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

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EX-32.2 - EXHIBIT 32.2 - PROSPECT CAPITAL CORPpsec10-kq12018ex322.htm
EX-32.1 - EXHIBIT 32.1 - PROSPECT CAPITAL CORPpsec10-kq12018ex321.htm
EX-31.2 - EXHIBIT 31.2 - PROSPECT CAPITAL CORPpsec10-kq12018ex312.htm
EX-31.1 - EXHIBIT 31.1 - PROSPECT CAPITAL CORPpsec10-kq12018ex311.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, 2017
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 7, 2017
$0.001 par value
 
360,394,335


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, 2017, and those described from time to time in our future reports filed with the Securities and Exchange Commission.

3

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, 2017
 
June 30, 2017
 
 
 
(Unaudited)
 
(Audited)
Assets
 
 
 

Investments at fair value:
 

 
 

Control investments (amortized cost of $1,861,230 and $1,840,731, respectively)
$
1,933,366

 
$
1,911,775

Affiliate investments (amortized cost of $24,075 and $22,957, respectively)
17,739

 
11,429

Non-control/non-affiliate investments (amortized cost of $3,997,812 and $4,117,868, respectively)
3,736,012

 
3,915,101

Total investments at fair value (amortized cost of $5,883,117 and $5,981,556, respectively)
5,687,117

 
5,838,305

Cash
264,517

 
318,083

Receivables for:
 
 
 
Interest, net
21,273

 
9,559

Other
1,098

 
924

Prepaid expenses
981

 
1,125

Due from Prospect Administration (Note 13)
12

 
—

Due from Affiliate (Note 13)
18

 
14

Deferred financing costs on Revolving Credit Facility (Note 4)
4,086

 
4,779

Total Assets 
5,979,102

 
6,172,789

 
 
 
 
Liabilities 
 

 
 

Revolving Credit Facility (Notes 4 and 8)
—

 
—

Prospect Capital InterNotes® (less unamortized debt issuance costs of $13,561 and $14,240,
respectively) (Notes 7 and 8)
902,471

 
966,254

Convertible Notes (less unamortized debt issuance costs of $14,437 and $15,512, respectively)
(Notes 5 and 8)
938,716

 
937,641

Public Notes (less unamortized discount and debt issuance costs of $10,476 and $10,981,
respectively) (Notes 6 and 8)
738,805

 
738,300

Due to Prospect Capital Management (Note 13)
46,313

 
48,249

Interest payable
33,324

 
38,630

Dividends payable
21,619

 
30,005

Due to Prospect Administration (Note 13)
1,910

 
1,910

Accrued expenses
3,287

 
4,380

Other liabilities
2,711

 
2,097

Due to broker
2,955

 
50,371

Total Liabilities 
2,692,111

 
2,817,837

Commitments and Contingencies (Note 3)
—

 
—

Net Assets 
$
3,286,991

 
$
3,354,952

 
 
 
 
Components of Net Assets 
 

 
 

Common stock, par value $0.001 per share (1,000,000,000 common shares authorized; 360,310,422 and 360,076,933 issued and outstanding, respectively) (Note 9)
$
360

 
$
360

Paid-in capital in excess of par (Note 9)
3,993,800

 
3,991,317

Accumulated overdistributed net investment income
(72,726
)
 
(54,039
)
Accumulated net realized loss
(438,443
)
 
(439,435
)
Net unrealized loss
(196,000
)
 
(143,251
)
Net Assets 
$
3,286,991

 
$
3,354,952

 
 
 
 
Net Asset Value Per Share (Note 16) 
$
9.12

 
$
9.32


See notes to consolidated financial statements.
4

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

 
Three Months Ended September 30,
 
2017
 
2016
Investment Income
 
 
 
Interest income:
 
 
 
Control investments
$
46,030

 
$
45,909

Affiliate investments
205

 
—

Non-control/non-affiliate investments
72,430

 
86,660

Structured credit securities
29,420

 
39,081

Total interest income
148,085

 
171,650

Dividend income:
 
 
 
Control investments
—

 
2,240

Non-control/non-affiliate investments
544

 
144

Total dividend income
544

 
2,384

Other income:
 
 
 
Control investments
2,091

 
2,940

Non-control/non-affiliate investments
7,859

 
2,858

Total other income (Note 10)
9,950

 
5,798

Total Investment Income
158,579

 
179,832

Operating Expenses
 
 
 
Base management fee (Note 13)
30,163

 
30,792

Income incentive fee (Note 13)
15,933

 
19,730

Interest and credit facility expenses
41,035

 
41,669

Allocation of overhead from Prospect Administration (Note 13)
3,528

 
3,533

Audit, compliance and tax related fees
1,088

 
1,395

Directors’ fees
113

 
113

Other general and administrative expenses
2,987

 
3,681

Total Operating Expenses
94,847

 
100,913

Net Investment Income
63,732

 
78,919

Net Realized and Change in Unrealized (Losses) Gains from Investments
 
 
 
Net realized gains
 
 
 
Control investments
9

 
5

Affiliate investments
846

 
137

Non-control/non-affiliate investments
582

 
572

Net realized gains
1,437

 
714

Net change in unrealized (losses) gains
 
 
 
