stock authorized for each of the Series A1, Series M1, and Series M2 and 20,000,000 shares of preferred stock authorized for each of the Series AA1 and Series MM1 and 1,000,000 shares of preferred stock authorized for the Series A2 and 6,900,000 shares of preferred stock authorized for the Series A; 16,394,214 Series A1 shares issued and outstanding; 1,380,203 Series M1 shares issued and outstanding; 0 Series M2 shares issued and outstanding; 0 Series AA1 shares issued and outstanding; 0 Series MM1 shares issued and outstanding; 187,000 Series A2 shares issued and outstanding; and 6,000,000 Series A shares issued and outstanding as of March 31, 2022) at carrying value plus cumulative accrued and unpaid dividends (Note 9)564,884 — 
Net Assets as of June 30, 2021$— $3,945,517 
Net Assets Applicable to Common Shares as of March 31, 2022$4,236,011 $— 
Components of Net Assets Applicable to Common Shares and Net Assets, respectively  
Preferred Stock, par value $0.001 per share (141,000,000 shares authorized, with 40,000,000 shares of preferred stock authorized for each of the Series A1, Series M1, and Series M2 and 20,000,000 shares of preferred stock authorized for the Series AA1 and 1,000,000 shares of preferred stock authorized for the Series A2; 5,163,926 Series A1 shares issued and outstanding; 130,666 Series M1 shares issued and outstanding; 0 Series M2 shares issued and outstanding; 0 Series AA1 shares issued and outstanding; and 187,000 Series A2 shares issued and outstanding as of June 30, 2021) (Note 9)$— 137,040 
Common stock, par value $0.001 per share (1,832,100,000 common shares authorized; 391,718,136 and 388,419,573 issued and outstanding, respectively) (Note 9)392 388 
Paid-in capital in excess of par (Note 9 and 12)4,039,944 4,018,659 
Total distributable earnings (loss) (Note 12)195,675 (210,570)
Net Assets as of June 30, 2021$— $3,945,517 
Net Assets Applicable to Common Shares as of March 31, 2022$4,236,011 $— 
Net Asset Value Per Common Share (Note 16) 
$10.81 $9.81 
See notes to consolidated financial statements.
4


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(Unaudited)
Three Months Ended March 31,Nine Months Ended March 31,
 2022202120222021
Investment Income
Interest income:
Control investments$53,095 $52,056 $166,036 $151,416 
Affiliate investments6,745 6,145 23,497 24,333 
Non-control/non-affiliate investments65,037 52,846 182,698 156,125 
Structured credit securities17,612 28,536 58,702 84,735 
Total interest income142,489 139,583 430,933 416,609 
Dividend income:
Control investments5,197 1,384 12,134 3,645 
Affiliate investments95 — 95 — 
Non-control/non-affiliate investments14 18 48 62 
Total dividend income5,306 1,402 12,277 3,707 
Other income:
Control investments26,571 15,877 55,306 45,493 
Affiliate investments19 38 3,961 102 
Non-control/non-affiliate investments7,046 2,556 23,804 8,717 
Total other income (Note 10)33,636 18,471 83,071 54,312 
Total Investment Income181,431 159,456 526,281 474,628 
Operating Expenses
Base management fee (Note 13)36,426 29,183 102,472 83,866 
Income incentive fee (Note 13)19,967 18,251 59,296 53,354 
Interest and credit facility expenses29,235 32,773 86,952 100,549 
Allocation of overhead from Prospect Administration (Note 13)4,126 2,685 10,891 10,768 
Audit, compliance and tax related fees994 989 1,940 2,267 
Directors’ fees131 113 360 339 
Other general and administrative expenses3,547 2,060 10,439 10,977 
Total Operating Expenses94,426 86,054 272,350 262,120 
Net Investment Income87,005 73,402 253,931 212,508 
Net Realized and Net Change in Unrealized Gains (Losses) from Investments
Net realized gains (losses)
Control investments5,298 121 5,304 2,953 
Affiliate investments— 745 — 4,469 
Non-control/non-affiliate investments(7,552)15 (17,386)29 
Net realized (losses) gains(2,254)881 (12,082)7,451 
Net change in unrealized gains
Control investments96,162 142,379 352,558 323,967 
Affiliate investments(11,610)21,876 26,016 107,582 
Non-control/non-affiliate investments(4,066)20,705 19,766 87,028 
Net change in unrealized gains80,486 184,960 398,340 518,577 
Net Realized and Net Change in Unrealized Gains from Investments78,232 185,841 386,258 526,028 
Net realized (losses) on extinguishment of debt(941)(12,835)(10,149)(18,415)
Net Increase in Net Assets Resulting from Operations164,296 246,408 630,040 720,121 
Preferred stock dividends7,139 400 16,748 446 
Net Increase in Net Assets Resulting from Operations applicable to Common Stockholders$157,157 $246,008 $613,292 $719,675 
Basic and diluted earnings per common share (Note 11)
Basic$0.40 $0.64 $1.57 $1.89 
Diluted$0.38 $0.63 $1.50 $1.88 
Weighted-average shares of common stock outstanding (Note 11)
Basic391,091,485385,996,921 389,981,608 380,985,329 
Diluted432,808,120389,420,855 419,914,712 382,259,257 

