PROSPECT CAPITAL CORP - FORM 10-Q - November 8, 2016

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EX-31.2 - EXHIBIT 31.2 - PROSPECT CAPITAL CORPpsec10-qq12017ex312.htm
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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, 2016
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 8, 2016
$0.001 par value
 
358,369,103



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, 2016, 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, 2016
 
June 30, 2016
 
 
 
(Unaudited)
 
(Audited)
Assets
 
 
 

Investments at fair value:
 

 
 

Control investments (amortized cost of $1,870,228 and $1,768,220, respectively)
$
1,867,823

 
$
1,752,449

Affiliate investments (amortized cost of $8,530 and $10,758, respectively)
6,966

 
11,320

Non-control/non-affiliate investments (amortized cost of $4,422,436 and $4,312,122, respectively)
4,234,807

 
4,133,939

Total investments at fair value (amortized cost of $6,301,194 and $6,091,100, respectively)
6,109,596

 
5,897,708

Cash
132,240

 
317,798

Receivables for:
 
 
 
Interest, net
9,920

 
12,127

Other
197

 
168

Prepaid expenses
703

 
855

Deferred financing costs on Revolving Credit Facility (Note 4)
6,834

 
7,525

Total Assets 
6,259,490

 
6,236,181

 
 
 
 
Liabilities 
 

 
 

Revolving Credit Facility (Notes 4 and 8)
44,000

 
—

Prospect Capital InterNotes® (Notes 7 and 8)
930,814

 
893,210

Convertible Notes (Notes 5 and 8)
908,240

 
1,074,361

Public Notes (Notes 6 and 8)
736,821

 
699,368

Interest payable
33,086

 
40,804

Due to broker
80,397

 
957

Due to Prospect Capital Management (Note 13)
51,091

 
54,149

Due to Prospect Administration (Note 13)
1,719

 
1,765

Accrued expenses
2,764

 
2,259

Other liabilities
5,113

 
3,633

Dividends payable
29,836

 
29,758

Total Liabilities 
2,823,881

 
2,800,264

Commitments and Contingencies (Note 3)
—

 
—

Net Assets 
$
3,435,609

 
$
3,435,917

 
 
 
 
Components of Net Assets 
 

 
 

Common stock, par value $0.001 per share (1,000,000,000 common shares authorized; 358,042,158 and 357,107,231 issued and outstanding, respectively) (Note 9)
$
358

 
$
357

Paid-in capital in excess of par (Note 9)
3,973,957

 
3,967,397

Accumulated overdistributed net investment income
(11,643
)
 
(3,623
)
Accumulated net realized loss
(335,465
)
 
(334,822
)
Net unrealized loss
(191,598
)
 
(193,392
)
Net Assets 
$
3,435,609

 
$
3,435,917

 
 
 
 
Net Asset Value Per Share (Note 16) 
$
9.60

 
$
9.62



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

 
Three Months Ended September 30,
 
2016
 
2015
Investment Income
 
 
 
Interest income:
 
 
 
Control investments
$
45,909

 
$
51,944

Affiliate investments
—

 
885

Non-control/non-affiliate investments
86,660

 
93,708

Structured credit securities
39,081

 
44,766

Total interest income
171,650

 
191,303

Dividend income:
 
 
 
Control investments
2,240

 
3,213

Non-control/non-affiliate investments
144

 
2

Total dividend income
2,384

 
3,215

Other income:
 
 
 
Control investments
2,940

 
2,409

Non-control/non-affiliate investments
2,858

 
3,324

Total other income (Note 10)
5,798

 
5,733

Total Investment Income
179,832

 
200,251

Operating Expenses
 
 
 
Investment advisory fees:
 
 
 
Base management fee (Note 13)
30,792

 
32,954

Income incentive fee (Note 13)
19,730

 
22,810

Interest and credit facility expenses
41,669

 
41,957

Allocation of overhead from Prospect Administration (Note 13)
3,533

 
4,178

Audit, compliance and tax related fees
1,395

 
1,877

Directors’ fees
113

 
94

Other general and administrative expenses
3,681

 
5,139

Total Operating Expenses
100,913

 
109,009

Net Investment Income
78,919

 
91,242

Net Realized and Change in Unrealized Gains (Losses)
 
 
 
Net realized gains (losses)
 
 
 
Control investments
—

 
—

Affiliate investments
137

 
—

Non-control/non-affiliate investments
572

 
(2,134
)
Foreign currency transactions
5

 
(1
)
Net realized gains (losses)
714

 
(2,135
)
Net change in unrealized gains (losses)
 
 
 
Control investments
13,345

 
(39,852
)
Affiliate investments
(2,126
)
 
105

Non-control/non-affiliate investments
(9,446
)
 
