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PROSPECT CAPITAL CORP - Quarter Report: 2023 March (Form 10-Q)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2023
OR
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)
Maryland43-2048643
(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
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbolsName of each exchange on which registered
Common Stock, $0.001 par valuePSECNASDAQ Global Select Market
5.35% Series A Fixed Rate Cumulative Perpetual Preferred Stock, par value $0.001PSEC PRANew York Stock Exchange
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 every Interactive Data File required to be submitted 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 such files). Yes ý    No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerýAccelerated filero
Non-accelerated fileroSmaller reporting companyo
Emerging growth companyo
 (Do not check if a smaller reporting company)
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o    No ý
As of May 8, 2023, there were 402,169,399 shares of the registrant’s common stock, $0.001 par value per share, outstanding.




Table of Contents
  Page
PART IFINANCIAL INFORMATION
Financial Statements
PART IIOTHER INFORMATION




FORWARD-LOOKING STATEMENTS
This report contains information that may constitute “forward-looking statements.” Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will,” “should,” “could,” “may,” “plan” 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, 2022, and those described from time to time in reports that we have filed or in the future may file with the Securities and Exchange Commission.

The forward-looking statements contained in this report involve a number of risks and uncertainties, including statements concerning:

our, or our portfolio companies’, future operating results;
our business prospects and the prospects of our portfolio companies;
the return or impact of current or future investments that we expect to make;
our contractual arrangements and relationships with third parties;
the dependence of our future success on the general economy and its impact on the industries in which we invest;
the impact of global events outside of our control, including the consequences of the ongoing conflict between Russia and Ukraine, on our and our portfolio companies’ business and the global economy;
uncertainty surrounding inflation and the financial stability of the United States, Europe, and China;
the financial condition of, and ability of our current and prospective portfolio companies to, achieve their objectives;
difficulty in obtaining financing or raising capital, especially in the current credit and equity environment, and the impact of a protracted decline in the liquidity of credit markets on our and our portfolio companies’ business;
the level, duration and volatility of prevailing interest rates and credit spreads, magnified by the current turmoil in the credit markets;
the phase-out and the cessation of the London Interbank Offered Rate (“LIBOR”) and the use of the Secured Overnight Financing Rate (“SOFR”) as a replacement rate on our operating results;
adverse developments in the availability of desirable loan and investment opportunities whether they are due to competition, regulation or otherwise;
a compression of the yield on our investments and the cost of our liabilities, as well as the level of leverage available to us;
the impact of changes in laws or regulations governing our operations or the operations of our portfolio companies;
our regulatory structure and tax treatment, including our ability to operate as a business development company and a regulated investment company;
the adequacy of our cash resources and working capital;
the timing of cash flows, if any, from the operations of our portfolio companies;
the ability of our investment adviser to locate suitable investments for us and to monitor and administer our investments;
the timing, form and amount of any dividend distributions;
authoritative generally accepted accounting principles or policy changes from such standard-setting bodies as the Financial Accounting Standards Board, the Securities and Exchange Commission, Internal Revenue Service, the NASDAQ Global Select Market, the New York Stock Exchange LLC, and other authorities that we are subject to, as well as their counterparts in any foreign jurisdictions where we might do business; and
any of the other risks, uncertainties and other factors we identify herein or in our Annual Report on Form 10-K for the year ended June 30, 2022.

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)
March 31, 2023June 30, 2022
(Unaudited)
Assets 
Investments at fair value:  
Control investments (amortized cost of $2,884,591 and $2,732,906, respectively)
$3,480,094 $3,438,317 
Affiliate investments (amortized cost of $8,996 and $242,101, respectively)
7,944 393,264 
Non-control/non-affiliate investments (amortized cost of $4,671,607 and $4,221,824, respectively)
4,104,739 3,770,929 
Total investments at fair value (amortized cost of $7,565,194 and $7,196,831, respectively)(Note 3)
7,592,777 7,602,510 
Cash and cash equivalents (restricted cash of $4,442 and $4,197, respectively)
65,092 35,364 
Receivables for:
Interest, net27,029 12,925 
Other1,063 745 
Deferred financing costs on Revolving Credit Facility (Note 4)14,842 10,801 
Due from broker400 — 
Prepaid expenses329 1,078 
Due from Affiliate (Note 13)— 
Total Assets 
7,701,533 7,663,423 
Liabilities 
  
Revolving Credit Facility (Notes 4 and 8)888,405 839,464 
Public Notes (less unamortized discount and debt issuance costs of $18,265 and $22,281,
  respectively) (Notes 6 and 8)
1,062,975 1,343,178 
Prospect Capital InterNotes® (less unamortized debt issuance costs of $6,817 and $7,122,
   respectively) (Notes 7 and 8)
348,647 340,442 
Convertible Notes (less unamortized debt issuance costs of $1,802 and $2,477, respectively) (Notes 5 and 8)
154,366 214,192 
Due to Prospect Capital Management (Note 13)59,542 58,100 
Dividends payable24,219 23,657 
Interest payable19,989 26,669 
Accrued expenses5,595 3,309 
Due to Prospect Administration (Note 13)10,128 2,281 
Other liabilities613 932 
Total Liabilities 
2,574,479 2,852,224 
Commitments and Contingencies (Note 3)
Preferred Stock, par value $0.001 per share (447,900,000 and 227,900,000 shares of preferred stock authorized, with 72,000,000 and 60,000,000 as Series A1, 72,000,000 and 60,000,000 as Series M1, 72,000,000 and 60,000,000 as Series M2, 20,000,000 and 20,000,000 as Series AA1, 20,000,000 and 20,000,000 as Series MM1, 1,000,000 and 1,000,000 as Series A2, 6,900,000 and 6,900,000 as Series A, 72,000,000 and 0 as Series A3, 72,000,000 and 0 as Series M3, 20,000,000 and 0 as Series AA2, and 20,000,000 and 0 as Series MM2, each as of March 31, 2023 and June 30, 2022; 31,091,585 and 20,794,645 Series A1 shares issued and outstanding; 3,922,740 and 2,626,238 Series M1 shares issued and outstanding; 0 and 0 Series M2 shares issued and outstanding; 0 and 0 Series AA1 shares issued and outstanding; 0 and 0 Series MM1 shares issued and outstanding; 164,000 and 187,000 Series A2 shares issued and outstanding; 6,000,000 and 6,000,000 Series A shares issued and outstanding; 15,058,173 and 0 Series A3 shares issued and outstanding; 1,816,637 and 0 Series M3 shares issued and outstanding; 0 and 0 Series AA2 shares issued and outstanding; and 0 and 0 Series MM2 shares issued and outstanding as of March 31, 2023 and June 30, 2022, respectively) at carrying value plus cumulative accrued and unpaid dividends (Note 9)
1,327,760 692,076
Net Assets Applicable to Common Shares$3,799,294 $4,119,123 
Components of Net Assets Applicable to Common Shares and Net Assets, respectively  
Common stock, par value $0.001 per share (1,552,100,000 and 1,772,100,000 common shares authorized; 400,833,873 and 393,164,437 issued and outstanding, respectively) (Note 9)
401 393 
Paid-in capital in excess of par (Note 9 and 12)4,103,778 4,050,370 
Total distributable (loss) earnings (Note 12)(304,885)68,360 
Net Assets Applicable to Common Shares$3,799,294 $4,119,123 
Net Asset Value Per Common Share (Note 16) 
$9.48 $10.48 
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 March 31,Nine Months Ended March 31,
 2023202220232022
Investment Income
Interest income:
Control investments$64,496 $53,095 $187,579 $166,036 
Affiliate investments— 6,745 15,034 23,497 
Non-control/non-affiliate investments109,601 65,037 287,735 182,698 
Structured credit securities24,039 17,612 72,982 58,702 
Total interest income198,136 142,489 563,330 430,933 
Dividend income:
Control investments800 5,197 3,157 12,134 
Affiliate investments— 95 1,374 95 
Non-control/non-affiliate investments1,128 14 2,515 48 
Total dividend income1,928 5,306 7,046 12,277 
Other income:
Control investments14,768 26,571 50,463 55,306 
Affiliate investments— 19 133 3,961 
Non-control/non-affiliate investments288 7,046 9,738 23,804 
Total other income (Note 10)15,056 33,636 60,334 83,071 
Total Investment Income215,120 181,431 630,710 526,281 
Operating Expenses
Base management fee (Note 13)38,980 36,426 116,176 102,472 
Income incentive fee (Note 13)20,561 19,967 64,692 59,296 
Interest and credit facility expenses37,517 29,235 109,170 86,952 
Allocation of overhead from Prospect Administration (Note 13)9,773 4,126 16,490 10,891 
Audit, compliance and tax related fees1,495 994 4,032 1,940 
Directors’ fees131 131 393 360 
Other general and administrative expenses4,483 3,547 11,607 10,439 
Total Operating Expenses112,940 94,426 322,560 272,350 
Net Investment Income102,180 87,005 308,150 253,931 
Net Realized and Net Change in Unrealized (Losses) Gains from Investments
Net realized (losses) gains
Control investments(800)5,298 (2,512)5,304 
Affiliate investments— — 16,143 — 
Non-control/non-affiliate investments(31,413)(7,552)(52,723)(17,386)
Net realized losses(32,213)(2,254)(39,092)(12,082)
Net change in unrealized (losses) gains
Control investments(41,162)96,162 (109,909)352,558 
Affiliate investments— (11,610)(89,034)26,016 
Non-control/non-affiliate investments(117,761)(4,066)(179,153)19,766 
Net change in unrealized (losses) gains(158,923)80,486 (378,096)398,340 
Net Realized and Net Change in Unrealized (Losses) Gains from Investments(191,136)78,232 (417,188)386,258 
Net realized losses on extinguishment of debt(58)(941)(138)(10,149)
Net (Decrease) Increase in Net Assets Resulting from Operations(89,014)164,296 (109,176)630,040 
Preferred stock dividends19,933 7,139 49,347 16,748 
Net (Decrease) Increase in Net Assets Resulting from Operations applicable to Common Stockholders$(108,947)$157,157 $(158,523)$613,292 
Basic and diluted earnings per common share (Note 11)
Basic$(0.27)$0.40 $(0.40)$1.57 
Diluted$(0.27)$0.38 $(0.40)$1.50 
Weighted-average shares of common stock outstanding (Note 11)
Basic399,732,263391,091,485 397,233,468 389,981,608 
Diluted399,732,263432,808,120 397,233,468 419,914,712 

See notes to consolidated financial statements.
5

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

Preferred Stock Classified as Temporary EquityCommon Stock
Three Months Ended March 31, 2023SharesCarrying ValueSharesParPaid-in capital in excess of par(1)Distributable earnings (loss)(1)Total Net Assets
Balance as of December 31, 2022(1)52,669,005 $1,207,553 398,852,478$399$4,089,950 $(123,958)$3,966,391 
Net Increase (Decrease) in Net Assets and Temporary Equity Resulting from Operations:
Net investment income102,180 102,180 
Net realized losses(32,271)(32,271)
Net change in unrealized losses(158,923)(158,923)
Distributions to Shareholders(1)
Distributions from earnings (Note 16)(91,942)(91,942)
Capital Transactions
Issuance of preferred stock5,539,836 123,915 
Shares issued through reinvestment of dividends16,826 420 1,399,596 9,757 9,758 
Conversion of preferred stock to common stock(172,533)(4,101)581,799 4,100 4,101 
Net decrease in preferred dividend accrual(27)— 
Tax reclassifications of net assets (Note 12)(29)29 — 
Total increase (decrease) for the three months ended March 31, 20235,384,129 120,207 1,981,395 13,828 (180,927)(167,097)
Balance as of March 31, 202358,053,134$1,327,760 400,833,873 $401 $4,103,778 $(304,885)$3,799,294 

Preferred Stock Classified as Temporary EquityCommon Stock
Three Months Ended March 31, 2022SharesCarrying ValueSharesParPaid-in capital in excess of par(1)Distributable earnings (loss)(1)Total Net Assets
Balance as of December 31, 2021(1)18,457,557 $440,661 390,584,255 $391 4,030,760 108,977 4,140,128 
Net Increase in Net Assets and Temporary Equity Resulting from Operations:
Net investment income87,005 87,005 
Net realized losses(3,195)(3,195)
Net change in unrealized gains80,486 80,486 
Distributions to Shareholders(1)
Distributions from earnings (Note 16)(77,578)(77,578)
Capital Transactions
Issuance of Preferred Stock5,504,190 124,221 
Shares issued through reinvestment of dividends4,270 107 1,120,220 9,049 9,050 
Conversion of preferred stock to common stock(4,600)(112)13,661 115 115 
Net increase in preferred dividend accrual
Tax reclassifications of net assets (Note 12)20 (20)— 
Total increase for the three months ended March 31, 20225,503,860 124,223 1,133,881 9,184 86,698 95,883 
Balance as of March 31, 202223,961,417 $564,884 391,718,136 $392 $4,039,944 $195,675 $4,236,011 
(1) See Note 2 and Note 12 within the accompanying notes to consolidated financial statements for further discussion on tax reclassification of net assets and tax basis components of dividends.
See notes to consolidated financial statements.
6


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

Preferred Stock Classified as Temporary EquityCommon Stock
Nine Months Ended March 31, 2023SharesCarrying ValueSharesParPaid-in capital in excess of par(1)Distributable earnings (loss)(1)Total Net Assets
Balance as of June 30, 2022(1)29,607,882 $692,076 393,164,437$393$4,050,370 $68,360 $4,119,123 
Net Increase (Decrease) in Net Assets and Temporary Equity Resulting from Operations:
Net investment income308,150 308,150 
Net realized losses(39,230)(39,230)
Net change in unrealized losses(378,096)(378,096)
Distributions to Shareholders(1)
Distributions from earnings (Note 16)(264,098)(264,098)
Return of capital to common stockholders (Note 12)— 
Capital Transactions
Issuance of preferred stock28,965,017 647,715 
Shares issued through reinvestment of dividends37,621 939 5,859,102 40,442 40,448 
Conversion of preferred stock to common stock(557,386)(12,994)1,810,034 12,992 12,994 
Net increase in preferred dividend accrual24 
Tax reclassifications of net assets (Note 12)(29)29 — 
Conversion of Convertible Notes to common stock300 
Total increase (decrease) for the nine months ended March 31, 202328,445,252 635,684 7,669,436 53,408 (373,245)(319,829)
Balance as of March 31, 202358,053,134$1,327,760 400,833,873 $401 $4,103,778 $(304,885)$3,799,294 

Preferred Stock Classified as Temporary EquityPreferred StockCommon Stock
Nine Months Ended March 31, 2022SharesCarrying ValueLiquidation ValueSharesParPaid-in capital in excess of par(1)Distributable earnings (loss)(1)Total Net Assets
Balance as of June 30, 2021— $— $137,040 388,419,573 $388 $4,018,659 $(210,570)$3,945,517 
Net Increase in Net Assets and Temporary Equity Resulting from Operations:
Net investment income253,931 253,931 
Net realized losses(22,231)(22,231)
Net change in unrealized gains398,340 398,340 
Distributions to Shareholders(1)
Distributions from earnings(Note 16)(223,775)(223,775)
Return of capital to common stockholders(Note 12)(3,695)(3,695)
Capital Transactions
Transfer of preferred stock to temporary equity(2)5,796,528 144,914 (144,914)(144,914)
Issuance of Preferred Stock18,166,948 430,621 7,866 (13,239)(5,373)
Transfer of preferred stock issuance costs to temporary equity(3)— (11,970)11,970 11,970 
Shares issued through reinvestment of dividends8,292 208 3,268,814 25,970 25,982 
Conversion of preferred stock to common stock(10,351)(256)29,749 259 259 
Net increase in preferred dividend accrual1,367 
Tax reclassification of net assets (Note 12)20 (20)— 
Total increase (decrease) for the nine months ended March 31, 202223,961,417 564,884 (137,040)3,298,563 21,285 406,245 290,494 
Balance as of March 31, 2022(1)23,961,417 $564,884 $— 391,718,136 $392 $4,039,944 $195,675 $4,236,011 
(1) See Note 2 and Note 12 within the accompanying notes to consolidated financial statements for further discussion on tax reclassification of net assets and tax basis components of dividends.
(2) Preferred Stock issued prior to our 5.35% Series A Preferred Stock issuance transferred to temporary equity. Refer to Note 9 within the accompanying notes to the consolidated financial statements for further discussion.
(3) Preferred stock issuance costs include offering costs and underwriting costs related to the issuance of preferred stock. During the nine months ended March 31, 2022, we have reclassified all preferred stock issuance costs related to preferred stock issued as temporary equity following our reclassification of preferred stock during the three months ended September 30, 2021. Refer to Note 9 within the accompanying notes to the consolidated financial statements for further discussion.
See notes to consolidated financial statements.
7

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except share data)
(Unaudited)
 Nine Months Ended March 31,
 20232022
Operating Activities
Net (decrease) increase in net assets resulting from operations $(109,176)$630,040 
Net realized losses on extinguishment of debt 138 10,149 
Net realized losses on investments 39,092 12,082 
Net change in unrealized losses (gains) on investments378,096 (398,340)
Amortization of discounts (accretion of premiums), net(5,345)62,435 
Accretion of original issue discount2,304 2,063 
Amortization of deferred financing costs5,255 6,242 
Payment-in-kind interest(97,952)(61,030)
Structuring fees(8,705)(16,437)
Change in operating assets and liabilities:
Payments for purchases of investments(597,552)(1,767,402)
Proceeds from sale of investments and collection of investment principal302,099 940,539 
Decrease in due to broker — (14,854)
Increase in due to Prospect Capital Management 1,442 7,787 
Increase in interest receivable, net (14,104)(394)
Decrease in interest payable(6,680)(7,858)
Increase (decrease) in accrued expenses 2,286 (1,734)
(Increase) decrease in due from broker (400)8,496 
Decrease in other liabilities (319)(144)
Increase in other receivables (318)(160)
Increase in due from affiliate(1)— 
Decrease in prepaid expenses 749 773 
Increase (decrease) in due to Prospect Administration 7,847 (1,980)
Net Cash Used In Operating Activities (101,244)(589,727)
Financing Activities
Borrowings under Revolving Credit Facility (Note 4)1,224,900 1,627,051 
Principal payments under Revolving Credit Facility (Note 4)(1,175,959)(1,284,548)
Issuances of Public Notes, net of original issue discount (Note 6)— 294,798 
Redemptions of Public Notes (Note 6)(284,218)(69,319)
Redemptions of Convertible Notes, net (Note 5)(60,501)(51,872)
Issuances of Prospect Capital InterNotes® (Note 7)13,333 155,909 
Redemptions of Prospect Capital InterNotes®, net (Note 7)(5,433)(323,846)
Financing costs paid and deferred(6,742)(11,206)
Proceeds from issuance of preferred stock, net of underwriting costs657,479 429,433 
Offering costs from issuance of preferred stock(9,764)(4,184)
Dividends paid and distributions to stockholders(222,123)(199,697)
Net Cash Provided by Financing Activities 130,972 562,519 
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash29,728 (27,208)
Cash, Cash Equivalents and Restricted Cash at beginning of period35,364 63,610 
Cash, Cash Equivalents and Restricted Cash at End of Period$65,092 $36,402 
Supplemental Disclosures
Cash paid for interest$108,291 $86,505 
Non-Cash Financing Activities
Value of common shares issued through reinvestment of dividends$41,386 $26,083 
See notes to consolidated financial statements.
8

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2023 (Unaudited)
(in thousands, except share data)

March 31, 2023 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Control Investments (greater than 25.00% voting control)(40)
CP Energy Services Inc. (20)Energy Equipment & ServicesFirst Lien Term Loan10/1/2017
14.16% (3ML+ 9.00%)
1.004/4/2027$51,303$51,303$51,3031.3% (10)(39)
First Lien Term Loan4/5/2022
14.16% (3ML+ 9.00%)
1.004/4/20276,5916,5916,5910.2%(10)(39)
First Lien Term Loan1/6/2023
14.16% (3ML + 9.00%)
1.004/4/202710,32210,32210,3220.3%(10)(39)
First Lien Term Loan A to Spartan Energy Services, LLC10/20/2014
12.84% (1ML+ 8.00%)
1.0012/31/202531,60331,60331,6030.8% (10)(39)
Series A Preferred Units to Spartan Energy Holdings, Inc. (10,000 shares)
9/25/2020
15.00%
N/A26,1933,6150.1%(16)
Series B Convertible Preferred Stock (790 shares)
10/30/2015
16.00%
N/A63,22512,9800.3%(16)
Common Stock (102,924 shares)
8/2/2013N/A86,240—%(16)
275,477116,4143.0%
Credit Central Loan Company, LLC (21)Consumer FinanceFirst Lien Term Loan12/28/2012
5.00% plus 5.00% PIK
6/30/202575,81574,47975,8152.0% (14)(39)
Class A Units (14,867,312 units)
12/28/2012N/A19,331—% (14)(16)
Preferred Class P Shares (11,520,481 units)
7/1/202212.75%N/A11,520210—%(14)
Net Revenues Interest (25% of Net Revenues)
1/28/2015N/A—% (14)(16)
105,33076,0252.0%
Echelon Transportation, LLC Aerospace & DefenseFirst Lien Term Loan3/31/2014
8.57% (1ML+ 4.00%)
2.003/31/202456,60056,60056,6001.5%(10)(39)
Membership Interest(100%)
3/31/2014N/A22,738—%(16)
Preferred Units(32,842,586 shares)
1/31/2022N/A32,8434,2720.1%(16)
112,18160,8721.6%
First Tower Finance Company LLC (23)Consumer FinanceFirst Lien Term Loan to First Tower, LLC6/24/2014
10.00% plus 5.00% PIK
2/18/2025384,085384,085384,08510.1% (14)(39)
Class A Units(95,709,910 units)
6/14/2012N/A31,146224,3475.8% (14)(16)
415,231608,43215.9%
Freedom Marine Solutions, LLC (24)Energy Equipment & Services
Membership Interest(100%)
11/9/2006N/A46,14213,1860.3%(16)
46,14213,1860.3%
InterDent, Inc. Health Care Providers & ServicesFirst Lien Term Loan A/B8/1/2018
19.49% (1ML+ 14.65%)
2.009/5/202514,24914,24914,2490.4%(3) (10)
First Lien Term Loan A8/3/2012
10.34% (1ML+ 5.50%)
1.009/5/202596,77396,77396,7732.5%(3) (10)
First Lien Term Loan B8/3/2012
12.00% PIK
9/5/2025177,717177,717177,7174.7%(39)
Common Stock(99,900 shares)
5/3/2019N/A45,118163,0134.3%(16)
333,857451,75211.9%
Kickapoo Ranch Pet Resort Diversified Consumer Services
Membership Interest (100%)
8/26/2019N/A2,3783,2420.1% 
2,3783,2420.1%
MITY, Inc. (25)Commercial Services & SuppliesFirst Lien Term Loan A9/19/2013
12.16% (3ML+ 7.00%)
3.004/30/202532,07432,07432,0740.8%(3) (10)(39)
First Lien Term Loan B6/23/2014
12.16% (3ML+ 7.00%) plus 10.00% PIK
3.004/30/202518,74418,74418,7440.5% (10)(39)
Unsecured Note to Broda Enterprises ULC9/19/2013
10.00%
1/1/20285,3267,2007,2000.2%(14)
Common Stock (42,053 shares)
9/19/2013N/A27,3494,8570.1%(16)
85,36762,8751.6%
See notes to consolidated financial statements.
9

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2023 (Unaudited)
(in thousands, except share data)
March 31, 2023 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Control Investments (greater than 25.00% voting control)(40)
National Property REIT Corp. (26)Equity Real Estate Investment Trusts (REITs) / Online Lending / Structured FinanceFirst Lien Term Loan A12/31/2018
6.60% (3ML+ 1.44%) plus 3.53% PIK
3.0012/31/2023$473,847$473,847$473,84712.5% (10)(39)
First Lien Term Loan B12/31/2018
7.16% (3ML+ 2.00%) plus 5.50% PIK
3.0012/31/202321,58021,58021,5800.6% (10)(39)
First Lien Term Loan C10/31/2019
15.16%(3ML+ 10.00%%) plus 2.25% PIK
1.0012/31/2023200,600200,600200,6005.3% (10)(39)
First Lien Term Loan D6/19/2020
5.66% (3ML+ 0.50%) plus 2.50% PIK
3.0012/31/2023183,425183,425183,4254.8% (10)(39)
First Lien Term Loan E11/14/2022
7.16% (3ML + 2.00%) plus 7.00% PIK
5.0012/31/202313,38413,38413,3840.4% (10)(39)
Residual Profit Interest12/31/2018N/A55,3321.5%(35)
Common Stock (3,350,519 shares)
12/31/2013N/A15,430646,50516.9% (16)(45)
908,2661,594,67342.0%
Nationwide Loan Company LLC (27)Consumer FinanceFirst Lien Term Loan6/18/2014
10.00% plus 10.00% PIK
6/18/202321,85521,85521,8550.6% (14)(39)
Class A Units (38,550,460 units)
1/31/2013N/A20,84625,8680.7%(14)
42,70147,7231.3%
NMMB, Inc. (28)MediaFirst Lien Term Loan12/30/2019
13.66% (3ML+ 8.50%)
2.003/31/202729,72329,72329,7230.8%(3) (10)
Common Stock(21,418 shares)
12/30/2019N/A74,6642.0% 
29,723104,3872.8%
Pacific World Corporation (36)Personal Products
First Lien Revolving Line of Credit - $26,000 Commitment
9/26/2014
12.09% PIK (1ML+ 7.25%)
1.009/26/202529,53429,53429,5340.8% (10)(15)(39)
First Lien Term Loan A12/31/2014
10.09% PIK (1ML+ 5.25%)
1.009/26/202557,88357,88343,9581.2% (10)(39)
Convertible Preferred Equity(339,338 shares)
6/15/2018
6.50% PIK
N/A189,294—%(16)
Common Stock (6,778,414 shares)
9/29/2017N/A—%(16)
276,71173,4922.0%
R-V Industries, Inc. MachineryFirst Lien Term Loan12/15/2020
14.16% (3ML+ 9.00%)
1.0012/15/202833,62233,62233,6220.9%(3) (10)
Common Stock (745,107 shares)
6/26/2007N/A6,86633,0270.9%(16)
40,48866,6491.8%
Universal Turbine Parts, LLC (34)Trading Companies & Distributors
First Lien Delayed Draw Term Loan - $6,965 Commitment
2/28/2019
12.59% (1ML+ 7.75%)
2.504/5/20253,1173,1173,1170.1% (10)(15)
First Lien Term Loan A7/22/2016
10.91% (3ML+ 5.75%)
1.004/5/202529,57529,57529,5750.8%(10)
Preferred Units (59,051,156 units)
3/31/2021N/A32,5009,8490.3%(16)
Common Stock (10,000 units)
12/10/2018N/A—%(16)
65,19242,5411.2%
USES Corp. (30)Commercial Services & SuppliesFirst Lien Term Loan12/30/2020
13.84% (1ML + 9.00%)
1.007/29/20242,0002,0001,9530.1%(10)
First Lien Equipment Term Loan8/3/2022
13.84% (1ML + 9.00%)
1.007/29/20246,5306,5306,3760.2%(10)(39)
First Lien Term Loan A3/31/2014
9.00% PIK
7/29/202464,62430,6517,9380.2%(9)
First Lien Term Loan B3/31/2014
15.50% PIK
7/29/2024101,84035,568—%(9)
Common Stock (268,962 shares)
6/15/2016N/A—%(16)
74,74916,2670.5%
Valley Electric Company, Inc. (31)Construction & EngineeringFirst Lien Term Loan to Valley Electric Co. of Mt. Vernon, Inc.12/31/2012
10.16% (3ML+ 5.00%) plus 2.50% PIK
3.0012/31/202410,45210,45210,4520.3%(3) (10)(39)
First Lien Term Loan6/24/2014
8.00% plus 10.00% PIK
6/23/202434,99734,99734,9970.8%(3) (39)
First Lien Term Loan B3/28/2022
8.00% plus 4.50% PIK
6/23/202413,29613,29613,2960.3%(3) (39)
Consolidated Revenue Interest (2.00%)
6/22/2018N/A1,107—%(12)
Common Stock (50,000 shares)
12/31/2012N/A12,05381,7122.2% 
70,798141,5643.6%
Total Control Investments (Level 3)$2,884,591$3,480,09491.6%
See notes to consolidated financial statements.
10

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2023 (Unaudited)
(in thousands, except share data)
March 31, 2023 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Affiliate Investments (5.00% to 24.99% voting control)(41)
Nixon, Inc. (32)Textiles, Apparel & Luxury Goods
Common Stock (857 units)
5/12/2017— N/A$— $— $— — % (16)
   %
RGIS Services, LLC Commercial Services & Supplies
Membership Interest (5.27%)
6/25/2020— N/A— 8,996 7,944 0.2 % 
8,996 7,944 0.2 %
Total Affiliate Investments (Level 3)$8,996 $7,944 0.2 %

See notes to consolidated financial statements.
11

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2023 (Unaudited)
(in thousands, except share data)
March 31, 2023 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
8th Avenue Food & Provisions, Inc. Food ProductsSecond Lien Term Loan9/21/2018
12.59% (1ML+ 7.75%)
10/1/2026$32,133 $31,995 $27,671 0.7 %(8)(10)
31,995 27,671 0.7 %
ABG Intermediate Holdings 2 LLC Textiles, Apparel & Luxury GoodsSecond Lien Term Loan12/20/2021
10.91% (1M SOFR+ 6.00%)
0.5012/20/20299,000 8,943 8,850 0.2 %(3)(8)(10)
8,943 8,850 0.2 %
Apidos CLO XI Structured FinanceSubordinated Structured Note12/6/2012
Residual Interest, current yield 12.02%
4/17/203467,783 39,043 29,387 0.8 %(5) (14)
39,043 29,387 0.8 %
Apidos CLO XII Structured FinanceSubordinated Structured Note3/15/2013
Residual Interest, current yield 14.59%
4/15/203152,202 34,013 30,971 0.8 %(5) (14)
34,013 30,971 0.8 %
Apidos CLO XV Structured FinanceSubordinated Structured Note9/13/2013
Residual Interest, current yield 13.73%
4/21/203148,515 35,087 31,092 0.8 %(5) (14)
35,087 31,092 0.8 %
Apidos CLO XXII Structured FinanceSubordinated Structured Note9/16/2015
Residual Interest, current yield 17.41%
4/21/203135,855 29,568 26,350 0.7 %(5) (14)
29,568 26,350 0.7 %
Atlantis Health Care Group (Puerto Rico), Inc. Health Care Providers & Services
First Lien Revolving Line of Credit - $3,000 Commitment
2/21/2013
13.91% (3ML+ 8.75%)
2.004/22/2024— — — — % (10)(15)
First Lien Term Loan2/21/2013
13.91% (3ML+ 8.75%)
2.004/22/202461,204 61,204 59,441 1.6 %(3) (10)
61,204 59,441 1.6 %
Aventiv Technologies, LLC (f/k/a Securus Technologies Holdings, Inc.) Communications EquipmentFirst Lien Term Loan8/2/2019
9.66% (3ML+ 4.50%)
1.0011/1/20249,619 9,237 6,905 0.2 %(3)(8)(10)(47)
Second Lien Term Loan6/20/2017
13.08% (3ML+ 8.25%)
1.0011/1/202550,662 50,597 37,250 1.0 %(3)(8)(10)
59,834 44,155 1.2 %
B. Riley Financial, Inc. Diversified Financial ServicesSenior Unsecured Bond10/18/2022
6.75%
0.00
5/31/20245,799 5,799 5,509 0.1 %(8)(47)
5,799 5,509 0.1%
Barings CLO 2018-III Structured FinanceSubordinated Structured Note10/9/2014
Residual Interest, current yield 0.00%
7/20/202983,098 33,395 17,222 0.4 %(5) (14)(17)
33,395 17,222 0.4 %
Barracuda Parent, LLC IT ServicesSecond Lien Term Loan8/15/2022
11.68% (3M SOFR+ 7.00%)
0.508/15/203020,000 19,450 19,424 0.5 %(8)(10)
19,450 19,424 0.5 %
BCPE North Star US Holdco 2, Inc. Food Products
Second Lien Delayed Draw Term Loan - $5,185 Commitment
6/7/2021
12.41% (3ML+ 7.25%)
0.756/11/20295,185 5,137 4,888 0.1 %(8)(10)(15)
Second Lien Term Loan6/7/2021
12.41% (3ML+ 7.25%)
0.756/11/202994,815 94,186 89,381 2.4 %(3)(8)(10)
99,323 94,269 2.5 %
BCPE Osprey Buyer, Inc. Health Care Technology
First Lien Revolving Line of Credit - $4,239 Commitment
10/18/2021
10.50% (3ML+ 5.75%)
0.758/21/2026942 942 922 — %(8)(10)(15)
First Lien Term Loan
10/18/2021
10.67% (3ML+ 5.75%)
0.758/23/202864,188 64,188 62,837 1.7 %(8)(10)
Second Lien Delayed Draw Term Loan - $22,609 Commitment
10/18/2021
10.67% (3ML+ 5.75%)
0.758/23/2028— — — — %(8)(10)(15)
65,130 63,759 1.7 %
Belnick, LLC (d/b/a The Ubique Group) Household DurablesFirst Lien Term Loan1/20/2022
12.66% (3ML+ 7.50%)
1.001/20/202789,672 89,672 89,672 2.4 %(3) (10)
89,672 89,672 2.4 %
Broder Bros., Co. Textiles, Apparel & Luxury GoodsFirst Lien Term Loan12/4/2017
11.16% (3ML+ 6.00%)
1.0012/4/2025159,562 159,562 158,967 4.2 %(3) (10)
159,562 158,967 4.2 %
Burgess Point Purchaser Corporation Automobile ComponentsSecond Lien Term Loan7/25/2022
13.91% (1M SOFR+ 9.00%)
0.757/25/203030,000 30,000 30,000 0.8 %(8)(10)
30,000 30,000 0.8 %
See notes to consolidated financial statements.
12

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2023 (Unaudited)
(in thousands, except share data)
March 31, 2023 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
California Street CLO IX Ltd. Structured FinanceSubordinated Structured Note4/19/2012
Residual Interest, current yield 11.71%
7/16/2032$58,914 $43,492 $29,908 0.8 %(5) (14)
43,492 29,908 0.8 %
Capstone Logistics Acquisition, Inc. Commercial Services & SuppliesSecond Lien Term Loan11/12/2020
13.66% (1M SOFR+ 8.75%)
1.0011/13/20288,500 8,276 8,500 0.2 %(3)(8)(10)
8,276 8,500 0.2 %
Carlyle C17 CLO Limited Structured FinanceSubordinated Structured Note1/24/2013
Residual Interest, current yield 14.38%
4/30/203124,870 15,100 13,438 0.4 %(5) (14)
15,100 13,438 0.4 %
Carlyle Global Market Strategies CLO 2014-4-R, Ltd. Structured FinanceSubordinated Structured Note4/7/2017
Residual Interest, current yield 14.83%
7/15/203025,534 18,231 16,370 0.4 %(5) (14)
18,231 16,370 0.4 %
Carlyle Global Market Strategies CLO 2016-3, Ltd. Structured FinanceSubordinated Structured Note8/9/2016
Residual Interest, current yield 11.25%
7/20/203432,200 30,940 25,661 0.6 %(5) (14)
30,940 25,661 0.6 %
Cent CLO 21 Limited Structured FinanceSubordinated Structured Note5/15/2014
Residual Interest, current yield 0.00%
7/29/203049,552 31,706 17,405 0.5 %(5) (14)(17)
31,706 17,405 0.5 %
CIFC Funding 2013-III-R, Ltd. Structured FinanceSubordinated Structured Note8/2/2013
Residual Interest, current yield 15.32%
4/24/203144,100 27,423 22,308 0.6 %(5) (14)
27,423 22,308 0.6 %
CIFC Funding 2013-IV, Ltd. Structured FinanceSubordinated Structured Note10/22/2013
Residual Interest, current yield 16.84%
4/28/203145,500 32,066 29,428 0.8 %(5) (14)
32,066 29,428 0.8 %
CIFC Funding 2014-IV-R, Ltd. Structured FinanceSubordinated Structured Note8/5/2014
Residual Interest, current yield 15.20%
10/17/203050,142 34,660 27,622 0.7 %(5) (14)
34,660 27,622 0.7 %
CIFC Funding 2016-I, Ltd. Structured FinanceSubordinated Structured Note12/9/2016
Residual Interest, current yield 16.22%
10/21/203134,000 32,479 29,259 0.8 %(5) (14)
32,479 29,259 0.8 %
Collections Acquisition Company, Inc. Diversified Financial ServicesFirst Lien Term Loan12/3/2019
13.31% (3ML+ 8.15%)
2.506/3/202436,597 36,597 36,597 1.0 %(3) (10)
36,597 36,597 1.0 %
Columbia Cent CLO 27 Limited Structured FinanceSubordinated Structured Note12/18/2013
Residual Interest, current yield 14.16%
10/25/202848,978 32,229 28,306 0.7 %(5) (14)
32,229 28,306 0.7 %
CP IRIS Holdco I, Inc. (48)Building ProductsSecond Lien Term Loan10/1/2021
11.84% (1ML+ 7.00%)
0.5010/1/202935,000 35,000 33,849 0.9 %(3)(8)(10)
35,000 33,849 0.9 %
Curo Group Holdings Corp. Consumer FinanceFirst Lien Term Loan7/30/2021
7.50%
8/1/202847,000 47,026 19,400 0.5 %(8)(14)(47)
47,026 19,400 0.5 %
DRI Holding Inc. Commercial Services & SuppliesFirst Lien Term Loan12/21/2021
10.09% (1ML+ 5.25%)
0.5012/21/202833,990 32,820 33,479 0.9 %(3)(8)(10)
Second Lien Term Loan12/21/2021
12.84% (1ML+ 8.00%)
0.5012/21/2029145,000 145,000 141,772 3.7 %(3) (10)
177,820 175,251 4.6 %
DTI Holdco, Inc. Professional ServicesFirst Lien Term Loan4/26/2022
9.43%(3M SOFR+ 4.75%)
0.754/26/202918,408 18,086 17,503 0.5 %(8)(10)(47)
Second Lien Term Loan4/26/2022
12.43% (3M SOFR+ 7.75%)
0.754/26/203075,000 75,000 71,998 1.9 %(8)(10)
93,086 89,501 2.4 %
Dukes Root Control Inc. Commercial Services & Supplies
First Lien Revolving Line of Credit - $4,464 Commitment
12/8/2022
11.56% (6M SOFR + 6.50%)
1.0012/8/2028357 262 357 —%(8)(10)(15)
First Lien Delayed Draw Term Loan - $8,929 Commitment
12/8/2022
11.56% (6M SOFR + 6.50%)
1.0012/8/2028— — — —%(8)(10)(15)
First Lien Term Loan12/8/2022
11.56% (6M SOFR + 6.50%)
1.0012/8/202836,516 35,643 36,516 1.0%(3)(8)(10)
See notes to consolidated financial statements.
13

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2023 (Unaudited)
(in thousands, except share data)
March 31, 2023 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
35,905 36,873 1.0%
Easy Gardener Products, Inc. Household Durables
Class A Units of EZG Holdings, LLC (200 units)
6/11/2020N/A$— $313 $— — % (16)
Class B Units of EZG Holdings, LLC(12,525 units)
6/11/2020N/A— 1,688 — — % (16)
2,001   %
Engine Group, Inc. (7)MediaFirst Lien Term Loan11/17/2020
16.00% (PRIME+ 8.00%)
1.0011/17/20233,546 3,546 2,112 0.1 %(8)(9)
Class B Common Units(1,039,554 units)
11/17/2020N/A— 26,991 — — %(8)(16)
30,537 2,112 0.1 %
Engineered Machinery Holdings, Inc. MachineryIncremental Amendment No. 2 Second Lien Term Loan5/6/2021
11.66% (3ML+ 6.50%)
0.757/18/20255,000 4,986 5,000 0.1 %(3)(8)(10)
Incremental Amendment No. 3 Second Lien Term Loan8/6/2021
11.16% (3ML+ 6.00%)
0.755/21/20295,000 5,000 4,939 0.1 %(3)(8)(10)
9,986 9,939 0.2 %
Enseo Acquisition, Inc. IT ServicesFirst Lien Term Loan6/2/2021
13.16% (3ML+ 8.00%)
1.006/2/202654,038 54,038 52,698 1.4 %(3) (10)
54,038 52,698 1.4 %
Eze Castle Integration, Inc. IT Services
First Lien Delayed Draw Term Loan - $1,786 Commitment
7/15/2020
13.82% (3ML+ 9.00%) plus 1.00% PIK
1.507/15/2025893 893 874 — % (10)(15)(39)
First Lien Term Loan7/15/2020
13.82% (3ML+ 9.00%) plus 1.00% PIK
1.507/15/202546,608 46,608 45,594 1.2 %(3)(10)(39)
47,501 46,468 1.2 %
Faraday Buyer, LLC Electrical Equipment
First Lien Delayed Draw Term Loan - $5,833 Commitment
10/11/2022
11.86% (6M SOFR + 7.00%)
1.0010/11/2028— — — — %(8)(10)(15)
First Lien Term Loan10/11/2022
11.86% (6M SOFR + 7.00%)
1.0010/11/202864,167 64,167 64,167 1.7 %(3)(8)(10)
64,167 64,167 1.7 %
First Brands Group, LLCAutomobile ComponentsFirst Lien Term Loan3/24/2021
10.25% (6M SOFR+ 5.00%)
1.003/30/202722,354 22,267 21,930 0.6 %(3)(8)(10)
Second Lien Term Loan3/24/2021
13.60% (6ML+ 8.50%)
1.003/30/202837,000 36,633 36,472 1.0 %(3)(8)(10)
58,900 58,402 1.6 %
Forta, LLC (f/k/a Help/Systems Holdings, Inc.) SoftwareSecond Lien Term Loan11/14/2019
11.66% (1M SOFR+ 6.75%)
0.7511/19/202752,500 52,336 48,691 1.3 %(3)(8)(10)
52,336 48,691 1.3 %
Galaxy XV CLO, Ltd. Structured FinanceSubordinated Structured Note2/13/2013
Residual Interest, current yield 8.68%
10/15/203050,524 33,305 24,543 0.5 %(5) (14)
33,305 24,543 0.5 %
Galaxy XXVII CLO, Ltd. Structured FinanceSubordinated Structured Note9/30/2013
Residual Interest, current yield 19.69%
5/16/203124,575 16,429 13,686 0.4 %(5) (14)
16,429 13,686 0.4 %
Galaxy XXVIII CLO, Ltd. Structured FinanceSubordinated Structured Note5/30/2014
Residual Interest, current yield 16.47%
7/15/203139,905 27,415 19,609 0.5 %(5) (14)
27,415 19,609 0.5 %
Halcyon Loan Advisors Funding 2012-1 Ltd. Structured FinanceSubordinated Structured Note8/7/2012
Residual Interest, current yield 0.00%
8/15/202323,188 3,704 — %(5) (14)(17)
3,704 1  %
Halcyon Loan Advisors Funding 2014-2 Ltd. Structured FinanceSubordinated Structured Note4/14/2014
Residual Interest, current yield 0.00%
4/28/202541,163 21,322 25 — %(5) (14)(17)
21,322 25  %
Halcyon Loan Advisors Funding 2015-3 Ltd. Structured FinanceSubordinated Structured Note7/23/2015
Residual Interest, current yield 0.00%
10/18/202739,598 29,557 139 — %(5) (14)(17)
29,557 139  %
HarbourView CLO VII-R, Ltd. Structured FinanceSubordinated Structured Note6/5/2015
Residual Interest, current yield 5.06%
7/18/203119,025 13,448 7,271 0.2 %(5) (14)
13,448 7,271 0.2 %
See notes to consolidated financial statements.
14

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2023 (Unaudited)
(in thousands, except share data)
March 31, 2023 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
The Hiller Companies, LLC (49)Commercial Services & SuppliesFirst Lien Term Loan10/11/2022
11.89% (3M SOFR + 7.00%)
1.009/15/2028$20,000 $20,000 $20,000 0.5 %(3)(8)(10)
20,000 20,000 0.5%
Interventional Management Services, LLC Health Care Providers & Services
First Lien Revolving Line of Credit - $5,000 Commitment
2/22/2021
14.16% (3ML+ 9.00%)
1.002/22/20255,000 5,000 5,000 0.1 % (10)(15)
First Lien Term Loan2/22/2021
14.16% (3ML+ 9.00%)
1.002/20/202667,328 67,328 67,328 1.8 %(3) (10)
72,328 72,328 1.9 %
Jefferson Mill CLO Ltd. Structured FinanceSubordinated Structured Note6/26/2015
Residual Interest, current yield 10.49%
10/20/203123,594 18,172 13,576 0.4 %(5) (14)
18,172 13,576 0.4 %
K&N HoldCo, LLC Automobile Components
Class A Common Units (84,553 units)
2/14/2023N/A— 25,697 1,188 — %(8)(16)
25,697 1,188  %
KM2 Solutions LLC IT ServicesFirst Lien Term Loan12/17/2020
14.05% (3M SOFR+ 9.00%)
1.0012/17/202523,738 23,738 23,194 0.6 %(3) (10)
23,738 23,194 0.6 %
LCM XIV Ltd. Structured FinanceSubordinated Structured Note6/25/2013
Residual Interest, current yield 8.70%
7/21/203149,934 25,333 19,545 0.5 %(5) (14)
25,333 19,545 0.5 %
LGC US FINCO, LLC MachineryFirst Lien Term Loan1/17/2020
11.34% (1ML+ 6.50%)
1.0012/20/202530,154 29,696 28,602 0.8 %(3)(8)(10)
29,696 28,602 0.8 %
Magnate Worldwide, LLC Air Freight & Logistics
First Lien Delayed Draw Term Loan - $2,357 Commitment
3/11/2022
10.23% (3ML+ 5.50%)
0.7512/30/2028— — — — %(8)(10)(15)
First Lien Term Loan3/11/2022
10.23% (3ML+ 5.50%)
0.7512/30/202830,186 30,186 30,186 0.8 %(3)(8)(10)
Second Lien Term Loan12/30/2021
13.66% (3ML+ 8.50%)
0.7512/30/202995,000 95,000 95,000 2.5 %(3)(8)(10)
125,186 125,186 3.3 %
Mamba Purchaser, Inc. Health Care Providers & ServicesSecond Lien Term Loan9/29/2021
11.34% (1ML+ 6.50%)
0.5010/14/202923,000 22,857 23,000 0.6 %(3)(8)(10)
22,857 23,000 0.6 %
Medical Solutions Holdings, Inc. (4)Health Care Providers & ServicesSecond Lien Term Loan11/1/2021
11.99% (3M SOFR+ 7.00%)
0.5011/1/202954,463 54,426 54,463 1.4 %(3)(8)(10)
54,426 54,463 1.4 %
Mountain View CLO 2013-I Ltd. Structured FinanceSubordinated Structured Note4/17/2013
Residual Interest, current yield 0.00%
10/15/203043,650 22,848 14,745 0.4 %(5) (14)(17)
22,848 14,745 0.4 %
Mountain View CLO IX Ltd. Structured FinanceSubordinated Structured Note5/13/2015
Residual Interest, current yield 14.28%
7/15/203147,829 24,439 20,639 0.5 %(5) (14)
24,439 20,639 0.5 %
Nexus Buyer LLC Capital MarketsSecond Lien Term Loan11/5/2021
11.09% (1ML+ 6.25%)
0.5011/5/202942,500 42,500 38,265 1.0 %(8)(10)
42,500 38,265 1.0 %
NH Kronos Buyer, Inc. PharmaceuticalsFirst Lien Term Loan12/7/2022
11.30% (3M SOFR + 6.25%)
1.0011/1/202874,766 74,766 74,766 2.0 %(3)(8)(10)
74,766 74,766 2.0 %
Octagon Investment Partners XV, Ltd. Structured FinanceSubordinated Structured Note1/24/2013
Residual Interest, current yield 5.90%
7/19/203042,064 28,163 22,333 0.6 %(5) (14)
28,163 22,333 0.6 %
Octagon Investment Partners 18-R Ltd. Structured FinanceSubordinated Structured Note8/12/2015
Residual Interest, current yield 15.45%
4/16/203146,016 21,475 17,746 0.5 %(5) (14)
21,475 17,746 0.5 %
OneTouchPoint Corp Professional ServicesFirst Lien Term Loan2/19/2021
13.16% (3ML+ 8.00%)
1.002/19/202638,880 38,880 38,477 1.0 %(3) (10)
38,880 38,477 1.0 %
See notes to consolidated financial statements.
15

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2023 (Unaudited)
(in thousands, except share data)
March 31, 2023 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
PeopleConnect Holdings, LLC (11)Interactive Media & ServicesFirst Lien Term Loan1/22/2020
13.41% (3ML+ 8.25%)
1.751/22/2025$211,754 $211,754 $211,754 5.6 %(3) (10)
211,754 211,754 5.6 %
PetVet Care Centers, LLC (f/k/a Pearl Intermediate Parent LLC) Health Care Providers & ServicesSecond Lien Term Loan2/1/2018
11.09% (1ML+ 6.25%)
2/15/202616,000 15,953 15,509 0.4 %(3)(8)(10)
15,953 15,509 0.4 %
PGX Holdings, Inc. (6)Diversified Consumer ServicesFirst Lien Term Loan7/21/2021
12.91% (3M SOFR + 7.75%)
1.507/21/202670,639 70,639 70,639 1.9%(8)(10)
Second Lien Delayed Draw Term Loan - $30,000 Commitment
12/28/2022
12.00% PIK
12/31/2025— — — —%(15)
Second Lien Term Loan7/21/2021
12.00% PIK
7/27/2027179,986 179,986 114,017 3.0%(39)
Class B of PGX TopCo LLC (999 Non-Voting Units)
5/27/2020N/A— — — —%(16)
250,625 184,656 4.9%
PlayPower, Inc. Leisure ProductsFirst Lien Term Loan5/7/2019
10.25% (3M SOFR+ 7.50%)
5/10/20265,808 5,779 5,123 0.1 %(3)(8)(10)
5,779 5,123 0.1 %
Precisely Software Incorporated (f/k/a Vision Solutions, Inc.) (29)IT ServicesSecond Lien Term Loan4/23/2021
12.07% (3ML+ 7.25%)
0.754/23/202980,000 79,302 67,796 1.8 %(3)(8)(10)
79,302 67,796 1.8 %
Preventics, Inc. (d/b/a Legere Pharmaceuticals) (46)Health Care Providers & ServicesFirst Lien Term Loan11/12/2021
15.66% (3ML+ 10.50%)
1.0011/12/20269,173 9,173 9,063 0.2 %(3) (10)
Series A Convertible Preferred Stock (320 units)
11/12/2021
8.00%
N/A— 127 131 — %(16)
Series C Convertible Preferred Stock (3,575 units)
11/12/2021
8.00%
N/A— 1,419 1,461 — %(16)
10,719 10,655 0.2 %
Raisin Acquisition Co, Inc. Pharmaceuticals
First Lien Revolving Line of Credit - $3,583 Commitment
6/17/2022
12.38% (3M SOFR+ 7.00%)
1.0012/13/2026— — — — %(8)(10)(15)
First Lien Delayed Draw Term Loan - $1,554 Commitment
6/17/2022
12.16% (3M SOFR+ 7.00%)
1.0012/13/20261,523 1,489 1,485 — %(8)(10)(15)
First Lien Term Loan6/17/2022
12.38% (3M SOFR+ 7.00%)
1.0012/13/202624,365 23,740 23,754 0.6 %(3)(8)(10)
25,229 25,239 0.6 %
RC Buyer, Inc. Automobile ComponentsSecond Lien Term Loan7/26/2021
11.34% (1ML+ 6.50%)
0.757/30/202920,000 19,921 19,117 0.5 %(3)(8)(10)
19,921 19,117 0.5 %
Reception Purchaser, LLC Air Freight & LogisticsFirst Lien Term Loan4/28/2022
10.83% (1M SOFR+ 6.00%)
0.753/24/202862,890 61,911 62,600 1.6 %(3)(8)(10)
61,911 62,600 1.6 %
Redstone Holdco 2 LP (22)IT ServicesSecond Lien Term Loan4/16/2021
12.56% (3ML+ 7.75%)
0.754/27/202950,000 49,322 41,358 1.1 %(3)(8)(10)
49,322 41,358 1.1 %
Research Now Group, Inc. & Survey Sampling International LLC Professional ServicesFirst Lien Term Loan12/8/2017
10.31% (3ML+ 5.50%)
1.0012/20/20249,500 9,359 8,345 0.2 %(3)(8)(10)
Second Lien Term Loan12/8/2017
14.31% (3ML+ 9.50%)
1.0012/20/202550,000 48,826 39,838 1.0 %(3)(8)(10)
58,185 48,183 1.2 %
Rising Tide Holdings, Inc. Diversified Consumer ServicesFirst Lien Term Loan3/23/2023
13.39% PIK (3M SOFR+ 8.25%)
0.756/1/202911,983 11,849 11,812 0.3 %(8)(10)(39)(50)
Second Lien Term Loan3/23/2023
13.39% PIK (3M SOFR + 8.25%)
0.756/1/202911,763 11,630 — — %(8)(9)(10)
23,479 11,812 0.3 %
See notes to consolidated financial statements.
16

