PROSPECT CAPITAL CORP - FORM 10-Q - February 8, 2017

Attached files

file filename
EX-32.2 - EXHIBIT 32.2 - PROSPECT CAPITAL CORPpsec10-qq22017ex322.htm
EX-32.1 - EXHIBIT 32.1 - PROSPECT CAPITAL CORPpsec10-qq22017ex321.htm
EX-31.2 - EXHIBIT 31.2 - PROSPECT CAPITAL CORPpsec10-qq22017ex312.htm
EX-31.1 - EXHIBIT 31.1 - PROSPECT CAPITAL CORPpsec10-qq22017ex311.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 December 31, 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 February 8, 2017
$0.001 par value
 
359,296,184



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)
 
December 31, 2016
 
June 30, 2016
 
 
 
(Unaudited)
 
(Audited)
Assets
 
 
 

Investments at fair value:
 

 
 

Control investments (amortized cost of $1,880,883 and $1,768,220, respectively)
$
1,867,410

 
$
1,752,449

Affiliate investments (amortized cost of $8,530 and $10,758, respectively)
7,819

 
11,320

Non-control/non-affiliate investments (amortized cost of $4,222,503 and $4,312,122, respectively)
4,061,770

 
4,133,939

Total investments at fair value (amortized cost of $6,111,916 and $6,091,100, respectively)
5,936,999

 
5,897,708

Cash
203,911

 
317,798

Receivables for:
 
 
 
Interest, net
23,943

 
12,127

Other
6,484

 
168

Prepaid expenses
670

 
855

Deferred financing costs on Revolving Credit Facility (Note 4)
6,141

 
7,525

Total Assets 
6,178,148

 
6,236,181

 
 
 
 
Liabilities 
 

 
 

Revolving Credit Facility (Notes 4 and 8)
—

 
—

Prospect Capital InterNotes® (Notes 7 and 8)
947,172

 
893,210

Convertible Notes (Notes 5 and 8)
909,505

 
1,074,361

Public Notes (Notes 6 and 8)
737,311

 
699,368

Due to Prospect Capital Management (Note 13)
52,212

 
54,149

Interest payable
38,419

 
40,804

Dividends payable
29,915

 
29,758

Due to Prospect Administration (Note 13)
3,010

 
1,765

Accrued expenses
2,885

 
2,259

Other liabilities
3,123

 
3,633

Due to broker
—

 
957

Total Liabilities 
2,723,552

 
2,800,264

Commitments and Contingencies (Note 3)
—

 
—

Net Assets 
$
3,454,596

 
$
3,435,917

 
 
 
 
Components of Net Assets 
 

 
 

Common stock, par value $0.001 per share (1,000,000,000 common shares authorized; 359,000,280 and 357,107,231 issued and outstanding, respectively) (Note 9)
$
359

 
$
357

Paid-in capital in excess of par (Note 9)
3,981,732

 
3,967,397

Accumulated overdistributed net investment income
(16,907
)
 
(3,623
)
Accumulated net realized loss
(335,671
)
 
(334,822
)
Net unrealized loss
(174,917
)
 
(193,392
)
Net Assets 
$
3,454,596

 
$
3,435,917

 
 
 
 
Net Asset Value Per Share (Note 16) 
$
9.62

 
$
9.62



See notes to consolidated financial statements.
2

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

 
Three Months Ended December 31,
 
Six Months Ended December 31,
 
2016
 
2015
 
2016
 
2015
Investment Income
 
 
 
 
 
 
 
Interest income:
 
 
 
 
 
 
 
Control investments
$
48,281

 
$
51,429

 
$
94,190

 
$
103,373

Affiliate investments
—

 
11

 
—

 
896

Non-control/non-affiliate investments
87,465

 
88,161

 
174,125

 
181,869

Structured credit securities
39,045

 
46,902

 
78,126

 
91,668

Total interest income
174,791

 
186,503

 
346,441

 
377,806

Dividend income:
 
 
 
 
 
 
 
Control investments
1,282

 
13,545

 
3,522

 
16,758

Non-control/non-affiliate investments
97

 
1

 
241

 
3

Total dividend income
1,379

 
13,546

 
3,763

 
16,761

Other income:
 
 
 
 
 
 
 
Control investments
3,856

 
3,270

 
6,796

 
5,679

Non-control/non-affiliate investments
3,454

 
5,872

 
6,312

 
9,196

Total other income (Note 10)
7,310

 
9,142

 
13,108

 
14,875

Total Investment Income
183,480

 
209,191

 
363,312

 
409,442

Operating Expenses
 
 
 
 
 
 
 
