Prospect Capital Announces Financial Results for September 2025

NEW YORK, Nov. 06, 2025 (GLOBE NEWSWIRE) -- Prospect Capital Corporation (NASDAQ: PSEC) (“Prospect”, “our”, or “we”) today announced financial results for our fiscal quarter ended September 30, 2025.

FINANCIAL RESULTS

CASH COMMON SHAREHOLDER DISTRIBUTION DECLARATION

Prospect is declaring distributions to common shareholders as follows:

Taking into account past distributions and our current share count for declared distributions, since inception through our January 2026 declared distribution, Prospect will have distributed $21.79 per share to original common shareholders, aggregating approximately $4.6 billion in cumulative distributions to all common shareholders.

Since Prospect’s initial public offering in July 2004 through September 30, 2025, Prospect has invested over $22 billion across over 450 investments, exiting over 350 of these investments.

Since Prospect's initial public offering in July 2004 through September 30, 2025, Prospect's exited investments resulted in an investment level realized gross internal rate of return ("IRR") of approximately 12% (based on total capital invested of approximately $13.0 billion and total proceeds from such exited investments of approximately $16.6 billion).

Drivers focused on optimizing our business include:

(1) rotation of assets into and increased focus on our core business of first lien senior secured middle market loans (with our first lien mix increasing 701 basis points to 71.1% (based on cost) from June 2024), with selected equity linked investments, focusing on new investments in companies with less than $50 million of EBITDA, including companies with smaller funded private equity sponsors, independent sponsors, and no third party financial sponsors;

(2) reduction in our second lien senior secured middle market loans (with our second lien mix decreasing 292 basis points to 13.5% (based on cost) from June 2024);

(3) exit of our subordinated structured notes portfolio (with our subordinated structured notes mix decreasing 808 basis points to 0.3% (based on cost) from June 2024);

(4) exit of targeted equity linked assets, including real estate properties (with three additional properties sold since July 1, 2025) and certain corporate investments (such as the sale of significant assets within Echelon Transportation, LLC in July 2025, with remaining assets expected to be sold in the December 2025 quarter), with other potential exits targeted;

(5) enhancement of portfolio company operating performance; and

(6) greater utilization of our cost efficient revolving floating rate credit facility (which significantly matches our majority floating rate assets).

In our middle market lending strategy, which represented 84.8% of our investments at cost as of September 30, 2025, we continued our focus on first lien senior secured loans during the quarter, with such investments totaling $74.2 million of our $91.6 million of originations during the September 2025 quarter. Investments during the quarter included a new first lien loan and preferred equity investment in Healthcare Venture Partners, LLC (a provider of inpatient and outpatient healthcare services), and other follow-on investments in existing portfolio companies to support acquisitions, working capital needs, organic growth initiatives, and other objectives.

In our real estate property portfolio at National Property REIT Corp. (“NPRC”), which totaled 14.2% of our investments at cost as of September 30, 2025, and which is focused on already developed and occupied cash flow multifamily investments, since the inception of this strategy in 2012 and through October 31, 2025, we have exited 55 property investments that have earned an unlevered investment-level gross cash IRR of 24% and cash on cash multiple of 2.4 times. We exited three property investments after July 1, 2025 for approximately $59 million of net proceeds to PSEC and that earned an unlevered investment-level gross cash IRR of 22.8% and cash on cash multiple of 2.3 times. NPRC has multiple additional properties in various stages of sale process. The remaining real estate property portfolio included 55 properties as of October 31, 2025 and paid us an income yield of 5.1% for the quarter ended September 30, 2025, thereby providing opportunities to exit certain such investments and recycle into more first lien senior secured loans with selected equity linked investments. Our aggregate investment in NPRC included a $320 million unrealized gain as of September 30, 2025.

Our senior management team and employees own 28.5% of all common shares outstanding (an increase of 148 basis points since September 30, 2024) or approximately $0.9 billion of our common equity as measured at NAV.