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2023 (Unaudited)
(in thousands, except share data)
March 31, 2023 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
The RK Logistics Group, Inc. Commercial Services & SuppliesFirst Lien Term Loan3/24/2022
15.66% (3ML+ 10.50%)
1.003/24/20275,925 5,925 5,925 0.2 %(3) (10)
Class A Common Units(263,000 units)
3/24/2022N/A— 263 2,049 0.1 %(16)
Class B Common Units(1,237,000 units)
3/24/2022N/A— 1,237 9,636 0.3 %(16)
7,425 17,610 0.6 %
RME Group Holding Company MediaFirst Lien Term Loan A5/4/2017
10.66% (3ML+ 5.50%)
1.005/6/202423,131 23,131 23,131 0.6 %(3) (10)
First Lien Term Loan B5/4/2017
16.16% (3ML+ 11.00%)
1.005/6/202421,302 21,302 21,302 0.6 %(3) (10)
44,433 44,433 1.2 %
Romark WM-R Ltd. Structured FinanceSubordinated Structured Note4/11/2014
Residual Interest, current yield 13.57%
4/21/203127,725 19,992 15,337 0.4 %(5) (14)
19,992 15,337 0.4 %
Rosa Mexicano Hotels, Restaurants & Leisure
First Lien Revolving Line of Credit - $500 Commitment
3/29/2018
12.66% (3ML+ 7.50%)
1.255/29/2024235 235 223 — % (10)(15)
First Lien Term Loan3/29/2018
12.66% (3ML+ 7.50%)
1.255/29/202422,161 22,161 21,006 0.6 %(10)
22,396 21,229 0.6 %
SEOTownCenter, Inc. IT ServicesFirst Lien Term Loan1/31/2022
13.16% (3ML+ 8.00%)
1.001/31/202751,350 51,350 49,608 1.3 %(3) (10)
51,350 49,608 1.3 %
Shearer’s Foods, LLC Food ProductsSecond Lien Term Loan9/15/2020
12.60% (1ML+ 7.75%)
1.009/23/20284,000 3,931 4,000 0.1 %(3)(8)(10)
3,931 4,000 0.1 %
ShiftKey, LLC Health Care TechnologyFirst Lien Term Loan6/21/2022
11.91% (3M SOFR+ 5.75%)
1.006/21/202764,513 64,030 64,513 1.7 %(3) (10)
64,030 64,513 1.7 %
Shutterfly, LLC Internet & Direct Marketing Retail2021 Refinancing First Lien Term Loan B7/1/2021
9.84% (1ML+ 5.00%)
0.759/25/202620,090 20,022 13,880 0.4 %(3)(8)(10)
20,022 13,880 0.4 %
Sorenson Communications, LLC Diversified Telecommunication ServicesFirst Lien Term Loan3/12/2021
10.34% (1ML+ 5.50%)
0.753/17/202632,052 31,694 31,797 0.8 %(3)(8)(10)
31,694 31,797 0.8 %
Southern Veterinary Partners Health Care Providers & ServicesSecond Lien Term Loan10/2/2020
12.59% (1ML+ 7.75%)
1.0010/5/20288,000 7,944 7,741 0.2 %(3)(8)(10)
7,944 7,741 0.2 %
Spectrum Holdings III Corp Health Care Equipment & SuppliesSecond Lien Term Loan1/26/2018
11.84% (1ML+ 7.00%)
1.001/31/20267,500 7,487 6,810 0.2 %(8)(10)
7,487 6,810 0.2 %
Staples, Inc. DistributorsFirst Lien Term Loan11/18/2019
9.81% (3ML+ 5.00%)
4/16/20268,706 8,663 8,094 0.2 %(3)(8)(10)(47)
8,663 8,094 0.2 %
Strategic Materials Holding Corp. Household DurablesSecond Lien Term Loan10/27/2017
12.56% (3ML+ 7.75%)
1.0011/1/20257,000 6,977 5,064 0.1 %(8)(10)
6,977 5,064 0.1 %
Stryker Energy, LLC Energy Equipment & ServicesOverriding Royalty Interest12/4/2006N/A— — — — % (13)
   %
Symphony CLO XIV, Ltd. Structured FinanceSubordinated Structured Note5/6/2014
Residual Interest, current yield 0.00%
7/14/202649,250 23,941 8,046 0.2 %(5) (14)(17)
23,941 8,046 0.2 %
Symphony CLO XV, Ltd. Structured FinanceSubordinated Structured Note10/17/2014
Residual Interest, current yield 8.97%
1/19/203263,830 41,644 28,051 0.7 %(5) (14)
41,644 28,051 0.7 %
See notes to consolidated financial statements.
17

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2023 (Unaudited)
(in thousands, except share data)
March 31, 2023 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
Town & Country Holdings, Inc. DistributorsFirst Lien Term Loan1/26/2018
12.00% PIK
2/27/2026$169,940 $169,940 $169,940 4.5 % (39)
First Lien Term Loan11/17/2022
12.00% PIK
2/27/202614,636 14,636 14,636 0.4 % (39)
Class W Interests of Town & Country Housewares Group, LP(188,105 Non-Voting Interests)
8/31/2022
4.00%
N/A— — 15 — % (16)
Class B of Town & Country TopCo LLC (999 Non-Voting Units)
11/17/2022N/A— — 38,355 1.0 % (16)
184,576 222,946 5.9 %
TPS, LLC MachineryFirst Lien Term Loan11/30/2020
14.16% (3ML+ 9.00%) plus 1.50% PIK
1.0011/30/202523,393 23,393 23,393 0.6 %(3) (10)(39)
23,393 23,393 0.6 %
United Sporting Companies, Inc. (18)DistributorsSecond Lien Term Loan9/28/2012
13.25% (1ML+ 11.00%) plus 2.00% PIK
2.2511/16/2019130,140 89,178 7,017 0.2 % (9)(10)
89,178 7,017 0.2 %
Upstream Newco, Inc. Health Care Providers & ServicesSecond Lien Term Loan11/20/2019
13.66% (3ML+ 8.50%)
11/20/202722,000 21,881 20,965 0.6 %(3)(8)(10)
21,881 20,965 0.6 %
USG Intermediate, LLC Leisure Products
First Lien Revolving Line of Credit - $3,000 Commitment
4/15/2015
14.09% (1ML+ 9.25%)
1.002/9/20273,000 3,000 3,000 0.1 % (10)(15)
First Lien Term Loan B4/15/2015
16.59% (1ML+ 11.75%)
1.002/9/202750,966 50,966 50,966 1.3 %(3) (10)
Equity4/15/2015N/A— — — %(16)
53,967 53,966 1.4 %
VC GB Holdings I Corp Household DurablesSecond Lien Term Loan6/30/2021
11.59% (1ML+ 6.75%)
0.507/23/202923,000 22,818 21,965 0.6 %(3)(8)(10)
22,818 21,965 0.6 %
ViaPath Technologies. (f/k/a Global Tel*Link Corporation) Diversified Telecommunication ServicesFirst Lien Term Loan8/7/2019
9.08% (3M SOFR+ 4.25%)
11/29/20259,647 9,473 9,110 0.2 %(3)(8)(10)
Second Lien Term Loan11/20/2018
14.83% (3M SOFR+ 10.00%)
11/29/2026122,670 121,903 116,672 3.1 %(3)(8)(10)
131,376 125,782 3.3 %
Victor Technology, LLC Commercial Services & SuppliesFirst Lien Term Loan12/3/2021
12.66% (3ML+ 7.50%)
1.0012/3/202829,625 29,625 27,827 0.7 %(3) (10)
29,625 27,827 0.7 %
Voya CLO 2012-4, Ltd. Structured FinanceSubordinated Structured Note11/5/2012
Residual Interest, current yield 0.91%
10/15/203040,613 27,041 21,546 0.5 %(5) (14)
27,041 21,546 0.5 %
Voya CLO 2014-1, Ltd. Structured FinanceSubordinated Structured Note2/5/2014
Residual Interest, current yield 4.58%
4/18/203140,773 24,228 17,409 0.5 %(5) (14)
24,228 17,409 0.5 %
Voya CLO 2016-3, Ltd. Structured FinanceSubordinated Structured Note9/30/2016
Residual Interest, current yield 10.49%
10/20/203128,100 23,533 19,211 0.5 %(5) (14)
23,533 19,211 0.5 %
Voya CLO 2017-3, Ltd. Structured FinanceSubordinated Structured Note6/13/2017
Residual Interest, current yield 13.87%
4/20/203444,885 51,611 40,238 1.1 %(5) (14)
51,611 40,238 1.1 %
VT Topco, Inc. Commercial Services & SuppliesSecond Lien Term Loan8/14/2018
11.59% (1ML+ 6.75%)
8/17/202612,000 11,939 11,683 0.3 %(3)(8)(10)
2021 Second Lien Term Loan7/30/2021
11.59% (1ML+ 6.75%)
0.758/17/202620,250 20,136 19,715 0.5 %(3)(8)(10)
32,075 31,398 0.8 %
WatchGuard Technologies, Inc. IT ServicesFirst Lien Term Loan8/17/2022
10.11% (6M SOFR+ 5.25%)
0.756/30/202934,913 34,913 34,264 0.9 %(8)(10)
34,913 34,264 0.9 %
See notes to consolidated financial statements.
18

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF MARCH 31, 2023 (Unaudited)
(in thousands, except share data)
March 31, 2023 (Unaudited)
Portfolio CompanyIndustryInvestments(1)(37)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of Net Assets
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
Wellful Inc. (f/k/a KNS Acquisition Corp.) Food & Staples RetailingFirst Lien Term Loan5/26/2022
11.17% (1M SOFR+ 6.25%)
0.754/21/2027$13,785 $12,994 $13,244 0.3 %(8)(10)
Incremental First Lien Term Loan7/21/2022
11.17% (1M SOFR+ 6.25%)
0.754/21/202714,813 14,244 14,231 0.4 %(8)(10)
27,238 27,475 0.7 %
Wellpath Holdings, Inc. (f/k/a CCS-CMGC Holdings, Inc.) Health Care Providers & ServicesFirst Lien Term Loan5/13/2019
10.33% (3ML+ 5.50%)
10/1/202514,278 14,154 13,577 0.4 %(3)(8)(10)
Second Lien Term Loan9/25/2018
13.83% (3ML+ 9.00%)
10/1/202637,000 36,688 33,526 0.9 %(3)(8)(10)
50,842 47,103 1.3 %
Total Non-Control/Non-Affiliate Investments (Level 3)$4,671,607 $4,104,739 108.0 %
Total Portfolio Investments (Level 3)$7,565,194 $7,592,777 199.8 %
See notes to consolidated financial statements.
19

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF JUNE 30, 2022
(in thousands, except share data)

June 30, 2022
Portfolio CompanyIndustryInvestments(1)(38)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of 
Net Assets
LEVEL 3 PORTFOLIO INVESTMENTS
Control Investments (greater than 25.00% voting control)(42)
CP Energy Services Inc. (20)Energy Equipment & ServicesFirst Lien Term Loan10/1/2017
13.25% (3ML+ 11.00%)
1.00 4/4/2027$46,698 $46,698 $46,698 1.1%(10)(39)
First Lien Term Loan4/5/2022
11.25% (3ML+ 8.00%)
1.00 4/4/20276,000 6,000 6,000 0.1%(10)
First Lien Term Loan A to Spartan Energy Services, LLC10/20/2014
9.67% (1ML+ 8.00%)
1.00 12/31/202226,648 26,648 26,648 0.6%(10)(39)
Series A Preferred Units to Spartan Energy Holdings, Inc. (10,000 shares)
9/25/2020N/A26,193 21,793 0.5%(16)
Series B Convertible Preferred Stock (790 shares)
10/30/2015N/A63,225 11,562 0.3%(16)
Common Stock (102,924 shares)
8/2/2013N/A86,240 — —%(16)
255,004 112,701 2.6%
Credit Central Loan Company, LLC (21)Consumer FinanceFirst Lien Term Loan12/28/2012
10.00% plus 10.00%PIK
— 6/30/202575,832 73,902 75,832 1.9%(14)(39)
Class A Units (14,867,312 units)
12/28/2012N/A19,331 1,103 —%(14)(16)
Net Revenues Interest (25% of Net Revenues)
1/28/2015N/A— — —%(14)(16)
93,233 76,935 1.9%
Echelon Transportation, LLCAerospace & DefenseFirst Lien Term Loan3/31/2014
6.00% (1ML+ 4.00%)
2.00 3/31/202453,209 53,209 53,209 1.3%(10)
Membership Interest (100%)
3/31/2014N/A22,738 — —%(16)
Preferred Units (32,842,586 shares)
1/31/2022N/A32,843 12,557 0.3%(16)
108,790 65,766 1.6%
First Tower Finance Company LLC (23)Consumer FinanceFirst Lien Term Loan to First Tower, LLC6/24/2014
10.00% plus 12.00% PIK
— 2/18/2025356,225 356,225 356,225 8.7%(14)(39)
Class A Units (95,709,910 units)
6/14/2012N/A31,146 251,058 6.1%(14)(16)
387,371 607,283 14.8%
Freedom Marine Solutions, LLC (24)Energy Equipment & Services
Membership Interest (100%)
11/9/2006N/A45,492 13,899 0.3%(16)
45,492 13,899 0.3%
InterDent, Inc.Health Care Providers & ServicesFirst Lien Term Loan A/B8/1/2018
16.65% (1ML+ 14.65%)
2.00 9/5/202514,249 14,249 14,249 0.3%(10)
First Lien Term Loan A8/3/2012
7.17% (1ML+ 5.50%)
1.00 9/5/202596,773 96,773 96,773 2.4%(3) (10)
First Lien Term Loan B8/3/2012
12.00% PIK
— 9/5/2025162,426 162,426 162,426 3.9%(39)
Common Stock (99,900 shares)
5/3/2019N/A45,118 132,746 3.2%(16)
318,566 406,194 9.8%
Kickapoo Ranch Pet ResortDiversified Consumer Services
Membership Interest (100%)
8/26/2019N/A2,378 3,833 0.1%
2,378 3,833 0.1%
MITY, Inc. (25)Commercial Services & SuppliesFirst Lien Term Loan A9/19/2013
10.00% (3ML+ 7.00%)
3.00 4/30/202532,210 32,210 32,210 0.8%(10)(39)
First Lien Term Loan B6/23/2014
10.00% (3ML+ 7.00%) plus 10.00% PIK
3.00 4/30/202518,711 18,711 18,711 0.5%(10)(39)
Unsecured Note to Broda Enterprises ULC9/19/2013
10.00%
— 1/1/20287,200 7,200 7,200 0.2%(14)
Common Stock (42,053 shares)
9/19/2013N/A27,349 1,878 —%(16)
85,470 59,999 1.5%
See notes to consolidated financial statements.
20

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF JUNE 30, 2022
(in thousands, except share data)

June 30, 2022
Portfolio CompanyIndustryInvestments(1)(38)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of 
Net Assets
LEVEL 3 PORTFOLIO INVESTMENTS
Control Investments (greater than 25.00% voting control)(42)
National Property REIT Corp. (26)Equity Real Estate Investment Trusts (REITs) / Online Lending / Structured FinanceFirst Lien Term Loan A12/31/2018
4.44% (3ML+ 1.44%) plus 3.53% PIK
3.00 12/31/2023$448,061 $448,061 $448,061 10.9%(10)(39)
First Lien Term Loan B12/31/2018
5.00% (3ML+ 2.00%) plus 5.50% PIK
3.00 12/31/202329,080 29,080 29,080 0.7%(10)(39)
First Lien Term Loan C10/31/2019
12.25% (3ML+ 10.00%) plus 2.25% PIK
1.00 12/31/2023186,800 186,800 186,800 4.5%(10)(39)
First Lien Term Loan D6/19/2020
3.50% (3ML+ 0.50%) plus 2.50% PIK
3.00 12/31/2023183,425 183,425 183,425 4.5%(10)(39)
Residual Profit Interest12/31/2018N/A— 60,749 1.5%(35)
Common Stock (3,334,895 shares)
12/31/2013N/A15,830 707,622 17.3%(45)
863,196 1,615,737 39.4%
Nationwide Loan Company LLC (27)Consumer FinanceFirst Lien Term Loan6/18/2014
10.00% plus 10.00% PIK
— 6/18/202220,260 20,260 20,260 0.5%(14)(39)
Class A Units (38,550,460 units)
1/31/2013N/A20,846 30,140 0.7%(14)
41,106 50,400 1.2%
NMMB, Inc. (28)MediaFirst Lien Term Loan12/30/2019
10.75% (3ML+ 8.50%)
2.00 3/31/202729,723 29,723 29,723 0.7%(3) (10)
Common Stock (21,418 shares)
12/30/2019N/A— 80,220 2.0%
29,723 109,943 2.7%
Pacific World Corporation (36)Personal Products
First Lien Revolving Line of Credit - $26,000 Commitment
9/26/2014
8.92% PIK (1ML+ 7.25%)
1.00 9/26/202526,743 26,743 26,743 0.6%(10)(15)(39)
First Lien Term Loan A12/31/2014
6.92% PIK (1ML+ 5.25%)
1.00 9/26/202544,358 44,358 32,436 0.8%(10)(39)
Convertible Preferred Equity (323,235 shares)
6/15/2018N/A189,295 — —%(16)
Common Stock (6,778,414 shares)
9/29/2017N/A— — —%(16)
260,396 59,179 1.4%
R-V Industries, Inc.MachineryFirst Lien Term Loan12/15/2020
11.25% (3ML+ 9.00%)
1.00 12/15/202833,622 33,622 33,622 0.8%(3) (10)
Common Stock (745,107 shares)
6/26/2007N/A6,866 23,301 0.6%
40,488 56,923 1.4%
Universal Turbine Parts, LLC (34)Trading Companies & Distributors
First Lien Delayed Draw Term Loan - $6,965 Commitment
2/28/2019
10.25% (1ML+ 7.75%)
2.50 4/5/20243,141 3,141 3,141 0.1%(10)(15)
First Lien Term Loan A7/22/2016
8.00% (3ML+ 5.75%)
1.00 4/5/202429,575 29,575 28,006 0.7%(10)
Preferred Units (55,383,218 units)
3/31/2021N/A32,500 — —%(16)
Common Stock (10,000 units)
12/10/2018N/A— — —%(16)
65,216 31,147 0.8%
USES Corp. (30)Commercial Services & SuppliesFirst Lien Term Loan A3/31/2014
9.00% PIK
— 7/29/202460,362 30,651 20,395 0.5%(9)
First Lien Term Loan B3/31/2014
15.50% PIK
— 7/29/202490,576 35,567 — —%(9)
First Lien Term Loan12/30/2020
10.67% (1ML+ 9.00%)
1.00 7/29/20242,000 2,000 2,000 —%(10)
Common Stock (268,962 shares)
6/15/2016N/A— — —%(16)
68,218 22,395 0.5%
Valley Electric Company, Inc. (31)Construction & EngineeringFirst Lien Term Loan to Valley Electric Co. of Mt. Vernon, Inc.12/31/2012
8.00% (3ML+ 5.00%) plus 2.50% PIK
3.00 12/31/202410,452 10,452 10,452 0.3%(3) (10)(39)
First Lien Term Loan6/24/2014
8.00% plus 10.00% PIK
— 6/23/202433,301 33,301 33,301 0.8%(39)
First Lien Term Loan B3/28/2022
8.00% plus 4.50% PIK
— 6/23/202413,000 13,000 13,000 0.3%(39)
Consolidated Revenue Interest (2.00%)
6/22/2018N/A— 1,781 —%(12)
Common Stock (50,000 shares)
12/31/2012N/A11,506 87,449 2.1%
68,259 145,983 3.5%
Total Control Investments (Level 3)$2,732,906 $3,438,317 83.5%
See notes to consolidated financial statements.
21

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF JUNE 30, 2022
(in thousands, except share data)

June 30, 2022
Portfolio CompanyIndustryInvestments(1)(38)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of 
Net Assets
LEVEL 3 PORTFOLIO INVESTMENTS
Affiliate Investments (5.00% to 24.99% voting control)(43)
Nixon, Inc. (32)Textiles, Apparel & Luxury Goods
Common Stock (857 units)
5/12/2017N/A$— $— —%(16)
  —%
PGX Holdings, Inc. (6)Diversified Consumer ServicesFirst Lien Term Loan7/21/2021
9.25% (6ML+ 7.75%)
1.50 7/21/202671,382 71,382 71,382 1.7%(3)(8)(10)
Second Lien Term Loan7/21/2021
13.42% (1ML+ 11.75%)
1.50 7/27/2027153,931 153,931 153,931 3.7%(3) (10)
Common Stock (40,780,359 shares)
5/27/2020N/A— 114,940 2.8%(16)
225,313 340,253 8.2%
RGIS Services, LLCCommercial Services & SuppliesFirst Lien Term Loan6/25/2020
9.17% (1ML+ 7.50%)
1.00 6/25/20253,680 3,680 3,680 0.1%(8)(10)
Membership Interest (5.27%)
6/25/2020N/A10,303 13,324 0.3%
13,983 17,004 0.4%
Targus Cayman HoldCo Limited (33)Textiles, Apparel & Luxury Goods
Common Stock (7,383,395 shares)
2/12/2016N/A2,805 36,007 0.9%(16)
2,805 36,007 0.9%
Total Affiliate Investments (Level 3)$242,101 $393,264 9.5%

See notes to consolidated financial statements.
22

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF JUNE 30, 2022
(in thousands, except share data)

June 30, 2022
Portfolio CompanyIndustryInvestments(1)(38)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of 
Net Assets
LEVEL 3 PORTFOLIO INVESTMENTS
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
8th Avenue Food & Provisions, Inc.Food ProductsSecond Lien Term Loan9/21/2018
9.42% (1ML+ 7.75%)
— 10/1/2026$32,133 $31,966 $27,668 0.7 %(3)(8)(10)
31,966 27,668 0.7 %
ABG Intermediate Holdings 2 LLCTextiles, Apparel & Luxury GoodsSecond Lien Term Loan12/20/2021
7.63% (1M SOFR+ 6.00%)
0.80 12/20/20299,000 8,937 8,666 0.2 %(3)(8)(10)
8,937 8,666 0.2 %
AmeriLife Holdings, LLCInsuranceSecond Lien Term Loan3/18/2020
9.56% (1ML+ 8.50%)
1.00 3/18/202822,280 21,966 22,280 0.5 %(3)(8)(10)
21,966 22,280 0.5 %
Apidos CLO XIStructured FinanceSubordinated Structured Note12/6/2012
Residual Interest, current yield 10.09%
— 4/17/203467,782 37,155 29,691 0.7 %(5) (14)
37,155 29,691 0.7 %
Apidos CLO XIIStructured FinanceSubordinated Structured Note3/15/2013
Residual Interest, current yield 6.72%
— 4/15/203152,203 33,580 28,847 0.7 %(5) (14)
33,580 28,847 0.7 %
Apidos CLO XVStructured FinanceSubordinated Structured Note9/13/2013
Residual Interest, current yield 7.45%
— 4/21/203148,515 34,910 28,370 0.7 %(5) (14)
34,910 28,370 0.7 %
Apidos CLO XXIIStructured FinanceSubordinated Structured Note9/16/2015
Residual Interest, current yield 10.78%
— 4/21/203135,855 28,563 25,318 0.6 %(5) (14)
28,563 25,318 0.6 %
Atlantis Health Care Group (Puerto Rico), Inc.Health Care Providers & Services
First Lien Revolving Line of Credit - $3,000 Commitment
2/21/2013
11.00% (3ML+ 8.75%)
2.00 4/22/2024— — — — %(10)(15)
First Lien Term Loan2/21/2013
11.00% (3ML+ 8.75%)
2.00 4/22/202461,815 61,815 61,815 1.5 %(3) (10)
61,815 61,815 1.5 %
Aventiv Technologies, LLC (f/k/a Securus Technologies Holdings, Inc.)Communications EquipmentFirst Lien Term Loan8/2/2019
6.75% (3ML+ 4.50%)
1.00 11/1/20249,695 9,202 8,962 0.2 %(3)(8)(10)(47)
Second Lien Term Loan6/20/2017
9.49% (3ML+ 8.25%)
1.00 11/1/202550,662 50,578 48,594 1.2 %(3)(8)(10)
59,780 57,556 1.4 %
Barings CLO 2018-IIIStructured FinanceSubordinated Structured Note10/9/2014
Residual Interest, current yield 0.00%
— 7/20/202983,097 36,316 24,262 0.6 %(5) (14)(17)
36,316 24,262 0.6 %
BCPE North Star US Holdco 2, Inc.Food Products
Second Lien Delayed Draw Term Loan - $5,185 Commitment
6/7/2021
9.50% (3ML+ 7.25%)
0.75 6/10/2023— — — — %(8)(10)(15)
Second Lien Term Loan6/7/2021
9.50% (3ML+ 7.25%)
0.75 6/11/202994,815 94,110 94,815 2.3 %(3)(8)(10)
94,110 94,815 2.3 %
BCPE Osprey Buyer, Inc.Health Care Technology
First Lien Revolving Line of Credit - $4,239 Commitment
10/18/2021
7.25% (3ML+ 5.75%)
0.75 8/21/2026— — — — %(8)(10)(15)
Second Lien Delayed Draw Term Loan - $22,609 Commitment
10/18/2021
7.25% (3ML+ 5.75%)
0.75 8/23/2028— — — — %(8)(10)(15)
First Lien Term Loan10/18/2021
7.25% (3ML+ 5.75%)
0.75 8/23/202864,675 64,675 64,675 1.6 %(8)(10)
64,675 64,675 1.6 %
Belnick, LLCHousehold DurablesFirst Lien Term Loan1/20/2022
10.25% (3ML+ 8.00%)
1.00 1/20/202791,406 91,406 91,406 2.2 %(3) (10)
91,406 91,406 2.2 %
Broder Bros., Co.Textiles, Apparel & Luxury GoodsFirst Lien Term Loan12/4/2017
7.39% (6ML+ 6.00%)
1.00 12/4/2025166,686 166,686 166,686 4.0 %(3) (10)
166,686 166,686 4.0 %
California Street CLO IX Ltd.Structured FinanceSubordinated Structured Note4/19/2012
Residual Interest, current yield 10.82%
— 7/16/203258,914 42,472 30,078 0.7 %(5) (14)
42,472 30,078 0.7 %
Candle-Lite Company, LLCHousehold ProductsFirst Lien Term Loan A1/23/2018
7.10% (3ML+ 5.50%)
1.25 4/30/20239,987 9,987 9,987 0.2 %(3) (10)
First Lien Term Loan B1/23/2018
11.10% (3ML+ 9.50%)
1.25 4/30/202310,949 10,949 10,949 0.3 %(3) (10)
20,936 20,936 0.5 %
See notes to consolidated financial statements.
23

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF JUNE 30, 2022
(in thousands, except share data)

June 30, 2022
Portfolio CompanyIndustryInvestments(1)(38)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of 
Net Assets
LEVEL 3 PORTFOLIO INVESTMENTS
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
Capstone Logistics Acquisition, Inc.Commercial Services & SuppliesSecond Lien Term Loan11/12/2020
10.42% (1ML+ 8.75%)
1.00 11/13/2028$8,500 $8,246 $8,500 0.2 %(3)(8)(10)
8,246 8,500 0.2 %
Carlyle C17 CLO LimitedStructured FinanceSubordinated Structured Note1/24/2013
Residual Interest, current yield 12.57%
— 4/30/203124,870 14,756 13,159 0.3 %(5) (14)
14,756 13,159 0.3 %
Carlyle Global Market Strategies CLO 2014-4-R, Ltd.Structured FinanceSubordinated Structured Note4/7/2017
Residual Interest, current yield 10.02%
— 7/15/203025,533 18,342 15,294 0.4 %(5) (14)
18,342 15,294 0.4 %
Carlyle Global Market Strategies CLO 2016-3, Ltd.Structured FinanceSubordinated Structured Note8/9/2016
Residual Interest, current yield 11.18%
— 7/20/203432,200 29,777 26,223 0.6 %(5) (14)
29,777 26,223 0.6 %
Cent CLO 21 LimitedStructured FinanceSubordinated Structured Note5/15/2014
Residual Interest, current yield 0.00%
— 7/29/203049,552 33,984 26,391 0.6 %(5) (14)(17)
33,984 26,391 0.6 %
CIFC Funding 2013-III-R, Ltd.Structured FinanceSubordinated Structured Note8/2/2013
Residual Interest, current yield 9.36%
— 4/24/203144,100 26,776 20,566 0.5 %(5) (14)
26,776 20,566 0.5 %
CIFC Funding 2013-IV, Ltd.Structured FinanceSubordinated Structured Note10/22/2013
Residual Interest, current yield 13.43%
— 4/28/203145,500 30,747 28,087 0.7 %(5) (14)
30,747 28,087 0.7 %
CIFC Funding 2014-IV-R, Ltd.Structured FinanceSubordinated Structured Note8/5/2014
Residual Interest, current yield 14.17%
— 10/17/203050,143 32,368 27,115 0.7 %(5) (14)
32,368 27,115 0.7 %
CIFC Funding 2016-I, Ltd.Structured FinanceSubordinated Structured Note12/9/2016
Residual Interest, current yield 14.47%
— 10/21/203134,000 30,444 29,000 0.7 %(5) (14)
30,444 29,000 0.7 %
Collections Acquisition Company, Inc.Diversified Financial ServicesFirst Lien Term Loan12/3/2019
10.65% (3ML+ 8.15%)
2.50 6/3/202436,878 36,878 36,878 0.9 %(3) (10)
36,878 36,878 0.9 %
Columbia Cent CLO 27 LimitedStructured FinanceSubordinated Structured Note12/18/2013
Residual Interest, current yield 15.76%
— 10/25/202848,977 29,834 28,052 0.7 %(5) (14)
29,834 28,052 0.7 %
CP IRIS Holdco I, Inc. (48)Building ProductsSecond Lien Term Loan10/1/2021
8.67% (1ML+ 7.00%)
0.50 10/1/202935,000 35,000 34,697 0.8 %(3)(8)(10)
35,000 34,697 0.8 %
Curo Group Holdings Corp.Consumer FinanceFirst Lien Term Loan7/30/2021
7.50%
— 8/1/202847,000 47,029 30,550 0.7 %(8)(14)(47)
47,029 30,550 0.7 %
DRI Holding Inc.Commercial Services & SuppliesFirst Lien Term Loan12/21/2021
6.92% (1ML+ 5.25%)
0.50 12/21/202824,938 24,840 24,563 0.6 %(3)(8)(10)
Second Lien Term Loan12/21/2021
9.67% (1ML+ 8.00%)
0.50 12/21/2029145,000 145,000 143,550 3.5 %(3) (10)
169,840 168,113 4.1 %
DTI Holdco, Inc.Professional ServicesFirst Lien Term Loan4/26/2022
6.28% (1M SOFR+ 4.75%)
0.75 4/26/202918,500 18,139 18,440 0.4 %(8)(10)
Second Lien Term Loan4/26/2022
9.28% (1M SOFR+ 7.75%)
0.75 4/26/203075,000 75,000 75,000 1.8 %(8)(10)
93,139 93,440 2.2 %
Dunn Paper, Inc.Paper & Forest ProductsSecond Lien Term Loan8/26/2016
10.31% (3ML+ 9.25%)
1.00 8/26/202311,500 11,445 4,952 0.1 %(8)(9)(10)
11,445 4,952 0.1 %
Easy Gardener Products, Inc.Household Durables
Class A Units of EZG Holdings, LLC (200 units)
6/11/2020N/A313 781 — %(16)
Class B Units of EZG Holdings, LLC (12,525 units)
6/11/2020N/A1,688 2,832 0.1 %(16)
2,001 3,613 0.1 %
See notes to consolidated financial statements.
24

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF JUNE 30, 2022
(in thousands, except share data)

June 30, 2022
Portfolio CompanyIndustryInvestments(1)(38)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of 
Net Assets
LEVEL 3 PORTFOLIO INVESTMENTS
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
Engine Group, Inc. (7)MediaFirst Lien Term Loan11/17/2020
6.42% (1ML+ 4.75%)
1.00 11/17/2023$3,551 $3,551 $3,400 0.1 %(8)(10)
Class B Common Units (1,039,554 units)
11/17/2020N/A26,991 — — %(8)(16)
30,542 3,400 0.1 %
Engineered Machinery Holdings, Inc.MachineryIncremental Amendment No. 2 Second Lien Term Loan5/6/2021
8.75% (3ML+ 6.50%)
0.75 5/21/20295,000 4,982 4,897 0.1 %(3)(8)(10)
Incremental Amendment No. 3 Second Lien Term Loan8/6/2021
8.25% (3ML+ 6.00%)
0.75 5/21/20295,000 5,000 4,772 0.1 %(3)(8)(10)
9,982 9,669 0.2 %
Enseo Acquisition, Inc.IT ServicesFirst Lien Term Loan6/2/2021
10.25% (3ML+ 8.00%)
1.00 6/2/202654,450 54,450 54,450 1.3 %(3) (10)
54,450 54,450 1.3 %
Excelitas Technologies Corp. (f/k/a/ EXC Holdings III Corp.)Technology Hardware, Storage & PeripheralsSecond Lien Term Loan11/17/2017
8.50% (3ML+ 7.50%)
1.00 12/1/202512,500 12,447 12,398 0.3 %(3)(8)(10)
12,447 12,398 0.3 %
Eze Castle Integration, Inc.IT Services
First Lien Delayed Draw Term Loan - $1,786 Commitment
7/15/2020
10.00% (3ML+ 8.50%)
1.50 7/15/2025— — — — %(10)(15)
First Lien Term Loan7/15/2020
10.00% (3ML+ 8.50%)
1.50 7/15/202546,740 46,740 46,740 1.1 %(3) (10)
46,740 46,740 1.1 %
First Brands GroupAuto ComponentsFirst Lien Term Loan3/24/2021
6.29% (3M SOFR+ 5.00%)
1.00 3/30/202722,525 22,388 22,210 0.5 %(3)(8)(10)
Second Lien Term Loan3/24/2021
9.74% (3ML+ 8.50%)
1.00 3/30/202837,000 36,503 37,000 0.9 %(3)(8)(10)
58,891 59,210 1.4 %
Galaxy XV CLO, Ltd.Structured FinanceSubordinated Structured Note2/13/2013
Residual Interest, current yield 12.12%
— 10/15/203050,525 33,868 26,924 0.8 %(5) (14)
33,868 26,924 0.8 %
Galaxy XXVII CLO, Ltd.Structured FinanceSubordinated Structured Note9/30/2013
Residual Interest, current yield 11.34%
— 5/16/203124,575 15,963 11,898 0.3 %(5) (14)
15,963 11,898 0.3 %
Galaxy XXVIII CLO, Ltd.Structured FinanceSubordinated Structured Note5/30/2014
Residual Interest, current yield 7.95%
— 7/15/203139,905 27,017 17,407 0.4 %(5) (14)
27,017 17,407 0.4 %
Halcyon Loan Advisors Funding 2012-1 Ltd.Structured FinanceSubordinated Structured Note8/7/2012
Residual Interest, current yield 0.00%
— 8/15/202323,188 3,704 — %(5) (14)(17)
3,704 6  %
Halcyon Loan Advisors Funding 2013-1 Ltd.Structured FinanceSubordinated Structured Note3/8/2013
Residual Interest, current yield 0.00%
— 4/15/202540,400 19,984 22 — %(5) (14)(17)
19,984 22  %
Halcyon Loan Advisors Funding 2014-1 Ltd.Structured FinanceSubordinated Structured Note2/7/2014
Residual Interest, current yield 0.00%
— 4/20/202624,500 11,822 37 — %(5) (14)(17)
11,822 37  %
Halcyon Loan Advisors Funding 2014-2 Ltd.Structured FinanceSubordinated Structured Note4/14/2014
Residual Interest, current yield 0.00%
— 4/28/202541,164 21,321 53 — %(5) (14)(17)
21,321 53  %
Halcyon Loan Advisors Funding 2015-3 Ltd.Structured FinanceSubordinated Structured Note7/23/2015
Residual Interest, current yield 0.00%
— 10/18/202739,598 29,557 234 — %(5) (14)(17)
29,557 234  %
HarbourView CLO VII-R, Ltd.Structured FinanceSubordinated Structured Note6/5/2015
Residual Interest, current yield 0.00%
— 7/18/203119,025 13,024 6,585 0.3 %(5) (14)(17)
13,024 6,585 0.3 %
See notes to consolidated financial statements.
25

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF JUNE 30, 2022
(in thousands, except share data)

June 30, 2022
Portfolio CompanyIndustryInvestments(1)(38)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of 
Net Assets
LEVEL 3 PORTFOLIO INVESTMENTS
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
Help/Systems Holdings, Inc.SoftwareSecond Lien Term Loan11/14/2019
7.56%(3M SOFR+ 6.75%)
0.75 11/19/2027$52,500 $52,295 $52,500 1.3 %(3)(8)(10)
52,295 52,500 1.3 %
Interventional Management Services, LLCHealth Care Providers & Services
First Lien Revolving Line of Credit - $5,000 Commitment
2/22/2021
11.25% (3ML+ 9.00%)
1.00 2/22/20255,000 5,000 4,964 0.1 %(10)(15)
First Lien Term Loan2/22/2021
11.25% (3ML+ 9.00%)
1.00 2/20/202668,385 68,385 67,897 1.6 %(3) (10)
73,385 72,861 1.7 %
Jefferson Mill CLO Ltd.Structured FinanceSubordinated Structured Note6/26/2015
Residual Interest, current yield 5.45%
— 10/20/203123,594 18,172 12,879 0.4 %(5) (14)
18,172 12,879 0.4 %
K&N Parent, Inc.Auto ComponentsSecond Lien Term Loan10/19/2016
11.00% (3ML+ 8.75%)
1.00 10/21/202425,887 25,697 24,337 0.6 %(8)(10)
25,697 24,337 0.6 %
KM2 Solutions LLCIT ServicesFirst Lien Term Loan12/17/2020
10.25% (3ML+ 8.00%)
1.00 12/17/202523,925 23,925 23,925 0.6 %(3) (10)
23,925 23,925 0.6 %
KNS Acquisition Corp.Food & Staples RetailingFirst Lien Term Loan5/26/2022
8.50% (3ML+ 6.25%)
0.75 4/21/20279,937 9,262 9,440 0.2 %(8)(10)
9,262 9,440 0.2 %
LCM XIV Ltd.Structured FinanceSubordinated Structured Note6/25/2013
Residual Interest, current yield 7.15%
— 7/21/203149,934 25,787 19,385 0.5 %(5) (14)
25,787 19,385 0.5 %
LGC US FINCO, LLCMachineryFirst Lien Term Loan1/17/2020
8.17% (1ML+ 6.50%)
1.00 12/20/202530,638 30,053 29,609 0.7 %(3)(8)(10)
30,053 29,609 0.7 %
Magnate Worldwide, LLCAir Freight & Logistics
First Lien Delayed Draw Term Loan - $2,357 Commitment
3/11/2022
7.75% (3ML+ 5.50%)
0.75 12/30/2028— — — — %(8)(10)(15)
First Lien Term Loan3/11/2022
7.75% (3ML+ 5.50%)
0.75 12/30/202830,490 30,490 30,490 0.7 %(3)(8)(10)
Second Lien Term Loan12/30/2021
10.75% (3ML+ 8.50%)
0.75 12/30/202995,000 95,000 95,000 2.3 %(3)(8)(10)
125,490 125,490 3.0 %
Mamba Purchaser, Inc.Health Care Providers & ServicesSecond Lien Term Loan9/29/2021
8.10% (1ML+ 6.50%)
0.50 10/14/202923,000 22,840 23,000 0.6 %(3)(8)(10)
22,840 23,000 0.6 %
Medical Solutions Holdings, Inc. (50)Health Care Providers & ServicesSecond Lien Term Loan11/1/2021
9.88% (6ML+ 7.00%)
0.50 11/1/202953,518 53,504 53,518 1.3 %(3)(8)(10)
53,504 53,518 1.3 %
Medusind Acquisition, Inc. (19)Health Care Providers & ServicesFirst Lien Term Loan9/30/2019
8.81% (3ML+ 6.50%)
1.00 4/8/202423,635 23,488 23,635 0.6 %(3) (10)
23,488 23,635 0.6 %
Mountain View CLO 2013-I Ltd.Structured FinanceSubordinated Structured Note4/17/2013
Residual Interest, current yield 2.05%
— 10/15/203043,650 25,461 15,560 0.4 %(5) (14)
25,461 15,560 0.4 %
Mountain View CLO IX Ltd.Structured FinanceSubordinated Structured Note5/13/2015
Residual Interest, current yield 10.29%
— 7/15/203147,830 25,333 22,510 0.6 %(5) (14)
25,333 22,510 0.6 %
Nexus Buyer LLCCapital MarketsSecond Lien Term Loan11/5/2021
7.44% (1ML+ 6.25%)
0.50 11/5/202942,500 42,500 41,574 1.0 %(8)(10)
42,500 41,574 1.0 %
Octagon Investment Partners XV, Ltd.Structured FinanceSubordinated Structured Note1/24/2013
Residual Interest, current yield 8.63%
— 7/19/203042,064 29,613 24,235 0.7 %(5) (14)
29,613 24,235 0.7 %
Octagon Investment Partners 18-R Ltd.Structured FinanceSubordinated Structured Note8/12/2015
Residual Interest, current yield 11.27%
— 4/16/203146,016 22,064 17,161 0.5 %(5) (14)
22,064 17,161 0.5 %
See notes to consolidated financial statements.
26

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF JUNE 30, 2022
(in thousands, except share data)

June 30, 2022
Portfolio CompanyIndustryInvestments(1)(38)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of 
Net Assets
LEVEL 3 PORTFOLIO INVESTMENTS
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
OneTouchPoint CorpProfessional ServicesFirst Lien Term Loan2/19/2021
10.25% (3ML+ 8.00%)
1.00 2/19/2026$39,488 $39,488 $39,488 1.0 %(3) (10)
39,488 39,488 1.0 %
PeopleConnect Holdings, LLC (11)Interactive Media & ServicesFirst Lien Term Loan1/22/2020
10.50% (3ML+ 8.25%)
1.75 1/22/2025233,204 233,204 233,204 5.7 %(3) (10)
233,204 233,204 5.7 %
PetVet Care Centers, LLC (f/k/a Pearl Intermediate Parent LLC)Health Care Providers & ServicesSecond Lien Term Loan2/1/2018
7.92% (1ML+ 6.25%)
— 2/15/202616,000 15,941 15,950 0.4 %(3)(8)(10)
15,941 15,950 0.4 %
PlayPower, Inc.Leisure ProductsFirst Lien Term Loan5/7/2019
7.75% (3ML+ 5.50%)
— 5/10/20265,841 5,805 5,548 0.1 %(3)(8)(10)
5,805 5,548 0.1 %
Preventics, Inc. (d/b/a Legere Pharmaceuticals) (46)Health Care Providers & ServicesFirst Lien Term Loan11/12/2021
12.75% (3ML+ 10.50%)
1.00 11/12/20269,243 9,243 9,243 0.2 %(3) (10)
Series A Convertible Preferred Stock (320 units)
11/12/2021N/A127 148 — %(16)
Series C Convertible Preferred Stock (3,575 units)
11/12/2021N/A1,419 1,659 — %(16)
10,789 11,050 0.2 %
Raisin Acquisition Co, Inc.PharmaceuticalsFirst Lien Revolving Line of Credit6/17/2022
8.75% (3ML+ 7.00%)
1.00 12/13/2026— — — — %(10)(15)
First Lien Delayed Draw Term Loan6/17/2022
9.26% (3ML+ 7.00%)
1.00 12/13/20261,550 1,509 1,527 — %(10)(15)
First Lien Term Loan6/17/2022
8.75% (3ML+ 7.00%)
1.00 12/13/202624,801 24,048 24,435 0.6 %(3) (10)
25,557 25,962 0.6 %
RC Buyer, Inc.Auto ComponentsSecond Lien Term Loan7/26/2021
8.75% (3ML+ 6.50%)
0.75 7/30/202920,000 19,911 19,989 0.5 %(3)(8)(10)
19,911 19,989 0.5 %
Reception Purchaser, LLCAir Freight & LogisticsFirst Lien Term Loan4/28/2022
8.20% (3M SOFR+ 6.00%)
0.75 3/24/202853,366 52,587 52,924 1.3 %(3)(8)(10)
52,587 52,924 1.3 %
Redstone Holdco 2 LP (22)IT ServicesSecond Lien Term Loan4/16/2021
8.97% (3ML+ 7.75%)
0.75 4/27/202950,000 49,240 48,506 1.2 %(3)(8)(10)
49,240 48,506 1.2 %
Research Now Group, Inc. & Survey Sampling International LLCProfessional ServicesFirst Lien Term Loan12/8/2017
6.50% (6ML+ 5.50%)
1.00 12/20/20249,550 9,355 8,929 0.2 %(3)(8)(10)(47)
Second Lien Term Loan12/8/2017
10.50% (6ML+ 9.50%)
1.00 12/20/202550,000 48,496 49,200 1.2 %(3)(8)(10)
57,851 58,129 1.4 %
Rising Tide Holdings, Inc.Diversified Consumer ServicesSecond Lien Term Loan5/26/2021
9.92% (1ML+ 8.25%)
0.75 6/1/202923,000 22,702 21,583 0.5 %(3)(8)(10)
22,702 21,583 0.5 %
The RK Logistics Group, Inc.Commercial Services & SuppliesFirst Lien Term Loan3/24/2022
12.75% (3ML+ 10.50%)
1.00 3/24/202715,652 15,652 15,808 0.4 %(3) (10)
Class A Common Units (263,000 units)
3/24/2022N/A263 — — %(16)
Class B Common Units (1,237,000 units)
3/24/2022N/A1,237 3,457 0.1 %(16)
17,152 19,265 0.5 %
RME Group Holding CompanyMediaFirst Lien Term Loan A5/4/2017
7.75% (3ML+ 5.50%)
1.00 5/6/202425,988 25,988 25,988 0.6 %(3) (10)
First Lien Term Loan B5/4/2017
13.25% (3ML+ 11.00%)
1.00 5/6/202421,809 21,809 21,809 0.5 %(3) (10)
47,797 47,797 1.1 %
Romark WM-R Ltd.Structured FinanceSubordinated Structured Note4/11/2014
Residual Interest, current yield 6.65%
— 4/21/203127,725 20,448 14,616 0.4 %(5) (14)
20,448 14,616 0.4 %
Rosa MexicanoHotels, Restaurants & Leisure
First Lien Revolving Line of Credit - $500 Commitment
3/29/2018
9.75% (3ML+ 7.50%)
1.25 5/29/2023382 382 371 — %(10)(15)
First Lien Term Loan3/29/2018
9.75% (3ML+ 7.50%)
1.25 5/29/202322,977 22,977 22,280 0.5 %(10)
23,359 22,651 0.5 %
See notes to consolidated financial statements.
27

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF JUNE 30, 2022
(in thousands, except share data)

June 30, 2022
Portfolio CompanyIndustryInvestments(1)(38)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of 
Net Assets
LEVEL 3 PORTFOLIO INVESTMENTS
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
SEOTownCenter, Inc.IT ServicesFirst Lien Term Loan1/31/2022
10.25% (3ML+ 8.00%)
1.00 1/31/2027$51,740 $51,740 $51,740 1.3 %(3) (10)
51,740 51,740 1.3 %
Shearer’s Foods, LLCFood ProductsSecond Lien Term Loan9/15/2020
9.42% (1ML+ 7.75%)
1.00 9/23/20285,000 4,922 4,953 0.1 %(3)(8)(10)
4,922 4,953 0.1 %
ShiftKey, LLCHealth Care TechnologyFirst Lien Term Loan6/21/2022
7.96% (3M SOFR+ 5.75%)
1.00 6/21/202725,000 25,000 25,000 0.6 %(10)
25,000 25,000 0.6 %
Shutterfly, LLCInternet & Direct Marketing Retail2021 Refinancing First Lien Term Loan B7/1/2021
7.25% (3ML+ 5.00%)
0.75 9/25/202620,295 20,212 17,454 0.4 %(3)(8)(10)(47)
20,212 17,454 0.4 %
Sorenson Communications, LLCDiversified Telecommunication ServicesFirst Lien Term Loan3/12/2021
7.75% (3ML+ 5.50%)
0.75 3/17/202635,194 34,746 34,965 0.8 %(3)(8)(10)
34,746 34,965 0.8 %
Southern Veterinary PartnersHealth Care Providers & ServicesSecond Lien Term Loan10/2/2020
9.42% (1ML+ 7.75%)
1.00 10/5/20288,000 7,937 7,911 0.2 %(3)(8)(10)
7,937 7,911 0.2 %
Spectrum Holdings III CorpHealth Care Equipment & SuppliesSecond Lien Term Loan1/26/2018
8.67% (1ML+ 7.00%)
1.00 1/31/20267,500 7,483 6,966 0.2 %(3)(8)(10)
7,483 6,966 0.2 %
Staples, Inc.DistributorsFirst Lien Term Loan11/18/2019
6.29% (3ML+ 5.00%)
— 4/16/20268,774 8,720 7,921 0.2 %(3)(8)(10)(47)
8,720 7,921 0.2 %
Strategic MaterialsHousehold DurablesSecond Lien Term Loan10/27/2017
9.04% (3ML+ 7.75%)
1.00 11/1/20257,000 6,971 5,737 0.1 %(8)(10)
6,971 5,737 0.1 %
Stryker Energy, LLCEnergy Equipment & ServicesOverriding Royalty Interest12/4/2006N/A— — — %(13)
   %
Sudbury Mill CLO Ltd.Structured FinanceSubordinated Structured Note11/14/2013
Residual Interest, current yield 0.00%
— 1/19/202628,200 — — — %(5) (14)(17)
   %
Symphony CLO XIV, Ltd.Structured FinanceSubordinated Structured Note5/6/2014
Residual Interest, current yield 0.00%
— 7/14/202649,250 24,723 14,392 0.3 %(5) (14)(17)
24,723 14,392 0.3 %
Symphony CLO XV, Ltd.Structured FinanceSubordinated Structured Note10/17/2014
Residual Interest, current yield 7.65%
— 1/19/203263,831 42,037 28,429 0.7 %(5) (14)
42,037 28,429 0.7 %
Town & Country Holdings, Inc.DistributorsFirst Lien Term Loan1/26/2018
10.75% (3ML+ 8.50%)
1.50 1/26/2023166,080 166,080 166,080 4.0 %(3) (10)(39)
166,080 166,080 4.0 %
TPS, LLCMachineryFirst Lien Term Loan11/30/2020
11.25% (3ML+ 9.00%) plus 1.50%PIK
1.00 11/30/202528,257 28,257 28,257 0.7 %(3) (10)(39)
28,257 28,257 0.7 %
United Sporting Companies, Inc. (18)DistributorsSecond Lien Term Loan9/28/2012
13.25% (1ML+ 11.00%) plus 2.00% PIK
2.25 11/16/2019144,692 103,730 6,107 0.1 %(9)(10)
103,730 6,107 0.1 %
Upstream Newco, Inc.Health Care Providers & ServicesSecond Lien Term Loan11/20/2019
10.17% (1ML+ 8.50%)
— 11/20/202722,000 21,861 22,000 0.5 %(3)(8)(10)
21,861 22,000 0.5 %
See notes to consolidated financial statements.
28

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS AS OF JUNE 30, 2022
(in thousands, except share data)