Base management fee (Note 13)
30,886

 
31,781

 
61,678

 
64,735

Income incentive fee (Note 13)
21,101

 
25,224

 
40,831

 
48,034

Interest and credit facility expenses
40,848

 
42,205

 
82,517

 
84,162

Allocation of overhead from Prospect Administration (Note 13)
2,657

 
2,000

 
6,190

 
6,178

Audit, compliance and tax related fees
1,058

 
1,192

 
2,453

 
3,069

Directors’ fees
112

 
94

 
225

 
188

Other general and administrative expenses
2,413

 
5,802

 
6,094

 
10,941

Total Operating Expenses
99,075

 
108,298

 
199,988

 
217,307

Net Investment Income
84,405

 
100,893

 
163,324

 
192,135

Net Realized and Change in Unrealized Gains (Losses) from Investments
 
 
 
 
 
 
 
Net realized (losses) gains
 
 
 
 
 
 
 
Control investments
178

 
(8
)
 
183

 
(9
)
Affiliate investments
—

 
—

 
137

 
—

Non-control/non-affiliate investments
(260
)
 
(5,310
)
 
312

 
(7,444
)
Net realized (losses) gains
(82
)
 
(5,318
)
 
632

 
(7,453
)
Net change in unrealized gains (losses)
 
 
 
 
 
 
 
Control investments
(11,068
)
 
(37,104
)
 
2,298

 
(77,287
)
Affiliate investments
853

 
241

 
(1,273
)
 
346

Non-control/non-affiliate investments
26,896

 
(153,784
)
 
17,450

 
(174,981
)
Net change in unrealized gains (losses)
16,681

 
(190,647
)
 
18,475

 
(251,922
)
Net Realized and Change in Unrealized Gains (Losses) from Investments
16,599

 
(195,965
)
 
19,107

 
(259,375
)
Net realized losses on extinguishment of debt
(124
)
 
(48
)
 
(185
)
 
(63
)
Net Increase (Decrease) in Net Assets Resulting from Operations
$
100,880

 
$
(95,120
)
 
$
182,246

 
$
(67,303
)
Net increase (decrease) in net assets resulting from operations per share
$
0.28

 
$
(0.27
)
 
$
0.51

 
$
(0.19
)
Dividends declared per share
$
(0.25
)
 
$
(0.25
)
 
$
(0.50
)
 
$
(0.50
)

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)

 
Six Months Ended December 31,
 

2016
 
2015
Operations
 

 
 

Net investment income
$
163,324

 
$
192,135

Net realized gains (losses)
447

 
(7,516
)
Net change in unrealized gains (losses)
18,475

 
(251,922
)
Net Increase (Decrease) in Net Assets Resulting from Operations 
182,246

 
(67,303
)
 
 
 
 
Distributions to Shareholders
 
 
 
Distribution from net investment income
(179,097
)
 
(177,942
)
Net Decrease in Net Assets Resulting from Distributions to Shareholders
(179,097
)
 
(177,942
)
 
 
 
 
Common Stock Transactions 
 
 
 
Offering costs from issuance of common stock
—

 
118

Repurchase of common stock under stock repurchase program
—

 
(34,140
)
Value of shares issued through reinvestment of dividends
15,530

 
7,645

Net Increase (Decrease) in Net Assets Resulting from Common Stock Transactions 
15,530

 
(26,377
)
 
 
 
 
Total Increase (Decrease) in Net Assets 
18,679

 
(271,622
)
Net assets at beginning of period
3,435,917

 
3,703,049

Net Assets at End of Period (Accumulated Overdistributed Net Investment Income of $(16,907) and $(3,623), respectively)
$
3,454,596

 
$
3,431,427

 
 
 
 
Common Stock Activity
 
 
 
Shares repurchased under stock repurchase program
—

 
(4,708,750
)
Shares issued through reinvestment of dividends
1,893,049

 
1,029,703

Net shares issued (repurchased) due to common stock activity
1,893,049

 
(3,679,047
)
Shares issued and outstanding at beginning of period
357,107,231

 
359,090,759

Shares Issued and Outstanding at End of Period
359,000,280

 
355,411,712

 


See notes to consolidated financial statements.
4

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

 
Six Months Ended December 31,
 
2016
 
2015
Operating Activities
 
 
 
Net increase (decrease) in net assets resulting from operations
$
182,246

 
$
(67,303
)
Net realized losses on extinguishment of debt
185

 
63

Net realized (gains) losses from investments
(632
)
 
7,453

Net change in unrealized (gains) losses from investments
(18,475
)
 
