PROSPECT CAPITAL CORP - FORM 10-Q - November 4, 2015

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EX-31.1 - EXHIBIT 31.1 - PROSPECT CAPITAL CORPpsec10-qq12016ex311.htm
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EX-32.2 - EXHIBIT 32.2 - PROSPECT CAPITAL CORPpsec10-qq12016ex322.htm
EX-31.2 - EXHIBIT 31.2 - PROSPECT CAPITAL CORPpsec10-qq12016ex312.htm

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 September 30, 2015
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)
Maryland
43-2048643
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
10 East 40th Street, 42nd Floor
 
New York, New York
10016
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (212) 448-0702
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 and posted on its corporate Website, 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). Yes o    No o
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ý
Accelerated filer o
Non-accelerated filer o
Smaller reporting company o
 (Do not check if a smaller reporting company)
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o    No ý
Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date.
Class of Common Stock
 
Outstanding at November 3, 2015
$0.001 par value
 
355,211,654



Table of Contents
 
 
Page
 
PART I
FINANCIAL INFORMATION
 
 
 
 
 
 
 
 
PART II
OTHER INFORMATION
 
 
 


FORWARD-LOOKING STATEMENTS
This report contains information that may constitute “forward-looking statements.” Generally, the words “believe,” “expect,”
“intend,” “estimate,” “anticipate,” “project,” “will” 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, 2015, and those described from time to time in our future reports filed with the Securities and Exchange Commission.



1

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)
 
September 30, 2015
 
June 30, 2015
 
(Unaudited)
 
(Audited)
Assets
 

 
 

Investments at fair value:
 

 
 

Control investments (amortized cost of $1,973,325 and $1,894,644, respectively)
$
2,012,700

 
$
1,974,202

Affiliate investments (amortized cost of $2,228 and $45,150, respectively)
3,128

 
45,945

Non-control/non-affiliate investments (amortized cost of $4,466,440 and $4,619,582, respectively)
4,415,072

 
4,589,411

Total investments at fair value (amortized cost of $6,441,993 and $6,559,376, respectively)
6,430,900

 
6,609,558

Cash and cash equivalents
71,828

 
110,026

Receivables for:
 
 
 
Interest, net
14,379

 
20,408

Other
907

 
2,885

Prepaid expenses
725

 
757

Deferred financing costs
51,740

 
54,420

Total Assets 
6,570,479

 
6,798,054

 
 
 
 
Liabilities 
 

 
 

Revolving Credit Facility (Notes 4 and 8)
156,700

 
368,700

Convertible Notes (Notes 5 and 8)
1,239,500

 
1,239,500

Public Notes (Notes 6 and 8)
548,143

 
548,094

Prospect Capital InterNotes® (Notes 7 and 8)
874,948

 
827,442

Commitments and Contingencies (Note 3)
—

 
—

Due to broker
55,253

 
26,778

Interest payable
35,639

 
39,659

Dividends payable
29,601

 
29,923

Due to Prospect Administration (Note 13)
5,415

 
4,238

Due to Prospect Capital Management (Note 13)
162

 
2,550

Accrued expenses
3,363

 
3,408

Other liabilities
7,734

 
4,713

Total Liabilities 
2,956,458

 
3,095,005

Net Assets 
$
3,614,021

 
$
3,703,049

 
 
 
 
Components of Net Assets 
 

 
 

Common stock, par value $0.001 per share (1,000,000,000 common shares authorized; 355,222,482 and 359,090,759 issued and outstanding, respectively) (Note 9)
$
355

 
$
359

Paid-in capital in excess of par (Note 9)
3,954,051

 
3,975,672

Accumulated overdistributed net investment income
(16,514
)
 
(21,077
)
Accumulated net realized loss on investments and extinguishment of debt
(312,778
)
 
(302,087
)
Net unrealized (depreciation) appreciation on investments
(11,093
)
 
50,182

Net Assets 
$
3,614,021

 
$
3,703,049

 
 
 
 
Net Asset Value Per Share (Note 16) 
$
10.17

 
$
10.31



2
PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(Unaudited)

 
Three Months Ended September 30,
 
2015
 
2014
Investment Income
 
 
 
Interest income:
 
 
 
Control investments
$
51,944

 
$
45,128

Affiliate investments
885

 
837

Non-control/non-affiliate investments
93,708

 
98,778

Structured credit securities
44,766

 
39,397

Total interest income
191,303

 
184,140

Dividend income:
 
 
 
Control investments
3,213

 
759

Affiliate investments
—

 
1,429

Non-control/non-affiliate investments
—

 
22

Money market funds
2

 
15

Total dividend income
3,215

 
2,225

Other income:
 
 
 
Control investments
2,409

 
5,663

Affiliate investments
—

 
226

Non-control/non-affiliate investments
3,324

 
9,767

Total other income (Note 10)
5,733

 
15,656

Total Investment Income
200,251

 
202,021

Operating Expenses
 
 
 
Investment advisory fees:
 
 
 
Base management fee (Note 13)
32,954

 
33,165

Income incentive fee (Note 13)
22,810

 
23,616

Total investment advisory fees
55,764

 
56,781

Interest and credit facility expenses
41,957

 
42,914

Legal fees
1,415

 
1,163

Valuation services
463

 
450

Audit, compliance and tax related fees
1,877

 
667

Allocation of overhead from Prospect Administration (Note 13)
4,178

 
3,016

Insurance expense
226

 
131

Directors’ fees
94

 
94

Other general and administrative expenses
3,035

 
2,342

Total Operating Expenses
109,009

 
107,558

Net Investment Income
91,242

 
94,463

 
 
 
 
Net realized losses on investments
(2,135
)
 
