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 December 31, 2013 | |
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|
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) |
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|
(212) 448-0702 | |
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|
(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. x Yes 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 January 31, 2014 was 310,346,894.
PROSPECT CAPITAL CORPORATION
FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 2013
TABLE OF CONTENTS
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Page |
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3 | ||
3 | ||
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3 | |
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4 | |
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5 | |
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6 | |
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Consolidated Schedules of Investments December 31, 2013 (Unaudited) and June 30, 2013 (Audited) |
7 |
|
41 | |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
70 | |
107 | ||
107 | ||
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|
|
108 | ||
108 | ||
108 | ||
108 | ||
108 | ||
108 | ||
108 | ||
108 | ||
|
118 |
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
December 31, 2013 and June 30, 2013
(in thousands, except share and per share data)
|
|
December 31, |
|
June 30, | ||
|
|
(Unaudited) |
|
(Audited) | ||
Assets (Note 4) |
|
|
|
| ||
Investments at fair value: |
|
|
|
| ||
Control investments (amortized cost of $1,236,286 and $830,151, respectively) |
|
$ |
1,163,300 |
|
$ |
811,634 |
Affiliate investments (amortized cost of $49,278 and $49,189, respectively) |
|
38,880 |
|
42,443 | ||
Non-control/Non-affiliate investments (amortized cost of $3,690,790 and $3,376,438, respectively) |
|
3,683,840 |
|
3,318,775 | ||
Total investments at fair value (amortized cost of $4,976,354 and $4,255,778, respectively) (Note 3) |
|
4,886,020 |
|
4,172,852 | ||
|
|
|
|
| ||
Investments in money market funds |
|
220,850 |
|
143,262 | ||
Cash |
|
25,154 |
|
59,974 | ||
Receivables for: |
|
|
|
| ||
Interest, net |
|
14,184 |
|
22,863 | ||
Other |
|
2,067 |
|
4,397 | ||
Prepaid expenses |
|
277 |
|
540 | ||
Deferred financing costs |
|
45,470 |
|
44,329 | ||
Total Assets |
|
5,194,022 |
|
4,448,217 | ||
|
|
|
|
| ||
Liabilities |
|
|
|
| ||
Credit facility payable (Notes 4 and 8) |
|
|
|
124,000 | ||
Senior Convertible Notes (Notes 5 and 8) |
|
847,500 |
|
847,500 | ||
Senior Unsecured Notes (Notes 6 and 8) |
|
347,814 |
|
347,725 | ||
Prospect Capital InterNotes® (Notes 7 and 8) |
|
600,907 |
|
363,777 | ||
Due to broker |
|
44,826 |
|
43,588 | ||
Dividends payable |
|
33,229 |
|
27,299 | ||
Due to Prospect Administration (Note 12) |
|
1,741 |
|
1,366 | ||
Due to Prospect Capital Management (Note 12) |
|
48,108 |
|
5,324 | ||
Accrued expenses |
|
3,624 |
|
2,345 | ||
Interest payable |
|
26,753 |
|
24,384 | ||
Other liabilities |
|
8,421 |
|
4,415 | ||
Total Liabilities |
|
1,962,923 |
|
1,791,723 | ||
Net Assets |
|
$ |
3,231,099 |
|
$ |
2,656,494 |
|
|
|
|
| ||
Components of Net Assets |
|
|
|
| ||
Common stock, par value $0.001 per share (500,000,000 common shares authorized; 301,259,436 and 247,836,965 issued and outstanding, respectively) (Note 9) |
|
$ |
301 |
|
$ |
248 |
Paid-in capital in excess of par (Note 9) |
|
3,332,469 |
|
2,739,864 | ||
Undistributed net investment income |
|
68,321 |
|
77,084 | ||
Accumulated realized losses on investments |
|
(79,658) |
|
(77,776) | ||
Unrealized depreciation on investments |