251,922

Amortization of discounts and premiums, net
37,178

 
40,627

Accretion of discount on Public Notes (Note 6)
132

 
98

Amortization of deferred financing costs
6,758

 
6,916

Payment-in-kind interest
(9,196
)
 
(4,140
)
Structuring fees
(5,693
)
 
(6,906
)
Change in operating assets and liabilities:
 
 
 
Payments for purchases of investments
(801,798
)
 
(650,842
)
Proceeds from sale of investments and collection of investment principal
759,326

 
791,774

(Increase) decrease in interest receivable, net
(11,816
)
 
5,288

(Increase) decrease in other receivables
(6,317
)
 
412

Decrease (increase) in prepaid expenses
185

 
(8
)
Decrease in due to broker
(957
)
 
(26,778
)
(Decrease) increase in interest payable
(2,385
)
 
1,148

Increase in due to Prospect Administration
1,245

 
3,610

(Decrease) increase in due to Prospect Capital Management
(1,937
)
 
54,632

Increase in accrued expenses
626

 
1,759

(Decrease) increase in other liabilities
(510
)
 
3,796

Net Cash Provided by Operating Activities 
128,165

 
413,521

Financing Activities
 
 
 
Borrowings under Revolving Credit Facility (Note 4)
210,000

 
536,000

Principal payments under Revolving Credit Facility (Note 4)
(210,000
)
 
(846,700
)
Issuances of Public Notes, net of original issue discount (Note 6)
37,466

 
160,000

Redemptions of Convertible Notes (Note 5)
(167,500
)
 
(150,000
)
Issuances of Prospect Capital InterNotes® (Note 7)
64,731

 
69,289

Redemptions of Prospect Capital InterNotes®, net (Note 7)
(11,440
)
 
(2,606
)
Financing costs paid and deferred
(1,900
)
 
(6,549
)
Cost of shares repurchased under stock repurchase program
—

 
(34,140
)
Offering costs from issuance of common stock
—

 
118

Dividends paid
(163,409
)
 
(170,605
)
Net Cash Used in Financing Activities
(242,052
)
 
(445,193
)
 
 
 
 
Net Decrease in Cash
(113,887
)
 
(31,672
)
Cash at beginning of period
317,798

 
110,026

Cash at End of period
$
203,911

 
$
78,354

 
 
 
 
Supplemental Disclosures
 
 
 
Cash paid for interest
$
78,012

 
$
75,735

Non-Cash Financing Activities
 
 
 
Value of shares issued through reinvestment of dividends
$
15,530

 
$
7,645

Cost basis of investments written off as worthless
$
1,720

 
$
3,762


See notes to consolidated financial statements.
5

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


 
 
 
December 31, 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)(41)
 
 
 
 
 
 
 
 
 
 
 
Arctic Energy Services, LLC(15)
Wyoming / Energy Equipment & Services
Class D Units (32,915 units)(39)
 
$
31,640

$
18,555

0.5%
Class E Units (21,080 units)(39)
 
20,230

—

—%
Class A Units (700 units)(39)
 
9,006

—

—%
Class C Units (10 units)(39)
 
—

—

—%
 
 
 
 
60,876

18,555

0.5%
CCPI Inc.(16)
Ohio / Metals & Mining
Senior Secured Term Loan A (10.00%, due 12/31/2017)(3)
12,088

12,088

12,088

0.3%
Senior Secured Term Loan B (12.00% plus 7.00% PIK, due 12/31/2017)(40)
9,320

9,320

9,320

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

21,469

0.6%
 
 
 
 
28,167

42,877

1.2%
CP Energy Services Inc.(17)
Oklahoma / Energy Equipment & Services
Series B Convertible Preferred Stock (1,043 shares)(39)
 
98,272

73,048

2.1%
Common Stock (2,924 shares)(39)
 
15,227

—

—%
 
 
 
 
113,499

73,048

2.1%
Credit Central Loan Company, LLC(18)
South Carolina / Consumer Finance
Subordinated Term Loan (10.00% plus 10.00% PIK, due 6/26/2019)(13)(40)
51,370

44,112

51,370

1.5%
Class A Units (10,640,642 units)(13)(39)
 
13,731

8,312

0.2%
Net Revenues Interest (25% of Net Revenues)(13)(39)
 
—

3,299

0.1%
 
 
 
 
57,843

62,981

1.8%
Echelon Aviation LLC
New York / Diversified Financial Services
Senior Secured Term Loan (11.75% (LIBOR + 9.75% with 2.00% LIBOR floor) plus 2.25% PIK, due 3/31/2022)(10)(12)(40)
31,055