(22,911
)
Net change in unrealized (depreciation) appreciation on investments
(61,275
)
 
12,556

Net realized and unrealized losses on investments
(63,410
)
 
(10,355
)
Net realized losses on extinguishment of debt
(15
)
 
—

Net Increase in Net Assets Resulting from Operations
$
27,817

 
$
84,108

Net increase in net assets resulting from operations per share
$
0.08

 
$
0.24

Dividends declared per share
$
(0.25
)
 
$
(0.33
)

See notes to consolidated financial statements.
3

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

 
Three Months Ended September 30,
 
2015
 
2014
Operations
 

 
 

Net investment income
$
91,242

 
$
94,463

Net realized losses on investments
(2,135
)
 
(22,911
)
Net change in unrealized (depreciation) appreciation on investments
(61,275
)
 
12,556

Net realized losses on extinguishment of debt
(15
)
 
—

Net Increase in Net Assets Resulting from Operations 
27,817

 
84,108

 
 
 
 
Distributions to Shareholders
 
 
 
Distribution from net investment income
(89,115
)
 
(114,266
)
Distribution of return of capital
—

 
—

Net Decrease in Net Assets Resulting from Distributions to Shareholders
(89,115
)
 
(114,266
)
 
 
 
 
Common Stock Transactions 
 
 
 
Issuance of common stock, net of underwriting costs
—

 
56,305

Less: Offering costs from issuance of common stock
118

 
(210
)
Repurchase of common stock under stock repurchase program
(31,530
)
 
—

Value of shares issued through reinvestment of dividends
3,682

 
3,640

Net (Decrease) Increase in Net Assets Resulting from Common Stock Transactions 
(27,730
)
 
59,735

 
 
 
 
Total (Decrease) Increase in Net Assets 
(89,028
)
 
29,577

Net assets at beginning of period
3,703,049

 
3,618,182

Net Assets at End of Period
$
3,614,021

 
$
3,647,759

 
 
 
 
Common Stock Activity
 
 
 
Shares sold
—

 
5,536,780

Shares repurchased under stock repurchase program
(4,358,750
)
 
—

Shares issued through reinvestment of dividends
490,473

 
340,958

Total shares issued due to common stock activity
(3,868,277
)
 
5,877,738

Shares issued and outstanding at beginning of period
359,090,759

 
342,626,637

Shares Issued and Outstanding at End of Period
355,222,482

 
348,504,375

 


See notes to consolidated financial statements.
4

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except share data)
(Unaudited)


 
Three Months Ended September 30,
 
2015
 
2014
Operating Activities
 
 
 
Net increase in net assets resulting from operations
$
27,817

 
$
84,108

Net realized losses on extinguishment of debt
15

 
—

Net realized losses on investments
2,135

 
22,911

Net change in unrealized depreciation (appreciation) on investments
61,275

 
(12,556
)
Amortization of discounts and premiums, net
24,072

 
13,952

Accretion of discount on Public Notes (Note 6)
49

 
69

Amortization of deferred financing costs
3,556

 
3,829

Payment-in-kind interest
(1,279
)
 
(5,887
)
Structuring fees
(3,556
)
 
(10,515
)
Change in operating assets and liabilities:
 
 
 
Payments for purchases of investments
(432,778
)
 
(870,803
)
Proceeds from sale of investments and collection of investment principal
528,789

 
863,144

Decrease in interest receivable, net
6,029

 
1,474

Decrease (increase) in other receivables
1,978

 
(178
)
Decrease in prepaid expenses
32

 
23

Increase in due to broker
28,475

 
1,787

Decrease in interest payable
(4,020
)
 
(1,509
)
Increase in due to Prospect Administration
1,177

 
64

(Decrease) increase in due to Prospect Capital Management
(2,388
)
 
3,912

(Decrease) increase in accrued expenses
(45
)
 
1,087

Increase in other liabilities
3,021

 
2,499

Net Cash Provided by Operating Activities 
244,354

 
97,411

Financing Activities
 
 
 
Borrowings under Revolving Credit Facility (Note 4)
200,000

 
547,000

Principal payments under Revolving Credit Facility (Note 4)
(412,000
)
 
(228,000
)
Issuances of Prospect Capital InterNotes® (Note 7)
48,134

 
—

Redemptions of Prospect Capital InterNotes®, net (Note 7)
(628
)
 
(1,365
)
Financing costs paid and deferred
(891
)
 
(7,309
)
Cost of shares repurchased under stock repurchase program
(31,530
)
 
—

Proceeds from issuance of common stock, net of underwriting costs
—

 
56,305

Offering costs from issuance of common stock
118

 
(210
)
Dividends paid
(85,755
)
 
(109,951
)
Net Cash (Used in) Provided by Financing Activities
(282,552
)
 
256,470

 
 
 
 
Total (Decrease) Increase in Cash and Cash Equivalents
(38,198
)
 
353,881

Cash and cash equivalents at beginning of period
110,026

 
134,225

Cash and Cash Equivalents at End of Period
$
71,828

 
$
488,106

 
 
 
 
Supplemental Disclosures
 
 
 
Cash paid for interest
$
43,004

 
$
40,524

Non-Cash Financing Activities
 
 
 
Value of shares issued through reinvestment of dividends
$
3,682

 
$
3,640


See notes to consolidated financial statements.
5

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS
(in thousands, except share data)


 
 
 
September 30, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(49)
 
 
 
 
 
 
 
 
 
 
 
American Property REIT Corp.(32)
Various / Real Estate
Senior Secured Term Loan (6.00% (LIBOR + 4.00% with 2.00% LIBOR floor) plus 5.50% PIK, due 4/1/2019)(4)(6)(20)
$
78,635

