UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 2011
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)
Maryland |
|
43-2048643 |
|
|
|
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
10 East 40th Street |
|
|
44th Floor |
|
|
New York, New York |
|
10016 |
(Address of principal executive offices) |
|
(Zip Code) |
(212) 448-0702
(Registrants telephone number, including area code)
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. xYes o No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). oYes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer x Accelerated Filer o Non-Accelerated Filer o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). oYes x No
The number of shares of the registrants common stock, $0.001 par value, outstanding as of November 9, 2011 was 109,506,161.
PROSPECT CAPITAL CORPORATION
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2011
TABLE OF CONTENTS
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Page |
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PART I. |
FINANCIAL INFORMATION |
|
3 |
Item 1. |
FINANCIAL STATEMENTS |
|
3 |
|
Consolidated Statements of Assets and Liabilities September 30, 2011 (Unaudited) and June 30, 2011 (Audited) |
|
3 |
|
Consolidated Statements of Operations (Unaudited) - For the Three Months Ended September 30, 2011 and 2010 |
|
4 |
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Consolidated Statements of Changes in Net Assets (Unaudited) - For the Three Months Ended September 30, 2011 and 2010 |
|
5 |
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Consolidated Statements of Cash Flows (Unaudited) - For the Three Months Ended September 30, 2011 and 2010 |
|
6 |
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Consolidated Schedule of Investments September 30, 2011 (Unaudited) and June 30, 2011 (Audited) |
|
7 |
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Notes to Consolidated Financial Statements (Unaudited) |
|
31 |
Item 2. |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
|
51 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
|
73 |
Item 4. |
Controls and Procedures |
|
73 |
|
|
|
|
PART II. |
OTHER INFORMATION |
|
74 |
Item 1. |
Legal Proceedings |
|
74 |
Item 1A. |
Risk Factors |
|
74 |
Item 2. |
Unregistered Sales in Equity Securities and Use of Proceeds |
|
74 |
Item 3. |
Defaults Upon Senior Securities |
|
74 |
Item 4. |
Submission of Matters to a Vote of Security Holders |
|
75 |
Item 5. |
Other Information |
|
75 |
Item 6. |
Exhibits |
|
75 |
|
Signatures |
|
76 |
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
September 30, 2011 and June 30, 2011
(in thousands, except share and per share data)
|
|
September 30, |
|
June 30, | ||||
|
|
(Unaudited) |
|
(Audited) | ||||
Assets (Note 4) |
|
|
|
|
|
| ||
Investments at fair value: |
|
|
|
|
|
| ||
Control investments (net cost of $259,272 and $262,301, respectively) |
|
$ |
329,536 |
|
|
$ |
310,072 |
|
Affiliate investments (net cost of $59,321 and $56,833, respectively) |
|
72,410 |
|
|
72,337 |
| ||
Non-control/Non-affiliate investments (net cost of $1,279,983 and $1,116,600, respectively) |
|
1,250,535 |
|
|
1,080,601 |
| ||
Total investments at fair value (net cost of $1,598,576 and $1,435,734, respectively, Note 3) |
|
1,652,481 |
|
|
1,463,010 |
| ||
|
|
|
|
|
|
| ||
Investments in money market funds |
|
48,218 |
|
|
59,903 |
| ||
Cash |
|
1,975 |
|
|
1,492 |
| ||
Receivables for: |
|
|
|
|
|
| ||
Interest, net |
|
10,099 |
|
|
9,269 |
| ||
Other |
|
38 |
|
|
267 |
| ||
Prepaid expenses |
|
118 |
|
|
101 |
| ||
Deferred financing costs |
|
14,618 |
|
|
15,275 |
| ||
Total Assets |
|
1,727,547 |
|
|
1,549,317 |
| ||
|
|
|
|
|
|
| ||
Liabilities |
|
|
|
|
|
| ||
Credit facility payable (Note 4) |
|
233,500 |
|
|
84,200 |
| ||
Senior convertible notes (Note 5) |
|
322,500 |
|
|
322,500 |
| ||
Dividends payable |
|
11,087 |
|
|
10,895 |
| ||
Due to Prospect Administration (Note 9) |
|
228 |
|
|
212 |
| ||
Due to Prospect Capital Management (Note 9) |
|
12,109 |
|
|
7,706 |
| ||
Accrued expenses |
|
6,853 |
|
|
5,876 |
| ||
Other liabilities |
|
2,494 |
|
|
3,571 |
| ||
Total Liabilities |
|
588,771 |
|
|
434,960 |
| ||
Net Assets |
|
$ |
1,138,776 |
|
|
$ |
1,114,357 |
|
|
|
|
|
|
|
| ||
Components of Net Assets |
|
|
|
|
|
| ||
Common stock, par value $0.001 per share (200,000,000 and 100,000,000 common shares authorized, respectively; 109,417,083 and 107,606,690 issued and outstanding, respectively) (Note 6) |
|
$ |
109 |
|
|
$ |
108 |
|
Paid-in capital in excess of par (Note 6) |
|
1,214,480 |
|
|
1,196,741 |
| ||
Distributions in excess of net investment income |
|
(26,982 |
) |
|
(21,638 |
) | ||
Accumulated realized losses on investments |
|
(102,737 |
) |
|
(88,130 |
) | ||
Unrealized appreciation on investments |
|
53,906 |
|
|
27,276 |
| ||
Net Assets |
|
$ |
1,138,776 |
|
|
$ |
1,114,357 |
|
|
|
|
|
|
|
| ||
Net Asset Value Per Share |
|
$ |
10.41 |
|
|
$ |
10.36 |
|
See notes to consolidated financial statements.