31,055

31,055

0.9%
Senior Secured Term Loan (11.00% (LIBOR + 9.00% with 2.00% LIBOR floor) plus 1.00% PIK, due 12/7/2024)(10)(12)(39)(40)
16,044

16,044

16,044

0.5%
Membership Interest (99%)
 
22,738

29,760

0.8%
 
 
 
 
69,837

76,859

2.2%
Edmentum Ultimate Holdings, LLC(19)
Minnesota / Internet Software & 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)(40)
6,619

6,619

6,619

0.2%
Unsecured Junior PIK Note (10.00% PIK, due 6/9/2020)(40)
30,326

23,829

26,561

0.8%
Class A Units (370,964 units)(39)
 
6,577

3,432

0.1%
 
 
 
 
37,025

36,612

1.1%
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)(40)
258,210

258,210

258,210

7.5%
Class A Units (93,997,533 units)(13)(39)
 
78,481

97,398

2.8%
 
 
 
 
336,691

355,608

10.3%
Freedom Marine Solutions, LLC(21)
Louisiana / Energy Equipment & Services
Membership Interest (100%)(39)
 
41,411

26,671

0.8%
 
 
 
 
41,411

26,671

0.8%

See notes to consolidated financial statements.
6

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

 
 
 
December 31, 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)(41)
 
 
 
 
 
 
 
 
 
 
 
Gulf Coast Machine & Supply Company
Texas / Energy Equipment & Services
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)
$
41,980

$
35,403

$
7,487

0.2%
Series A Convertible Preferred Stock (99,900 shares)(39)
 
25,950

—

—%
Common Stock (100 shares)(39)
—

—

—

—%
 
 
 
 
61,353

7,487

0.2%
MITY, Inc.(22)
Utah / Commercial Services & Supplies
Senior Secured Note A (10.00% (LIBOR + 7.00% with 3.00% LIBOR floor), due 1/30/2020)(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 1/30/2020)(3)(10)(11)(40)
16,442

16,442

16,442

0.5%
Subordinated Unsecured Note to Broda Enterprises ULC (10.00%, due on demand)(13)
5,478

7,200

5,478

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

16,789

0.4%
 
 
 
 
48,741

56,959

1.6%
National Property REIT Corp.(23)
Various / Equity Real Estate Investment Trusts (REITs) / Online Lending
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)(40)
284,421

284,421

284,421

8.2%
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)(40)
205,591

205,591

205,591

6.0%
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)(40)
88,556

88,556

88,556

2.6%
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 12/15/2020)(10)(11)(13)(40)
46,918

46,918

46,918

1.4%
Common Stock (1,743,534 shares)(39)
—

184,768

254,187

7.4%
Net Operating Income Interest (5% of Net Operating Income)(39)
—

—

68,948

1.9%
 
 
 
 
810,254

948,621

27.5%
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)(40)
16,819

16,819

16,819

0.5%
Class A Units (29,559,899 units)(13)
 
16,293

19,456

0.6%
 
 
 
 
33,112

36,275

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

3,714

3,714

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

7,000

7,000

0.2%
Series A Preferred Stock (7,200 shares)(39)
 
7,200

2,558

0.1%
Series B Preferred Stock (5,669 shares)(39)
 
5,669

2,014

0.1%
 
 
 
 
23,583

15,286

0.4%
R-V Industries, Inc.
Pennsylvania / Construction & Engineering
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 (745,107 shares)
 
6,941

6,909

0.2%
 
 
 
 
35,563

35,531

1.0%

See notes to consolidated financial statements.
7

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

 
 
 
December 31, 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)(41)
 
 
 
 
 
 
 
 
 
 
 
USES Corp.(26)
Texas / Commercial Services & Supplies
Senior Secured Term Loan A (9.00% PIK, in non-accrual status effective 4/1/2016, due 3/31/2019)
$
27,091

$
26,158

$
27,091

0.8%
Senior Secured Term Loan B (15.50% PIK, in non-accrual status effective 4/1/2016, due 3/31/2019)
37,880

35,568

16,013

0.4%
Common Stock (268,962 shares)(39)
 
—

—

—%
 
 
 
 
61,726

43,104

1.2%
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)(40)
10,430

10,430

10,430

0.3%
Senior Secured Note (10.00% plus 8.50% PIK, due 6/23/2019)(40)
24,568

24,568

20,491

0.6%
Common Stock (50,000 shares)(39)
 
26,204

—

—%
 
 
 
 
61,202

30,921

0.9%
Wolf Energy, LLC
Kansas / Energy Equipment & Services
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)
41,758

—

—

—%
Membership Interest (100%)(39)
 