June 30, 2022
Portfolio CompanyIndustryInvestments(1)(38)Acquisition Date(44)Coupon/YieldFloorLegal MaturityPrincipal ValueAmortized CostFair
Value(2)
% of 
Net Assets
LEVEL 3 PORTFOLIO INVESTMENTS
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
USG Intermediate, LLCLeisure Products
First Lien Revolving Line of Credit - $3,000 Commitment
4/15/2015
10.92% (1ML+ 9.25%)
1.00 2/9/2027$3,000 $3,000 $3,000 0.1 %(10)(15)
First Lien Term Loan B4/15/2015
13.42% (1ML+ 11.75%)
1.00 2/9/202730,209 30,209 30,209 0.7 %(3) (10)
Equity4/15/2015N/A— — %(16)
33,210 33,209 0.8 %
VC GB Holdings I CorpHousehold DurablesSecond Lien Term Loan6/30/2021
9.63% (6ML+ 6.75%)
0.50 7/23/202923,000 22,797 21,896 0.5 %(3)(8)(10)
22,797 21,896 0.5 %
Venio LLC (48)Professional ServicesFirst Lien Term Loan2/19/2014
1.00% PIK
— 2/19/202014,554 14,554 12,199 0.3 %(39)
14,554 12,199 0.3 %
ViaPath Technologies.Diversified Telecommunication ServicesFirst Lien Term Loan8/7/2019
5.92% (1ML+ 4.25%)
— 11/29/20259,698 9,474 9,125 0.2 %(3)(8)(10)
Second Lien Term Loan11/20/2018
11.63% (1M SOFR+ 10.00%)
— 11/29/2026122,670 121,746 122,266 3.0 %(3)(8)(10)
131,220 131,391 3.2 %
Victor Technology, LLCCommercial Services & SuppliesFirst Lien Term Loan12/3/2021
9.75%(3ML+ 7.50%)
1.00 12/3/202829,850 29,850 29,850 0.7 %(3) (10)
29,850 29,850 0.7 %
Vision Solutions, Inc. (29)IT ServicesSecond Lien Term Loan4/23/2021
8.43% (1ML+ 7.25%)
0.75 4/23/202980,000 79,216 78,320 1.9 %(3)(8)(10)
79,216 78,320 1.9 %
Voya CLO 2012-4, Ltd.Structured FinanceSubordinated Structured Note11/5/2012
Residual Interest, current yield 3.74%
— 10/15/203040,613 28,996 22,424 0.5 %(5) (14)
28,996 22,424 0.5 %
Voya CLO 2014-1, Ltd.Structured FinanceSubordinated Structured Note2/5/2014
Residual Interest, current yield 0.00%
— 4/18/203140,773 26,014 16,336 0.4 %(5) (14)(17)
26,014 16,336 0.4 %
Voya CLO 2016-3, Ltd.Structured FinanceSubordinated Structured Note9/30/2016
Residual Interest, current yield 7.08%
— 10/20/203128,100 23,495 18,811 0.5 %(5) (14)
23,495 18,811 0.5 %
Voya CLO 2017-3, Ltd.Structured FinanceSubordinated Structured Note6/13/2017
Residual Interest, current yield 12.14%
— 4/20/203444,885 49,276 41,072 1.1 %(5) (14)
49,276 41,072 1.1 %
VT Topco, Inc.Commercial Services & SuppliesSecond Lien Term Loan8/14/2018
8.42% (1ML+ 6.75%)
— 8/17/202612,000 11,926 11,847 0.3 %(3)(8)(10)
2021 Second Lien Term Loan7/30/2021
8.67% (1ML+ 7.00%)
0.75 8/17/202620,250 20,110 19,992 0.5 %(3)(8)(10)
32,036 31,839 0.8 %
Wellpath Holdings, Inc. (f/k/a CCS-CMGC Holdings, Inc.)Health Care Providers & ServicesFirst Lien Term Loan5/13/2019
7.07% (3ML+ 5.50%)
— 10/1/202514,389 14,229 14,193 0.3 %(3)(8)(10)
Second Lien Term Loan9/25/2018
10.57% (3ML+ 9.00%)
— 10/1/202637,000 36,621 36,464 0.9 %(3)(8)(10)
50,850 50,657 1.2 %
Total Non-Control/Non-Affiliate Investments (Level 3)$4,221,824 $3,770,929 91.6 %
Total Portfolio Investments (Level 3)$7,196,831 $7,602,510 184.6 %
See notes to consolidated financial statements.
29

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

Endnote Explanations as of March 31, 2023 (Unaudited) and June 30, 2022


(1)The terms “Prospect,” “the Company,” “we,” “us” and “our” mean Prospect Capital Corporation and its subsidiaries unless the context specifically requires otherwise. The securities in which Prospect has invested were acquired in transactions that were exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”). These securities may be resold only in transactions that are exempt from registration under the Securities Act.
(2)Fair value is determined by or under the direction of our Board of Directors. Unless otherwise indicated by endnote 47 below, all of our investments are valued using significant unobservable inputs. In accordance with ASC 820, such investments are classified as Level 3 within the fair value hierarchy. See Notes 2 and 3 within the accompanying notes to consolidated financial statements for further discussion.
(3)Security, or a portion thereof, is held by Prospect Capital Funding LLC (“PCF”), our wholly owned subsidiary and a bankruptcy remote special purpose entity, and is pledged as collateral for the Revolving Credit Facility and such security is not available as collateral to our general creditors (see Note 4). The fair value of the investments held by PCF at March 31, 2023 and June 30, 2022 were $2,559,175 and $2,638,042, respectively, representing 33.7% and 34.7% of our total investments, respectively.
(4)Medical Solutions Holdings, Inc. and Medical Solutions, LLC are joint borrowers on the Second Lien Term Loan.
(5)This investment is in the equity class of the collateralized loan obligation (“CLO”) security, which is referred to as “Subordinated Structured Note,” or “SSN”. The SSN investments are entitled to recurring distributions which are generally equal to the excess cash flow generated from the underlying investments after payment of the contractual payments to debt holders and fund expenses. The current estimated yield, calculated using amortized cost, is based on the current projections of this excess cash flow taking into account assumptions which have been made regarding expected prepayments, losses and future reinvestment rates. These assumptions are periodically reviewed and adjusted. Ultimately, the actual yield may be higher or lower than the estimated yield if actual results differ from those used for the assumptions.
(6)On December 28, 2022, we provided $15,000 of additional Second Lien Term Loans and $30,000 of Second Lien Delayed Draw Term Loan commitments to PGX Holdings, Inc. (“PGX”). Also as of December 28, 2022, we contributed our existing equity interest in PGX to PGX TopCo LLC, an entity in which we own 100% of the Class B non-voting shares. Given the only equity we hold in the PGX structure is non-voting, we classify our investment in the PGX structure as non-control/non-affiliate as of December 31, 2022.
(7)Engine Group, Inc., EMX Digital, Inc. (f/k/a Clearstream.TV, Inc.), and Engine International, Inc., are joint borrowers on the first lien term loan.
(8)Syndicated investment which was originated by a financial institution and broadly distributed.
(9)Investment on non-accrual status as of the reporting date (See Note 2).
(10)Certain variable rate securities in our portfolio bear interest at a rate determined by a publicly disclosed base rate plus a basis point spread. The 1-Month LIBOR, or “1ML”, was 4.86% as of March 31, 2023 and 1.79% as of June 30, 2022. The 3-Month LIBOR, or “3ML”, was 5.19% as of March 31, 2023 and 2.29% as of June 30, 2022. The 6-Month LIBOR, or “6ML”, was 5.31% as of March 31, 2023 and 2.94% as of June 30, 2022. The 1-Month Secured Overnight Financing Rate or “1M SOFR”, was 4.80% as of March 31, 2023 and 1.69% as of June 30, 2022. The 3-Month Secured Overnight Financing Rate or “3M SOFR”, was 4.91% as of March 31, 2023 and 2.12% as of June 30, 2022. The 6-Month Secured Overnight Financing Rate or “6M SOFR” was 4.90% as of March 31, 2023. The PRIME Rate or “PRIME” was 8.00% as of March 31, 2023
(11)PeopleConnect Holdings, Inc. and Pubrec Holdings, Inc. are joint borrowers.
(12)The consolidated revenue interest is equal to the lesser of (i) 2.0% of consolidated revenue for the twelve-month period ending on the last day of the prior fiscal quarter (or portion thereof) and (ii) 25% of the amount of interest accrued on the Notes at the cash interest rate for such fiscal quarter (or portion thereof).
(13)The overriding royalty interests held receive payments at the stated rates based upon operations of the borrower.
(14)Investment has been designated as an investment not “qualifying” under Section 55(a) of the Investment Company Act of 1940 (the “1940 Act”). Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time such acquisition is made, qualifying assets represent at least 70% of our total assets. As of March 31, 2023 and June 30, 2022, our qualifying
See notes to consolidated financial statements.
30


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

Endnote Explanations as of March 31, 2023 (Unaudited) and June 30, 2022 (Continued)
assets, as a percentage of total assets, stood at 81.08% and 80.64%, respectively. We monitor the status of these assets on an ongoing basis.
(15)Undrawn committed revolvers and delayed draw term loans to our portfolio companies incur commitment and unused fees ranging from 0.00% to 7.25%. As of March 31, 2023 and June 30, 2022, we had $54,133 and $43,934, respectively, of undrawn revolver and delayed draw term loan commitments to our portfolio companies.
(16)Represents non-income producing security that has not paid a dividend in the year preceding the reporting date.
(17)The effective yield has been estimated to be 0% as expected future cash flows are anticipated to not be sufficient to repay the investment at cost. If the expected investment proceeds increase, there is a potential for future investment income from the investment. Distributions, once received, will be recognized as return of capital, and when called, any remaining unamortized investment costs will be written off if the actual distributions are less than the amortized investment cost. To the extent that the cost basis of the SSN is fully recovered, any future distributions will be recorded as realized gains.
(18)Ellett Brothers, LLC, Evans Sports, Inc., Jerry’s Sports, Inc., Simmons Gun Specialties, Inc., Bonitz Brothers, Inc., and Outdoor Sports Headquarters, Inc. are joint borrowers on the second lien term loan. United Sporting Companies, Inc. (“USC”) is a parent guarantor of this debt investment, and is 100% owned by SportCo Holdings, Inc. (“SportCo”). In June 2019, USC filed for Chapter 11 bankruptcy and began liquidating its remaining assets.
(19)Medusind Acquisition, Inc., Medusind Intermediate, Inc., Medusind Solutions Inc. and Medusind Inc. are joint borrowers.
(20)CP Holdings of Delaware LLC (“CP Holdings”), a consolidated entity in which we own 100% of the membership interests, owns 99.8% of CP Energy Services Inc. (“CP Energy”) as of March 31, 2023 and June 30, 2022. CP Energy owns directly or indirectly 100% of each of CP Well Testing, LLC; Wright Foster Disposals, LLC; Foster Testing Co., Inc.; ProHaul Transports, LLC; and Wright Trucking, Inc. We report CP Energy as a separate controlled company. In June 2019, CP Energy purchased a controlling interest in the common equity of Spartan Energy Holdings, Inc. (“Spartan Holdings”), which owns 100% of Spartan Energy Services, LLC (“Spartan”), a portfolio company of Prospect with $31,603 in first lien term loans (the “Spartan Term Loans”) due to us as of March 31, 2023. As a result of CP Energy’s purchase, and given Prospect’s controlling interest in CP Energy, our Spartan Term Loans are presented as control investments under CP Energy. Spartan remains the direct borrower and guarantor to Prospect for the Spartan Term Loans. In September 2020, we made a new $26,193 Series A preferred stock investment in Spartan Energy Holdings, Inc., which equates to 100% of the Series A non-voting non-convertible preferred stock outstanding. In September 2020, Spartan Energy Services, LLC fully repaid the $26,193 Senior Secured Term Loan B receivable to us at par. We recorded a realized gain of $2,832 in our Consolidated Statement of Operations for the quarter ended September 30, 2020 as a result of this transaction.
(21)Credit Central Holdings of Delaware, LLC (“Credit Central Delaware”), a consolidated entity in which we own 100% of the membership interests, owns 99.8% and 99.0% of Credit Central Loan Company, LLC (f/k/a Credit Central Holdings, LLC (“Credit Central”)) as of March 31, 2023 and June 30, 2022, respectively. Credit Central owns 100% of each of Credit Central, LLC; Credit Central South, LLC; Credit Central of Texas, LLC; and Credit Central of Tennessee, LLC, the operating companies. We report Credit Central as a separate controlled company. Effective December 10, 2021, Credit Central’s term loan lenders were granted a first priority security interest on certain assets of Credit Central and our investment became classified as a First Lien Term Loan.
(22)Redstone Holdco 2 LP is the parent borrower on the second lien term loan. Redstone Buyer, LLC, Redstone Intermediate (Archer) HoldCo LLC, Redstone Intermediate (FRI) HoldCo LLC, Redstone Intermediate (NetWitness) HoldCo, LLC, and Redstone Intermediate (SecurID) HoldCo, LLC are joint borrowers on the Second Lien Term Loan.
(23)First Tower Holdings of Delaware LLC (“First Tower Delaware”), a consolidated entity in which we own 100% of the membership interests, owns 80.10% of the voting interest and 78.06% of the fully-diluted economic interest of First Tower Finance Company LLC (“First Tower Finance”). First Tower Finance owns 100% of First Tower, LLC, the operating company. We report First Tower Finance as a separate controlled company. Effective March 17, 2021, the First Tower, LLC lenders were granted a first priority security interest in First Tower Finance’s assets and our investment became classified as a First Lien Term Loan. Effective June 30, 2021, we increased our investment in our first lien term loan in the aggregate principal amount of $50,000 and the proceeds were returned to us as a distribution on our equity investment in First Tower, LLC.
See notes to consolidated financial statements.
31

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

Endnote Explanations as of March 31, 2023 (Unaudited) and June 30, 2022 (Continued)
(24)Energy Solutions Holdings Inc., a consolidated entity in which we own 100% of the equity, owns 100% of Freedom Marine Solutions, LLC (“Freedom Marine”), which owns Vessel Company, LLC, Vessel Company II, LLC and Vessel Company III, LLC. We report Freedom Marine as a separate controlled company.
(25)MITY Holdings of Delaware Inc. (“MITY Delaware”), a consolidated entity in which we own 100% of the common stock, owns 100% of the equity of MITY, Inc. (f/k/a MITY Enterprises, Inc.) (“MITY”). MITY owns 100% of each of MITY-Lite, Inc. (“Mity-Lite”); Broda Enterprises USA, Inc.; and Broda Enterprises ULC (“Broda Canada”). We report MITY as a separate controlled company. Our subordinated unsecured note issued and outstanding to Broda Canada is denominated in Canadian Dollars (“CAD”). As of March 31, 2023 and June 30, 2022, the principal balance of this note was CAD 7,371. In accordance with ASC 830, Foreign Currency Matters (“ASC 830”), this note was remeasured into our functional currency, US Dollars (USD), and is presented on our Consolidated Schedule of Investments in USD. We formed a separate legal entity domiciled in the United States, MITY FSC, Inc., (“MITY FSC”) in which Prospect owns 100% of the equity. MITY FSC does not have material operations. This entity earns commission payments from MITY-Lite based on its sales to foreign customers, and distributes it to its shareholder.
(26)NPH Property Holdings, LLC (“NPH”), a consolidated entity in which we own 100% of the membership interests, owns 100% of the common equity of National Property REIT Corp. (“NPRC”) (f/k/a National Property Holdings Corp.), a property REIT which holds investments in several real estate properties. Additionally, NPRC invests in online consumer loans and rated secured structured notes through American Consumer Lending Limited (“ACLL”) and National General Lending Limited (“NGL”), respectively, its wholly owned subsidiaries. We report NPRC as a separate controlled company. See Note 3 for further discussion of the investments held by NPRC.
(27)Nationwide Acceptance Holdings LLC (“Nationwide Holdings”), a consolidated entity in which we own 100% of the membership interests, owns 94.48% of Nationwide Loan Company LLC, the operating company, as of March 31, 2023 and June 30, 2022. We report Nationwide Loan Company LLC as a separate controlled company. Prospect has a first priority security interest in the assets of Nationwide.
(28)NMMB Holdings, Inc. (“NMMB Holdings”), a consolidated entity in which we own 100% of the equity, owns 90.42% of the fully diluted equity of NMMB, Inc. (“NMMB”) as of March 31, 2023 and June 30, 2022. NMMB owns 100% of Refuel Agency, Inc., which owns 100% of Armed Forces Communications, Inc. We report NMMB as a separate controlled company.
(29)Vision Solutions, Inc. and Precisely Software Incorporate are joint borrowers on the Second Lien Term Loan.
(30)Prospect owns 99.96% of the equity of USES Corp. as of March 31, 2023 and June 30, 2022.
(31)Valley Electric Holdings I, Inc., a consolidated entity in which we own 100% of the common stock, owns 100% of Valley Electric Holdings II, Inc. (“Valley Holdings II”), another consolidated entity. Valley Holdings II owns 94.99% of Valley Electric Company, Inc. (“Valley Electric”). Valley Electric owns 100% of the equity of VE Company, Inc., which owns 100% of the equity of Valley Electric Co. of Mt. Vernon, Inc. We report Valley Electric as a separate controlled company.
(32)As of March 31, 2023 and June 30, 2022, Prospect owns 8.57% of the equity in Encinitas Watches Holdco, LLC, the parent company of Nixon, Inc.
(33)Prospect owns 9.19% of the equity in Targus Cayman HoldCo Limited (“Targus”), the parent company of Targus International LLC (“Targus International”), as of June 30, 2022.
(34)UTP Holdings Group, Inc. (“UTP Holdings”) owns all of the voting stock of Universal Turbine Parts, LLC (“UTP”) and has appointed a Board of Directors to UTP Holdings, consisting of three employees of the Investment Advisor. UTP Holdings owns UTP. UTP Holdings is a wholly-owned holding company controlled by Prospect and therefore Prospect’s investment in UTP is classified as a control investment.
(35)As of March 31, 2023 and June 30, 2022, the residual profit interest includes both (i) 8.33% of New TLA, TLD and TLE residual profit and (ii) 100% of TLC residual profits, with both calculated quarterly in arrears.
(36)Prospect owns 100% of the preferred equity of Pacific World Corporation (“Pacific World”), which represents a 99.97% ownership interest of Pacific World as of March 31, 2023 and as of June 30, 2022. As a result, Prospect’s investment in Pacific World is classified as a control investment.
(37)The following shows the composition of our investment portfolio at cost by control designation, investment type and by industry as of March 31, 2023:
See notes to consolidated financial statements.
32

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

Endnote Explanations as of March 31, 2023 (Unaudited) and June 30, 2022 (Continued)
See notes to consolidated financial statements.
33

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

Endnote Explanations as of March 31, 2023 (Unaudited) and June 30, 2022 (Continued)
Industry1st Lien
Term Loan
2nd Lien
Term Loan
Subordinated Structured NotesUnsecured Debt
Equity (B)
Cost Total
Control Investments
Aerospace & Defense$56,600 $— $— $— $55,581 $112,181 
Commercial Services & Supplies125,567 — — 7,200 27,349 160,116 
Construction & Engineering58,745 — — — 12,053 70,798 
Consumer Finance480,419 — — — 82,843 563,262 
Diversified Consumer Services— — — — 2,378 2,378 
Energy Equipment & Services99,819 — — — 221,800 321,619 
Equity Real Estate Investment Trusts (REITs)670,656 — — — 15,430 686,086 
Health Care Providers & Services288,739 — — — 45,118 333,857 
Machinery33,622 — — — 6,866 40,488 
Media29,723 — — — — 29,723 
Online Lending21,580 — — — — 21,580 
Personal Products87,417 — — — 189,294 276,711 
Trading Companies & Distributors32,692 — — — 32,500 65,192 
Structured Finance200,600 — — — — 200,600 
Total Control Investments$2,186,179 $— $— $7,200 $691,212 $2,884,591 
Affiliate Investments
Commercial Services & Supplies$— $— $— $— $8,996 $8,996 
 Total Affiliate Investments $— $— $— $— $8,996 $8,996 
Non-Control/Non-Affiliate Investments
Air Freight & Logistics$92,097 $95,000 $— $— $— $187,097 
Automobile Components22,267 86,554 — — 25,697 134,518 
Building Products— 35,000 — — — 35,000 
Capital Markets— 42,500 — — — 42,500 
Commercial Services & Supplies124,275 185,351 — — 1,500 311,126 
Communications Equipment9,237 50,597 — — — 59,834 
Consumer Finance47,026 — — — — 47,026 
Distributors193,239 89,178 — — — 282,417 
Diversified Consumer Services82,488 191,616 — — — 274,104 
Diversified Financial Services36,597 — — 5,799 — 42,396 
Diversified Telecommunication Services41,167 121,903 — — — 163,070 
Electrical Equipment64,167 — — — — 64,167 
Food & Staples Retailing27,238 — — — — 27,238 
Food Products— 135,249 — — — 135,249 
Health Care Equipment & Supplies— 7,487 — — — 7,487 
Health Care Providers & Services156,859 159,749 — — 1,546 318,154 
Health Care Technology129,160 — — — — 129,160 
Hotels, Restaurants & Leisure22,396 — — — — 22,396 
Household Durables89,672 29,795 — — 2,001 121,468 
Interactive Media & Services211,754 — — — — 211,754 
Internet & Direct Marketing Retail20,022 — — — — 20,022 
IT Services211,540 148,074 — — — 359,614 
Leisure Products59,745 — — — 59,746 
Machinery53,089 9,986 — — — 63,075 
Media47,979 — — — 26,991 74,970 
Pharmaceuticals99,995 — — — — 99,995 
Professional Services66,325 123,826 — — — 190,151 
Software— 52,336 — — — 52,336 
Textiles, Apparel & Luxury Goods159,562 8,943 — — — 168,505 
Structured Finance (A)— — 967,032 — — 967,032 
 Total Non-Control/Non-Affiliate $2,067,896 $1,573,144 $967,032 $5,799 $57,736 $4,671,607 
Total Portfolio Investment Cost$4,254,075 $1,573,144 $967,032 $12,999 $757,944 $7,565,194 
See notes to consolidated financial statements.
34

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

Endnote Explanations as of March 31, 2023 (Unaudited) and June 30, 2022 (Continued)
The following table shows the composition of our investment portfolio at fair value by control designation, investment type and by industry as of March 31, 2023:
Industry1st Lien
Term Loan
2nd Lien
Term Loan
Subordinated Structured NotesUnsecured Debt
Equity (B)
Fair Value TotalFair Value % of Net Assets Applicable to Common Stock
Control Investments
 Aerospace & Defense $56,600 $— $— $— $4,272 $60,872 1.6 %
 Commercial Services & Supplies 67,085 — — 7,200 4,857 79,142 2.1 %
 Construction & Engineering 58,745 — — — 82,819 141,564 3.7 %
 Consumer Finance 481,755 — — — 250,425 732,180 19.3 %
 Diversified Consumer Services — — — — 3,242 3,242 0.1 %
 Energy Equipment & Services 99,819 — — — 29,781 129,600 3.4 %
Equity Real Estate Investment Trusts (REITs)670,656 — — — 701,837 1,372,493 36.1 %
 Health Care Providers & Services 288,739 — — — 163,013 451,752 11.9 %
 Machinery 33,622 — — — 33,027 66,649 1.8 %
 Media 29,723 — — — 74,664 104,387 2.7 %
 Online Lending 21,580 — — — — 21,580 0.6 %
 Personal Products 73,492 — — — — 73,492 1.9 %
 Trading Companies & Distributors 32,692 — — — 9,849 42,541 1.1 %
Structured Finance (A)200,600 — — — — 200,600 5.3 %
Total Control Investments$2,115,108 $— $— $7,200 $1,357,786 $3,480,094 91.6 %
Fair Value % of Net Assets55.7 %— %— %0.2 %35.7 %91.6 %
Affiliate Investments
Commercial Services & Supplies$— $— $— $— $7,944 $7,944 0.2 %
Total Affiliate Investments$— $— $— $— $7,944 $7,944 0.2 %
Fair Value % of Net Assets— %— %— %— %0.2 %0.2 %
Non-Control/Non-Affiliate Investments
Air Freight & Logistics$92,786 $95,000 $— $— $— $187,786 4.9 %
Automobile Components21,930 85,589 — — 1,188 108,707 2.9 %
Building Products— 33,849 — — — 33,849 0.9 %
Capital Markets— 38,265 — — — 38,265 1.0 %
Commercial Services & Supplies124,104 181,670 — — 11,685 317,459 8.4 %
Communications Equipment6,905 37,250 — — — 44,155 1.2 %
Consumer Finance19,400 — — — — 19,400 0.5 %
Distributors192,670 7,017 — — 38,370 238,057 6.3 %
Diversified Consumer Services82,451 114,017 — — — 196,468 5.1 %
Diversified Financial Services36,597 — — 5,509 — 42,106 1.1 %
Diversified Telecommunication Services40,907 116,672 — — — 157,579 4.1 %
Electrical Equipment64,167 — — — — 64,167 1.7 %
Food & Staples Retailing27,475 — — — — 27,475 0.7 %
Food Products— 125,940 — — — 125,940 3.3 %
Health Care Equipment & Supplies— 6,810 — — — 6,810 0.1 %
Health Care Providers & Services154,409 155,204 — — 1,592 311,205 8.2 %
Health Care Technology128,272 — — — — 128,272 3.4 %
Hotels, Restaurants & Leisure21,229 — — — — 21,229 0.6 %
Household Durables89,672 27,029 — — — 116,701 3.1 %
Interactive Media & Services211,754 — — — — 211,754 5.6 %
Internet & Direct Marketing Retail13,880 — — — — 13,880 0.4 %
IT Services206,232 128,578 — — — 334,810 8.8 %
Leisure Products59,089 — — — — 59,089 1.6 %
Machinery51,995 9,939 — — — 61,934 1.6 %
Media46,545 — — — — 46,545 1.2 %
Pharmaceuticals100,005 — — — — 100,005 2.6 %
See notes to consolidated financial statements.
35

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

Endnote Explanations as of March 31, 2023 (Unaudited) and June 30, 2022 (Continued)
Industry1st Lien
Term Loan
2nd Lien
Term Loan
Subordinated Structured NotesUnsecured Debt
Equity (B)
Fair Value TotalFair Value % of Net Assets Applicable to Common Stock
Professional Services64,325 111,836 — — — 176,161 4.6 %
Software— 48,691 — — — 48,691 1.3 %
Textiles, Apparel & Luxury Goods158,967 8,850 — — — 167,817 4.4 %
Structured Finance (A)— — 698,423 — — 698,423 18.4 %
Total Non-Control/Non-Affiliate$2,015,766 $1,332,206 $698,423 $5,509 $52,835 $4,104,739 108.0 %
Fair Value % of Net Assets53.0 %35.1 %18.4 %0.1 %1.4 %108.0 %
Total Portfolio$4,130,874 $1,332,206 $698,423 $12,709 $1,418,565 $7,592,777 199.8 %
Fair Value % of Net Assets108.7 %35.1 %18.4 %0.3 %37.3 %199.8 %
(A) Our SSN investments do not have industry concentrations and as such have been separated in the tables above.
(B) Equity, unless specifically stated otherwise, includes our investments in preferred stock, common stock, membership interests, net profits interests, net operating income interests, net revenue interests, overriding royalty interests, escrows receivable, and warrants.
(38)The following table shows the composition of our investment portfolio at cost by control designation, investment type and by industry as of June 30, 2022:
Industry1st Lien
Term Loan
2nd Lien
Term Loan
Subordinated Structured NotesUnsecured Debt
Equity (B)
Cost Total
Control Investments
Aerospace & Defense$53,209 $— $— $— $55,581 $108,790 
Commercial Services & Supplies119,139 — — 7,200 27,349 153,688 
Construction & Engineering56,753 — — — 11,506 68,259 
Consumer Finance450,387 — — — 71,323 521,710 
Diversified Consumer Services— — — — 2,378 2,378 
Energy Equipment & Services79,346 — — — 221,150 300,496 
Equity Real Estate Investment Trusts (REITs)631,486 — — — 15,830 647,316 
Health Care Providers & Services273,448 — — — 45,118 318,566 
Machinery33,622 — — — 6,866 40,488 
Media29,723 — — — — 29,723 
Online Lending29,080 — — — — 29,080 
Personal Products71,101 — — — 189,295 260,396 
Trading Companies & Distributors32,716 — — — 32,500 65,216 
Structured Finance (A)186,800 — — — — 186,800 
    Total Control Investments$2,046,810 $— $— $7,200 $678,896 $2,732,906 
Affiliate Investments
Commercial Services & Supplies$3,680 $— $— $— $10,303 $13,983 
Diversified Consumer Services71,382 153,931 — — — 225,313 
Textiles, Apparel & Luxury Goods— — — — 2,805 2,805 
Total Affiliate Investments$75,062 $153,931 $— $— $13,108 $242,101 
Non-Control/Non-Affiliate Investments
Air Freight & Logistics$83,077 $95,000 $— $— $— $178,077 
Auto Components22,388 82,111 — — — 104,499 
Building Products— 35,000 — — — 35,000 
Capital Markets— 42,500 — — — 42,500 
Commercial Services & Supplies70,342 185,282 — — 1,500 257,124 
Communications Equipment9,202 50,578 — — — 59,780 
Consumer Finance47,029 — — — — 47,029 
Distributors174,800 103,730 — — — 278,530 
Diversified Consumer Services— 22,702 — — — 22,702 
Diversified Financial Services36,878 — — — — 36,878 
Diversified Telecommunication Services44,220 121,746 — — — 165,966 
Food & Staples Retailing9,262 — — — — 9,262 
Food Products— 130,998 — — — 130,998 
Health Care Equipment & Supplies— 7,483 — — — 7,483 
Health Care Providers & Services182,160 158,704 — — 1,546 342,410 
Health Care Technology89,675 — — — — 89,675 
See notes to consolidated financial statements.
36

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

Endnote Explanations as of March 31, 2023 (Unaudited) and June 30, 2022 (Continued)
Industry1st Lien
Term Loan
2nd Lien
Term Loan
Subordinated Structured NotesUnsecured Debt
Equity (B)
Cost Total
Hotels, Restaurants & Leisure23,359 — — — — 23,359 
Household Durables91,406 29,768 — — 2,001 123,175 
Household Products20,936 — — — — 20,936 
Insurance— 21,966 — — — 21,966 
Interactive Media & Services233,204 — — — — 233,204 
Internet & Direct Marketing Retail20,212 — — — — 20,212 
IT Services176,855 128,456 — — — 305,311 
Leisure Products39,014 — — — 39,015 
Machinery58,310 9,982 — — — 68,292 
Media51,348 — — — 26,991 78,339 
Paper & Forest Products— 11,445 — — — 11,445 
Pharmaceuticals25,557 — — — — 25,557 
Professional Services81,536 123,496 — — — 205,032 
Software— 52,295 — — — 52,295 
Technology Hardware, Storage & Peripherals— 12,447 — — — 12,447 
Textiles, Apparel & Luxury Goods166,686 8,937 — — — 175,623 
Structured Finance— — 997,703 — — 997,703 
Total Non-Control/Non-Affiliate $1,757,456 $1,434,626 $997,703 $— $32,039 $4,221,824 
Total Portfolio Investment Cost$3,879,328 $1,588,557 $997,703 $7,200 $724,043 $7,196,831 

The following table shows the composition of our investment portfolio at fair value by control designation, investment type and by industry as of June 30, 2022:
Industry1st Lien
Term Loan
2nd Lien
Term Loan
Subordinated Structured NotesUnsecured Debt
Equity (B)
Fair Value TotalFair Value % of Net Assets
Control Investments
Aerospace & Defense$53,209 $— $— $— $12,557 $65,766 1.6 %
Commercial Services & Supplies73,316 — — 7,200 1,878 82,394 2.0 %
Construction & Engineering56,753 — — — 89,230 145,983 3.5 %
Consumer Finance452,317 — — — 282,301 734,618 17.8 %
Diversified Consumer Services— — — — 3,833 3,833 0.1 %
Energy Equipment & Services79,346 — — — 47,254 126,600 3.1 %
Equity Real Estate Investment Trusts (REITs)631,486 — — — 768,371 1,399,857 34.0 %
Health Care Providers & Services273,448 — — — 132,746 406,194 9.9 %
Machinery33,622 — — — 23,301 56,923 1.4 %
Media29,723 — — — 80,220 109,943 2.7 %
Online Lending29,080 — — — — 29,080 0.7 %
Personal Products59,179 — — — — 59,179 1.4 %
Trading Companies & Distributors31,147 — — — — 31,147 0.8 %
Structured Finance (A)186,800 — — — — 186,800 4.5 %
Total Control Investments$1,989,426 $— $— $7,200 $1,441,691 $3,438,317 83.5 %
Fair Value % of Net Assets48.3 %— %— %0.2 %35.0 %83.5 %
Affiliate Investments
Commerical Sevices & Supplies$3,680 $— $— $— $13,324 $17,004 0.4 %
Diversified Consumer Services71,382 153,931 — — 114,940 340,253 8.2 %
Textiles, Apparel & Luxury Goods— — — — 36,007 36,007 0.9 %
Total Affiliate Investments$75,062 $153,931 $— $— $164,271 $393,264 9.5 %
Fair Value % of Net Assets1.8 %3.7 %— %— %4.0 %9.5 %
Non-Control/Non-Affiliate Investments
Air Freight & Logistics$83,414 $95,000 $— $— $— $178,414 4.3 %
Auto Components22,210 81,326 — — — 103,536 2.5 %
Commercial Services & Supplies70,221 183,889 — — 3,457 257,567 6.3 %
Communications Equipment8,962 48,594 — — — 57,556 1.4 %
Building Products— 34,697 — — — 34,697 0.8 %
Capital Markets— 41,574 — — — 41,574 1.0 %
See notes to consolidated financial statements.
37

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

Endnote Explanations as of March 31, 2023 (Unaudited) and June 30, 2022 (Continued)
Industry1st Lien
Term Loan
2nd Lien
Term Loan
Subordinated Structured NotesUnsecured Debt
Equity (B)
Fair Value TotalFair Value % of Net Assets
Consumer Finance30,550 — — — — 30,550 0.7 %
Distributors174,001 6,107 — — — 180,108 4.4 %
Diversified Consumer Services— 21,583 — — — 21,583 0.5 %
Diversified Financial Services36,878 — — — — 36,878 0.9 %
Diversified Telecommunication Services44,090 122,266 — — — 166,356 4.0 %
Food & Staples Retailing9,440 — — — — 9,440 0.2 %
Food Products— 127,436 — — — 127,436 3.1 %
Health Care Equipment & Supplies— 6,966 — — — 6,966 0.2 %
Health Care Providers & Services181,747 158,843 — — 1,807 342,397 8.4 %
Health Care Technology89,675 — — — — 89,675 2.2 %
Hotels, Restaurants & Leisure22,651 — — — — 22,651 0.5 %
Household Durables91,406 27,633 — — 3,613 122,652 3.0 %
Household Products20,936 — — — — 20,936 0.5 %
Insurance— 22,280 — — — 22,280 0.5 %
Interactive Media & Services233,204 — — — — 233,204 5.8 %
Internet & Direct Marketing Retail17,454 — — — — 17,454 0.4 %
IT Services176,855 126,826 — — — 303,681 7.4 %
Leisure Products38,757 — — — — 38,757 0.9 %
Machinery57,866 9,669 — — — 67,535 1.6 %
Media51,197 — — — — 51,197 1.2 %
Paper & Forest Products— 4,952 — — — 4,952 0.1 %
Pharmaceuticals25,962 — — — — 25,962 0.6 %
Professional Services79,056 124,200 — — — 203,256 4.9 %
Software— 52,500 — — — 52,500 1.3 %
Technology Hardware, Storage & Peripherals— 12,398 — — — 12,398 0.3 %
Textiles, Apparel & Luxury Goods166,686 8,666 — — — 175,352 4.4 %
Structured Finance— — 711,429 — — 711,429 17.3 %
Total Non-Control/Non-Affiliate$1,733,218 $1,317,405 $711,429 $— $8,877 $3,770,929 91.6 %
Fair Value % of Net Assets42.1 %32.0 %17.3 %— %0.2 %91.6 %
Total Portfolio$3,797,706 $1,471,336 $711,429 $7,200 $1,614,839 $7,602,510 184.6 %
Fair Value % of Net Assets92.2 %35.7 %17.3 %0.2 %39.2 %184.6 %
(A) Our SSN investments do not have industry concentrations and as such have been separated in the tables above.
(B) Equity, unless specifically stated otherwise, includes our investments in preferred stock, common stock, membership interests, net profits interests, net operating income interests, net revenue interests, overriding royalty interests, escrows receivable, and warrants.
See notes to consolidated financial statements.
38

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

Endnote Explanations as of March 31, 2023 (Unaudited) and June 30, 2022 (Continued)

(39)The interest rate on these investments, excluding those on non-accrual, contains a paid in kind (“PIK”) provision, whereby the issuer has either the option or the obligation to make interest payments with the issuance of additional securities. The interest rate in the schedule represents the current interest rate in effect for these investments.
The following table provides additional details on these PIK investments, including the maximum annual PIK interest rate allowed under the existing credit agreements, as of and for three months ended March 31, 2023:
Security NamePIK Rate -
Capitalized
PIK Rate -
Paid as cash
Maximum
Current PIK Rate
CP Energy Services Inc. - First Lien Term Loan14.16%—%14.16%(A)
CP Energy Services Inc. - First Lien Term Loan14.16%—%14.16%(A)
CP Energy Services Inc. - First Lien Term Loan14.16%—%14.16%(A)
CP Energy Services Inc. - First Lien Term Loan A to Spartan Energy Services, LLC12.84%—%—%(B)
Credit Central Loan Company, LLC - First Lien Term Loan10.00%—%5.00%(C)
Echelon Transportation, LLC - First Lien Term Loan8.57%—%—%(D)
Eze Castle Integration, Inc. - First Lien Term Loan1.00%—%1.00%
Eze Castle Integration, Inc. - Delayed Draw Term Loan1.00%—%1.00%
First Tower Finance Company LLC - First Lien Term Loan11.09%3.91%5.00%(E)
InterDent, Inc. - First Lien Term Loan B12.00%—%12.00%
MITY, Inc. - First Lien Term Loan A5.94%6.22%—%(F)
MITY, Inc. - First Lien Term Loan B14.48%7.68%10.00%(F)
National Property REIT Corp. - First Lien Term Loan A—%3.53%3.53%
National Property REIT Corp. - First Lien Term Loan B—%5.50%5.50%
National Property REIT Corp. - First Lien Term Loan C—%2.25%2.25%
National Property REIT Corp. - First Lien Term Loan D—%2.50%2.50%
National Property REIT Corp. - First Lien Term Loan E7.00%—%7.00%
Nationwide Loan Company LLC - First Lien Term Loan10.00%—%10.00%
Pacific World Corporation - First Lien Revolving Line of Credit12.09%—%12.09%(G)
Pacific World Corporation - First Lien Term Loan A10.09%—%10.09%
PGX Holdings, Inc. - Second Lien Term Loan12.00%—%12.00%(H)
Rising Tide Holdings, Inc. - First Lien Term LoanN/AN/AN/A(I)
Town & Country Holdings, Inc. - First Lien Term Loan12.00%—%12.00%(J)
Town & Country Holdings, Inc. - First Lien Term Loan12.00%—%12.00%(J)
TPS, LLC - First Lien Term Loan1.50%—%1.50%
USES Corp. - First Lien Equipment Term Loan13.84%—%13.84%(K)
Valley Electric Co. of Mt. Vernon, Inc. - First Lien Term Loan—%2.50%2.50%
Valley Electric Company, Inc. - First Lien Term Loan10.00%—%10.00%
Valley Electric Company, Inc. - First Lien Term Loan B4.50%—%4.50%
(A) On January 6, 2023, the CP Energy Services, Inc. Amendment No. 16 to Loan Agreement was amended to allow interest accruing in cash to be payable in kind resulting in a maximum current PIK rate of 14.16%.
(B) On August 22, 2022, the Spartan Energy Services, LLC Twenty-Fifth Amendment to Amended and Restated Senior Secured Loan Agreement was amended to allow interest accruing in cash to be payable in kind resulting in a maximum current PIK rate of 12.84%.
(C) On September 30, 2022, the Credit Central Senior Subordinated Loan Agreement was amended to allow interest accruing in cash to be payable in kind resulting in a maximum current PIK rate of 10.00%.
(D) On January 31, 2022, the Echelon Fifth Amendment and Restated Credit Agreement was amended to remove the PIK rate and to allow the
interest accruing in cash to be payable in kind resulting in a maximum current PIK rate of 8.57%.
(E) On December 30, 2022, the First Tower Finance Company LLC Amendment No. 15 was amended to reduce the PIK rate to 5.00% and allow the interest accruing in cash to be payable in kind resulting in a maximum current PIK rate of 15.00%.
(F) On March 23, 2021, the Mity Amendment No. 1 and Waiver to Note Purchase Agreement was amended to allow Senior Secured Note A and Senior Secured Note B interest accruing in cash to be payable in kind resulting in a maximum current TLA PIK rate of 12.16% and TLB PIK rate of 22.16%..
(G) Effective as of December 29, 2021, the Pacific World Corporation Amendment No. 8 was amended to allow the Revolving Line of Credit interest accruing in cash to be payable in kind resulting in a maximum current rate of 12.09%.
(H) On December 28, 2022, the PGX Holdings, Inc. Second Lien Term Loan was amended to a fixed PIK rate of 12.00%
(I) Next PIK payment/capitalization date is May 31, 2023.
(J) On November 17, 2022, the Town & Country Holdings, Inc. Eighth Amendment to Loan Agreement was amended to a fixed PIK rate of 12.00%.
(K) On March 28, 2023, the USES Corp. First Lien Equipment Term loan was amended to allow interest accruing in cash to be payable in kind resulting in a maximum current PIK rate of 13.84%.

See notes to consolidated financial statements.
39

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

Endnote Explanations as of March 31, 2023 (Unaudited) and June 30, 2022 (Continued)
The following table provides additional details on these PIK investments, including the maximum annual PIK interest rate allowed under the existing credit agreements, as of and for three months ended June 30, 2022:    
Security NamePIK Rate -
Capitalized
PIK Rate -
Paid as cash
Maximum
Current PIK Rate
CP Energy Services Inc. - First Lien Term Loan13.25%—%13.25%(A)
CP Energy Services Inc. - First Lien Term Loan A to Spartan Energy Services, LLC9.67%—%9.67%(B)
Credit Central Loan Company, LLC - First Lien Term Loan12.92%7.08%10.00%(C)
First Tower Finance Company LLC - First Lien Term Loan8.72%3.28%12.00%
InterDent, Inc. - First Lien Term Loan B12.00%—%12.00%
MITY, Inc. - First Lien Term Loan A3.30%6.70%—%(D)
MITY, Inc. - First Lien Term Loan B6.59%13.41%10.00%(D)
National Property REIT Corp. - First Lien Term Loan A—%3.53%3.53%
National Property REIT Corp. - First Lien Term Loan B—%5.50%5.50%
National Property REIT Corp. - First Lien Term Loan C—%2.25%2.25%
National Property REIT Corp. - First Lien Term Loan D—%2.50%2.50%
Nationwide Loan Company LLC - First Lien Term Loan—%10.00%10.00%
Pacific World Corporation - Revolving Line of Credit8.92%—%8.92%(E)
Pacific World Corporation - First Lien Term Loan A6.92%—%6.92%
Town & Country Holdings, Inc. - First Lien Term LoanN/AN/AN/A(F)
TPS, LLC - First Lien Term Loan1.50%—%1.50%
Valley Electric Co. of Mt. Vernon, Inc. - First Lien Term Loan—%2.50%2.50%
Valley Electric Company, Inc. - First Lien Term Loan—%10.00%10.00%
Valley Electric Company, Inc. - First Lien Term Loan B—%4.50%4.50%(G)
Venio LLC - First Lien Term Loan1.00%—%1.00%
(A) Effective March 31, 2022, the CP Energy Fourteenth Amendment to Loan Agreement was amended to allow 100% of the June 30, 2022 interest accruing in cash to be payable in kind resulting in a current PIK rate capitalized of 13.25%.
(B) On October 28, 2021, the Spartan Energy Services, LLC Twenty-Second Amendment to Amended and Restated Senior Secured Loan Agreement was amended to allow interest accruing in cash to be payable in kind resulting in maximum current PIK rate of 9.67%.
(C) On December 17, 2018, the Credit Central Senior Subordinated Loan Agreement was amended to allow interest accruing in cash to be payable in kind resulting in a maximum current PIK rate of 20.00%.
(D) On March 23, 2021, the Mity Amendment No. 1 and Waiver to Note Purchase Agreement was amended to allow Senior Secured Note A and Senior Secured Note B interest accruing in cash to be payable in kind resulting in a maximum current TLA PIK rate of 10% and TLB PIK rate of 20.00%.
(E) Effective as of December 29, 2021, the Pacific World Corporation Amendment No. 8 was amended to allow the Revolving Line of Credit interest accruing in cash to be payable in kind resulting in a maximum current rate of 8.92%
(F) On December 31, 2021, the Town & Country Holdings, Inc. Seventh Amendment to Loan Agreement was amended to allow the First Lien Term Loan interest accruing in cash to be payable in kind resulting in a maximum current PIK rate of 8.125%. As of June 30, 2022 there is no longer interest accruing as payable in kind.
(G) On March 28, 2022, the Valley Electric Company, Inc. Loan Agreement was amended to allow interest accruing at a maximum current PIK rate of 4.50%.

See notes to consolidated financial statements.
40

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

Endnote Explanations as of March 31, 2023 (Unaudited) and June 30, 2022 (Continued)
(40)As defined in the 1940 Act, we are deemed to “Control” these portfolio companies because we own more than 25% of the portfolio company’s outstanding voting securities. Transactions during the nine months ended March 31, 2023 with these controlled investments were as follows:
Controlled CompaniesFair Value at June 30, 2022Gross Additions (Cost)(A)Gross Reductions (Cost)(B)Net unrealized
gains (losses)
Fair Value at March 31, 2023Interest
income
Dividend
income
Other
income
Net realized
gains (losses)
CP Energy Services Inc.$64,260 $15,518 $— $1,418 $81,196 $5,525 $— $— $— 
CP Energy - Spartan Energy Services, Inc.48,441 4,955 — (18,178)35,218 2,459 — — — 
Credit Central Loan Company, LLC76,935 12,097 — (13,007)76,025 5,878 — 123 — 
Echelon Transportation, LLC65,766 3,391 — (8,285)60,872 2,860 — — — 
First Tower Finance Company LLC607,283 28,847 (987)(26,711)608,432 48,636 — — — 
Freedom Marine Solutions, LLC13,899 650 — (1,363)13,186 — — — — 
InterDent, Inc.406,194 15,291 — 30,267 451,752 23,865 — — — 
Kickapoo Ranch Pet Resort3,833 — — (591)3,242 — 100 — — 
MITY, Inc.59,999 2,166 (2,269)2,979 62,875 5,989 — — (2)
National Property REIT Corp.1,615,737 135,922 (90,852)(66,134)1,594,673 67,804 — 49,735 — 
Nationwide Loan Company LLC50,400 1,595 — (4,272)47,723 3,191 — — — 
NMMB, Inc.109,943 — — (5,556)104,387 2,727 2,510 — (2,510)
Pacific World Corporation59,179 16,315 — (2,002)73,492 5,613 — 105 — 
R-V Industries, Inc.56,923 — — 9,726 66,649 3,265 — — — 
Universal Turbine Parts, LLC31,147 — (24)11,418 42,541 2,364 — — — 
USES Corp.22,395 6,531 — (12,659)16,267 722 — — — 
Valley Electric Company, Inc.145,983 1,992 548 (6,959)141,564 6,681 547 500 — 
Total$3,438,317 $245,270 $(93,584)$(109,909)$3,480,094 $187,579 $3,157 $50,463 $(2,512)
(A) Gross additions include increases in the cost basis of the investments resulting from new portfolio investments, OID accretion and PIK interest, and any transfer of investments.
(B) Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investments repayments or sales, impairments, and any transfer of investments.

(41)As defined in the 1940 Act, we are deemed to be an “Affiliated company” of these portfolio companies because we own more than 5% of the portfolio company’s outstanding voting securities. Transactions during the nine months ended March 31, 2023 with these affiliated investments were as follows:
Affiliated CompaniesFair Value at June 30, 2022Gross Additions (Cost)(A)Gross Reductions (Cost)(B)Net unrealized
gains (losses)
Fair Value at March 31, 2023Interest
income
Dividend
income
Other
income
Net realized
gains (losses)
Nixon, Inc.— — — — — — — — — 
PGX Holdings, Inc. (C)340,253 — (288,494)(51,759)— 15,003 — 133 — 
RGIS Services, LLC17,004 — (4,987)(4,073)7,944 31 1,374 — — 
Targus Cayman HoldCo Limited36,007 — (2,805)(33,202)— — — — 16,143 
Total$393,264 $— $(296,286)$(89,034)$7,944 $15,034 $1,374 $133 $16,143 
(A) Gross additions include increases in the cost basis of the investments resulting from new portfolio investments, PIK interest, and any transfer of investments.
(B) Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investments repayments or sales, impairments, and any transfer of investments.
(C) The investment was transferred to non-control investment classification at $287,751, the fair market value of the investment at the beginning of the three month period ended December 31, 2022.


See notes to consolidated financial statements.
41

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

Endnote Explanations as of March 31, 2023 (Unaudited) and June 30, 2022 (Continued)
(42)As defined in the 1940 Act, we are deemed to “Control” these portfolio companies because we own more than 25% of the portfolio company’s outstanding voting securities. Transactions during the year ended June 30, 2022 with these controlled investments were as follows:
Portfolio CompanyFair Value at June 30, 2021Gross Additions (Cost)(A)Gross Reductions (Cost)(B)Net unrealized
gains (losses)
Fair Value at June 30, 2022Interest
income
Dividend
income
Other
income
Net realized
gains (losses)
CP Energy Services Inc.$44,621 $11,277 $— $8,362 $64,260 $5,424 $— $— $— 
CP Energy - Spartan Energy Services, LLC26,866 10,992 — 10,583 48,441 1,884 — — 
Credit Central Loan Company, LLC78,023 9,599 (1,295)(9,392)76,935 15,106 — — — 
Echelon Transportation LLC84,240 10,646 — (29,120)65,766 7,695 — — — 
First Tower Finance Company LLC592,356 42,669 (11,153)(16,589)607,283 74,501 — 7,898 — 
Freedom Marine Solutions, LLC11,717 1,000 — 1,182 13,899 — — — — 
InterDent, Inc.412,339 36,123 (246)(42,022)406,194 26,517 — 200 — 
Kickapoo Ranch Pet Resort3,833 — — — 3,833 — 25 — — 
MITY, Inc.49,680 4,956 — 5,363 59,999 7,317 — — 12 
National Property REIT Corp.1,189,755 410,867 (301,382)316,497 1,615,737 63,818 — 69,772 — 
Nationwide Loan Company LLC47,993 — — 2,407 50,400 4,108 2,650 405 — 
NMMB, Inc.46,888 25,000 (13,021)51,076 109,943 1,206 8,383 450 3,946 
Pacific World Corporation71,097 11,151 — (23,069)59,179 4,779 — — — 
R-V Industries, Inc.49,693 5,000 — 2,230 56,923 3,051 441 125 — 
Universal Turbine Parts, LLC27,106 — (33)4,074 31,147 2,354 — — — 
USES Corp.33,815 — — (11,420)22,395 203 — — — 
Valley Electric Company, Inc.149,695 13,022 (14,698)(2,036)145,983 7,531 3,150 926 — 
Total$2,919,717 $592,302 $(341,828)$268,126 $3,438,317 $225,494 $14,649 $79,782 $3,958 
(A) Gross additions include increases in the cost basis of the investments resulting from new portfolio investments, PIK interest, and any transfer of investments.
(B) Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investments repayments or sales, impairments, and any transfer of investments.
(43)As defined in the 1940 Act, we are deemed to be an “Affiliated company” of these portfolio companies because we own more than 5% of the portfolio company’s outstanding voting securities. Transactions during the year ended June 30, 2022 with these affiliated investments were as follows:
Portfolio CompanyFair Value at June 30, 2021Gross Additions (Cost)(A)Gross Reductions (Cost)(B)Net unrealized
gains (losses)
Fair Value at June 30, 2022Interest
income
Dividend
income
Other
income
Net realized
gains (losses)
Nixon, Inc.$— $— $— $— $— $— $— $— $— 
PGX Holdings, Inc.$313,089 $229,984 $(190,825)$(11,995)$340,253 $30,032 $— $4,032 $— 
RGIS Services, LLC$17,440 $— $— $(436)$17,004 $317 $256 $— $— 
Targus Cayman HoldCo Limited$26,205 $— $— $9,802 $36,007 $— $— $— $— 
356,734 229,984 (190,825)(2,629)393,264 30,349 256 4,032 — 
(A)    Gross additions include increases in the cost basis of the investments resulting from new portfolio investments, PIK interest, and any transfer of investments.
(B)    Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investments repayments or sales, impairments, and any transfer of investments.