|
(90,334) |
|
(82,926) | ||
Net Assets |
|
$ |
3,231,099 |
|
$ |
2,656,494 |
|
|
|
|
| ||
Net Asset Value Per Share (Note 15) |
|
$ |
10.73 |
|
$ |
10.72 |
|
|
|
|
| ||
See notes to consolidated financial statements. |
|
|
|
|
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended December 31, 2013 and 2012
(in thousands, except share and per share data)
(Unaudited)
|
|
For the Three Months Ended |
|
For the Six Months Ended | ||||||||
|
|
December 31, |
|
December 31, | ||||||||
|
|
2013 |
|
2012 |
|
2013 |
|
2012 | ||||
|
|
|
|
|
|
|
|
| ||||
Investment Income |
|
|
|
|
|
|
|
| ||||
Interest income: |
|
|
|
|
|
|
|
| ||||
Control investments |
|
$ |
37,086 |
|
$ |
33,239 |
|
$ |
69,719 |
|
$ |
51,158 |
Affiliate investments |
|
1,399 |
|
1,694 |
|
2,895 |
|
3,345 | ||||
Non-control/Non-affiliate investments |
|
79,420 |
|
58,513 |
|
157,532 |
|
103,540 | ||||
CLO fund securities |
|
29,198 |
|
23,420 |
|
55,378 |
|
37,133 | ||||
Total interest income |
|
147,103 |
|
116,866 |
|
285,524 |
|
195,176 | ||||
|
|
|
|
|
|
|
|
| ||||
Dividend income: |
|
|
|
|
|
|
|
| ||||
Control investments |
|
8,877 |
|
31,717 |
|
15,952 |
|
64,967 | ||||
Non-control/Non-affiliate investments |
|
9 |
|
230 |
|
12 |
|
3,185 | ||||
Money market funds |
|
6 |
|
8 |
|
17 |
|
11 | ||||
Total dividend income |
|
8,892 |
|
31,955 |
|
15,981 |
|
68,163 | ||||
|
|
|
|
|
|
|
|
| ||||
Other income: (Note 10) |
|
|
|
|
|
|
|
| ||||
Control investments |
|
17,928 |
|
5,095 |
|
27,149 |
|
5,097 | ||||
Affiliate investments |
|
5 |
|
605 |
|
7 |
|
613 | ||||
Non-control/Non-affiliate investments |
|
4,162 |
|
11,514 |
|
10,463 |
|
20,622 | ||||
Total other income |
|
22,095 |
|
17,214 |
|
37,619 |
|
26,332 | ||||
Total Investment Income |
|
178,090 |
|
166,035 |
|
339,124 |
|
289,671 | ||||
|
|
|
|
|
|
|
|
| ||||
Operating Expenses |
|
|
|
|
|
|
|
| ||||
Investment advisory fees: |
|
|
|
|
|
|
|
| ||||
Base management fee (Note 12) |
|
25,075 |
|
16,306 |
|
48,120 |
|
29,534 | ||||
Income incentive fee (Note 12) |
|
23,054 |
|
24,804 |
|
43,638 |
|
43,311 | ||||
Total investment advisory fees |
|
48,129 |
|
41,110 |
|
91,758 |
|
72,845 | ||||
|
|
|
|
|
|
|
|
| ||||
Interest and credit facility expenses |
|
29,256 |
|
16,414 |
|
56,663 |
|
29,925 | ||||
Legal fees |
|
(42) |
|
635 |
|
177 |
|
1,257 | ||||
Valuation services |
|
449 |
|
371 |
|
888 |
|
747 | ||||
Audit, compliance and tax related fees |
|
745 |
|
378 |
|
1,368 |
|
810 | ||||
Allocation of overhead from Prospect Administration (Note 12) |
|
3,986 |
|
2,139 |
|
7,972 |
|
4,323 | ||||
Insurance expense |
|
90 |
|
78 |
|
183 |
|
171 | ||||
Directors fees |
|
75 |
|
75 |
|
150 |
|
150 | ||||
Excise tax |
|
1,000 |
|
4,500 |
|
2,000 |
|
4,500 | ||||
Other general and administrative expenses |
|
2,187 |
|
1,119 |
|
3,413 |
|
1,700 | ||||
Total Operating Expenses |
|
85,875 |
|
66,819 |
|
164,572 |
|
116,428 | ||||
|
|
|
|
|
|
|
|
| ||||
Net Investment Income |
|
92,215 |
|
99,216 |
|
174,552 |
|
173,243 | ||||
|
|
|
|
|
|
|
|
| ||||
Net realized loss on investments (Note 3) |
|
(5,671) |
|
(8,123) |
|
(1,882) |
|
(6,348) | ||||
Net change in unrealized depreciation on investments (Note 3) |
|
(1,182) |
|
(44,604) |
|
(7,408) |
|
(73,157) | ||||
|
|
|
|
|
|
|
|
| ||||
Net Increase in Net Assets Resulting from Operations |
|
$ |
85,362 |
|
$ |
46,489 |
|
$ |
165,262 |
|
$ |
93,738 |
|
|
|
|
|
|
|
|
| ||||
Net increase in net assets resulting from operations per share (Notes 11 and 16) |
|
$ |
0.30 |
|
$ |
0.24 |
|
$ |
0.61 |
|
$ |
0.52 |
Dividends declared per share |
|
$ |
0.33 |
|
$ |
0.31 |
|
$ |
0.66 |
|
$ |
0.62 |
See notes to consolidated financial statements.