Control investments
1,093

 
13,366

Affiliate investments
5,193

 
(2,126
)
Non-control/non-affiliate investments
(59,037
)
 
(9,446
)
Net change in unrealized (losses) gains
(52,751
)
 
1,794

Net Realized and Change in Unrealized (Losses) Gains from Investments
(51,314
)
 
2,508

Net realized losses on extinguishment of debt
(445
)
 
(61
)
Net Increase in Net Assets Resulting from Operations
$
11,973

 
$
81,366

Net increase in net assets resulting from operations per share
$
0.03

 
$
0.23

Dividends declared per share
$
(0.23
)
 
$
(0.25
)

See notes to consolidated financial statements.
5

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

 
Three Months Ended September 30,
 

2017
 
2016
Operations
 

 
 

Net investment income
$
63,732

 
$
78,919

Net realized gain
992

 
653

Net change in unrealized (losses) gains
(52,751
)
 
1,794

Net Increase in Net Assets Resulting from Operations 
11,973

 
81,366

 
 
 
 
Distributions to Shareholders
 
 
 
Distribution from net investment income
(81,647
)
 
(89,428
)
Net Decrease in Net Assets Resulting from Distributions to Shareholders
(81,647
)
 
(89,428
)
 
 
 
 
Common Stock Transactions 
 
 
 
Value of shares issued through reinvestment of dividends
1,713

 
7,754

Net Increase in Net Assets Resulting from Common Stock Transactions
1,713

 
7,754

 
 
 
 
Total Decrease in Net Assets
(67,961
)
 
(308
)
Net assets at beginning of period
3,354,952

 
3,435,917

Net Assets at End of Period (Accumulated Overdistributed Net Investment Income of $72,726 and $11,643, respectively)
$
3,286,991

 
$
3,435,609

 
 
 
 
Common Stock Activity
 
 
 
Shares issued through reinvestment of dividends
233,489

 
934,927

Net shares issued due to common stock activity
233,489

 
934,927

Shares issued and outstanding at beginning of period
360,076,933

 
357,107,231

Shares Issued and Outstanding at End of Period
360,310,422

 
358,042,158

 


See notes to consolidated financial statements.
6

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

 
Three Months Ended September 30,
 
2017
 
2016
Operating Activities
 
 
 
Net increase in net assets resulting from operations
$
11,973

 
$
81,366

Net realized losses on extinguishment of debt
445

 
61

Net realized gains on investments
(1,437
)
 
(714
)
Net change in unrealized losses (gains) on investments
52,751

 
(1,794
)
Amortization of discounts and (accretion of premiums), net
11,133

 
23,439

Accretion of discount on Public Notes (Note 6)
69

 
64

Amortization of deferred financing costs
3,166

 
3,631

Payment-in-kind interest
(1,980
)
 
(5,439
)
Structuring fees
(2,285
)
 
(3,028
)
Change in operating assets and liabilities:
 
 
 
Payments for purchases of investments
(217,886
)
 
(338,683
)
Proceeds from sale of investments and collection of investment principal
310,894

 
114,331

(Decrease) increase in due to broker
(47,416
)
 
79,440

Decrease in due to Prospect Capital Management
(1,936
)
 
(3,058
)
(Increase) decrease in interest receivable, net
(11,714
)
 
2,207

Decrease in interest payable
(5,306
)
 
(7,718
)
(Decrease) increase in accrued expenses
(1,093
)
 
505

Increase in other liabilities
614

 
1,480

Increase in other receivables
(174
)
 
(29
)
Increase in due from Prospect Administration
(12
)
 
—

Increase in due from affiliate
(4
)
 
—

Decrease in prepaid expenses
144

 
152

Decrease in due to Prospect Administration
—

 
(46
)
Net Cash Provided by (Used in) Operating Activities
99,946

 
(53,833
)
Financing Activities
 
 
 
Borrowings under Revolving Credit Facility (Note 4)
—

 
44,000

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)
27,402

 
38,917

Redemptions of Prospect Capital InterNotes®, net (Note 7)
(91,864
)
 
(1,979
)
Financing costs paid and deferred
(729
)
 
(1,033
)
Dividends paid
(88,321
)
 
(81,596
)
Net Cash Used in Financing Activities
(153,512
)
 
(131,725
)
 
 
 
 
Net Decrease in Cash
(53,566
)
 
(185,558
)
Cash at beginning of period
318,083

 
317,798

Cash at End of period
$
264,517

 
$
132,240

Supplemental Disclosures
 
 
 
Cash paid for interest
$
43,106

 
$
44,542

Non-Cash Financing Activities
 
 
 
Value of shares issued through reinvestment of dividends
$
1,713

 
$
7,754

Cost basis of investments written off as worthless
$
310

 
$
801


See notes to consolidated financial statements.
7

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





September 30, 2017 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)(44)(45)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets










LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 










Control Investments (greater than 25.00% voting control)(47)
 
 
 
 










Arctic Energy Services, LLC(37)
Wyoming / Energy Equipment & Services
Class D Units (12.00%, 32,915 units)(16)


$
31,640

$
18,235

0.6%
Class E Units (14.00%, 21,080 units)(16)


20,230

—

—%
Class A Units (14.00%, 700 units)(16)