See notes to consolidated financial statements.
42

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

Endnote Explanations as of March 31, 2023 (Unaudited) and June 30, 2022 (Continued)

(44)Acquisition date represents the date of PSEC's initial investment. Follow-on acquisitions have occurred on the following dates to arrive at PSEC's current investment (excluding effects of capitalized PIK interest, premium/original issue discount amortization/accretion, and partial repayments) (See endnote 45 for NPRC equity follow-on acquisitions):
Portfolio CompanyInvestmentFollow-On Acquisition DatesFollow-On Acquisitions
(Excluding initial investment cost)
8th Avenue Food & Provisions, Inc. Second Lien Term Loan11/17/2020, 9/17/20217,051 
Amerilife Group, LLCSecond Lien Term Loan9/3/2020, 12/2/2020, 6/10/202112,060 
Apidos CLO XISubordinated Structured Note11/2/2016, 4/8/20217,559 
Apidos CLO XIISubordinated Structured Note1/26/20184,070 
Apidos CLO XVSubordinated Structured Note3/29/20186,480 
Apidos CLO XXIISubordinated Structured Note2/24/20201,912 
Atlantis Health Care Group (Puerto Rico), Inc.First Lien Revolving Line of Credit4/15/2013, 5/21/2013, 3/11/2014, 6/26/2017, 9/29/2017, 10/12/2017, 10/31/20177,500 
Atlantis Health Care Group (Puerto Rico), Inc.First Lien Term Loan12/9/201642,000 
Barings CLO 2018-IIISubordinated Structured Note5/18/20189,255 
BCPE North Star US Holdco 2, Inc.Second Lien Delayed Draw Term Loan10/28/20225,133 
BCPE North Star US Holdco 2, Inc.Second Lien Term Loan12/30/202165,000 
BCPE Osprey Buyer, Inc.First Lien Revolving Line of Credit2/22/2023942 
Belnick, LLCFirst Lien Term Loan6/27/20225,000 
Broder Bros., Co.First Lien Term Loan1/29/2019, 2/28/2019, 9/10/2021, 9/30/202125,370 
California Street CLO IX Ltd.Subordinated Structured Note9/6/2016, 10/17/20166,842 
Cent CLO 21 LimitedSubordinated Structured Note7/12/20181,024 
CIFC Funding 2014-IV-R, Ltd.Subordinated Structured Note10/12/2018, 12/20/20212,860 
Collections Acquisition Company, Inc. First Lien Term Loan1/13/20226,900 
Columbia Cent CLO 27 LimitedSubordinated Structured Note12/2/20217,815 
CP Energy Services Inc.First Lien Term Loan A to Spartan Energy Services, LLC4/9/2021, 1/10/2022, 2/10/202314,681 
CP Energy Services Inc.Common Stock10/11/2013, 12/26/2013, 4/6/2018, 12/31/201969,586 
Credit Central Loan Company, LLCClass A Units12/28/2012, 3/28/2014, 6/26/2014, 9/28/2016, 8/21/201911,975 
Credit Central Loan Company, LLCClass P Units1/27/20231,540 
Credit Central Loan Company, LLCFirst Lien Term Loan6/26/2014, 9/28/2016, 12/16/2022, 1/27/202345,995 
Curo Group Holdings Corp.First Lien Term Loan8/31/2021, 11/18/2021, 1/12/202217,033 
DRI Holding, Inc.First Lien Term Loan4/26/2022, 7/21/202212,999 
DRI Holding, Inc.Second Lien Term Loan5/18/202210,000 
Echelon Transportation, LLCMembership Interest3/31/2014, 9/30/2014, 12/9/201622,488 
Echelon Transportation, LLCFirst Lien Term Loan11/14/2018, 7/9/2019, 5/5/2020, 10/9/2020, 1/21/2021, 3/18/20215,465 
Eze Castle Integration, Inc. (f/k/a/ H.I.G. ECI Merger Sub, Inc.)First Lien Delayed Draw Term Loan10/7/2022893 
First Brands GroupFirst Lien Term Loan4/27/20225,955 
First Brands GroupSecond Lien Term Loan5/12/20224,938 
First Tower Finance Company LLCClass A Units12/30/2013, 6/24/2014, 12/15/2015, 11/21/2016, 3/9/201839,885 
First Tower Finance Company LLCFirst Lien Term Loan to First Tower, LLC12/15/2015, 3/9/2018, 3/24/202243,047 
Freedom Marine Solutions, LLCMembership Interest10/1/2009, 12/22/2009, 1/13/2010, 3/30/2010, 5/13/2010, 2/14/2011, 4/28/2011, 7/7/2011, 10/20/2011, 10/30/2015, 1/7/2016, 4/11/2016, 8/11/2016, 1/30/2017, 4/20/2017, 6/13/2017, 8/30/2017, 1/17/2018, 2/15/2018, 5/8/2018, 10/31/2018, 5/14/2021, 4/18/2022, 2/15/202342,118 
Galaxy XV CLO, Ltd.Subordinated Structured Note8/21/2015, 3/10/20179,161 
Galaxy XXVII CLO, Ltd.Subordinated Structured Note6/11/20151,460 
Help/Systems Holdings, Inc.Second Lien Term Loan5/11/2021, 10/14/202154,649 
InterDent, Inc.First Lien Term Loan A2/11/2014, 4/21/2014, 11/25/2014, 12/23/2014, 7/14/2021, 3/28/202293,903 
InterDent, Inc.First Lien Term Loan B2/11/2014, 4/21/2014, 11/25/2014, 12/23/201476,125 
Interventional Management Services, LLCFirst Lien Revolving Line of Credit2/25/2021, 11/17/20215,000 
Jefferson Mill CLO Ltd.Subordinated Structured Note9/21/20182,047 
See notes to consolidated financial statements.
43

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

Endnote Explanations as of March 31, 2023 (Unaudited) and June 30, 2022 (Continued)
Portfolio CompanyInvestmentFollow-On Acquisition DatesFollow-On Acquisitions
(Excluding initial investment cost)
K&N Parent, Inc.Second Lien Term Loan8/14/2018, 9/5/2018, 9/7/2018, 9/10/2018, 9/24/2018, 11/12/202013,111 
Kickapoo Ranch Pet ResortMembership Interest10/21/2019, 12/4/201928 
LCM XIV Ltd.Subordinated Structured Note9/25/2015, 5/18/20189,422 
LGC US FINCO, LLC First Lien Term Loan3/2/20222,095 
Magnate Worldwide, LLCFirst Lien Delayed Draw Term Loan10/26/20221,126 
Mamba Purchaser, Inc.Second Lien Term Loan5/4/2022, 5/10/202217,860 
Medical Solutions Holdings, Inc.Second Lien Term Loan5/4/2022, 9/22/20221,423 
MITY, Inc.Common Stock6/23/20147,200 
MITY, Inc.First Lien Term Loan A1/17/2017, 3/23/202110,650 
MITY, Inc.First Lien Term Loan B1/17/2017, 6/3/201911,000 
Nationwide Loan Company LLCClass A Units3/28/2014, 6/18/2014, 9/30/2014, 6/29/2015, 3/31/2016, 8/31/2016, 5/31/2017, 10/31/201720,469 
Nationwide Loan Company LLCFirst Lien Term Loan12/28/2015, 8/31/20161,999 
National Property REIT Corp.First Lien Term Loan A4/3/2020, 5/15/2020, 6/10/2020, 7/29/2020, 8/14/2020, 9/15/2020,10/15/2020, 10/30/2020, 11/10/2020, 11/13/2020, 11/19/2020, 12/11/2020, 1/27/2021, 2/25/2021, 3/11/2021, 5/14/2021, 6/14/2021, 6/25/2021, 8/16/2021, 11/15/2021, 11/26/2021, 12/1/2021, 12/28/2021, 1/14/2022, 2/15/2022, 3/17/2022, 3/28/2022, 4/1/2022, 4/7/2022, 5/24/2022, 6/6/2022, 7/5/2022, 8/31/2022, 10/6/2022, 1/10/2023, 2/28/2023565,519 
National Property REIT Corp.First Lien Term Loan B12/8/2021, 12/17/2021, 1/13/2022, 2/8/2022, 2/14/2022, 2/17/2022, 2/24/202228,880 
National Property REIT Corp.First Lien Term Loan C10/23/2019, 1/23/2020, 3/31/2020, 4/8/2020, 8/4/2020, 12/7/2021, 1/7/2022, 2/2/2022, 5/12/2022, 5/19/2022, 6/6/2022, 8/1/2022, 9/15/2022, 9/19/2022, 10/21/2022243,600 
NMMB, Inc.First Lien Term Loan12/30/2019, 3/28/202240,100 
Octagon Investment Partners XV, Ltd.Subordinated Structured Note4/27/2015, 8/3/2015, 6/27/201710,516 
Octagon Investment Partners 18-R Ltd.Subordinated Structured Note3/23/20188,908 
Pacific World CorporationFirst Lien Revolving Line of Credit10/21/2014, 12/19/2014, 4/7/2015, 4/22/2015, 8/12/2016, 10/18/2016, 2/7/2017, 2/21/2017, 4/26/2017, 10/11/2017, 10/17/2017, 1/16/2018, 12/27/2018, 3/15/2019, 7/2/2019, 8/15/2019, 9/1/2021, 10/19/2021, 9/6/202241,325 
Pacific World CorporationConvertible Preferred Equity4/3/2019, 4/29/2019, 6/3/2019, 10/4/2019, 11/12/2019, 12/20/2019, 1/7/2020, 3/5/2020, 12/30/202122,600 
Pacific World CorporationFirst Lien Term Loan A12/22/202210,500 
PeopleConnect Holdings, LLCFirst Lien Term Loan10/21/202182,005 
PetVet Care Centers, LLC (f/k/a Pearl Intermediate Parent LLC)Second Lien Term Loan11/22/2021, 5/10/202210,950 
PGX Holdings, Inc.First Lien Term Loan11/16/2021, 5/25/202225,000 
PGX Holdings, Inc.Second Lien Term Loan12/28/202215,000 
Reception Purchaser, LLCFirst Lien Term Loan7/29/2022, 9/22/20229,655 
Redstone Holdco 2 LPSecond Lien Term Loan9/10/202117,903 
Romark WM-R Ltd.Subordinated Structured Note3/29/20185,125 
Rosa MexicanoFirst Lien Revolving Line of Credit3/27/2020500 
R-V Industries, Inc.First Lien Term Loan3/4/20225,000 
R-V Industries, Inc.Common Stock12/27/20161,854 
Securus Technologies Holdings, Inc.Second Lien Term Loan11/13/2017, 11/24/2017, 8/6/2018, 8/24/2018, 3/18/201922,750 
Shiftkey, LLCFirst Lien Term Loan8/26/2022, 9/14/2022, 9/23/202239,450 
Shutterfly, LLC2021 Refinancing First Lien Term Loan B9/17/20213,969 
Sorenson Communications, LLCFirst Lien Term Loan5/12/2022, 5/19/202219,675 
Symphony CLO XV, Ltd.Subordinated Structured Note12/7/20182,655 
Town & Country Holdings, Inc.First Lien Term Loan7/13/2018, 7/16/2018105,000 
United Sporting Companies, Inc.Second Lien Term Loan3/7/201358,650 
Universal Turbine Parts, LLCFirst Lien Delayed Draw Term Loan10/24/2019, 2/7/2020, 2/26/2020, 4/5/20213,216 
USES Corp.First Lien Term Loan A6/15/2016, 6/29/2016, 2/22/2017, 4/27/2017, 5/4/2017, 8/30/2017, 10/11/2017, 12/11/2018, 8/30/201914,100 
USG Intermediate, LLCFirst Lien Revolving Line of Credit7/2/2015, 9/23/2015, 9/14/2017, 8/21/2019, 9/17/2020, 9/18/2021, 5/19/202210,700 
See notes to consolidated financial statements.
44

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(in thousands, except share and per share data)

Portfolio CompanyInvestmentFollow-On Acquisition DatesFollow-On Acquisitions
(Excluding initial investment cost)
USG Intermediate, LLCFirst Lien Term Loan B8/24/2017, 7/30/2021, 2/9/2022, 8/17/202257,975 
Valley Electric Company, Inc.Common Stock12/31/2012, 6/24/201418,502 
Valley Electric Company, Inc.First Lien Term Loan6/30/2014, 8/31/2018, 3/28/202218,129 
ViaPath Technologies (f/k/a Global Tel*Link Corporation)Second Lien Term Loan4/10/2019, 8/22/2019, 9/20/2019, 9/14/2021, 9/17/2021, 12/17/2021, 2/7/202296,743 
Vision Solutions, Inc.Second Lien Term Loan5/28/2021, 6/24/2021, 6/3/202259,333 
Voya CLO 2014-1, Ltd.Subordinated Structured Note3/29/20183,943 
VT Topco, Inc.Second Lien Term Loan5/2/2022, 5/12/20224,941 
VT Topco, Inc.2021 Second Lien Term Loan4/27/2022, 5/12/20226,939 
Wellful Inc.First Lien Term Loan7/28/20223,860 
Wellpath Holdings, Inc.First Lien Term Loan10/8/2019, 10/8/20219,592 
Wellpath Holdings, Inc.Second Lien Term Loan8/20/20191,993 
(45)Since Prospect's initial common equity investment in NPRC on December 31, 2013, we have made numerous additional follow-on investments that have been used to invest in new and existing properties as well as online consumer loans and rated secured structured notes. These follow-on acquisitions are summarized by fiscal year below (excluding effects of return of capital distributions). Details of specific transactions are included in the respective fiscal year Form 10-K filing (refer to endnote 44 for NPRC term loan follow-on investments):
Fiscal YearFollow-On Investments
(NPRC Common Stock, excluding cost of initial investment)
2014$4,555 
201568,693 
201693,857 
2017116,830 
2018137,024 
201911,582 
202019,800 
202215,620 
20233,600 
(46)Prospect owns 38.95% of the preferred stock of Legere Pharmaceutical Holdings, Inc. (“Legere”), which represents 4.98% voting interest in Legere. Legere is the parent company of the borrower, Preventics, Inc. (d/b/a Legere Pharmaceuticals).
(47)This investment represents a Level 1 or Level 2 security in the ASC 820 table as of March 31, 2023. See Notes 2 and 3 within the accompanying notes to consolidated financial statements for further discussion.
(48)CP Iris Holdco I, Inc. and CP Iris Holdco II, Inc. are joint borrowers on the Second Lien Term Loan.
(49)Investment represents a unitranche loan with characteristics of a traditional first lien senior secured loan, but which pursuant to an agreement among lenders is divided among unaffiliated lenders into “first out” and “last out” tranches yielding different interest rates. Our investment is the “last out” tranche of such unitranche loan, subject to payment priority in favor of a first out tranche held by an unaffiliated lender.
(50)The Company has entered into an intercreditor agreement that entitles the Company to the “last out” tranche of the first lien secured loans, whereby the “first out” tranche will receive priority as to the “last out” tranche with respect to payments of principal, interest, and any other amounts due thereunder. Therefore, the Company receives a higher interest rate than the “first out” lenders and the Consolidated Schedule of Investments above reflects such higher rate.



45

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)


Note 1. Organization
In this report, the terms “Prospect”, “the Company”, “we”, “us” and “our” mean Prospect Capital Corporation and its subsidiaries unless the context specifically requires otherwise.

Prospect is a financial services company that primarily lends to and invests in middle market privately-held companies. We are a closed-end investment company incorporated in Maryland. We have elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). As a BDC, we have elected to be treated as a regulated investment company (“RIC”), under Subchapter M of the Internal Revenue Code of 1986 (the “Code”). We were organized on April 13, 2004, and were funded in an initial public offering completed on July 27, 2004.

On May 15, 2007, we formed a wholly owned subsidiary Prospect Capital Funding LLC (“PCF”), a Delaware limited liability company and a bankruptcy remote special purpose entity, which holds certain of our portfolio loan investments that are used as collateral for the revolving credit facility at PCF. Our wholly owned subsidiary Prospect Small Business Lending, LLC (“PSBL”) was formed on January 27, 2014, and purchased small business whole loans from online small business loan originators, including On Deck Capital, Inc. (“OnDeck”). On September 30, 2014, we formed a wholly-owned subsidiary Prospect Yield Corporation, LLC (“PYC”) and effective October 23, 2014, PYC holds a portion of our collateralized loan obligations (“CLOs”), which we also refer to as subordinated structured notes (“SSNs”). Each of these subsidiaries have been consolidated since operations commenced.
We consolidate certain of our wholly owned and substantially wholly owned holding companies formed by us in order to facilitate our investment strategy. The following companies are included in our consolidated financial statements and are collectively referred to as the “Consolidated Holding Companies”: CP Holdings of Delaware LLC (“CP Holdings”); Credit Central Holdings of Delaware, LLC; Energy Solutions Holdings Inc.; First Tower Holdings of Delaware LLC (“First Tower Delaware”); MITY Holdings of Delaware Inc.; Nationwide Acceptance Holdings LLC; NMMB Holdings, Inc. (“NMMB Holdings”); NPH Property Holdings, LLC (“NPH”); Prospect Opportunity Holdings I, Inc. (“POHI”); SB Forging Company, Inc. (“SB Forging”); STI Holding, Inc.; UTP Holdings Group Inc. (“UTP Holdings”); Valley Electric Holdings I, Inc. (“Valley Holdings I”); and Valley Electric Holdings II, Inc. (“Valley Holdings II”).
We are externally managed by our investment adviser, Prospect Capital Management L.P. (“Prospect Capital Management” or the “Investment Adviser”). Prospect Administration LLC (“Prospect Administration” or the “Administrator”), a wholly-owned subsidiary of the Investment Adviser, provides administrative services and facilities necessary for us to operate.
Our investment objective is to generate both current income and long-term capital appreciation through debt and equity investments. We invest primarily in senior and subordinated debt and equity of private companies in need of capital for acquisitions, divestitures, growth, development, recapitalizations and other purposes. We work with the management teams or financial sponsors to identify investments with historical cash flows, asset collateral or contracted pro forma cash flows for investment.
Note 2. Significant Accounting Policies
Basis of Presentation and Consolidation
The accompanying consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) pursuant to the requirements for reporting on Form 10-Q, ASC 946, Financial Services—Investment Companies (“ASC 946”), and Articles 6, 10 and 12 of Regulation S-X. Under the 1940 Act, ASC 946, and the regulations pursuant to Article 6 of Regulation S-X, we are precluded from consolidating any entity other than another investment company or an operating company which provides substantially all of its services to benefit us. Our consolidated financial statements include the accounts of Prospect, PCF, PSBL, PYC, and the Consolidated Holding Companies. All intercompany balances and transactions have been eliminated in consolidation. The financial results of our non-substantially wholly-owned holding companies and operating portfolio company investments are not consolidated in the financial statements. Any operating companies owned by the Consolidated Holding Companies are not consolidated.
46

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents consist of cash and highly liquid investments with an original maturity of three months or less at the date of purchase. Cash, cash equivalents, and restricted cash are carried at cost, which approximates fair value.
All cash and restricted cash balances are maintained with high credit quality financial institutions which are members of the Federal Deposit Insurance Corporation (“FDIC”). Cash and restricted cash held at financial institutions, at times, has exceeded the FDIC insured limit. The Company has not incurred any losses on these accounts, and the credit risk exposure is mitigated by the financial strength of the banking institutions where the amounts are held.
Restricted cash relates to a contractual requirement for our Revolving Credit Facility to maintain a minimum cash balance in a reserve account. The contractual requirement is based upon our outstanding borrowing on our Revolving Credit Facility.
Reclassifications

Certain reclassifications have been made in the presentation of prior consolidated financial statements and accompanying notes to conform to the presentation as of and for the nine months ended March 31, 2023. Refer to Note 12. Income Taxes.
Use of Estimates
The preparation of the consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of income, expenses, and gains and losses during the reported period. Changes in the economic environment, financial markets, creditworthiness of the issuers of our investment portfolio and any other parameters used in determining these estimates could cause actual results to differ, and these differences could be material.
Investment Classification
We are a non-diversified company within the meaning of the 1940 Act. As required by the 1940 Act, we classify our investments by level of control. As defined in the 1940 Act, “Control Investments” are those where there is the ability or power to exercise a controlling influence over the management or policies of a company. Control is generally deemed to exist when a company or individual possesses a beneficial ownership of more than 25% of the voting securities of an investee company. Under the 1940 Act, “Affiliate Investments” are defined by a lesser degree of influence and are deemed to exist through owning, controlling, or holding with power to vote, 5% or more of the outstanding voting securities of another person. “Non-Control/Non-Affiliate Investments” are those that are neither Control Investments nor Affiliate Investments.
As a BDC, we must not acquire any assets other than “qualifying assets” specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions). As of March 31, 2023 and June 30, 2022, our qualifying assets as a percentage of total assets, stood at 81.08% and 80.64%, respectively.
Investment Transactions
Investments are recognized when we assume an obligation to acquire a financial instrument and assume the risks for gains or losses related to that instrument. Specifically, we record all security transactions on a trade date basis. We determine the fair value of our investments on a quarterly basis (as discussed in Investment Valuation below), with quarter over quarter fluctuations in fair value reflected as a net change in unrealized gains (losses) from investments in the Consolidated Statement of Operations.
Investments are derecognized when we assume an obligation to sell a financial instrument and forego the risks for gains or losses related to that instrument. Realized gains or losses on the sale of investments are calculated using the specific identification method. Amounts for investments traded but not yet settled are reported in Due to Broker or Due from Broker, in the Consolidated Statements of Assets and Liabilities. As of March 31, 2023, we have no assets going through foreclosure.
Foreign Currency
Foreign currency amounts are translated into US Dollars (USD) on the following basis:
i.fair value of investment securities, other assets and liabilities—at the spot exchange rate on the last business day of the period; and
47

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

ii.purchases and sales of investment securities, income and expenses—at the rates of exchange prevailing on the respective dates of such investment transactions, income or expenses.
We do not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in fair values of investments held or disposed of during the period. Such fluctuations are included within the net realized and net change in unrealized gains or losses from investments in the Consolidated Statements of Operations.
Investment Risks
Our investments are subject to a variety of risks. Those risks include the following:
Market Risk
Market risk represents the potential loss that can be caused by a change in the fair value of the financial instrument.
Credit Risk
Credit risk represents the risk that we would incur if the counterparties failed to perform pursuant to the terms of their agreements with us.
Liquidity Risk
Liquidity risk represents the possibility that we may not be able to rapidly adjust the size of our investment positions in times of high volatility and financial stress at a reasonable price.
Interest Rate Risk
Interest rate risk represents a change in interest rates, which could result in an adverse change in the fair value of an interest-bearing financial instrument.
Prepayment Risk
Many of our debt investments allow for prepayment of principal without penalty. Downward changes in interest rates may cause prepayments to occur at a faster than expected rate, thereby effectively shortening the maturity of the security and making us less likely to fully earn all of the expected income of that security and reinvesting in a lower yielding instrument.
Structured Credit Related Risk

CLO investments may be riskier and less transparent to us than direct investments in underlying companies. CLOs typically will have no significant assets other than their underlying senior secured loans. Therefore, payments on CLO investments are and will be payable solely from the cash flows from such senior secured loans. 
Foreign Currency
Investments denominated in foreign currencies and foreign currency transactions may involve certain considerations and risks not typically associated with those of domestic origin. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices more volatile than those of comparable U.S. companies or U.S. government securities.
Other Risks
Political developments, including civil conflicts and war, sanctions or other measures by the United States or other governments, natural disasters, public health crises and other events outside the Company's control can directly or indirectly have a material adverse impact on the Company and our portfolio companies.
48

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Investment Valuation
As a BDC, and in accordance with the 1940 Act, we fair value our investment portfolio on a quarterly basis, with any unrealized gains and losses reflected in net increase (decrease) in net assets resulting from operations on our Consolidated Statement of Operations. To value our investments, we follow the guidance of ASC 820, Fair Value Measurement (“ASC 820”), that defines fair value, establishes a framework for measuring fair value in conformity with GAAP, and requires disclosures about fair value measurements. In accordance with ASC 820, the fair value of our investments is defined as the price that we would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market in which that investment is transacted.
ASC 820 classifies the inputs used to measure these fair values into the following hierarchy:
Level 1: Quoted prices in active markets for identical assets or liabilities, accessible by us at the measurement date.
Level 2: Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.
Level 3: Unobservable inputs for the asset or liability.
In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each investment.
Our Board of Directors has established procedures for the valuation of our investment portfolio. These procedures are detailed below.
Investments for which market quotations are readily available are valued at such market quotations.
For most of our investments, market quotations are not available. With respect to investments for which market quotations are not readily available or when such market quotations are deemed not to represent fair value, due to factors such as volume and frequency of price quotes, our Board of Directors has approved a multi-step valuation process each quarter, as described below.
1.Each portfolio company or investment is reviewed by our investment professionals with independent valuation firms engaged by our Board of Directors.
2.The independent valuation firms prepare independent valuations for each investment based on their own independent assessments and issue their report.
3.The Audit Committee of our Board of Directors reviews and discusses with the independent valuation firms the valuation reports, and then makes a recommendation to the Board of Directors of the value for each investment.
4.The Board of Directors discusses valuations and determines the fair value of each investment in our portfolio in good faith based on the input of the Investment Adviser, the respective independent valuation firm and the Audit Committee.
Our non-CLO investments that are classified as Level 3 are valued utilizing a yield technique, enterprise value (“EV”) technique, net asset value technique, asset recovery technique, discounted cash flow technique, or a combination of techniques, as appropriate. The yield technique uses loan spreads for loans and other relevant information implied by market data involving identical or comparable assets or liabilities. Under the EV technique, the EV of a portfolio company is first determined and allocated over the portfolio company’s securities in order of their preference relative to one another (i.e., “waterfall” allocation). To determine the EV, we typically use a market (multiples) valuation approach that considers relevant and applicable market trading data of guideline public companies, transaction metrics from precedent merger and acquisitions transactions, and/or a discounted cash flow technique. The net asset value technique, an income approach, is used to derive a value of an underlying investment (such as real estate property) by dividing a relevant earnings stream by an appropriate capitalization rate. For this purpose, we consider capitalization rates for similar properties as may be obtained from guideline public companies and/or relevant transactions. The asset recovery technique is intended to approximate the net recovery value of an investment based on, among other things, assumptions regarding liquidation proceeds based on a hypothetical liquidation of a portfolio company’s assets. The discounted cash flow technique converts future cash flows or earnings to a range of fair values from which a single
49

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

estimate may be derived utilizing an appropriate discount rate. The fair value measurement is based on the net present value indicated by current market expectations about those future amounts.
In applying these methodologies, additional factors that we consider in valuing our investments may include, as we deem relevant: security covenants, call protection provisions, and information rights; the nature and realizable value of any collateral; the portfolio company’s ability to make payments; the principal markets in which the portfolio company does business; publicly available financial ratios of peer companies; the principal market; and enterprise values, among other factors.
Our investments in CLOs are classified as Level 3 fair value measured securities under ASC 820 and are valued using a discounted multi-path cash flow model. The CLO structures are analyzed to identify the risk exposures and to determine an appropriate call date (i.e., expected maturity). These risk factors are sensitized in the multi-path cash flow model using Monte Carlo simulations, which is a simulation used to model the probability of different outcomes, to generate probability-weighted (i.e., multi-path) cash flows from the underlying assets and liabilities. These cash flows are discounted using appropriate market discount rates, and relevant data in the CLO market as well as certain benchmark credit indices are considered, to determine the value of each CLO investment.  In addition, we generate a single-path cash flow utilizing our best estimate of expected cash receipts, and assess the reasonableness of the implied discount rate that would be effective for the value derived from the multi-path cash flows. We are not responsible for and have no influence over the asset management of the portfolios underlying the CLO investments we hold, as those portfolios are managed by non-affiliated third-party CLO collateral managers. The main risk factors are default risk, prepayment risk, interest rate risk, downgrade risk, and credit spread risk.
Convertible Notes
We have recorded the Convertible Notes at their contractual amounts and at issuance, we determined that the embedded conversion options in the Convertible Unsecured Notes are not required to be separately accounted for as a derivative under ASC 815, Derivatives and Hedging. The adoption of ASU 2020-06 (defined below under Recent Accounting Pronouncements) did not impact the accounting for the Convertible Notes. See Note 5 for further discussion on our Convertible Notes outstanding.
Revenue Recognition
Interest income, adjusted for amortization of premium and accretion of discount, is recorded on an accrual basis. Original issue discounts and market discounts are capitalized and accreted into interest income over the respective terms of the applicable loans using the effective interest method or straight-line, as applicable, and adjusted only for material amendments or prepayments. Upon a prepayment of a loan, prepayment premiums, original issue discount, or market discounts are recorded as interest income.
Loans are placed on non-accrual status when there is reasonable doubt that principal or interest will be collected. Unpaid accrued interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans are either applied to the cost basis or interest income, depending upon management’s judgment of the collectability of the loan receivable. Non-accrual loans are restored to accrual status when past due principal and interest is paid and in management’s judgment, is likely to remain current and future principal and interest collections when due are probable. Interest received and applied against cost while a loan is on non-accrual, and PIK interest capitalized but not recognized while on non-accrual, is recognized prospectively on the effective yield basis through maturity of the loan when placed back on accrual status, to the extent deemed collectible by management. As of March 31, 2023, approximately 0.2% of our total assets at fair value are in non-accrual status.
Some of our loans and other investments may have contractual payment-in-kind (“PIK”) interest or dividends. PIK income computed at the contractual rate is accrued into income and reflected as receivable up to the capitalization date. PIK investments offer issuers the option at each payment date of making payments in cash or in additional securities. When additional securities are received, they typically have the same terms, including maturity dates and interest rates as the original securities issued. On these payment dates, we capitalize the accrued interest (reflecting such amounts in the basis as additional securities received). PIK generally becomes due at maturity of the investment or upon the investment being called by the issuer. At the point that we believe PIK is not fully expected to be realized, the PIK investment will be placed on non-accrual status. When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest or dividends are reversed from the related receivable through interest or dividend income, respectively. We do not reverse previously capitalized PIK interest or dividends. Upon capitalization, PIK is subject to the fair value estimates associated with their related investments. PIK investments on non-accrual status are restored to accrual status if we believe that PIK is expected to be realized.
50

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Interest income from investments in Subordinated Structured Notes (typically preferred shares, income notes or subordinated notes of CLO funds) and “equity” class of security of securitized trust is recorded based upon an estimation of an effective yield to expected maturity utilizing assumed cash flows in accordance with ASC 325-40, Beneficial Interests in Securitized Financial Assets. We monitor the expected cash inflows from our CLO and securitized trust equity investments, including the expected residual payments, and the effective yield is determined and updated periodically.
ASC Topic 606 Revenue from Contracts with Customers (“ASC Topic 606”) does not apply to the above revenue associated with financial instruments and interest income.
Other income consists of structuring fees, amendment fees, overriding royalty interests, revenue receipts related to net profit interests, deal deposits, administrative agent fees, and other miscellaneous receipts, which are recognized as revenue when received. Structuring fees, and certain other amendment or advisory fees, are derived from us providing specific transaction or advisory related services to our portfolio companies. We evaluate and make conclusions on the appropriateness of taking fees immediately into revenue in accordance with ASC Topic 606. Our fees are generally earned in response to us providing advisory assistance to our portfolio companies for capital structuring services (amendments where applicable). These fees are generated from new originations as well as from follow-on investments and amendments to existing portfolio companies. These fees are fixed based on contractual terms, are generally only available to us as a result of PSEC’s investments, are paid at the closing, are generally non-recurring and non-refundable and are recognized as revenue upon completion of our performance obligations (closing of transaction, execution of amendments, etc.). See Note 10 Other Income.
Dividend income is recorded on the ex-dividend date. Each distribution received from limited liability company (“LLC”) and limited partnership (“LP”) investments is evaluated to determine if the distribution should be recorded as dividend income or a return of capital. Generally, the Company will not record distributions from equity investments in LLCs and LPs as dividend income unless there are sufficient current or accumulated tax-basis earnings and profits in the LLC or LP prior to the distribution. Distributions that are classified as a return of capital are recorded as a reduction in the cost basis of the investment.
For the three months ended March 31, 2023 and March 31, 2022, the Company recorded dividend income of $1,928 and $5,306, respectively, and return of capital distributions of $0 and $28,208, respectively.
For the nine months ended March 31, 2023 and March 31, 2022, the Company recorded dividend income of $7,046 and $12,277, respectively, and return of capital distributions of $4,760 and $28,208, respectively.
Federal and State Income Taxes
We have elected to be treated as a RIC and intend to continue to comply with the requirements of the Code applicable to RICs. We are required to distribute at least 90% of our investment company taxable income and intend to distribute (or retain through a deemed distribution) all of our investment company taxable income and net capital gain to stockholders; therefore, we have made no provision for income taxes. The character of income and gains that we will distribute is determined in accordance with income tax regulations that may differ from GAAP. Book and tax basis differences relating to stockholder dividends and distributions and other permanent book and tax differences are reclassified to paid-in capital.
If we do not distribute (or are not deemed to have distributed) at least 98% of our annual ordinary income and 98.2% of our capital gains in the calendar year earned, we will generally be required to pay an excise tax equal to 4% of the amount by which 98% of our annual ordinary income and 98.2% of our capital gains exceed the distributions from such taxable income for the year. To the extent that we determine that our estimated current year annual taxable income will be in excess of estimated current year dividend distributions from such taxable income, we accrue excise taxes, if any, on estimated excess taxable income. As of March 31, 2023, we do not expect to have any excise tax due for the 2023 calendar year. Thus, we have not accrued any excise tax for this period.
If we fail to satisfy the annual distribution requirement or otherwise fail to qualify as a RIC in any taxable year, we would be subject to tax on all of our taxable income at regular corporate income tax rates. We would not be able to deduct distributions to stockholders, nor would we be required to make distributions. Distributions would generally be taxable to our individual and other non-corporate taxable stockholders as ordinary dividend income eligible for the reduced maximum rate applicable to qualified dividend income to the extent of our current and accumulated earnings and profits, provided certain holding period and other requirements are met. Subject to certain limitations under the Code, corporate distributions would be eligible for the dividends-received deduction. To qualify again to be taxed as a RIC in a subsequent year, we would be required to distribute to our stockholders our accumulated earnings and profits attributable to non-RIC years. In addition, if we failed to qualify as a RIC for a period greater than two taxable years, then, in order to qualify as a RIC in a subsequent year, we would be required to elect to recognize and pay tax on any net built-in gain (the excess of aggregate gain, including items of income, over aggregate
51

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

loss that would have been realized if we had been liquidated) or, alternatively, be subject to taxation on such built-in gain recognized for a period of five years.

We follow ASC 740, Income Taxes (“ASC 740”). ASC 740 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the consolidated financial statements. ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. As of March 31, 2023, we did not record any unrecognized tax benefits or liabilities. Management’s determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors including, but not limited to, an on-going analysis of tax laws, regulations and interpretations thereof. Although we file both federal and state income tax returns, our major tax jurisdiction is federal. Our federal tax returns for the tax years ended August 31, 2019 and thereafter remain subject to examination by the Internal Revenue Service.
Dividends and Distributions to Common Shareholders
Dividends and distributions to common stockholders are recorded on the ex-dividend date. The amount, if any, to be paid as a monthly dividend or distribution is approved by our Board of Directors quarterly and is generally based upon our management’s estimate of our future taxable earnings. Net realized capital gains, if any, are distributed at least annually.
Our distributions may exceed our earnings, and therefore, portions of the distributions that we make may be a return of the money originally invested and represent a return of capital distribution to shareholders for tax purposes.
Financing Costs
We record origination expenses related to our Revolving Credit Facility as deferred financing costs. These expenses are deferred and amortized as part of interest expense using the straight-line method over the stated life of the obligation for our Revolving Credit Facility. Debt issuance costs and origination discounts related to our Convertible Notes and Public Notes are presented net against the outstanding principal of the respective instrument and amortized as part of interest expense using the effective interest method over the stated life of the respective instrument. Debt issuance costs and origination discounts related to our Prospect Capital InterNotes® (collectively, with our Convertible Notes and Public Notes, our “Unsecured Notes”) are net against the outstanding principal amount of our Prospect Capital InterNotes® and are amortized as part of interest expense using the straight-line method over the stated maturity of the respective note. In the event that we modify or extinguish our debt before maturity, we follow the guidance in ASC 470-50, Modification and Extinguishments (“ASC 470-50”). For modifications to or exchanges of our Revolving Credit Facility, any unamortized deferred costs relating to lenders who are not part of the new lending group are expensed. For extinguishments of our Unsecured Notes, any unamortized deferred costs are deducted from the carrying amount of the debt in determining the gain or loss from the extinguishment.

Unamortized deferred financing costs are presented as a direct deduction to the respective Unsecured Notes (see Notes 5, 6, and 7).
We may record registration expenses related to shelf filings as prepaid expenses. These expenses consist principally of the Securities and Exchange Commission (“SEC”) registration fees, legal fees and accounting fees incurred. These prepaid expenses are charged to capital upon the receipt of proceeds from an equity offering or charged to expense if no offering is completed. As of March 31, 2023 and June 30, 2022, there are no prepaid expenses related to registration expenses and all amounts incurred have been expensed.
Per Share Information
In accordance with ASC 946, senior equity securities, such as preferred stock, are not considered in the calculation of net asset value per share. Net asset value per share also excludes the effects of assumed conversion of outstanding convertible securities, regardless of whether their conversion would have a diluting effect. Therefore, our net asset value is presented on the basis of per common share outstanding as of the applicable period end.
52

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

We compute earnings per common share in accordance with ASC 260, Earnings Per Share (“ASC 260”). Basic earnings per common share is calculated by dividing the net increase (decrease) in net assets resulting from operations applicable to common stockholders by the weighted average number of shares of common stock outstanding. Diluted earnings per share gives effect to all dilutive potential common shares outstanding using the if-converted method for our Convertible Preferred Stock and Convertible Notes (together, “convertible instruments”). Diluted earnings per share excludes all dilutive potential common shares if their effect is anti-dilutive.
Preferred Stock
In accordance with ASC 480-10-S99-3A, the Company’s Preferred Stock (as defined in “Note 9. Equity Offerings, Offering Expenses, and Distributions”) has been classified in temporary equity on the Statement of Assets and Liabilities beginning the period ended September 30, 2021 due to the possibility of a Change of Control triggering event that could lead to redemption outside of the Company’s control. The Preferred Stock issued as temporary equity is recorded net of offering costs and issuance costs. 5.50% Preferred Stock issued prior to the issuance of our 5.35% Series A Preferred Stock has a carrying value on our Consolidated Statement of Assets and Liabilities equal to liquidation value per share. Accrued and unpaid dividends relating to the Preferred Stock are included in the preferred stock carrying value on the Statement of Assets and Liabilities. Dividends declared on the Preferred Stock are included in preferred stock dividends on the Statement of Operations.
Recent Accounting Pronouncements
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform. The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The standard is effective as of March 12, 2020 through December 31, 2024, as updated by ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 in December 2022. The Company did not utilize the optional expedients and exceptions provided by ASU 2020-04 during the nine months ended March 31, 2023. The Company has concluded that this guidance will not have a material impact on its consolidated financial statements.
On July 1, 2022, we adopted, ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”)which simplifies the accounting for convertible instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, after adoption, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost. Additionally, ASU 2020-06 requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share. We adopted ASU 2020-06 using the modified retrospective transition method. As a result, we are now required to calculate diluted earnings per share using the if-converted method for our convertible instruments. The Company’s adoption of this guidance did not have a material impact on the Company’s financial position, results of operations or cash flows. See Note 11. Net Increase (Decrease) in Net Assets per Common Share for additional information on the effects of the adoption of ASU 2020-06.
In December 2020, the SEC adopted Rule 2a-5 under the 1940 Act. Rule 2a-5 establishes a consistent, principles-based framework for boards of directors to use in creating their own specific processes in order to determine fair values in good faith. The effective date for compliance with Rule 2a-5 was September 8, 2022. Adoption of Rule 2a-5 did not have a significant impact on the Company’s financial statements and disclosures as our board of directors has chosen to continue to determine fair value in good faith.

In June 2022, the FASB issued ASU 2022-03, which amends Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies guidance for fair value measurement of an equity security subject to a contractual sale restriction and establishes new disclosure requirements for such equity securities. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023 and for interim periods within those fiscal years, with early adoption permitted. The Company has concluded that this guidance will not have a material impact on its consolidated financial statements.




53

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Note 3. Portfolio Investments
At March 31, 2023, we had investments in 127 long-term portfolio investments and CLOs, which had an amortized cost of $7,565,194 and a fair value of $7,592,777. At June 30, 2022, we had investments in 129 long-term portfolio investments and CLOs, which had an amortized cost of $7,196,831 and a fair value of $7,602,510.
The original cost basis of debt placement and equity securities acquired, including follow-on investments for existing portfolio companies, payment-in-kind interest, and structuring fees, totaled $704,209 and $1,844,869 during the nine months ended March 31, 2023 and March 31, 2022, respectively. Debt repayments and considerations from sales of equity securities of approximately $341,191 and $952,621 were received during the nine months ended March 31, 2023 and March 31, 2022, respectively.
Throughout the remainder of this footnote, we aggregate our portfolio investments by type of investment, which may differ slightly from the nomenclature used by the constituent instruments defining the rights of holders of the investment, as disclosed on our Consolidated Schedules of Investments (“SOI”). The following investments are included in each category:
First Lien Revolving Line of Credit includes our debt investments in first lien revolvers as well as our debt investments in delayed draw term loans.
First Lien Debt includes our debt investments listed on the SOI such as first lien term loans (including “unitranche” loans, which are loans that combine both senior and subordinated debt and “last out” loans which are loans that have a secondary payment priority behind “first out” first-lien loans).
1.5 Lien Debt includes our debt investments listed on the SOI as 1.5 lien term loans.
Second Lien Revolving Line of Credit includes our debt investments in second lien revolvers as well as our debt investments in delayed draw term loans.
Second Lien Debt includes our debt investments listed on the SOI as second lien term loans.
Third Lien Debt includes our debt investments listed on the SOI as third lien term loans.
Unsecured Debt includes our debt investments listed on the SOI as unsecured.
Subordinated Structured Notes includes our investments in the “equity” security class of CLO funds such as income notes, preference shares, and subordinated notes.
Equity, unless specifically stated otherwise, includes our investments in preferred stock, common stock, membership interests, net profits interests, net operating income interests, net revenue interests, overriding royalty interests, escrows receivable, and warrants.
The following table shows the composition of our investment portfolio as of March 31, 2023 and June 30, 2022:
 March 31, 2023June 30, 2022
 CostFair ValueCostFair Value
First Lien Revolving Line of Credit$44,472 $44,512 $39,775 $39,746 
First Lien Debt (1)4,209,603 4,086,362 3,839,553 3,757,960 
Second Lien Revolving Line of Credit5,137 4,888 — — 
Second Lien Debt1,568,007 1,327,318 1,588,557 1,471,336 
Unsecured Debt12,999 12,709 7,200 7,200 
Subordinated Structured Notes967,032 698,423 997,703 711,429 
Equity757,944 1,418,565 724,043 1,614,839 
Total Investments$7,565,194 $7,592,777 $7,196,831 $7,602,510 
(1) First lien debt includes a loan that the Company classifies as “unitranche”. The total amortized cost and fair value of the unitranche loan were $20,000 and $20,000, respectively, as of March 31, 2023. As of June 30, 2022, none of the Company’s first lien debt was classified as unitranche.
54

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)


The following table shows the fair value of our investments disaggregated into the three levels of the ASC 820 valuation hierarchy as of March 31, 2023:
Level 1Level 2Level 3Total
First Lien Revolving Line of Credit$— $— $44,512 $44,512 
First Lien Debt(1)— 51,902 4,034,460 4,086,362 
Second Lien Revolving Line of Credit— — 4,888 4,888 
Second Lien Debt— — 1,327,318 1,327,318 
Unsecured Debt5,509 — 7,200 12,709 
Subordinated Structured Notes— — 698,423 698,423 
Equity— — 1,418,565 1,418,565 
Total Investments$5,509 $51,902 $7,535,366 $7,592,777 
(1) First lien debt includes a loan that the Company classifies as “unitranche”. The total amortized cost and fair value of the unitranche loan were $20,000 and $20,000, respectively, as of March 31, 2023.
The following table shows the fair value of our investments disaggregated into the three levels of the ASC 820 valuation hierarchy as of June 30, 2022:
Level 1Level 2Level 3Total
First Lien Revolving Line of Credit$— $— $39,746 $39,746 
First Lien Debt— 73,816 3,684,144 3,757,960 
Second Lien Debt— — 1,471,336 1,471,336 
Unsecured Debt— — 7,200 7,200 
Subordinated Structured Notes— — 711,429 711,429 
Equity— — 1,614,839 1,614,839 
Total Investments$— $73,816 $7,528,694 $7,602,510 

The following tables show the aggregate changes in the fair value of our Level 3 investments during the nine months ended March 31, 2023:
 Fair Value Measurements Using Unobservable Inputs (Level 3)
 
Control
 Investments
Affiliate
 Investments
Non-Control/
 Non-Affiliate
 Investments
Total
Fair value as of June 30, 2022$3,438,317 $393,264 $3,697,113 $7,528,694 
Net realized (losses) gains on investments(2,512)16,143 (52,812)(39,181)
Net change in unrealized losses(109,909)(89,034)(165,503)(364,446)
Net realized and unrealized losses(112,421)(72,891)(218,315)(403,627)
Purchases of portfolio investments172,021 — 428,437 600,458 
Payment-in-kind interest72,653 — 25,299 97,952 
Accretion of discounts and premiums, net
596 — 4,601 5,197 
Repayments and sales of portfolio investments(91,072)(24,678)(186,047)(301,797)
Transfers within Level 3(1)— (287,751)287,751 — 
Transfers out of Level 3(1)— — (17,699)(17,699)
Transfers into Level 3(1)— — 26,188 26,188 
Fair value as of March 31, 2023$3,480,094 $7,944 $4,047,328 $7,535,366 
55

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

 First Lien Revolving Line of CreditFirst Lien Debt(2)Second Lien Revolving Line of CreditSecond Lien DebtUnsecured DebtSubordinated Structured NotesEquityTotal
Fair value as of June 30, 2022$39,746 $3,684,144 $— $1,471,336 $7,200 $711,429 $1,614,839 $7,528,694 
Net realized (losses) gains on investments— (14,554)— (8,791)(2)(29,466)13,632 (39,181)
Net change in unrealized gains (losses)69 (28,288)(249)(123,468)— 17,665 (230,175)(364,446)
Net realized and unrealized gains (losses)69 (42,842)(249)(132,259)(2)(11,801)(216,543)(403,627)
Purchases of portfolio investments3,718 522,365 5,133 27,774 — — 41,468 600,458 
Payment-in-kind interest2,295 83,855 — 11,802 — — — 97,952 
Accretion of discounts and premiums, net36 2,372 1,654 — 1,131 — 5,197 
Repayments and sales of portfolio investments(1,352)(223,923)— (52,989)(2,336)(21,199)(301,797)
Transfers out of Level 3(1)— (17,699)— — — — — (17,699)
Transfers into Level 3(1)— 26,188 — — — — — 26,188 
Fair value as of March 31, 2023$44,512 $4,034,460 $4,888 $1,327,318 $7,200 $698,423 $1,418,565 $7,535,366 
    
(1)Transfers are assumed to have occurred at the beginning of the quarter during which the asset was transferred. During the nine months ended March 31, 2023 two of our first lien notes transferred out of Level 2 to Level 3 because inputs to the valuation became unobservable. During the nine months ended March 31, 2023 one of our first lien notes transferred out of Level 3 to Level 2 because inputs to the valuation became observable.
(2) First lien debt includes a loan that the Company classifies as “unitranche”. The total amortized cost and fair value of the unitranche loan were $20,000 and $20,000, respectively, as of March 31, 2023.
56

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)


The following tables show the aggregate changes in the fair value of our Level 3 investments during the nine months ended March 31, 2022:
 Fair Value Measurements Using Unobservable Inputs (Level 3)
 
Control
 Investments
Affiliate
 Investments
Non-Control/
 Non-Affiliate
 Investments
Total
Fair value as of June 30, 2021$2,919,717 $356,734 $2,885,433 $6,161,884 
Net realized gains (losses) on investments5,304 — (16,958)(11,654)
Net change in unrealized gains352,558 26,016 30,038 408,612 
Net realized and unrealized gains357,862 26,016 13,080 396,958 
Purchases of portfolio investments379,248 222,931 1,114,231 1,716,410 
Payment-in-kind interest56,168 27 4,835 61,030 
Accretion (amortization) of discounts and premiums, net
439 2,026 (68,464)(65,999)
Repayments and sales of portfolio investments(334,929)(190,082)(385,223)(910,234)
Transfers into Level 3(2)— — 20,505 20,505 
Transfers out of Level 3(2)— — (9,600)(9,600)
Fair Value as of March 31, 2022$3,378,505 $417,652 $3,574,797 $7,370,954 
 Revolving Line of CreditFirst Lien Debt1.5 Lien DebtSecond Lien DebtThird Lien DebtUnsecured DebtSubordinated Structured NotesEquityTotal
Fair value as of June 30, 2021$27,503 $3,104,139 $18,164 $944,123 $3,950 $3,715 $756,109 $1,304,181 $6,161,884 
Net realized (losses) gains on investments— (385)— — — 10 (16,573)5,294 (11,654)
Net change in unrealized (losses) gains(2)(26,884)— (13,597)— 2,004 46,619 400,472 408,612 
Net realized and unrealized (losses) gains(2)(27,269)— (13,597)— 2,014 30,046 405,766 396,958 
Purchases of portfolio investments9,000 886,132 — 794,594 — — 9,518 17,166 1,716,410 
Payment-in-kind interest1,349 57,926 — 1,755 — — — — 61,030 
Accretion (amortization) of discounts and premiums, net— 6,079 — 1,929 — — (74,007)— (65,999)
Repayments and sales of portfolio investments(1,636)(574,467)(18,164)(285,671)(3,950)(10)7,167 (33,503)(910,234)
Transfers within Level 3(1)— 38,748 — (69,893)— — — 31,145 — 
Transfers into Level 3(2)— 20,505 — — — — — — 20,505 
Transfers out of Level 3(2)— (9,600)— — — — — — (9,600)
Fair value as of March 31, 2022$36,214 $3,502,193 $— $1,373,240 $— $5,719 $728,833 $1,724,755 $7,370,954 
(1) Transfers are assumed to have occurred at the beginning of the quarter during which the asset was transferred.
(2) Transfers are assumed to have occurred at the beginning of the quarter during which the asset was transferred. During the three months ended December 31, 2021 one of our first lien notes transferred out of Level 2 to Level 3 because inputs to the valuation became unobservable. During the three months ended March 31, 2022 one of our first lien notes transferred out of Level 3 to Level 2 because inputs to the valuation became observable.
The net change in unrealized (losses) gains on the investments that use Level 3 inputs was $(373,373) and $407,396 for investments still held as of March 31, 2023 and March 31, 2022, respectively.
The following table shows industries that comprise of greater than 10% of our portfolio at fair value as of March 31, 2023 and June 30, 2022:
 March 31, 2023June 30, 2022
 CostFair Value% of PortfolioCostFair Value% of Portfolio
Equity Real Estate Investment Trusts (REITs)$686,086 $1,372,493 18.1 %$647,316 $1,399,857 18.4 %
Health Care Providers & Services652,011 762,957 10.0 %660,976 748,591 9.8 %
Consumer Finance610,288 751,580 9.9 %568,739 765,168 10.1 %
All Other Industries5,616,809 4,705,747 62.0 %5,319,800 4,688,894 61.7 %
Total$7,565,194 $7,592,777 100.0 %$7,196,831 $7,602,510 100.0 %

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

As of March 31, 2023 investments in California comprised 10.4% of our investments at fair value, with a cost of $926,519 and a fair value of $788,558. As of June 30, 2022 investments in California comprised 10.1% of our investments at fair value, with a cost of $880,210 and a fair value of $768,646.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

The ranges of unobservable inputs used in the fair value measurement of our Level 3 investments as of March 31, 2023 were as follows:
Unobservable Input
Asset CategoryFair ValuePrimary Valuation Approach or TechniqueInputRangeWeighted
Average (5)
First Lien Debt$1,694,725 Discounted cash flow (Yield analysis)Market yield8.6%to20.0%12.5%
First Lien Debt678,915 Enterprise value waterfall (Market approach)EBITDA multiple6.3xto11.3x9.5x
First Lien Debt70,639 Enterprise value waterfall (Market approach)EBITDA multiple7.0xto9.0x8.0x
Enterprise value waterfall (Discounted cash flow)Discount rate12.3%to50.0%31.1%
First Lien Debt201,390 Enterprise value waterfall (Market approach)Revenue multiple0.5xto1.7x1.1x
First Lien Debt56,600 Enterprise value waterfall (Discounted cash flow)Discount rate 6.5%to8.5%7.5%
First Lien Debt (1)21,580 Enterprise value waterfallLoss-adjusted discount rate7.6%to12.8%8.3%
Projected loss rates0.2%to36.9%8.3%
First Lien Debt (2)200,600 Enterprise value waterfallDiscount rate (3)10.4%to16.8%12.5%
First Lien Debt459,900 Enterprise value waterfall (Market approach)Tangible book value multiple1.9xto2.8x2.5x
Earnings multiple6.3xto8.8x7.7x
First Lien Debt21,855 Enterprise value waterfall (Market approach)Tangible book value multiple1.0xto1.5x1.3x
First Lien Debt670,656 Discounted cash flowDiscount Rate6.3%to9.8%7.0%
First Lien Debt2,112 Asset recovery analysisRecoverable amountn/an/a
Second Lien Debt1,211,172 Discounted cash flow (Yield analysis)Market yield10.4%to35.0%15.1%
Second Lien Debt7,017 Asset recovery analysisRecoverable amountn/an/a
Second Lien Debt114,017 Enterprise value waterfall (Market approach)EBITDA multiple7.0xto9.0x8.0x
Enterprise value waterfall (Discounted cash flow)Discount rate12.3%to50.0%31.1%
Unsecured Debt7,200 Enterprise value waterfall (Market approach)EBITDA multiple6.3xto7.3x6.8x
Subordinated Structured Notes698,423 Discounted cash flowDiscount rate (3)2.8%to37.2%23.0%
Preferred Equity 18,187 Enterprise value waterfall (Market approach)Revenue multiple0.7xto1.7x1.3x
Preferred Equity9,864 Enterprise value waterfall (Market approach)EBITDA multiple8.3xto10.0x9.5x
Preferred Equity4,271 Enterprise value waterfall (Discounted cash flow)Discount rate6.5%to8.5%7.5%
Common Equity/Interests/Warrants 416,445 Enterprise value waterfall (Market approach)EBITDA multiple4.8xto11.3x9.3x
Common Equity/Interests/Warrants (2)37,209 Enterprise value waterfallDiscount rate (3)10.4%to16.8%12.5%
Common Equity/Interests/Warrants (4)55,332 Discounted cash flowDiscount rate6.3%to9.8%7.0%
Common Equity/Interests/Warrants224,557 Enterprise value waterfall (Market approach)Tangible book value multiple1.9xto2.8x2.6x
Earnings multiple6.3xto8.8x7.7x
Common Equity/Interests/Warrants25,868 Enterprise value waterfall (Market approach)Tangible book value multiple1.0xto1.5x1.3x
Common Equity/Interests/Warrants609,297 Discounted cash flowDiscount rate6.3%to9.8%7.0%
Common Equity/Interests/Warrants4,349 Enterprise value waterfall (Discounted cash flow)Discount Rate13.5%to30.0%22.2%
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Unobservable Input
Asset CategoryFair ValuePrimary Valuation Approach or TechniqueInputRangeWeighted
Average (5)
Common Equity/Interests/Warrants13,186 Asset recovery analysisRecoverable amountn/an/a
Total Level 3 Investments$7,535,366 


(1)Represents the fair value of online consumer loans held by NPRC (see National Property REIT Corp section below) through its wholly owned subsidiary, American Consumer Lending Limited (“ACLL”), and valued using a discounted cash flow valuation technique.