(21,197
)
Foreign currency translations
21

 
(331
)
Net change in unrealized gains (losses)
1,794

 
(61,275
)
Net Realized and Change in Unrealized Gains (Losses)
2,508

 
(63,410
)
Net realized losses on extinguishment of debt
(61
)
 
(15
)
Net Increase in Net Assets Resulting from Operations
$
81,366

 
$
27,817

Net increase in net assets resulting from operations per share
$
0.23

 
$
0.08

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

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,
 

2016
 
2015
Operations
 

 
 

Net investment income
$
78,919

 
$
91,242

Net realized gains (losses)
653

 
(2,150
)
Net change in unrealized gains (losses)
1,794

 
(61,275
)
Net Increase in Net Assets Resulting from Operations 
81,366

 
27,817

 
 
 
 
Distributions to Shareholders
 
 
 
Distribution from net investment income
(89,428
)
 
(89,115
)
Net Decrease in Net Assets Resulting from Distributions to Shareholders
(89,428
)
 
(89,115
)
 
 
 
 
Common Stock Transactions 
 
 
 
Offering costs from issuance of common stock
—

 
118

Repurchase of common stock under stock repurchase program
—

 
(31,530
)
Value of shares issued through reinvestment of dividends
7,754

 
3,682

Net Increase (Decrease) in Net Assets Resulting from Common Stock Transactions 
7,754

 
(27,730
)
 
 
 
 
Total Decrease in Net Assets 
(308
)
 
(89,028
)
Net assets at beginning of period
3,435,917

 
3,703,049

Net Assets at End of Period
$
3,435,609

 
$
3,614,021

 
 
 
 
Common Stock Activity
 
 
 
Shares repurchased under stock repurchase program
—

 
(4,358,750
)
Shares issued through reinvestment of dividends
934,927

 
490,473

Net shares issued (repurchased) due to common stock activity
934,927

 
(3,868,277
)
Shares issued and outstanding at beginning of period
357,107,231

 
359,090,759

Shares Issued and Outstanding at End of Period
358,042,158

 
355,222,482

 


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,
 
2016
 
2015
Operating Activities
 
 
 
Net increase in net assets resulting from operations
$
81,366

 
$
27,817

Net realized losses on extinguishment of debt
61

 
15

Net realized (gains) losses on investments and foreign currency transactions
(714
)
 
2,135

Net change in unrealized (gains) losses on investments and foreign currency transactions
(1,794
)
 
61,275

Amortization of discounts and premiums, net
23,439

 
24,072

Accretion of discount on Public Notes (Note 6)
64

 
49

Amortization of deferred financing costs
3,631

 
3,556

Payment-in-kind interest
(5,439
)
 
(1,279
)
Structuring fees
(3,028
)
 
(3,556
)
Change in operating assets and liabilities:
 
 
 
Payments for purchases of investments
(338,683
)
 
(340,908
)
Proceeds from sale of investments and collection of investment principal
114,331

 
436,919

Decrease in interest receivable, net
2,207

 
6,029

(Increase) decrease in other receivables
(29
)
 
1,978

Decrease in prepaid expenses
152

 
32

Increase in due to broker
79,440

 
28,475

Decrease in interest payable
(7,718
)
 
(4,020
)
(Decrease) increase in due to Prospect Administration
(46
)
 
1,177

Decrease in due to Prospect Capital Management
(3,058
)
 
(2,388
)
Increase (decrease) in accrued expenses
505

 
(45
)
Increase in other liabilities
1,480

 
3,021

Net Cash (Used in) Provided by Operating Activities 
(53,833
)
 
244,354

Financing Activities
 
 
 
Borrowings under Revolving Credit Facility (Note 4)
44,000

 
200,000

Principal payments under Revolving Credit Facility (Note 4)
—

 
(412,000
)
Issuances of Public Notes, net of original issue discount (Note 6)
37,466

 
—

Redemptions of Convertible Notes (Note 5)
(167,500
)
 
—

Issuances of Prospect Capital InterNotes® (Note 7)
38,917

 
48,134

Redemptions of Prospect Capital InterNotes®, net (Note 7)
(1,979
)
 
(628
)
Financing costs paid and deferred
(1,033
)
 
(891
)
Cost of shares repurchased under stock repurchase program
—

 
(31,530
)
Offering costs from issuance of common stock
—

 
118

Dividends paid
(81,596
)
 
(85,755
)
Net Cash Used in Financing Activities
(131,725
)
 
(282,552
)
 
 
 
 
Net Decrease in Cash
(185,558
)
 
(38,198
)
Cash at beginning of period
317,798

 
110,026

Cash at End of period
$
132,240

 
$
71,828

 
 
 
 
Supplemental Disclosures
 
 
 
Cash paid for interest
$
44,542

 
$
43,004

Non-Cash Financing Activities
 
 
 