PORTFOLIO UPDATE AND INVESTMENT ACTIVITY

During the June 2025 and September 2025 quarters, investment originations (including follow on investments in existing portfolio companies) and repayments were as follows:

For additional disclosure see “Primary Origination Strategies” at the end of this release.

CAPITAL AND LIQUIDITY

Our multi-year, long-term laddered and diversified historical funding profile over our more than 21 year history has included our current $2.1 billion revolving credit facility (aggregate commitments with 48 current lenders), program notes, institutional bonds, convertible bonds, listed preferred stock, and program preferred stock. We have retired multiple upcoming maturities and, after successful retirement of our $156.2 million convertible bond maturity in March 2025 and redemption of our remaining outstanding 3.706% Notes due January 2026 in June 2025 (original principal amount $400.0 million), we have $2.4 million remaining of debt maturing during calendar year 2025. Our next institutional bond maturity is $300 million in November 2026.

On October 30, 2025, we successfully completed the institutional issuance of approximately $168 million in aggregate principal amount of senior unsecured 5.5% Series A Notes due 2030 (the "Notes"), which mature on December 31, 2030. We expect to use the net proceeds of the offering primarily for the refinancing of existing indebtedness.

Our unfunded eligible commitments to portfolio companies aggregate approximately $35.9 million, of which $15.0 million are considered at our sole discretion, representing 0.5% and 0.2% of our total assets as of September 30, 2025, respectively.

We currently have three separate unsecured debt issuances aggregating approximately $0.7 billion outstanding, not including our program notes, with laddered maturities extending through December 2030. At September 30, 2025, $652.2 million of program notes were outstanding with laddered maturities through March 2052.

At September 30, 2025 our weighted average cost of unsecured debt financing was 4.54%, an increase of 0.02% from June 30, 2025, and an increase of 0.12% from September 30, 2024.

We have raised significant capital from our existing $2.25 billion perpetual preferred stock offering programs. The perpetual preferred stock provides Prospect with a diversified source of programmatic capital without creating scheduled maturity risk due to the perpetual term of multiple preferred tranches.

DIVIDEND REINVESTMENT PLAN

We have adopted a dividend reinvestment plan (also known as our “DRIP”) that provides for reinvestment of our distributions on behalf of our shareholders, unless a shareholder elects to receive cash. On April 17, 2020, our board of directors approved amendments to the Company’s DRIP, effective May 21, 2020. These amendments principally provide for the number of newly-issued shares pursuant to the DRIP to be determined by dividing (i) the total dollar amount of the distribution payable by (ii) 95% of the closing market price per share of our stock on the valuation date of the distribution (providing a 5% discount to the market price of our common stock), a benefit to shareholders who participate.

HOW TO PARTICIPATE IN OUR DIVIDEND REINVESTMENT PLAN

Shares held with a broker or financial institution

Many shareholders have been automatically “opted out” of our DRIP by their brokers. Even if you have elected to automatically reinvest your PSEC stock with your broker, your broker may have “opted out” of our DRIP (which utilizes DTC’s dividend reinvestment service), and you may therefore not be receiving the 5% pricing discount. Shareholders interested in participating in our DRIP to receive the 5% discount should contact their brokers to make sure each such DRIP participation election has been made through DTC. In making such DRIP election, each shareholder should specify to one’s broker the desire to participate in the "Prospect Capital Corporation DRIP through DTC" that issues shares based on 95% of the market price (a 5% discount to the market price) and not the broker's own "synthetic DRIP” plan (if any) that offers no such discount. Each shareholder should not assume one’s broker will automatically place such shareholder in our DRIP through DTC. Each shareholder will need to make this election proactively with one’s broker or risk not receiving the 5% discount. Each shareholder may also consult with a representative of such shareholder’s broker to request that the number of shares the shareholder wishes to enroll in our DRIP be re-registered by the broker in the shareholder’s own name as record owner in order to participate directly in our DRIP.

Shares registered directly with our transfer agent

If a shareholder holds shares registered in the shareholder’s own name with our transfer agent (less than 0.1% of our shareholders hold shares this way) and wants to make a change to how the shareholder receives dividends, please contact our plan administrator, Equiniti Trust Company, LLC by calling (888) 888-0313 or by mailing Equiniti Trust Company LLC, PO Box 10027, Newark, New Jersey 07101.