(2)Represents the fair value of rated secured structured notes held by NPRC through its wholly owned subsidiary, National General Lending Limited (“NGL”), and valued using a discounted cash flow valuation technique.
(3)Represents the implied discount rate based on our internally generated single-cash flow model that is derived from the fair value estimated by the corresponding multi-path cash flow model utilized by the independent valuation firm.
(4)Represents Residual Profit Interests in Real Estate Investments.
(5)The weighted average information is generally derived by assigning each disclosed unobservable input a proportionate weight based on the fair value of the related investment. For the Loss-adjusted discount rate and Projected loss rate unobservable inputs of investments represented in (1), the weighted average is determined based on the purchase yield of recently issued loans within each respective term-grade cohort.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

The ranges of unobservable inputs used in the fair value measurement of our Level 3 investments as of June 30, 2022 were as follows:
Unobservable Input
Asset CategoryFair ValuePrimary Valuation Approach or TechniqueInputRangeWeighted
Average (5)
First Lien Debt$1,722,265 Discounted cash flow (Yield analysis)Market yield8.1%to16.9%11.7%
First Lien Debt528,312 Enterprise value waterfall (Market approach)EBITDA multiple6.0xto10.5x9.0x
First Lien Debt108,222 Enterprise value waterfall (Market approach)Revenue multiple0.5xto1.2x0.9x
First Lien Debt53,209 Enterprise value waterfall (Discounted cash flow)Discount rate 8.8%to10.8%9.8%
First Lien Debt12,199 Asset recovery analysisRecoverable amountn/an/a
First Lien Debt (1)29,080 Enterprise value waterfallLoss-adjusted discount rate5.6%to9.4% 8.1%
Projected loss rates—%to1.6%—%
First Lien Debt (2)186,800 Enterprise value waterfallDiscount rate (3)9.2%to14.8%11.1%
First Lien Debt432,057 Enterprise value waterfall (Market approach)Tangible book value multiple2.2xto3.0x2.7x
Earnings multiple4.8xto7.5x7.0x
First Lien Debt20,260 Enterprise value waterfall (Market approach)Tangible book value multiple1.3xto1.5x1.4x
First Lien Debt631,486 Enterprise value waterfall (NAV analysis)Capitalization Rate3.3%to7.5%4.5%
Second Lien Debt1,460,277 Discounted cash flow (Yield analysis)Market yield9.6%to25.0%13.0%
Second Lien Debt4,952 Enterprise value waterfall (Market approach)Revenue multiple0.8xto1.0x0.9x
Second Lien Debt6,107 Asset recovery analysisRecoverable amountn/an/a
Unsecured Debt7,200 Enterprise value waterfall (Market approach)Revenue multiple0.5xto0.6x0.5x
Subordinated Structured Notes711,429 Discounted cash flowDiscount rate (3)6.9%to30.5%18.7%
Preferred Equity 33,355 Enterprise value waterfall (Market approach)Revenue multiple0.8xto1.5x1.2x
Preferred Equity 1,807 Enterprise value waterfall (Market approach)EBITDA multiple3.8xto4.8x4.3x
Preferred Equity12,557 Enterprise value waterfall (Market approach)Discount rate8.8%to10.8%9.8%
Common Equity/Interests/Warrants 493,322 Enterprise value waterfall (Market approach)EBITDA multiple1.8xto10.5x8.8x
Common Equity/Interests/Warrants 3,613 Enterprise value waterfall (Market approach)Revenue multiple0.4xto1.0x0.5x
Common Equity/Interests/Warrants (1)8,994 Enterprise value waterfallLoss-adjusted discount rate5.6%to9.4%8.1%
Projected loss rates—%to1.6%—%
Common Equity/Interests/Warrants (2)30,386 Enterprise value waterfallDiscount rate (3)9.2%to14.8%11.1%
Common Equity/Interests/Warrants (4)60,749 Enterprise value waterfall (NAV analysis)Capitalization Rate3.3%to7.5%4.5%
Common Equity/Interests/Warrants252,161 Enterprise value waterfall (Market approach)Tangible book value multiple2.2xto3.0x2.8x
Earnings multiple4.8xto7.5x7.0x
Common Equity/Interests/Warrants30,140 Enterprise value waterfall (Market approach)Tangible book value multiple1.3xto1.5x1.4x
Common Equity/Interests/Warrants668,242 Enterprise value waterfall (NAV analysis)Capitalization Rate3.3%to7.5%4.5%
Common Equity/Interests/Warrants5,614 Enterprise value waterfall (Discounted cash flow)Discount rate12.5%to30.0%21.2%
Common Equity/Interests/Warrants13,899 Asset recovery analysis Recoverable amountn/an/a
Total Level 3 Investments$7,528,694     
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(in thousands, except share and per share data)


(1)Represents the fair value of online consumer loans held by NPRC through its wholly owned subsidiary, American Consumer Lending Limited (“ACLL”), and valued using a discounted cash flow valuation technique.
(2)Represents the fair value of rated secured structured notes held by NPRC through its wholly owned subsidiary, National General Lending Limited (“NGL”), and valued using a discounted cash flow valuation technique.
(3)Represents the implied discount rate based on our internally generated single-cash flow model that is derived from the fair value estimated by the corresponding multi-path cash flow model utilized by the independent valuation firm.
(4)Represents Residual Profit Interests in Real Estate Investments.
(5)The weighted average information is generally derived by assigning each disclosed unobservable input a proportionate weight based on the fair value of the related investment. For the Loss-adjusted discount rate and Projected loss rate unobservable inputs of investments represented in (1), the weighted average is determined based on the purchase yield of recently issued loans within each respective term-grade cohort.
Investments for which market quotations are readily available must be valued at such market quotations. In order to validate market quotations, management and the independent valuation firm look at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. These investments are classified as Level 1 or Level 2 in the fair value hierarchy.
The fair value of debt investments specifically classified as Level 2 in the fair value hierarchy are generally valued by an independent pricing agent or more than one principal market maker, if available, otherwise a principal market maker or a primary market dealer. We generally value over-the-counter securities by using the prevailing bid and ask prices from dealers during the relevant period end, which were provided by an independent pricing agent and screened for validity by such service.
In determining the range of values for debt instruments where market quotations are not readily available, and are therefore classified as Level 3 in the fair value hierarchy, except CLOs and debt investments in controlling portfolio companies, management and the independent valuation firm estimated corporate and security credit ratings and identified corresponding yields to maturity for each loan from relevant market data. A discounted cash flow technique was then applied using the appropriate yield to maturity as the discount rate, to determine a range of values. In determining the range of values for debt investments of controlled companies and equity investments, the enterprise value was determined by applying a market approach such as using earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples, net income and/or book value multiples for similar guideline public companies and/or similar recent investment transactions and/or an income approach, such as the discounted cash flow technique. The enterprise value technique may also be used to value debt investments which are credit impaired. For stressed debt and equity investments, asset recovery analysis was used.
In determining the range of values for our investments in CLOs, the independent valuation firm uses a discounted multi-path cash flow model. The valuations were accomplished through the analysis of the CLO deal structures to identify the risk exposures from the modeling point of view as well as to determine an appropriate call date (i.e., expected maturity). These risk factors are sensitized in the multi-path cash flow model using Monte Carlo simulations to generate probability-weighted (i.e., multi-path) cash flows for the underlying assets and liabilities. These cash flows are discounted using appropriate market discount rates, and relevant data in the CLO market and certain benchmark credit indices are considered, to determine the value of each CLO investment. In addition, we generate a single-path cash flow utilizing our best estimate of expected cash receipts, and assess the reasonableness of the implied discount rate that would be effective for the value derived from the corresponding multi-path cash flow model.
Our portfolio consists of residual interests and debt investments in CLOs, which involve a number of significant risks. CLOs are typically very highly levered (10 - 14 times), and therefore the residual interest tranches that we invest in are subject to a higher degree of risk of total loss. In particular, investors in CLO residual interests indirectly bear risks of the underlying loan investments held by such CLOs. We generally have the right to receive payments only from the CLOs, and generally do not have direct rights against the underlying borrowers or the entity that sponsored the CLOs. While the CLOs we target generally enable the investor to acquire interests in a pool of senior loans without the expenses associated with directly holding the same investments, the prices of indices and securities underlying our CLOs will rise or fall. These prices (and, therefore, the prices of the CLOs) will be influenced by the same types of political and economic events that affect issuers of securities and capital markets generally. The failure by a CLO investment in which we invest to satisfy financial covenants, including with respect to adequate collateralization and/or interest coverage tests, could lead to a reduction in its payments to us. In the event that a CLO fails certain tests, holders of debt senior to us would be entitled to additional payments that would, in turn, reduce the payments we would otherwise be entitled to receive. Separately, we may incur expenses to the extent necessary to seek recovery upon
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(in thousands, except share and per share data)

default or to negotiate new terms with a defaulting CLO or any other investment we may make. If any of these occur, it could materially and adversely affect our operating results and cash flows.
The interests we have acquired in CLOs are generally thinly traded or have only a limited trading market. CLOs are typically privately offered and sold, even in the secondary market. As a result, investments in CLOs may be characterized as illiquid securities. In addition to the general risks associated with investing in debt securities, CLO residual interests carry additional risks, including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (ii) the quality of the collateral may decline in value or default; (iii) our investments in CLO tranches will likely be subordinate to other senior classes of note tranches thereof; and (iv) the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the CLO investment or unexpected investment results. Our net asset value may also decline over time if our principal recovery with respect to CLO residual interests is less than the cost of those investments. Our CLO investments and/or the CLOs’ underlying senior secured loans may prepay more quickly than expected, which could have an adverse impact on our value. These investments are classified as Level 3 in the fair value hierarchy.
An increase in LIBOR would materially increase the CLO’s financing costs. Since most of the collateral positions within the CLOs have LIBOR floors, there may not be corresponding increases in investment income (if LIBOR increases but stays below the LIBOR floor rate of such investments) resulting in materially smaller distribution payments to the residual interest investors.
We hold more than a 10% interest in certain foreign corporations that are treated as controlled foreign corporations (“CFC”) for U.S. federal income tax purposes (including our residual interest tranche investments in CLOs). Therefore, we are treated as receiving a deemed distribution (taxable as ordinary income) each year from such foreign corporations in an amount equal to our pro rata share of the corporation’s income for that tax year (including both ordinary earnings and capital gains). We are required to include such deemed distributions from a CFC in our taxable income and we are required to distribute at least 90% of such income to maintain our RIC status, regardless of whether or not the CFC makes an actual distribution during such year.
If we acquire shares in “passive foreign investment companies” (“PFICs”) (including residual interest tranche investments in CLOs that are PFICs), we may be subject to federal income tax on a portion of any “excess distribution” or gain from the disposition of such shares even if such income is distributed as a taxable dividend to our stockholders. Certain elections may be available to mitigate or eliminate such tax on excess distributions, but such elections (if available) will generally require us to recognize our share of the PFIC’s income for each year regardless of whether we receive any distributions from such PFICs. We must nonetheless distribute such income to maintain our status as a RIC.
Legislation known as FATCA and regulations thereunder impose a withholding tax of 30% on payments of U.S. source interest and dividends, to certain non-U.S. entities, including certain non-U.S. financial institutions and investment funds, unless such non-U.S. entity complies with certain reporting requirements regarding its United States account holders and its United States owners. Most CLOs in which we invest will be treated as non-U.S. financial entities for this purpose, and therefore will be required to comply with these reporting requirements to avoid the 30% withholding. If a CLO in which we invest fails to properly comply with these reporting requirements, it could reduce the amounts available to distribute to residual interest and junior debt holders in such CLO vehicle, which could materially and adversely affect our operating results and cash flows.
If we are required to include amounts in income prior to receiving distributions representing such income, we may have to sell some of our investments at times and/or at prices management would not consider advantageous, raise additional debt or equity capital or forgo new investment opportunities for this purpose.
The significant unobservable input used to value our investments based on the yield technique and discounted cash flow technique is the market yield (or applicable discount rate) used to discount the estimated future cash flows expected to be received from the underlying investment, which includes both future principal and interest/dividend payments. Increases or decreases in the market yield (or applicable discount rate) would result in a decrease or increase, respectively, in the fair value measurement. Management and the independent valuation firms consider the following factors when selecting market yields or discount rates: risk of default, rating of the investment and comparable company investments, and call provisions.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

The significant unobservable inputs used to value our investments based on the EV analysis may include market multiples of specified financial measures such as EBITDA, net income, or book value of identified guideline public companies, implied valuation multiples from precedent M&A transactions, and/or discount rates applied in a discounted cash flow technique. The independent valuation firm identifies a population of publicly traded companies with similar operations and key attributes to that of the portfolio company. Using valuation and operating metrics of these guideline public companies and/or as implied by relevant precedent transactions, a range of multiples of the latest twelve months EBITDA, or other measure such as net income or book value, is typically calculated. The independent valuation firm utilizes the determined multiples to estimate the portfolio company’s EV generally based on the latest twelve months EBITDA of the portfolio company (or other meaningful measure). Increases or decreases in the multiple would result in an increase or decrease, respectively, in EV which would result in an increase or decrease in the fair value measurement of the debt of controlled companies and/or equity investment, as applicable. In certain instances, a discounted cash flow analysis may be considered in estimating EV, in which case, discount rates based on a weighted average cost of capital and application of the capital asset pricing model may be utilized.
The significant unobservable input used to value our private REIT investments based on the discounted cash flow analysis is the discount rate and terminal capitalization rate applied to projected cash flows of the underlying properties. Increases or decreases in the discount rate and terminal capitalization rate would result in a decrease or increase, respectively, in the fair value measurement.

Changes in market yields, discount rates, capitalization rates or EBITDA multiples, each in isolation, may change the fair value measurement of certain of our investments. Generally, an increase in market yields, discount rates or capitalization rates, or a decrease in EBITDA (or other) multiples may result in a decrease in the fair value measurement of certain of our investments.
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of our investments may fluctuate from period to period. Additionally, the fair value of our investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that we may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which we have recorded it.
In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the currently assigned valuations.
Changes in Valuation Techniques
During the nine months ended March 31, 2023, the valuation methodology for DTI Holdco, Inc. (“Epiq”) for the First Lien Term Loan changed from the yield method to market quotes, which were more active in the current period. As a result of a the quoted prices of the First Lien Term Loan, the fair value of our investment in Epiq First Lien Term Loan decreased to $17,503 as of March 31, 2023, a discount of $583 from its amortized cost, compared to the $301 unrealized appreciation recorded at June 30, 2022.
During the nine months ended March 31, 2023, the valuation methodology for Engine Group, Inc. (“Engine”) for the First Lien Term Loan and Warrants changed from the yield method and Current Value Method (“CVM”), respectively, to the Liquidation Analysis, due to a deterioration in the company’s operational performance. As a result, our investment in Engine decreased to $2,112 as of March 31, 2022, a discount of $28,425 from its amortized cost, compared to the $27,142 unrealized discount recorded at June 30, 2022.
During the nine months ended March 31, 2023, the valuation methodology for National Property REIT Corp. (“NPRC”) for the real estate portfolio changed from the direct capitalization method to the discounted cash flow method, due to a reduction in collaborative capitalization rate market data. Our investment in NPRC for the real estate portfolio was valued at $1,372,493 as of March 31, 2023, a premium of $686,407 from its amortized cost, compared to the $752,541 unrealized appreciation recorded at June 30, 2022.
During the nine months ended March 31, 2023, the valuation methodology for PGX Holdings, Inc. (“PGX”) for the First and Second Lien Term Loans changed from the yield method to the CVM method, due to a restructuring of the equity ownership during the current period. Leading into March 2023, PGX was undergoing a litigation process commenced by the Consumer Financial Protection Bureau regarding the legality of PGX’s billing practices when using telemarketing to acquire new business. Due to recent rulings issued by the courts in these legal proceedings, PGX determined it needed to move away from a telemarketing model to an online model to attract new customers. As a result of this material change to PGX’s business model (which will take time to develop) and other impacts from the court rulings, our investment in PGX First and Second Lien Term
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Loans decreased to $184,656 as of March 31, 2023, a discount of $65,969. The fair value at June 30, 2022 equaled its amortized cost.

During the nine months ended March 31, 2023, the valuation methodology for Research Now Group, Inc. & Survey Sampling International LLC (“Research Now”) for the First Lien Term Loan changed from relying solely on market quotes to a combination of market quotes and the yield method since market quotes were less active in the current period. As a result of this change and a public credit rating downgrade, the fair value of our investment in Research Now First Lien Term Loan decreased to $8,345 as of March 31, 2023, a discount of $1,014 from its amortized cost, compared to the $426 unrealized discount recorded at June 30, 2022.

During the nine months ended March 31, 2023, the valuation methodology for Rising Tide Holdings, Inc. (“West Marine”) changed from the yield approach to the CVM method, given the decline in company performance and increase in net leverage. As a result, the fair value of our investment in West Marine decreased to $11,812 as of March 31, 2023, a discount of $11,669 to its amortized cost, compared to the unrealized discount of $1,119 recorded at June 30, 2022.
During the nine months ended March 31, 2023, the valuation methodology for Shutterfly, LLC (“Shutterfly”) changed from market quotes to a combination of market quotes and the yield method, due to a decrease in average liquidity of market quotes. As a result of a decrease in observed market quotes and a public credit rating downgrade, the fair value of our investment in Shutterfly decreased to $13,880 as of March 31, 2023, a discount of $6,142 from its amortized cost, compared to the $2,758 unrealized discount recorded at June 30, 2022.
During the nine months ended March 31, 2023, the valuation methodology for Town & Country Holdings, Inc. (“Town & Country”) for the First Lien Term Loan changed from the yield method to the CVM method, due to a restructuring of the equity ownership during the current period. As a result, our investment in Town & Country First Lien Term Loan is $169,940 as of March 31, 2023, which is equal to its amortized cost. The fair value at June 30, 2022 also equaled its amortized cost.
During the nine months ended March 31, 2023, the valuation methodology for Vision Solutions, Inc (“Precisely”) changed from a combination of the yield method, market quotes, and inclusion of the price observed in a minority equity transaction for the Precisely investment itself (given the recency and inclusion of outside investors in the transaction at June 30, 2022) to a combination of the yield method and market quotes, since the noted transaction was no longer relevant. As a result of a decrease in the quoted price of the Second Lien Term Loan, the fair value of our investment in Precisely decreased to $67,796 as of March 31, 2023, a discount of $11,506 from its amortized cost, compared to the $896 unrealized discount recorded at June 30, 2022.
Credit Quality Indicators and Undrawn Commitments
As of March 31, 2023, $4,429,384 of our loans to portfolio companies, at fair value, bear interest at floating rates and have LIBOR or SOFR floors ranging from 0.0% - 5.0%. As of March 31, 2023, $1,046,405 of our loans to portfolio companies, at fair value, bear interest at fixed rates ranging from 6.8% to 20.0%. As of June 30, 2022, $4,544,854 of our loans to portfolio companies, at fair value, bore interest at floating rates and have LIBOR floors ranging from 0.0% to 3.0%. As of June 30, 2022, $731,388 of our loans to portfolio companies, at fair value, bore interest at fixed rates ranging from 1.0% to 22.0%
As of March 31, 2023 and June 30, 2022, the cost basis of our loans on non-accrual status amounted to $170,573 and $181,393 respectively, with fair value of $17,067 and $31,454, respectively. The fair values of these investments represent approximately 0.2% and 0.4% of our total assets at fair value as of March 31, 2023 and June 30, 2022, respectively.
Undrawn committed revolvers and delayed draw term loans to our portfolio companies incur commitment and unused fees ranging from 0.00% to 7.25%. As of March 31, 2023 and June 30, 2022, we had $54,133 and $43,934, respectively, of undrawn revolver and delayed draw term loan commitments to our portfolio companies. The fair value of our undrawn committed revolvers and delayed draw term loans was zero as of March 31, 2023 and June 30, 2022 as they were all floating rate instruments that repriced frequently.
National Property REIT Corp.
Prospect owns 100% of the equity of NPH Property Holdings, LLC (“NPH”), a consolidated holding company which owns 100% of the common equity of NPRC.
NPRC is a Maryland corporation and a qualified REIT for federal income tax purposes. NPRC was formed to hold for investment, operate, finance, lease, manage, and sell a portfolio of real estate assets and engage in any and all other activities as may be necessary, incidental or convenient to carry out the foregoing. NPRC acquires real estate assets, including, but not limited to, industrial, commercial, and multi-family properties. NPRC may acquire real estate assets directly or through joint ventures by making a majority equity investment in a property-owning entity (“JV”). Additionally, through its wholly-owned subsidiaries, NPRC invests in online consumer loans and rated secured structured notes (“RSSN”).
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

During the nine months ended March 31, 2023, we received partial repayments of $86,852 of our loans previously outstanding with NPRC and its wholly owned subsidiaries and $4,000 as a return of capital on our equity investment in NPRC. During the nine months ended March 31, 2023, we provided $132,071 of debt financing and $3,600 of equity financing to NPRC to invest in real estate property, to provide working capital, and to fund purchases of rated secured structured notes.
The online consumer loan investments held by certain of NPRC’s wholly owned subsidiaries are unsecured obligations of individual borrowers that are issued in amounts ranging from $1 to $50, with fixed terms ranging from 60 months to 84 months. As of March 31, 2023, the outstanding investment in online consumer loans by certain of NPRC’s wholly-owned subsidiaries was comprised of 106 individual loans, residual interest in two securitizations, and one corporate bond, and had an aggregate fair value of $21,181. The average outstanding individual loan balance is approximately $3 and the loans mature on dates ranging from April 1, 2023 to April 11, 2025 with a weighted-average outstanding term of 12 months as of March 31, 2023. Fixed interest rates range from 9.0% to 36.0% with a weighted-average current interest rate of 17.0%. As of March 31, 2023, our investment in NPRC and its wholly-owned subsidiaries relating to online consumer lending had a fair value of $21,580.
As of March 31, 2023, based on outstanding principal balance, 43.3% of the online consumer loan portfolio held by certain of NPRC’s wholly-owned subsidiaries was invested in super prime loans (borrowers with a Fair Isaac Corporation (“FICO”) score, of 720 or greater), 44.2% of the portfolio in prime loans (borrowers with a FICO score of 660 to 719) and 12.5% of the portfolio in near prime loans (borrowers with a FICO score of 580 to 659, a portion of which are considered sub-prime).
Loan TypeOutstanding Principal BalanceFair ValueInterest Rate RangeWeighted Average Interest Rate*
Super Prime$135 $132 9.0%-20.5%12.3%
Prime138 133 13.5%-25.0%19.1%
Near Prime39 32 23.3%-36.0%26.1%
*Weighted by outstanding principal balance of the online consumer loans.

The rated secured structured note investments held by certain of NPRC’s wholly owned subsidiaries are subordinated debt interests in broadly syndicated loans managed by established collateral management teams with many years of experience in the industry. As of March 31, 2023, the outstanding investment in rated secured structured notes by certain of NPRC’s wholly owned subsidiaries was comprised of 94 investments with a fair value of $425,903 and face value of $448,235. The average outstanding note is approximately $4,768 with an expected maturity date ranging from April 2026 to October 2033 and weighted-average expected maturity of 6 years as of March 31, 2023. Coupons range from three-month LIBOR (“3ML”) plus 5.20% to 9.23% with a weighted-average coupon of 3ML + 6.93%. As of March 31, 2023, our investment in NPRC and its wholly-owned subsidiaries relating to rated secured structured notes had a fair value of $200,600.
As of March 31, 2023, based on outstanding notional balance, 12.6% of the portfolio was invested in Single - B rated tranches and 87.4% of the portfolio in BB rated tranches.
As of March 31, 2023, our investment in NPRC and its wholly owned subsidiaries had an amortized cost of $908,266 and a fair value of $1,594,673, including our investment in online consumer lending and rated secured structured notes as discussed above. The fair value of $1,372,493 related to NPRC’s real estate portfolio was comprised of forty-eight multi-family properties, eight student housing properties, four senior living properties, and three commercial properties. The following table shows the location, acquisition date, purchase price, and mortgage outstanding due to other parties for each of the properties held by NPRC as of March 31, 2023:
No.Property NameCityAcquisition DatePurchase PriceMortgage Outstanding
1Filet of ChickenForest Park, GA10/24/2012$7,400 $— 
2Arlington Park Marietta, LLCMarietta, GA5/8/201314,850 13,492 
3Taco Bell, OKYukon, OK6/4/20141,719 — 
4Taco Bell, MOMarshall, MO6/4/20141,405 — 
5Abbie Lakes OH Partners, LLCCanal Winchester, OH9/30/201412,600 14,877 
6Kengary Way OH Partners, LLCReynoldsburg, OH9/30/201411,500 15,040 
7Lakeview Trail OH Partners, LLCCanal Winchester, OH9/30/201426,500 28,691 
8Lakepoint OH Partners, LLCPickerington, OH9/30/201411,000 16,328 
9Sunbury OH Partners, LLCColumbus, OH9/30/201413,000 16,558 
10Heatherbridge OH Partners, LLCBlacklick, OH9/30/201418,416 23,656 
66

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

No.Property NameCityAcquisition DatePurchase PriceMortgage Outstanding
11Jefferson Chase OH Partners, LLCBlacklick, OH9/30/201413,551 18,426 
12Goldenstrand OH Partners, LLCHilliard, OH10/29/20147,810 11,229 
13SSIL I, LLCAurora, IL11/5/201534,500 25,028 
14Vesper Tuscaloosa, LLCTuscaloosa, AL9/28/201654,500 42,032 
15Vesper Iowa City, LLCIowa City, IA9/28/201632,750 24,239 
16Vesper Corpus Christi, LLCCorpus Christi, TX9/28/201614,250 10,545 
17Vesper Campus Quarters, LLCCorpus Christi, TX9/28/201618,350 13,841 
18Vesper College Station, LLCCollege Station, TX9/28/201641,500 31,302 
19Vesper Kennesaw, LLCKennesaw, GA9/28/201657,900 49,852 
20Vesper Statesboro, LLCStatesboro, GA9/28/20167,500 7,480 
21Vesper Manhattan KS, LLCManhattan, KS9/28/201623,250 14,679 
229220 Old Lantern Way, LLCLaurel, MD1/30/2017187,250 153,580 
237915 Baymeadows Circle Owner, LLCJacksonville, FL 10/31/201795,700 90,290 
248025 Baymeadows Circle Owner, LLCJacksonville, FL 10/31/201715,300 15,704 
2523275 Riverside Drive Owner, LLCSouthfield, MI11/8/201752,000 54,411 
2623741 Pond Road Owner, LLCSouthfield, MI11/8/201716,500 18,852 
27150 Steeplechase Way Owner, LLCLargo, MD1/10/201844,500 36,608 
28Olentangy Commons Owner LLCColumbus, OH6/1/2018113,000 92,876 
29Villages of Wildwood Holdings LLCFairfield, OH7/20/201846,500 58,393 
30Falling Creek Holdings LLCRichmond, VA8/8/201825,000 25,374 
31Crown Pointe Passthrough LLCDanbury, CT8/30/2018108,500 89,400 
32Lorring Owner LLCForestville, MD10/30/201858,521 47,680 
33Hamptons Apartments Owner, LLCBeachwood, OH1/9/201996,500 79,520 
345224 Long Road Holdings, LLCOrlando, FL6/28/201926,500 21,200 
35Druid Hills Holdings LLCAtlanta, GA7/30/201996,000 79,104 
36Bel Canto NPRC Parcstone LLCFayetteville, NC10/15/201945,000 42,793 
37Bel Canto NPRC Stone Ridge LLCFayetteville, NC10/15/201921,900 21,545 
38Sterling Place Holdings LLCColumbus, OH10/28/201941,500 34,196 
39SPCP Hampton LLCDallas, TX11/2/202036,000 38,843 
40Palmetto Creek Holdings LLCNorth Charleston, SC11/10/202033,182 25,865 
41Valora at Homewood Holdings LLCHomewood, AL11/19/202081,250 63,844 
42NPRC Fairburn LLCFairburn, GA12/14/202052,140 43,900 
43NPRC Grayson LLCGrayson, GA12/14/202047,860 40,500 
44NPRC Taylors LLCTaylors, SC1/27/202118,762 14,075 
45Parkside at Laurel West Owner LLCSpartanburg, SC2/26/202157,005 42,025 
46Willows at North End Owner LLCSpartanburg, SC2/26/202123,255 19,000 
47SPCP Edge CL Owner LLCWebster, TX3/12/202134,000 25,496 
48Jackson Pear Orchard LLCRidgeland, MS6/28/202150,900 42,975 
49Jackson Lakeshore Landing LLCRidgeland, MS6/28/202122,600 17,955 
50Jackson Reflection Pointe LLCFlowood, MS6/28/202145,100 33,203 
51Jackson Crosswinds LLCPearl, MS6/28/202141,400 38,601 
52Elliot Apartments Norcross, LLCNorcross, GA11/30/2021128,000 102,301 
53Orlando 442 Owner, LLC (West Vue Apartments)Orlando, FL12/30/202197,500 73,000 
54NPRC Wolfchase LLCMemphis, TN3/18/202282,100 60,000 
55NPRC Twin Oaks LLCHattiesburg. MS3/18/202244,850 34,242 
56NPRC Lancaster LLCBirmingham, AL3/18/202237,550 28,650 
57NPRC Rutland LLCMacon, GA3/18/202229,750 22,768 
58Southport Owner LLC (Southport Crossing)Indianapolis, IN3/29/202248,100 36,075 
59TP Cheyenne, LLCCheyenne, WY5/26/202227,500 17,656 
60TP Pueblo, LLCPueblo, CO5/26/202231,500 20,166 
61TP Stillwater, LLCStillwater, OK5/26/202226,100 15,328 
62TP Kokomo, LLCKokomo, IN5/26/202220,500 12,753 
67

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

No.Property NameCityAcquisition DatePurchase PriceMortgage Outstanding
63Terraces at Perkins Rowe JV LLCBaton Rouge, LA11/14/202241,400 29,566 
$2,672,726 $2,237,608 
Unconsolidated Significant Subsidiaries
Our investments are generally in small and mid-sized companies in a variety of industries. In accordance with Regulation S-X 3-09 and Regulation S-X 4-08(g), we must determine which of our unconsolidated controlled portfolio companies are considered “significant subsidiaries,” if any, as defined in Rule 1-02(w)(2) for BDC’s and closed end investment companies. Regulation S-X 3-09 requires separate audited financial statements of an unconsolidated subsidiary in an annual report. Regulation S-X 4-08(g) requires summarized financial information in an annual report.
Pursuant to Regulation S-X 10-01(b), Interim Financial Statements, summarized interim income statement information is required for an unconsolidated subsidiary within a quarterly report if the unconsolidated subsidiary would otherwise require separate audited financial statements within an annual report pursuant to Regulation S-X 3-09.
As of March 31, 2023, InterDent, Inc. (“InterDent”) was deemed to be a significant subsidiary. The following table shows summarized income statement information for InterDent for the periods included in this quarterly report:
Three Months Ended March 31, Nine Months Ended March 31,
Summary Statement of Operations2023202220232022
Total revenue$81,838 $80,104 $247,068 $234,690 
Operating expenses82,436 77,140 240,740 231,628 
Other expenses (including tax expense)8,430 7,438 20,276 20,212 
   Net (loss)$(9,028)$(4,474)$(13,948)$(17,150)
During the three months ended March 31, 2023, NPRC was deemed to be a significant subsidiary. The following table shows summarized income statement information for NPRC for the periods included in this quarterly report:
Three Months Ended March 31, Nine Months Ended March 31,
Summary Statement of Operations2023202220232022
Total income$100,769 $104,120 $313,223 $630,858 
Operating expenses48,980 39,541 157,176 131,242 
Operating income51,789 64,579 156,047 499,616 
Interest expense(65,797)(59,607)(201,646)(175,038)
Depreciation and amortization(23,094)(28,154)(81,033)(83,201)
Fair value adjustment3,130 (2,274)(3,435)960 
Net (loss) income$(33,972)$(25,456)$(130,067)$242,337 
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PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Note 4. Revolving Credit Facility
On May 15, 2007, we formed our wholly owned subsidiary, Prospect Capital Funding LLC (“PCF”), a Delaware limited liability company and a bankruptcy remote special purpose entity, which holds certain of our portfolio loan investments that are used as collateral for the revolving credit facility at PCF. Since origination of the revolving credit facility, we have renegotiated the terms and extended the commitments of the revolving credit facility several times. Most recently, effective September 15, 2022, we completed an extension and upsizing of the revolving credit facility (the “2022 Facility” or the “Revolving Credit Facility”). The lenders have extended commitments of $1,777,500 as of March 31, 2023. The 2022 Facility includes an accordion feature which allows commitments to be increased up to $2,000,000 in the aggregate. The extension and upsizing of the Revolving Credit Facility extended the maturity date to September 15, 2027 and the revolving period through September 15, 2026, followed by an additional one-year amortization period, with distributions allowed to Prospect after the completion of the revolving period. During such one-year amortization period, all principal payments on the pledged assets will be applied to reduce the balance. At the end of the one-year amortization period, the remaining balance will become due.

The Revolving Credit Facility contains restrictions pertaining to the geographic and industry concentrations of funded loans, maximum size of funded loans, interest rate payment frequency of funded loans, maturity dates of funded loans and minimum equity requirements, among other items. The Revolving Credit Facility also contains certain requirements relating to portfolio performance, including required minimum portfolio yield and limitations on delinquencies and charge-offs, violation of which could result in the early termination of the Revolving Credit Facility. As of March 31, 2023, we were in compliance with the applicable covenants of the Revolving Credit Facility.
Interest on borrowings under the 2022 Facility is one-month SOFR plus 205 basis points. Additionally, the lenders charge a fee on the unused portion of the credit facility equal to either 40 basis points if more than 60% of the credit facility is drawn, 70 basis points if more than 35% and an amount less than or equal to 60% of the credit facility is drawn, or 150 basis points if an amount less than or equal to 35% of the credit facility is drawn. The 2022 Facility requires us to pledge assets as collateral in order to borrow under the credit facility.
For the nine months ended March 31, 2023 and March 31, 2022, the average stated interest rate (i.e., rate in effect plus the spread) and average outstanding borrowings for the Revolving Credit Facility were as follows:
Three Months Ended March 31,Nine Months Ended March 31,
2023202220232022
Average stated interest rate6.61%2.14%5.44 %2.14 %
Average outstanding balance839,694 737,280 926,518 546,080 
As of March 31, 2023 and June 30, 2022, we had $609,101 and $660,536, respectively, available to us for borrowing under the Revolving Credit Facility, net of $888,405 and $839,464 outstanding borrowings as of the respective balance sheet dates. As of March 31, 2023, the investments, including cash and cash equivalents, used as collateral for the Revolving Credit Facility had an aggregate fair value of $2,577,544, which represents 33.7% of our total investments, including cash and cash equivalents. These assets are held and owned by PCF, a bankruptcy remote special purpose entity, and, as such, these investments are not available to our general creditors. As additional eligible investments are transferred to PCF and pledged under the Revolving Credit Facility, PCF will generate additional availability up to the current commitment amount of $1,777,500. The release of any assets from PCF requires the approval of the facility agent.
In connection with the origination and amendments of the Revolving Credit Facility, we incurred $25,047 of fees, all of which are being amortized over the term of the facility. As of March 31, 2023 and June 30, 2022, $14,842 and $10,801, respectively, of the fees remain to be amortized and is reflected as deferred financing costs on the Consolidated Statements of Assets and Liabilities.
During the three months ended March 31, 2023 and March 31, 2022, we recorded $16,157 and $6,452, respectively, of interest costs, unused fees and amortization of financing costs on the Revolving Credit Facility as interest expense. During the nine months ended March 31, 2023 and March 31, 2022, we recorded $43,653 and $16,153, respectively, of interest costs, unused fees and amortization of financing costs on the Revolving Credit Facility as interest expense.
69

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Note 5. Convertible Notes
2022 Notes
On April 11, 2017, we issued $225,000 aggregate principal amount of convertible notes that matured on July 15, 2022 (the “Original 2022 Notes”), unless previously converted or repurchased in accordance with their terms. The Original 2022 Notes bore interest at a rate of 4.95% per year, payable semi-annually on January 15 and July 15 each year, beginning July 15, 2017. Total proceeds from the issuance of the Original 2022 Notes, net of underwriting discounts and offering costs, were $218,010. On May 18, 2018, we issued an additional $103,500 aggregate principal amount of convertible notes that matured on July 15, 2022 (the “Additional 2022 Notes,” and together with the Original 2022 Notes, the “2022 Notes”), unless previously converted or repurchased in accordance with their terms. The Additional 2022 Notes were a further issuance of, and were fully fungible and ranked equally in right of payment with, the Original 2022 Notes and bore interest at a rate of 4.95% per year, payable semi-annually on January 15 and July 15 each year, beginning July 15, 2018. Total proceeds from the issuance of the Additional 2022 Notes, net of underwriting discounts and offering costs, were $100,749.
During the nine months ended March 31, 2022, we commenced a tender offer to purchase for cash up to $60,000 aggregate principal outstanding amount of the 2022 Notes at the purchase price of 102.50%, plus accrued and unpaid interest. As a result, $50,554 aggregate principal amount of the 2022 Notes were validly tendered and accepted and we recognized a realized loss of $1,584 from the extinguishment of debt in the amount of the difference between the reacquisition price and the net carrying amount of the 2022 Notes, net of the proportionate amount of unamortized debt issuance costs.
On July 14, 2022, we converted $3 in outstanding principal amount of the 2022 Notes to 300 shares of common stock at a rate of 100.2305 shares of common stock per $1 principal amount, together with cash in lieu of fractional shares, in accordance with a Holder Conversion Notice.
As of June 30, 2022, the outstanding principal amount of the 2022 Notes was $60,501. On July 15, 2022 we repaid the remaining outstanding principal amount of $60,498 of the 2022 Notes, plus interest, at maturity.
Following the maturity of the 2022 Notes during the nine months ended March 31, 2023, none of the 2022 Notes remained outstanding.
2025 Notes
On March 1, 2019, we issued $175,000 aggregate principal amount of senior convertible notes that mature on March 1, 2025 (the “2025 Notes”), unless previously converted or repurchased in accordance with their terms. We granted the underwriters a 13-day over-allotment option to purchase up to an additional $26,250 aggregate principal amount of the 2025 Notes. The underwriters fully exercised the over-allotment option on March 11, 2019 and we issued $26,250 aggregate principal amount of 2025 Notes at settlement on March 13, 2019. The 2025 Notes bear interest at a rate of 6.375% per year, payable semi-annually on March 1 and September 1 each year, beginning September 1, 2019. Total proceeds from the issuance of the 2025 Notes, net of underwriting discounts and offering costs, were $198,674.
As of March 31, 2023 and June 30, 2022, the outstanding aggregate principal amount of the 2025 Notes were $156,168 and $156,168, respectively.
Certain key terms related to the convertible features for the 2025 Notes are listed below:
 2025 Notes
Initial conversion rate(1)110.7420 
Initial conversion price$9.03 
Conversion rate at March 31, 2023(1)(2)110.7420 
Conversion price at March 31, 2023(2)(3)$9.03 
Last conversion price calculation date3/1/2023
Dividend threshold amount (per share)(4)$0.060000 
(1)Conversion rates denominated in shares of common stock per $1 principal amount of the Convertible Notes converted. 
(2)Represents conversion rate and conversion price, as applicable, taking into account certain de minimis adjustments that will be made on the conversion date.
(3)The conversion price will increase only if the current monthly dividends (per share) exceed the dividend threshold amount (per share).
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

(4)The conversion rate is increased if monthly cash dividends paid to common shares exceed the monthly dividend threshold amount, subject to adjustment. Current dividend rates are at or below the minimum dividend threshold amount for further conversion rate adjustments for all bonds.
Interest accrues from the date of the original issuance of the Convertible Notes or from the most recent date to which interest has been paid or duly provided. Upon conversion, the holder will receive a separate cash payment with respect to the notes surrendered for conversion representing accrued and unpaid interest to, but not including, the conversion date. Any such payment will be made on the settlement date applicable to the relevant conversion on the Convertible Notes. If a holder converts the Convertible Notes after a record date for an interest payment but prior to the corresponding interest payment date, the holder will receive shares of our common stock based on the conversion formula described above, a cash payment representing accrued and unpaid interest through the record date in the normal course and a separate cash payment representing accrued and unpaid interest from the record date to the conversion date.
No holder of Convertible Notes will be entitled to receive shares of our common stock upon conversion to the extent (but only to the extent) that such receipt would cause such converting holder to become, directly or indirectly, a beneficial owner (within the meaning of Section 13(d) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder) of more than 5.0% of the shares of our common stock outstanding at such time. The 5.0% limitation shall no longer apply following the effective date of any fundamental change. We will not issue any shares in connection with the conversion or redemption of the Convertible Notes which would equal or exceed 20% of the shares outstanding at the time of the transaction in accordance with NASDAQ rules.
Subject to certain exceptions, holders may require us to repurchase, for cash, all or part of their Convertible Notes upon a fundamental change at a price equal to 100% of the principal amount of the Convertible Notes being repurchased plus any accrued and unpaid interest up to, but excluding, the fundamental change repurchase date. In addition, upon a fundamental change that constitutes a non-stock change of control we will also pay holders an amount in cash equal to the present value of all remaining interest payments (without duplication of the foregoing amounts) on such Convertible Notes through and including the maturity date.
In connection with the issuance of the Convertible Notes, we recorded a discount of $3,369 and debt issuance costs of $2,090 which are being amortized over the terms of the Convertible Notes. As of March 31, 2023 and June 30, 2022, $1,103 and $1,511 of the original issue discount and $699 and $966, respectively, of the debt issuance costs remain to be amortized and is included as a reduction within Convertible Notes on the Consolidated Statement of Assets and Liabilities.
During the three months ended March 31, 2023 and March 31, 2022, we recorded $2,711 and $3,550, respectively, of interest costs and amortization of financing costs on the Convertible Notes as interest expense. During the nine months ended March 31, 2023 and March 31, 2022, we recorded $8,266 and $11,333, respectively, of interest costs and amortization of financing costs on the Convertible Notes as interest expense.
Note 6. Public Notes
2023 Notes
On March 15, 2013, we issued $250,000 aggregate principal amount of unsecured notes that mature on March 15, 2023 (the “Original 2023 Notes”). The Original 2023 Notes bear interest at a rate of 5.875% per year, payable semi-annually on March 15 and September 15 of each year, beginning September 15, 2013. Total proceeds from the issuance of the Original 2023 Notes, net of underwriting discounts and offering costs, were $243,641. On June 20, 2018, we issued an additional $70,000 aggregate principal amount of unsecured notes that mature on March 15, 2023 (the “Additional 2023 Notes”, and together with the Original 2023 Notes, the “2023 Notes”). The Additional 2023 Notes were a further issuance of, and are fully fungible and rank equally in right of payment with, the Original 2023 Notes and bear interest at a rate of 5.875% per year, payable semi-annually on March 15 and September 15 of each year, beginning September 15, 2018. Total proceeds from the issuance of the Additional 2023 Notes, net of underwriting discounts, were $69,403.
71

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

On September 19, 2022, we commenced a tender offer to purchase for cash any and all of the $284,219 then outstanding aggregate principal amount of the 2023 Notes at a price of 98.00%, plus accrued and unpaid interest (“2023 Notes September Tender Offer”). On September 23, 2022, $347 aggregate principal amount of the 2023 Notes were validly tendered and accepted. On October 17, 2022, we commenced a tender offer to purchase for cash any and all of the $283,872 then outstanding aggregate principal amount of the 2023 Notes at a price of 98.50%, plus accrued and unpaid interest (“2023 Notes October Tender Offer”). On October 26, 2022, $1,508 aggregate principal amount of the 2023 Notes were validly tendered and accepted. On November 14, 2022, we commenced a tender offer to purchase for cash any and all of the $282,364 then outstanding aggregate principal amount of the 2023 Notes at a price of 98.75%, plus accrued and unpaid interest (“2023 Notes November Tender Offer”). On November 23, 2022, $249 aggregate principal amount of the 2023 Notes were validly tendered and accepted. As a result of 2023 Notes September, October, and November Tender Offers during the six months ended December 31, 2022, $2,104 aggregate principal amount of the 2023 Notes were validly tendered and accepted, and we recognized a realized loss of $30 from the extinguishment of debt in the amount of the difference between the reacquisition price and the net carrying amount of the 2023 Notes, net of the proportionate amount of unamortized debt issuance costs.
As of June 30, 2022, the outstanding aggregate principal amount of the 2023 Notes was $284,219. On March 15, 2023 we repaid the remaining outstanding principal amount of $282,115 of the 2023 Notes, plus interest, at maturity.
Following the maturity of the 2023 Notes during the nine months ended March 31, 2023, none of the 2023 Notes remained outstanding.
6.375% 2024 Notes
On October 1, 2018, we issued $100,000 aggregate principal amount of unsecured notes that mature on January 15, 2024 (the “6.375% 2024 Notes”). The 6.375% 2024 Notes bear interest at a rate of 6.375% per year, payable semi-annually on January 15 and July 15 of each year, beginning January 15, 2019. Total proceeds from the issuance of the 6.375% 2024 Notes, net of underwriting discounts and offering costs, were $98,985.
During the nine months ended March 31, 2022, we commenced a tender offer to purchase for cash any and all of the $81,389 aggregate principal amount of the 6.375% 2024 Notes at a purchase price of 107.75%, plus accrued and unpaid interest. As a result, $149 aggregate principal amount of the 6.375% 2024 Notes were validly tendered and accepted, and we recognized a loss of $12 from the extinguishment of debt in the amount of the difference between the reacquisition price and the net carrying amount of the 6.375% 2024 Notes, net of the proportionate amount of unamortized debt issuance costs.
As of March 31, 2023 and June 30, 2022, the outstanding aggregate principal amount of the 6.375% 2024 Notes were $81,240 and $81,240, respectively.
2029 Notes
On December 5, 2018, we issued $50,000 aggregate principal amount of unsecured notes that mature on June 15, 2029 (the “2029 Notes”). The 2029 Notes bear interest at a rate of 6.875% per year, payable quarterly on March 15, June 15, September 15, and December 15 of each year, beginning March 19, 2019. Total proceeds from the issuance of the 2029 Notes, net of underwriting discounts and offering costs, were $48,057. On February 9, 2019, we entered into an ATM program with B. Riley FBR, Inc., BB&T Capital Markets, and Comerica Securities, Inc., through which we could sell, by means of ATM offerings, up to $100,000 in aggregate principal amount of our existing 2029 Notes (“2029 Notes ATM” or “2029 Notes Follow-on Program”). The 2029 Notes are listed on the NYSE and trade thereon under the ticker “PBC.” During the year ended June 30, 2019, we issued an additional $19,170 aggregate principal amount under the 2029 Notes ATM, for net proceeds of $18,523, after commissions and offering costs. On December 30, 2021, we redeemed $69,170 of the aggregate principal amount of the 2029 Notes. The transaction resulted in our recognizing a loss of $2,044 during the three months ended December 31, 2021. Following the redemption, none of the 2029 Notes remained outstanding.
2026 Notes
72

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

On January 22, 2021, we issued $325,000 aggregate principal amount of unsecured notes that mature on January 22, 2026 (the “Original 2026 Notes”). The Original 2026 Notes bear interest at a rate of 3.706% per year, payable semi-annually on July 22, and January 22 of each year, beginning on July 22, 2021. Total proceeds from the issuance of the 2026 Notes, net of underwriting discounts and offering costs, were $317,720. On February 19, 2021, we issued an additional $75,000 aggregate principal amount of unsecured notes that mature on January 22, 2026 (the “Additional 2026 Notes”, and together with the Original 2026 Notes, the “2026 Notes”). The Additional 2026 Notes were a further issuance of, and are fully fungible and rank equally in right of payment with, the Original 2026 Notes and bear interest at a rate of 3.706% per year, payable semi-annually on July 22 and January 22 of each year, beginning July 22, 2021. Total proceeds from the issuance of the Additional 2026 Notes, net of underwriting discounts and offering costs, were $74,061. As of March 31, 2023 and June 30, 2022, the outstanding aggregate principal amount of the 2026 Notes were $400,000 and $400,000, respectively.
3.364% 2026 Notes
On May 27, 2021, we issued $300,000 aggregate principal amount of unsecured notes that mature on November 15, 2026 (the “3.364% 2026 Notes”). The 3.364% 2026 Notes bear interest at a rate of 3.364% per year, payable semi-annually on November 15, and May 15 of each year, beginning on November 15, 2021. Total proceeds from the issuance of the 3.364% 2026 Notes, net of underwriting discounts and offering costs, were $293,283. As of March 31, 2023 and June 30, 2022, the outstanding aggregate principal amount of the 3.364% 2026 Notes were $300,000 and $300,000, respectively.
3.437% 2028 Notes
On September 30, 2021, we issued $300,000 aggregate principal amount of unsecured notes that mature on October 15, 2028 (the “3.437% 2028 Notes”). The 3.437% 2028 Notes bear interest at a rate of 3.437% per year, payable semi-annually on April 15 and October 15 of each year, beginning on April 15, 2022. Total proceeds from the issuance of the 3.437% 2028 Notes, net of underwriting discounts and offering costs, were $291,798. As of March 31, 2023 and June 30, 2022, the outstanding aggregate principal amount of the 3.437% 2028 Notes were $300,000 and $300,000, respectively.
The 2023 Notes, the 6.375% 2024 Notes, the 2026 Notes, the 3.364% 2026 Notes, and the 3.437% 2028 Notes (collectively, the “Public Notes”) are direct unsecured obligations and rank equally with all of our unsecured indebtedness from time to time outstanding.
In connection with the issuance of the Public Notes we recorded a discount of $13,417 and debt issuance costs of $13,491, which are being amortized over the term of the notes. As of March 31, 2023 and June 30, 2022, $9,341 and $11,234 of the original issue discount and $8,924 and $11,047, respectively, of the debt issuance costs remain to be amortized and are included as a reduction within Public Notes on the Consolidated Statement of Assets and Liabilities.
During the three months ended March 31, 2023 and March 31, 2022, we recorded $14,878 and $15,581, respectively, of interest costs and amortization of financing costs on the Public Notes as interest expense. During the nine months ended March 31, 2023 and March 31, 2022, we recorded $46,097 and $46,336, respectively, of interest costs and amortization of financing costs on the Public Notes as interest expense.
73

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Note 7. Prospect Capital InterNotes® 
On February 13, 2020, we entered into a selling agent agreement with InspereX LLC (formerly known as “Incapital LLC”) (the “Selling Agent Agreement”), authorizing the issuance and sale from time to time of up to $1,000,000 of Prospect Capital InterNotes® (collectively with previously authorized selling agent agreements, the “InterNotes® Offerings”). On February 8, 2023, our Board of Directors reauthorized $1,000,000 of Prospect Capital InterNotes® for sale under the Selling Agent Agreement. Additional agents may be appointed by us from time to time in connection with the InterNotes® Offering and become parties to the Selling Agent Agreement. We have, from time to time, repurchased certain notes issued through the InterNotes® Offerings and, therefore, as of March 31, 2023, $355,464 aggregate principal amount of Prospect Capital InterNotes® were outstanding.
These notes are direct unsecured obligations and rank equally with all of our unsecured indebtedness from time to time outstanding. Each series of notes will be issued by a separate trust. These notes bear interest at fixed interest rates and offer a variety of maturities no less than twelve months from the original date of issuance.
During the nine months ended March 31, 2023, we issued $13,333 aggregate principal amount of Prospect Capital InterNotes® for net proceeds of $13,153. These notes were issued with stated interest rates ranging from 4.50% to 5.95% with a weighted average interest rate of 5.41%. These notes will mature between October 15, 2025 and March 15, 2033. The following table summarizes the Prospect Capital InterNotes® issued during the nine months ended March 31, 2023:
Tenor at
Origination
(in years)
Principal
Amount
Interest Rate
Range
Weighted
Average
Interest Rate
Maturity Date Range
3$6,539 
5.00% – 5.75%
5.50%October 15, 2025 – March 15, 2026
52,635 
4.50% – 5.50%
4.50%July 15, 2027 – October 15, 2027
61,933 5.75%5.75%December 15, 2028 – March 15, 2029
102,226 5.95%5.95%December 15, 2032 – March 15, 2033
$13,333 
During the nine months ended March 31, 2022, we issued $155,909 aggregate principal amount of our Prospect Capital InterNotes® for net proceeds of $152,441. These notes were issued with stated interest rates ranging from 2.25% to 4.63% with a weighted average interest rate of 3.48%. These notes mature between February 15, 2025 and March 15, 2052. The following table summarizes the Prospect Capital InterNotes® issued during the nine months ended March 31, 2022:
Tenor at
Origination
(in years)
Principal
Amount
Interest Rate
Range
Weighted
Average
Interest Rate
Maturity Date Range
3$1,499 2.50 %2.50%February 15, 2025 – March 15, 2025
558,068 
2.25% – 4.50%
3.26%July 15, 2026 – March 15, 2027
720,929 
2.75% – 4.25%
3.02%July 15, 2028 – February 15, 2029
1022,435 
3.15% – 4.50%
3.38%July 15, 2031 – March 15, 2032
122,422 3.70 %3.70%July 15, 2033
1515,041 
3.50% – 4.50%
3.84%July 15, 2036 – February 15, 2037
3035,515 
4.00% – 4.63%
4.06%July 15, 2051 – March 15, 2052
$155,909 
During the nine months ended March 31, 2023, we repaid $5,433 aggregate principal amount of Prospect Capital InterNotes® at par in accordance with the Survivor’s Option of the InterNotes®. As a result of these transactions, we recorded a loss in the amount of the unamortized debt issuance costs. The net loss on the extinguishment of Prospect Capital InterNotes® in the nine months ended March 31, 2023 was $138.