See notes to consolidated financial statements.
5

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(in thousands, except share data)
(Unaudited)

Common Stock
For the Three Months Ended March 31, 2022SharesParPaid-in-capital in excess of par(1)Distributable Earnings (Loss)(1)Total Net Asset Applicable to Common Shares
Balance as of December 31, 2021(1)390,584,255$391$4,030,760 $108,977 $4,140,128 
Net Increase in Net Assets resulting from Operations:
Net investment income87,005 87,005 
Net realized losses(3,195)(3,195)
Net change in unrealized gains80,486 80,486 
Distributions to Shareholders
Distributions from earnings(77,578)(77,578)
Capital Transactions
Shares issued through reinvestment of dividends1,120,220 9,049 9,050 
Conversion of preferred stock to common stock13,661 — 115 115 
Tax reclassifications of net assets (Note 12)20 (20)— 
Total increase for the three months ended March 31, 20221,133,881 9,184 86,698 95,883 
Balance as of March 31, 2022391,718,136 $392 $4,039,944 $195,675 $4,236,011 


Preferred Stock Common Stock
For the Three Months Ended March 31, 2021Liquidation ValueSharesParPaid-in capital in excess of par(1)Distributable earnings (loss)(1)Total Net Assets
Balance as of December 31, 2020$13,786 384,097,645$384$4,023,978 $(581,628)$3,456,520 
Net Increase in Net Assets resulting from Operations:
Net investment income73,402 73,402 
Net realized losses(11,954)(11,954)
Net change in unrealized gains184,960 184,960 
Distributions to Shareholders(1)
Distributions from earnings(58,979)(58,979)
Return of capital to common stockholders(Note 12)(11,024)(11,024)
Capital Transactions
Issuance of preferred stock53,185 (5,579)47,606 
Shares issued through reinvestment of dividends3,292,927 21,297 21,309 
Conversion of preferred stock to common stock(80)9,982 — 80 — 
Total increase for the three months ended March 31, 202153,114 3,302,909 4,774 187,429 245,320 
Balance as of March 31, 2021(1)$66,900 387,400,554 $387 $4,028,752 $(394,199)$3,701,840 
(1) Certain reclassifications have been made in the presentation of prior year and prior quarter amounts to conform to the presentation for the current fiscal year. See Note 2 and Note 12 within the accompanying notes to consolidated financial statements for further discussion.

See notes to consolidated financial statements.
6


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
(in thousands, except share data)
(Unaudited)



Preferred Stock Common Stock
Nine Months Ended March 31, 2022Liquidation ValueSharesParPaid-in capital in excess of par(1)Distributable earnings (loss)(1)Total Net Assets
Balance as of June 30, 2021(1)$137,040 388,419,573$388$4,018,659 $(210,570)$3,945,517 
Net Increase in Net Assets Resulting from Operations:
Net investment income253,931 253,931 
Net realized losses(22,231)(22,231)
Net change in unrealized gains398,340 398,340 
Distributions to Shareholders(1)
Distributions from earnings(223,775)(223,775)
Return of capital to common stockholders (Note 12)(3,695)(3,695)
Capital Transactions
Issuance of preferred stock7,866 (13,239)(5,373)
Reclassification of preferred stock issuance costs to temporary equity(3)11,970 11,970 
Shares issued through reinvestment of dividends3,268,814 25,970 25,982 
Conversion of preferred stock to common stock29,749 259 259 
Reclassification of preferred stock to temporary equity(2)(144,914)(144,914)
Tax reclassifications of net assets (Note 12)20 (20)— 
Total (decrease) increase for the nine months ended March 31, 2022(137,040)3,298,563 21,285 406,245 290,494 
Balance as of March 31, 2022$— 391,718,136 $392 $4,039,944 $195,675 $4,236,011 

Preferred StockCommon Stock
Nine Months Ended March 31, 2021Liquidation ValueSharesParPaid-in capital in excess of par(1)Distributable earnings (loss)(1)Total Net Assets
Balance as of June 30, 2020$— 373,538,499 $374 $3,986,417 $(930,930)$3,055,861 
Net Increase in Net Assets Resulting from Operations:
Net investment income212,508 212,508 
Net realized losses(10,964)(10,964)
Net change in unrealized gains518,577 518,577 
Distributions to Shareholders(1)
Distributions from earnings(183,447)(183,447)
Return of capital to common stockholders(Note 12)(23,287)(23,287)
Capital Transactions
Issuance of Preferred Stock66,971 (7,610)59,361 
Shares issued through reinvestment of dividends13,852,073 13 73,209 73,231 
Conversion of preferred stock to common stock(80)9,982 80 — 
Tax reclassifications of net assets (Note 12)(57)57 — 
Total increase for the nine months ended March 31, 202166,900 13,862,055 13 42,335 536,731 645,979 
Balance as of March 31, 2021(1)$66,900 387,400,554 $387 $4,028,752 $(394,199)$3,701,840 