—

—

—%
Net Profits Interest (8% of Equity Distributions)(4)(39)
 
—

15

—%
 
 
 
 
—

15

—%
 
$
1,880,883

$
1,867,410

54.0%

Affiliate Investments (5.00% to 24.99% voting control)(42)
 
 
 
 
 
 
 
 
 
 
 
Targus International, LLC(28)
California / Leisure Products
Senior Secured Term Loan A (15.00% PIK, in non-accrual status effective 10/1/15, due 12/31/2019)(8)
$
1,422

$
1,263

$
1,422

—%
Senior Secured Term Loan B (15.00% PIK, in non-accrual status effective 10/1/15, due 12/31/2019)(8)
4,267

3,788

4,267

0.1%
Common Stock (1,262,737 shares)(39)
 
3,479

2,130

0.1%
 
 
 
 
8,530

7,819

0.2%
 
$
8,530

$
7,819

0.2%


See notes to consolidated financial statements.
8

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

 
 
 
December 31, 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 / Trading Companies & Distributors
Class A Units (32,500 units)(39)
 
$
289

$
679

—%
 
 
 
 
289

679

—%
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

11,649

11,771

0.3%
 
 
 
 
11,649

11,771

0.3%
American Gilsonite Company(29)
Utah / Metals & Mining
Membership Interest (1.93%)(39)
 
—

—

—%
 
 
 
 
—

—

—%
Apidos CLO IX
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 9.57%, due 7/15/2023)(5)(13)
23,525

19,276

17,295

0.5%
 
 
 
 
19,276

17,295

0.5%
Apidos CLO XI
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 12.96%, due 1/17/2023)(5)(13)
40,500

30,870

26,902

0.8%
 
 
 
 
30,870

26,902

0.8%
Apidos CLO XII
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 13.28%, due 4/15/2025)(5)(13)
44,063

32,596

29,821

0.9%
 
 
 
 
32,596

29,821

0.9%
Apidos CLO XV
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 10.36%, due 10/20/2025)(5)(13)
36,515

29,887

24,655

0.7%
 
 
 
 
29,887

24,655

0.7%
Apidos CLO XXII
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 18.08%, due 10/20/2027)(5)(6)(13)
31,350

26,710

26,752

0.8%
 
 
 
 
26,710

26,752

0.8%
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

150,000

4.3%
 
 
 
 
150,000

150,000

4.3%
Ark-La-Tex Wireline Services, LLC
Louisiana / Energy Equipment & 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

20,353

9,074

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)
25,282

23,239

—

—%
 
 
 
 
43,592

9,074

0.3%
Armor Holding II LLC
New York / Commercial Services & Supplies
Second Lien Term Loan (10.25% (LIBOR + 9.00% with 1.25% LIBOR floor), due 12/26/2020)(3)(8)(10)(11)
7,000

6,918

6,918

0.2%
 
 
 
 
6,918

6,918

0.2%
Atlantis Health Care Group (Puerto Rico), Inc.
Puerto Rico / Health Care Providers & Services
Revolving Line of Credit – $7,000 Commitment (9.50% (LIBOR + 8.00% with 1.50% LIBOR floor), due 8/21/2018)(10)(11)(14)
2,350

2,350

2,350

0.1%
Senior Term Loan (9.50% (LIBOR + 8.00% with 1.50% LIBOR floor), due 2/21/2020)(3)(10)(11)
79,968

79,968

79,968

2.3%
 
 
 
 
82,318

82,318

2.4%
Babson CLO Ltd. 2014-III
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.56%, due 1/15/2026)(5)(6)(13)
52,250

42,034

41,223

1.2%
 
 
 
 
42,034

41,223

1.2%

See notes to consolidated financial statements.
9

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

 
 
 
December 31, 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)
 
 
 
 
 
 
 
 
 
 
 
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)
$
119,262

$
119,262

$
119,262

3.5%
Senior Secured Term Loan B (13.50% (LIBOR + 12.25% with 1.25% LIBOR floor), due 6/03/2021)(10)(12)
120,491

120,491

120,491

3.4%
 
 
 
 
239,753

239,753

6.9%
Brookside Mill CLO Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 6.98%, due 4/17/2025)(5)(13)
26,000

18,734

15,918

0.5%
 
 
 
 
18,734

15,918

0.5%
California Street CLO IX Ltd. (f/k/a Symphony CLO IX Ltd.)
Cayman Islands / Structured Finance
Preference Shares (Residual Interest, current yield 13.15%, due 10/16/2028)(5)(13)
58,915

40,253

34,799

1.0%
 
 
 