Value of shares issued through reinvestment of dividends
$
7,754

 
$
3,682


See notes to consolidated financial statements.
5

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


 
 
 
September 30, 2016 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(40)
 
 
 
 
 
 
 
 
 
 
 
Arctic Energy Services, LLC(15)
Wyoming / Oil & Gas Services
Class D Units (32,915 units)
 
$
31,640

$
20,167

0.6%
Class E Units (21,080 units)
 
20,230

—

—%
Class A Units (700 units)
 
9,006

—

—%
Class C Units (10 units)
 
—

—

—%
 
 
 
 
60,876

20,167

0.6%
CCPI Inc.(16)
Ohio / Manufacturing
Senior Secured Term Loan A (10.00%, due 12/31/2017)(3)
12,200

12,200

12,200

0.4%
Senior Secured Term Loan B (12.00% plus 7.00% PIK, due 12/31/2017)(39)
9,320

9,320

9,320

0.3%
Common Stock (14,857 shares)
 
6,759

20,722

0.5%
 
 
 
 
28,279

42,242

1.2%
CP Energy Services Inc.(17)
Oklahoma / Oil & Gas Services
Series B Convertible Preferred Stock (1,043 shares)
 
98,273

76,002

2.2%
Common Stock (2,924 shares)
 
15,227

—

—%
 
 
 
 
113,500

76,002

2.2%
Credit Central Loan Company, LLC(18)
South Carolina / Consumer Finance
Subordinated Term Loan (10.00% plus 10.00% PIK, due 6/26/2019)(13)(39)
50,510

42,989

50,510

1.5%
Class A Shares (10,640,642 shares)(13)
 
13,731

9,341

0.3%
Net Revenues Interest (25% of Net Revenues)(13)
 
—

4,069

0.1%
 
 
 
 
56,720

63,920

1.9%
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)(10)(12)(39)
31,055

31,055

31,055

0.9%
Membership Interest (99%)
 
19,907

23,988

0.7%
 
 
 
 
50,962

55,043

1.6%
Edmentum Ultimate Holdings, LLC(19)
Minnesota / Consumer Services
Second Lien Revolving Credit Facility to Edmentum, Inc. – $7,834 Commitment (5.00%, due 6/9/2020)(14)
—

—

—

—%
Unsecured Senior PIK Note (8.50% PIK, due 6/9/2020)(39)
6,478

6,478

6,478

0.2%
Unsecured Junior PIK Note (10.00% PIK, due 6/9/2020)(39)
29,571

23,073

24,766

0.7%
Class A Common Units (370,964 units)
 
6,577

4,241

0.1%
 
 
 
 
36,128

35,485

1.0%
First Tower Finance Company LLC(20)
Mississippi / Consumer Finance
Subordinated Term Loan to First Tower, LLC (10.00% plus 12.00% PIK, due 6/24/2019)(13)(39)
256,578

256,578

256,578

7.5%
Class A Shares (86,711,625 shares)(13)
 
70,476

95,275

2.7%
 
 
 
 
327,054

351,853

10.2%
Freedom Marine Solutions, LLC(21)
Louisiana / Oil & Gas Services
Membership Interest (100%)
 
41,411

26,671

0.8%
 
 
 
 
41,411

26,671

0.8%
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)(10)(11)
38,906

33,403

7,394

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

—

—%
 
 
 
 
59,353

7,394

0.2%

See notes to consolidated financial statements.
6

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

 
 
 
September 30, 2016 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(40)
 
 
 
 
 
 
 
 
 
 
 
MITY, Inc.(22)
Utah / Durable Consumer Products
Senior Secured Note A (10.00% (LIBOR + 7.00% with 3.00% LIBOR floor), due 3/19/2019)(3)(10)(11)
$
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)(3)(10)(11)(39)
16,442

16,442

16,442

0.5%
Subordinated Unsecured Note to Broda Enterprises ULC (10.00%, due on demand)(13)
5,646

7,200

5,646

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

13,177

0.4%
 
 
 
 
48,741

53,515

1.6%
National Property REIT Corp.(23)
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)(10)(11)(39)
283,972

283,972

283,972

8.3%
Senior Secured Term Loan E (11.00% (LIBOR + 9.00% with 2.00% LIBOR floor) plus 5.00% PIK, due 4/1/2019)(10)(11)(39)
212,819

212,819

212,819

6.2%
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)(10)(11)(13)(39)
135,818

135,818

135,818

4.0%
Senior Secured Term Loan C to American Consumer Lending Limited (11.00% (LIBOR + 9.00% with 2.00% LIBOR floor) plus 5.00% PIK, due 4/1/2019)(10)(11)(13)(39)
11,508

11,508

11,508

0.3%
Common Stock (1,656,276 shares)
—

188,444

267,511

7.7%
Net Operating Income Interest (5% of Net Operating Income)
—

—

68,362

2.0%
 
 
 