(1) Certain reclassifications have been made in the presentation of prior year and prior quarter amounts to conform to the presentation for the current fiscal year. See Note 2 and Note 12 within the accompanying notes to consolidated financial statements for further discussion.
(2) Preferred Stock issued prior to our 5.35% Series A Preferred Stock issuance reclassified to temporary equity. Refer to Note 9 within the accompanying notes to the consolidated financial statements for further discussion.
(3) Preferred stock issuance costs include offering costs and underwriting costs related to the issuance of preferred stock. During the nine months ended March 31, 2022, we have reclassified all preferred stock issuance costs related to preferred stock issued as temporary equity following our reclassification of preferred stock during the three months ended September 30, 2021. Refer to Note 9 within the accompanying notes to the consolidated financial statements for further discussion.

See notes to consolidated financial statements.
7

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except share data)
(Unaudited)
 Nine Months Ended March 31,
 20222021
Operating Activities
Net increase in net assets resulting from operations $630,040 $720,121 
Net realized losses on extinguishment of debt 10,149 18,415 
Net realized losses (gains) on investments12,082 (7,451)
Net change in unrealized (gains) on investments(398,340)(518,577)
Amortization of discounts (accretion of premiums), net62,435 (17,163)
Accretion of original issue discount2,063 903 
Amortization of deferred financing costs6,242 5,527 
Payment-in-kind interest(61,030)(58,750)
Structuring fees(16,437)(20,620)
Change in operating assets and liabilities:
Payments for purchases of investments(1,767,402)(701,768)
Proceeds from sale of investments and collection of investment principal940,539 673,329 
(Decrease) increase in due to broker (14,854)48,668 
Increase in due to Prospect Capital Management 7,787 4,960 
Increase in interest receivable, net (394)(1,892)
Decrease in interest payable(7,858)(12,335)
Decrease in accrued expenses (1,734)(217)
Decrease in due from broker 8,496 1,524 
Decrease in other liabilities (144)(1,252)
Increase in other receivables (160)(179)
Increase in due from Prospect Administration— (38)
Decrease in prepaid expenses 773 1,053 
Decrease in due to Prospect Administration (1,980)(3,255)
Net Cash (Used in) Provided by Operating Activities (589,727)131,003 
Financing Activities
Borrowings under Revolving Credit Facility (Note 4)1,627,051 668,000 
Principal payments under Revolving Credit Facility (Note 4)(1,284,548)(561,999)
Issuances of Public Notes, net of original issue discount (Note 6)294,798 395,781 
Redemptions of Public Notes (Note 6)(69,319)(290,419)
Redemptions of Convertible Notes, net (Note 5)(51,872)(199,626)
Issuances of Prospect Capital InterNotes® (Note 7)155,909 109,562 
Redemptions of Prospect Capital InterNotes®, net (Note 7)(323,846)(116,511)
Financing costs paid and deferred(11,206)(6,053)
Proceeds from issuance of preferred stock, net of underwriting costs429,433 61,823 
Offering costs from issuance of preferred stock(4,184)(2,462)
Dividends paid and distributions to stockholders(199,697)(132,671)
Net Cash Provided by (Used in) Financing Activities562,519 (74,575)
Net (Decrease) Increase in Cash (27,208)56,428 
Cash at beginning of period63,610 44,561 
Cash at End of Period$36,402 $100,989 
Supplemental Disclosures
Cash paid for interest$86,505 $106,454 
Non-Cash Financing Activities
Value of shares issued through reinvestment of dividends$26,083 $73,222 
See notes to consolidated financial statements.
8

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2022 (Unaudited)
(in thousands, except share data)