74

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

The following table summarizes the Prospect Capital InterNotes® outstanding as of March 31, 2023:
Tenor at
Origination
(in years)
Principal
Amount
Interest Rate
Range
Weighted
Average
Interest Rate
Maturity Date Range
3$8,700 
1.50% – 5.75%
4.68%January 15, 2024 – March 15, 2026
597,050 
2.25% – 5.50%
3.30%January 15, 2026 – October 15, 2027
616,790 
3.00% – 5.75%
3.32%June 15, 2027 – March 15, 2029
728,912 
2.75% – 4.25%
3.17%January 15, 2028 – February 15, 2029
83,486 
3.40% – 3.50%
3.45%June 15, 2029 – July 15, 2029
1079,222 
3.15% – 5.95%
3.94%August 15, 2029 – March 15, 2033
1214,491 
3.70% – 4.00%
3.95%June 15, 2033 – July 15, 2033
1514,647 
3.50% – 4.50%
3.84%July 15, 2036 – February 15, 2037
183,030 
4.50% – 5.00%
4.80%January 15, 2031 – April 15, 2031
201,597 5.75%5.75%November 15, 2032
257,835 
6.25% – 6.50%
6.37%November 15, 2038 – May 15, 2039
3079,704 
4.00% – 6.63%
5.31%November 15, 2042 – March 15, 2052
Principal Outstanding$355,464    
Less Discounts
Unamortized Debt Issuance(6,817)
Carrying Amount$348,647 
75

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

During the nine months ended March 31, 2022, we repaid $1,223 aggregate principal amount of Prospect Capital InterNotes® at par in accordance with the Survivor’s Option, as defined in the InterNotes® Offering prospectus. In order to replace short maturity debt with longer-term debt, we redeemed $322,623 aggregate principal amount of Prospect Capital InterNotes® at par with a weighted average interest rate of 5.45%. As a result of these transactions, we recorded a loss in the amount of the unamortized debt issuance costs. The net loss on the extinguishment of Prospect Capital InterNotes® in the nine months ended March 31, 2022 was $6,403.
The following table summarizes the Prospect Capital InterNotes® outstanding as of June 30, 2022:
Tenor at
Origination
(in years)
Principal
Amount
Interest Rate
Range
Weighted
Average
Interest Rate
Maturity Date Range
3$2,161 
1.50% - 2.50%
2.19%January 15, 2024 – March 15, 2025
595,134 
2.25% - 4.50%
3.27%January 15, 2026 – June 15, 2027
615,057 3.00%3.00%June 15, 2027 – July 15, 2027
729,252 
2.75% - 4.25%
3.17%January 15, 2028 – February 15, 2029
83,511 
3.40% - 3.50%
3.45%June 15, 2029 – July 15, 2029
1077,434 
3.15% - 4.50%
3.85%August 15, 2029 – May 15, 2032
1215,066 
3.70% - 4.00%
3.95%June 15, 2033 – July 15, 2033
1515,041 
3.50% - 4.50%
3.84%July 15, 2036 – February 15, 2037
183,085 
4.50% - 5.00%
4.73%January 15, 2031 – April 15, 2031
201,597 5.75%5.75%November 15, 2032
258,036 
6.25% - 6.50%
6.37%November 15, 2038 – May 15, 2039
3082,190 
4.00% - 6.63%
5.29%November 15, 2042 – March 15, 2052
Principal Outstanding$347,564    
Less Discounts
Unamortized debt issuance(7,122)
Carrying Amount$340,442 
During the three months ended March 31, 2023 and March 31, 2022, we recorded $3,771 and $3,652, respectively, of interest costs and amortization of financing costs on the Prospect Capital InterNotes® as interest expense. During the nine months ended March 31, 2023 and March 31, 2022, we recorded $11,154 and $13,130, respectively, of interest costs and amortization of financing costs on the Prospect Capital InterNotes® as interest expense.
Note 8. Fair Value and Maturity of Debt Outstanding 
As of March 31, 2023, our asset coverage ratio stood at 306.2% based on the outstanding principal amount of our senior securities representing indebtedness of $2,481,277 and our asset coverage ratio on our senior securities that are stock was 193.2%. As of June 30, 2022, our asset coverage ratio stood at 273.3% based on the outstanding principal amount of our senior securities representing indebtedness of $2,769,156 and our asset coverage ratio on our senior securities that are stock was 215.6%. Refer to Note 9, Equity Offerings, Offering Expenses and Distributions for additional discussion on our senior securities that are stock.
Information about our senior securities is shown in the following table as of the end of each of the last ten fiscal years and as of March 31, 2023 (All figures in this item are in thousands except per unit data):
Total Amount
Outstanding(1)
Asset
Coverage per
Unit(2)
Involuntary
Liquidating
Preference per
Unit
Average
Market
Value per
Unit(3)
Credit Facility
Fiscal 2023 (as of March 31, 2023)$888,405 $8,552 — — 
Fiscal 2022 (as of June 30, 2022)839,464 9,015 — — 
Fiscal 2021 (as of June 30, 2021)356,937 17,408 — — 
Fiscal 2020 (as of June 30, 2020)237,536 22,000 — — 
Fiscal 2019 (as of June 30, 2019)167,000 34,298 — — 
76

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Fiscal 2018 (as of June 30, 2018)37,000 155,503 — — 
Fiscal 2017 (as of June 30, 2017)— — — — 
Fiscal 2016 (as of June 30, 2016)— — — — 
Fiscal 2015 (as of June 30, 2015)368,700 18,136 — — 
Fiscal 2014 (as of June 30, 2014)92,000 69,470 — — 
Fiscal 2013 (as of June 30, 2013)124,000 34,996 — — 
2015 Notes(4)    
Fiscal 2015 (as of June 30, 2015)$150,000 $2,241 — — 
Fiscal 2014 (as of June 30, 2014)150,000 2,305 — — 
Fiscal 2013 (as of June 30, 2013)150,000 2,578 — — 
2016 Notes(5)    
Fiscal 2016 (as of June 30, 2016)$167,500 $2,269 — — 
Fiscal 2015 (as of June 30, 2015)167,500 2,241 — — 
Fiscal 2014 (as of June 30, 2014)167,500 2,305 — — 
Fiscal 2013 (as of June 30, 2013)167,500 2,578 — — 
2017 Notes(6)    
Fiscal 2017 (as of June 30, 2017)$50,734 $2,251 — — 
Fiscal 2016 (as of June 30, 2016)129,500 2,269 — — 
Fiscal 2015 (as of June 30, 2015)130,000 2,241 — — 
Fiscal 2014 (as of June 30, 2014)130,000 2,305 — — 
Fiscal 2013 (as of June 30, 2013)130,000 2,578 — — 
2018 Notes(7)    
Fiscal 2017 (as of June 30, 2017)$85,419 $2,251 — — 
Fiscal 2016 (as of June 30, 2016)200,000 2,269 — — 
Fiscal 2015 (as of June 30, 2015)200,000 2,241 — — 
Fiscal 2014 (as of June 30, 2014)200,000 2,305 — — 
Fiscal 2013 (as of June 30, 2013)200,000 2,578 — — 
2019 Notes(9)    
Fiscal 2018 (as of June 30, 2018)$101,647 $2,452 — — 
Fiscal 2017 (as of June 30, 2017)200,000 2,251 — — 
Fiscal 2016 (as of June 30, 2016)200,000 2,269 — — 
Fiscal 2015 (as of June 30, 2015)200,000 2,241 — — 
Fiscal 2014 (as of June 30, 2014)200,000 2,305 — — 
Fiscal 2013 (as of June 30, 2013)200,000 2,578 — — 
5.00% 2019 Notes(10)
Fiscal 2018 (as of June 30, 2018)$153,536 $2,452 — — 
Fiscal 2017 (as of June 30, 2017)300,000 2,251 — — 
Fiscal 2016 (as of June 30, 2016)300,000 2,269 — — 
Fiscal 2015 (as of June 30, 2015)300,000 2,241 — — 
Fiscal 2014 (as of June 30, 2014)300,000 2,305 — — 
2020 Notes(13)
Fiscal 2019 (as of June 30, 2019)$224,114 $2,365 — — 
Fiscal 2018 (as of June 30, 2018)392,000 2,452 — — 
Fiscal 2017 (as of June 30, 2017)392,000 2,251 — — 
Fiscal 2016 (as of June 30, 2016)392,000 2,269 — — 
Fiscal 2015 (as of June 30, 2015)392,000 2,241 — — 
77

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Fiscal 2014 (as of June 30, 2014)400,000 2,305 — — 
6.95% 2022 Notes(8)
    
Fiscal 2014 (as of June 30, 2014)$100,000 $2,305 — $1,038 
Fiscal 2013 (as of June 30, 2013)100,000 2,578 — 1,036 
2022 Notes    
Fiscal 2022 (as of June 30, 2022)$60,501 $2,733 — — 
Fiscal 2021 (as of June 30, 2021)111,055 2,740 — — 
Fiscal 2020 (as of June 30, 2020)258,240 2,408 — — 
Fiscal 2019 (as of June 30, 2019)328,500 2,365 — — 
Fiscal 2018 (as of June 30, 2018)328,500 2,452 — — 
Fiscal 2017 (as of June 30, 2017)225,000 2,251 — — 
2023 Notes(11)(18)    
Fiscal 2022 (as of June 30, 2022)284,219 2,733 — — 
Fiscal 2021 (as of June 30, 2021)284,219 2,740 — — 
Fiscal 2020 (as of June 30, 2020)319,145 2,408 — — 
Fiscal 2019 (as of June 30, 2019)318,863 2,365 — — 
Fiscal 2018 (as of June 30, 2018)318,675 2,452 — — 
Fiscal 2017 (as of June 30, 2017)248,507 2,251 — — 
Fiscal 2016 (as of June 30, 2016)248,293 2,269 — — 
Fiscal 2015 (as of June 30, 2015)248,094 2,241 — — 
Fiscal 2014 (as of June 30, 2014)247,881 2,305 — — 
Fiscal 2013 (as of June 30, 2013)247,725 2,578 — — 
2024 Notes(14)
Fiscal 2020 (as of June 30, 2020)$233,788 $2,408 — $959 
Fiscal 2019 (as of June 30, 2019)234,443 2,365 — 1,002 
Fiscal 2018 (as of June 30, 2018)199,281 2,452 — 1,029 
Fiscal 2017 (as of June 30, 2017)199,281 2,251 — 1,027 
Fiscal 2016 (as of June 30, 2016)161,364 2,269 — 951 
6.375% 2024 Notes(11)
Fiscal 2023 (as of March 31, 2023)$81,240 $3,062 — — 
Fiscal 2022 (as of June 30, 2022)81,240 2,733 — — 
Fiscal 2021 (as of June 30, 2021)81,389 2,740 — — 
Fiscal 2020 (as of June 30, 2020)99,780 2,408 — — 
Fiscal 2019 (as of June 30, 2019)99,726 2,365 — — 
2025 Notes
Fiscal 2023 (as of March 31, 2023)$156,168 $3,062 — — 
Fiscal 2022 (as of June 30, 2022)156,168 2,733 — — 
Fiscal 2021 (as of June 30, 2021)156,168 2,740 — — 
Fiscal 2020 (as of June 30, 2020)201,250 2,408 — — 
Fiscal 2019 (as of June 30, 2019)201,250 2,365 — — 
2026 Notes
Fiscal 2023 (as of March 31, 2023)$400,000 $3,062 — — 
Fiscal 2022 (as of June 30, 2022)400,000 2,733 — — 
Fiscal 2021 (as of June 30, 2021)400,000 2,740 — — 
3.364% 2026 Notes
78

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Fiscal 2023 (as of March 31, 2023)$300,000 $3,062 — — 
Fiscal 2022 (as of June 30, 2022)300,000 2,733 — — 
Fiscal 2021 (as of June 30, 2021)300,000 2,740 — — 
3.437% 2028 Notes
Fiscal 2023 (as of March 31, 2023)$300,000 $3,062 — — 
Fiscal 2022 (as of June 30, 2022)300,000 2,733 — — 
2028 Notes(15)
Fiscal 2020 (as of June 30, 2020)$70,761 $2,408 — $950 
Fiscal 2019 (as of June 30, 2019)70,761 2,365 — 984 
Fiscal 2018 (as of June 30, 2018)55,000 2,452 — 1,004 
2029 Notes(16)
Fiscal 2021 (as of June 30, 2021)$69,170 $2,740 — $1,028 
Fiscal 2020 (as of June 30, 2020)69,170 2,408 — 970 
Fiscal 2019 (as of June 30, 2019)69,170 2,365 — 983 
Prospect Capital InterNotes®
Fiscal 2023 (as of March 31, 2023)$355,464 $3,062 — — 
Fiscal 2022 (as of June 30, 2022)347,564 2,733 — — 
Fiscal 2021 (as of June 30, 2021)508,711 2,740 — — 
Fiscal 2020 (as of June 30, 2020)680,229 2,408 — — 
Fiscal 2019 (as of June 30, 2019)707,699 2,365 — — 
Fiscal 2018 (as of June 30, 2018)760,924 2,452 — — 
Fiscal 2017 (as of June 30, 2017)980,494 2,251 — — 
Fiscal 2016 (as of June 30, 2016)908,808 2,269 — — 
Fiscal 2015 (as of June 30, 2015)827,442 2,241 — — 
Fiscal 2014 (as of June 30, 2014)785,670 2,305 — — 
Fiscal 2013 (as of June 30, 2013)363,777 2,578 — — 
6.50% Preferred Stock
Fiscal 2023 (as of March 31, 2023)$421,870 $48 $25 $— 
5.50% Preferred Stock
Fiscal 2023 (as of March 31, 2023)$879,458 $48 $25 — 
Fiscal 2022 (as of June 30, 2022)590,197 54 25 — 
Fiscal 2021 (as of June 30, 2021)137,040 65 25 — 
5.35% Preferred Stock
Fiscal 2023 (as of March 31, 2023)$150,000 $48 $25 $15.96 
Fiscal 2022 (as of June 30, 2022)150,000 54 $25 21.08 
All Senior Securities(11)(12)    
Fiscal 2023 (as of March 31, 2023)$3,932,605 $1,932 — — 
Fiscal 2022 (as of June 30, 2022)3,509,353 2,156 — — 
Fiscal 2021 (as of June 30, 2021)2,404,689 2,584 — — 
Fiscal 2020 (as of June 30, 2020)2,169,899 2,408 — — 
Fiscal 2019 (as of June 30, 2019)2,421,526 2,365 — — 
Fiscal 2018 (as of June 30, 2018)2,346,563 2,452 — — 
Fiscal 2017 (as of June 30, 2017)2,681,435 2,251 — — 
Fiscal 2016 (as of June 30, 2016)2,707,465 2,269 — — 
Fiscal 2015 (as of June 30, 2015)2,983,736 2,241 — — 
Fiscal 2014 (as of June 30, 2014)2,773,051 2,305 — — 
79

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Fiscal 2013 (as of June 30, 2013)1,683,002 2,578 — — 

(1)     Except as noted, the total amount of each class of senior securities outstanding at the end of the year/period presented (in 000’s).
(2)The asset coverage ratio for a class of secured senior securities representing indebtedness is calculated as our consolidated total assets, less all liabilities and indebtedness not represented by senior securities, divided by secured senior securities representing indebtedness. The asset coverage ratio for a class of unsecured senior securities representing indebtedness is inclusive of all senior securities representing indebtedness. With respect to the senior securities represented by indebtedness, this asset coverage ratio is multiplied by $1,000 to determine the Asset Coverage Per Unit. The asset coverage ratio for a class of senior securities representing preferred stock is calculated as our consolidated total assets, less all liabilities and indebtedness not represented by senior securities, divided by the sum of all senior securities representing indebtedness and the involuntary liquidation preference of senior securities representing preferred stock (the “Total Asset Coverage Ratio”). With respect to the Preferred Stock, the Asset Coverage Per Unit figure is expressed in terms of a dollar amount per share of outstanding Preferred Stock (based on a per share liquidation preference of $25). The rows reflecting “All Senior Securities” reflect the Total Asset Coverage Ratio as the asset coverage ratio, and express Asset Coverage Per Unit as per $1,000 of indebtedness or per $1,000 of Preferred Stock liquidation preference.
(3)This column is inapplicable, except for the 6.95% 2022 Notes, the 2024 Notes, the 2028 Notes, the 2029 Notes, and the 5.35% Preferred Stock. The average market value per unit is calculated as an average of quarter-end prices. With respect to the senior securities represented by indebtedness, the market value is shown per $1,000 of indebtedness.
(4)We repaid the outstanding principal amount of the 2015 Notes on December 15, 2015.
(5)We repaid the outstanding principal amount of the 2016 Notes on August 15, 2016.
(6)We repaid the outstanding principal amount of the 2017 Notes on October 15, 2017.
(7)We repaid the outstanding principal amount of the 2018 Notes on March 15, 2018.
(8)We redeemed the 6.95% 2022 Notes on May 15, 2015.
(9)We repaid the outstanding principal amount of the 2019 Notes on January 15, 2019.
(10)We redeemed the 5.00% 2019 Notes on September 26, 2018.
(11)For the fiscal years ended June 30, 2020 or prior, the 2023 Notes and 6.375% 2024 Notes are presented net of unamortized discount.
(12)While we do not consider commitments to fund under revolving arrangements to be Senior Securities, if we were to elect to treat such unfunded commitments, which were $54,133 as of March 31, 2023 as Senior Securities for purposes of Section 18 of the 1940 Act, our asset coverage per unit would be $1,906.
(13)We repaid the outstanding principal amount of the 2020 Notes on April 15, 2020.
(14)We redeemed the 2024 Notes on February 16, 2021.
(15)We redeemed the 2028 Notes on June 15, 2021.
(16)We redeemed the 2029 Notes on December 30, 2021.
(17)We redeemed the 2022 Notes on July 15, 2022.
(18)We redeemed the 2023 Notes on March 15, 2023.

The following table shows our outstanding debt as of March 31, 2023:
 Principal OutstandingUnamortized Discount & Debt Issuance CostsNet Carrying ValueFair ValueEffective Interest Rate
Revolving Credit Facility$888,405 $14,842 $888,405 (1)$888,405 (2)1M SOFR +2.05%(5)
2025 Notes156,168 1,802 154,366 153,833 (3)6.63%(6)
Convertible Notes156,168 154,366 153,833 
6.375% 2024 Notes81,240 161 81,079 81,065 (3)6.57%(6)
2026 Notes400,000 5,720 394,280 354,504 (3)3.98%(6)
3.364% 2026 Notes300,000 5,059 294,941 252,930 (3)3.60%(6)
3.437% 2028 Notes300,000 7,325 292,675 230,055 (3)3.64%(6)
Public Notes1,081,240 1,062,975 918,554 
Prospect Capital InterNotes®355,464 6,817 348,647 314,017 (4)5.76%(7)
Total$2,481,277 $2,454,393 $2,274,809 
(1)Net Carrying Value excludes deferred financing costs associated with the Revolving Credit Facility. See Note 2 for accounting policy details.
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(in thousands, except share and per share data)

(2)The fair value of the Revolving Credit Facility is equal to its carrying value as the Company has the ability to repay the outstanding principal at par value at any time. The fair value is categorized as Level 2 under ASC 820.
(3)We use available market quotes to estimate the fair value of the Convertible Notes and Public Notes. The fair value of these debt obligations are categorized as Level 1 under ASC 820.
(4)The fair value of Prospect Capital InterNotes® is estimated by discounting remaining payments using current Treasury rates plus spread based on observable market inputs. The fair value of these debt obligations are categorized as Level 2 under ASC 820.
(5)Represents the rate on drawn down and outstanding balances. Deferred debt issuance costs are amortized on a straight-line method over the stated life of the obligation.
(6)The effective interest rate is equal to the effect of the stated interest, the accretion of original issue discount and amortization of debt issuance costs.
(7)For the Prospect Capital InterNotes®, the rate presented is the weighted average effective interest rate. Interest expense and deferred debt issuance costs, which are amortized on a straight-line method over the stated life of the obligation which approximates level yield, are weighted against the average year-to-date principal balance.

The following table shows our outstanding debt as of June 30, 2022:
 Principal OutstandingUnamortized Discount & Debt Issuance CostsNet Carrying ValueFair ValueEffective Interest Rate
Revolving Credit Facility$839,464 $10,801 $839,464 (1)$839,464 (2)1ML +2.05 %(5)
2022 Notes60,501 18 60,483 60,753 (3)5.63%(6)
2025 Notes156,168 2,459 153,709 158,094 (3)6.63%(6)
Convertible Notes216,669 214,192 218,847 
2023 Notes284,219 600 283,619 286,101 (3)6.07%(6)
6.375% 81,240 299 80,941 82,084 (3)6.57%(6)
2026 Notes400,000 7,134 392,866 355,316 (3)3.98%(6)
3.364% 2026 Notes300,000 6,026 293,974 254,931 (3)3.60%(6)
3.437% 2028 Notes300,000 8,222 291,778 229,866 (3)3.64%(6)
Public Notes1,365,459 1,343,178 1,208,298 
Prospect Capital InterNotes®
347,564 7,122 340,442 285,822 (4)5.71%(7)
Total$2,769,156 $2,737,276 $2,552,431 

(1)Net Carrying Value excludes deferred financing costs associated with the Revolving Credit Facility. See Note 2 for accounting policy details.
(2)The fair value of the Revolving Credit Facility is equal to its carrying value as the Company has the ability to repay the outstanding principal at par value at any time. The fair value is categorized as Level 2 under ASC 820.
(3)We use available market quotes to estimate the fair value of the Convertible Notes and Public Notes. The fair value of these debt obligations are categorized as Level 1 under ASC 820.
(4)The fair value of Prospect Capital InterNotes® is estimated by discounting remaining payments using current Treasury rates plus spread based on observable market inputs. The fair value of these debt obligations are categorized as Level 2 under ASC 820.
(5)Represents the rate on drawn down and outstanding balances. Deferred debt issuance costs are amortized on a straight-line method over the stated life of the obligation.
(6)The effective interest rate is equal to the effect of the stated interest, the accretion of original issue discount and amortization of debt issuance costs.
(7)For the Prospect Capital InterNotes®, the rate presented is the weighted average effective interest rate. Interest expense and deferred debt issuance costs, which are amortized on a straight-line method over the stated life of the obligation which approximates level yield, are weighted against the average year-to-date principal balance.
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(in thousands, except share and per share data)

The following table shows the contractual maturities by fiscal year of our Revolving Credit Facility, Convertible Notes, Public Notes and Prospect Capital InterNotes® as of March 31, 2023:
Payments Due by Fiscal Year ending June 30,
TotalRemainder of 20232024202520262027After 5 Years
Revolving Credit Facility$888,405 $— $— $— $— $— $888,405 
Convertible Notes156,168 — — 156,168 — — — 
Public Notes1,081,240 — 81,240 — 400,000 300,000 300,000 
Prospect Capital InterNotes®355,464 — 662 1,499 36,657 74,632 242,014 
Total Contractual Obligations$2,481,277 $— $81,902 $157,667 $436,657 $374,632 $1,430,419 
We may from time to time seek to cancel or purchase our outstanding debt through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions or otherwise. The amounts involved may be material. In addition, we may from time to time enter into additional debt facilities, increase the size of existing facilities or issue additional debt securities, including secured debt, unsecured debt and/or debt securities convertible into common stock. Any such purchases or exchanges of outstanding debt would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors.
Note 9. Equity Offerings, Offering Expenses, and Distributions
On February 13, 2020, we filed a registration statement on Form N-2 (File No. 333-236415) that was effective upon filing pursuant to Rule 462(e) under the Securities Act as permitted under the Small Business Credit Availability Act. The registration statement permits us to issue, through one or more transactions, an indeterminate amount of securities, consisting of common stock, preferred stock, debt securities, subscription rights to purchase our securities, warrants representing rights to purchase our securities or separately tradable units combining two or more of our securities.
Preferred Stock
On August 3, 2020, we entered into a Dealer Manager Agreement with Preferred Capital Securities, LLC (“PCS”), amended on June 9, 2022, October 7, 2022 and February 10, 2023, pursuant to which PCS has agreed to serve as the Company’s agent, principal distributor and dealer manager for the Company’s offering of up to 72,000,000 shares, par value $0.001 per share, of preferred stock, with a liquidation preference of $25.00 per share. Such preferred stock will initially be issued in multiple series, including the 5.50% Series A1 Preferred Stock (“Series A1 Preferred Stock”), the 5.50% Series M1 Preferred Stock (“Series M1 Preferred Stock”), the 5.50% Series M2 Preferred Stock (“Series M2 Preferred Stock”), the 6.50% Series A3 Preferred Stock (“Series A3 Preferred Stock”), and the 6.50% Series M3 Preferred Stock (“Series M3 Preferred Stock”). In connection with such offering, on August 3, 2020, June 9, 2022, October 11, 2022 and February 10, 2023 we filed Articles Supplementary with the State Department of Assessments and Taxation of Maryland (“SDAT”), reclassifying and designating 120,000,000, 60,000,000, 120,000,000, and 60,000,000 shares, respectively, of the Company’s authorized and unissued shares of common stock into shares of preferred stock as “Convertible Preferred Stock.”

On October 30, 2020, and amended on February 18, 2022 and October 7, 2022, we entered into a Dealer Manager Agreement with InspereX LLC, pursuant to which InspereX LLC has agreed to serve as the Company’s agent and dealer manager for the Company’s offering of up to 10,000,000 shares, par value $0.001 per share, of preferred stock, with a liquidation preference of $25.00 per share. Such preferred stock will initially be issued in multiple series, including the 5.50% Series AA1 Preferred Stock (the “Series AA1 Preferred Stock”), the 5.50% Series MM1 Preferred Stock (the “Series MM1 Preferred Stock”), the 6.50% Series AA2 Preferred Stock (the “Series AA2 Preferred Stock”), and the 6.50% Series MM2 Preferred Stock (the “Series MM2 Preferred Stock” and together with the Series M1 Preferred Stock, the Series M2 Preferred Stock, the Series M3 Preferred Stock, and the Series MM1 Preferred Stock, the “Series M Preferred Stock”, and the Series MM2 Preferred Stock, together with the Series AA2 Preferred Stock, the Series A3 Preferred Stock and the Series M3 Preferred Stock, the “6.50% Preferred Stock”). In connection with such offering, on October 30, 2020, February 17, 2022, and October 11, 2022, we filed Articles Supplementary with the SDAT, reclassifying and designating an additional 80,000,000 shares of the Company’s authorized and unissued shares of common stock into shares of preferred stock as Convertible Preferred Stock. On May 19, 2021, we entered into an Underwriting Agreement with UBS Securities LLC, relating to the offer and sale of 187,000 shares, par value $0.001 per share, of 5.50% Series A2 Preferred Stock, with a liquidation preference of $25.00 per share (the “Series A2 Preferred Stock”, and together with the Series A1 Preferred Stock, Series M1 Preferred Stock, Series M2 Preferred Stock, Series AA1 Preferred Stock, and Series MM1 Preferred Stock, the “5.50% Preferred Stock”). The issuance of the Series A2 Preferred Stock settled on May 26, 2021. In connection with such offering, on May 19, 2021, we filed Articles Supplementary
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(in thousands, except share and per share data)

with the SDAT, reclassifying and designating an additional 1,000,000 shares of the Company’s authorized and unissued shares of common stock into shares of preferred stock as Convertible Preferred Stock.

In connection with the offerings of the 5.50% Preferred Stock and the 6.50% Preferred Stock, we adopted and amended, respectively, a preferred stock dividend reinvestment plan (the “Preferred Stock Plan” or the “Preferred Stock DRIP”), pursuant to which holders of the 5.50% Preferred Stock and the 6.50% Preferred Stock will have dividends on their 5.50% Preferred Stock and 6.50% Preferred Stock automatically reinvested in additional shares of such 5.50% Preferred Stock and 6.50% Preferred Stock at a price per share of $25.00, if they elect.

Each series of 5.50% Preferred Stock and 6.50% Preferred Stock ranks (with respect to the payment of dividends and rights upon liquidation, dissolution or winding up) (a) senior to our common stock, (b) on parity with each other series of our preferred stock, and (c) junior to our existing and future secured and unsecured indebtedness. See Note 8, Fair Value and Maturity of Debt Outstanding for further discussion on our senior securities.
At any time prior to the listing of the 5.50% Preferred Stock and the 6.50% Preferred Stock on a national securities exchange, shares of the 5.50% Preferred Stock and the 6.50% Preferred Stock are convertible, at the option of the holder of the 5.50% Preferred Stock and the 6.50% Preferred Stock (the “Holder Optional Conversion”). We will settle any Holder Optional Conversion by paying or delivering, as the case may be, (A) any portion of the Settlement Amount (as defined below) that we elect to pay in cash and (B) a number of shares of our common stock at a conversion rate equal to (1) (a) the Settlement Amount, minus (b) any portion of the Settlement Amount that we elect to pay in cash, divided by (2) the arithmetic average of the daily volume weighted average price of shares of our common stock over each of the five consecutive trading days ending on the Holder Conversion Exercise Date (such arithmetic average, the “5-day VWAP”). For the Series A1 Preferred Stock, the Series A3 Preferred Stock, the Series AA1 Preferred Stock, the Series AA2 Preferred Stock and the Series A2 Preferred Stock, “Settlement Amount” means (A) $25.00 per share (the “Stated Value”), plus (B) unpaid dividends accrued to, but not including, the Holder Conversion Exercise Date, minus (C) the applicable Holder Optional Conversion Fee for the respective Holder Conversion Deadline. For the Series M Preferred Stock, “Settlement Amount” means (A) the Stated Value, plus (B) unpaid dividends accrued to, but not including, the Holder Conversion Exercise Date, minus (C) the applicable Series M Clawback, if any. “Series M Clawback”, if applicable, means an amount equal to the aggregate amount of all dividends, whether paid or accrued, on such share of Series M Stock in the three full months prior to the Holder Conversion Exercise Date. Subject to certain limited exceptions, we will not pay any portion of the Settlement Amount in cash (other than cash in lieu of fractional shares of our common stock) until the five year anniversary of the date on which a share of 5.50% Preferred Stock or 6.50% Preferred Stock has been issued. Beginning on the five year anniversary of the date on which a share of 5.50% Preferred Stock or 6.50% Preferred Stock is issued, we may elect to settle all or a portion of any Holder Optional Conversion in cash without limitation or restriction. The right of holders to convert a share of 5.50% Preferred Stock or 6.50% Preferred Stock will terminate upon the listing of such share on a national securities exchange.
Subject to certain limited exceptions allowing earlier redemption, beginning on the earlier of the five year anniversary of the date on which a share of 5.50% Preferred Stock or 6.50% Preferred Stock has been issued, or, for listed shares of 5.50% Preferred Stock and 6.50% Preferred Stock, five years from the earliest date on which any series that has been listed was first issued (the earlier of such dates, the “Redemption Eligibility Date”), such share of 5.50% Preferred Stock or 6.50% Preferred Stock may be redeemed at any time or from time to time at our option (the “Issuer Optional Redemption”), at a redemption price of 100% of the Stated Value of the shares of 5.50% Preferred Stock or 6.50% Preferred Stock to be redeemed plus unpaid dividends accrued to, but not including, the date fixed for redemption.
Subject to certain limitations, each share of 5.50% Preferred Stock and 6.50% Preferred Stock may be converted at our option (the “Issuer Optional Conversion”). We will settle any Issuer Optional Conversion by paying or delivering, as the case may be, (A) any portion of the IOC Settlement Amount (as defined below) that we elect to pay in cash and (B) a number of shares of our common stock at a conversion rate equal to (1) (a) the IOC Settlement Amount, minus (b) any portion of the IOC Settlement Amount that we elect to pay in cash, divided by (2) the 5-day VWAP, subject to our ability to obtain or maintain any stockholder approval that may be required under the 1940 Act to permit us to sell our common stock below net asset value if the 5-day VWAP represents a discount to our net asset value per share of common stock. For the 5.50% Preferred Stock and 6.50% Preferred Stock, “IOC Settlement Amount” means (A) the Stated Value, plus (B) unpaid dividends accrued to, but not including, the date fixed for conversion. In connection with an Issuer Optional Conversion, we will use commercially reasonable efforts to obtain or maintain any stockholder approval that may be required under the 1940 Act to permit us to sell our common stock below net asset value. If we do not have or obtain any required stockholder approval under the 1940 Act to sell our common stock below net asset value and the 5-day VWAP is at a discount to our net asset value per share of common stock, we will settle any conversions in connection with an Issuer Optional Conversion by paying or delivering, as the case may be, (A) any portion of the IOC Settlement Amount that we elect to pay in cash and (B) a number of shares of our common stock at a conversion rate equal to (1) (a) the IOC Settlement Amount, minus (b) any portion of the IOC Settlement Amount that we
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(in thousands, except share and per share data)

elect to pay in cash, divided by (2) the NAV per share of common stock at the close of business on the business day immediately preceding the date of conversion. We will not pay any portion of the IOC Settlement Amount from an Issuer Optional Conversion in cash (other than cash in lieu of fractional shares of our common stock) until the Redemption Eligibility Date. Beginning on the Redemption Eligibility Date, we may elect to settle any Issuer Optional Conversion in cash without limitation or restriction. In the event that we exercise an Issuer Optional Conversion with respect to any shares of 5.50% Preferred Stock and 6.50% Preferred Stock, the holder of such 5.50% Preferred Stock or 6.50% Preferred Stock may instead elect a Holder Optional Conversion with respect to such 5.50% Preferred Stock or 6.50% Preferred Stock provided that the date of conversion for such Holder Optional Conversion would occur prior to the date of conversion for an Issuer Optional Conversion.
On July 12, 2021, we entered into an underwriting agreement by and among us, Prospect Capital Management L.P., Prospect Administration LLC, and Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and UBS Securities LLC, as representatives of the underwriters, relating to the offer and sale of 6,000,000 shares, or $150,000 in aggregate liquidation preference, of our 5.35% Series A Fixed Rate Cumulative Perpetual Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock” or “5.35% Preferred Stock”), at a public offering price of $25.00 per share. Pursuant to the Underwriting Agreement, we also granted the underwriters a 30-day option to purchase up to an additional 900,000 shares of Series A Preferred Stock solely to cover over-allotments. The offer settled on July 19, 2021, and no additional shares of the Series A Preferred Stock were issued pursuant to the option. In connection with such offering, on July 15, 2021, we filed Articles Supplementary with SDAT, reclassifying and designating 6,900,000 shares of the Company’s authorized and unissued shares of Common Stock into shares of Series A Preferred Stock.
The Series A Preferred Stock ranks (with respect to the payment of dividends and rights upon liquidation, dissolution or winding up) (a) senior to our common stock, (b) on parity with each other series of our preferred stock, and (c) junior to our existing and future secured and unsecured indebtedness. See Note 8, Fair Value and Maturity of Debt Outstanding for further discussion on our senior securities.
Subject to certain limited exceptions allowing earlier redemption, at any time after the close of business on July 19, 2026 (any such date, an “Optional Redemption Date”), at our sole option, we may redeem the Series A Preferred Stock in whole or, from time to time, in part, out of funds legally available for such redemption, at a price per share equal to the liquidation preference of $25.00 per share, plus an amount equal to all unpaid dividends on such shares (whether or not earned or declared, but excluding interest thereon) accumulated up to, but excluding, the date fixed for redemption. We may also redeem the Series A Preferred Stock at any time, in whole or, from time to time, in part, including prior to the Optional Redemption Date, pro rata, based on liquidation preference, with all other series of our then outstanding preferred stock, in the event that our Board determines to redeem any series of our preferred stock, in whole or, from time to time, in part, because such redemption is deemed necessary by the Board to comply with the asset coverage requirements of the 1940 Act or for us to maintain RIC status.
In the event of a Change of Control Triggering Event (as defined below), we may, at our option, exercise our special optional redemption right to redeem the Series A Preferred Stock, in whole or in part, within 120 days after the first date on which such Change of Control Triggering Event has occurred by paying the liquidation preference, plus an amount equal to all unpaid dividends on such shares (whether or not earned or declared, but excluding interest thereon) accumulated up to, but excluding, the date fixed for such redemption. To the extent that we exercise our optional redemption right or our special optional redemption right relating to the Series A Preferred Stock, the holders of Series A Preferred Stock will not be permitted to exercise the conversion right described below in respect of their shares called for redemption.
Except to the extent that we have elected to exercise our optional redemption right or our special optional redemption right by providing notice of redemption prior to the Change of Control Conversion Date (as defined below), upon the occurrence of a Change of Control Triggering Event, each holder of Series A Preferred Stock will have the right to convert some or all of the Series A Preferred Stock held by such holder on the Change of Control Conversion Date into a number of our shares of common stock per Series A Preferred Stock to be converted equal to the lesser of:
the quotient obtained by dividing (i) the sum of the Liquidation Preference per share plus an amount equal to all unpaid dividends thereon (whether or not earned or declared, but excluding interest thereon) accumulated up to, but excluding, the Change of Control Conversion Date (unless the Change of Control Conversion Date is after a Record Date for a Series A Preferred Stock dividend payment and prior to the corresponding Series A Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividends will be included in this sum) by (ii) the Common Stock Price (as defined below); and
6.03865, subject to certain adjustments,
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

subject, in each case, to provisions for the receipt of alternative consideration upon conversion as described in the applicable prospectus supplement.
If we have provided or provide a redemption notice with respect to some or all of the Series A Preferred Stock, holders of any Series A Preferred Stock that we have called for redemption will not be permitted to exercise their Change of Control Conversion Right in respect of any of their Series A Preferred Stock that have been called for redemption, and any Series A Preferred Stock subsequently called for redemption that have been tendered for conversion will be redeemed on the applicable date of redemption instead of converted on the Change of Control Conversion Date.
For purposes of the foregoing discussion of a redemption upon the occurrence of a Change of Control Triggering Event, the following definitions are applicable:
“Change of Control Triggering Event” means the occurrence of any of the following:
the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation and other than an Excluded Transaction) in one or a series of related transactions, of all or substantially all of the assets of the Company and its Controlled Subsidiaries taken as a whole to any “person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act) (other than to any Permitted Holders); provided that, for the avoidance of doubt, a pledge of assets pursuant to any of our secured debt instruments or the secured debt instruments of our Controlled Subsidiaries shall not be deemed to be any such sale, lease, transfer, conveyance or disposition; or
the consummation of any transaction (including, without limitation, any merger or consolidation and other than an Excluded Transaction) the result of which is that any “person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act) (other than any Permitted Holders) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of our outstanding Voting Stock, measured by voting power rather than number of shares.
Notwithstanding the foregoing, the consummation of any of the transactions referred to in the bullet points above will not be deemed a Change of Control Triggering Event if we or the acquiring or surviving consolidated entity has or continues to have a class of common securities (or ADRs representing such securities) listed on the NYSE, the NYSE American or NASDAQ, or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE American or NASDAQ, or is otherwise listed or quoted on a national securities exchange.
The “Change of Control Conversion Date” is the date the shares of Series A Preferred Stock are to be converted, which will be a business day selected by us that is no fewer than 20 days nor more than 35 days after the date on which we provide the notice described above to the holders of Series A Preferred Stock.
The “Common Stock Price” will be (i) if the consideration to be received in the Change of Control Triggering Event by the holders of our common stock is solely cash, the amount of cash consideration per share of our common stock or (ii) if the consideration to be received in the Change of Control Triggering Event by holders of our common stock is other than solely cash (x) the average of the closing sale prices per share of our common stock (or, if no closing sale price is reported, the average of the closing bid and ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) for the ten consecutive trading days immediately preceding, but not including, the effective date of the Change of Control Triggering Event as reported on the principal U.S. securities exchange on which our common stock is then traded, or (y) the average of the last quoted bid prices for our common stock in the over-the-counter market as reported by OTC Markets Group Inc. or similar organization for the ten consecutive trading days immediately preceding, but not including, the effective date of the Change of Control Triggering Event, if our common stock is not then listed for trading on a U.S. securities exchange.
“Controlled Subsidiary” means any of our subsidiaries, 50% or more of the outstanding equity interests of which are owned by us and our direct or indirect subsidiaries and of which we possess, directly or indirectly, the power to direct or cause the direction of the management or policies, whether through the ownership of voting equity interests, by agreement or otherwise.
“Excluded Transaction” means (i) any transaction that does not result in any reclassification, conversion, exchange or cancellation of all or substantially all of the outstanding shares of our Voting Stock; (ii) any changes resulting from a subdivision or combination or a change solely in par value; (iii) any transaction where the shares of our Voting Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving “person” (as that term is used in Section 13(d)(3) of the Exchange Act) or any direct or indirect parent company of the surviving “person” (as that term is used in Section 13(d)(3) of the Exchange Act) immediately after giving effect to such transaction; (iv) any transaction if (A) we become a direct or indirect wholly-owned subsidiary of a holding company and (B)(1) the direct or indirect holders of the Voting Stock of such holding company immediately following that
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(in thousands, except share and per share data)

transaction are substantially the same as the holders of our Voting Stock immediately prior to that transaction or (2) immediately following that transaction no “person” (as that term is used in Section 13(d)(3) of the Exchange Act) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company; or (v) any transaction primarily for the purpose of changing our jurisdiction of incorporation or form of organization.
“Permitted Holders” means (i) us, (ii) one or more of our Controlled Subsidiaries and (iii) Prospect Capital Management or any affiliate of Prospect Capital Management that is organized under the laws of a jurisdiction located in the United States of America and in the business of managing or advising clients.
“Voting Stocks” as applied to stock of any person, means shares, interests, participations or other equivalents in the equity interest (however designated) in such person having ordinary voting power for the election of the directors (or the equivalent) of such person, other than shares, interests, participations or other equivalents having such power only by reason of the occurrence of a contingency.
Except as provided above in connection with a Change of Control Triggering Event, the Series A Preferred Stock is not convertible into or exchangeable for any other securities or property.
For so long as the Series A Preferred Stock is outstanding, we will not exercise any option we have to convert any other series of our outstanding preferred stock to common stock, including the Issuer Optional Conversion, or any other security ranking junior to such preferred stock. As a result, and in accordance with ASC 480, we have presented our 5.50% Preferred Stock, 6.50% Preferred Stock, and Series A Preferred Stock within temporary equity on our Consolidated Statement of Assets and Liabilities as of March 31, 2023 and June 30, 2022.
Shares of the 5.50% Preferred Stock and 6.50% Preferred Stock will pay a monthly dividend, when and if declared by the Board, at a fixed annual rate of 5.50% and 6.50%, respectively, per annum of the Stated Value of $25.00 per share (computed on the basis of a 360-day year consisting of twelve 30-day months), payable in cash or through the issuance of additional 5.50% Preferred Stock and 6.50% Preferred Stock through the 5.50% Preferred Stock DRIP and 6.50% Preferred Stock DRIP, respectively.
Shares of the Series A Preferred Stock will pay a quarterly dividend, when and if declared by the Board, at a fixed annual rate of 5.35% per annum of the Stated Value of $25.00 per share (computed on the bases of a 360-day year consisting of twelve 30-day months), payable in cash.
During the nine months ended March 31, 2023 and March 31, 2022, we distributed approximately $35,057 and $11,078, respectively, to our 5.50% Preferred Stock holders. During the nine months ended March 31, 2023, we distributed approximately $8,246 to our 6.50% Preferred Stock holders. During the nine months ended March 31, 2023 and March 31, 2022, we distributed approximately $6,018 and $4,302 to our 5.35% Series A Preferred Stock holders.
Our distributions to our 5.50% Preferred Stock holders, 6.50% Preferred Stock holders, and 5.35% Series A Preferred Stock holders for the nine months ended March 31, 2023 and March 31, 2022, are summarized in the following table:
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Declaration DateRecord DatePayment DateAmount ($ per share), before pro ration for partial periodsAmount Distributed
5.50% Preferred Stock holders
5/7/20217/21/20218/2/2021$0.114583 $680 
5/7/20218/18/20219/1/20210.114583 786 
8/24/20219/15/202110/1/20210.114583 941 
8/24/202110/20/202111/1/20210.114583 1,054 
8/24/202111/17/202112/1/20210.114583 1,197 
11/5/202112/15/20211/3/20220.114583 1,296 
11/5/20211/19/20222/1/20220.114583 1,498 
11/5/20212/16/20223/1/20220.114583 1,688 
2/7/20223/23/20224/1/20220.114583 1,938 
Distributions for the nine months ended March 31, 2022$11,078 
5/6/20227/20/20228/1/2022$0.114583 $3,104 
5/6/20228/17/20229/1/20220.114583 3,721 
8/23/20229/21/202210/3/20220.114583 3,928 
8/23/202210/19/202211/1/20220.114583 4,077 
8/23/202211/16/202212/1/20220.114583 4,056 
11/8/202212/21/20221/3/20230.114583 4,051 
11/8/20221/18/20232/1/20230.1145834,045 
11/8/20222/15/20233/1/20230.1145834,039 
2/8/20233/22/20234/3/20230.1145834,036 
Distributions for the nine months ended March 31, 2023$35,057 
6.50% Preferred Stock holders
11/8/202211/16/202212/1/2022$0.135417 $978 
11/8/202212/21/20221/3/20230.135417 1,433 
11/8/20221/18/20232/1/20230.135417 1,675 
11/8/20222/15/20233/1/20230.135417 1,959 
2/8/20233/22/20234/3/20230.135417 2,201 
Distributions for the nine months ended March 31, 2023$8,246 
5.35% Preferred Stock holders
8/24/202110/20/202111/1/2021$0.382674 $2,296 
11/5/20211/19/20222/1/20220.334375$2,006 
Distributions for the nine months ended March 31, 2022$4,302 
5/6/20227/20/20228/1/2022$0.334375 $2,006 
8/23/202210/19/202211/1/20220.334375 2,006 
11/8/20221/18/20232/1/2023$0.334375 2,006 
Distributions for the nine months ended March 31, 2023$6,018 
The above table includes dividends paid during the nine months ended March 31, 2023. It does not include distributions previously declared to the 5.50% Preferred Stock holders, 6.50% Preferred Stock holders, and 5.35% Series A Preferred Stock holders of record for any future dates, as those amounts are not yet determinable. The following dividends were previously declared and will be recorded and paid subsequent to March 31, 2023:
87

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

$0.114583 per share (before pro ration for partial period holders of record) for 5.50% Preferred Stock holders of record on April 19, 2023 with a payment date of May 1, 2023.
$0.114583 per share (before pro ration for partial period holders of record) for 5.50% Preferred Stock holders of record on May 17, 2023 with a payment date of June 1, 2023.
$0.135417 per share (before pro ration for partial period holders of record) for 6.50% Preferred Stock holders of record on April 19, 2023 with a payment date of May 1, 2023.
$0.135417 per share (before pro ration for partial period holders of record) for 6.50% Preferred Stock holders of record on May 17, 2023 with a payment date of June 1, 2023.
$0.334375 per share (before pro ration for partial period holders of record) for 5.35% Series A Preferred Stock holders of record on April 19, 2023 with a payment date of May 1, 2023.
As of March 31, 2023, we have accrued approximately $28 and $1,338 in dividends that have not yet been paid for our 6.50% Preferred Stock holders and 5.35% Series A Preferred Stock holders, respectively.
The following table shows our outstanding Preferred Stock as of March 31, 2023:
SeriesMaximum Offering Size (Shares)Maximum Aggregate Liquidation Preference of OfferingInception to Date Preferred Shares Issued via OfferingInception to Date Liquidation Preference of Shares Issued via OfferingPreferred Stock Shares OutstandingLiquidation Preference of Shares Outstanding
Series A172,000,000 (1)$1,800,000 (1)31,448,021 $786,201 31,091,585 (4)$777,290 
Series M172,000,000 (1)1,800,000 (1)4,110,318 102,758 3,922,740 (4)98,068 
Series M272,000,000 (1)1,800,000 (1)— — — — 
Series A372,000,000 (1)1,800,000 (1)15,058,892 376,472 15,058,173 (4)376,454 
Series M372,000,000 (1)1,800,000 (1)1,825,723 45,643 1,816,637 (4)45,416 
Series AA110,000,000 (2)250,000 (2)— — — — 
Series MM110,000,000 (2)250,000 (2)— — — — 
Series AA210,000,000 (2)250,000 (2)— — — — 
Series MM210,000,000 (2)250,000 (2)— — — — 
Series A2187,000 4,675 187,000 4,675 164,000 4,100 
Series A6,000,000 150,000 6,000,000 150,000 6,000,000 150,000 
Total88,187,000 (3)$2,204,675 (3)58,629,954 $1,465,749 58,053,134 (5)$1,451,328 
(1) The maximum offering of 72,000,000 shares and $1,800,000 aggregate liquidation preference is for any combination of Series A1, Series M1, Series M2, Series A3, and Series M3 shares.
(2) The maximum offering of 10,000,000 shares and $250,000 aggregate liquidation preference is for any combinations of Series AA1, Series MM1, Series AA2, and Series MM2.
(3) The authorized maximum offering size of Preferred Stock as of March 31, 2023 is 88,187,000 shares, par value $0.001 per share, with an aggregate liquidation preference of $2,204,675, a liquidation preference of $25.00 per share. The totals referenced in the above table are in light of the combined maximum offering amounts for the various series of shares identified in footnote 1 and footnote 2 and the table columns are not intended to foot.
(4) Preferred Stock shares outstanding is calculated as shares issued under the respective offering program, net of additional shares issued through the Preferred Stock DRIP and net of Preferred Stock conversions to common stock through the Holder Optional Redemption and Optional Redemption Upon Death of Holder. Refer to subsequent tables for respective fiscal year activity.
(5) Does not foot due to rounding.
The following table shows our outstanding Preferred Stock as of June 30, 2022:
88

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

SeriesMaximum Offering Size (Shares)Maximum Aggregate Liquidation Preference of OfferingInception to Date Preferred Shares Issued via OfferingInception to Date Liquidation Preference of Shares IssuedPreferred Stock Shares OutstandingLiquidation Preference of Shares Outstanding
Series A160,000,000 (1)$1,500,000 (1)20,837,185 $520,930 20,794,645 (4)$519,866 
Series M160,000,000 (1)1,500,000 (1)2,640,752 66,019 2,626,238 (4)65,656 
Series M260,000,000 (1)1,500,000 (1)— — — — 
Series AA110,000,000 (2)250,000 (2)— — — — 
Series MM110,000,000 (2)250,000 (2)— — — — 
Series A2187,000 4,675 187,000 4,675 187,000 4,675 
Series A6,000,000 150,000 6,000,000 150,000 6,000,000 150,000 
Total76,187,000 (3)$1,904,675 (3)29,664,937 $741,624 29,607,882 (5)$740,197 
(1) The maximum offering of 60,000,000 shares and $1,500,000 aggregate liquidation preference is for any combinations of Series A1, Series M1, and Series M2 shares.
(2) The maximum offering of 10,000,000 shares and $250,000 aggregate liquidation preference is for any combinations of Series AA1 and Series MM1.
(3) The authorized maximum offering size of Preferred Stock as of June 30, 2022 is 76,187,000 shares, par value $0.001 per share, with an aggregate liquidation preference of $1,904,675, a liquidation preference of $25.00 per share. The totals referenced in the above table are in light of the combined maximum offering amounts for the various series of shares identified in footnote 1 and footnote 2 and the table columns are not intended to foot.
(4) Preferred Stock shares outstanding is calculated as shares issued under the respective offering program, net of additional shares issued through the Preferred Stock DRIP and Preferred Stock converted to common stock through the Holder Optional Redemption and Optional Redemption Upon Death of Holder. Refer to subsequent tables for respective fiscal year activity.
(5) Does not foot due to rounding.
Preferred Stock issued prior to the issuance of our 5.35% Series A Preferred Stock has a carrying value equal to liquidation value per share on our Consolidated Statements of Assets and Liabilities. Subsequent issuances of our Preferred Stock classified as temporary equity are recorded net of issuance costs. The carrying value is inclusive of cumulative accrued and unpaid dividends as of March 31, 2023.
Series A1, Series M1, Series A3, and Series M3 shares outstanding are net of dividend reinvestments paid and conversions to common stock in accordance with their liquidation features. The following tables show such activity during the nine months ended March 31, 2023:
SeriesJune 30, 2022 Shares OutstandingShares IssuedShares issued through Preferred Stock DRIP
Shares Converted to Common(1)
March 31, 2023 Shares Outstanding
Series A120,794,645 10,610,836 33,947 (347,842)31,091,585 
Series M12,626,238 1,469,566 901 (173,966)3,922,740 (2)
Series A3— 15,058,892 2,554 (3,273)15,058,173 
Series M3— 1,825,723 219 (9,305)1,816,637 
Series A2187,000 — — (23,000)164,000 
Series A6,000,000 — — — 6,000,000 
Total29,607,882 (2)28,965,017 (3)37,621 (557,386)58,053,134 (2)
(1)Convert to common shares via Holder Optional Redemptions and Optional Redemption Upon Death of Holder.
(2)Does not foot or crossfoot due to fractional share rounding.
(3)During the nine months ended March 31, 2023, we issued 28,965,017 shares of Preferred Stock for net proceeds of $647,715 with a liquidation value of $724,125.