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended December 31, 2013 and 2012
(in thousands, except share data)
(Unaudited)
|
|
For the Six Months Ended December 31, | ||||
|
|
2013 |
|
2012 | ||
Increase in Net Assets from Operations: |
|
|
|
| ||
Net investment income |
|
$ |
174,552 |
|
$ |
173,243 |
Net realized loss on investments |
|
(1,882) |
|
(6,348) | ||
Net change in unrealized depreciation on investments |
|
(7,408) |
|
(73,157) | ||
Net Increase in Net Assets Resulting from Operations |
|
165,262 |
|
93,738 | ||
|
|
|
|
| ||
Dividends to Shareholders: |
|
|
|
| ||
Distribution of net investment income |
|
(183,315) |
|
(114,093) | ||
Distribution of return of capital |
|
|
|
| ||
Total Dividends to Shareholders |
|
(183,315) |
|
(114,093) | ||
|
|
|
|
| ||
Capital Share Transactions: |
|
|
|
| ||
Proceeds from capital shares sold, net of underwriting costs |
|
563,578 |
|
770,252 | ||
Less: Offering costs of public share offerings |
|
(1,019) |
|
(1,514) | ||
Proceeds from shares issued to acquire controlled investments |
|
21,006 |
|
59,251 | ||
Reinvestment of dividends |
|
9,093 |
|
7,027 | ||
Net Increase in Net Assets Resulting from Capital Share Transactions |
|
592,658 |
|
835,016 | ||
|
|
|
|
| ||
Total Increase in Net Assets |
|
574,605 |
|
814,661 | ||
Net assets at beginning of period |
|
2,656,494 |
|
1,511,974 | ||
Net Assets at End of Period |
|
$ |
3,231,099 |
|
$ |
2,326,635 |
|
|
|
|
| ||
Capital Share Activity: |
|
|
|
| ||
Shares sold |
|
50,700,067 |
|
69,407,632 | ||
Shares issued to acquire controlled investments |
|
1,918,342 |
|
5,507,381 | ||
Shares issued through reinvestment of dividends |
|
804,062 |
|
624,527 | ||
Net increase in capital share activity |
|
53,422,471 |
|
75,539,540 | ||
Shares outstanding at beginning of period |
|
247,836,965 |
|
139,633,870 | ||
|
|
|
|
| ||
Shares Outstanding at End of Period |
|
301,259,436 |
|
215,173,410 |
See notes to consolidated financial statements.
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended December 31, 2013 and 2012
(in thousands, except share data)
(Unaudited)
|
|
For the Six Months Ended December 31, | ||||
|
|
2013 |
|
2012 | ||
Cash Flows from Operating Activities: |
|
|
|
| ||
Net increase in net assets resulting from operations |
|
$ |
165,262 |
|
$ |
93,738 |
Net realized loss on investments |
|
1,882 |
|
6,348 | ||
Net change in unrealized depreciation on investments |
|
7,408 |
|
73,157 | ||
Amortization of discounts and premiums, net |
|
23,133 |
|
(11,422) | ||
Amortization of deferred financing costs |
|
5,087 |
|
3,724 | ||
Payment-in-kind interest |
|
(9,845) |
|
(4,048) | ||
Structuring fees |
|
(15,533) |
|
(24,273) | ||
Change in operating assets and liabilities |
|
|
|
| ||
Payments for purchases of investments |
|
(1,118,612) |
|
(1,432,490) | ||
Proceeds from sale of investments and collection of investment principal |
|
419,405 |
|
507,392 | ||
Net increase of investments in money market funds |
|
(77,588) |
|
(312,576) | ||
Decrease (increase) in interest receivable, net |
|
8,679 |
|
(2,312) | ||
Decrease (increase) in other receivables |
|
2,328 |
|
(1,636) | ||
Decrease in prepaid expenses |
|
263 |
|
194 | ||
Increase (decrease) in due to broker |
|
1,238 |
|
(6,242) | ||
Increase (decrease) in due to Prospect Administration |
|
375 |
|
(285) | ||
Increase (decrease) in due to Prospect Capital Management |
|
42,784 |
|
(5,894) | ||
Increase in accrued expenses |
|
1,279 |
|
380 | ||
Increase in interest payable |
|
2,369 |
|
6,516 | ||
Increase in other liabilities |
|
4,006 |
|
7,487 | ||
Net Cash Used In Operating Activities |
|
(536,080) |
|
(1,102,242) | ||
|
|
|
|
| ||
Cash Flows from Financing Activities: |
|
|
|
| ||
Borrowings under credit facility (Note 4) |
|
96,000 |
|
99,000 | ||
Principal payments under credit facility (Note 4) |
|
(220,000) |
|
(195,000) | ||
Issuance of Senior Convertible Notes (Note 5) |
|
|
|
400,000 | ||
Issuance of Prospect Capital InterNotes® (Note 7) |
|
238,780 |
|
144,355 | ||
Redemptions of Prospect Capital InterNotes® (Note 7) |
|
(1,650) |
|
| ||
Financing costs paid and deferred |
|
(6,139) |
|
(17,880) | ||
Proceeds from issuance of common stock, net of underwriting costs |
|
563,578 |
|
770,252 | ||
Offering costs from issuance of common stock |
|
(1,019) |
|
(1,514) | ||
Dividends paid |
|
(168,290) |
|
(97,577) | ||
Net Cash Provided By Financing Activities |
|
501,260 |
|
1,101,636 | ||
|
|
|
|
| ||
Total Decrease in Cash |
|
(34,820) |
|
(606) | ||
Cash balance at beginning of period |
|
59,974 |
|
2,825 | ||
Cash Balance at End of Period |
|
$ |
25,154 |
|
$ |
2,219 |
|
|
|
|
| ||
Cash Paid For Interest |
|
$ |
47,226 |
|
$ |
17,442 |
|
|
|
|
| ||
Non-Cash Financing Activity: |
|
|
|
| ||
Proceeds from shares issued in connection with dividend reinvestment plan |
|
$ |
9,093 |
|
$ |
7,027 |
Proceeds from shares issued in conjunction with controlled investments |
|
$ |
21,006 |
|
$ |
59,251 |
See notes to consolidated financial statements.