March 31, 2022 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Control Investments (greater than 25.00% voting control)(40)
CP Energy Services Inc. (20)Energy Equipment & ServicesFirst Lien Term Loan10/1/201712.01% (3ML+ 11.00%)1.001/31/2024$45,322$45,322$45,3221.1%(10)(39)
First Lien Term Loan A to Spartan Energy Services, LLC10/20/20149.00% (1ML+ 8.00%)1.0012/31/202226,25826,25826,2580.6%(10)(39)
Series A Preferred Units to Spartan Energy Holdings, Inc. (10,000 shares)9/25/2020N/A26,19326,1930.6%(16)
Series B Convertible Preferred Stock (790 shares)10/30/2015N/A63,22520,6880.5%(16)
Common Stock (102,924 shares)8/2/2013N/A86,240—%(16)
  247,238118,4612.8%
Credit Central Loan Company, LLC (21)Consumer FinanceFirst Lien Term Loan12/28/201210.00% plus 10.00% PIK6/30/202574,70272,60274,7021.9%(14)(39)
Class A Units (14,867,312 units)12/28/2012N/A19,33111,4540.3%(14)(16)
Net Revenues Interest (25% of Net Revenues)1/28/2015N/A—%(14)(16)
  91,93386,1562.2%
Echelon Transportation, LLC Aerospace & DefenseFirst Lien Term Loan3/31/20146.00% (1ML+ 4.00%)2.003/31/202453,20953,20953,2091.3%(10)(39)
Preferred Units (32,842,586 shares)1/31/2022N/A32,84314,7500.3%(16)
Membership Interest (100%)3/31/2014N/A22,738—%(16)
  108,79067,9591.6%
First Tower Finance Company LLC (23)Consumer FinanceFirst Lien Term Loan to First Tower, LLC6/24/201410.00% plus 12.00% PIK2/18/2025348,484348,484348,4848.3%(14)(39)
Class A Units (95,709,910 units)6/14/2012N/A31,146296,6727.0%(14)(16)
  379,630645,15615.3%
Freedom Marine Solutions, LLC (24)Energy Equipment & ServicesMembership Interest (100%)11/9/2006N/A44,49211,9380.3%(16)
  44,49211,9380.3%
InterDent, Inc. Health Care Providers & ServicesFirst Lien Term Loan A/B8/1/201816.65% (1ML+ 14.65%)2.009/5/202514,24914,24914,2490.3%(10)
First Lien Term Loan A8/3/20126.50% (1ML+ 5.50%)1.009/5/202596,77396,77396,7732.3%(3)(10)
First Lien Term Loan B8/3/201212.00% PIK9/5/2025157,644157,644157,6443.8%(39)
Common Stock (99,900 shares)5/3/2019N/A45,118141,0913.3%(16)
  313,784409,7579.7%
Kickapoo Ranch Pet Resort Diversified Consumer ServicesMembership Interest (100%)8/26/2019N/A2,3783,8330.1%(16)
  2,3783,8330.1%
MITY, Inc. (25)Commercial Services & SuppliesFirst Lien Term Loan A9/19/201310.00% (3ML+ 7.00%)3.004/30/202531,94431,94431,9440.8%(10)(39)
First Lien Term Loan B6/23/201410.00% (3ML+ 7.00%) plus 10.00% PIK3.004/30/202518,40418,40418,4040.4%(10)(39)
Unsecured Note to Broda Enterprises ULC9/19/201310.00%1/1/20285,7197,2005,7190.1%(14)
Common Stock (42,053 shares)9/19/2013N/A27,3494,4280.1%(16)
  84,89760,4951.4%
See notes to consolidated financial statements.
9