9,006

—

—%
Class C Units (10 units)(16)


—

—

—%





60,876

18,235

0.6%
CCPI Inc.(19)
Ohio / Electronic Equipment, Instruments & Components
Senior Secured Term Loan A (10.00%, due 12/31/2020)(3)
2,938

2,938

2,938

0.1%
Senior Secured Term Loan B (12.00% plus 7.00% PIK, due 12/31/2020)(3)(46)
17,988

17,988

17,988

0.5%
Common Stock (14,857 shares)(16)


6,759

19,710

0.6%





27,685

40,636

1.2%
CP Energy Services Inc.(20)
Oklahoma / Energy Equipment & Services
Series B Convertible Preferred Stock (16.00%, 1,043 shares)(16)


98,273

87,341

2.7%
Common Stock (2,924 shares)(16)


15,227

—

—%





113,500

87,341

2.7%
Credit Central Loan Company, LLC(21)
South Carolina / Consumer Finance
Subordinated Term Loan (10.00% plus 10.00% PIK, due 6/26/2019)(14)(46)
51,855

45,685

51,855

1.5%
Class A Units (10,640,642 units)(14)(16)


13,731

11,953

0.4%
Net Revenues Interest (25% of Net Revenues)(14)(16)


—

2,277

0.1%





59,416

66,085

2.0%
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)(13)(46)
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)(13)(46)
16,044

16,044

16,044

0.5%
Membership Interest (99%)(16)


22,738

23,403

0.7%





69,837

70,502

2.1%
Edmentum Ultimate Holdings, LLC(22)
Minnesota / Diversified Consumer Services
Second Lien Revolving Credit Facility to Edmentum, Inc. – $7,834 Commitment (5.00%, due 6/9/2020)(15)


—

—

—%
Unsecured Senior PIK Note (8.50% PIK, due 6/9/2020)(46)
7,055

7,055

7,055

0.2%
Unsecured Junior PIK Note (10.00% PIK, in non-accrual status effective 1/1/2017, due 6/9/2020)
32,685

23,829

22,693

0.7%
Class A Units (370,964 units)(16)


6,577

1,132

—%





37,461

30,880

0.9%
First Tower Finance Company LLC(23)
Mississippi / Consumer Finance
Subordinated Term Loan to First Tower, LLC (10.00% plus 7.00% PIK, due 6/24/2019)(14)(46)
260,073

260,073

260,073

7.9%
Class A Units (93,997,533 units)(14)(16)


78,481

113,604

3.5%





338,554

373,677

11.4%
Freedom Marine Solutions, LLC(24)
Louisiana / Energy Equipment & Services
Membership Interest (100%)(16)


42,812

25,055

0.8%





42,812

25,055

0.8%

See notes to consolidated financial statements.
8

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




September 30, 2017 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)(44)(45)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets










LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 










Control Investments (greater than 25.00% voting control)(47)
 
 
 
 










MITY, Inc.(25)
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)
$
26,250

$
26,250

$
26,250

0.8%
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)(46)
24,442

24,442

24,442

0.7%
Subordinated Unsecured Note to Broda Enterprises ULC (10.00%, due on demand)(14)
5,897

7,200

5,897

0.2%
Common Stock (42,053 shares)(16)


6,849

21,147

0.7%





64,741

77,736

2.4%
National Property REIT Corp.(26)
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 10.50% PIK, due 4/1/2019)(10)(11)(46)
292,426

292,426

292,426

8.9%
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)(46)
137,512

137,512

137,512

4.2%
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)(14)(46)
30,305

30,305

30,305

0.9%
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)(14)(46)
116,547

116,547

116,547

3.5%
Common Stock (2,280,992 shares)(16)


242,939

347,263

10.6%
Net Operating Income Interest (5% of Net Operating Income)


—

88,956

2.7%





819,729

1,013,009

30.8%
Nationwide Loan Company LLC(27)
Illinois / Consumer Finance
Senior Subordinated Term Loan to Nationwide Acceptance LLC (10.00% plus 10.00% PIK, due 6/18/2019)(14)(46)
16,964

16,964

16,964

0.5%
Class A Units (32,456,159 units)(14)(16)


18,183

19,188

0.6%





35,147

36,152

1.1%
NMMB, Inc.(28)
New York / Media
Senior Secured Note (14.00%, due 5/6/2021)(3)
3,714

3,714

3,714

0.1%
Senior Secured Note to Armed Forces Communications, Inc. (14.00%, due 5/6/2021)(3)
6,900

6,900

6,900

0.2%
Series A Preferred Stock (7,200 shares)(16)


7,200

6,090

0.2%
Series B Preferred Stock (5,669 shares)(16)


5,669

4,795

0.1%





23,483

21,499

0.6%
R-V Industries, Inc.
Pennsylvania / Machinery
Senior Subordinated Note (10.30% (LIBOR + 9.00% with 1.00% LIBOR floor), due 3/31/2022)(3)(10)(11)
28,622

28,622

27,094

0.8%
Common Stock (745,107 shares)(16)


6,866

764

—%





35,488

27,858

0.8%
SB Forging Company II, Inc. (f/k/a Gulf Coast Machine & Supply Company)(29)
Texas / Energy Equipment & Services
Series A Convertible Preferred Stock (6.50%, 99,000 shares)(16)