 
832,561

979,990

28.5%
Nationwide Loan Company LLC(24)
Illinois / Consumer Finance
Senior Subordinated Term Loan to Nationwide Acceptance LLC (10.00% plus 10.00% PIK, due 6/18/2019)(13)(39)
16,819

16,819

16,819

0.5%
Class A Shares (29,559,899 shares)(13)
 
16,292

20,690

0.6%
 
 
 
 
33,111

37,509

1.1%
NMMB, Inc.(25)
New York / Media
Senior Secured Note (14.00%, due 5/6/2021)
3,714

3,714

3,404

0.1%
Senior Secured Note to Armed Forces Communications, Inc. (14.00%, due 5/6/2021)
7,000

7,000

6,416

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

28

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

35

—%
 
 
 
 
23,583

9,883

0.3%
R-V Industries, Inc.
Pennsylvania / Manufacturing
Senior Subordinated Note (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 6/12/2018)(3)(10)(11)
28,622

28,622

28,622

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

4,824

0.1%
Warrant (to purchase 200,000 shares of Common Stock, expires 6/30/2017)
 
1,681

1,769

0.1%
 
 
 
 
35,390

35,215

1.0%
USES Corp.(26)
Texas / Commercial Services
Senior Secured Term Loan A (9.00% PIK, in non-accrual status effective 4/1/2016, due 3/31/2019)
26,683

26,158

26,683

0.8%
Senior Secured Term Loan B (15.50% PIK, in non-accrual status effective 4/1/2016, due 3/31/2019)
36,905

35,568

15,704

0.4%
Common Stock (268,962 shares)
 
—

—

—%
 
 
 
 
61,726

42,387

1.2%

See notes to consolidated financial statements.
7

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

 
 
 
September 30, 2016 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(40)
 
 
 
 
 
 
 
 
 
 
 
Valley Electric Company, Inc.(27)
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 12/31/2019)(3)(10)(11)(39)
$
10,430

$
10,430

$
10,430

0.3%
Senior Secured Note (10.00% plus 8.50% PIK, due 6/23/2019)(39)
24,199

24,199

20,101

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

—

—%
 
 
 
 
60,833

30,531

0.9%
Wolf Energy, LLC
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)
38,257

—

—

—%
Membership Interest (100%)
 
—

—

—%
Net Profits Interest (8% of Equity Distributions)(4)
 
—

16

—%
 
 
 
 
—

16

—%
 
$
1,870,228

$
1,867,823

54.3%

Affiliate Investments (5.00% to 24.99% voting control)(41)
 
 
 
 
 
 
 
 
 
 
 
Targus International, LLC(28)
California / Durable Consumer Products
Senior Secured Term Loan A (15.00% PIK, in non-accrual status effective 10/1/15, due 12/31/2019)(8)
$
1,371

$
1,263

$
1,371

—%
Senior Secured Term Loan B (15.00% PIK , in non-accrual status effective 10/1/15, due 12/31/2019)(8)
4,113

3,788

4,113

0.2%
Common Stock (1,262,737 shares)
 
3,479

1,482

—%
 
 
 
 
8,530

6,966

0.2%
 
$
8,530

$
6,966

0.2%


See notes to consolidated financial statements.
8

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

 
 
 
September 30, 2016 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
AFI Shareholder, LLC
(f/k/a Aircraft Fasteners International, LLC)
California / Machinery
Class A Units (32,500 units)
 
$
309

$
617

—%
 
 
 
 
309

617

—%
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)(8)(10)(11)
11,771

11,640

11,771

0.3%
 
 
 
 
11,640

11,771

0.3%
American Gilsonite Company(29)
Utah / Metal Services & Minerals
Membership Interest (1.93%)
 
—

—

—%
 
 
 
 
—

—

—%
Apidos CLO IX
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.72%, due 7/15/2023)(5)(13)
23,525

19,651

18,919

0.6%
 
 
 
 
19,651

18,919

0.6%
Apidos CLO XI
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 11.36%, due 1/17/2023)(5)(13)
38,340

29,137

25,439

0.7%
 
 
 
 
29,137

25,439

0.7%
Apidos CLO XII
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 13.25%, due 4/15/2025)(5)(13)
44,063

33,470

29,888

0.9%
 
 
 
 
33,470

29,888

0.9%
Apidos CLO XV
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 9.22%, due 10/20/2025)(5)(13)
36,515

30,624

24,264

0.7%
 
 
 
 
30,624

24,264

0.7%
Apidos CLO XXII
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 16.19%, due 10/20/2027)(5)(6)(13)
31,350

26,735

24,751

0.7%
 
 
 
 
26,735

24,751

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)(10)(11)
150,000

150,000

149,324

4.3%
 
 
 
 
150,000

149,324

4.3%
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), in non-accrual status effective 4/1/2016, due 4/8/2019)(10)(12)
21,322