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For The Three Months Ended September 30, 2011 and 2010
(in thousands, except share and per share data)
(Unaudited)
|
|
For Three Months Ended September 30, | ||||||
|
|
| ||||||
|
|
2011 |
|
2010 | ||||
|
|
|
|
| ||||
Investment Income |
|
|
|
|
|
| ||
Interest income: (Note 3) |
|
|
|
|
|
| ||
Control investments |
|
$ |
6,165 |
|
|
$ |
5,189 |
|
Affiliate investments |
|
2,402 |
|
|
2,950 |
| ||
Non-control/Non-affiliate investments |
|
33,320 |
|
|
20,782 |
| ||
Total interest income |
|
41,887 |
|
|
28,921 |
| ||
|
|
|
|
|
|
| ||
Dividend income: |
|
|
|
|
|
| ||
Control investments |
|
6,700 |
|
|
1,750 |
| ||
Non-control/Non-affiliate investments |
|
849 |
|
|
440 |
| ||
Money market funds |
|
1 |
|
|
4 |
| ||
Total dividend income |
|
7,550 |
|
|
2,194 |
| ||
|
|
|
|
|
|
| ||
Other income: (Note 7) |
|
|
|
|
|
| ||
Control/affiliate investments |
|
6 |
|
|
1,771 |
| ||
Affiliate investments |
|
61 |
|
|
147 |
| ||
Non-control/Non-affiliate investments |
|
5,838 |
|
|
2,179 |
| ||
Total other income |
|
5,905 |
|
|
4,097 |
| ||
Total Investment Income |
|
55,342 |
|
|
35,212 |
| ||
|
|
|
|
|
|
| ||
Operating Expenses |
|
|
|
|
|
| ||
Investment advisory fees: |
|
|
|
|
|
| ||
Base management fee (Note 9) |
|
8,211 |
|
|
4,276 |
| ||
Income incentive fee (Note 9) |
|
6,969 |
|
|
5,249 |
| ||
Total investment advisory fees |
|
15,180 |
|
|
9,525 |
| ||
|
|
|
|
|
|
| ||
Interest and credit facility expenses |
|
8,960 |
|
|
2,261 |
| ||
Legal fees |
|
432 |
|
|
310 |
| ||
Valuation services |
|
302 |
|
|
217 |
| ||
Audit, compliance and tax related fees |
|
340 |
|
|
216 |
| ||
Allocation of overhead from Prospect Administration (Note 9) |
|
1,116 |
|
|
800 |
| ||
Insurance expense |
|
79 |
|
|
71 |
| ||
Directors fees |
|
64 |
|
|
64 |
| ||
Other general and administrative expenses |
|
992 |
|
|
753 |
| ||
Total Operating Expenses |
|
27,465 |
|
|
14,217 |
| ||
|
|
|
|
|
|
| ||
Net Investment Income |
|
27,877 |
|
|
20,995 |
| ||
|
|
|
|
|
|
| ||
Net realized (loss) gain on investments (Note 3) |
|
(14,607 |
) |
|
527 |
| ||
Net change in unrealized appreciation on investments (Note 3) |
|
26,630 |
|
|
4,058 |
| ||
Net Increase in Net Assets Resulting from Operations |
|
$ |
39,900 |
|
|
$ |
25,580 |
|
|
|
|
|
|
|
| ||
Net increase in net assets resulting from operations per share |
|
|
|
|
|
| ||
(Note 8 and Note 12) |
|
$ |
0.37 |
|
|
$ |
0.34 |
|
Dividends declared per share |
|
$ |
0.30 |
|
|
$ |
0.30 |
|
See notes to consolidated financial statements.
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
For The Three Months Ended September 30, 2011 and 2010
(in thousands, except share data)
(Unaudited)
|
|
For The Three Months Ended September 30,
| ||||||
|
|
2011
|
|
2010
| ||||
Increase in Net Assets from Operations: |
|
|
|
|
|
| ||
Net investment income |
|
$ |
27,877 |
|
|
$ |
20,995 |
|
Net realized (loss) gain on investments |
|
(14,607 |
) |
|
527 |
| ||
Net change in unrealized appreciation on investments |
|
26,630 |
|
|
4,058 |
| ||
Net Increase in Net Assets Resulting from Operations |
|
39,900 |
|
|
25,580 |
| ||
|
|
|
|
|
|
| ||
Dividends to Shareholders |
|
(33,221 |
) |
|
(22,838 |
) | ||
|
|
|
|
|
|
| ||
Capital Share Transactions: |
|
|
|
|
|
| ||
Proceeds from capital shares sold, net of underwriting costs |
|
15,060 |
|
|
86,435 |
| ||
Less: Offering costs of public share offerings |
|
(137 |
) |
|
(308 |
) | ||
Reinvestment of dividends |
|
2,817 |
|
|
2,531 |
| ||
Net Increase in Net Assets Resulting from Capital Share Transactions |
|
17,740 |
|
|
88,658 |
| ||
|
|
|
|
|
|
| ||
Total Increase in Net Assets |
|
24,419 |
|
|
91,400 |
| ||
Net assets at beginning of period |
|
1,114,357 |
|
|
711,424 |
| ||
Net Assets at End of Period |
|
$ |
1,138,776 |
|
|
$ |
802,824 |
|
|
|
|
|
|
|
| ||
Capital Share Activity: |
|
|
|
|
|
| ||
Shares sold |
|
1,500,000 |
|
|
9,051,000 |
| ||
Shares issued through reinvestment of dividends |
|
310,393 |
|
|
263,501 |
| ||
Net increase in capital share activity |
|
1,810,393 |
|
|
9,314,501 |
| ||
Shares outstanding at beginning of period |
|
107,606,690 |
|
|
69,086,862 |
| ||
|
|
|
|
|
|
| ||
Shares Outstanding at End of Period |
|
109,417,083 |
|
|
78,401,363 |
|
See notes to consolidated financial statements.