—

982

—%
Common Stock (100 shares)(16)


—

—

—%





—

982

—%

See notes to consolidated financial statements.
9

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




September 30, 2017 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)(44)(45)
Principal Value
Amortized Cost
Fair
Value(2)
% of Net Assets










LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 










Control Investments (greater than 25.00% voting control)(47)
 
 
 
 










USES Corp.(30)
Texas / Commercial Services & Supplies
Senior Secured Term Loan A (9.00% PIK, in non-accrual status effective 4/1/2016, due 7/22/2020)
$
33,051

$
30,102

$
5,384

0.2%
Senior Secured Term Loan B (15.50% PIK, in non-accrual status effective 4/1/2016, due 7/22/2020)
42,590

35,568

—

—%
Common Stock (268,962 shares)(16)


—

—

—%





65,670

5,384

0.2%
Valley Electric Company, Inc.(31)
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 12/31/2024)(3)(10)(11)(46)
10,430

10,430

10,430

0.3%
Senior Secured Note (10.00% plus 8.50% PIK, due 6/23/2024)(46)
26,168

26,168

26,148

0.8%
Common Stock (50,000 shares)(16)


26,204

—

—%





62,802

36,578

1.1%
Wolf Energy, LLC(32)
Kansas / Energy Equipment & Services
Membership Interest (100%)(16)


—

—

—%
Membership Interest in Wolf Energy Services Company, LLC (100%)(16)


4,029

1,747

0.1%
Net Profits Interest (8% of Equity Distributions)(4)(16)


—

10

—%





4,029

1,757

0.1%
Total Control Investments (Level 3)
 
$
1,861,230

$
1,933,366

58.8%

Affiliate Investments (5.00% to 24.99% voting control)(48)
 
 
 
 
 
 
 
 
 
 
 
Nixon, Inc.(39)
California / Textiles, Apparel & Luxury Goods
Senior Secured Term Loan (11.50% PIK, in non-accrual status effective 7/1/2016, due 11/12/2022)(8)
$
16,978

$
14,197

$
—

—%
Common Stock (857 units)(16)


—

—

—%
 
 
 
 
14,197

—

—%
Targus Cayman HoldCo Limited(33)
California / Textiles, Apparel & Luxury Goods
Common Stock (7,383,395 shares)(16)


9,878

17,739

0.5%
 
 
 
 
9,878

17,739

0.5%
Total Affiliate Investments (Level 3)
 
$
24,075

$
17,739

0.5%

See notes to consolidated financial statements.
10

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

 
 
 
September 30, 2017 (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)
 
 
 
 
 
 
 
 
 
 
 
AgaMatrix, Inc.
New Hampshire / Healthcare Equipment and Supplies
Senior Secured Term Loan (10.08% (LIBOR + 8.75% with 1.25% LIBOR floor), due 9/29/2022)(10)(11)
$
32,000

$
32,000

$
32,000

1.0%
 
 
 
 
32,000

32,000

1.0%
American Gilsonite Company(34)
Utah / Chemicals
Membership Interest (1.93%)(16)


—

—

—%
 
 
 
 
—

—

—%
Apidos CLO IX
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 0.00%, due 7/15/2023)(5)(14)(17)
23,525

3,450

1,147

—%
 
 
 
 
3,450

1,147

—%
Apidos CLO XI
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 7.64%, due 10/17/28)(5)(14)
40,500

30,812

23,514

0.7%
 
 
 
 
30,812

23,514

0.7%
Apidos CLO XII
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 0.00%, due 4/15/2025)(5)(14)(17)
44,063

29,926

22,202

0.7%
 
 
 
 
29,926

22,202

0.7%
Apidos CLO XV
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 5.29%, due 10/20/2025)(5)(14)
36,515

28,862

22,671

0.7%
 
 
 
 
28,862

22,671

0.7%
Apidos CLO XXII
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.06%, due 10/20/2027)(5)(6)(14)
31,350

27,118

25,342

0.8%
 
 
 
 
27,118

25,342

0.8%
Ark-La-Tex Wireline Services, LLC
Louisiana / Energy Equipment & Services
Senior Secured Term Loan B (12.74% (LIBOR + 11.50% with 1.00% LIBOR floor), in non-accrual status effective 4/1/2016, due 4/8/2019)(10)(13)
26,080

1,630

1,372

—%
 
 
 
 
1,630

1,372

—%
Armor Holding II LLC
New York / Commercial Services & Supplies
Second Lien Term Loan (10.34% (LIBOR + 9.00% with 1.25% LIBOR floor), due 12/26/2020)(3)(8)(10)(11)
7,000

6,933

7,000

0.2%
 
 
 
 
6,933

7,000

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)(15)
5,200

5,200

5,200

0.2%
Senior Term Loan (9.50% (LIBOR + 8.00% with 1.50% LIBOR floor), due 2/21/2020)(3)(10)(11)
79,356

79,356

79,356

2.4%
 
 
 
 
84,556

84,556

2.6%
Babson CLO Ltd. 2014-III
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 12.65%, due 1/15/2026)(5)(6)(14)
52,250