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2022 (Unaudited)
(in thousands, except share data)
March 31, 2022 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Control Investments (greater than 25.00% voting control)(40)
National Property REIT Corp. (26)Equity Real Estate Investment Trusts (REITs) / Online Lending / Structured FinanceFirst Lien Term Loan A12/31/20184.44% (3ML+ 1.44%) plus 3.53% PIK3.0012/31/2023$378,861$378,861$378,8618.9%(10)(39)
First Lien Term Loan B12/31/20185.00% (3ML+ 2.00%) plus 5.50% PIK3.0012/31/202329,08029,08029,0800.7%(10)(39)
First Lien Term Loan C10/31/201911.01% (3ML+ 10.00%) plus 2.25% PIK1.0012/31/2023140,800140,800140,8003.3%(10)(39)
First Lien Term Loan D6/19/20203.50% (3ML+ 0.50%) plus 2.50% PIK3.0012/31/2023183,425183,425183,4254.3%(10)(39)
Residual Profit Interest12/31/2018N/A63,1931.5%(35)
Common Stock (3,318,230 shares)12/31/2013N/A11,830733,21717.4%(16)(45)
  743,9961,528,57636.1%
Nationwide Loan Company LLC (27)Consumer FinanceFirst Lien Term Loan6/18/201410.00% plus 10.00% PIK6/18/202220,26020,26020,2600.5%(14)(39)
Class A Units (38,550,460 units)1/31/2013N/A20,84630,0540.7%(14)
  41,10650,3141.2%
NMMB, Inc. (28)MediaFirst Lien Term Loan12/30/201910.50% (3ML+ 8.50%)2.003/31/202729,76029,76029,7600.7%(3)(10)
Common Stock (21,418 shares)12/30/2019N/A50,5081.1%
  29,76080,2681.8%
Pacific World Corporation (36)Personal ProductsFirst Lien Revolving Line of Credit - $26,000 Commitment9/26/20148.25% (1ML+ 7.25%)1.009/26/202526,17426,17426,1740.6%(10)(15)(39)
First Lien Term Loan A12/31/20146.25% PIK (1ML+ 5.25%)1.009/26/202543,63943,63930,6130.7%(10)(39)
Convertible Preferred Equity (318,038 shares)6/15/2018N/A189,295—%(16)
Common Stock (6,778,414 shares)9/29/2017N/A—%(16)
  259,10856,7871.3%
R-V Industries, Inc. MachineryFirst Lien Term Loan12/15/202010.01% (3ML+ 9.00%)1.0012/15/202833,62233,62233,6220.8%(3)(10)
Common Stock (745,107 shares)6/26/2007N/A6,86625,1330.6%
  40,48858,7551.4%
Universal Turbine Parts, LLC (34)Trading Companies & DistributorsFirst Lien Delayed Draw Term Loan - $6,965 Commitment2/28/201910.25% (1ML+ 7.75%)2.504/5/20243,1493,1493,1490.1%(10)(15)
First Lien Term Loan A7/22/20166.76% (3ML+ 5.75%)1.004/5/202429,57529,57522,6180.5%(10)
Preferred Units (47,244,213 units)3/31/2021N/A32,500—%(16)
Common Stock (10,000 units)12/10/2018N/A—%(16)
  65,22425,7670.6%
USES Corp. (30)Commercial Services & SuppliesFirst Lien Term Loan A3/31/20149.00% PIK7/29/202459,01030,65123,9160.6%(9)
First Lien Term Loan B3/31/201415.50% PIK7/29/202487,11835,568—%(9)
First Lien Term Loan12/30/202010.00% (1ML+ 9.00%)1.007/29/20242,0002,0002,000—%(10)
Common Stock (268,962 shares)6/15/2016N/A—%(16)
  68,21925,9160.6%
Valley Electric Company, Inc. (31)Construction & EngineeringFirst Lien Term Loan to Valley Electric Co. of Mt. Vernon, Inc.12/31/20128.00% (3ML+ 5.00%) plus 2.50% PIK3.0012/31/202410,45210,45210,4520.2%(3)(10)(39)
First Lien Term Loan6/24/20148.00% plus 10.00% PIK6/23/202433,30133,30133,3010.8%(39)
First Lien Term Loan B3/28/20228.00% plus 4.50% PIK6/23/202413,00013,00013,0000.3%
Consolidated Revenue Interest (2.00%)6/22/2018N/A1,984—%(12)
Common Stock (50,000 shares)12/31/2012N/A10,86589,6302.1%
  67,618148,3673.4%
Total Control Investments (Level 3)$2,588,661$3,378,50579.8%
See notes to consolidated financial statements.
10

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2022 (Unaudited)
(in thousands, except share data)
March 31, 2022 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Affiliate Investments (5.00% to 24.99% voting control)(41)
 Nixon, Inc. (32)  Textiles, Apparel & Luxury Goods Common Stock (857 units)5/12/2017— N/A$— $— $— — %(16)
   %
PGX Holdings, Inc. (6)Diversified Consumer ServicesFirst Lien Term Loan7/21/20219.25% (1ML+ 7.75%)1.50 7/21/202667,126 67,126 67,126 1.6 %(3)(8)(10)
Second Lien Term Loan7/21/202113.25% (1ML+ 11.75%)1.50 7/27/2027153,931 153,931 153,931 3.6 %(3)(10)
Common Stock (40,780,359 shares)5/27/2020— N/A— — 141,123 3.3 %(16)
  221,057 362,180 8.5 %
 RGIS Services, LLC  Commercial Services & Supplies First Lien Term Loan6/25/20208.50% (1ML+ 7.50%)1.00 6/25/20253,680 3,680 3,680 0.1 %(8)(10)
Membership Interest (5.11%)6/25/2020— N/A— 10,303 15,256 0.4 %
    13,983 18,936 0.5 %
Targus Cayman HoldCo Limited (33)Textiles, Apparel & Luxury GoodsCommon Stock (7,383,395 shares)2/12/2016— N/A— 2,805 36,536 0.9 %(16)
2,805 36,536 0.9 %
Total Affiliate Investments (Level 3)$237,845 $417,652 9.9 %