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Three Months Ended September 30, 2011 and 2010
(in thousands, except share data)
(Unaudited)
|
|
For The Three Months Ended September 30,
| ||||||
|
|
2011
|
|
2010
| ||||
Cash Flows from Operating Activities: |
|
|
|
|
|
| ||
Net increase in net assets resulting from operations |
|
$ |
39,900 |
|
|
$ |
25,580 |
|
Net realized loss (gain) on investments |
|
14,607 |
|
|
(527 |
) | ||
Net change in unrealized appreciation on investments |
|
(26,630 |
) |
|
(4,058 |
) | ||
Accretion of purchase discount on investments |
|
(928 |
) |
|
(4,305 |
) | ||
Amortization of deferred financing costs |
|
2,088 |
|
|
990 |
| ||
|
|
|
|
|
|
| ||
Change in operating assets and liabilities |
|
|
|
|
|
| ||
Payments for purchases of investments |
|
(221,002 |
) |
|
(137,797 |
) | ||
Payment-in-kind interest |
|
(1,573 |
) |
|
(3,154 |
) | ||
Proceeds from sale of investments and collection of investment principal |
|
46,055 |
|
|
68,148 |
| ||
Net investments in money market funds |
|
11,685 |
|
|
47,831 |
| ||
Increase in interest receivable |
|
(830 |
) |
|
(542 |
) | ||
Increase in dividends receivable |
|
|
|
|
(1,750 |
) | ||
Decrease (increase) in other receivables |
|
229 |
|
|
(260 |
) | ||
Decrease (increase) in prepaid expenses |
|
(17 |
) |
|
74 |
| ||
Increase in due from broker |
|
|
|
|
(1,803 |
) | ||
Increase in due to broker |
|
|
|
|
1,980 |
| ||
Increase in due to Prospect Administration |
|
16 |
|
|
113 |
| ||
Increase (decrease) in due to Prospect Capital Management |
|
4,403 |
|
|
(2,188 |
) | ||
Increase (decrease) in accrued expenses |
|
977 |
|
|
(1,013 |
) | ||
(Decrease) increase in other liabilities |
|
(1,077 |
) |
|
333 |
| ||
Net Cash Used In Operating Activities |
|
(132,097 |
) |
|
(12,348 |
) | ||
|
|
|
|
|
|
| ||
Cash Flows from Financing Activities: |
|
|
|
|
|
| ||
Borrowings under credit facility |
|
284,300 |
|
|
93,200 |
| ||
Principal payments under credit facility |
|
(135,000 |
) |
|
(146,900 |
) | ||
Financing costs paid and deferred |
|
(1,431 |
) |
|
(770 |
) | ||
Proceeds from issuance of common stock, net of underwriting costs |
|
15,060 |
|
|
86,435 |
| ||
Offering costs from issuance of common stock |
|
(137 |
) |
|
(308 |
) | ||
Dividends paid |
|
(30,212 |
) |
|
(19,328 |
) | ||
Net Cash Provided By Financing Activities |
|
132,580 |
|
|
12,329 |
| ||
|
|
|
|
|
|
| ||
Total Increase (Decrease) in Cash |
|
483 |
|
|
(19 |
) | ||
Cash balance at beginning of period |
|
1,492 |
|
|
1,081 |
| ||
Cash Balance at End of Period |
|
$ |
1,975 |
|
|
$ |
1,062 |
|
|
|
|
|
|
|
| ||
Cash Paid For Interest |
|
$ |
5,659 |
|
|
$ |
982 |
|
|
|
|
|
|
|
| ||
Non-Cash Financing Activity: |
|
|
|
|
|
| ||
Amount of shares issued in connection with dividend reinvestment plan |
|
$ |
2,817 |
|
|
$ |
2,531 |
|
See notes to consolidated financial statements.