41,425

36,550

1.1%
 
 
 
 
41,425

36,550

1.1%
Broder Bros., Co.
Pennsylvania / Textiles, Apparel & Luxury Goods
Senior Secured Term Loan A (7.08% (LIBOR + 5.75% with 1.25% LIBOR floor), due 6/03/2021)(3)(10)(11)
110,138

110,138

110,138

3.4%
Senior Secured Term Loan B (13.58% (LIBOR + 12.25% with 1.25% LIBOR floor), due 6/03/2021)(10)(11)
114,409

114,409

114,409

3.4%
 
 
 
 
224,547

224,547

6.8%
Brookside Mill CLO Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 0.32%, due 4/17/2025)(5)(14)
26,000

16,476

13,483

0.4%
 
 
 
 
16,476

13,483

0.4%

See notes to consolidated financial statements.
11

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

 
 
 
September 30, 2017 (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)
 
 
 
 
 
 
 
 
 
 
 
California Street CLO IX Ltd. (f/k/a Symphony CLO IX Ltd.)
Cayman Islands / Structured Finance
Preference Shares (Residual Interest, current yield 13.31%, due 10/16/2028)(5)(14)
$
58,915

$
40,827

$
35,582

1.1%
 
 
 
 
40,827

35,582

1.1%
Capstone Logistics Acquisition, Inc.
Georgia / Commercial Services & Supplies
Second Lien Term Loan (9.49% (LIBOR + 8.25% with 1.00% LIBOR floor), due 10/7/2022)(3)(8)(10)(13)
101,517

101,092

97,382

3.0%
 
 
 
 
101,092

97,382

3.0%
Carlyle Global Market Strategies CLO 2014-4, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 21.48%, due 10/15/2026)(5)(6)(14)
25,534

19,600

19,860

0.6%
 
 
 
 
19,600

19,860

0.6%
Carlyle Global Market Strategies CLO 2016-3, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 16.12%, due 10/20/2029)(5)(6)(14)
32,200

31,405

27,914

0.8%
 
 
 
 
31,405

27,914

0.8%
Cent CLO 17 Limited
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 0.00%, due 1/30/2025)(5)(14)(17)
24,870

17,723

11,862

0.4%
 
 
 
 
17,723

11,862

0.4%
Cent CLO 20 Limited
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.32%, due 1/25/2026)(5)(14)
40,275

31,893

31,093

0.9%
 
 
 
 
31,893

31,093

0.9%
Cent CLO 21 Limited
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.43%, due 7/27/2026)(5)(6)(14)
48,528

36,334

34,914

1.1%
 
 
 
 
36,334

34,914

1.1%
Centerfield Media Holding Company(35)
California / Internet Software and Services
Senior Secured Term Loan A (8.34% (LIBOR + 7.00% with 1.00% LIBOR floor), due 1/17/2022)(3)(8)(10)(11)
66,980

66,980

66,980

2.0%
Senior Secured Term Loan B (13.84% (LIBOR + 12.50% with 1.00% LIBOR floor), due 1/17/2022)(8)(10)(11)
68,000

68,000

68,000

2.1%
 
 
 
 
134,980

134,980

4.1%
CIFC Funding 2013-III, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 11.93%, due 10/24/2025)(5)(14)
44,100

30,659

28,043

0.9%
 
 
 
 
30,659

28,043

0.9%
CIFC Funding 2013-IV, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 13.42%, due 11/27/2024)(5)(14)
45,500

32,393

30,702

0.9%
 
 
 
 
32,393

30,702

0.9%
CIFC Funding 2014-IV Investor, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 9.79%, due 10/17/2026)(5)(6)(14)
41,500

29,454

26,111

0.8%
 
 
 
 
29,454

26,111

0.8%
CIFC Funding 2016-I, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 14.99%, due 10/21/2028)(5)(6)(14)
34,000

31,312

28,040

0.9%
 
 
 
 
31,312

28,040

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)(46)
44,056

44,006

44,056

1.3%
 
 
 
 
44,006

44,056

1.3%

See notes to consolidated financial statements.
12

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

 
 
 
September 30, 2017 (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 (7.34% (LIBOR + 6.00% with 1.00% LIBOR floor), due 11/02/2020)(3)(10)(11)
$
22,658

$
22,658

$
22,658

0.7%
Senior Secured Term Loan B (12.34% (LIBOR + 11.00% with 1.00% LIBOR floor), due 11/02/2020)(3)(10)(11)
24,938

24,938

24,938

0.7%
 
 
 
 
47,596

47,596

1.4%
CURO Financial Technologies Corp.
Canada / Consumer Finance
Senior Secured Notes (12.00%, due 3/1/2022)(8)(14)
10,000

9,840

10,000

0.3%
 
 
 
 
9,840

10,000

0.3%
Digital Room LLC
California / Commercial Services & Supplies
Second Lien Term Loan (11.24% (LIBOR + 10.00% with 1.00% LIBOR floor), due 5/21/2023)(3)(8)(10)(13)
34,000

33,415

34,000

1.0%
 
 
 
 
33,415

34,000

1.0%
Dunn Paper, Inc.
Georgia / Paper & Forest Products
Second Lien Term Loan (9.99% (LIBOR + 8.75% with 1.00% LIBOR floor), due 8/26/2023)(3)(8)(10)(13)
11,500