$
78,635

$
78,635

2.2%
Common Stock (301,845 shares)
 
22,912

33,531

0.9%
Net Operating Income Interest (5% of Net Operating Income)
 
—

8,182

0.2%
 
 
 
 
101,547

120,348

3.3%
Arctic Energy Services, LLC(30)
Wyoming / Oil & Gas Services
Class D Units (32915.09 units)
 
31,640

32,915

1.0%
Class E Units (21,080 units)
 
20,230

21,080

0.6%
Class A Units (700 units)
 
9,006

1,600

—%
Class C Units (10 units)
 
—

745

—%
 
 
 
 
60,876

56,340

1.6%
CCPI Inc.(33)
Ohio / Manufacturing
Senior Secured Term Loan A (10.00%, due 12/31/2017)(3)
12,650

12,650

12,650

0.4%
Senior Secured Term Loan B (12.00% plus 7.00% PIK, due 12/31/2017)(6)
9,000

9,000

9,000

0.2%
Common Stock (14,857 shares)
 
6,636

14,756

0.4%
 
 
 
 
28,286

36,406

1.0%
CP Energy Services Inc.(38)
Oklahoma / Oil & Gas Services
Senior Secured Term Loan A to CP Well Testing, LLC (7.00% (LIBOR + 5.00% with 2.00% LIBOR floor), in non-accrual status effective 9/30/2015, due 4/1/2019)(4)(20)
11,035

11,035

11,035

0.3%
Senior Secured Term Loan B to CP Well Testing, LLC (10.00% (LIBOR + 8.00% with 2.00% LIBOR floor) plus 7.50% PIK, in non-accrual status effective 9/30/2015, due 4/1/2019)(3)(4)(6)(20)
75,930

72,238

71,826

2.0%
Second Lien Term Loan to CP Well Testing, LLC (9.00% (LIBOR + 7.00% with 2.00% LIBOR floor) plus 9.00% PIK, in non-accrual status effective 9/30/2015, due 4/1/2019)(4)(6)(20)
15,924

15,000

—

—%
Common Stock (2,924 shares)
 
15,227

—

—%
 
 
 
 
113,500

82,861

2.3%
Credit Central Loan Company, LLC(34)
South Carolina / Consumer Finance
Subordinated Term Loan (10.00% plus 10.00% PIK, due 6/26/2019)(6)(22)
36,333

36,333

36,333

1.1%
Class A Shares (7,500,000 shares)(22)


11,633

16,110

0.4%
Net Revenues Interest (25% of Net Revenues)(22)
 
—

4,066

0.1%
 
 
 
 
47,966

56,509

1.6%
Echelon Aviation LLC
New York / Aerospace & Defense
Senior Secured Term Loan (11.75% (LIBOR + 9.75% with 2.00% LIBOR floor) plus 2.25% PIK, due 3/31/2022)(4)(6)(20)
40,808

40,808

40,808

1.2%
Membership Interest (99%)


19,907

19,745

0.5%
 
 
 
 
60,715

60,553

1.7%
Edmentum Ultimate Holdings, LLC(47)
Minnesota / Consumer Services
Second Lien Revolving Credit Facility to Edmentum, Inc. – $7,834 Commitment (5.00%, due 6/9/2020)(25)(26)
—

—

—

—%
Unsecured Senior PIK Note (8.50% PIK, due 6/9/2020)(6)
5,948

5,948

5,875

0.2%
Unsecured Junior PIK Note (10.00% PIK, due 6/9/2020)(6)
26,746

20,249

19,868

0.5%
Class A Common Units (370,964.14 units)
 
6,577

6,577

0.2%
 
 
 
 
32,774

32,320

0.9%
 
 
 
 
 
 
 

See notes to consolidated financial statements.
6

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
September 30, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(49)
 
 
 
 
 
 
 
 
 
 
 
First Tower Finance Company LLC(29)
Mississippi / Consumer Finance
Subordinated Term Loan to First Tower, LLC (10.00% plus 12.00% PIK, due 6/24/2019)(6)(22)
$
251,246

$
251,246

$
251,246

7.0%
Class A Shares (83,729,323 shares)(22)
 
66,473

112,378

3.1%
 
 
 
 
317,719

363,624

10.1%
Freedom Marine Solutions, LLC(8)
Louisiana / Oil & Gas Services
Senior Secured Note to Vessel Company, LLC (18.00%, due 12/12/2016)
3,500

3,500

3,500

0.1%
Senior Secured Note to Vessel Company II, LLC (13.00%, due 11/25/2018)
13,000

12,504

8,682

0.2%
Senior Secured Note to Vessel Company III, LLC (13.00%, due 12/3/2018)
16,000

16,000

13,794

0.4%
Membership Interest (100%)
 
7,808

1,121

—%
 
 
 
 
39,812

27,097

0.7%
Gulf Coast Machine & Supply Company
Texas / Manufacturing
Senior Secured Term Loan (10.50% (LIBOR + 8.50% with 2.00% LIBOR floor), in non-accrual status effective 1/1/2015, due 10/12/2017)(4)(20)
30,535

28,925

8,896

0.2%
Series A Convertible Preferred Stock (99,900 shares)
 
25,950

—

—%
 
 
 
 
54,875

8,896

0.2%
Harbortouch Payments, LLC(43)
Pennsylvania / Business Services
Senior Secured Term Loan A (9.00% (LIBOR + 7.00% with 2.00% LIBOR floor), due 9/30/2017)(3)(4)(20)
128,820