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED SCHEDULES OF INVESTMENTS
December 31, 2013 (Unaudited) and June 30, 2013 (Audited)
(in thousands, except share data)
|
|
|
|
|
|
|
December 31, 2013 (Unaudited) |
| ||||||
|
Portfolio Company |
|
Locale / Industry |
|
Investments(1) |
|
Principal |
|
Cost |
|
Fair |
|
% of Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEVEL 3 PORTFOLIO INVESTMENTS: |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Control Investments (greater than 25.00% voting control)(42) |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
|
$ 27,881 |
|
$ 27,881 |
|
$ 27,881 |
|
0.9% |
|
|
|
|
|
|
Senior Subordinated Term Loan (12.00% plus 6.00% PIK, due 12/31/2015) |
|
19,698 |
|
19,698 |
|
19,698 |
|
0.6% |
|
|
|
|
|
|
Convertible Preferred Stock (9,919.684 shares) |
|
|
|
9,920 |
|
1,888 |
|
0.1% |
|
|
|
|
|
|
Common Stock (100 shares) |
|
|
|
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
57,499 |
|
49,467 |
|
1.6% |
|
|
Ajax Rolled Ring & Machine, Inc. |
|
South Carolina / Manufacturing |
|
Senior Secured Note (10.50% (LIBOR + 7.50% with 3.00% LIBOR floor), due 3/30/2018) (4) |
|
19,536 |
|
19,536 |
|
19,536 |
|
0.6% |
|
|
|
|
|
|
Convertible Preferred Stock Series B (25,000 shares) |
|
|
|
25,000 |
|
5,045 |
|
0.2% |
|
|
|
|
|
|
Convertible Preferred Stock Series A (6,142.6 shares) |
|
|
|
6,057 |
|
|
|
0.0% |
|
|
|
|
|
|
Unrestricted Common Stock (6 shares) |
|
|
|
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
50,593 |
|
24,581 |
|
0.8% |
|
|
APH Property Holdings, LLC(32) |
|
Florida / Real Estate |
|
Senior Secured Note (6.00% (LIBOR + 4.00% with 2.00% LIBOR floor) plus 5.50% PIK, due 10/24/2020)(4) |
|
161,662 |
|
161,662 |
|
161,662 |
|
5.0% |
|
|
|
|
|
|
Membership Units (100 shares) |
|
|
|
32,240 |
|
32,240 |
|
1.0% |
|
|
|
|
|
|
|
|
|
|
193,902 |
|
193,902 |
|
6.0% |
|
|
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 $1,150 Commitment (5.00% (PRIME + 1.75%) plus 3.00% default interest, in non-accrual status effective 03/02/2010, past due)(4), (25) |
|
1,150 |
|
1,095 |
|
474 |
|
0.0% |
|
|
|
|
|
|
Senior Secured Term Loan B (8.50% (PRIME + 5.25%) plus 3.00% default interest, in non-accrual status effective 03/02/2010, past due)(4) |
|
1,612 |
|
1,501 |
|
|
|
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) |
|
9,940 |
|
707 |
|
|
|
0.0% |
|
|
|
|
|
|
Common Stock (100 shares)(21) |
|
|
|
|
|
|
|
0.0% |
|
|
|
|
|
|
Warrants (33,750 warrants)(21) |
|
|
|
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
3,303 |
|
474 |
|
0.0% |
|
|
CCPI Holdings, Inc.(33) |
|
Ohio / Manufacturing |
|
Senior Secured Note (10.00%, due 12/31/2017)(3) |
|
17,437 |
|
17,437 |
|
17,437 |
|
0.5% |
|
|
|
|
|
|
Senior Secured Note (12.00% plus 7.00% PIK, due 6/30/2018) |
|
8,075 |
|
8,075 |
|
8,075 |
|
0.2% |
|
|
|
|
|
|
Common Stock (100 shares) |
|
|
|
8,581 |
|
13,790 |
|
0.4% |
|
|
|
|
|
|
Net Revenue Interest (4% of Net Revenue) |
|
|
|
|
|
516 |
|
0.0% |
|
|
|
|
|
|
|
|
|
|
34,093 |
|
39,818 |
|
1.1% |
|
|
CP Holdings of Delaware LLC(38) |
|
Oklahoma / Oil & Gas Production |
|
Senior Secured Note (9.00% (LIBOR + 7.00% with 2.00% LIBOR floor) plus 9.00% PIK, due 8/2/2018) (4) |
|
75,773 |
|
75,773 |
|
75,773 |
|
2.3% |
|
|
|
|
|
|
Senior Secured Note (11.00% (LIBOR + 9.00% with 2.00% LIBOR floor), due 8/2/2018) (4) |
|
22,400 |
|
22,400 |
|
22,400 |
|
0.7% |
|
|
|
|
|
|
Membership Units (100 shares) |
|
|
|
15,228 |
|
20,955 |
|
0.6% |
|
|
|
|
|
|
|
|
|
|
113,401 |
|
119,128 |
|
3.6% |
|
See notes to consolidated financial statements.