See notes to consolidated financial statements.
11

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2022 (Unaudited)
(in thousands, except share data)
March 31, 2022 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
8th Avenue Food & Provisions, Inc. Food ProductsSecond Lien Term Loan9/21/20188.21% (1ML+ 7.75%)— 10/1/2026$32,133 $31,956 $29,168 0.7 %(3)(8)(10)
  31,956 29,168 0.7 %
ABG Intermediate Holdings 2 LLC Textiles, Apparel & Luxury GoodsSecond Lien Term Loan12/20/20216.80% (3M SOFR+ 6.00%)0.80 12/20/20299,000 8,935 8,955 0.2 %(3)(8)(10)
  8,935 8,955 0.2 %
AmeriLife Holdings, LLC InsuranceSecond Lien Term Loan3/18/20209.50% (1ML+ 8.50%)1.00 3/18/202822,280 21,952 22,280 0.5 %(3)(8)(10)
  21,952 22,280 0.5 %
Apidos CLO XI Structured FinanceSubordinated Structured Note12/6/2012Residual Interest, current yield 9.31%— 4/17/203467,782 37,180 29,680 0.7 %(5)(14)
  37,180 29,680 0.7 %
Apidos CLO XII Structured FinanceSubordinated Structured Note3/15/2013Residual Interest, current yield 4.16%— 4/15/203152,203 34,646 29,278 0.7 %(5)(14)
  34,646 29,278 0.7 %
Apidos CLO XV Structured FinanceSubordinated Structured Note9/13/2013Residual Interest, current yield 5.58%— 4/21/203148,515 35,857 28,659 0.7 %(5)(14)
  35,857 28,659 0.7 %
Apidos CLO XXII Structured FinanceSubordinated Structured Note9/16/2015Residual Interest, current yield 8.26%— 4/21/203135,855 29,084 25,474 0.6 %(5)(14)
  29,084 25,474 0.6 %
Atlantis Health Care Group (Puerto Rico), Inc. Health Care Providers & ServicesFirst Lien Revolving Line of Credit - $3,000 Commitment2/21/201310.75% (3ML+ 8.75%)2.00 4/29/2022— — — — %(10)(15)
First Lien Term Loan2/21/201310.75% (3ML+ 8.75%)2.00 4/29/202265,552 65,552 65,552 1.5 %(3)(10)
  65,552 65,552 1.5 %
Barings CLO 2018-III Structured FinanceSubordinated Structured Note10/9/2014Residual Interest, current yield 0.00%— 7/20/202983,097 38,122 28,903 0.7 %(5)(14)(17)
  38,122 28,903 0.7 %
BCPE North Star US Holdco 2, Inc. Food ProductsSecond Lien Delayed Draw Term Loan - $5,185 Commitment6/7/20218.26% (3ML+ 7.25%)0.75 6/10/2023— — — — %(8)(10)(15)
Second Lien Term Loan6/7/20218.26% (3ML+ 7.25%)0.75 6/11/202994,815 94,084 94,815 2.2 %(3)(8)(10)
    94,084 94,815 2.2 %
BCPE Osprey Buyer, Inc. Health Care TechnologyFirst Lien Revolving Line of Credit - $4,239 Commitment10/18/20216.50% (3ML+ 5.75%)0.75 8/21/2026— — — — %(8)(10)(15)
Second Lien Delayed Draw Term Loan - $22,609 Commitment10/18/20216.50% (3ML+ 5.75%)0.75 8/23/2028— — — — %(8)(10)(15)
First Lien Term Loan10/18/20216.50% (3ML+ 5.75%)0.75 8/23/202864,838 64,838 64,838 1.5 %(8)(10)
64,838 64,838 1.5 %
Belnick, LLC Household DurablesFirst Lien Term Loan1/20/20229.50% (1ML+ 8.50%)1,000 1/20/202786,953 86,953 86,953 2.1 %(3)(10)
86,953 86,953 2.1 %
Broder Bros., Co. Textiles, Apparel & Luxury GoodsFirst Lien Term Loan12/4/20177.39% (6ML+ 6.00%)1.00 12/4/2025177,568 177,568 177,568 4.2 %(3)(10)
  177,568 177,568 4.2 %
California Street CLO IX Ltd. Structured FinanceSubordinated Structured Note4/19/2012Residual Interest, current yield 9.99%— 7/16/203258,914 42,597 30,057 0.7 %(5)(14)
  42,597 30,057 0.7 %
Candle-Lite Company, LLC Household ProductsFirst Lien Term Loan A1/23/20186.75% (3ML+ 5.50%)1.25 4/30/202310,050 10,050 10,050 0.2 %(3)(10)
First Lien Term Loan B1/23/201810.75% (3ML+ 9.50%)1.25 4/30/202310,949 10,949 10,949 0.3 %(3)(10)
  20,999 20,999 0.5 %
Capstone Logistics Acquisition, Inc. Commercial Services & SuppliesSecond Lien Delayed Draw Term Loan - $1,500 Commitment11/12/20209.75% (1ML+ 8.75%)1.0011/13/2028— — — — %(8)(10)(15)
Second Lien Term Loan11/12/20209.75% (1ML+ 8.75%)1.0011/13/20288,500 8,236 8,500 0.2 %(3)(8)(10)
  8,236 8,500 0.2 %
See notes to consolidated financial statements.
12