128,820

128,820

3.6%
Senior Secured Term Loan B (5.50% (LIBOR + 4.00% with 1.50% LIBOR floor) plus 5.50% PIK, due 3/31/2018)(4)(6)(20)
144,878

144,878

144,878

4.0%
Senior Secured Term Loan C (13.00% (LIBOR + 9.00% with 4.00% LIBOR floor), due 9/29/2018)(4)(20)
21,762

21,762

21,762

0.6%
Class C Shares (535 shares)
 
8,712

62,899

1.7%
 
 
 
 
304,172

358,359

9.9%
MITY, Inc.(17)
Utah / Durable Consumer Products
Senior Secured Note A (10.00% (LIBOR + 7.00% with 3.00% LIBOR floor), due 3/19/2019)(3)(4)(20)
18,250

18,250

18,250

0.5%
Senior Secured Note B (10.00% (LIBOR + 7.00% with 3.00% LIBOR floor) plus 10.00% PIK, due 3/19/2019)(4)(6)(20)
16,442

16,442

16,442

0.5%
Subordinated Unsecured Note to Broda Enterprises ULC (10.00%, due on demand)(22)
7,200

7,200

5,496

0.2%
Common Stock (42,053 shares)
 
6,849

12,261

0.3%
 
 
 
 
48,741

52,449

1.5%
National Property REIT Corp.(40)
Various / Real Estate
Senior Secured Term Loan A (6.00% (LIBOR + 4.00% with 2.00% LIBOR floor) plus 5.50% PIK, due 4/1/2019)(4)(6)(20)
203,332

203,332

203,332

5.7%
Senior Secured Term Loan E (11.00% (LIBOR + 9.00% with 2.00% LIBOR floor) plus 5.00% PIK, due 4/1/2019)(4)(6)(20)
131,606

131,606

131,606

3.6%
Senior Secured Term Loan C to ACL Loan Holdings, Inc. (11.00% (LIBOR + 9.00% with 2.00% LIBOR floor) plus 5.00% PIK, due 4/1/2019)(4)(6)(20)
99,133

99,133

99,133

2.7%
Common Stock (643,175 shares)
 
102,020

92,124

2.5%
Net Operating Income Interest (5% of Net Operating Income)
 
—

21,101

0.6%
 
 
 
 
536,091

547,296

15.1%
Nationwide Loan Company LLC(36)
Illinois / Consumer Finance
Senior Subordinated Term Loan to Nationwide Acceptance LLC (10.00% plus 10.00% PIK, due 6/18/2019)(6)(22)
14,820

14,820

14,820

0.4%
Class A Shares (26,974,454.27 shares)(22)
 
14,794

19,018

0.5%
 
 
 
 
29,614

33,838

0.9%

See notes to consolidated financial statements.
7

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
September 30, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(49)
 
 
 
 
 
 
 
 
 
 
 
NMMB, Inc.(24)
New York / Media
Senior Secured Note (14.00%, due 5/6/2016)
$
3,714

$
3,714

$
3,714

0.1%
Senior Secured Note to Armed Forces Communications, Inc. (14.00%, due 5/6/2016)
7,000

7,000

7,000

0.2%
Series A Preferred Stock (7,200 shares)


7,200

2,306

0.1%
Series B Preferred Stock (5,669 shares)
 
5,669

—

—%
 
 
 
 
23,583

13,020

0.4%
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)(20)
29,237

29,237

29,237

0.8%
Common Stock (545,107 shares)
 
5,087

2,775

0.1%
Warrant (to purchase 200,000 shares of Common Stock, expires 6/30/2017)
 
1,682

1,018

—%
 
 
 
 
36,006

33,030

0.9%
United Property REIT Corp.(41)
Various / Real Estate
Senior Term Loan (6.00% (LIBOR + 4.00% with 2.00% LIBOR floor) plus 5.50% PIK, due 4/1/2019)(4)(6)(20)
64,506

64,506

64,506

1.8%
Common Stock (74,449 shares)
 
13,165

14,809

0.4%
Net Operating Income Interest (5% of Net Operating Income)
 
—

10,632

0.3%
 
 
 
 
77,671

89,947

2.5%
Valley Electric Company, Inc.(35)
Washington / Construction & Engineering
Senior Secured Note to Valley Electric Co. of Mt. Vernon, Inc. (8.00% (LIBOR + 5.00% with 3.00% LIBOR floor) plus 2.50% PIK, due 12/31/2017)(3)(4)(6)(20)
10,406

10,406

10,406

0.3%
Senior Secured Note (10.00% plus 8.50% PIK, due 12/31/2018)(6)
22,767

22,767

22,767

0.6%
Common Stock (50,000 shares)
 
26,204

4,223

0.1%
 
 
 
 
59,377

37,396

1.0%
Wolf Energy, LLC(12)
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)(37)
32,112

—

2,326

0.1%
Membership Interest (100%)
 
—

—

—%
Net Profits Interest (8% of Equity Distributions)(7)
 
—

85

—%
 
 
 
 
—

2,411

0.1%
Total Control Investments
 
$
1,973,325

$
2,012,700

55.7%
Affiliate Investments (5.00% to 24.99% voting control)(50)
 
 
 
 
 
 
 
 
 
 
 
BNN Holdings Corp.
Michigan / Healthcare
Series A Preferred Stock (9,925.455 shares)(13)
 
$
1,780

$
2,572

0.1%
Series B Preferred Stock (1,753.636 shares)(13)
 
448

556

—%
 
 
 
 
2,228

3,128

0.1%
Total Affiliate Investments
$
2,228

$
3,128

0.1%

See notes to consolidated financial statements.
8

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
September 30, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% 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)(16)(21)
$
7,000

$
6,931

$
7,000

0.2%
 
 
 