20,706

$
9,568

0.3%
Senior Secured Term Loan B (12.50% (LIBOR + 11.50% with 1.00% LIBOR floor), in non-accrual status effective 4/1/2016, due 4/8/2019)(10)(12)
24,755

23,239

—

—%
 
 
 
 
43,945

9,568

0.3%
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)(8)(10)(11)
7,000

6,912

6,912

0.2%
 
 
 
 
6,912

6,912

0.2%
Atlantis Health Care Group (Puerto Rico), Inc.
Puerto Rico / Healthcare
Revolving Line of Credit – $7,000 Commitment (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor), due 8/21/2017)(10)(11)(14)
2,350

2,350

2,350

0.1%
Senior Term Loan (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor), due 2/21/2018)(3)(10)(11)
38,067

38,067

38,067

1.1%
 
 
 
 
40,417

40,417

1.2%
Babson CLO Ltd. 2014-III
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 13.09%, due 1/15/2026)(5)(6)(13)
52,250

42,771

40,630

1.2%
 
 
 
 
42,771

40,630

1.2%

See notes to consolidated financial statements.
9

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

 
 
 
September 30, 2016 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
BNN Holdings, Corp.
Michigan / Healthcare
Escrow Receivable


$
—

$
486

—%
 
 
 
 
—

486

—%
Broder Bros., Co.
Pennsylvania / Textiles, Apparel & Luxury Goods
Senior Secured Term Loan A (7.00% (LIBOR + 5.75% with 1.25% LIBOR floor), due 6/03/2021)(3)(10)(12)
119,999

119,999

$
119,999

3.5%
Senior Secured Term Loan B (13.50% (LIBOR + 12.25% with 1.25% LIBOR floor), due 6/03/2021)(10)(12)
120,983

120,983

120,983

3.5%
 
 
 
 
240,982

240,982

7.0%
Brookside Mill CLO Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 12.67%, due 4/17/2025)(5)(13)
26,000

19,432

18,083

0.5%
 
 
 
 
19,432

18,083

0.5%
California Street CLO IX Ltd. (f/k/a Symphony CLO IX Ltd.)
Cayman Islands / Structured Finance
Preference Shares (Residual Interest, current yield 15.77%, due 4/16/2022)(5)(13)
57,000

37,813

34,132

1.0%
 
 
 
 
37,813

34,132

1.0%
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)(8)(10)(12)
101,828

101,319

101,033

2.9%
 
 
 
 
101,319

101,033

2.9%
Carlyle Carlyle Global Market Strategies CLO 2016-3, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.69%, due 10/20/2029)(5)(6)(13)
32,200

29,854

29,717

0.9%
 
 
 
 
29,854

29,717

0.9%
Cent CLO 17 Limited
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 12.17%, due 1/30/2025)(5)(13)
24,870

18,616

16,504

0.5%
 
 
 
 
18,616

16,504

0.5%
Cent CLO 20 Limited
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 9.27%, due 1/25/2026)(5)(13)
40,275

32,288

25,591

0.7%
 
 
 
 
32,288

25,591

0.7%
Cent CLO 21 Limited
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 8.66%, due 7/27/2026)(5)(6)(13)
48,528

37,278

28,947

0.8%
 
 
 
 
37,278

28,947

0.8%
CIFC Funding 2013-III, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.62%, due 10/24/2025)(5)(13)
44,100

31,703

28,775

0.8%
 
 
 
 
31,703

28,775

0.8%
CIFC Funding 2013-IV, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.24%, due 11/27/2024)(5)(13)
45,500

33,065

32,209

0.9%
 
 
 
 
33,065

32,209

0.9%
CIFC Funding 2014-IV Investor, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 13.72%, due 10/17/2026)(5)(6)(13)
41,500

30,980

29,141

0.8%
 
 
 
 
30,980

29,141

0.8%
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)(10)(11)(39)
65,640

65,590

65,640

1.9%
 
 
 
 
65,590

65,640

1.9%

See notes to consolidated financial statements.
10

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

 
 
 
September 30, 2016 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
Coverall North America, Inc.
Florida / Commercial Services
Senior Secured Term Loan A (7.00% (LIBOR + 6.00% with 1.00% LIBOR floor), due 11/02/2020)(3)(10)(11)
$
24,000

$
24,000

$
24,000

0.7%
Senior Secured Term Loan B (12.00% (LIBOR + 11.00% with 1.00% LIBOR floor), due 11/02/2020)(3)(10)(11)
25,000

25,000

25,000

0.7%
 
 
 
 
49,000

49,000

1.4%
Crosman Corporation
New York / Manufacturing
Senior Secured Term Loan A (9.22% (LIBOR + 8.70% with .30% LIBOR floor) plus 4.00% PIK, due 8/5/2020)(3)(10)(12)(39)
54,673