 
40,253

34,799

1.0%
Capstone Logistics Acquisition, Inc.
Georgia / Commercial Services & Supplies
Second Lien Term Loan (9.25% (LIBOR + 8.25% with 1.00% LIBOR floor), due 10/7/2022)(3)(8)(10)(11)
101,828

101,340

100,698

2.9%
 
 
 
 
101,340

100,698

2.9%
Carlyle Carlyle Global Market Strategies CLO 2016-3, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 18.30%, due 10/20/2029)(5)(6)(13)
32,200

31,153

30,160

0.9%
 
 
 
 
31,153

30,160

0.9%
Cent CLO 17 Limited
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 13.59%, due 1/30/2025)(5)(13)
24,870

18,364

16,768

0.5%
 
 
 
 
18,364

16,768

0.5%
Cent CLO 20 Limited
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 9.64%, due 1/25/2026)(5)(13)
40,275

31,752

25,771

0.7%
 
 
 
 
31,752

25,771

0.7%
Cent CLO 21 Limited
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 11.61%, due 7/27/2026)(5)(6)(13)
48,528

36,287

30,756

0.9%
 
 
 
 
36,287

30,756

0.9%
CIFC Funding 2013-III, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 17.38%, due 10/24/2025)(5)(13)
44,100

31,347

30,928

0.9%
 
 
 
 
31,347

30,928

0.9%
CIFC Funding 2013-IV, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 18.13%, due 11/27/2024)(5)(13)
45,500

32,561

34,499

1.0%
 
 
 
 
32,561

34,499

1.0%
CIFC Funding 2014-IV Investor, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 18.31%, due 10/17/2026)(5)(6)(13)
41,500

30,480

31,494

0.9%
 
 
 
 
30,480

31,494

0.9%
CIFC Funding 2016-I, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 17.14%, due 10/21/2028)(5)(6)(13)
34,000

30,091

29,879

0.9%
 
 
 
 
30,091

29,879

0.9%
Cinedigm DC Holdings, LLC
New York / Media
Senior Secured Term Loan (11.00% (LIBOR + 9.00% with 2.00% LIBOR floor) plus 2.50% PIK, due 3/31/2021)(10)(11)(40)
62,442

62,392

62,442

1.8%
 
 
 
 
62,392

62,442

1.8%

See notes to consolidated financial statements.
10

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

 
 
 
December 31, 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 & Supplies
Senior Secured Term Loan A (7.00% (LIBOR + 6.00% with 1.00% LIBOR floor), due 11/02/2020)(3)(10)(11)
$
23,750

$
23,750

$
23,750

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%
 
 
 
 
48,750

48,750

1.4%
Crosman Corporation
New York / Leisure Products
Senior Secured Term Loan A (9.31% (LIBOR + 8.70% with .30% LIBOR floor) plus 4.00% PIK, due 8/5/2020)(3)(10)(12)(40)
54,673

54,673

54,673

1.6%
Senior Secured Term Loan B (16.31% (LIBOR + 15.70% with .30% LIBOR floor) plus 4.00% PIK, due 8/5/2020)(10)(12)(40)
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

11,988

0.3%
Subordinated Secured Term Loan (10.75%, due 5/15/2018)(8)(13)
10,000

9,546

9,575

0.3%
 
 
 
 
24,546

21,563

0.6%
Digital Room LLC
California / Commercial Services & Supplies
Second Lien Term Loan (11.00% (LIBOR + 10.00% with 1.00% LIBOR floor), due 5/21/2023)(8)(10)(12)
34,000

33,337

33,337

1.0%
 
 
 
 
33,337

33,337

1.0%
Dunn Paper, Inc.
Georgia / Paper & Forest Products
Second Lien Term Loan (9.75% (LIBOR + 8.75% with 1.00% LIBOR floor), due 8/26/2023)(3)(8)(10)(11)
11,500

11,278

11,295

0.3%
 
 
 
 
11,278

11,295

0.3%
Easy Gardener Products, Inc.
Texas / Commercial Services & Supplies
Senior Secured Term Loan (10.84% (LIBOR + 10.00% with .25% LIBOR floor), due 09/30/2020)(3)(10)(11)
17,281

17,281

16,481

0.5%
 
 
 
 
17,281

16,481

0.5%
Fleetwash, Inc.
New Jersey / Commercial Services & Supplies
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 (9.50% (LIBOR + 8.50% with 1.00% LIBOR floor)expires 4/30/2019)(10)(14)
—

—

—

—%
 
 
 
 
23,402

23,402

0.7%
Galaxy XV CLO, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.90%, due 4/15/2025)(5)(13)
39,275