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
December 31, 2013 (Unaudited) and June 30, 2013 (Audited)
(in thousands, except share data)
|
|
|
|
|
|
|
December 31, 2013 (Unaudited) |
| ||||||
|
Portfolio Company |
|
Locale / Industry |
|
Investments(1) |
|
Principal |
|
Cost |
|
Fair |
|
% of Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEVEL 3 PORTFOLIO INVESTMENTS: |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Control Investments (greater than 25.00% voting control)(42) |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Central Holdings of Delaware, LLC (22), (34) |
|
South Carolina / Consumer Finance |
|
Senior Secured Revolving Credit Facility $60,000 Commitment (20.00% (LIBOR + 18.50% with 1.50% LIBOR floor), due 12/31/2022)(4), (25) |
|
$ 38,082 |
|
$ 38,082 |
|
$ 38,082 |
|
1.2% |
|
|
|
|
|
|
Membership Units (100 shares) |
|
|
|
9,581 |
|
10,957 |
|
0.3% |
|
|
|
|
|
|
Net Revenue Interest (5% of Net Revenue) |
|
|
|
|
|
2,207 |
|
0.1% |
|
|
|
|
|
|
|
|
|
|
47,663 |
|
51,246 |
|
1.6% |
|
|
Energy Solutions Holdings, Inc.(8) |
|
Texas / Energy |
|
Senior Secured Note to Vessel Holdings LLC (18.00%, due 12/12/2016) |
|
3,500 |
|
3,500 |
|
3,500 |
|
0.1% |
|
|
|
|
|
|
Senior Secured Debt to Vessel Holdings II, LLC (13.00%, in non-accrual status, due 11/25/2018) |
|
13,000 |
|
13,000 |
|
11,928 |
|
0.4% |
|
|
|
|
|
|
Senior Secured Debt to Vessel Holdings III, LLC (13.00%, due 12/3/2018) |
|
16,000 |
|
16,000 |
|
14,584 |
|
0.5% |
|
|
|
|
|
|
Senior Secured Debt to Yatesville Coal Holdings, Inc. (Non-accrual status effective 1/1/2009, past due) |
|
1,449 |
|
1,449 |
|
|
|
0.0% |
|
|
|
|
|
|
Common Stock (100 shares) |
|
|
|
8,318 |
|
3,539 |
|
0.1% |
|
|
|
|
|
|
|
|
|
|
42,267 |
|
33,551 |
|
1.1% |
|
|
First Tower Holdings of Delaware, LLC (22), (29) |
|
Mississippi / Consumer Finance |
|
Senior Secured Revolving Credit Facility $400,000 Commitment (20.00% (LIBOR + 18.50% with 1.50% LIBOR floor), due 6/30/2022)(4), (25) |
|
273,260 |
|
273,260 |
|
273,260 |
|
8.4% |
|
|
|
|
|
|
Membership Units (100 shares) |
|
|
|
44,693 |
|
34,648 |
|
1.1% |
|
|
|
|
|
|
Net Revenue Interest (5% of Net Revenue & Distributions) |
|
|
|
|
|
14,603 |
|
0.5% |
|
|
|
|
|
|
|
|
|
|
317,953 |
|
322,511 |
|
10.0% |
|
|
Gulf Coast Machine & Supply Company |
|
Texas / Manufacturing |
|
Senior Secured Term Loan (10.50% (LIBOR + 8.50% with 2.00% LIBOR floor), due 10/12/2017)(4) |
|
17,500 |
|
17,500 |
|
12,414 |
|
0.4% |
|
|
|
|
|
|
Convertible Preferred Stock Series A (99,900 shares) |
|
|
|
25,950 |
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
43,450 |
|
12,414 |
|
0.4% |
|
|
The Healing Staff, Inc.(9) |
|
North Carolina / Contracting |
|
Secured Promissory Notes (15.00%, in non-accrual status effective 12/22/2010, past due) |
|
1,688 |
|
1,686 |
|
|
|
0.0% |
|
|
|
|
|
|
Senior Demand Note (15.00%, in non-accrual status effective 11/1/2010, past due) |
|
1,170 |
|
1,170 |
|
|
|
0.0% |
|
|
|
|
|
|
Common Stock (1,000 shares) |
|
|
|
975 |
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
3,831 |
|
|
|
0.0% |
|
|
Manx Energy, Inc.(12) |
|
Kansas / Oil & Gas Production |
|
Senior Secured Note (13.00%, in non-accrual status effective 1/19/2010, past due) |
|
225 |
|
225 |
|
|
|
0.0% |
|
|
|
|
|
|
Preferred Stock (6,635 shares) |
|
|
|
|
|
|
|
0.0% |
|
|
|
|
|
|
Common Stock (17,082 shares) |
|
|
|
|
|
|
|
0.0% |
|
|
|
|
|
|
|
|
|
|
225 |
|
|
|
0.0% |
|
|
MITY Holdings of Delaware Inc.(17) |
|
Utah / Durable Consumer Products |
|
Senior Secured Note (9.00% (LIBOR + 7.00% with 2.00% LIBOR floor) plus 9.00% PIK, due 9/19/2019) (4) |
|
22,968 |
|
22,968 |
|
22,968 |
|
0.7% |
|
|
|
|
|
|
Senior Secured Note (10.00% (LIBOR + 7.00% with 3.00% LIBOR floor), due 3/19/2019) (3), (4) |
|
18,250 |
|
18,250 |
|
18,250 |
|
0.6% |
|
|
|
|
|
|
Common Stock (100 shares) |
|
|
|
6,943 |
|
6,943 |
|
0.2% |
|
|
|
|
|
|
|
|
|
|
48,161 |
|
48,161 |
|
1.5% |
|
See notes to consolidated financial statements.