11,303

11,500

0.3%
 
 
 
 
11,303

11,500

0.3%
Easy Gardener Products, Inc.
Texas / Household Durables
Senior Secured Term Loan (11.30% (LIBOR + 10.00% with .25% LIBOR floor), due 09/30/2020)(3)(10)(11)
17,194

17,194

16,683

0.5%
 
 
 
 
17,194

16,683

0.5%
Engine Group, Inc.(7)
California / Media
Senior Secured Term Loan (5.95% (LIBOR + 4.75% with 1.00% LIBOR floor), due 9/15/2022)(8)(9)(10)(11)
5,000

5,000

5,000

0.2%
Second Lien Term Loan (10.08% (LIBOR + 8.75% with 1.00% LIBOR floor), due 9/15/2023)(8)(10)(11)
35,000

35,000

35,000

1.0%
 
 
 
 
40,000

40,000

1.2%
Fleetwash, Inc.
New Jersey / Commercial Services & Supplies
Senior Secured Term Loan B (10.30% (LIBOR + 9.00% with 1.00% LIBOR floor), due 4/30/2022)(3)(10)(11)
21,544

21,544

21,544

0.7%
Delayed Draw Term Loan – $15,000 Commitment (9.80% (LIBOR + 8.50% with 1.00% LIBOR floor)expires 4/30/2022)(10)(11)(15)


—

—

—%
 
 
 
 
21,544

21,544

0.7%
Galaxy XV CLO, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 10.86%, due 4/15/2025)(5)(14)
50,525

33,768

33,118

1.0%
 
 
 
 
33,768

33,118

1.0%
Galaxy XVI CLO, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 8.31%, due 11/16/2025)(5)(14)
24,575

17,579

15,324

0.5%
 
 
 
 
17,579

15,324

0.5%
Galaxy XVII CLO, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 7.38%, due 7/15/2026)(5)(6)(14)
39,905

28,985

24,897

0.8%
 
 
 
 
28,985

24,897

0.8%
Halcyon Loan Advisors Funding 2012-1 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 0.00%, due 8/15/2023)(5)(14)(17)
23,188

4,351

4,714

0.1%
 
 
 
 
4,351

4,714

0.1%
Halcyon Loan Advisors Funding 2013-1 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 6.34%, due 4/15/2025)(5)(14)
40,400

25,749

21,925

0.7%
 
 
 
 
25,749

21,925

0.7%
Halcyon Loan Advisors Funding 2014-1 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 9.02%, due 4/18/2026)(5)(14)
24,500

15,910

14,637

0.4%
 
 
 
 
15,910

14,637

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, 2017 (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 2014-2 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 15.00%, due 4/28/2025)(5)(6)(14)
$
41,164

$
26,946

$
25,257

0.8%
 
 
 
 
26,946

25,257

0.8%
Halcyon Loan Advisors Funding 2015-3 Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 14.65%, due 10/18/2027)(5)(6)(14)
39,598

33,779

34,298

1.0%
 
 
 
 
33,779

34,298

1.0%
Harbortouch Payments, LLC
Pennsylvania / Commercial Services & Supplies
Escrow Receivable


—

862

—%
 
 
 
 
—

862

—%
HarbourView CLO VII, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 17.53%, due 11/18/2026)(5)(6)(14)
19,025

15,016

13,626

0.4%
 
 
 
 
15,016

13,626

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

8,927

8,853

0.3%
 
 
 
 
8,927

8,853

0.3%
Ingenio, LLC
California / Internet Software and Services
Senior Secured Term Loan (8.82% (LIBOR + 7.50% with 1.25% LIBOR floor), due 9/26/2022)(8)(10)(11)
10,000

10,000

10,000

0.3%
 
 
 
 
10,000

10,000

0.3%
Inpatient Care Management Company, LLC
Florida / Health Care Providers & Services
Senior Secured Term Loan (9.30% (LIBOR + 8.00% with 1.00% LIBOR floor), due 6/8/2021(3)(10)(11)
25,196

25,196

25,191

0.8%
 
 
 
 
25,196

25,191

0.8%
Instant Web, LLC
Minnesota / Media
Senior Secured Term Loan A (5.80% (LIBOR + 4.50% with 1.00% LIBOR floor), due 3/28/2019)(10)(11)
120,948

120,948

120,948

3.7%
Senior Secured Term Loan B (12.30% (LIBOR + 11.00% with 1.00% LIBOR floor), due 3/28/2019)(3)(10)(11)
158,100

158,100

158,100

4.8%
Senior Secured Term Loan C-1 (13.05% (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 (13.80% (LIBOR + 12.50% with 1.00% LIBOR floor), due 3/28/2019)(10)(11)
25,000

25,000

25,000

0.8%
Senior Secured Term Loan C-3 (12.83% (LIBOR + 11.50% with 1.00% LIBOR floor), due 3/28/2019)(10)(11)
22,000

22,000

22,000

0.7%
 
 
 
 
353,048

353,048

10.8%
InterDent, Inc.
California / Health Care Providers & Services
Senior Secured Term Loan A (6.74% (LIBOR + 5.50% with 0.75% LIBOR floor), due 12/31/2017)(10)(13)
78,435