54,673

54,673

1.6%
Senior Secured Term Loan B (16.22% (LIBOR + 15.70% with .30% LIBOR floor) plus 4.00% PIK, due 8/5/2020)(10)(12)(39)
41,656

41,656

41,656

1.2%
 
 
 
 
96,329

96,329

2.8%
CURO Group Holdings Corp. (f/k/a Speedy Cash Holdings Corp.)
Canada / Consumer Finance
Senior Unsecured Notes (12.00%, due 11/15/2017)(8)(13)
15,000

15,000

7,076

0.2%
 
 
 
 
15,000

7,076

0.2%
Easy Gardener Products, Inc.
Texas / Durable Consumer Products
Senior Secured Term Loan (10.84% (LIBOR + 10.00% with .25% LIBOR floor), due 09/30/2020)(3)(10)(11)
17,325

17,325

17,325

0.5%
 
 
 
 
17,325

17,325

0.5%
Empire Today, LLC
Illinois / Durable Consumer Products
Senior Secured Note (11.375%, due 2/1/2017)(8)
50,426

50,189

50,426

1.5%
 
 
 
 
50,189

50,426

1.5%
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)(10)(11)
23,402

23,402

23,402

0.7%
Delayed Draw Term Loan – $15,000 Commitment (expires 4/30/2019)(10)(14)
—

—

—

—%
 
 
 
 
23,402

23,402

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)(8)(10)(12)
18,000

17,891

18,000

0.5%
 
 
 
 
17,891

18,000

0.5%
Galaxy XV CLO, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 16.76%, due 4/15/2025)(5)(13)
39,275

28,658

29,503

0.9%
 
 
 
 
28,658

29,503

0.9%
Galaxy XVI CLO, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.53%, due 11/16/2025)(5)(13)
24,575

18,900

18,168

0.5%
 
 
 
 
18,900

18,168

0.5%
Galaxy XVII CLO, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.47%, due 7/15/2026)(5)(6)(13)
39,905

30,527

28,779

0.8%
 
 
 
 
30,527

28,779

0.8%
Generation Brands Holdings, Inc.
Illinois / Durable Consumer Products
Subordinated Secured Term Loan (11.00% (LIBOR + 10.00% with 1.00% LIBOR floor), due 12/10/2022)(8)(10)(11)
19,000

18,459

19,000

0.6%
 
 
 
 
18,459

19,000

0.6%
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)(10)(12)
49,250

49,250

49,250

1.4%
 
 
 
 
49,250

49,250

1.4%

See notes to consolidated financial statements.
11

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

 
 
 
September 30, 2016 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized 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 2012-1 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.13%, due 8/15/2023)(5)(13)
$
23,188

$
17,575

$
16,637

0.5%
 
 
 
 
17,575

16,637

0.5%
Halcyon Loan Advisors Funding 2013-1 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 9.26%, due 4/15/2025)(5)(13)
40,400

30,747

26,838

0.8%
 
 
 
 
30,747

26,838

0.8%
Halcyon Loan Advisors Funding 2014-1 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 8.12%, due 4/18/2026)(5)(13)
24,500

17,613

14,751

0.4%
 
 
 
 
17,613

14,751

0.4%
Halcyon Loan Advisors Funding 2014-2 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 8.84%, due 4/28/2025)(5)(6)(13)
41,164

29,585

25,007

0.7%
 
 
 
 
29,585

25,007

0.7%
Halcyon Loan Advisors Funding 2015-3 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 12.37%, due 10/18/2027)(5)(6)(13)
39,598

35,736

31,619

0.9%
 
 
 
 
35,736

31,619

0.9%
Harbortouch Payments, LLC
Pennsylvania / Business Services
Second Lien Term Loan (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor) plus 3.00% PIK, due 5/31/2023)(3)(10)(11)(39)
27,711

27,711

28,404

0.9%
Escrow Receivable
 
—

1,629

—%
 
 
 
 
27,711

30,033

0.9%
HarbourView CLO VII, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 16.22%, due 11/18/2026)(5)(6)(13)
19,025

14,432

12,806

0.4%
 
 
 
 
14,432

12,806

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)(8)(10)(11)
9,000

8,894

8,352

0.2%
 
 
 
 
8,894

8,352

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)(10)(12)
21,860

21,860

20,293

0.6%
 
 
 
 
21,860

20,293

0.6%
Inpatient Care Management Company LLC
Florida / Healthcare
Senior Secured Term Loan (11.50% (LIBOR + 10.50% with 1.00% LIBOR floor), due 6/8/2021(10)(12)
16,830

16,830

16,830

0.5%
 
 
 
 
16,830

16,830

0.5%
Instant Web, LLC
Minnesota / Media
Senior Secured Term Loan A (5.50% (LIBOR + 4.50% with 1.00% LIBOR floor), due 3/28/2019)(10)(11)
122,444