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED SCHEDULE OF INVESTMENTS
September 30, 2011 and June 30, 2011
(in thousands, except share data)
|
|
|
|
|
|
September 30, 2011 (Unaudited) | ||||||||||
Portfolio Company |
|
Locale / Industry |
|
Investments(1) |
|
Principal |
|
Cost |
|
Fair |
|
% of Net | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
LEVEL 3 PORTFOLIO INVESTMENTS: |
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Control Investments (25.00% or greater of voting control) |
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
AIRMALL USA, Inc (27) |
|
Pennsylvania / Property Management |
|
Senior Secured Term Loan (12.00% (LIBOR + 9.00% with 3.00% LIBOR floor), due 6/30/2015)(3), (4) |
|
$ |
29,800 |
|
$ |
29,800 |
|
$ |
29,800 |
|
2.6% |
|
|
Senior Subordinated Term Loan (12.00% plus 6.00% PIK, due 12/31/2015) |
|
12,500 |
|
12,500 |
|
12,500 |
|
1.1% |
| ||||||
|
Convertible Preferred Stock (9,919.684 shares) |
|
|
|
9,920 |
|
9,226 |
|
0.8% |
| ||||||
|
Common Stock (100 shares) |
|
|
|
|
|
|
|
0.0% |
| ||||||
|
|
|
|
|
|
|
|
52,220 |
|
51,526 |
|
4.5% |
| |||
Ajax Rolled Ring & Machine, Inc. |
|
South Carolina / Manufacturing |
|
Senior Secured Note Tranche A (10.50% (LIBOR + 7.50% with 3.00% LIBOR floor), due 4/01/2013)(3), (4) |
|
20,497 |
|
20,497 |
|
20,497 |
|
1.8% |
| |||
|
Subordinated Secured Note Tranche B (11.50% (LIBOR + 8.50% with 3.00% LIBOR floor) plus 6.00% PIK, due 4/01/2013)(3), (4) |
|
15,035 |
|
15,035 |
|
15,035 |
|
1.3% |
| ||||||
|
Convertible Preferred Stock Series A (6,142.6 shares) |
|
|
|
6,057 |
|
3,583 |
|
0.3% |
| ||||||
|
Unrestricted Common Stock (6 shares) |
|
|
|
|
|
|
|
0.0% |
| ||||||
|
|
|
|
|
|
|
|
41,589 |
|
39,115 |
|
3.4% |
| |||
AWCNC, LLC(19) |
|
North Carolina / Machinery |
|
Members Units Class A (1,800,000 units) |
|
|
|
|
|
|
|
0.0% |
| |||
|
Members Units Class B-1 (1 unit) |
|
|
|
|
|
|
|
0.0% |
| ||||||
|
Members Units Class B-2 (7,999,999 units) |
|
|
|
|
|
|
|
0.0% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
0.0% |
| |||
Borga, Inc. |
|
California / Manufacturing |
|
Revolving Line of Credit $1,000 Commitment (5.00% (PRIME + 4.75%) plus 3.00% default interest, in non-accrual status effective 03/02/2010, past due)(4), (25) |
|
1,000 |
|
945 |
|
1,000 |
|
0.1% |
| |||
|
Senior Secured Term Loan B (8.50% (PRIME + 8.25%) plus 3.00% default interest, in non-accrual status effective 03/02/2010, past due)(4) |
|
1,612 |
|
1,500 |
|
315 |
|
0.0% |
| ||||||
|
Senior Secured Term Loan C (12.00% plus 4.00% PIK plus 3.00% default interest, in non-accrual status effective 03/02/2010, past due) |
|
9,072 |
|
706 |
|
|
|
0.0% |
| ||||||
|
Common Stock (100 shares)(21) |
|
|
|
|
|
|
|
0.0% |
| ||||||
|
Warrants (33,750 warrants)(21) |
|
|
|
|
|
|
|
0.0% |
| ||||||
|
|
|
|
|
|
|
|
3,151 |
|
1,315 |
|
0.1% |
| |||
C&J Cladding LLC |
|
Texas / Metal Services and Minerals |
|
Membership Interest (400 units)(22) |
|
|
|
580 |
|
4,804 |
|
0.4% |
| |||
|
|
|
|
|
|
|
|
580 |
|
4,804 |
|
0.4% |
| |||
Change Clean Energy Holdings, Inc. (CCEHI or Biomass) (5) |
|
Maine / Biomass Power |
|
Common Stock (1,000 shares) |
|
|
|
2,540 |
|
|
|
0.0% |
| |||
|
|
|
|
|
|
|
|
2,540 |
|
|
|
0.0% |
| |||
Freedom Marine Services LLC(20) |
|
Louisiana / Shipping Vessels |
|
Subordinated Secured Note (12.00% (LIBOR + 6.11% with 5.89% LIBOR floor) plus 4.00% PIK, in non-accrual status effective 10/1/2010, due 12/31/2011)(4) |
|
12,360 |
|
11,866 |
|
2,946 |
|
0.3% |
| |||
|
|
|
|
Net Profits Interest (22.50% payable on equity distributions)(7) |
|
|
|
|
|
|
|
0.0% |
| |||
|
|
|
|
|
|
|
|
11,866 |
|
2,946 |
|
0.3% |
| |||
Gas Solutions Holdings, Inc.(8), (3) |
|
Texas / Gas Gathering and Processing |
|
Senior Secured Note (18.00%, due 12/11/2016) |
|
25,000 |
|
25,000 |
|
25,000 |
|
2.2% |
| |||
|
Junior Secured Note (18.00%, due 12/12/2016) |
|
12,000 |
|
12,000 |
|
12,000 |
|
1.1% |
| ||||||
|
Common Stock (100 shares) |
|
|
|
5,003 |
|
68,634 |
|
6.0% |
| ||||||
|
|
|
|
|
|
|
|
42,003 |
|
105,634 |
|
9.3% |
| |||
See notes to consolidated financial statements.