78,435

78,435

2.4%
Senior Secured Term Loan B (11.74% (LIBOR + 10.50% with 0.75% LIBOR floor), due 12/31/2017)(3)(10)(13)
131,125

131,125

126,287

3.8%
 
 
 
 
209,560

204,722

6.2%
JD Power and Associates
California / Capital Markets
Second Lien Term Loan (9.83% (LIBOR + 8.50% with 1.00% LIBOR floor), due 9/7/2024)(3)(8)(10)(11)
20,000

19,778

20,000

0.6%
 
 
 
 
19,778

20,000

0.6%
Jefferson Mill CLO Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 9.10%, due 7/20/2027)(5)(6)(14)
19,500

16,362

12,863

0.4%
 
 
 
 
16,362

12,863

0.4%

See notes to consolidated financial statements.
14

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

 
 
 
September 30, 2017 (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)
 
 
 
 
 
 
 
 
 
 
 
K&N Parent, Inc.
California / Auto Components
Second Lien Term Loan (9.99% (LIBOR + 8.75% with 1.00% LIBOR floor), due 10/21/2024)(3)(8)(10)(13)
$
13,000

$
12,770

$
13,000

0.4%
 
 
 
 
12,770

13,000

0.4%
Keystone Acquisition Corp.(36)
Pennsylvania / Health Care Providers & Services
Second Lien Term Loan (10.58% (LIBOR + 9.25% with 1.00% LIBOR floor), due 5/1/2025)(3)(8)(10)(11)
50,000

50,000

50,000

1.5%
 
 
 
 
50,000

50,000

1.5%
LaserShip, Inc.
Virginia / Air Freight & Logistics
Senior Secured Term Loan A (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor), due 3/18/2019)(3)(10)(13)
31,960

31,960

31,960

1.0%
Senior Secured Term Loan B (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor), due 3/18/2019)(3)(10)(13)
19,635

19,635

19,635

0.6%
 
 
 
 
51,595

51,595

1.6%
LCM XIV Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 12.18%, due 7/15/2025)(5)(14)
30,500

20,730

20,077

0.6%
 
 
 
 
20,730

20,077

0.6%
Madison Park Funding IX, Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 0.00%, due 8/15/2022)(5)(14)(17)
43,110

6,834

8,655

0.3%
 
 
 
 
6,834

8,655

0.3%
Matrixx Initiatives, Inc.
New Jersey / Pharmaceuticals
Senior Secured Term Loan A (7.84% (LIBOR + 6.50% with 1.00% LIBOR floor), due 9/22/2020)(3)(10)(11)
86,427

86,427

86,427

2.6%
Senior Secured Term Loan B (12.84% (LIBOR + 11.50% with 1.00% LIBOR floor), due 9/22/2020)(3)(10)(11)
69,562

69,562

69,562

2.1%
 
 
 
 
155,989

155,989

4.7%
Maverick Healthcare Equity, LLC
Arizona / Health Care Providers & Services
Preferred Units (10.00%, 1,250,000 units)(16)
 
1,252

697

—%
Class A Common Units (1,250,000 units)(16)
 
—

—

—%
 
 
 
 
1,252

697

—%
Memorial MRI & Diagnostic, LLC
Texas / Health Care Providers & Services
Senior Secured Term Loan (9.83% (LIBOR + 8.50% with 1.00% LIBOR floor), due 3/16/2022)(10)(11)
37,620

37,620

37,620

1.1%
 
 
 
 
37,620

37,620

1.1%
Mountain View CLO 2013-I Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 7.01%, due 4/12/2024)(5)(14)
43,650

27,464

24,695

0.8%
 
 
 
 
27,464

24,695

0.8%
Mountain View CLO IX Ltd.
Cayman Islands / Structured Finance
Subordinated Notes (Residual Interest, current yield 13.85%, due 7/15/2027)(5)(6)(14)
47,830

40,597

38,942

1.2%
 
 
 
 
40,597

38,942

1.2%
National Home Healthcare Corp.
Michigan / Health Care Providers & Services
Second Lien Term Loan (10.24% (LIBOR + 9.00% with 1.00% LIBOR floor), due 12/8/2022)(3)(8)(10)(13)
15,407

15,209

15,407

0.5%
 
 
 
 
15,209

15,407

0.5%
NCP Finance Limited Partnership(38)
Ohio / Consumer Finance
Subordinated Secured Term Loan (11.00% (LIBOR + 9.75% with 1.25% LIBOR floor), due 9/30/2018)(3)(8)(10)(13)(14)
26,800

26,440

26,269

0.8%
 
 
 
 
26,440

26,269

0.8%
Octagon Investment Partners XV, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 14.48%, due 7/19/2030)(5)(14)
42,064

30,368

24,346

0.7%
 
 
 
 
30,368

24,346

0.7%

See notes to consolidated financial statements.
15

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

 
 
 
September 30, 2017 (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)
 
 
 
 
 
 
 
 
 
 
 
Octagon Investment Partners XVIII, Ltd.
Cayman Islands / Structured Finance
Income Notes (Residual Interest, current yield 11.58%, due 12/16/2024)(5)(6)(14)
$
28,200