The following tables show such activity during the nine months ended March 31, 2022:
SeriesJune 30, 2021 Shares OutstandingShares IssuedShares issued through Preferred Stock DRIP
Shares Converted to Common(1)
March 31, 2022 Shares Outstanding
Series A15,163,926 11,230,210 8,428 (8,350)16,394,214 
Series M1130,666 1,251,361 176 (2,000)1,380,203 
Series A2187,000 — — — 187,000 
Series A— 6,000,000 — — 6,000,000 
Total5,481,592 18,481,571 (2)8,604 (10,350)23,961,417 
89

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

(1)Convert to common shares via Holder Optional Redemptions and Optional Redemption Upon Death of Holder.
(2)During the nine months ended March 31, 2022, we issued 18,481,571 shares of Preferred Stock for net proceeds of $425,250 with a liquidation value of $462,039.

Common Stock
Our common stockholders’ equity accounts as of March 31, 2023 and June 30, 2022 reflect cumulative shares issued, net of shares previously repurchased, as of those respective dates. Our common stock has been issued through public offerings, a registered direct offering, the exercise of over-allotment options on the part of the underwriters, our common stock dividend reinvestment plan in connection with the acquisition of certain controlled portfolio companies and in connection with our 5.50% and 6.50% Preferred Stock Holder Optional Conversion and Optional Redemptions Following Death of a Holder. When our common stock is issued, the related offering expenses have been charged against paid-in capital in excess of par. All underwriting fees and offering expenses were borne by us.
On August 24, 2011, our Board of Directors approved a share repurchase plan (the “Repurchase Program”) under which we may repurchase up to $100,000 of our common stock at prices below our net asset value per share. Prior to any repurchase, we are required to notify stockholders of our intention to purchase our common stock.
We did not repurchase any shares of our common stock under the Repurchase Program for the nine months ended March 31, 2023 and March 31, 2022. As of March 31, 2023, the approximate dollar value of shares that may yet be purchased under the Repurchase Program is $65,860.
Excluding common stock dividend reinvestments and shares issued in connection with the 5.50% and 6.50% Preferred Stock Holder Optional Conversion and Optional Redemption Upon Death of Holder, during the nine months ended March 31, 2023 and March 31, 2022, we did not issue any shares of our common stock.
On February 9, 2016, we amended our common stock dividend reinvestment plan that provided for reinvestment of our dividends or distributions on behalf of our stockholders, unless a stockholder elects to receive cash, to add the ability of stockholders to purchase additional common shares by making optional cash investments. Under the revised dividend reinvestment and direct common stock repurchase plan, stockholders may elect to purchase additional common shares through our transfer agent in the open market or in negotiated transactions.
On April 17, 2020, our Board of Directors approved further amendments to our common stock dividend reinvestment plan, effective May 21, 2020, that principally provide for the number of newly-issued shares of our common stock to be credited to a stockholder’s account shall be determined by dividing the total dollar amount of the distribution payable to such common stockholder by 95% of the market price per share of our common stock at the close of regular trading on the Nasdaq Global Select Market on the date fixed by the Board of Directors for such distribution (which shall be the last business day before the payment date).
On June 10, 2022, at a special meeting of stockholders, our stockholders authorized us to sell shares of our common stock (during the next 12 months) at a price or prices below our net asset value per share at the time of sale in one or more offerings, subject to certain conditions as set forth in the proxy statement relating to the special meeting (including that the number of shares sold on any given date does not exceed 25% of its outstanding common stock immediately prior to such sale).
On March 13, 2023, we filed a notice of meeting and definitive proxy statement in connection with a special meeting of our stockholders that is scheduled to be held on June 9, 2023 for the purpose of asking our stockholders to vote on a proposal to authorize us, with approval of our Board of Directors, to sell shares of our common stock (during the next 12 months) at a price or prices below our then current net asset value per share in one or more offerings subject to certain conditions as set forth in the proxy statement relating to the special meeting (including that the number of shares sold on any given date does not exceed 25% of our outstanding common stock immediately prior to such sale).
During the nine months ended March 31, 2023 and March 31, 2022, we distributed approximately $214,751 and $210,722, respectively, to our common stockholders. The following table summarizes our distributions to common stockholders declared and payable for the nine months ended March 31, 2023 and March 31, 2022:
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PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Declaration DateRecord DatePayment DateAmount Per ShareAmount Distributed (in thousands)
5/7/20217/28/20218/19/2021$0.06 $23,325 
5/7/20218/27/20219/23/20210.06 23,348 
8/24/20219/28/202110/21/20210.06 23,370 
8/24/202110/27/202111/18/20210.06 23,392 
11/5/202111/26/202112/23/20210.06 23,413 
11/5/202112/29/20211/20/20220.06 23,435 
11/5/20211/27/20222/17/20220.06 23,457 
2/7/20222/24/20223/22/20220.06 23,479 
2/7/20223/29/20224/20/20220.06 23,503 
Total declared and payable for the nine months ended March 31, 2022$210,722 
5/6/20227/27/20228/18/2022$0.06 $23,635 
5/6/20228/29/20229/21/20220.06 23,670 
8/23/20229/28/202210/20/20220.06 23,767 
8/23/202210/27/202211/17/20220.06 23,857 
11/8/202211/28/202212/20/20220.06 23,888 
11/8/202212/28/20221/19/20230.06 23,925 
11/8/20221/27/20232/16/20230.06 23,965 
2/8/20232/24/20233/22/20230.06 24,003 
2/8/20233/29/20234/19/20230.06 24,041 
Total declared and payable for the nine months ended March 31, 2023$214,751 
Dividends and distributions to common stockholders are recorded on the ex-dividend date. As such, the table above includes distributions with record dates during nine months ended March 31, 2023 and March 31, 2022. It does not include distributions previously declared to common stockholders of record on any future dates, as those amounts are not yet determinable. The following dividends were previously declared and will be recorded and payable subsequent to March 31, 2023:
$0.06 per share for April 2023 holders of record on April 26, 2023 with a payment date of May 18, 2023.
During the nine months ended March 31, 2023 and March 31, 2022, we issued 5,859,102 and 3,268,814 shares of our common stock, respectively, in connection with the common stock dividend reinvestment plan.
During the nine months ended March 31, 2023, Prospect officers and directors purchased 1,379,324 shares of our common stock, or 0.34% of total outstanding shares as of March 31, 2023, both through the open market transactions and shares issued in connection with our common stock dividend reinvestment plan.
As of March 31, 2023, we have reserved 17,294,357 shares of our common stock for issuance upon conversion of the Convertible Notes (see Note 5) and 1,000,000,000 shares of our common stock for issuance upon conversion of the 5.50% Preferred Stock and the 6.50% Preferred Stock.
91

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Note 10. Other Income
Other income consists of structuring fees, amendment fees, overriding royalty interests, revenue receipts related to net profit interests, deal deposits, administrative agent fees, and other miscellaneous and sundry cash receipts. The following table shows income from such sources during the three and nine months ended March 31, 2023 and March 31, 2022:
 Three Months Ended March 31,Nine Months Ended March 31,
2023202220232022
Structuring and amendment fees (refer to Note 3)$145 $10,149 $9,875 $38,963 
Royalty and net revenue interests14,740 23,285 50,027 43,579 
Administrative agent fees171 202 432 529 
Total other income$15,056 $33,636 $60,334 $83,071 
Note 11. Net Increase (Decrease) in Net Assets per Common Share
Basic earnings per share is calculated by dividing the net increase (decrease) in net assets resulting from operations, less preferred dividends, by the weighted average number of common shares outstanding. Diluted earnings per share gives effect to all dilutive potential common shares outstanding using the if-converted method for the 5.50% Preferred Stock, for the 6.50% Preferred Stock (Refer to Note 9) and, beginning on July 1, 2022, for the 2025 Notes (Refer to Note 5).
Subsequent to the adoption of ASU 2020-06 on July 1, 2022, for the purpose of calculating diluted net increase in net assets resulting from operations applicable to common stockholders per share for the three and nine months ended March 31, 2023, the Company utilized the if-converted method, which assumes full share settlement for the aggregate value of the 2025 Notes, the 5.50% Preferred Stock, and the 6.50% Preferred Stock. Under the allowed modified retrospective method, diluted net increase in net assets resulting from operations applicable to common stockholders per share for prior periods were not restated to reflect the impact of ASU 2020-06. Diluted earnings per share excludes all dilutive potential common shares if their effect is anti-dilutive.
During the nine months ended March 31, 2023, conversion of our convertible instruments has an anti-dilutive effect and therefore, conversion is not assumed.
The following information sets forth the computation of basic and diluted earnings per common share during the three and nine months ended March 31, 2023 and March 31, 2022:
 For the Three Months Ended March 31,For the Nine Months Ended March 31,
 2023202220232022
Net (decrease) increase in net assets resulting from operations - basic$(108,947)$157,157 $(158,523)$613,292 
Adjustment for dividends on Convertible Preferred Stock— 7,139 — 16,748 
Adjustment for interest on Convertible Notes— — — — 
Net (decrease) increase in net assets resulting from operations - diluted$(108,947)$164,296 $(158,523)$630,040 
Weighted average common shares outstanding - basic399,732,263391,091,485397,233,468389,981,608
Assumed conversion of Convertible Preferred Stock41,716,63529,933,104
Assumed conversion of Convertible Notes
Weighted average shares of common stock outstanding - diluted399,732,263432,808,120397,233,468419,914,712
Earnings (loss) per share - basic$(0.27)$0.40 $(0.40)$1.57 
Earnings (loss) per share - diluted $(0.27)$0.38 $(0.40)$1.50 
92

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Note 12. Income Taxes
While our fiscal year end for financial reporting purposes is June 30 of each year, our tax year end is August 31 of each year. The information presented in this footnote is based on our tax year end for each period presented, unless otherwise specified.
For income tax purposes, dividends paid and distributions made to stockholders are reported as ordinary income, capital gains, non-taxable return of capital, or a combination thereof. The tax character of dividends paid to common stockholders during the tax years ended August 31, 2022, 2021, and 2020 were as follows:
 Tax Year Ended August 31,
 202220212020
Ordinary income$231,984 $251,171 $169,041 
Capital gain49,719 — — 
Return of capital— 25,784 96,720 
Total common dividends paid to stockholders$281,703 (1)$276,955 $265,761 
(1) Final determination of tax character will not be final until we file our return for the tax year ended August 31, 2022.

The Company began issuing shares of Preferred Stock and declaring dividends on shares Preferred Stock outstanding during the tax year ended August 31, 2021. The tax character of dividends paid to preferred stockholders during the tax years ended August 31, 2022 and August 31, 2021 were as follows:
 Tax Year Ended August 31, 2022Tax Year Ended August 31, 2021
Ordinary income$22,551 $2,391 
Capital gain6,476 — 
Return of capital— — 
Total preferred dividends paid to stockholders$29,027 (2)$2,391 
(2) Final determination of tax character will not be final until we file our return for the tax year ended August 31, 2022.
As of August 25, 2021 when our prior Form 10-K was filed for the year ended June 30, 2021, we estimated our distributions for the fiscal year then ended to be $265,593 of distributions of ordinary income and $12,263 of our distributions to be return of capital. Subsequent to our filing date, we obtained more information from our underlying investments as to the character of the distributions for the tax year ended August 31, 2021, which resulted in changes to distributions previously disclosed in our Form 10-K filing. As a result of the change, our total distributable loss on our Consolidated Statement of Assets and Liabilities for the year ended June 30, 2021 changed from $232,659 to $210,570, with $22,089 being reclassified to distributions from capital. The remaining reclassification of tax distributions classified as return of capital for the tax year ended August 31, 2021 have been adjusted in the fiscal year ended June 30, 2022. This adjustment resulted in an increase to distributable earnings of $3,695 for the three months ended September 30, 2021.
We generate certain types of income that may be exempt from U.S. withholding tax when distributed to non-U.S. stockholders. Under IRC Section 871(k), a RIC is permitted to designate distributions of qualified interest income and short-term capital gains as exempt from U.S. withholding tax when paid to non-U.S. stockholders with proper documentation. For the 2023 calendar year, 62.41% of our taxable ordinary dividends as of March 31, 2023 qualified as interest related dividends which are exempt from U.S. withholding tax applicable to non-U.S. stockholders. This percentage is based on the best estimates available at the time of this filing. The final percentage will be determined with the filing of Form 1099-DIV.

We generate income that may be beneficial to shareholders that face interest expense limitations. Under IRC Section 163(j), a RIC is permitted to designate distributions attributable to net business interest income as section 163(j) interest dividends. For the 2023 calendar year 96.07% of our taxable ordinary dividends as of March 31, 2023 qualified as section 163(j) interest dividends. This percentage is based on the best estimates available at the time of this filing. The final percentage will be determined with the filing of Form 1099-DIV.

We generate dividend income that may be beneficial to certain U.S. corporate shareholders. Under IRC Sections 243 and 854, a RIC is permitted to designate ordinary dividends as eligible for the 50% dividends received deduction. For the 2023 calendar year 1.21% of our taxable ordinary dividends as of March 31, 2023 qualified for the deduction under sections 243 and 854. This
93

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

percentage is based on the best estimates available at the time of this filing. The final percentage will be determined with the filing of Form 1099-DIV.
For the tax year ending August 31, 2022, the tax character of dividends paid to stockholders through August 31, 2022 is expected to be ordinary income and capital gains however due to the difference between our fiscal and tax year ends, the final determination of the tax character of dividends between ordinary income and capital gains will not be made until we file our tax return for the tax year ending August 31, 2022.
Taxable income generally differs from net increase in net assets resulting from operations for financial reporting purposes due to temporary and permanent differences in the recognition of income and expenses, and generally excludes net unrealized gains or losses, as unrealized gains or losses are generally not included in taxable income until they are realized. The following reconciles the net increase in net assets resulting from operations to taxable income for the tax years ended August 31, 2022, 2021, and 2020:
 Tax Year Ended August 31,
 202220212020
Net increase (decrease) in net assets resulting from operations$735,343 $428,106 $(78,949)
Net realized losses on investments22,375 16,173 10,139 
Net unrealized (gains) losses on investments(405,414)(143,654)328,997 
Other temporary book-to-tax differences(65,664)(47,330)(91,368)
Permanent differences30 (20)57 
Taxable income before deductions for distributions
$286,670 (3)$253,275 $168,876 
(3) Final determination of permanent differences will not be final until we file our return for the tax year ended August 31, 2022.
Capital losses in excess of capital gains earned in a tax year may generally be carried forward and used to offset capital gains, subject to certain limitations. As of August 31, 2022, we had no capital loss carryforwards available for use in later tax years. While our ability to utilize losses in the future depends upon a variety of factors that cannot be known in advance, some of the Company’s capital loss carryforwards may become permanently unavailable due to limitations by the Code.
For the tax year ended August 31, 2022, we had $32,134 of undistributed ordinary income in excess of cumulative distributions and no capital gain in excess of cumulative distributions.
As of March 31, 2023, the cost basis of investments for tax purposes was $7,792,689 resulting in an estimated net unrealized loss of $199,912. As of March 31, 2023, the gross unrealized gains and losses were $1,332,087 and $1,531,999, respectively. As of June 30, 2022, the cost basis of investments for tax purposes was $7,214,493 resulting in an estimated net unrealized gain of $388,017. As of June 30, 2022, the gross unrealized gains and losses were $1,506,944 and $1,118,927, respectively. Due to the difference between our fiscal year end and tax year end, the cost basis of our investments for tax purposes as of March 31, 2023 and June 30, 2022 was calculated based on the book cost of investments as of March 31, 2023 and June 30, 2022, respectively, with cumulative book-to-tax adjustments for investments through August 31, 2022 and 2021, respectively.
In general, we may make certain adjustments to the classification of net assets as a result of permanent book-to-tax differences, which may include merger-related items, differences in the book and tax basis of certain assets and liabilities, and nondeductible federal excise taxes, among other items. During the tax year ended August 31, 2022, we increased overdistributed net investment income by $30 and decreased capital in excess of par value by $30. During the tax year ended August 31, 2021, we decreased overdistributed net investment income by $20 and increased capital in excess of par value by $20. Due to the difference between our fiscal and tax year end, the reclassifications for the taxable year ended August 31, 2022 have been recorded in the fiscal year ending June 30, 2023 and the reclassifications for the taxable year ended August 31, 2021 were recorded in the fiscal year ended June 30, 2022.
94

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Note 13. Related Party Agreements and Transactions
Investment Advisory Agreement
We have entered into an investment advisory and management agreement with the Investment Adviser (the “Investment Advisory Agreement”) under which the Investment Adviser, subject to the overall supervision of our Board of Directors, manages the day-to-day operations of, and provides investment advisory services to, us. Under the terms of the Investment Advisory Agreement, the Investment Adviser: (i) determines the composition of our portfolio, the nature and timing of the changes to our portfolio and the manner of implementing such changes, (ii) identifies, evaluates and negotiates the structure of the investments we make (including performing due diligence on our prospective portfolio companies), and (iii) closes and monitors investments we make.
The Investment Adviser’s services under the Investment Advisory Agreement are not exclusive, and it is free to furnish similar services to other entities so long as its services to us are not impaired. For providing these services the Investment Adviser receives a fee from us, consisting of two components: a base management fee and an incentive fee. The base management fee is calculated at an annual rate of 2.00% on our total assets. For services currently rendered under the Investment Advisory Agreement, the base management fee is payable quarterly in arrears. The base management fee is calculated based on the average value of our gross assets at the end of the two most recently completed calendar quarters and appropriately adjusted for any share issuances or repurchases during the current calendar quarter. The total gross base management fee incurred to the favor of the Investment Adviser was $38,980 and $36,426 during the three months ended March 31, 2023 and March 31, 2022, respectively. The total gross base management fee incurred to the favor of the Investment Advisor was $116,176 and $102,472 during the nine months ended March 31, 2023 and March 31, 2022, respectively.
The incentive fee has two parts. The first part, the income incentive fee, is calculated and payable quarterly in arrears based on our pre-incentive fee net investment income for the immediately preceding calendar quarter. For this purpose, pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees and other fees that we receive from portfolio companies) accrued during the calendar quarter, minus our operating expenses for the quarter (including the base management fee, expenses payable under the Administration Agreement described below, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-incentive fee net investment income includes, in the case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued income that we have not yet received in cash. Pre-incentive fee net investment income does not include any realized capital gains, realized capital losses or unrealized capital gains or losses. Pre-incentive fee net investment income, expressed as a rate of return on the value of our net assets at the end of the immediately preceding calendar quarter, is compared to a “hurdle rate” of 1.75% per quarter (7.00% annualized).
The net investment income used to calculate this part of the incentive fee is also included in the amount of the gross assets used to calculate the 2.00% base management fee. We pay the Investment Adviser an income incentive fee with respect to our pre-incentive fee net investment income in each calendar quarter as follows: 
No incentive fee in any calendar quarter in which our pre-incentive fee net investment income does not exceed the hurdle rate;
100.00% of our pre-incentive fee net investment income with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 125.00% of the quarterly hurdle rate in any calendar quarter (8.75% annualized assuming a 7.00% annualized hurdle rate); and
20.00% of the amount of our pre-incentive fee net investment income, if any, that exceeds 125.00% of the quarterly hurdle rate in any calendar quarter (8.75% annualized assuming a 7.00% annualized hurdle rate).
These calculations are appropriately prorated for any period of less than three months and adjusted for any share issuances or repurchases during the current quarter.
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PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

The second part of the incentive fee, the capital gains incentive fee, is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Advisory Agreement, as of the termination date), and equals 20.00% of our realized capital gains for the calendar year, if any, computed net of all realized capital losses and unrealized capital depreciation at the end of such year. In determining the capital gains incentive fee payable to the Investment Adviser, we calculate the aggregate realized capital gains, aggregate realized capital losses and aggregate unrealized capital depreciation, as applicable, with respect to each investment that has been in our portfolio. For the purpose of this calculation, an “investment” is defined as the total of all rights and claims which may be asserted against a portfolio company arising from our participation in the debt, equity, and other financial instruments issued by that company. Aggregate realized capital gains, if any, equal the sum of the differences between the aggregate net sales price of each investment and the aggregate amortized cost basis of such investment when sold or otherwise disposed. Aggregate realized capital losses equal the sum of the amounts by which the aggregate net sales price of each investment is less than the aggregate amortized cost basis of such investment when sold or otherwise disposed. Aggregate unrealized capital depreciation equals the sum of the differences, if negative, between the aggregate valuation of each investment and the aggregate amortized cost basis of such investment as of the applicable calendar year-end. At the end of the applicable calendar year, the amount of capital gains that serves as the basis for our calculation of the capital gains incentive fee involves netting aggregate realized capital gains against aggregate realized capital losses on a since-inception basis and then reducing this amount by the aggregate unrealized capital depreciation. If this number is positive, then the capital gains incentive fee payable is equal to 20.00% of such amount, less the aggregate amount of any capital gains incentive fees paid since inception.
The total income incentive fee incurred was $20,561 and $19,967 during the three months ended March 31, 2023 and March 31, 2022, respectively. The fees incurred for the nine months ended March 31, 2023 and March 31, 2022 were $64,692 and $59,296, respectively. No capital gains incentive fee was incurred during the nine months ended March 31, 2023 and March 31, 2022.
Administration Agreement
We have also entered into an administration agreement (the “Administration Agreement”) with Prospect Administration under which Prospect Administration, among other things, provides (or arranges for the provision of) administrative services and facilities for us. For providing these services, we reimburse Prospect Administration for our allocable portion of overhead incurred by Prospect Administration in performing its obligations under the Administration Agreement, including rent and our allocable portion of the costs of our Chief Financial Officer and Chief Compliance Officer and her staff, including the internal legal staff. Under this agreement, Prospect Administration furnishes us with office facilities, equipment and clerical, bookkeeping and record keeping services at such facilities. Prospect Administration also performs, or oversees the performance of, our required administrative services, which include, among other things, being responsible for the financial records that we are required to maintain and preparing reports to our stockholders and reports filed with the SEC. In addition, Prospect Administration assists us in determining and publishing our net asset value, overseeing the preparation and filing of our tax returns and the printing and dissemination of reports to our stockholders, and generally oversees the payment of our expenses and the performance of administrative and professional services rendered to us by others. Under the Administration Agreement, Prospect Administration also provides on our behalf managerial assistance to certain portfolio companies (see Managerial Assistance section below). The Administration Agreement may be terminated by either party without penalty upon 60 days’ written notice to the other party. Prospect Administration is a wholly-owned subsidiary of the Investment Adviser.
The Administration Agreement provides that, absent willful misfeasance, bad faith or negligence in the performance of its duties or by reason of the reckless disregard of its duties and obligations, Prospect Administration and its officers, managers, partners, agents, employees, controlling persons, members and any other person or entity affiliated with it are entitled to indemnification from us for any damages, liabilities, costs and expenses (including reasonable attorneys’ fees and amounts reasonably paid in settlement) arising from the rendering of Prospect Administration’s services under the Administration Agreement or otherwise as administrator for us. Our payments to Prospect Administration are reviewed quarterly by our Board of Directors.
The allocation of net overhead expense from Prospect Administration was $9,773 and $4,126 for the three months ended March 31, 2023 and March 31, 2022, respectively. Prospect Administration received estimated payments of $918 and $807 directly from our portfolio companies and certain funds managed by the Investment Adviser for legal, tax, and other administrative services during the three months ended March 31, 2023 and March 31, 2022, respectively. We were given a credit for these payments as a reduction of the administrative services cost payable by us to Prospect Administration. Had Prospect Administration not received these payments, Prospect Administration’s charges for its administrative services would have increased by this amount.
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PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

The allocation of net overhead expense from Prospect Administration was $16,490 and $10,891 for the nine months ended March 31, 2023 and March 31, 2022, respectively. Prospect Administration received estimated payments of $1,808 and $4,869 directly from our portfolio companies and certain funds managed by the Investment Adviser for legal, tax, and other administrative services during the nine months ended March 31, 2023 and March 31, 2022, respectively. In addition, we were given a credit in the amount of $1,212 for legal expense incurred on behalf of our portfolio companies that were remitted to Prospect Administration during the nine months ended March 31, 2023.
Managerial Assistance
As a BDC, we are obligated under the 1940 Act to make available to certain of our portfolio companies significant managerial assistance. “Making available significant managerial assistance” refers to any arrangement whereby we provide significant guidance and counsel concerning the management, operations, or business objectives and policies of a portfolio company. We are also deemed to be providing managerial assistance to all portfolio companies that we control, either by ourselves or in conjunction with others. The nature and extent of significant managerial assistance provided by us to controlled and non-controlled portfolio companies will vary according to the particular needs of each portfolio company. Examples of such activities include (i) advice on recruiting, hiring, management and termination of employees, officers and directors, succession planning and other human resource matters; (ii) advice on capital raising, capital budgeting, and capital expenditures; (iii) advice on advertising, marketing, and sales; (iv) advice on fulfillment, operations, and execution; (v) advice on managing relationships with unions and other personnel organizations, financing sources, vendors, customers, lessors, lessees, lawyers, accountants, regulators and other important counterparties; (vi) evaluating acquisition and divestiture opportunities, plant expansions and closings, and market expansions; (vii) participating in audit committee, nominating committee, board and management meetings; (viii) consulting with and advising board members and officers of portfolio companies (on overall strategy and other matters); and (ix) providing other organizational, operational, managerial and financial guidance.
Prospect Administration arranges for the provision of such managerial assistance on our behalf. When doing so, Prospect Administration utilizes personnel of our Investment Adviser. We, on behalf of Prospect Administration, may invoice portfolio companies receiving and paying for managerial assistance, and we remit to Prospect Administration its cost of providing such services, including the charges deemed appropriate by our Investment Adviser for providing such managerial assistance. No income is recognized by Prospect.
During the three months ended March 31, 2023 and March 31, 2022, we received payments of $2,316 and $2,276, respectively, from our portfolio companies for managerial assistance and subsequently remitted these amounts to Prospect Administration. During the nine months ended March 31, 2023 and March 31, 2022, we received payments of $7,008 and $5,946, respectively, from our portfolio companies for managerial assistance and subsequently remitted these amounts to Prospect Administration.
Co-Investments
On January 13, 2020, (amended on August 2, 2022), we received an exemptive order from the SEC (the “Order”), which superseded a prior co-investment exemptive order granted on February 10, 2014, that gave us the ability to negotiate terms other than price and quantity of co-investment transactions with other funds managed by the Investment Adviser or certain affiliates, including Priority Income Fund, Inc. and Prospect Floating Rate and Alternative Income Fund, Inc. (f/k/a Prospect Sustainable Income Fund, Inc.), where co-investing would otherwise be prohibited under the 1940 Act, subject to the conditions included therein. 
Under the terms of the relief permitting us to co-invest with other funds managed by our Investment Adviser or its affiliates, a “required majority” (as defined in Section 57(o) of the 1940 Act) of our independent directors must make certain conclusions in connection with a co-investment transaction, including that (1) the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair to us and our stockholders and do not involve overreaching of us or our stockholders on the part of any person concerned and (2) the transaction is consistent with the interests of our stockholders and is consistent with our investment objective and strategies. In certain situations where a co-investment with one or more funds managed by the Investment Adviser or its affiliates is not covered by the Order, such as when there is an opportunity to invest in different securities of the same issuer, the personnel of the Investment Adviser or its affiliates will need to decide which fund will proceed with the investment. Such personnel will make these determinations based on policies and procedures, which are designed to reasonably ensure that investment opportunities are allocated fairly and equitably among affiliated funds over time and in a manner that is consistent with applicable laws, rules and regulations. Moreover, except in certain circumstances, when relying on the Order, we will be unable to invest in any issuer in which one or more funds managed by the Investment Adviser or its affiliates has previously invested.
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PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

We reimburse CLO investment valuation services fees initially incurred by Priority Income Fund, Inc. During the three months ended March 31, 2023 and March 31, 2022, we recognized expenses that were reimbursed for valuation services of $22 and $28, respectively. During the nine months ended March 31, 2023 and March 31, 2022, we recognized expenses that were reimbursed for valuation services of $67 and $88, respectively. Conversely, Priority Income Fund, Inc. and Prospect Floating Rate and Alternative Income Fund, Inc. (f/k/a Prospect Sustainable Income Fund, Inc.) reimburse us for software fees, expenses which were initially incurred by Prospect.
Note 14. Transactions with Controlled Companies
The descriptions below detail the transactions which Prospect Capital Corporation (“Prospect”) has entered into with each of our controlled companies. Certain of the controlled entities discussed below were consolidated effective July 1, 2014 (see Note 1). As such, transactions with these Consolidated Holding Companies are presented on a consolidated basis.
CP Energy Services Inc.
Prospect owns 100% of the equity of CP Holdings of Delaware LLC (“CP Holdings”), a Consolidated Holding Company. CP Holdings owns 99.8% of the equity of CP Energy Services, Inc. (“CP Energy”), and the remaining equity is owned by CP Energy management. CP Energy owns directly or indirectly 100% of each of CP Well; Wright Foster Disposals, LLC; Foster Testing Co., Inc.; ProHaul Transports, LLC; and Wright Trucking, Inc. CP Energy provides oilfield flowback services and fluid hauling and disposal services through its subsidiaries. In June 2019, CP Energy purchased a controlling interest in the common equity of Spartan Energy Holdings, Inc. (“Spartan Holdings”), which owns 100% of Spartan Energy Services, LLC (“Spartan”) a portfolio company of Prospect with $31,603 in first lien term loans (the “Spartan Term Loans”) due to us as of March 31, 2023. As a result of CP Energy’s purchase, and given Prospect’s controlling interest in CP Energy, our Spartan Term Loans are presented as control investments under CP Energy beginning June 30, 2019. Spartan remains the direct borrow and guarantor to Prospect for the Spartan Term Loans.
In December 2019, Wolf Energy Holdings, Inc. (“Wolf Energy Holdings”), our Consolidated Holding Company that previously owned 100% of Appalachian Energy LLC (“AEH”); Wolf Energy Services Company, LLC (“Wolf Energy Services”); and Wolf Energy, LLC (collectively our previously controlled membership interest and net profit interest investments in “Wolf Energy”), merged with and into CP Energy, with CP Energy continuing as the surviving entity. CP Energy acquired 100% of our equity investment in Wolf Energy, which is reflected in our valuation of the CP Energy common stock beginning December 31, 2019.
Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income
  Interest Income from CP Energy
$2,248 $1,321 $5,525 $3,901 
  Interest Income from Spartan
959 561 2,459 1,284 
Total Interest Income$3,207 $1,882 $7,984 $5,185 
Other Income
Administrative Agent$— $— $— $
Total Other Income$— $— $— $
Reimbursement of Legal, Tax, etc. (1)
216 — 237 — 
1) Paid from CP Energy to PA as reimbursement for legal, tax, and portfolio level accounting services provided directly to CP Energy (No direct income recognized by Prospect, but we were given a credit for these payments as a reduction to the administrative services payable by Prospect to PA).
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PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Additions$12,500 $9,681 $12,500 $9,681 
Interest Income Capitalized as PIK
CP Energy$3,996 $1,320 $5,517 $3,901 
Spartan1,225 558 2,456 921 
Total Interest Income Capitalized as PIK$5,221 $1,878 $7,973 $4,822 
As of
March 31, 2023June 30, 2022
Interest Receivable (2)
$38 $26 
Other Receivables (3)
179 171 
(2) Interest income recognized but not yet paid.
(3) Represents amounts due from CP Energy and Spartan to Prospect for reimbursement of expenses paid by Prospect on behalf of CP Energy and Spartan.

Credit Central Loan Company, LLC
Prospect owns 100% of the equity of Credit Central Holdings of Delaware, LLC (“Credit Central Delaware”), a Consolidated Holding Company. Credit Central Delaware owns 99.81% of the equity of Credit Central Loan Company, LLC (f/k/a Credit Central Holdings, LLC) (“Credit Central”), with entities owned by Credit Central management owning the remaining equity. Credit Central owns 100% of each of Credit Central, LLC; Credit Central South, LLC; Credit Central of Texas, LLC; and Credit Central of Tennessee, LLC. Credit Central is a branch-based provider of installment loans.
Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income$2,065 $3,781 $5,878 $11,182 
Other Income
Structuring Fee
$62 $— $123 $— 
Total Other Income$62 $— $123 $— 
Managerial Assistance (1)
175 175 525 525 
Reimbursement of Legal, Tax, etc.(2)
12 — 69 
(1) No income recognized by Prospect. MA payments were paid from Credit Central to Prospect and subsequently remitted to PA.
(2) Paid from Credit Central to PA as reimbursement for legal, tax, and portfolio level accounting services provided directly to Credit Central (No direct income recognized by Prospect, but we were given a credit for these payments as a reduction to the administrative services payable by Prospect to PA.)

Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Additions$3,080 $— $6,200 $— 
Accreted Original Issue Discount$210 $155 $594 $439 
Interest Income Capitalized as PIK2,457 3,007 5,303 6,564 

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PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

As of
March 31, 2023June 30, 2022
Interest Receivable (3)
$21 $42 
Other Receivables (4)
(3) Interest income recognized but not yet paid.
(4) Represents amounts due from Credit Central to Prospect for reimbursement of expenses paid by Prospect on behalf of Credit Central.
Echelon Transportation LLC (f/k/a Echelon Aviation LLC)
Prospect owns 100% of the membership interests of Echelon Transportation LLC (“Echelon”). Echelon owns 60.7% of the equity of AerLift Leasing Limited (“AerLift”).

Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income$1,099 $1,431 $2,860 $6,888 
Managerial Assistance (1)
63 63 188 188 
Reimbursement of Legal, Tax, etc.(2)
77 — 89 102 
(1) No income recognized by Prospect. MA payments were paid from Echelon to Prospect and subsequently remitted to PA.
(2) Paid from Echelon to PA as reimbursement for legal, tax, and portfolio level accounting services provided directly to Echelon (No direct income recognized by Prospect, but we were given a credit for these payments as a reduction to the administrative services payable by Prospect to PA).
Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income Capitalized as PIK$1,803 $5,542 $3,391 $10,646 
As of
March 31, 2023June 30, 2022
Interest Receivable (3)
$808 $1,339 
Other Receivables (4)
(3) Interest income recognized but not yet paid.
(4) Represents amounts due from Echelon to Prospect for reimbursement of expenses paid by Prospect on behalf of Echelon.
Energy Solutions Holdings Inc.
Prospect owns 100% of the equity of Energy Solutions Holdings Inc. (f/k/a Gas Solutions Holdings Inc.) (“Energy Solutions”), a Consolidated Holding Company. Energy Solutions owns 100% of each of Change Clean Energy Company, LLC (f/k/a Change Clean Energy Holdings, LLC) (“Change Clean”); Freedom Marine Solutions, LLC (f/k/a Freedom Marine Services Holdings, LLC) (“Freedom Marine”); and Yatesville Coal Company, LLC (f/k/a Yatesville Coal Holdings, LLC) (“Yatesville”). Change Clean owns 100% of each of Change Clean Energy, LLC and Down East Power Company, LLC, and 50.1% of BioChips LLC. Freedom Marine owns 100% of each of Vessel Company, LLC (f/k/a Vessel Holdings, LLC) (“Vessel”); Vessel Company II, LLC (f/k/a Vessel Holdings II, LLC) (“Vessel II”); and Vessel Company III, LLC (f/k/a Vessel Holdings III, LLC) (“Vessel III”). Yatesville owns 100% of North Fork Collieries, LLC.

Energy Solutions owns interests in companies operating in the energy sector. These include companies operating offshore supply vessels, ownership of a non-operating biomass electrical generation plant and several coal mines. Energy Solutions subsidiaries formerly owned interests in gathering and processing business in east Texas.

Transactions between Prospect and Freedom Marine are separately discussed below under “Freedom Marine Solutions, LLC.”
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PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

First Tower Finance Company LLC
Prospect owns 100% of the equity of First Tower Holdings of Delaware LLC (“First Tower Delaware”), a Consolidated Holding Company. First Tower Delaware holds 80.10% of the voting interest of First Tower Finance Company LLC (“First Tower Finance”), resulting in a 78.06% ownership of First Tower Finance. First Tower Finance owns 100% of First Tower, LLC (“First Tower”), a multiline specialty finance company.

Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income$14,273 $18,180 $48,636 $54,959 
Other Income
Structuring Fee$— $664 $— $7,898 
Total Other Income$— $664 $— $7,898 
Managerial Assistance (1)
$600 $600 $1,800 $1,800 
(1) No income recognized by Prospect. MA payments were paid from First Tower to Prospect and subsequently remitted to PA.

Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Additions$— $22,123 $— $22,123 
Interest Income Capitalized as PIK$14,085 $5,554 28,847 12,804 
Repayment of Loan Receivable987 9,992 987 11,151 
As of
March 31, 2023June 30, 2022
Interest Receivable (2)
$160 $218 
Other Receivables (3)
(2) Interest income recognized but not yet paid.
(3) Represents amounts due from First Tower to Prospect for reimbursement of expenses paid by Prospect on behalf of First Tower.

Freedom Marine Solutions, LLC
As discussed above, Prospect owns 100% of the equity of Energy Solutions, a Consolidated Holding Company. Energy Solutions owns 100% of Freedom Marine. Freedom Marine owns 100% of each of Vessel, Vessel II, and Vessel III.
Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Additions (1)
$650 $— $650 $— 
(1) During the quarter ended March 31, 2023, Prospect provided $650 of equity funding to support growth in Freedom Marine’s loan portfolio.
As of
March 31, 2023June 30, 2022
Other Receivables$$
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PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)


InterDent, Inc.
During the year ended June 30, 2018, Prospect exercised its rights and remedies under its loan documents to exercise the shareholder voting rights in respect of the stock of InterDent, Inc. (“InterDent”) and to appoint a new Board of Directors of InterDent, all the members of which are our Investment Adviser’s professionals. As a result, Prospect’s investment in InterDent is classified as a control investment.

Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income$8,287 $6,604 $23,865 $19,537 
Other Income
Structuring Fee
$— $200 $— $200 
Total Other Income$— $200 $— $200 
Managerial Assistance (1)
366 366 1,097 731 
Reimbursement of Legal, Tax, etc.(2)
— — — 1,443 
(1) No income recognized by Prospect. MA payments were paid from InterDent to Prospect and subsequently remitted to PA.
(2) Paid from InterDent to PA as reimbursement for legal, tax, and portfolio level accounting services provided directly to InterDent (No direct income recognized by Prospect, but we were given a credit for these payments as a reduction to the administrative services payable by Prospect to PA).

Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Additions
$— $10,000 $— $17,778 
Interest Income Capitalized as PIK5,232 4,592 15,291 13,563 
Repayment of Loan Receivable— — — 246 
As of
March 31, 2023June 30, 2022
Interest Receivable (3)
$95 $80 
Other Receivables (4)
16 
(3) Interest income recognized but not yet paid.
(4) Represents amounts due from InterDent to Prospect for reimbursement of expenses paid by Prospect on behalf of InterDent.

Kickapoo Ranch Pet Resort

Prospect owns 100% of the membership interest of Kickapoo Ranch Pet Resort (“Kickapoo”). Kickapoo is a luxury pet boarding facility.
Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Dividend Income$— $— $100 $— 
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PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

As of
March 31, 2023June 30, 2022
Other Receivables (1)
$$
(1) Represents amounts due from Kickapoo to Prospect for reimbursement of expenses paid by Prospect on behalf of Kickapoo

MITY, Inc.
Prospect owns 100% of the equity of MITY Holdings of Delaware Inc. (“MITY Delaware”), a Consolidated Holding Company.
MITY Delaware owns 100% of the equity of MITY, Inc. (f/k/a MITY Enterprises, Inc.) (“MITY”). MITY owns 100% of each of MITY-Lite, Inc. (“MITY-Lite”); Broda USA, Inc. (f/k/a Broda Enterprises USA, Inc.) (“Broda USA”); and Broda Enterprises ULC (“Broda Canada”). MITY is a designer, manufacturer and seller of multipurpose room furniture and specialty healthcare seating products.

During the three months ended December 31, 2016, Prospect formed a separate legal entity, MITY FSC, Inc., (“MITY FSC”) in which Prospect owns 100% of the equity. MITY FSC does not have material operations. This entity earns commission payments from MITY-Lite based on its sales to foreign customers, and distributes it to its shareholder. We recognize such commission, if any, as other income.
Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income$1,935 $1,844 $5,989 $5,421 
Managerial Assistance (1)
75 75 225 75 
Reimbursement of Legal, Tax, etc.(2)
— — — 10 
Realized (Loss) Gain(1)4(2)10 
(1) No income recognized by Prospect. MA payments were paid from MITY to Prospect and subsequently remitted to PA.
(2) Paid from Mity to PA as reimbursement for legal, tax, and portfolio level accounting services provided directly to Mity (No direct income recognized by Prospect, but we were given a credit for these payments as a reduction to the administrative services payable by Prospect to PA).
Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income Capitalized as PIK$1,136 $1,107 $2,166 $4,383 
Repayment of Loan Receivable666 — 2,269 — 
As of
March 31, 2023June 30, 2022
Interest Receivable (3)
$24 $81 
Other Receivables (4)
(3) Interest income recognized but not yet paid.
(4) Represents amounts due from MITY to Prospect for reimbursement of expenses paid by Prospect on behalf of MITY.
National Property REIT Corp.
Prospect owns 100% of the equity of NPH Property Holdings, LLC (“NPH”), a consolidated holding company. NPH owns 100% of the common equity of National Property REIT Corp. (“NPRC”).
NPRC is a Maryland corporation and a qualified REIT for federal income tax purposes. In order to qualify as a REIT, NPRC issued 125 shares of Series A Cumulative Non-Voting Preferred Stock to 125 accredited investors. The preferred stockholders are entitled to receive cumulative dividends semi-annually at an annual rate of 12.5% and do not have the ability to participate in the management or operation of NPRC.
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PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

NPRC was formed to hold for investment, operate, finance, lease, manage, and sell a portfolio of real estate assets and engage in any and all other activities as may be necessary, incidental or convenient to carry out the foregoing. NPRC acquires real estate assets, including, but not limited to, industrial, commercial, and multi-family properties. NPRC may acquire real estate assets directly or through joint ventures by making a majority equity investment in a property-owning entity (the “JV”). Additionally, through its wholly owned subsidiaries, NPRC invests in online consumer loans and rated secured structured notes (“RSSN”).
Effective June 19, 2020, we amended and restated the terms of our credit agreement with NPRC, as part of the amendment we increased our investment through a new Term Loan D first lien note in the aggregate principal amount of $183,425 and the proceeds were returned to us as a return of capital, reducing our equity investment in NPRC. We received structuring fees of $3,669 as a result of the amendment.
During the nine months ended March 31, 2023, we received partial repayments of $86,852 of our loans previously outstanding with NPRC and its wholly owned subsidiaries and $4,000 as a return of capital on our equity investment in NPRC. During the nine months ended March 31, 2023, we provided $132,071 of debt financing and $3,600 of equity financing to NPRC to fund purchases of real estate properties, to provide working capital, and to fund purchases of rated secured structured notes.
Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income$24,748 $13,880 $67,804 $46,441 
Other Income
Structuring Fee
$— $1,593 $261 $2,815 
Residual Profit Interest
14,540 23,112 49,474 43,052 
Total Other Income$14,540 $24,705 $49,735 $45,867 
Managerial Assistance (1)
$525 $525 $1,575 $1,575 
Reimbursement of Legal, Tax, etc.(2)
585 868 3,296 
(1) No income recognized by Prospect. MA payments were paid from NPRC to Prospect and subsequently remitted to PA.
(2) Paid from NPRC to PA as reimbursement for legal, tax, and portfolio level accounting services provided directly to NPRC (No direct income recognized by Prospect, but we were given a credit for these payments as a reduction to the administrative services payable by Prospect to PA).
Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Additions$27,600 $164,811 $135,671 $280,167 
Interest Income Capitalized as PIK232 — 251 — 
Repayment of Loan Receivable14,000 10,000 86,852 289,882 
Return of Capital— — 4,000 — 

As of
March 31, 2023June 30, 2022
Interest Receivable (3)
$— $83 
Other Receivables (4)
(3) Interest income recognized but not yet paid.
(4) Represents amounts due from NPRC to Prospect for reimbursement of expenses paid by Prospect on behalf of NPRC.
Nationwide Loan Company LLC
Prospect owns 100% of the membership interests of Nationwide Acceptance Holdings LLC (“Nationwide Holdings”), a Consolidated Holding Company. Nationwide Holdings owns 94.48% of the equity of Nationwide Loan Company LLC (“Nationwide”), with members of Nationwide management owning the remaining 5.52% of the equity.
On March 24, 2020, Prospect received distributions of $1,500 that were paid from Nationwide Holdings to Prospect and were recognized as a return of capital by Prospect.
104

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income$1,073 $1,013 $3,191 $3,084 
Dividend Income (1)
— 400 — 2,150 
Managerial Assistance (2)
100 100 300 300 
Reimbursement of Legal, Tax, etc. (3)
— — — 
(1) All dividends were paid from earnings and profits of Nationwide.
(2) No income recognized by Prospect. MA payments were paid from Nationwide to Prospect and subsequently remitted to PA.
(3) Paid from Nationwide to PA as reimbursement for legal, tax, and portfolio level accounting services provided directly to Nationwide (No direct income recognized by Prospect, but we were given a credit for these payments as a reduction to the administrative services payable by Prospect to PA).

Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income Capitalized as PIK$719 $— $1,595 $— 
As of
March 31, 2023June 30, 2022
Interest Receivable (4)
$12 $11 
Other Receivables (5)
12 
(4) Interest income recognized but not yet paid.
(5) Represents amounts due from Nationwide to Prospect for reimbursement of expenses paid by Prospect on behalf of Nationwide.
NMMB, Inc.
Prospect owns 100% of the equity of NMMB Holdings, Inc. (“NMMB Holdings”), a Consolidated Holding Company. NMMB Holdings owns 90.42% of the fully-diluted equity of NMMB, Inc. (f/k/a NMMB Acquisition, Inc.) (“NMMB”) as of March 31, 2023 and June 30, 2022, respectively, with NMMB management owning the remaining equity. NMMB owns 100% of Refuel Agency, Inc. (“Refuel Agency”). Refuel Agency owns 100% of Armed Forces Communications, Inc. (“Armed Forces”). NMMB is an advertising media buying business.
On December 30, 2019, NMMB executed a dividend recapitalization whereby Prospect invested $15,100 of a first lien term loan to repay NMMB’s existing term loan, provide a shareholder distribution, and pay fees and expenses. As part of the recapitalization, Prospect converted its Series A and Series B preferred securities into 92.42% common equity and received a dividend distribution of $2,797.
Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income$983 $133 $2,727 $394 
Dividend Income (1)
800 3,988 2,510 7,034 
Other Income
Structuring Fee
$— $450 $— $450 
Total Other Income$— $450 $— $450 
Managerial Assistance (2)
100 100 300 300 
Realized Loss(799)5,294 (2,510)5,294 
Reimbursement of Legal, Tax, etc. (3)
— 26 — 26 
(1) All dividends were paid from earnings and profits of NMMB.
(2) No income recognized by Prospect. MA payments were paid from NMMB to Prospect and subsequently remitted to PA.
105

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

(3) Paid from NMMB to PA as reimbursement for legal, tax, and portfolio level accounting services provided directly to NMMB (No direct income recognized by Prospect, but we were given a credit for these payments as a reduction to the administrative services payable by Prospect to PA).
Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Additions$— $25,000 $— $25,000 
Repayment of loan receivable
   Repayment from NMMB$— $12,907 $— $12,983 
Total Repayment of Loan Receivable (4)
$— $12,907 $— 0$12,983 

(4) During the nine months ended March 31, 2022, Prospect received partial repayments totaling $12,983, respectively, for our First Lien Notes outstanding with NMMB, Inc.
As of
March 31, 2023June 30, 2022
Interest Receivable (5)
$11 $
Other Receivables (6)
(5) Interest income recognized but not yet paid.
(6) Represents amounts due from NMMB to Prospect for reimbursement of expenses paid by Prospect on behalf of NMMB.

Pacific World Corporation
Prospect owns 100% of the preferred equity of Pacific World Corporation (“Pacific World”), which represents a 99.97% ownership interest of Pacific World as of March 31, 2023 and June 30, 2022, respectively. As a result, Prospect’s investment in Pacific World is classified as a control investment.
Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income$2,251 $1,185 $5,613 $3,507 
Other Income
Structuring Fee
$— $— $105 $— 
Total Other Income$— $— $105 $— 

Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Additions (1)
$— $— $11,000 $6,500 
Interest Income Capitalized as PIK2,014 1,194 5,315 3,363 
(1) During the nine months ended March 31, 2022, Prospect provided $4,000 of debt financing and $2,500 of equity financing to Pacific World to fund working capital needs.
As of
March 31, 2023June 30, 2022
Interest Receivable (2)
$27 $16 
Other Receivables (3)
126 109 
106

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

(2) Interest income recognized but not yet paid.
(3) Represents amounts due from Pacific World to Prospect for reimbursement of expenses paid by Prospect on behalf of Pacific World.
R-V Industries, Inc.
Prospect owns 87.75% of the fully-diluted equity of R-V Industries, Inc. (“R-V”), with R-V management owning the remaining 12.25% of the equity. On December 15, 2020 we restructured our $28,622 Senior Subordinated Note with R-V into a $28,622 First Lien Note. No realized gain or loss was recorded as a result of the transaction.
Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income$1,151 $753 $3,265 $2,184 
Dividend Income (1)
— — — 441 
Other Income
Advisory Fee
$— $125 $— $125 
Total Other Income$— $125 $— $125 
Managerial Assistance (2)
45 45 135 135 
Reimbursement of Legal, Tax, etc.(3)
— 42 — 46 
(1) All dividends were paid from earnings and profits of R-V.
(2) No income recognized by Prospect. MA payments were paid from R-V to Prospect and subsequently remitted to PA.
(3) Paid from R-V to PA as reimbursement for legal, tax, and portfolio level accounting services provided directly to R-V (No direct income recognized by Prospect, but we were given a credit for these payments as a reduction to the administrative services payable by Prospect to PA).
Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Additions$— $5,000 $— $5,000 
As of
March 31, 2023June 30, 2022
Interest Receivable (4)
$13 $11 
Other Receivables (5)
— 
(4) Interest income recognized but not yet paid.
(5) Represents amounts due from R-V to Prospect for reimbursement of expenses paid by Prospect on behalf of R-V.