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2011 and June 30, 2011
(in thousands, except share data)
|
|
|
|
|
|
September 30, 2011 (Unaudited) | ||||||||||
Portfolio Company |
|
Locale / Industry |
|
Investments(1) |
|
Principal |
|
Cost |
|
Fair |
|
% of | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
LEVEL 3 PORTFOLIO INVESTMENTS: |
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Control Investments (25.00% or greater of voting control) |
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Integrated Contract Services, Inc. (9) |
|
North Carolina / Contracting |
|
Secured Promissory Notes (15.00%, in non-accrual status effective 12/22/2010, due 3/21/2012 7/24/2013) (10) |
|
$ |
2,080 |
|
$ |
2,079 |
|
$ |
1,701 |
|
0.1% |
|
|
Senior Demand Note (15.00%, in non-accrual status effective 11/1/2010, past due)(10) |
|
1,170 |
|
1,170 |
|
|
|
0.0% |
| ||||||
|
Senior Secured Note (7.00% plus 7.00% PIK plus 6.00% default interest, in non-accrual status effective 10/09/2007, past due) |
|
960 |
|
660 |
|
|
|
0.0% |
| ||||||
|
Junior Secured Note (7.00% plus 7.00% PIK plus 6.00% default interest, in non-accrual status effective 10/09/2007, past due) |
|
14,003 |
|
14,003 |
|
|
|
0.0% |
| ||||||
|
Preferred Stock Series A (10 shares) |
|
|
|
|
|
|
|
0.0% |
| ||||||
|
Common Stock (49 shares) |
|
|
|
679 |
|
|
|
0.0% |
| ||||||
|
|
|
|
|
|
|
|
18,591 |
|
1,701 |
|
0.1% |
| |||
Iron Horse Coiled Tubing, Inc. (23) |
|
Alberta, Canada / Production Services |
|
Senior Secured Tranche 2 (Zero Coupon, due 12/31/2015) |
|
2,338 |
|
2,338 |
|
2,306 |
|
0.2% |
| |||
|
Senior Secured Tranche 3 (2.00%, due 12/31/2015) |
|
9,000 |
|
8,781 |
|
8,925 |
|
0.8% |
| ||||||
|
Common Stock (3,821 shares) |
|
|
|
268 |
|
1,957 |
|
0.2% |
| ||||||
|
|
|
|
|
|
|
|
11,387 |
|
13,188 |
|
1.2% |
| |||
Manx Energy, Inc. (Manx)(12) |
|
Kansas / Oil & Gas Production |
|
Appalachian Energy Holdings, LLC (AEH) Senior Secured Note (8.00%, in non-accrual status effective 1/19/2010, due 1/19/2013) |
|
2,294 |
|
2,000 |
|
|
|
0.0% |
| |||
|
Coalbed, LLC Senior Secured Note (8.00%, in non-accrual status effective 1/19/2010, due 1/19/2013)(6) |
|
6,882 |
|
5,991 |
|
|
|
0.0% |
| ||||||
|
Manx Senior Secured Note (13.00%, in non-accrual status effective 1/19/2010, due 1/19/2013) |
|
3,550 |
|
3,550 |
|
1,650 |
|
0.1% |
| ||||||
|
Manx Preferred Stock (6,635 shares) |
|
|
|
6,307 |
|
|
|
0.0% |
| ||||||
|
Manx Common Stock (3,416,335 shares) |
|
|
|
1,171 |
|
|
|
0.0% |
| ||||||
|
|
|
|
|
|
|
|
19,019 |
|
1,650 |
|
0.1% |
| |||
NMMB Holdings, Inc. (24) |
|
New York / Media |
|
Revolving Line of Credit $3,000 Commitment (10.50% (LIBOR + 8.50% with 2.00% LIBOR floor), due 5/6/2016) (4), (25) |
|
|
|
|
|
|
|
0.0% |
| |||
|
Senior Term Loan (14.00%, due 5/6/2016) |
|
23,700 |
|
23,700 |
|
23,700 |
|
2.1% |
| ||||||
|
Senior Subordinated Term Loan (15.00%, due 5/6/2016) |
|
2,800 |
|
2,800 |
|
2,800 |
|
0.2% |
| ||||||
|
Series A Preferred Stock (4,400 shares) |
|
|
|
4,400 |
|
5,358 |
|
0.5% |
| ||||||
|
|
|
|
|
|
|
|
30,900 |
|
31,858 |
|
2.8% |
| |||
NRG Manufacturing, Inc. |
|
Texas / Manufacturing |
|
Senior Secured Note (16.50% (LIBOR + 11.00% with 5.50% LIBOR floor), due 7/31/2012)(3), (4) |
|
13,080 |
|
13,080 |
|
13,080 |
|
1.1% |
| |||
|
Common Stock (800 shares) |
|
|
|
2,317 |
|
45,122 |
|
4.0% |
| ||||||
|
|
|
|
|
|
|
|
15,397 |
|
58,202 |
|
5.1% |
| |||
See notes to consolidated financial statements.