28,394

28,998

0.8%
 
 
 
 
28,394

28,998

0.8%
Galaxy XVI CLO, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 13.13%, due 11/16/2025)(5)(13)
24,575

18,535

17,544

0.5%
 
 
 
 
18,535

17,544

0.5%
Galaxy XVII CLO, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 13.47%, due 7/15/2026)(5)(6)(13)
39,905

30,698

28,707

0.8%
 
 
 
 
30,698

28,707

0.8%
Generation Brands Holdings, Inc.
Illinois / Household Durables
Subordinated Secured Term Loan (11.00% (LIBOR + 10.00% with 1.00% LIBOR floor), due 12/10/2022)(3)(8)(10)(11)
19,000

18,479

19,000

0.5%
 
 
 
 
18,479

19,000

0.5%

See notes to consolidated financial statements.
11

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

 
 
 
December 31, 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)
 
 
 
 
 
 
 
 
 
 
 
Global Employment Solutions, Inc.
Colorado / Commercial Services & Supplies
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%
Halcyon Loan Advisors Funding 2012-1 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 5.30%, due 8/15/2023)(5)(13)
23,188

16,595

13,952

0.4%
 
 
 
 
16,595

13,952

0.4%
Halcyon Loan Advisors Funding 2013-1 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.56%, due 4/15/2025)(5)(13)
40,400

29,554

28,782

0.8%
 
 
 
 
29,554

28,782

0.8%
Halcyon Loan Advisors Funding 2014-1 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.69%, due 4/18/2026)(5)(13)
24,500

17,056

16,417

0.5%
 
 
 
 
17,056

16,417

0.5%
Halcyon Loan Advisors Funding 2014-2 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.95%, due 4/28/2025)(5)(6)(13)
41,164

28,625

28,563

0.8%
 
 
 
 
28,625

28,563

0.8%
Halcyon Loan Advisors Funding 2015-3 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 16.68%, due 10/18/2027)(5)(6)(13)
39,598

35,167

35,569

1.0%
 
 
 
 
35,167

35,569

1.0%
Harbortouch Payments, LLC
Pennsylvania / Commercial Services & Supplies
Escrow Receivable(39)
 
—

2,173

0.1%
 
 
 
 
—

2,173

0.1%
HarbourView CLO VII, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 18.57%, due 11/18/2026)(5)(6)(13)
19,025

14,475

13,980

0.4%
 
 
 
 
14,475

13,980

0.4%
Harley Marine Services, Inc.
Washington / Oil, Gas & Consumable Fuels
Second Lien Term Loan (10.50% (LIBOR + 9.25% with 1.25% LIBOR floor), due 12/20/2019)(3)(8)(10)(11)
9,000

8,902

8,323

0.2%
 
 
 
 
8,902

8,323

0.2%
Hollander Sleep Products, LLC
Florida / Household Durables
Senior Secured Term Loan (9.00% (LIBOR + 8.00% with 1.00% LIBOR floor), due 10/21/2020)(3)(10)(11)
21,860

21,860

21,071

0.6%
 
 
 
 
21,860

21,071

0.6%
Inpatient Care Management Company, LLC
Florida / Health Care Providers & Services
Senior Secured Term Loan (11.50% (LIBOR + 10.50% with 1.00% LIBOR floor), due 6/8/2021(10)(12)
26,293

26,293

26,293

0.8%
 
 
 
 
26,293

26,293

0.8%
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)
121,945

121,945

121,945

3.5%
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%
 
 
 
 
332,045

332,045

9.6%

See notes to consolidated financial statements.
12

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

 
 
 
December 31, 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 / Health Care Providers & Services
Senior Secured Term Loan A (6.27% (LIBOR + 5.50% with 0.75% LIBOR floor), due 8/3/2017)(10)(12)
$
79,097

$
79,097

$
79,097

2.3%
Senior Secured Term Loan B (11.27% (LIBOR + 10.50% with 0.75% LIBOR floor), due 8/3/2017)(3)(10)(12)
131,125

131,125

131,125

3.8%
 
 
 
 
210,222

210,222

6.1%
JD Power and Associates
California / Professional Services
Second Lien Term Loan (9.50% (LIBOR + 8.50% with 1.00% LIBOR floor), due 9/7/2024)(3)(8)(10)(11)
15,000

14,784

15,000

0.4%
 
 
 
 
14,784

15,000

0.4%
Jefferson Mill CLO Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.32%, due 7/20/2027)(5)(6)(13)
19,500

16,946

15,376

0.4%
 
 
 