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
December 31, 2013 (Unaudited) and June 30, 2013 (Audited)
(in thousands, except share data)
|
|
|
|
|
|
|
December 31, 2013 (Unaudited) |
| ||||||
|
Portfolio Company |
|
Locale / Industry |
|
Investments(1) |
|
Principal |
|
Cost |
|
Fair |
|
% of Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEVEL 3 PORTFOLIO INVESTMENTS: |
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Control Investments (greater than 25.00% voting control)(42) |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nationwide Acceptance Holdings, LLC (22), (36) |
|
Illinois / Consumer Finance |
|
Senior Secured Revolving Credit Facility $30,000 Commitment (20.00% (LIBOR + 18.50% with 1.50% LIBOR floor), due 1/31/2023)(4), (25) |
|
$ 21,308 |
|
$ 21,308 |
|
$ 21,308 |
|
0.7% |
|
|
|
|
|
|
Membership Units (100 shares) |
|
|
|
3,843 |
|
3,843 |
|
0.1% |
|
|
|
|
|
|
Net Revenue Interest (5% of Net Revenue) |
|
|
|
|
|
1,739 |
|
0.1% |
|
|
|
|
|
|
|
|
|
|
25,151 |
|
26,890 |
|
0.9% |
|
|
NMMB Holdings, Inc. (24) |
|
New York / Media |
|
Senior Secured Note (14.00%, due 5/6/2016) |
|
10,714 |
|
10,714 |
|
10,714 |
|
0.3% |
|
|
|
|
|
|
Series A Preferred Stock (8,086 shares) |
|
|
|
12,486 |
|
453 |
|
0.0% |
|
|
|
|
|
|
|
|
|
|
23,200 |
|
11,167 |
|
0.3% |
|
|
NPH Property Holdings, LLC (40) |
|
Texas / Real Estate |
|
Senior Term Loan (6.00% (LIBOR + 4.00% with 2.00% LIBOR floor) plus 5.50% PIK, due 10/24/2020)(4) |
|
88,109 |
|
88,109 |
|
88,109 |
|
2.7% |
|
|
|
|
|
|
Membership Units (100 shares) |
|
|
|
18,135 |
|
18,135 |
|
0.6% |
|
|
|
|
|
|
|
|
|
|
106,244 |
|
106,244 |
|
3.3% |
|
|
R-V Industries, Inc. |
|
Pennsylvania / Manufacturing |
|
Senior Subordinated Note (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 6/12/2018)(3), (4) |
|
32,750 |
|
32,750 |
|
32,750 |
|
1.0% |
|
|
|
|
|
|
Warrants (200,000 warrants, expiring 6/30/2017) |
|
|
|
1,682 |
|
6,692 |
|
0.2% |
|
|
|
|
|
|
Common Stock (545,107 shares) |
|
|
|
5,087 |
|
18,238 |
|
0.6% |
|
|
|
|
|
|
|
|
|
|
39,519 |
|
57,680 |
|
1.8% |
|
|
UPH Property Holdings, LLC (41) |
|
Georgia / Real Estate |
|
Senior Secured Note (6.00% (LIBOR + 4.00% with 2.00% LIBOR floor) plus 5.50% PIK, due 10/24/2020) (4) |
|
18,855 |
|
18,855 |
|
18,855 |
|
0.6% |
|
|
|
|
|
|
Membership Units (100 shares) |
|
|
|
3,707 |
|
3,707 |
|
0.1% |
|
|
|
|
|
|
|
|
|
|
22,562 |
|
22,562 |
|
0.7% |
|
|
Valley Electric Holdings I, Inc.(35) |
|
Washington / Construction & Engineering |
|
Senior Secured Note (9.00% (LIBOR + 6.00%, with 3.00% LIBOR floor) plus 9.00% PIK, due 12/31/2018)(4) |
|
35,648 |
|
35,648 |
|
28,163 |
|
0.9% |
|
|
|
|
|
|
Senior Secured Note (8.00% (LIBOR + 5.00% with 3.00% LIBOR floor) plus 2.50% PIK, due 12/31/2017)(3),(4) |
|
10,054 |
|
10,054 |
|
10,054 |
|
0.3% |
|
|
|
|
|
|
Common Stock (50,000 shares) |
|
|
|
9,526 |
|
|
|
0.0% |
|
|
|
|
|
|
Net Revenue Interest (5% of Net Revenue) |
|
|
|
|
|
724 |
|
0.0% |
|
|
|
|
|
|
|
|
|
|
55,228 |
|
38,941 |
|
1.2% |
|
|
Wolf Energy Holdings, |
|
Kansas / Oil & Gas Production |
|
Senior Secured Promissory Note secured by assets formerly owned by H&M (18.00%, in non-accrual status effective 4/15/2013, due 4/15/2018) |
|
22,000 |
|
|
|