 
6,931

7,000

0.2%
AFI Shareholder, LLC
(f/k/a Aircraft Fasteners International, LLC)
California / Machinery
Class A Units (32,500 units)
—

376

533

—%
 
 
 
 
376

533

—%
Airmall Inc.
Pennsylvania / Property Management
Escrow Receivable
—

5,880

3,901

0.1%
 
 
 
 
5,880

3,901

0.1%
Ajax Rolled Ring & Machine, LLC
South Carolina / Manufacturing
Escrow Receivable
—

1,264

2,222

0.1%
 
 
 
 
1,264

2,222

0.1%
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)(16)(21)
11,771

11,601

11,733

0.3%
 
 
 
 
11,601

11,733

0.3%
American Gilsonite Company
Utah / Metal Services & Minerals
Second Lien Term Loan (11.50%, due 9/1/2017)(16)
14,755

14,755

13,084

0.4%
Membership Interest (99.9999%)(15)
—

—

—

—%
 
 
 
 
14,755

13,084

0.4%
Apidos CLO IX
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 19.60%)(11)(22)
23,525

20,533

22,946

0.6%
 
 
 
 
20,533

22,946

0.6%
Apidos CLO XI
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.52%)(11)(22)
38,340

30,890

30,289

0.8%
 
 
 
 
30,890

30,289

0.8%
Apidos CLO XII
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 18.87%)(11)(22)
44,063

36,762

37,440

1.0%
 
 
 
 
36,762

37,440

1.0%
Apidos CLO XV
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.12%)(11)(22)
36,515

33,078

29,558

0.8%
 
 
 
 
33,078

29,558

0.8%
Apidos CLO XXII
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 16.53%)(11)(22)(48)
31,350

26,773

26,806

0.7%
 
 
 
 
26,773

26,806

0.7%
Arctic Glacier U.S.A., Inc.
Minnesota / Food Products
Second Lien Term Loan (10.50% (LIBOR + 9.25% with 1.25% LIBOR floor), due 11/10/2019)(3)(4)(20)
150,000

150,000

147,346

4.1%
 
 
 
 
150,000

147,346

4.1%
Ark-La-Tex Wireline Services, LLC
Louisiana / Oil & Gas Services
Senior Secured Term Loan A (6.50% (LIBOR + 5.50% with 1.00% LIBOR floor), due 4/8/2019)(4)(21)
21,603

21,603

19,604

0.5%
Senior Secured Term Loan B (10.50% (LIBOR + 9.50% with 1.00% LIBOR floor), due 4/8/2019)(4)(21)
23,544

23,544

20,605

0.6%
 
 
 
 
45,147

40,209

1.1%
Armor Holding II LLC
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)(16)(20)
7,000

6,892

6,374

0.2%
 
 
 
 
6,892

6,374

0.2%
 
 
 
 
 
 
 

See notes to consolidated financial statements.
9

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
September 30, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
Atlantis Health Care Group (Puerto Rico), Inc.
Puerto Rico / Healthcare
Revolving Line of Credit – $4,000 Commitment (13.00% (LIBOR + 11.00% with 2.00% LIBOR floor), due 8/21/2016)(4)(20)(25)(26)
$
2,350

$
2,350

$
2,350

0.1%
Senior Term Loan (10.00% (LIBOR + 8.00% with 2.00% LIBOR floor), due 2/21/2018)(3)(4)(20)
38,462

38,462

35,863

1.0%
 
 
 
 
40,812

38,213

1.1%
BAART Programs, Inc.
California / Healthcare
Revolving Line of Credit – $5,000 Commitment (8.75% (LIBOR + 8.25% with 0.50% LIBOR floor), due 6/30/2018)(20)(25)(26)
—

—

—

—%
Senior Secured Term Loan A (6.25% (LIBOR + 5.75% with 0.50% LIBOR floor), due 6/30/2020)(4)(20)
21,366

21,366

21,793

0.6%
Senior Secured Term Loan B (11.25% (LIBOR + 10.75% with 0.50% LIBOR floor), due 6/30/2020)(4)(20)
21,500

21,500

22,145

0.6%
Delayed Draw Term Loan – $10,500 Commitment (expires 12/31/2015)(25)
 
—

—

—%
 
 
 
 
42,866

43,938

1.2%
Babson CLO Ltd. 2014-III
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.11%)(11)(22)(48)
52,250

46,603

45,565

1.3%
 
 
 
 
46,603

45,565

1.3%
Broder Bros., Co.
Pennsylvania / Textiles, Apparel & Luxury Goods
Senior Secured Notes (10.25% (LIBOR + 9.00% with 1.25% LIBOR floor), due 4/8/2019)(3)(4)(21)(46)
251,075

251,075

249,164

6.9%
 
 
 
 
251,075

249,164

6.9%
Brookside Mill CLO Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 18.48%)(11)(22)
26,000

20,990

22,927

0.6%
 
 
 
 
20,990

22,927

0.6%
Caleel + Hayden, LLC
Colorado / Personal & Nondurable Consumer Products
Membership Interest(31)
 
—

303

—%
 
 
 
 
—

303

—%
Capstone Logistics Acquisition, Inc.
Georgia / Business Services
Second Lien Term Loan (9.25% (LIBOR + 8.25% with 1.00% LIBOR floor), due 10/7/2022)(3)(4)(21)
102,500

101,907

101,892

2.8%
 
 
 
 
101,907

101,892

2.8%
Cent CLO 17 Limited
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.79%)(11)(22)
24,870

19,907

20,167

0.6%
 
 
 
 
19,907

20,167

0.6%
Cent CLO 20 Limited
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 12.51%)(11)(22)
40,275