 
16,946

15,376

0.4%
K&N Parent, Inc.
California / Auto Components
Second Lien Term Loan (9.75% (LIBOR + 8.75% with 1.00% LIBOR floor), due 10/20/2024)(8)(10)(11)
13,000

12,745

12,745

0.4%
 
 
 
 
12,745

12,745

0.4%
Keystone Peer Review Organization Holdings, Inc.
Pennsylvania / Health Care Providers & Services
Second Lien Term Loan (11.75% (PRIME + 8.00%) with 3.75% PRIME floor), due 7/28/2023)(8)(10)
45,000

45,000

45,000

1.3%
 
 
 
 
45,000

45,000

1.3%
LaserShip, Inc.
Virginia / Road & Rail
Senior Secured Term Loan A (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor), due 3/18/2019)(3)(10)(12)
34,189

34,189

34,189

1.0%
Senior Secured Term Loan B (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor), due 3/18/2019)(3)(10)(12)
20,990

20,990

20,990

0.6%
 
 
 
 
55,179

55,179

1.6%
LCM XIV Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 16.91%, due 7/15/2025)(5)(13)
30,500

22,027

22,226

0.6%
 
 
 
 
22,027

22,226

0.6%
Madison Park Funding IX, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 20.22%, due 8/15/2022)(5)(13)
43,110

28,989

28,091

0.8%
 
 
 
 
28,989

28,091

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)
33,802

33,802

33,802

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%
 
 
 
 
79,364

79,364

2.3%
Maverick Healthcare Equity, LLC
Arizona / Health Care Providers & Services
Preferred Units (1,250,000 units)(39)
 
1,252

1,738

0.1%
Class A Common Units (1,250,000 units)(39)
 
—

—

—%
 
 
 
 
1,252

1,738

0.1%
Mineral Fusion Natural Brands(30)
Colorado / Personal Products
Membership Interest (1.43%)(39)
 
—

115

—%
 
 
 
 
—

115

—%
Mountain View CLO 2013-I Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.40%, due 4/12/2024)(5)(13)
43,650

30,835

29,821

0.9%
 
 
 
 
30,835

29,821

0.9%

See notes to consolidated financial statements.
13

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

 
 
 
December 31, 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)
 
 
 
 
 
 
 
 
 
 
 
Mountain View CLO IX Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 17.21%, due 7/15/2027)(5)(6)(13)
$
47,830

$
41,924

$
41,550

1.2%
 
 
 
 
41,924

41,550

1.2%
National Home Healthcare Corp.
Michigan / Health Care Providers & Services
Second Lien Term Loan (11.75% (PRIME + 8.00%) with 3.75% PRIME floor), due 12/8/2022)(8)(10)
15,400

15,172

15,172

0.4%
 
 
 
 
15,172

15,172

0.4%
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)
27,039

26,486

25,687

0.7%
 
 
 
 
26,486

25,687

0.7%
Nixon, Inc.
California / Textiles, Apparel & Luxury Goods
Senior Secured Term Loan (9.50% plus 3.00% PIK, plus 2.00% default interest, in non-accrual status effective 7/1/2016, due 4/16/2018)(8)
15,413

14,197

7,334

0.2%
 
 
 
 
14,197

7,334

0.2%
Octagon Investment Partners XV, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 12.23%, due 1/19/2025)(5)(13)
32,921

24,984

22,018

0.6%
 
 
 
 
24,984

22,018

0.6%
Octagon Investment Partners XVIII, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 17.44%, due 12/16/2024)(5)(6)(13)
28,200

18,856

17,946

0.5%
 
 
 
 
18,856

17,946

0.5%
Outerwall Inc.
Washington / Diversified Consumer Services
Senior Secured Term Loan B (9.75% (LIBOR + 8.75% with 1.00% LIBOR floor), due 9/27/2024)(3)(8)(10)(11)
40,000

39,421

40,000

1.2%
 
 
 
 
39,421

40,000

1.2%
Pacific World Corporation
California / Personal 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)
8,000

8,000

8,000

0.2%
Senior Secured Term Loan A (6.00% (LIBOR + 5.00% with 1.00% LIBOR floor), due 9/26/2020)(3)(10)(12)
97,750

97,750

93,215

2.7%
Senior Secured Term Loan B (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 9/26/2020)(3)(10)(12)
97,750

97,750

70,659

2.1%
 
 
 
 
203,500

171,874

5.0%
Pelican Products, Inc.
California / Leisure 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

17,488

16,862

0.5%
 
 
 
 
17,488

16,862

0.5%
PeopleConnect Intermediate, LLC (f/k/a Intelius, Inc.)
Washington / Internet Software & 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)
20,020

20,020