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2011 and June 30, 2011
(in thousands, except share data)
|
|
|
|
|
|
September 30, 2011 (Unaudited) | ||||||||||
Portfolio Company |
|
Locale / Industry |
|
Investments(1) |
|
Principal |
|
Cost |
|
Fair |
|
% of | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
LEVEL 3 PORTFOLIO INVESTMENTS: |
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Control Investments (25.00% or greater of voting control) |
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Nupla Corporation |
|
California / Home & Office Furnishings, Housewares & Durable |
|
Revolving Line of Credit $2,000 Commitment (7.25% (PRIME + 6.00%), plus 2.00% default interest, due 9/04/2012)(4), (25) |
|
$ |
1,093 |
|
$ |
1,030 |
|
$ |
1,093 |
|
0.1% |
|
|
Senior Secured Term Loan A (8.00% (PRIME + 6.75%) plus 2.00% default interest, due 9/04/2012)(4) |
|
4,418 |
|
782 |
|
4,000 |
|
0.4% |
| ||||||
|
Senior Subordinated Debt (15.00% PIK, in non-accrual status effective 4/01/2009, due 3/04/2013) |
|
4,059 |
|
|
|
96 |
|
0.0% |
| ||||||
|
Preferred Stock Class A (2,850 shares) |
|
|
|
|
|
|
|
0.0% |
| ||||||
|
Preferred Stock Class B (1,330 shares) |
|
|
|
|
|
|
|
0.0% |
| ||||||
|
Common Stock (2,360,743 shares) |
|
|
|
|
|
|
|
0.0% |
| ||||||
|
|
|
|
|
|
|
|
1,812 |
|
5,189 |
|
0.5% |
| |||
R-V Industries, Inc. |
|
Pennsylvania / Manufacturing |
|
Warrants (200,000 warrants, expiring 6/30/2017) |
|
|
|
1,682 |
|
3,330 |
|
0.3% |
| |||
|
Common Stock (545,107 shares) |
|
|
|
5,087 |
|
9,078 |
|
0.8% |
| ||||||
|
|
|
|
|
|
|
|
6,769 |
|
12,408 |
|
1.1% |
| |||
Yatesville Coal Holdings, Inc.(11) |
|
Kentucky / Mining, Steel, Iron and Non-Precious Metals and Coal Production |
|
Senior Secured Note (Non-accrual status effective 1/01/2009, past due)(4) |
|
1,035 |
|
1,035 |
|
|
|
0.0% |
| |||
|
Junior Secured Note (Non-accrual status effective 1/01/2009, past due)(4) |
|
414 |
|
413 |
|
|
|
0.0% |
| ||||||
|
Common Stock (1,000 shares) |
|
|
|
|
|
|
|
0.0% |
| ||||||
|
|
|
|
|
|
|
|
1,448 |
|
|
|
0.0% |
| |||
|
|
|
|
Total Control Investments |
|
259,272 |
|
329,536 |
|
28.9% |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Affiliate Investments (5.00% to 24.99% voting control) |
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
BNN Holdings Corp., (f/k/a Biotronic NeuroNetwork) |
|
Michigan / Healthcare |
|
Senior Secured Note (11.50% (LIBOR + 7.00% with 4.50% LIBOR floor) plus 1.00% PIK, due 2/21/2013)(3), (4) |
|
26,227 |
|
26,227 |
|
27,014 |
|
2.4% |
| |||
|
Preferred Stock Series A (9,925.455 shares)(13) |
|
|
|
2,300 |
|
3,382 |
|
0.3% |
| ||||||
|
Preferred Stock Series B (1,753.64 shares)(13) |
|
|
|
579 |
|
851 |
|
0.1% |
| ||||||
|
|
|
|
|
|
|
|
29,106 |
|
31,247 |
|
2.8% |
| |||
Boxercraft Incorporated |
|
Georgia / Textiles & Leather |
|
Senior Secured Term Loan A (9.50% (LIBOR + 6.50% with 3.00% LIBOR floor), due 9/16/2013)(3), (4) |
|
2,469 |
|
2,232 |
|
2,506 |
|
0.2% |
| |||
|
Senior Secured Term Loan B (10.00% (LIBOR + 7.00% with 3.00% LIBOR floor), due 9/16/2013)(3), (4) |
|
4,739 |
|
4,081 |
|
4,810 |
|
0.4% |
| ||||||
|
Senior Secured Term Loan C (10.50% (LIBOR + 7.50% with 3.00% LIBOR floor), due 9/16/2013)(3), (4) |
|
2,294 |
|
2,294 |
|
2,329 |
|
0.2% |
| ||||||
|
Subordinated Secured Term Loan (12.00% plus 3.00% PIK, due 3/16/2014)(3) |
|
7,787 |
|
6,614 |
|
7,904 |
|
0.7% |
| ||||||
|
Preferred Stock (1,000,000 shares) |
|
|
|
|
|
1,094 |
|
0.1% |
| ||||||
|
Common Stock (10,000 shares) |
|
|
|
|
|
|
|
0.0% |
| ||||||
|
|
|
|
|
|
|
|
15,221 |
|
18,643 |
|
1.6% |
| |||
Smart, LLC(14) |
|
New York / Diversified / Conglomerate Service |
|
Membership Interest Class B (1,218 units) |
|
|
|
|
|
|
|
0.0% |
| |||
|
Membership Interest Class D (1 unit) |
|
|
|
|
|
|
|
0.0% |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
0.0% |
| |||
See notes to consolidated financial statements.