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2022 (Unaudited)
(in thousands, except share data)
March 31, 2022 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
Carlyle C17 CLO Limited Structured FinanceSubordinated Structured Note1/24/2013Residual Interest, current yield 12.01%— 4/30/2031$24,870 $15,058 $13,292 0.3 %(5)(14)
  15,058 13,292 0.3 %
Carlyle Global Market Strategies CLO 2014-4-R, Ltd. Structured FinanceSubordinated Structured Note4/7/2017Residual Interest, current yield 10.27%— 7/15/203025,534 18,717 16,221 0.4 %(5)(14)
  18,717 16,221 0.4 %
Carlyle Global Market Strategies CLO 2016-3, Ltd. Structured FinanceSubordinated Structured Note8/9/2016Residual Interest, current yield 9.97%— 7/20/203432,199 29,881 27,294 0.6 %(5)(14)
  29,881 27,294 0.6 %
Cent CLO 21 Limited Structured FinanceSubordinated Structured Note5/15/2014Residual Interest, current yield 2.34%— 7/29/203049,552 35,843 29,459 0.7 %(5)(14)
  35,843 29,459 0.7 %
CIFC Funding 2013-III-R, Ltd. Structured FinanceSubordinated Structured Note8/2/2013Residual Interest, current yield 9.58%— 4/24/203144,100 27,283 20,672 0.5 %(5)(14)
  27,283 20,672 0.5 %
CIFC Funding 2013-IV, Ltd. Structured FinanceSubordinated Structured Note10/22/2013Residual Interest, current yield 13.00%— 4/28/203145,500 31,329 29,094 0.7 %(5)(14)
  31,329 29,094 0.7 %
CIFC Funding 2014-IV-R, Ltd. Structured FinanceSubordinated Structured Note8/5/2014Residual Interest, current yield 13.51%— 10/17/203050,143 31,694 27,132 0.6 %(5)(14)
  31,694 27,132 0.6 %
CIFC Funding 2016-I, Ltd. Structured FinanceSubordinated Structured Note12/9/2016Residual Interest, current yield 13.24%— 10/21/203134,000 30,545 29,553 0.7 %(5)(14)
  30,545 29,553 0.7 %
Collections Acquisition Company, Inc. Diversified Financial ServicesFirst Lien Term Loan12/3/201910.65% (1ML+ 8.15%)2.506/3/202436,971 36,971 36,971 0.9 %(3)(10)
  36,971 36,971 0.9 %
Columbia Cent CLO 27 Limited Structured FinanceSubordinated Structured Note12/18/2013Residual Interest, current yield 13.82%— 10/25/202848,977 29,577 28,059 0.7 %(5)(14)
  29,577 28,059 0.7 %
CP IRIS Holdco I, Inc. (49)Building ProductsSecond Lien Term Loan10/1/20217.50% (1ML+ 7.00%)0.5010/1/202935,000 35,000 35,000 0.8 %(3)(8)(10)
35,000 35,000 0.8 %
Curo Group Holdings Corp. Consumer FinanceFirst Lien Term Loan7/30/20217.50%— 8/1/202847,000 47,030 41,128 1.0 %(8)(14)(47)
  47,030 41,128 1.0 %
DRI Holding Inc. Commercial Services & SuppliesFirst Lien Term Loan12/21/20215.75% (1ML+ 5.25%)0.50 12/21/202820,000 20,000 20,000 0.5 %(3)(8)(10)
Second Lien Term Loan12/21/20218.50% (1ML+ 8.00%)0.50 12/21/2029135,000 135,000 135,000 3.2 %(10)
  155,000 155,000 3.7 %
Dunn Paper, Inc. Paper & Forest ProductsSecond Lien Term Loan8/26/201610.26% (3ML+ 9.25%)1.00 8/26/202311,500 11,454 9,457 0.2 %(8)(10)
  11,454 9,457 0.2 %
Easy Gardener Products, Inc. Household DurablesClass A Units of EZG Holdings, LLC (200 units)6/11/2020— N/A— 313 781 — %(16)
Class B Units of EZG Holdings, LLC (12,525 units)6/11/2020— N/A— 1,688 3,269 0.1 %(16)
    2,001 4,050 0.1 %
Engine Group, Inc. (7)MediaFirst Lien Term Loan11/17/20205.75% (1ML+ 4.75%)1.00 11/17/20233,556 3,556 3,433 0.1 %(8)(10)
Class B Common Units (1,039,554 units)11/17/2020— N/A— 26,991 294 — %(8)(16)
    30,547 3,727 0.1 %
Engineered Machinery Holdings, Inc. MachineryIncremental Amendment No. 2 Second Lien Term Loan5/6/20217.51% (3ML+ 6.50%)0.75 7/18/20255,000 4,980 5,000 0.1 %(3)(8)(10)
Incremental Amendment No. 3 Second Lien Term Loan8/6/20217.01% (3ML+ 6.00%)0.75 5/21/20295,000 5,000 5,000 0.1 %(3)(8)(10)
9,980 10,000 0.2 %
See notes to consolidated financial statements.
13