34,950

32,087

0.9%
 
 
 
 
34,950

32,087

0.9%
Cent CLO 21 Limited
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.29%)(11)(22)(48)
48,528

41,719

40,353

1.1%
 
 
 
 
41,719

40,353

1.1%
CIFC Funding 2011-I, Ltd.
Cayman Islands / Structured Finance
Class D Senior Secured Notes (5.32% (LIBOR + 5.00%, due 1/19/2023)(4)(9)(22)(20)
19,000

15,684

18,446

0.5%
Class E Subordinated Notes (7.32% (LIBOR + 7.00%, due 1/19/2023)(4)(9)(22)(20)
15,400

13,062

14,336

0.4%
 
 
 
 
28,746

32,782

0.9%
CIFC Funding 2013-III, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.18%)(11)(22)
44,100

34,395

33,811

0.9%
 
 
 
 
34,395

33,811

0.9%
CIFC Funding 2013-IV, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 16.03%)(11)(22)
45,500

35,246

36,772

1.0%
 
 
 
 
35,246

36,772

1.0%

See notes to consolidated financial statements.
10

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
September 30, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
CIFC Funding 2014-IV Investor, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 14.72%)(11)(22)(48)
$
41,500

$
33,724

$
35,354

1.0%
 
 
 
 
33,724

35,354

1.0%
Cinedigm DC Holdings, LLC
New York / Software & Computer Services
Senior Secured Term Loan (11.00% (LIBOR + 9.00% with 2.00% LIBOR floor) plus 2.50% PIK, due 3/31/2021)(4)(6)(20)
67,204

67,154

67,204

1.9%
 
 
 
 
67,154

67,204

1.9%
Coverall North America, Inc.
Florida / Commercial Services
Senior Secured Term Loan (11.50% (LIBOR + 8.50% with 3.00% LIBOR floor), due 12/17/2017)(3)(4)(21)
49,600

49,600

49,600

1.4%
 
 
 
 
49,600

49,600

1.4%
Crosman Corporation
New York / Manufacturing
Senior Secured Term Loan A (9.00% (LIBOR + 8.70% with 0.30% LIBOR floor) plus 4.00% PIK, due 8/5/2020)(3)(4)(6)(21)
52,761

52,761

52,129

1.4%
Senior Secured Term Loan B (16.00% (LIBOR + 15.70% with 0.30% LIBOR floor) plus 4.00% PIK, due 8/5/2020)(3)(4)(6)(21)
40,199

40,199

39,251

1.1%
 
 
 
 
92,960

91,380

2.5%
Diamondback Operating, LP
Oklahoma / Oil & Gas Production
Net Profits Interest (15% of Equity Distributions)(7)
—

—

—

—%
 
 
 
 
—

—

—%
Empire Today, LLC
Illinois / Durable Consumer Products
Senior Secured Note (11.375%, due 2/1/2017)(16)
15,700

15,544

13,818

0.4%
 
 
 
 
15,544

13,818

0.4%
Fleetwash, Inc.
New Jersey / Business Services
Senior Secured Term Loan B (10.50% (LIBOR + 9.50% with 1.00% LIBOR floor), due 4/30/2019)(3)(4)(20)
24,446

24,446

24,446

0.7%
Delayed Draw Term Loan – $15,000 Commitment (expires 4/30/2019)(25)
 
—

—

—%
 
 
 
 
24,446

24,446

0.7%
Focus Brands, Inc.
Georgia / Consumer Services
Second Lien Term Loan (10.25% (LIBOR + 9.00% with 1.25% LIBOR floor), due 8/21/2018)(4)(16)(21)
18,000

17,834

18,000

0.5%
 
 
 
 
17,834

18,000

0.5%
Galaxy XV CLO, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.67%)(11)(22)
39,275

30,079

31,905

0.9%
 
 
 
 
30,079

31,905

0.9%
Galaxy XVI CLO, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.39%)(11)(22)
24,575

20,073

19,910

0.6%
 
 
 
 
20,073

19,910

0.6%
Galaxy XVII CLO, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 13.96%)(11)(22)(48)
39,905

32,681

32,168

0.9%
 
 
 
 
32,681

32,168

0.9%
Global Employment Solutions, Inc.
Colorado / Business Services
Senior Secured Term Loan (10.25% (LIBOR + 9.25% with 1.00% LIBOR floor), due 6/26/2020)(3)(4)(21)
49,567

49,567

49,567

1.4%
 
 
 
 
49,567

49,567

1.4%
Halcyon Loan Advisors Funding 2012-1 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 25.29%)(11)(22)
23,188

19,661

23,249

0.6%
 
 
 
 
19,661

23,249

0.6%
Halcyon Loan Advisors Funding 2013-1 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 23.47%)(11)(22)
40,400

34,345

38,136

1.1%
 
 
 
 
34,345

38,136

1.1%
Halcyon Loan Advisors Funding 2014-1 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 19.30%)(11)(22)
24,500

20,436

21,719

0.6%
 
 
 
 
20,436

21,719

0.6%

See notes to consolidated financial statements.
11

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
September 30, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
Halcyon Loan Advisors Funding 2014-2 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 20.63%)(11)(22)(48)
$
41,164

$
33,869

$
36,727

1.0%
 
 
 
 
33,869

36,727

1.0%
Halcyon Loan Advisors Funding 2015-3 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.91%)(11)(22)(48)
39,598

38,415

37,639

1.0%
 
 
 
 
38,415

37,639

1.0%
HarbourView CLO VII, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 17.08%)(11)(22)(48)
19,025

14,826

13,908

0.4%
 
 
 