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2011 and June 30, 2011
(in thousands, except share data)
|
|
|
|
|
|
September 30, 2011 (Unaudited) | ||||||||||
Portfolio Company |
|
Locale / Industry |
|
Investments(1) |
|
Principal |
|
Cost |
|
Fair |
|
% of Net | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
LEVEL 3 PORTFOLIO INVESTMENTS: |
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Affiliate Investments (5.00% to 24.99% voting control) |
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Sport Helmets Holdings, LLC(14) |
|
New York / Personal & Nondurable Consumer Products |
|
Revolving Line of Credit $3,000 Commitment (3.97% (LIBOR + 3.75%), due 12/14/2013) (4), (25), (26) |
|
$ |
|
|
$ |
|
|
$ |
|
|
0.0% |
|
Senior Secured Term Loan A (3.97% (LIBOR + 3.75%), due 12/14/2013)(3), (4) |
|
1,900 |
|
1,232 |
|
1,874 |
|
0.2% |
| |||||||
|
|
|
|
Senior Secured Term Loan B (4.47%, (LIBOR + 4.25%) due 12/14/2013)(3), (4) |
|
7,294 |
|
5,744 |
|
7,172 |
|
0.6% |
| |||
|
|
|
|
Senior Subordinated Debt Series A (12.00% plus 3.00% PIK, due 6/14/2014)(3) |
|
7,608 |
|
6,446 |
|
7,608 |
|
0.7% |
| |||
Senior Subordinated Debt Series B (10.00% plus 5.00% PIK, due 6/14/2014)(3) |
|
1,445 |
|
1,113 |
|
1,444 |
|
0.1% |
| |||||||
Common Stock (20,974 shares) |
|
|
|
459 |
|
4,422 |
|
0.4% |
| |||||||
|
|
|
|
|
|
|
|
14,994 |
|
22,520 |
|
2.0% |
| |||
|
|
|
|
Total Affiliate Investments |
|
59,321 |
|
72,410 |
|
6.4% |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Non-control/Non-affiliate Investments (less than 5.00% of voting control) |
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
ADAPCO, Inc. |
|
Florida / Ecological |
|
Common Stock (5,000 shares) |
|
|
|
141 |
|
214 |
|
0.0% |
| |||
|
|
|
|
|
|
|
|
141 |
|
214 |
|
0.0% |
| |||
Aircraft Fasteners International, LLC |
|
California / Machinery |
|
Revolving Line of Credit $500 Commitment (9.50% (LIBOR + 7.00% with 2.50% LIBOR floor), due 11/01/2012)(4) , (25), (26) |
|
|
|
|
|
|
|
0.0% |
| |||
|
|
|
|
Senior Secured Term Loan (9.50% (LIBOR + 7.00% with 2.50% LIBOR floor), due 11/01/2012)(3), (4) |
|
3,527 |
|
3,527 |
|
3,527 |
|
0.3% |
| |||
|
|
|
|
Junior Secured Term Loan (12.00% plus 6.00% PIK, due 5/01/2013)(3) |
|
4,975 |
|
4,975 |
|
4,975 |
|
0.4% |
| |||
|
|
|
|
Convertible Preferred Stock (32,500 units) |
|
|
|
396 |
|
378 |
|
0.0% |
| |||
|
|
|
|
|
|
|
|
8,898 |
|
8,880 |
|
0.7% |
| |||
American Gilsonite Company |
|
Utah / Specialty Minerals |
|
Senior Subordinated Note (12.00% (LIBOR + 10.00% with 2.00% LIBOR floor) plus 2.50% PIK, due 3/10/2016) (3), (4) |
|
30,169 |
|
30,169 |
|
30,169 |
|
2.7% |
| |||
|
|
|
|
Membership Interest in AGC/PEP, LLC (99.9999%)(15) |
|
|
|
|
|
4,799 |
|
0.4% |
| |||
|
|
|
|
|
|
|
|
30,169 |
|
34,968 |
|
3.1% |
| |||
Anchor Hocking, LLC |
|
Ohio / Durable Consumer Products |
|
Senior Secured Term Loan (10.50% (LIBOR + 9.00% with 1.50% LIBOR floor), due 9/27/2016) (4) |
|
23,000 |
|
23,000 |
|
23,000 |
|
2.0% |
| |||
|
|
|
|
|
|
|
|
23,000 |
|
23,000 |
|
2.0% |
| |||
Arrowhead General Insurance Agency, Inc.(16) |
|
California / Insurance |
|
Junior Secured Term Loan (11.25% (LIBOR + 9.50% with 1.75% LIBOR floor), due 9/30/2017) (4) |
|
27,000 |
|
27,000 |
|
24,540 |
|
2.2% |
| |||
|
|
|
|
|
|
|
|
27,000 |
|
24,540 |
|
2.2% |
| |||
Babson CLO Ltd 2011-I |
|
Cayman Islands / Diversified Financial Services |
|
Subordinated Notes (Residual Interest) |
|
|
|
32,116 |
|
32,116 |
|
2.8% |
| |||
|
|
|
|
|
|
|
|
32,116 |
|
32,116 |
|
2.8% |
| |||
Byrider Systems Acquisition Corp. |
|
Indiana / Auto Finance |
|
Senior Subordinated Notes (12.00% plus 2.00% PIK, due 11/3/2016) (3) |
|
25,168 |
|
25,168 |
|
25,378 |
|
2.2% |
| |||
|
|
|
|
|
|
|
|
25,168 |
|
25,378 |
|
2.2% |
| |||
See notes to consolidated financial statements.