122,444

122,444

3.6%
Senior Secured Term Loan B (12.00% (LIBOR + 11.00% with 1.00% LIBOR floor), due 3/28/2019)(3)(10)(11)
158,100

158,100

158,100

4.6%
Senior Secured Term Loan C-1 (12.75% (LIBOR + 11.75% with 1.00% LIBOR floor), due 3/28/2019)(10)(11)
27,000

27,000

27,000

0.8%
Senior Secured Term Loan C-2 (13.50% (LIBOR + 12.50% with 1.00% LIBOR floor), due 3/28/2019)(10)(11)
25,000

25,000

25,000

0.7%
 
 
 
 
332,544

332,544

9.7%

See notes to consolidated financial statements.
12

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

 
 
 
September 30, 2016 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
InterDent, Inc.
California / Healthcare
Senior Secured Term Loan A (6.25% (LIBOR + 5.50% with 0.75% LIBOR floor), due 8/3/2017)(10)(12)
$
79,317

$
79,317

$
79,317

2.3%
Senior Secured Term Loan B (11.25% (LIBOR + 10.50% with 0.75% LIBOR floor), due 8/3/2017)(3)(10)(12)
131,125

131,125

131,125

3.8%
 
 
 
 
210,442

210,442

6.1%
JAC Holding Corporation
Michigan / Transportation
Senior Secured Note (11.50%, due 10/1/2019)(8)
2,868

2,868

2,868

0.1%
 
 
 
 
2,868

2,868

0.1%
JD Power and Associates
California / Consumer Services
Second Lien Term Loan (9.50% (LIBOR + 8.50% with 1.00% LIBOR floor), due 9/7/2024)(8)(10)(11)
15,000

14,777

15,000

0.4%
 
 
 
 
14,777

15,000

0.4%
Jefferson Mill CLO Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 9.47%, due 7/20/2027)(5)(6)(13)
19,500

16,821

13,174

0.4%
 
 
 
 
16,821

13,174

0.4%
LaserShip, Inc.
Virginia / Transportation
Senior Secured Term Loan A (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor) plus 1.00% PIK, due 3/18/2019)(3)(10)(12)(39)
34,424

34,424

33,667

1.0%
Senior Secured Term Loan B (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor) plus 1.00% PIK, due 3/18/2019)(3)(10)(12)(39)
21,129

21,129

20,664

0.6%
 
 
 
 
55,553

54,331

1.6%
LCM XIV Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 16.10%, due 7/15/2025)(5)(13)
30,500

22,359

21,872

0.6%
 
 
 
 
22,359

21,872

0.6%
Madison Park Funding IX, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 21.72%, due 8/15/2022)(5)(13)
43,110

29,343

28,543

0.8%
 
 
 
 
29,343

28,543

0.8%
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)(10)(11)
34,490

34,490

34,490

1.0%
Senior Secured Term Loan B (12.50% (LIBOR + 11.00% with 1.50% LIBOR floor), due 8/9/2018)(3)(10)(11)
45,562

45,562

45,562

1.3%
 
 
 
 
80,052

80,052

2.3%
Maverick Healthcare Equity, LLC
Arizona / Healthcare
Preferred Units (1,250,000 units)
 
1,252

1,990

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

204

—%
 
 
 
 
1,252

2,194

0.1%
Mineral Fusion Natural Brands(30)
Colorado / Personal & Nondurable Consumer Products
Membership Interest (1.43%)
 
—

197

—%
 
 
 
 
—

197

—%
Mountain View CLO 2013-I Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.27%m due 4/12/2024)(5)(13)
43,650

32,078

29,996

0.9%
 
 
 
 
32,078

29,996

0.9%
Mountain View CLO IX Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.52%, due 7/15/2027)(5)(6)(13)
47,830

42,415

38,431

1.1%
 
 
 
 
42,415

38,431

1.1%

See notes to consolidated financial statements.
13

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

 
 
 
September 30, 2016 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
NCP Finance Limited Partnership(31)
Ohio / Consumer Finance
Subordinated Secured Term Loan (11.00% (LIBOR + 9.75% with 1.25% LIBOR floor), due 9/30/2018)(3)(8)(10)(12)(13)
$
27,119

$
26,502

$
25,763

0.7%
 
 
 
 
26,502

25,763

0.7%
Nixon, Inc.
California / Durable Consumer Products
Senior Secured Term Loan (9.50% plus 3.00% PIK, in non-accrual status effective 7/1/2016, due 4/16/2018)(3)(8)(39)
14,421

14,197

10,877

0.3%
 
 
 
 
14,197

10,877

0.3%
Octagon Investment Partners XV, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 13.99%, due 1/19/2025)(5)(13)
32,921