 
14,826

13,908

0.4%
Harley Marine Services, Inc.
Washington / Transportation
Second Lien Term Loan (10.50% (LIBOR + 9.25% with 1.25% LIBOR floor), due 12/20/2019)(3)(4)(16)(20)
9,000

8,861

8,855

0.2%
 
 
 
 
8,861

8,855

0.2%
Hollander Sleep Products, LLC
Florida / Durable Consumer Products
Senior Secured Term Loan (9.00% (LIBOR + 8.00% with 1.00% LIBOR floor), due 10/21/2020)(3)(4)(21)
22,388

22,388

22,063

0.6%
 
 
 
 
22,388

22,063

0.6%
ICON Health & Fitness, Inc.
Utah / Durable Consumer Products
Senior Secured Note (11.875%, due 10/15/2016)(16)
16,100

16,081

16,016

0.4%
 
 
 
 
16,081

16,016

0.4%
ICV-CSI Holdings, LLC
New York / Transportation
Membership Units (1.6 units)
—

1,639

2,439

0.1%
 
 
 
 
1,639

2,439

0.1%
Instant Web, LLC
Minnesota / Media
Senior Secured Term Loan A (5.50% (LIBOR + 4.50% with 1.00% LIBOR floor), due 3/28/2019)(4)(20)
116,424

116,424

116,424

3.2%
Senior Secured Term Loan B (12.00% (LIBOR + 11.00% with 1.00% LIBOR floor), due 3/28/2019)(3)(4)(20)
150,100

150,100

150,100

4.2%
Senior Secured Term Loan C (12.75% (LIBOR + 11.75% with 1.00% LIBOR floor), due 3/28/2019)(4)(20)
27,000

27,000

27,000

0.7%
Delayed Draw Term Loan – $16,000 Commitment (expires 5/29/2016)(25)
 
—

—

—%
 
 
 
 
293,524

293,524

8.1%
Intelius, Inc.
 
Revolving Line of Credit – $1,500 Commitment (9.50% (LIBOR + 8.50% with 1.00% LIBOR floor), due 7/1/2016)(4)(20)
—

—

—

—%
Senior Secured Term Loan A (6.50% (LIBOR + 5.50% with 1.00% LIBOR floor), due 7/1/2020)(4)(20)
21,500

21,500

21,500

0.6%
Senior Secured Term Loan B (12.50% (LIBOR + 11.50% with 1.00% LIBOR floor), due 7/1/2020)(4)(20)
21,500

21,500

21,500

0.6%
 
 
 
 
43,000

43,000

1.2%
InterDent, Inc.
California / Healthcare
Senior Secured Term Loan A (6.25% (LIBOR + 5.25% with 1.00% LIBOR floor), due 8/3/2017)(4)(21)
80,200

80,200

80,200

2.2%
Senior Secured Term Loan B (11.25% (LIBOR + 10.25% with 1.00% LIBOR floor), due 8/3/2017)(3)(4)(21)
131,125

131,125

131,125

3.6%
 
 
 
 
211,325

211,325

5.8%
JAC Holding Corporation
Michigan / Transportation
Senior Secured Note (11.50%, due 10/1/2019)(16)
3,000

3,000

2,973

0.1%
 
 
 
 
3,000

2,973

0.1%
 
 
 
 
 
 
 

See notes to consolidated financial statements.
12

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
September 30, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
Jefferson Mill CLO Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.65%)(11)(22)(48)
$
19,500

$
16,916

$
16,777

0.5%
 
 
 
 
16,916

16,777

0.5%
JHH Holdings, Inc.
Texas / Healthcare
Second Lien Term Loan (11.25% (LIBOR + 10.00% with 1.25% LIBOR floor) plus 0.50% PIK, due 3/30/2019)(3)(4)(6)(20)
35,342

35,342

35,342

1.0%
 
 
 
 
35,342

35,342

1.0%
LaserShip, Inc.
Virginia / Transportation
Senior Secured Term Loan A (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor) plus 2.00% default interest, due 3/18/2019)(3)(4)(21)
34,922

34,922

27,805

0.7%
Senior Secured Term Loan B (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor) plus 2.00% default interest, due 3/18/2019)(3)(4)(21)
21,416

21,416

17,048

0.5%
Delayed Draw Term Loan – $6,000 Commitment (expires 12/31/2016)(25)
 
—

—

—%
 
 
 
 
56,338

44,853

1.2%
LCM XIV Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 16.54%)(11)(22)
30,500

24,565

25,696

0.7%
 
 
 
 
24,565

25,696

0.7%
Madison Park Funding IX, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 18.16%)(11)(22)
31,110

23,522

25,868

0.7%
 
 
 
 
23,522

25,868

0.7%
Matrixx Initiatives, Inc.
New Jersey / Pharmaceuticals
Senior Secured Term Loan A (7.50% (LIBOR + 6.00% with 1.50% LIBOR floor), due 8/9/2018)(3)(4)(20)
33,702

33,702

33,702

0.9%
Senior Secured Term Loan B (12.50% (LIBOR + 11.00% with 1.50% LIBOR floor), due 8/9/2018)(3)(4)(20)
40,562

40,562

40,562

1.1%
 
 
 
 
74,264

74,264

2.0%
Maverick Healthcare Equity, LLC
Arizona / Healthcare
Preferred Units (1,250,000 units)
—

1,252

2,037

0.1%
Class A Common Units (1,250,000 units)
—

—

303

—%
 
 
 
 
1,252

2,340

0.1%
Mountain View CLO 2013-I Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 19.96%)(11)(22)
43,650

36,279

38,974

1.1%
 
 
 
 
36,279

38,974

1.1%
Mountain View CLO IX Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 17.87%)(11)(22)(48)
47,830