4,043 |
|
0.1% |
|
|
|
|
|
|
Appalachian Energy Holdings, LLC (AEH) Senior Secured First Lien Note (8.00%, in non-accrual status effective 1/19/2010, past due) |
|
2,753 |
|
2,000 |
|
|
|
0.0% |
|
|
|
|
|
|
Appalachian Energy Holdings, LLC (AEH) Senior Secured First Lien Note (8.00%, in non-accrual status, past due) |
|
54 |
|
50 |
|
|
|
0.0% |
|
|
|
|
|
|
Coalbed, LLC Senior Secured Note (8.00%, in non-accrual status effective 1/19/2010, past due)(6) |
|
8,258 |
|
5,991 |
|
|
|
0.0% |
|
|
|
|
|
|
Common Stock (100 shares) |
|
|
|
|
|
|
|
0.0% |
|
|
|
|
|
|
Net Profits Interest (8.00% payable on Equity distributions)(7) |
|
|
|
|
|
520 |
|
0.0% |
|
|
|
|
|
|
|
|
|
|
8,041 |
|
4,563 |
|
0.1% |
|
|
|
|
|
|
Total Control Investments |
|
1,236,286 |
|
1,163,300 |
|
36.0% |
|
See notes to consolidated financial statements.
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
December 31, 2013 (Unaudited) and June 30, 2013 (Audited)
(in thousands, except share data)
|
|
|
|
|
|
|
December 31, 2013 (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)(43) |
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
BNN Holdings Corp. (f/k/a Biotronic NeuroNetwork) |
|
Michigan / Healthcare |
|
Senior Secured Note (10.00% (LIBOR + 8.00% with 2.00% LIBOR floor), due 12/17/2017)(3),(4) |
|
$ 29,250 |
|
$ 29,250 |
|
$ 29,250 |
|
0.9% |
| |
|
|
|
|
|
Preferred Stock Series A (9,925.455 shares)(13) |
|
|
|
2,300 |
|
1,869 |
|
0.1% |
| |
|
|
|
|
|
Preferred Stock Series B (1,753.64 shares)(13) |
|
|
|
579 |
|
405 |
|
0.0% |
| |
|
|
|
|
|
|
|
|
|
32,129 |
|
31,524 |
|
1.0% |
| |
|
Boxercraft Incorporated(20) |
|
Georgia / Textiles & Leather |
|
Senior Secured Term Loan A (10.00% plus 1.00% PIK, due 9/15/2015) |
|
1,621 |
|
1,621 |
|
1,621 |
|
0.0% |
| |
|
|
|
|
|
Senior Secured Term Loan B (10.00% plus 1.00% PIK, due 9/15/2015) |
|
4,918 |
|
4,918 |
|
3,990 |
|
0.1% |
| |
|
|
|
|
|
Senior Secured Term Loan C (10.00% plus 1.00% PIK, due 9/15/2015) |
|
2,383 |
|
2,383 |
|
|
|
0.0% |
| |
|
|
|
|
|
Senior Secured Term Loan (10.00% plus 1.00% PIK, due 9/15/2015) |
|
8,368 |
|
8,227 |
|
|
|
0.0% |
| |
|
|
|
|
|
Preferred Stock (1,000,000 shares) |
|
|
|
|
|
|
|
0.0% |
| |
|
|
|
|
|
Common Stock (10,000 shares) |
|
|
|
|
|
|
|
0.0% |
| |
|
|
|
|
|
Warrants (1 warrant, expiring 8/31/2022) |
|
|
|
|
|
|
|
0.0% |
| |
|
|
|
|
|
|
|
|
|
17,149 |
|
5,611 |
|
0.1% |
| |
|
Smart, LLC(14) |
|
New York / Diversified / Conglomerate Service |
|
Membership Interest |
|
|
|
|
|
1,745 |
|
0.1% |
| |
|
|
|
|
|
|
|
|
|
|
|
1,745 |
|
0.1% |
| |
|
|
|
|
|
Total Affiliate Investments |
|
49,278 |
|
38,880 |
|
1.2% |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Non-control/Non-affiliate Investments (less than 5.00% of voting control) |
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Aderant North America, Inc. |
|
Georgia / Software & Computer Services |
|
Second Lien Term Loan (10.00% (LIBOR + 8.75% with 1.25% LIBOR floor), due 6/20/2019)(4) |
|
7,000 |
|
6,907 |
|
7,000 |
|
0.2% |
| |
|
|
|
|
|
|
|
|
|
6,907 |
|
7,000 |
|
0.2% |
| |
|
Aircraft Fasteners International, LLC |
|
California / Machinery |
|
Convertible Preferred Stock (32,500 units) |
|
|
|
396 |
|
571 |
|
0.0% |
| |
|
|
|
|
|
|
|
|
|
396 |