25,527

22,633

0.7%
 
 
 
 
25,527

22,633

0.7%
Octagon Investment Partners XVIII, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 16.76%, due 12/16/2024)(5)(6)(13)
28,200

19,391

17,805

0.5%
 
 
 
 
19,391

17,805

0.5%
Onyx Payments(32)
Texas / Diversified Financial Services
Revolving Line of Credit – $3,000 Commitment (9.00% (LIBOR + 8.00% with 1.00% LIBOR floor), due 12/31/2016)(10)(11)(14)
—

—

—

—%
Senior Secured Term Loan A (6.50% (LIBOR + 5.50% with 1.00% LIBOR floor), due 9/10/2019)(3)(10)(11)
45,130

45,130

45,130

1.3%
Senior Secured Term Loan A (6.00% (LIBOR + 5.00% with 1.00% LIBOR floor), due 9/10/2019)(10)(11)
25,000

25,000

25,000

0.7%
Senior Secured Term Loan B (13.50% (LIBOR + 12.50% with 1.00% LIBOR floor), due 9/10/2019)(3)(10)(11)
56,889

56,889

56,889

1.7%
Senior Secured Term Loan B (13.00% (LIBOR + 12.00% with 1.00% LIBOR floor), due 9/10/2019)(10)(11)
25,000

25,000

25,000

0.7%
 
 
 
 
152,019

152,019

4.4%
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)(10)(12)(14)
5,500

5,500

5,500

0.2%
Senior Secured Term Loan A (6.00% (LIBOR + 5.00% with 1.00% LIBOR floor), due 9/26/2020)(10)(12)
97,994

97,994

94,364

2.7%
Senior Secured Term Loan B (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 9/26/2020)(3)(10)(12)
97,994

97,994

83,137

2.4%
 
 
 
 
201,488

183,001

5.3%
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)(3)(8)(10)(12)
17,500

17,487

16,383

0.5%
 
 
 
 
17,487

16,383

0.5%
PeopleConnect Intermediate, LLC (f/k/a Intelius, Inc.)
Washington / Software & Computer Services
Revolving Line of Credit – $1,000 Commitment (9.50% (LIBOR + 8.50% with 1.00% LIBOR floor), due 8/11/17)(10)(11)(14)
—

—

—

—%
Senior Secured Term Loan A (6.50% (LIBOR + 5.50% with 1.00% LIBOR floor), due 7/1/2020)(3)(10)(11)
20,199

20,199

19,764

0.6%
Senior Secured Term Loan B (12.50% (LIBOR + 11.50% with 1.00% LIBOR floor), due 7/1/2020)(3)(10)(11)
20,849

20,849

20,154

0.6%
 
 
 
 
41,048

39,918

1.2%

See notes to consolidated financial statements.
14

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

 
 
 
September 30, 2016 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
PGX Holdings, Inc.(33)
Utah / Consumer Services
Second Lien Term Loan (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 9/29/2021)(3)(10)(12)
$
135,000

$
135,000

$
135,000

3.9%
 
 
 
 
135,000

135,000

3.9%
Photonis Technologies SAS
France / Aerospace & Defense
First Lien Term Loan (8.50% (LIBOR + 7.50% with 1.00% LIBOR floor), due 9/18/2019)(8)(10)(12)(13)
9,927

9,770

9,127

0.3%
 
 
 
 
9,770

9,127

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)(8)(10)(11)
7,037

6,925

5,188

0.2%
 
 
 
 
6,925

5,188

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)(3)(8)(10)(11)
11,000

10,862

10,924

0.3%
 
 
 
 
10,862

10,924

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)(8)(10)(12)
5,192

5,067

5,192

0.2%
 
 
 
 
5,067

5,192

0.2%
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)(10)(11)
53,546

53,546

53,546

1.6%
Senior Secured Term Loan B (12.00% (LIBOR + 11.00% with 1.00% LIBOR floor), due 2/11/2021)(3)(10)(11)
74,500

74,500

72,741

2.1%
 
 
 
 
128,046

126,287

3.7%
Prince Mineral Holding Corp.
New York / Metal Services & Minerals
Senior Secured Term Loan (11.50%, due 12/15/2019)(8)
10,000

9,939

9,004

0.3%
 
 
 
 
9,939

9,004

0.3%
Royal Holdings, Inc.
Indiana / Chemicals
Second Lien Term Loan (8.50% (LIBOR + 7.50% with 1.00% LIBOR floor), due 6/19/2023)(8)(10)(11)
5,000

4,968

4,915

0.1%
 
 
 
 
4,968

4,915

0.1%
SCS Merger Sub, Inc.
Texas / Software & Computer Services
Second Lien Term Loan (10.50% (LIBOR + 9.50% with 1.00% LIBOR floor), due 10/30/2023)(3)(8)(10)(12)
20,000