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2011 and June 30, 2011
(in thousands, except share data)
|
|
|
|
|
|
September 30, 2011 (Unaudited) | ||||||||||
Portfolio Company |
|
Locale / Industry |
|
Investments(1) |
|
Principal |
|
Cost |
|
Fair |
|
% of Net | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
LEVEL 3 PORTFOLIO INVESTMENTS: |
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Non-control/Non-affiliate Investments (less than 5.00% of voting control) |
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Caleel + Hayden, LLC (14) |
Colorado / Personal & Nondurable Consumer Products |
|
Membership Units (7,500 shares) |
|
|
|
$ |
351 |
|
$ |
39 |
|
0.0% |
| ||
|
|
|
|
|
|
|
|
351 |
|
39 |
|
0.0% |
| |||
Capstone Logistics, LLC(4) |
|
Georgia / Commercial Services |
|
Senior Secured Term Loan A (7.50% (LIBOR + 5.50% with 2.00% LIBOR floor), due 9/16/2016) |
|
$ |
41,500 |
|
41,500 |
|
41,500 |
|
3.6% |
| ||
Senior Secured Term Loan B (13.50% (LIBOR + 11.50% with 2.00% LIBOR floor), due 9/16/2016) |
|
|
|
|
|
|
|
|
| |||||||
|
49,000 |
|
49,000 |
|
49,000 |
|
4.3% |
| ||||||||
|
|
|
|
|
|
|
|
90,500 |
|
90,500 |
|
7.9% |
| |||
Cargo Airport Services USA, LLC |
|
New York / Transportation |
|
Revolving Line of Credit $5,000 Commitment (11.50% (LIBOR + 8.50% with 3.00% LIBOR floor), due 3/31/2012)(4) ,(25) |
|
1,000 |
|
1,000 |
|
1,000 |
|
0.1% |
| |||
|
|
|
|
Senior Secured Term Loan (11.50% (LIBOR + 8.50% with 3.00% LIBOR floor), due 3/31/2016) (3), (4) |
|
52,338 |
|
52,338 |
|
53,036 |
|
4.7% |
| |||
|
|
|
|
Common Equity (1.5 units) |
|
|
|
1,500 |
|
1,627 |
|
0.1% |
| |||
|
|
|
|
|
|
|
|
54,838 |
|
55,663 |
|
4.9% |
| |||
Clearwater Seafoods LP |
|
Canada / Food Products |
|
Second Lien Term Loan (12.00%, due 2/4/2016) (3) |
|
45,000 |
|
45,000 |
|
45,000 |
|
4.0% |
| |||
|
|
|
|
|
|
|
|
45,000 |
|
45,000 |
|
4.0% |
| |||
The Copernicus Group, Inc. |
|
North Carolina / Healthcare |
|
Revolving Line of Credit $1,000 Commitment (8.00% (LIBOR + 5.00% with 3.00% LIBOR floor), due 2/9/2016)(4), (25) |
|
|
|
|
|
|
|
0.0% |
| |||
|
|
|
|
Senior Secured Term Loan A (8.00% (LIBOR + 5.00% with 3.00% LIBOR floor), due 2/9/2016)(3), (4) |
|
10,688 |
|
10,688 |
|
10,848 |
|
1.0% |
| |||
|
|
|
|
Senior Secured Term Loan B (14.00% (LIBOR + 11.00% with 3.00% LIBOR floor), due 2/9/2016) (3), (4) |
|
11,250 |
|
11,250 |
|
11,419 |
|
1.0% |
| |||
|
|
|
|
Preferred Stock Series A (1,000,000 shares) |
|
|
|
67 |
|
1,448 |
|
0.1% |
| |||
|
|
|
|
Preferred Stock Series C (212,121 shares) |
|
|
|
212 |
|
419 |
|
0.0% |
| |||
|
|
|
|
|
|
|
|
22,217 |
|
24,134 |
|
2.1% |
| |||
CRT MIDCO, LLC |
|
Wisconsin / Media |
|
Senior Secured Term Loan (10.50% (LIBOR + 7.50% with 3.00% LIBOR floor), due 6/30/2017)(3), (4) |
|
74,625 |
|
74,625 |
|
74,625 |
|
6.6% |
| |||
|
|
|
|
|
|
|
|
74,625 |
|
74,625 |
|
6.6% |
| |||
Diamondback Operating, LP |
|
Oklahoma / Oil & Gas Production |
|
Net Profits Interest (15.00% payable on Equity distributions)(7) |
|
|
|
|
|
|
|
0.0% |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
0.0% |
| |||
Empire Today, LLC(16) |
|
Illinois / Durable Consumer Products |
|
Senior Secured Note (11.375%, due 2/1/2017) |
|
7,500 |
|
7,427 |
|
7,500 |
|
0.7% |
| |||
|
|
|
|
|
|
|
|
7,427 |
|
7,500 |
|
0.7% |
| |||
Fairchild Industrial Products, Co. |
|
North Carolina / Electronics |
|
Preferred Stock Class A (285.1 shares) Common Stock Class B (28 shares) |
|
|
|
377 |
|
805 |
|
0.1% |
| |||
|
|
|
|
|
|
|
|
588 |
|
1,375 |
|
0.2% |
| |||
Fischbein, LLC |
|
North Carolina / Machinery |
|
Senior Subordinated Debt (12.00% plus 2.00% PIK, due 10/31/2016) |
|
3,362 |
|
3,362 |
|
3,362 |
|
0.3% |
| |||
|
|
|
|
Membership Class A (875,000 units) |
|
|
|
875 |
|
1,240 |
|
0.1% |
| |||
|
|
|
|
|
|
|
|
4,237 |
|
4,602 |
|
0.4% |
| |||
See notes to consolidated financial statements.
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED SCHEDULE OF INVESTMENTS (CONTINUED)
September 30, 2011 and June 30, 2011
(in thousands, except share data)
|
|
|
|
|
|
September 30, 2011 (Unaudited) | ||||||||||
Portfolio Company |
|
Locale / Industry |
|
Investments(1) |
|
Principal |
|
Cost |
|
Fair |
|
% of Net | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
LEVEL 3 PORTFOLIO INVESTMENTS: |
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Non-control/Non-affiliate Investments (less than 5.00% of voting control) |
|
|
|
|
|
|
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
H&M Oil & Gas, LLC |
|
Texas / Oil & Gas Production |
|
Senior Secured Note (13.00% (LIBOR + 7.50% with 5.50% LIBOR floor) plus 3.00% PIK, in non-accrual status effective 01/01/2011, past due)(4) |
|
$ |
61,398 |
|
$ |
60,019 |
|
$ |
38,785 |
|
3.4% |
|
Net Profits Interest (8.00% payable on Equity distributions)(7) |
|
|
|
|
|
|
|
0.0% |
| |||||||
|
|