|
571 |
|
0.0% |
| |
|
ALG USA Holdings, LLC |
|
Pennsylvania / Hotels, Restaurants & Leisure |
|
Second Lien Term Loan (10.25% (LIBOR + 9.00% with 1.25% LIBOR floor), due 2/28/2020)(4) |
|
12,000 |
|
11,778 |
|
12,000 |
|
0.4% |
| |
|
|
|
|
|
|
|
|
|
11,778 |
|
12,000 |
|
0.4% |
| |
|
Allied Defense Group, Inc. |
|
Virginia / Aerospace & Defense |
|
Common Stock (10,000 shares) |
|
|
|
5 |
|
|
|
0.0% |
| |
|
|
|
|
|
|
|
|
|
5 |
|
|
|
0.0% |
| |
|
American Broadband Holding Company and Cameron Holdings of NC, Inc |
|
North Carolina / Telecommunication Services |
|
Senior Secured Term Loan B (11.00% (LIBOR + 9.75% with 1.25% LIBOR floor), due 9/30/2018) (3), (4) |
|
75,000 |
|
75,000 |
|
75,000 |
|
2.3% |
| |
|
|
|
|
|
|
|
|
|
75,000 |
|
75,000 |
|
2.3% |
| |
|
American Gilsonite Company |
|
Utah / Specialty Minerals |
|
Second Lien Term Loan (11.50%, due 9/1/2017) |
|
38,500 |
|
38,500 |
|
38,500 |
|
1.2% |
| |
|
Membership Interest in AGC/PEP, LLC (99.9999%)(15) |
|
|
|
|
|
1,988 |
|
0.1% |
| |||||
|
|
|
|
|
|
|
|
|
38,500 |
|
40,488 |
|
1.3% |
| |
See notes to consolidated financial statements.
PROSPECT CAPITAL CORPORATION AND SUBSIDIARY
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
December 31, 2013 (Unaudited) and June 30, 2013 (Audited)
(in thousands, except share data)
|
|
|
|
|
|
|
December 31, 2013 (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) |
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apidos CLO IX, Ltd.(22) |
|
Cayman Islands / Diversified Financial Services |
|
Subordinated Notes (Residual Interest) |
|
$ 20,525 |
|
$ 18,932 |
|
$ 20,196 |
|
0.6% |
|
|
|
|
|
|
|
|
|
|
18,932 |
|
20,196 |
|
0.6% |
|
|
Apidos CLO XI, Ltd.(22) |
|
Cayman Islands / Diversified Financial Services |
|
Subordinated Notes (Residual Interest) |
|
38,340 |
|
35,440 |
|
38,755 |
|
1.2% |
|
|
|
|
|
|
|
|
|
|
35,440 |
|
38,755 |
|
1.2% |
|
|
Apidos CLO XII, Ltd.(22) |
|
Cayman Islands / Diversified Financial Services |
|
Subordinated Notes (Residual Interest) |
|
44,063 |
|
42,873 |
|
41,681 |
|
1.3% |
|
|
|
|
|
|
|
|
|
|
42,873 |
|
41,681 |
|
1.3% |
|
|
Apidos CLO XV, Ltd.(22) |
|
Cayman Islands / Diversified Financial Services |
|
Subordinated Notes (Residual Interest) |
|
36,515 |
|
37,111 |
|
36,326 |
|
1.1% |
|
|
|
|
|
|
|
|
|
|
37,111 |
|
36,326 |
|
1.1% |
|
|
Arctic Glacier U.S.A, Inc. (3) ,(4) |
|
Minnesota / Food Products |
|
Second Lien Term Loan (11.25% (LIBOR + 10.00% with 1.25% LIBOR floor), due 11/10/2019) |
|
150,000 |
|
150,000 |
|
150,000 |
|
4.6% |
|
|
|
|
|
|
|
|
|
|
150,000 |
|
150,000 |
|
4.6% |
|
|
Armor Holding II LLC(16) |
|
New York / Diversified Financial Services |
|
Second Lien Term Loan (10.25% (LIBOR + 9.00% with 1.25% LIBOR floor), due 12/26/2020) (3), (4) |
|
7,000 |
|
6,867 |
|
6,867 |
|
0.2% |
|
|
|
|
|
|
|
|
|
|
6,867 |
|
6,867 |
|
0.2% |
|
|
Atlantis Healthcare Group (Puerto Rico), Inc.(4) |
|
Puerto Rico / Healthcare |
|
Revolving Line of Credit $7,000 Commitment (10.00% (LIBOR + 8.00% with 2.00% LIBOR floor), due 2/21/2014)(25),(26) |
|
2,000 |
|
2,000 |
|
2,000 |
|
0.1% |
|
|
|
|
|
|
Senior Term Loan (10.00% (LIBOR + 8.00% with 2.00% LIBOR floor), due 2/21/2018)(3) |
|
39,155 |
|
39,155 |
|
33,589 |
|
1.0% |
|
|
|
|
|