45,551

45,263

1.3%
 
 
 
 
45,551

45,263

1.3%
Nathan's Famous, Inc.
New York / Food Products
Senior Secured Notes (10.00%, due 3/15/2020)(16)
3,000

3,000

3,000

0.1%
 
 
 
 
3,000

3,000

0.1%
NCP Finance Limited Partnership
Ohio / Consumer Finance
Subordinated Secured Term Loan (11.00% (LIBOR + 9.75% with 1.25% LIBOR floor), due 9/30/2018)(3)(4)(16)(21)(22)
16,252

16,021

16,143

0.4%
 
 
 
 
16,021

16,143

0.4%
New Century Transportation, Inc.
New Jersey / Transportation
Senior Subordinated Term Loan (12.00% (LIBOR + 10.00% with 2.00% LIBOR floor) plus 4.00% PIK, in non-accrual status effective 4/1/2014, due 2/3/2018)(4)(6)(21)
187

187

—

—%
 
 
 
 
187

—

—%
Nixon, Inc.
California / Durable Consumer Products
Senior Secured Term Loan (8.75% plus 2.75% PIK, due 4/16/2018)(3)(6)(16)
14,022

13,860

13,686

0.4%
 
 
 
 
13,860

13,686

0.4%

See notes to consolidated financial statements.
13

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
(in thousands, except share data)

 
 
 
September 30, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
Octagon Investment Partners XV, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 20.17%)(11)(22)
$
32,921

$
27,580

$
28,601

0.8%
 
 
 
 
27,580

28,601

0.8%
Octagon Investment Partners XVIII, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 22.18%)(11)(22)(48)
28,200

21,530

23,183

0.6%
 
 
 
 
21,530

23,183

0.6%
Onyx Payments
Texas / Diversified Financial Services
Revolving Line of Credit – $5,000 Commitment (9.00% (LIBOR + 8.00% with 1.00% LIBOR floor), due 9/10/2016)(4)(20)(25)(26)
2,000

2,000

2,000

0.1%
Senior Secured Term Loan A (6.50% (LIBOR + 5.50% with 1.00% LIBOR floor), due 9/10/2019)(3)(4)(20)
51,328

51,328

51,328

1.4%
Senior Secured Term Loan B (13.50% (LIBOR + 12.50% with 1.00% LIBOR floor), due 9/10/2019)(4)(20)
59,389

59,389

59,389

1.6%
 
 
 
 
112,717

112,717

3.1%
Pacific World Corporation
California / Personal & Nondurable Consumer Products
Revolving Line of Credit – $15,000 Commitment (8.00% (LIBOR + 7.00% with 1.00% LIBOR floor), due 9/26/2020)(4)(21)(25)(26)
2,500

2,500

2,500

0.1%
Senior Secured Term Loan A (6.00% (LIBOR + 5.00% with 1.00% LIBOR floor), due 9/26/2020)(4)(21)
99,000

99,000

93,929

2.6%
Senior Secured Term Loan B (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 9/26/2020)(3)(4)(21)
99,000

99,000

82,591

2.3%
 
 
 
 
200,500

179,020

5.0%
Pelican Products, Inc.
California / Durable Consumer Products
Second Lien Term Loan (9.25% (LIBOR + 8.25% with 1.00% LIBOR floor), due 4/9/2021)(4)(16)(21)
17,500

17,484

17,337

0.5%
 
 
 
 
17,484

17,337

0.5%
PGX Holdings, Inc.
Utah / Consumer Services
Second Lien Term Loan (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 9/29/2021)(3)(4)(21)
135,000

135,000

135,000

3.7%
 
 
 
 
135,000

135,000

3.7%
Photonis Technologies SAS
France / Aerospace & Defense
First Lien Term Loan (8.50% (LIBOR + 7.50% with 1.00% LIBOR floor), due 9/18/2019)(4)(16)(21)(22)
10,343

10,132

10,051

0.3%
 
 
 
 
10,132

10,051

0.3%
Pinnacle (US) Acquisition Co. Limited
Texas / Software & Computer Services
Second Lien Term Loan (10.50% (LIBOR + 9.25% with 1.25% LIBOR floor), due 8/3/2020)(4)(16)(20)
7,037

6,896

6,760

0.2%
 
 
 
 
6,896

6,760

0.2%
PlayPower, Inc.
North Carolina / Durable Consumer Products
Second Lien Term Loan (9.75% (LIBOR + 8.75% with 1.00% LIBOR floor), due 6/23/2022)(4)(16)(20)
10,000

9,854

9,850

0.3%
 
 
 
 
9,854

9,850

0.3%
Prime Security Services Borrower, LLC
Illinois / Consumer Services
Second Lien Term Loan (9.75% (LIBOR + 8.75% with 1.00% LIBOR floor), due 7/1/2022)(4)(16)(21)
10,000

9,853

9,850

0.3%
 
 
 
 
9,853

9,850

0.3%
PrimeSport, Inc.
Georgia / Hotels, Restaurants & Leisure
Senior Secured Term Loan A (7.00% (LIBOR + 6.00% with 1.00% LIBOR floor), due 2/11/2021)(3)(4)(20)
54,091

54,091

54,091

1.5%
Senior Secured Term Loan B (12.00% (LIBOR + 11.00% with 1.00% LIBOR floor), due 2/11/2021)(3)(4)(20)
74,500

74,500

74,500

2.1%
 
 
 
 
128,591

128,591

3.6%
Prince Mineral Holding Corp.
New York / Metal Services & Minerals
Senior Secured Term Loan (11.50%, due 12/15/2019)(16)
10,000

9,919

9,108