$
17,927

$
15,900

0.5%
 
 
 
 
17,927

15,900

0.5%
Pacific World Corporation
California / Personal Products
Revolving Line of Credit – $21,000 Commitment (8.49% (LIBOR + 7.25% with 1.00% LIBOR floor), due 9/26/2020)(10)(13)(15)
14,725

14,725

14,725

0.4%
Senior Secured Term Loan A (6.49% (LIBOR + 5.25% with 1.00% LIBOR floor), due 9/26/2020)(3)(10)(13)
97,250

97,250

95,322

2.9%
Senior Secured Term Loan B (10.49% (LIBOR + 9.25% with 1.00% LIBOR floor), due 9/26/2020)(3)(10)(13)
97,250

97,250

72,866

2.2%
Common Stock (6,778,414 units)(16)


—

—

—%
 
 
 
 
209,225

182,913

5.6%
Pelican Products, Inc.
California / Chemicals
Second Lien Term Loan (9.58% (LIBOR + 8.25% with 1.00% LIBOR floor), due 4/9/2021)(3)(8)(10)(11)
17,500

17,490

16,905

0.5%
 
 
 
 
17,490

16,905

0.5%
PeopleConnect Intermediate, LLC (f/k/a Intelius, Inc.)
Washington / Internet Software & Services
Revolving Line of Credit – $1,000 Commitment (9.80% (LIBOR + 8.50% with 1.00% LIBOR floor), due 8/11/2018)(10)(11)(15)


—

—

—%
Senior Secured Term Loan A (6.80% (LIBOR + 5.50% with 1.00% LIBOR floor), due 7/1/2020)(3)(10)(11)
19,427

19,427

19,427

0.6%
Senior Secured Term Loan B (12.80% (LIBOR + 11.50% with 1.00% LIBOR floor), due 7/1/2020)(3)(10)(11)
20,463

20,463

20,463

0.6%
 
 
 
 
39,890

39,890

1.2%
PGX Holdings, Inc.(40)
Utah / Diversified Consumer Services
Second Lien Term Loan (10.24% (LIBOR + 9.00% with 1.00% LIBOR floor), due 9/29/2021)(3)(10)(13)
134,668

134,668

134,668

4.1%
 
 
 
 
134,668

134,668

4.1%
Photonis Technologies SAS
France / Electronic Equipment, Instruments & Components
First Lien Term Loan (8.83% (LIBOR + 7.50% with 1.00% LIBOR floor), due 9/18/2019)(8)(10)(11)(14)
9,872

9,768

8,480

0.3%
 
 
 
 
9,768

8,480

0.3%
Pinnacle (US) Acquisition Co. Limited
Texas / Software
Second Lien Term Loan (10.55% (LIBOR + 9.25% with 1.25% LIBOR floor), in non-accrual status effective 7/1/2017, due 8/3/2020)(8)(10)(11)
7,037

6,947

6,333

0.2%
 
 
 
 
6,947

6,333

0.2%
PlayPower, Inc.
North Carolina / Leisure Products
Second Lien Term Loan (10.08% (LIBOR + 8.75% with 1.00% LIBOR floor), due 6/23/2022)(3)(8)(10)(11)
11,000

10,886

11,000

0.3%
 
 
 
 
10,886

11,000

0.3%
PrimeSport, Inc.
Georgia / Hotels, Restaurants & Leisure
Senior Secured Term Loan A (8.30% (LIBOR + 7.00% with 1.00% LIBOR floor), due 2/11/2021)(3)(10)(11)
53,000

53,000

47,693

1.5%
Senior Secured Term Loan B (13.30% (LIBOR + 12.00% with 1.00% LIBOR floor), due 2/11/2021)(3)(10)(11)
74,500

74,500

60,453

1.8%
 
 
 
 
127,500

108,146

3.3%
Prince Mineral Holding Corp.
New York / Metals & Mining
Senior Secured Term Loan (11.50%, due 12/15/2019)(8)
10,000

9,958

10,000

0.3%
 
 
 
 
9,958

10,000

0.3%

See notes to consolidated financial statements.
16

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

 
 
 
September 30, 2017 (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)
 
 
 
 
 
 
 
 
 
 
 
RGIS Services, LLC
Michigan / Commercial Services & Supplies
Senior Secured Term Loan (8.83% (LIBOR + 7.50% with 1.00% LIBOR floor), due 3/31/2023)(8)(10)(11)
$
30,884

$
30,208

$
28,832

0.9%
 
 
 
 
30,208

28,832

0.9%
RME Group Holding Company
Florida / Media
Senior Secured Term Loan A (7.33% (LIBOR + 6.00% with 1.00% LIBOR floor), due 5/4/2022)(3)(10)(11)
37,313

37,313

37,313

1.1%
Senior Secured Term Loan B (12.33% (LIBOR + 11.00% with 1.00% LIBOR floor), due 5/4/2022)(3)(10)(11)
24,938

24,938

24,938

0.8%
 
 
 
 
62,251

62,251

1.9%
Rocket Software, Inc.
Massachusetts / Software
Second Lien Term Loan (10.83% (LIBOR + 9.50% with 1.00% LIBOR floor), due 10/14/2024)(3)(8)(10)(11)
50,000