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2022 (Unaudited)
(in thousands, except share data)
March 31, 2022 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
Enseo Acquisition, Inc. IT ServicesFirst Lien Term Loan6/2/20219.01% (3ML+ 8.00%)1.00 6/2/2026$54,588 $54,588 $54,588 1.3 %(3)(10)
    54,588 54,588 1.3 %
EXC Holdings III Corp Technology Hardware, Storage & PeripheralsSecond Lien Term Loan11/17/20178.50% (3ML+ 7.50%)1.00 12/1/202512,500 12,443 12,500 0.3 %(3)(8)(10)
    12,443 12,500 0.3 %
Eze Castle Integration, Inc. (f/k/a/ H.I.G. ECI Merger Sub, Inc.) IT ServicesFirst Lien Delayed Draw Term Loan - $1,786 Commitment7/15/202010.00% (1ML+ 8.50%)1.50 7/15/2025— — — — %(10)(15)
First Lien Term Loan7/15/202010.00% (1ML+ 8.50%)1.50 7/15/202546,861 46,861 46,861 1.1 %(3)(10)
    46,861 46,861 1.1 %
First Brands Group Auto ComponentsFirst Lien Term Loan3/24/20216.00% (3ML+ 5.00%)1.00 3/30/202716,583 16,474 16,474 0.4 %(3)(8)(10)
Second Lien Term Loan3/24/20219.50% (3ML+ 8.50%)1.00 3/30/202832,000 31,523 31,523 0.7 %(3)(8)(10)
    47,997 47,997 1.1 %
Galaxy XV CLO, Ltd. Structured FinanceSubordinated Structured Note2/13/2013Residual Interest, current yield 11.91%— 10/15/203050,525 34,529 27,387 0.6 %(5)(14)
    34,529 27,387 0.6 %
Galaxy XXVII CLO, Ltd. Structured FinanceSubordinated Structured Note9/30/2013Residual Interest, current yield 10.43%— 5/16/203124,575 16,183 12,109 0.3 %(5)(14)
    16,183 12,109 0.3 %
Galaxy XXVIII CLO, Ltd. Structured FinanceSubordinated Structured Note5/30/2014Residual Interest, current yield 8.11%— 7/15/203139,905 27,797 17,669 0.4 %(5)(14)
    27,797 17,669 0.4 %
Global Tel*Link Corporation Diversified Telecommunication ServicesFirst Lien Term Loan8/7/20194.71% (1ML+ 4.25%)— 11/29/20259,723 9,483 9,596 0.2 %(3)(8)(10)
Second Lien Term Loan11/20/201810.41% (1M SOFR+ 10.00%)— 11/29/2026122,670 121,694 122,474 2.9 %(3)(8)(10)
    131,177 132,070 3.1 %
Halcyon Loan Advisors Funding 2012-1 Ltd. Structured FinanceSubordinated Structured Note8/7/2012Residual Interest, current yield 0.00%— 8/15/202323,188 3,704 11 — %(5)(14)(17)
    3,704 11  %
Halcyon Loan Advisors Funding 2013-1 Ltd. Structured FinanceSubordinated Structured Note3/8/2013Residual Interest, current yield 0.00%— 4/15/202540,400 19,984 28 — %(5)(14)(17)
    19,984 28  %
Halcyon Loan Advisors Funding 2014-1 Ltd. Structured FinanceSubordinated Structured Note2/7/2014Residual Interest, current yield 0.00%— 4/20/202624,500 11,822 52 — %(5)(14)(17)
    11,822 52  %
Halcyon Loan Advisors Funding 2014-2 Ltd. Structured FinanceSubordinated Structured Note4/14/2014Residual Interest, current yield 0.00%— 4/28/202541,164 21,322 73 — %(5)(14)(17)
    21,322 73  %
Halcyon Loan Advisors Funding 2015-3 Ltd. Structured FinanceSubordinated Structured Note7/23/2015Residual Interest, current yield 0.00%— 10/18/202739,598 29,557 406 — %(5)(14)(17)
    29,557 406  %
HarbourView CLO VII-R, Ltd. Structured FinanceSubordinated Structured Note6/5/2015Residual Interest, current yield 0.00%— 7/18/203119,025 13,024 5,593 0.1 %(5)(14)(17)
    13,024 5,593 0.1 %
Help/Systems Holdings, Inc. SoftwareSecond Lien Term Loan11/14/20197.50% (3ML+ 6.75%)0.75 11/19/202752,500 52,281 52,500 1.2 %(3)(8)(10)
    52,281 52,500 1.2 %
Interventional Management Services, LLC Health Care Providers & ServicesFirst Lien Revolving Line of Credit - $5,000 Commitment2/22/20219.51% (3ML+ 8.50%)1.00 2/22/20255,000 5,000 4,986 0.1 %(10)(15)
First Lien Term Loan2/22/20219.51% (3ML+ 8.50%)1.00 2/20/202669,090 69,090 68,891 1.6