EARNINGS CONFERENCE CALL

Prospect will host an earnings call on Friday, November 7, 2025 at 9:00 a.m. Eastern Time. Dial 888-338-7333. For a replay after November 7, 2025 visit www.prospectstreet.com or call 855-669-9658 with passcode 5323424.

INTERNAL RATE OF RETURN

Internal Rate of Return (“IRR”) is the discount rate that makes the net present value of all cash flows related to a particular investment equal to zero. IRR is gross of general expenses not related to specific investments as these expenses are not allocable to specific investments. Investments are considered to be exited when the original investment objective has been achieved through the receipt of cash and/or non-cash consideration upon the repayment of a debt investment or sale of an investment or through the determination that no further consideration was collectible and, thus, a loss may have been realized. Prospect’s gross IRR calculations are unaudited. Information regarding internal rates of return are historical results relating to Prospect’s past performance and are not necessarily indicative of future results, the achievement of which cannot be assured.

PRIMARY ORIGINATION STRATEGIES

Our primary investment strategy is investing in private, middle-market companies in the U.S. in need of capital for refinancings, acquisitions, capital expenditures, growth initiatives, recapitalizations and other purposes. Typically, we focus on making investments in middle-market companies with annual revenues of less than $750 million and enterprise values of less than $1 billion. These private, middle-market companies are primarily owned by private equity funded and independent sponsors or us, as well as by a portfolio company’s management team, founder(s), or other investors. Our typical investment involves a senior and secured loan of less than $250 million.

Our investments in senior and secured loans are generally senior debt instruments that rank ahead of unsecured debt and equity of a given portfolio company. These loans also have the benefit of security interests on assets of the applicable portfolio company, which often rank ahead of any other security interests. We also make equity and equity-linked investments with capital-appreciation potential (such as senior and secured convertible debt, preferred equity, common equity and warrants).

We also invest a lesser amount of our assets in senior and secured debt and controlling equity positions in real estate investment trusts (“REIT” or “REITs”). The real estate investments of National Property REIT Corp. (“NPRC”) are in various classes of developed and occupied real estate properties that generate current yields, including multi-family properties and other tenant-diversified properties; historically, NPRC made investments in structured credit (primarily debt tranches). We historically invested in structured credit (primarily equity tranches).

We may also invest in other strategies and opportunities from time to time that the Investment Adviser views as attractive. The Investment Adviser may continue to evaluate other origination strategies in the ordinary course of business with no specific top-down allocation to any single origination strategy.

We directly originate the significant majority of our investments through our long-term relationships with private equity funded and independent sponsors, financial intermediaries, and management teams, as well as other sources. We seek to maximize returns, including both current yield and capital-appreciation potential, and minimize risk for our investors by applying rigorous credit and other analyses and cash-flow and asset-based lending techniques to originate, close, and monitor our investments.

We are consistently pursuing multiple investment opportunities. There can be no assurance that we will successfully consummate any investment opportunity we pursue. If any of these opportunities are consummated, there can be no assurance that investors will share our view of valuation or that any assets acquired will not be subject to future write downs, each of which could have an adverse effect on our stock price.

About Prospect Capital Corporation

Prospect is a business development company that primarily lends to and invests in middle market privately-held companies. Prospect’s investment objective is to generate both current income and long-term capital appreciation.

Prospect has elected to be treated as a business development company under the Investment Company Act of 1940. Prospect has elected to be treated as a regulated investment company under the Internal Revenue Code of 1986.

Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, whose safe harbor for forward-looking statements does not apply to business development companies. Any such statements, other than statements of historical fact, are highly likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under our control, and that we may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from any forward-looking statements. Such statements speak only as of the time when made, and we undertake no obligation to update any such statement now or in the future.

For additional information, contact:

Grier Eliasek, President and Chief Operating Officer

grier@prospectcap.com

Telephone (212) 448-0702