Universal Turbine Parts, LLC

On December 10, 2018, UTP Holdings Group, Inc. (“UTP Holdings”) purchased all of the voting stock of Universal Turbine Parts, LLC (“UTP”) and appointed a new Board of Directors to UTP Holdings, consisting of three employees of the Investment Advisor. At the time UTP Holdings acquired UTP, UTP Holdings (f/k/a Harbortouch Holdings of Delaware) was a wholly-owned holding company controlled by Prospect and therefore Prospect’s investment in UTP is classified as a control investment.
Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income$871 $580 $2,364 $1,766 
Managerial Assistance (1)
(1) No income recognized by Prospect. MA payments were paid from UTP to Prospect and subsequently remitted to PA.
107

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Repayment of Loan Receivable$$$24 $24 

As of
March 31, 2023June 30, 2022
Interest Receivable (2)
$10 $
Other Receivables (3)
— 17 
(2) Interest income recognized but not yet paid.
(3) Represents amounts due from UTP to Prospect for reimbursement of expenses paid by Prospect on behalf of UTP.
USES Corp.
On June 15, 2016, we provided additional $1,300 debt financing to USES Corp. (“United States Environmental Services” or “USES”) and its subsidiaries in the form of additional Term Loan A debt and, in connection with such Term Loan A debt financing, USES issued to us 99,900 shares of its common stock. On June 29, 2016, we provided additional $2,200 debt financing to USES and its subsidiaries in the form of additional Term Loan A debt and, in connection with such Term Loan A debt financing, USES issued to us 169,062 shares of its common stock. As a result of such debt financing and recapitalization, as of June 29, 2016, we held 268,962 shares of USES common stock representing a 99.96% common equity ownership interest in USES. As such, USES became a controlled company on June 30, 2016.
Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income$286 $50 $722 $152 

Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Additions $— $— $6,000 $— 
Interest Income Capitalized as PIK287 — 531 — 

As of
March 31, 2023June 30, 2022
Interest Receivable (1)
$$
Other Receivables (2)
62 62 

(1) Interest income recognized but not yet paid.
(2) Represents amounts due from USES to Prospect for reimbursement of expenses paid by Prospect on behalf of USES.

Valley Electric Company, Inc.
Prospect owns 100% of the common stock of Valley Electric Holdings I, Inc. (“Valley Holdings I”), a Consolidated Holding Company. Valley Holdings I owns 100% of Valley Electric Holdings II, Inc. (“Valley Holdings II”), a Consolidated Holding Company. Valley Holdings II owns 94.99% of Valley Electric Company, Inc. (“Valley Electric”), with Valley Electric management owning the remaining 5.01% of the equity. Valley Electric owns 100% of the equity of VE Company, Inc., which owns 100% of the equity of Valley Electric Co. of Mt. Vernon, Inc. (“Valley”), a leading provider of specialty electrical services in the state of Washington and among the top 50 electrical contractors in the United States.
108

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Interest Income
Interest Income from Valley
$319 $274 $1,173 $834 
Interest Income from Valley Electric
1,948 1,505 5,508 4,502 
Total Interest Income$2,267 $1,779 $6,681 $5,336 
Dividend Income (1)
$— $809 $547 $2,509 
Other Income
Structuring Fee
$— $260 $— $260 
Residual Profit Interest
167 167 500 500 
Total Other Income$167 $427 $500 $760 
Managerial Assistance (2)
$150 $150 $450 $450 
(1) All dividends were paid from earnings and profits.
(2) No income recognized by Prospect. MA payments were paid from Valley Electric to Prospect and subsequently remitted to PA.


Three Months EndedNine Months Ended
March 31, 2023March 31, 2022March 31, 2023March 31, 2022
Additions$— $13,000 $— $13,000 
Interest Income Capitalized as PIK1,992 22 1,992 22 
Repayment of loan receivable— 15,339 (548)15,339 

As of
March 31, 2023June 30, 2022
Interest Receivable (3)
$24 $19 
Other Receivables (4)
(3) Interest income recognized but not yet paid.
(4) Represents amounts due from Valley Electric to Prospect for reimbursement of expenses paid by Prospect on behalf of Valley Electric.

Note 15. Litigation
From time to time, we may become involved in various investigations, claims and legal proceedings that arise in the ordinary course of our business. These matters may relate to intellectual property, employment, tax, regulation, contract or other matters. The resolution of such matters as may arise will be subject to various uncertainties and, even if such claims are without merit, could result in the expenditure of significant financial and managerial resources.
We are not aware of any material legal proceedings as of March 31, 2023.

109

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

Note 16. Financial Highlights
The following is a schedule of financial highlights for the nine months ended March 31, 2023 and March 31, 2022:
 Three Months Ended March 31,Nine Months Ended March 31,
 2023202220232022
Per Share Data   
Net asset value per common share at beginning of period$9.94 $10.60 $10.48 $9.81 
Net investment income(1)
0.26 0.22 0.78 0.65 
Net realized and change in unrealized (losses) gains(1)
(0.48)0.20 (1.05)0.96 
Net increase (decrease) from operations(0.22)0.42 (0.27)1.61 
Distributions of net investment income to preferred stockholders(0.05)(0.01)(11)(0.12)(0.03)(11)
Distributions of capital gains to preferred stockholders— (0.01)(11)— (10)(0.01)(11)
Total distributions to preferred stockholders(0.05)(0.02)(0.12)(0.04)
Net increase (decrease) from operations applicable to common stockholders(0.27)0.40 (0.40)(5)1.57 
Distributions of net investment income to common stockholders(0.18)(4)(0.13)(11)(0.52)(4)(0.48)(11)
Distributions of capital gains to common stockholders— (0.05)(11)(0.02)(0.05)(11)
Return of Capital to common stockholders— (4)— — (4)(0.01)
Total distributions to common stockholders(0.18)(0.18)(0.54)(0.54)
Common stock transactions(2)
(0.01)(0.01)(0.07)(0.03)
Offering costs from issuance of preferred stock— — — (0.03)
Reclassification of preferred stock issuance costs(6)
— — — 0.03 
  Net asset value per common share at end of period$9.48 $10.81 (5)$9.48 (5)$10.81 
Per common share market value at end of period$6.96 $8.28 $6.96 $8.28 
Total return based on market value(3)
2.16 %0.66 %7.53 %5.61 %
Total return based on net asset value(3)
(2.14 %)4.27 %(2.31 %)17.92 %
Shares of common stock outstanding at end of period400,833,873 391,718,136 400,833,873 391,718,136 
Weighted average shares of common stock outstanding399,732,263 391,091,485 397,233,468 389,981,608 
Ratios/Supplemental Data
Net assets at end of period$3,799,294 $4,236,011 $3,799,294 $4,236,011 
Portfolio turnover rate1.19 %2.56 %4.47 %14.08 %
Annualized ratio of operating expenses to average net assets applicable to common shares(8)
11.63 %9.02 %10.85 %9.01 %
Annualized ratio of net investment income to average net assets applicable to common shares(8)
10.53 %8.31 %10.37 %8.40 %
110

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

The following is a schedule of financial highlights for each of the five years ended in the period ended June 30, 2022:
 Year Ended June 30,
 20222021202020192018
Per Share Data
Net asset value per common share at beginning of year$9.81 $8.18 $9.01 $9.35 $9.32 
Net investment income(1)0.88 0.75 0.72 0.85 0.79 
Net realized and change in unrealized gains (losses)(1)0.61 1.77 (0.76)(0.46)0.04 
Net increase (decrease) from operations1.49 2.51 (5)(0.04)0.39 0.83 
Distributions of net investment income to preferred stockholders(0.05)(11)— (10)— — — 
Distributions of capital gains to preferred stockholders(0.01)(11)— — — — 
Total distributions to preferred stockholders(0.06)— — — — 
Net increase (decrease) from operations applicable to common stockholders1.43 2.51 (0.04)0.39 0.83 
Distributions of net investment income to common stockholders(0.60)(11)(0.63)(9)(0.49)(7)(0.72)(0.77)
Distributions of capital gains to common stockholders(0.11)(11)— — — — 
Return of capital to common stockholders(0.01)(0.09)(9)(0.23)(7)— — 
Total distributions to common stockholders(0.72)(0.72)(0.72)(0.72)(0.77)
Common stock transactions(2)(0.05)(0.11)(0.07)(0.01)(0.03)(4)
Offering costs from issuance of preferred stock(0.03)(0.04)— — — 
Reclassification of preferred stock issuance costs(6)0.03 — — — — 
Net asset value per common share at end of year$10.48 (5)$9.81 (5)$8.18 $9.01 $9.35 
Per share market value at end of year$6.99 $8.39 $5.11 $6.53 $6.71 
Total return based on market value(3)(8.59 %)85.53 %(11.35 %)8.23 %(7.42 %)
Total return based on net asset value(3)17.21 %35.52 %2.84 %7.17 %12.39 %
Shares of common stock outstanding at end of year393,164,437 388,419,573 373,538,499 367,131,025 364,409,938 
Weighted average shares of common stock outstanding390,571,648 382,705,106 368,094,299 365,984,541 361,456,075 
Ratios/Supplemental Data
Net assets at end of year$4,119,123 $3,945,517 $3,055,861 $3,306,275 $3,407,047 
Portfolio turnover rate15.92 %14.64 %16.46 %10.86 %30.70 %
Ratio of operating expenses to average net assets applicable to common shares(8)9.00 %9.98 %11.37 %11.65 %11.08 %
Ratio of net investment income to average net assets applicable to common shares(8)8.44 %8.24 %8.44 %9.32 %8.57 %
(1)Per share data amount is based on the basic weighted average number of common shares outstanding for the year/period presented (except for dividends to stockholders which is based on actual rate per share).
(2)Common stock transactions include the effect of our issuance of common stock in public offerings (net of underwriting and offering costs), shares issued in connection with our common stock dividend reinvestment plan, common shares issued to acquire investments, common shares repurchased below net asset value pursuant to our Repurchase Program, and common shares issued pursuant to the Holder Optional Conversion of our 5.50% Preferred Stock.
(3)Total return based on market value is based on the change in market price per common share between the opening and ending market prices per share in each period and assumes that common stock dividends are reinvested in accordance with our common stock dividend reinvestment plan. Total return based on net asset value is based upon the change in net asset value per common share between the opening and ending net asset values per common share in each period and assumes that dividends are reinvested in accordance with our common stock dividend reinvestment plan. For periods less than a year, total return is not annualized.
(4)Not finalized for the respective fiscal period. Refer to Note 12.
(5)Does not foot due to rounding.
111

PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)(Continued)
(in thousands, except share and per share data)

(6)Preferred stock issuance costs include offering costs and underwriting costs related to the issuance of preferred stock. During the three months ended December 31, 2021, we have reclassified all preferred stock issuance costs related to preferred stock issued as temporary equity following our reclassification of preferred stock during the three months ended September 30, 2021. Refer to Note 9 within the accompanying notes to the consolidated financial statements for further discussion.
(7)The amounts reflected for the respective fiscal periods were updated based on tax information received subsequent to our Form 10-K filing for the year ended June 30, 2020 and our Form 10-Q filing for September 30, 2020. Certain reclassifications have been made in the presentation of prior period amounts. See Note 2 and Note 12 within the accompanying notes to the consolidated financial statements for further discussion.
(8)The amounts reflected for the respective fiscal periods do not reflect the effect of dividend payments to preferred shareholders.
(9)The amounts reflected for the respective fiscal periods were updated based on tax information received subsequent to our Form 10-K filing for the year ended June 30, 2021 and our Form 10-Q filing for December 31, 2021. Certain reclassifications have been made in the presentation of prior period amounts. See Note 2 and Note 12 within the accompanying notes to the consolidated financial statements for further discussion.
(10)Amount is less than $0.01.
(11)The amounts reflected for the respective fiscal periods were updated based on tax information received subsequent to our Form 10-K filing for the year ended June 30, 2022 and our Form 10-Q filing for December 31, 2022. Certain reclassifications have been made in the presentation of prior period amounts. See Note 2 and Note 12 within the accompanying notes to the consolidated financial statements for further discussion.
Note 17. Selected Quarterly Financial Data (Unaudited)
The following table sets forth selected financial data for each quarter within the three years ended June 30, 2023:
Investment 
Income
Net Investment 
Income
Net Realized and 
Unrealized (Losses) Gains
Net Increase (Decrease) in 
Net Assets from Operations Applicable to Common Stockholders
Quarter EndedTotalPer Share (1)TotalPer Share (1)TotalPer Share (1)TotalPer Share (1)
September 30, 2020$142,880 $0.38 $57,545 $0.15 $110,201 $0.30 $167,746 $0.45 
December 31, 2020172,292 0.45 81,561 0.21 224,406 0.60 305,921 0.80 
March 31, 2021159,456 0.41 73,402 0.19 173,006 0.45 246,008 0.64 
June 30, 2021157,339 0.41 73,229 0.19 170,457 0.44 242,421 0.62 
September 30, 2021$169,474 $0.44 $81,369 $0.21 $130,762 $0.34 $209,724 $0.54 
December 31, 2021175,376 0.45 85,557 0.22 168,056 0.43 246,411 0.63 
March 31, 2022181,431 0.46 87,005 0.22 77,291 0.20 157,157 0.40 
June 30, 2022184,623 0.47 89,969 0.23 (137,425)(0.35)(56,643)(0.14)
September 30, 2022$202,674 $0.51 $99,266 $0.25 $(191,705)$(0.49)$(105,199)$(0.27)
December 31, 2022212,916 0.54 106,704 0.27 (34,427)(0.09)55,623 0.14 
March 31, 2023215,120 0.54 102,180 0.26 (191,194)(0.48)(108,947)(0.27)
(1)Per share amounts are calculated using the basic weighted average number of common shares outstanding for the period presented and does not reflect the assumed conversion of dilutive securities (basic earnings per common share). The sum of the quarterly per share amounts above will not necessarily equal the per share amounts for the fiscal year.

112


Note 18. Subsequent Events
Management has evaluated subsequent events through the date of issuance of these financial statements and has determined that there are no subsequent events outside the ordinary scope of business that require adjustment to, or disclosure in, the financial statements other than those disclosed below.
On May 9, 2023, we announced the declaration of monthly dividends for our 5.50% Preferred Stock for holders of record on the following dates based on an annual rate equal to 5.50% of the Stated Value of $25.00 per share as set forth in the Articles Supplementary for the Preferred Stock, from the date of issuance or, if later from the most recent dividend payment date (the first business day of the month, with no additional dividend accruing in July as a result), as follows:
Monthly Cash 5.50% Preferred Shareholder Distribution
Record DatePayment DateMonthly Amount ($ per share), before pro ration for partial periods
June 20236/21/20237/3/2023$0.114583
July 20237/19/20238/1/2023$0.114583
August 20238/16/20239/1/2023$0.114583
On May 9, 2023, we announced the declaration of monthly dividends for our 6.50% Preferred Stock for holders of record on the following dates based on an annual rate equal to 6.50% of the Stated Value of $25.00 per share as set forth in the Articles Supplementary for the Preferred Stock, from the date of issuance or, if later from the most recent dividend payment date (the first business day of the month, with no additional dividend accruing in July as a result), as follows:
Monthly Cash 6.50% Preferred Shareholder Distribution
Record DatePayment DateMonthly Amount ($ per share), before pro ration for partial periods
June 20236/21/20237/3/2023$0.135417
July 20237/19/20238/1/2023$0.135417
August 20238/16/20239/1/2023$0.135417
On May 9, 2023, we announced the declaration of quarterly dividends for our 5.35% Preferred Stock for holders of record on the following dates based on an annual rate equal to 5.35% of the Stated Value of $25.00 per share as set forth in the Articles Supplementary for the 5.35% Preferred Stock, from the date of issuance or, if later from the most recent dividend payment date, as follows:

Quarterly Cash 5.35% Preferred Shareholder Distribution
Record DatePayment DateAmount ($ per share)
May 2023 - July 20237/19/20238/1/2023$0.334375
On May 9, 2023, we announced the declaration of monthly dividends on our common stock as follows:
Monthly Cash Common Shareholder DistributionRecord DatePayment DateAmount ($ per share)
May 20235/26/20236/21/2023$0.0600
June 20236/28/20237/20/2023$0.0600
July 20237/27/20238/22/2023$0.0600
August 20238/29/20239/20/2023$0.0600

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(All figures in this item are in thousands except share, per share and other data.)
The following discussion should be read in conjunction with our consolidated financial statements and related notes and other financial information appearing elsewhere in this Quarterly Report. In addition to historical information, the following discussion and other parts of this Quarterly Report contain forward-looking information that involves risks and uncertainties. Our actual results may differ significantly from any results expressed or implied by these forward-looking statements due to the factors discussed in Part II, “Item 1A. Risk Factors” and “Forward-Looking Statements” appearing elsewhere herein.
Overview
The terms “Prospect”, “the Company”, “we”, “us” and “our” mean Prospect Capital Corporation and its subsidiaries unless the context specifically requires otherwise.

Prospect is a financial services company that primarily lends to and invests in middle market privately-held companies. We are a closed-end investment company incorporated in Maryland. We have elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). As a BDC, we have elected to be treated as a regulated investment company (“RIC”), under Subchapter M of the Internal Revenue Code of 1986 (the “Code”). We were organized on April 13, 2004, and were funded in an initial public offering completed on July 27, 2004.

On May 15, 2007, we formed a wholly owned subsidiary Prospect Capital Funding LLC (“PCF”), a Delaware limited liability company and a bankruptcy remote special purpose entity, which holds certain of our portfolio loan investments that are used as collateral for the revolving credit facility at PCF. Our wholly owned subsidiary Prospect Small Business Lending, LLC (“PSBL”) was formed on January 27, 2014, and purchased small business whole loans from online small business loan originators, including On Deck Capital, Inc. (“OnDeck”). On September 30, 2014, we formed a wholly-owned subsidiary Prospect Yield Corporation, LLC (“PYC”) and effective October 23, 2014, PYC holds a portion of our collateralized loan obligations (“CLOs”), which we also refer to as subordinated structured notes (“SSNs”). Each of these subsidiaries have been consolidated since operations commenced.
We consolidate certain of our wholly owned and substantially wholly owned holding companies formed by us in order to facilitate our investment strategy. The following companies are included in our consolidated financial statements and are collectively referred to as the “Consolidated Holding Companies”: CP Holdings of Delaware LLC (“CP Holdings”); Credit Central Holdings of Delaware, LLC (“Credit Central Delaware”); Energy Solutions Holdings Inc.; First Tower Holdings of Delaware LLC (“First Tower Delaware”); MITY Holdings of Delaware Inc. (“MITY Delaware”); Nationwide Acceptance Holdings LLC; NMMB Holdings, Inc. (“NMMB Holdings”); NPH Property Holdings, LLC (“NPH”); Prospect Opportunity Holdings I, Inc. (“POHI”); SB Forging Company, Inc. (“SB Forging”); STI Holding, Inc.; UTP Holdings Group Inc. (“UTP Holdings”); Valley Electric Holdings I, Inc. (“Valley Holdings I”); and Valley Electric Holdings II, Inc. (“Valley Holdings II”).
We are externally managed by our investment adviser, Prospect Capital Management L.P. (“Prospect Capital Management” or the “Investment Adviser”). Prospect Administration LLC (“Prospect Administration”), a wholly-owned subsidiary of the Investment Adviser, provides administrative services and facilities necessary for us to operate.
Our investment objective is to generate both current income and long-term capital appreciation through debt and equity investments. We invest primarily in senior and subordinated secured debt and equity of private companies in need of capital for acquisitions, divestitures, growth, development, recapitalizations and other purposes. We work with the management teams or financial sponsors to seek investments with historical cash flows, asset collateral or contracted pro-forma cash flows.
We currently have four primary strategies that guide our origination of investment opportunities: (1) lending to companies, including companies controlled by private equity sponsors and not controlled by private equity sponsors, and including both directly-originated loans and syndicated loans, (2) lending to companies and purchasing controlling equity positions in such companies, including both operating companies and financial services companies, (3) purchasing controlling equity positions and lending to real estate companies, and (4) investing in structured credit. We may also invest in other strategies and opportunities from time to time that we view as attractive. We continue to evaluate other origination strategies in the ordinary course of business with no specific top-down allocation to any single origination strategy.
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Lending to Companies - We make directly-originated, agented loans to companies, including companies which are controlled by private equity sponsors and companies that are not controlled by private equity sponsors (such as companies that are controlled by the management team, the founder, a family or public shareholders). This debt can take the form of first lien, second lien, unitranche or unsecured loans. These loans typically have equity subordinate to our loan position. We may also purchase selected equity co-investments in such companies. In addition to directly-originated, agented loans, we also invest in senior and secured loans syndicated loans and high yield bonds that have been sold to a club or syndicate of buyers, both in the primary and secondary markets. These investments are often purchased with a long term, buy-and-hold outlook, and we often look to provide significant input to the transaction by providing anchoring orders. Historically, this strategy has comprised approximately 40%-60% of our portfolio.
Lending to Companies and Purchasing Controlling Equity Positions in Such Companies - This strategy involves purchasing senior and secured yield-producing debt and controlling equity positions in operating companies across various industries. We believe this strategy provides enhanced certainty of closure to sellers and the opportunity for management to continue on in their current roles. These investments are often structured in tax-efficient partnerships, enhancing returns. Historically, this strategy has comprised approximately 15%-25% of our portfolio.
Purchasing Controlling Equity Positions and Lending to Real Estate Companies - We purchase debt and controlling equity positions in tax-efficient 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 student housing. NPRC seeks to identify properties that have historically significant occupancy rates and recurring cash flow generation. NPRC generally co-invests with established and experienced property management teams that manage such properties after acquisition. Additionally, NPRC makes investments in rated secured structured notes (primarily debt of structured credit). NPRC also purchases loans originated by certain consumer loan facilitators. It purchases each loan in its entirety (i.e., a “whole loan”). The borrowers are consumers, and the loans are typically serviced by the facilitators of the loans. Historically, this overall investment strategy has comprised approximately 10%-20% of our business.
Investing in Structured Credit - We make investments in structured credit, often taking a significant position in subordinated structured notes (equity) and rated secured structured notes (debt). The underlying portfolio of each structured credit investment is diversified across approximately 100 to 200 broadly syndicated loans and does not have direct exposure to real estate, mortgages, or consumer-based credit assets. The structured credit portfolios in which we invest are managed by established collateral management teams with many years of experience in the industry. Historically, this overall strategy has comprised approximately 10%-20% of our portfolio.
We invest primarily in first and second lien secured loans and unsecured debt, which in some cases includes an equity component. First and second lien secured loans generally are senior debt instruments that rank ahead of unsecured debt of a given portfolio company. These loans also have the benefit of security interests on the assets of the portfolio company, which may rank ahead of or be junior to other security interests. Our investments in structured credit are subordinated to senior loans and are generally unsecured. We invest in debt and equity positions of structured credit which are a form of securitization in which the cash flows of a portfolio of loans are pooled and passed on to different classes of owners in various tranches. Our structured credit investments are derived from portfolios of corporate debt securities which are generally risk rated from BB to B.
We hold many of our control investments in a two-tier structure consisting of a holding company and one or more related operating companies for tax purposes. These holding companies serve various business purposes including concentration of management teams, optimization of third-party borrowing costs, improvement of supplier, customer, and insurance terms, and enhancement of co-investments by the management teams. In these cases, our investment, which is generally equity in the holding company, the holding company’s equity investment in the operating company and any debt from us directly to the operating company structure represents our total exposure for the investment. As of March 31, 2023, as shown in our Consolidated Schedule of Investments, the cost basis and fair value of our investments in controlled companies was $2,884,591 and $3,480,094, respectively. This structure gives rise to several of the risks described in our public documents and highlighted elsewhere in this Quarterly Report. We consolidate all wholly owned and substantially wholly owned holding companies formed by us for the purpose of holding our controlled investments in operating companies. There is no significant effect of consolidating these holding companies as they hold minimal assets other than their investments in the controlled operating companies. Investment company accounting prohibits the consolidation of any operating companies.
On June 10, 2022, at a special meeting of stockholders, our stockholders authorized us to sell shares of our common stock (during the next 12 months) at a price or prices below our net asset value per share at the time of sale in one or more offerings, subject to certain conditions as set forth in the proxy statement relating to the special meeting (including that the number of shares sold on any given date does not exceed 25% of its outstanding common stock immediately prior to such sale).
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On March 13, 2023, we filed a notice of meeting and definitive proxy statement in connection with a special meeting of our stockholders that is scheduled to be held on June 9, 2023 for the purpose of asking our stockholders to vote on a proposal to authorize us, with approval of our Board of Directors, to sell shares of our common stock (during the next 12 months) at a price or prices below our then current net asset value per share in one or more offerings subject to certain conditions as set forth in the proxy statement relating to the special meeting (including that the number of shares sold on any given date does not exceed 25% of our outstanding common stock immediately prior to such sale).
Third Quarter Highlights
Investment Transactions
We seek to be a long-term investor with our portfolio companies. During the three months ended March 31, 2023, we acquired $10,000 of new investments, completed follow-on investments in existing portfolio companies totaling approximately $33,830, funded $942 of revolver advances, and recorded PIK interest of $46,926, resulting in gross investment originations of $91,698. During the three months ended March 31, 2023, we received full repayments totaling $29,164, received $31,806 in sales, received $1,223 of revolver paydowns, and received $51,804 in partial prepayments, scheduled principal amortization payments, and return of capital distributions, resulting in net repayments of $113,997.

Debt Issuances and Redemptions
On March 15, 2023, we repaid the remaining outstanding principal amount of $282,115 of the 2023 Notes, plus interest, at maturity.
During the three months ended March 31, 2023, we repaid $2,438 aggregate principal amount of Prospect Capital InterNotes® at par in accordance with the Survivor’s Option, as defined in the InterNotes® Offering prospectus. As a result of these transactions, we recorded a loss in the amount of the unamortized debt issuance costs. The net loss on the extinguishment of Prospect Capital InterNotes® in the three months ended March 31, 2023 was $58.
During the three months ended March 31, 2023, we issued $7,857 aggregate principal amount of Prospect Capital InterNotes® with a weighted average stated interest rate of 5.68%, to extend our borrowing base. The newly issued notes mature between January 15, 2026 and March 15, 2033 and generated net proceeds of $7,742.
During the three months ended March 31, 2023, we increased total commitments to the Revolving Credit Facility by $76,000 to $1,777,500 in the aggregate.
Equity Issuances
On January 19, 2023, February 16, 2023, and March 22, 2023, we issued 458,461, 448,326, and 492,809 shares of our common stock in connection with the dividend reinvestment plan, respectively.
During the three months ended March 31, 2023, 65,968 shares of our Series A1 Preferred Stock, 23,000 shares of our Series A2 Preferred Stock, 460 shares of our Series A3 Preferred Stock, 74,400 shares of our Series M1 Preferred Stock, and 8,705 shares of our Series M3 Preferred Stock were converted to 581,799 shares of our common stock, in connection with Holder Optional Conversions and Optional Redemptions Following Death of a Holder.
During the three months ended March 31, 2023, we issued 4,871,732 shares of our Series A3 Preferred Stock for net proceeds of $109,614 and 668,104 shares of our Series M3 Preferred Stock for net proceeds of $16,202, each excluding offering costs and preferred stock dividend reinvestment.

In connection with our Preferred Stock Dividend Reinvestment Plan, we issued additional Series A1 Preferred Stock, Series A3 Preferred Stock, Series M1 Preferred Stock, and Series M3 Preferred Stock of 4,408, 5,970, and 6,448 shares throughout January, February and March 2023.

On March 13, 2023, we filed a notice of meeting and definitive proxy statement in connection with a special meeting of our stockholders that is scheduled to be held on June 9, 2023 for the purpose of asking our stockholders to vote on a proposal to authorize us, with approval of our Board of Directors, to sell shares of our common stock (during the next 12 months) at a price or prices below our then current net asset value per share in one or more offerings subject to certain conditions as set forth in the proxy statement relating to the special meeting (including that the number of shares sold on any given date does not exceed 25% of our outstanding common stock immediately prior to such sale).

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Investment Holdings
At March 31, 2023, we have $7,592,777, or 199.8%, of our net assets applicable to common shares invested in 127 long-term portfolio investments and CLOs.
Our annualized current yield was 13.4% and 11.1% as of March 31, 2023 and June 30, 2022, respectively, across all performing interest bearing investments, excluding equity investments and non-accrual loans. Our annualized current yield was 10.9% and 8.7% as of March 31, 2023 and June 30, 2022, respectively, across all investments. In many of our portfolio companies we hold equity positions, ranging from minority interests to majority stakes, which we expect over time to contribute to our investment returns. Some of these equity positions include features such as contractual minimum internal rates of returns, preferred distributions, flip structures and other features expected to generate additional investment returns, as well as contractual protections and preferences over junior equity, in addition to the yield and security offered by our cash flow and collateral debt protections.
We are a non-diversified company within the meaning of the 1940 Act. As required by the 1940 Act, we classify our investments by level of control. As defined in the 1940 Act, “Control Investments” are those where there is the ability or power to exercise a controlling influence over the management or policies of a company. Control is generally deemed to exist when a company or individual possesses a beneficial ownership of 25% or more of the voting securities of an investee company. Under the 1940 Act, “Affiliate Investments” are defined by a lesser degree of influence and are deemed to exist through owning, controlling, or holding with power to vote, 5% or more of the outstanding voting securities of another person. “Non-Control/Non-Affiliate Investments” are those that are neither Control Investments nor Affiliate Investments.
As of March 31, 2023, we own controlling interests in the following portfolio companies: CP Energy Services Inc. (“CP Energy”); Credit Central Loan Company, LLC (“Credit Central”); Echelon Transportation, LLC (“Echelon”); First Tower Finance Company LLC (“First Tower Finance”); Freedom Marine Solutions, LLC (“Freedom Marine”); InterDent, Inc. (“InterDent”); Kickapoo Ranch Pet Resort (“Kickapoo”); MITY, Inc. (“MITY”); NPRC; Nationwide Loan Company LLC (“Nationwide”); NMMB, Inc. (“NMMB”); Pacific World Corporation (“Pacific World”); R-V Industries, Inc. (“R-V”); Universal Turbine Parts, LLC (“UTP”); USES Corp. (“United States Environmental Services” or “USES”); and Valley Electric Company, Inc. (“Valley Electric”). In June 2019, CP Energy purchased a controlling interest of the common equity of Spartan Energy Holdings, Inc. (“Spartan Holdings”), which owns 100% of Spartan Energy Services, LLC (“Spartan”), a portfolio company of Prospect with $31,603 in senior secured term loans (the “Spartan Term Loan A”) due to us as of March 31, 2023. As a result of CP Energy’s purchase, and given Prospect’s controlling interest in CP Energy, we report our investments in Spartan as control investment. Spartan remains the direct borrower and guarantor to Prospect for the Spartan Term Loan A.
As of March 31, 2023, we also own affiliated interests in Nixon, Inc. (“Nixon”) and RGIS Services, LLC, (“RGIS”).
The following shows the composition of our investment portfolio by level of control as of March 31, 2023 and June 30, 2022:
March 31, 2023June 30, 2022
Level of ControlCost% of PortfolioFair Value% of PortfolioCost% of PortfolioFair Value% of Portfolio
Control Investments$2,884,591 38.1 %$3,480,094 45.8 %$2,732,906 38.0 %$3,438,317 45.2 %
Affiliate Investments8,996 0.1 %7,944 0.1 %242,101 3.4 %393,264 5.2 %
Non-Control/Non-Affiliate Investments4,671,607 61.8 %4,104,739 54.1 %4,221,824 58.6 %3,770,929 49.6 %
Total Investments
$7,565,194 100.0 %$7,592,777 100.0 %$7,196,831 100.0 %$7,602,510 100.0 %
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The following shows the composition of our investment portfolio by type of investment as of March 31, 2023 and June 30, 2022:
March 31, 2023June 30, 2022
Type of InvestmentCost% of PortfolioFair Value% of PortfolioCost% of PortfolioFair Value% of Portfolio
First Lien Revolving Line of Credit$44,472 0.6 %$44,512 0.6 %$39,775 0.6 %$39,746 0.5 %
First Lien Debt4,209,603 55.6 %4,086,362 53.8 %3,839,553 53.3 %3,757,960 49.4 %
Second Lien Revolving Line of Credit5,137 0.1 %4,888 0.1 %— — %— — %
Second Lien Debt1,568,007 20.7 %1,327,318 17.5 %1,588,557 22.1 %1,471,336 19.4 %
Unsecured Debt12,999 0.2 %12,709 0.2 %7,200 0.1 %7,200 0.1 %
Subordinated Structured Notes967,032 12.8 %698,423 9.2 %997,703 13.9 %711,429 9.4 %
Preferred Stock357,121 4.7 %32,533 0.4 %345,602 4.8 %47,719 0.6 %
Common Stock194,557 2.6 %1,053,818 13.9 %197,215 2.7 %1,187,620 15.6 %
Membership Interest206,266 2.7 %275,775 3.6 %181,226 2.5 %316,970 4.2 %
Participating Interest— — %56,439 0.7 %— — %62,530 0.8 %
Total Investments$7,565,194 100.0 %$7,592,777 100.0 %$7,196,831 100.0 %$7,602,510 100.0 %
(1)Participating Interest includes our participating equity investments, such as net profits interests, net operating income interests, net revenue interests, and overriding royalty interests.
The following shows our investments in interest bearing securities by type of investment as of March 31, 2023 and June 30, 2022:
March 31, 2023June 30, 2022
Type of InvestmentCost% of PortfolioFair Value% of PortfolioCost% of PortfolioFair Value% of Portfolio
First Lien Debt and First Lien Revolving Line of Credit$4,254,075 62.5 %$4,130,874 66.9 %$3,879,328 59.9 %$3,797,706 63.4 %
Second Lien Debt and Second Lien Revolving Line of Credit1,573,144 23.1 %1,332,206 21.6 %1,588,557 24.5 %1,471,336 24.6 %
Unsecured12,999 0.2 %12,709 0.2 %7,200 0.1 %7,200 0.1 %
Subordinated Structured Notes967,032 14.2 %698,423 11.3 %997,703 15.5 %711,429 11.9 %
Total Interest Bearing Investments$6,807,250 100.0 %$6,174,212 100.0 %$6,472,788 100.0 %$5,987,671 100.0 %

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The following shows the composition of our investment portfolio by industry as of March 31, 2023 and June 30, 2022:
March 31, 2023June 30, 2022
IndustryCost% of PortfolioFair Value% of PortfolioCost% of PortfolioFair Value% of Portfolio
Aerospace & Defense$112,181 1.5 %$60,872 0.8 %$108,790 1.5 %$65,766 0.9 %
Air Freight & Logistics187,097 2.5 %187,786 2.5 %178,077 2.5 %178,414 2.3 %
Automobile Components134,518 1.8 %108,707 1.4 %104,499 1.5 %103,536 1.4 %
Building Products35,000 0.5 %33,849 0.4 %35,000 0.5 %34,697 0.5 %
Capital Markets42,500 0.6 %38,265 0.5 %42,500 0.6 %41,574 0.5 %
Commercial Services & Supplies480,238 6.2 %404,545 5.3 %424,795 5.9 %356,965 4.7 %
Communications Equipment59,834 0.8 %44,155 0.6 %59,780 0.8 %57,556 0.8 %
Construction & Engineering70,798 0.9 %141,564 1.9 %68,259 0.9 %145,983 1.9 %
Consumer Finance610,288 8.1 %751,580 9.9 %568,739 7.9 %765,168 10.1 %
Distributors282,417 3.7 %238,057 3.1 %278,530 3.9 %180,108 2.4 %
Diversified Consumer Services276,482 3.7 %199,710 2.6 %250,393 3.5 %365,669 4.8 %
Diversified Financial Services42,396 0.6 %42,106 0.6 %36,878 0.5 %36,878 0.5 %
Diversified Telecommunication Services163,070 2.2 %157,579 2.1 %165,966 2.3 %166,356 2.2 %
Electrical Equipment64,167 0.8 %64,167 0.8 %— — %— — %
Energy Equipment & Services321,619 4.2 %129,600 1.7 %300,496 4.2 %126,600 1.7 %
Equity Real Estate Investment Trusts (REITs)686,086 9.1 %1,372,493 18.1 %647,316 9.0 %1,399,857 18.3 %
Food & Staples Retailing27,238 0.4 %27,475 0.4 %9,262 0.1 %9,440 0.1 %
Food Products135,249 1.8 %125,940 1.7 %130,998 1.8 %127,436 1.7 %
Health Care Equipment & Supplies7,487 0.1 %6,810 0.1 %7,483 0.1 %6,966 0.1 %
Health Care Providers & Services652,011 8.6 %762,957 10.0 %660,976 9.2 %748,591 9.8 %
Health Care Technology129,160 1.7 %128,272 1.7 %89,675 1.2 %89,675 1.2 %
Hotels, Restaurants & Leisure22,396 0.3 %21,229 0.3 %23,359 0.3 %22,651 0.3 %
Household Durables121,468 1.6 %116,701 1.5 %123,175 1.7 %122,652 1.6 %
Household Products— — %— — %20,936 0.3 %20,936 0.3 %
Insurance— — %— — %21,966 0.3 %22,280 0.3 %
Interactive Media & Services211,754 2.8 %211,754 2.8 %233,204 3.2 %233,204 3.1 %
Internet & Direct Marketing Retail20,022 0.3 %13,880 0.2 %20,212 0.3 %17,454 0.2 %
IT Services359,614 4.8 %334,810 4.4 %305,311 4.2 %303,681 4.0 %
Leisure Products59,746 0.8 %59,089 0.8 %39,015 0.5 %38,757 0.5 %
Machinery103,563 1.4 %128,583 1.7 %108,780 1.5 %124,458 1.6 %
Media104,693 1.4 %150,932 2.0 %108,062 1.5 %161,140 2.1 %
Online Lending21,580 0.3 %21,580 0.3 %29,080 0.4 %29,080 0.4 %
Paper & Forest Products— — %— — %11,445 0.2 %4,952 0.1 %
Personal Products276,711 3.6 %73,492 1.0 %260,396 3.6 %59,179 0.8 %
Pharmaceuticals99,995 1.3 %100,005 1.3 %25,557 0.4 %25,962 0.3 %
Professional Services190,151 2.5 %176,161 2.3 %205,032 2.8 %203,256 2.7 %
Software52,336 0.7 %48,691 0.6 %52,295 0.7 %52,500 0.7 %
Technology Hardware, Storage & Peripherals— — %— — %12,447 0.2 %12,398 0.2 %
Textiles, Apparel & Luxury Goods168,505 2.2 %167,817 2.2 %178,428 2.5 %211,359 2.8 %
Trading Companies & Distributors65,192 0.9 %42,541 0.6 %65,216 0.9 %31,147 0.4 %
Subtotal6,397,562 84.7 %6,693,754 88.2 %6,012,328 83.4 %6,704,281 88.3 %
Structured Finance(1)1,167,632 15.3 %899,023 11.8 %1,184,503 16.6 %898,229 11.7 %
Total Investments$7,565,194 100.0 %$7,592,777 100.0 %$7,196,831 100.0 %$7,602,510 100.0 %
(1) Our SSN investments do not have industry concentrations and as such have been separated in the tables above. As of March 31, 2023 and June 30, 2022, Structured Finance includes 200,600 and $186,800, respectively, of senior secured debt investments held through our investment in NPRC and its wholly-owned subsidiary.
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Portfolio Investment Activity
Our origination efforts are focused primarily on secured lending to non-control investments to reduce the risk in the portfolio by investing primarily in first lien loans and second lien loans, though we also continue to close select equity investments. For information regarding investment activity for the nine months ended March 31, 2023 and March 31, 2022 are presented below:
 Nine months ended March 31,
20232022
Investments in portfolio companies
Investments in new portfolio companies$348,473 $997,817 
Follow-on investments in existing portfolio companies (1)
248,933 777,022 
Revolver advances8,851 9,000 
PIK interest (2)
97,952 61,030 
Total investments in portfolio companies$704,209 $1,844,869 
Investments by portfolio composition
First Lien Debt$610,230 $1,021,834 
Second Lien Debt82,390 796,351 
Subordinated Structured Notes— 9,518 
Unsecured Debt5,799 — 
Equity5,790 17,166 
Total investments by portfolio composition$704,209 $1,844,869 
Investments repaid or sold
Partial repayments (3)
$186,731 $401,201 
Full repayments103,052 545,333 
Investments sold50,056 4,451 
Revolver paydowns1,352 1,636 
Total investments repaid or sold$341,191 $952,621 
Investments repaid or sold by portfolio composition
First Lien Debt$240,044 $592,601 
1.5 Lien Debt— 18,164 
Second Lien Debt61,777 300,292 
Third Lien Debt— 3,950 
Subordinated Structured Notes31,805 9,406 
Equity7,565 28,208 
Total investments repaid or sold by portfolio composition$341,191 $952,621 
Weighted average interest rates for new investments by portfolio composition (4)
First Lien Debt11.34 %8.30 %
Second Lien Debt13.02 %9.54 %
    (1) Includes follow-on investments in existing portfolio companies and refinancings, if any.
(2) During the nine months ended March 31, 2023, approximately $96,654 of PIK interest capitalized was accrued as interest income and the remaining $1,298 was included due to the timing of interest payment dates and resulting capitalization occurring during the prior year. During the nine months ended March 31, 2022, approximately $56,824 of PIK interest capitalized was accrued as interest income and the remaining $4,206 was included due to the timing of interest payment dates and resulting capitalization occurring during the prior year.
    (3) Includes partial prepayments of principal, scheduled amortization payments and refinancings, if any.
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(4) Weighted average interest rates for new investments by portfolio composition is calculated with the current rate at the end of the period. In addition, Revolving Line of Credit and Delayed Draw Term Loans are excluded from the calculation.


Investment Valuation
Investments for which market quotations are readily available must be valued at such market quotations. In order to validate market quotations, management and the independent valuation firm look at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. These investments are classified as Level 1 or Level 2 in the fair value hierarchy.
The fair value of debt investments specifically classified as Level 2 in the fair value hierarchy are generally valued by an independent pricing agent or more than one principal market maker, if available, otherwise a principal market maker or a primary market dealer. We generally value over-the-counter securities by using the prevailing bid and ask prices from dealers during the relevant period end, which were provided by an independent pricing agent and screened for validity by such service.
In determining the range of values for debt instruments where market quotations are not readily available, and are therefore classified as Level 3 in the fair value hierarchy, except CLOs and debt investments in controlling portfolio companies, management and the independent valuation firm estimated corporate and security credit ratings and identified corresponding yields to maturity for each loan from relevant market data. A discounted cash flow technique was then applied using the appropriate yield to maturity as the discount rate, to determine a range of values. In determining the range of values for debt investments of controlled companies and equity investments, the enterprise value was determined by applying a market approach such as using earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples, net income and/or book value multiples for similar guideline public companies and/or similar recent investment transactions and/or an income approach, such as the discounted cash flow technique. The enterprise value technique may also be used to value debt investments which are credit impaired. For stressed debt and equity investments, asset recovery analysis was used.
In determining the range of values for our investments in CLOs, the independent valuation firm uses a discounted multi-path cash flow model. The valuations were accomplished through the analysis of the CLO deal structures to identify the risk exposures from the modeling point of view as well as to determine an appropriate call date (i.e., expected maturity). These risk factors are sensitized in the multi-path cash flow model using Monte Carlo simulations, which are simulations used to model the probability of different outcomes, to generate probability-weighted (i.e., multi-path) cash flows for the underlying assets and liabilities. These cash flows are discounted using appropriate market discount rates, and relevant data in the CLO market and certain benchmark credit indices are considered, to determine the value of each CLO investment. In addition, we generate a single-path cash flow utilizing our best estimate of expected cash receipts, and assess the reasonableness of the implied discount rate that would be effective for the value derived from the corresponding multi-path cash flow model.
With respect to our online consumer and SME lending initiative, we invest primarily in marketplace loans through marketplace lending platforms.  We do not conduct loan origination activities ourselves. Therefore, our ability to purchase consumer and SME loans, and our ability to grow our portfolio of consumer and SME loans, are directly influenced by the business performance and competitiveness of the marketplace loan origination business of the marketplace lending platforms from which we purchase consumer and SME loans. In addition, our ability to analyze the risk-return profile of consumer and SME loans is significantly dependent on the marketplace platforms’ ability to effectively evaluate a borrower’s credit profile and likelihood of default. If we are unable to effectively evaluate borrowers’ credit profiles or the credit decisioning and scoring models implemented by each platform, we may incur unanticipated losses which could adversely impact our operating results.
The Board of Directors looked at several factors in determining where within the range to value the asset including: recent operating and financial trends for the asset, independent ratings obtained from third parties, comparable multiples for recent sales of companies within the industry and discounted cash flow models for our investments in CLOs. The composite of all these various valuation techniques, applied to each investment, was a total valuation of $7,592,777.
Our portfolio companies are generally lower middle-market companies, outside of the financial sector, with less than $100,000 of annual EBITDA. We believe our investment portfolio has experienced less volatility than others because we believe there are more buy and hold investors who own these less liquid investments.

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Control Company Investments
Control investments offer increased risk and reward over straight debt investments. Operating results and changes in market multiples can result in dramatic changes in values from quarter to quarter. Significant downturns in operations can further result in our looking to recoveries on sales of assets rather than the enterprise value of the investment. Equity positions in our portfolio are susceptible to potentially significant changes in value, both increases as well as decreases, due to changes in operating results and market multiples. Our controlled companies discussed below experienced such changes and we recorded corresponding fluctuations in valuations during the nine months ended March 31, 2023.
CP Energy Services, Inc.

Prospect owns 100% of the equity of CP Holdings, a Consolidated Holding Company. CP Holdings owns 99.8% of the equity of CP Energy, and the remaining equity is owned by CP Energy management. CP Energy provides oilfield flowback services and fluid hauling and disposal services through its subsidiaries.

In June 2019, CP Energy purchased a controlling interest in the common equity of Spartan Energy Holdings, Inc. (“Spartan Holdings”), which owns 100% of Spartan Energy Services, LLC (“Spartan”) a portfolio company of Prospect with $31,603 in first lien term loans (the “Spartan Term Loans”) due to us as of March 31, 2023. As a result of CP Energy’s purchase, and given Prospect’s controlling interest in CP Energy, our Spartan Term Loans are presented as control investments under CP Energy beginning June 30, 2019. Spartan remains the direct borrow and guarantor to Prospect for the Spartan Term Loans.

The fair value of our investment in CP Energy was $116,414 as of March 31, 2023, which is a discount of $159,063 from its amortized cost, compared to a fair value of $112,701 as of June 30, 2022, representing a discount of $142,303 to its amortized cost. The increase in discount to amortized cost resulted from increased debt in the capital structure, offset by improved performance and increased activity in the oil and gas industry.

Credit Central Loan Company, LLC

Prospect owns 100% of the equity of Credit Central Delaware, a consolidated holding company. Credit Central Delaware owns 99.82% of Credit Central, with entities owned by Credit Central management owning the remaining 0.18% of the equity. Credit Central is a branch-based provider of installment loans.

The fair value of our investment in Credit Central decreased to $76,025 as of March 31, 2023, which represents a discount of $29,305 from its amortized cost, compared to a fair value of $76,935 as of June 30, 2022, representing a discount of $16,298 to its amortized cost basis. The increase in discount to amortized cost resulted from a decline in financial performance and increased cost basis from the issuance of Preferred Class P Shares in the current period.

First Tower Finance Company LLC

Prospect owns 100% of the equity of First Tower Delaware, a consolidated holding company. First Tower Delaware owns 78.06% of First Tower Finance. First Tower Finance owns 100% of First Tower, LLC (“First Tower”), a multiline specialty finance company.

The fair value of our investment in First Tower was $608,432 as of March 31, 2023, representing a premium of $193,201 to its amortized cost basis compared to a fair value of $607,283 as of June 30, 2022, a premium of $219,912 to its amortized cost. The decrease in premium to amortized cost resulted from a decline in financial performance and increased debt in the capital structure.

InterDent, Inc.

During the year ended June 30, 2018, Prospect exercised its rights and remedies under its loan documents to exercise the shareholder voting rights in respect of the stock of InterDent and to appoint a new Board of Directors of InterDent, all the members of which are our Investment Adviser’s professionals. As a result, Prospect’s investment in InterDent is classified as a control investment. InterDent is a dental support organization (“DSO”). InterDent provides business and administrative support services to a regionally-diversified set of dental practices so that dentists can focus on delivering high-quality clinical care and patient satisfaction.

The fair value of our investment in InterDent increased to $451,752 as of March 31, 2023, a premium of $117,895 to its amortized cost basis compared to a fair value of $406,194 as of June 30, 2022, a premium of $87,628 to its amortized cost. The increase in premium to amortized cost was driven by an increase in financial performance.

National Property REIT Corp.
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NPRC is a Maryland corporation and a qualified REIT for federal income tax purposes. NPRC is held for purposes of investing, operating, financing, leasing, managing and selling a portfolio of real estate assets and engages in any and all other activities that may be necessary, incidental, or convenient to perform the foregoing. NPRC acquires real estate assets, including, but not limited to, industrial, commercial, and multi-family properties, self-storage, and student housing properties. NPRC may acquire real estate assets directly or through joint ventures by making a majority equity investment in a property-owning entity. Additionally, through its wholly owned subsidiaries, NPRC invests in online consumer loans and RSSNs. As of March 31, 2023, we own 100% of the fully-diluted common equity of NPRC.
During the nine months ended March 31, 2023, we received partial repayments of $86,852 of our loans previously outstanding with NPRC and its wholly owned subsidiaries and $4,000 as a return of capital on our equity investment in NPRC. During the nine months ended March 31, 2023, we provided $132,071 of debt financing and $3,600 of equity financing to NPRC to invest in real estate property, to provide working capital, and to fund purchases of rated secured structured notes.

The online consumer loan investments held by certain of NPRC’s wholly owned subsidiaries are unsecured obligations of individual borrowers that are issued in amounts ranging from $1 to $50, with fixed terms ranging from 60 months to 84 months. As of March 31, 2023, the outstanding investment in online consumer loans by certain of NPRC’s wholly-owned subsidiaries was comprised of 106 individual loans, residual interest in two securitizations, and one high yield corporate bond, and had an aggregate fair value of $21,181. The average outstanding individual loan balance is approximately $3 and the loans mature on dates ranging from April 1, 2023 to April 11, 2025 with a weighted-average outstanding term of 12 months as of March 31, 2023. Fixed interest rates range from 9.0% to 36.0% with a weighted-average current interest rate of 17.0%. As of March 31, 2023, our investment in NPRC and its wholly-owned subsidiaries relating to online consumer lending had a fair value of $21,580.
As of March 31, 2023, based on outstanding principal balance, 43.3% of the online consumer loan portfolio held by certain of NPRC’s wholly-owned subsidiaries was invested in super prime loans (borrowers with a Fair Isaac Corporation (“FICO”) score, of 720 or greater), 44.2% of the portfolio in prime loans (borrowers with a FICO score of 660 to 719) and 12.5% of the portfolio in near prime loans (borrowers with a FICO score of 580 to 659, a portion of which are considered sub-prime).
Loan TypeOutstanding Principal BalanceFair ValueInterest Rate RangeWeighted Average Interest Rate*
Super Prime$135 $132 9.0%-20.5%12.3%
Prime138 $133 13.5%-25.0%19.1%
Near Prime39 $32 23.3%-36.0%26.1%
*Weighted by outstanding principal balance of the online consumer loans.
The rated secured structured note investments held by certain of NPRC’s wholly owned subsidiaries are subordinated debt interests in broadly syndicated loans managed by established collateral management teams with many years of experience in the industry. As of March 31, 2023, the outstanding investment in rated secured structured notes by certain of NPRC’s wholly owned subsidiaries was comprised of 94 investments with a fair value of $425,903 and face value of $448,235. The average outstanding note is approximately $4,768 with an expected maturity date ranging from April 2026 to October 2033 and weighted-average expected maturity of 6 years as of March 31, 2023. Coupons range from three-month LIBOR (“3ML”) plus 5.20% to 9.23% with a weighted-average coupon of 3ML + 6.93%. As of March 31, 2023, our investment in NPRC and its wholly-owned subsidiaries relating to rated secured structured notes had a fair value of $200,600.
As of March 31, 2023, based on outstanding notional balance, 12.6% of the portfolio was invested in Single - B rated tranches and 87.4% of the portfolio in BB rated tranches.
As of March 31, 2023, our investment in NPRC and its wholly owned subsidiaries had an amortized cost of $908,266 and a fair value of $1,594,673, including our investment in online consumer lending and rated secured structured notes as discussed above. The fair value of $1,372,493 related to NPRC’s real estate portfolio was comprised of forty-eight multi-family properties, eight student housing properties, four senior living properties, and three commercial properties. The following table shows the location, acquisition date, purchase price, and mortgage outstanding due to other parties for each of the properties held by NPRC as of March 31, 2023:
No.Property NameCityAcquisition DatePurchase PriceMortgage Outstanding
1Filet of ChickenForest Park, GA10/24/2012$7,400 $— 
2Arlington Park Marietta, LLCMarietta, GA5/8/201314,850 13,492 
3Taco Bell, OKYukon, OK6/4/20141,719 — 
4Taco Bell, MOMarshall, MO6/4/20141,405 — 
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No.Property NameCityAcquisition DatePurchase PriceMortgage Outstanding
5Abbie Lakes OH Partners, LLCCanal Winchester, OH9/30/201412,600 14,877 
6Kengary Way OH Partners, LLCReynoldsburg, OH9/30/201411,500 15,040 
7Lakeview Trail OH Partners, LLCCanal Winchester, OH9/30/201426,500 28,691 
8Lakepoint OH Partners, LLCPickerington, OH9/30/201411,000 16,328 
9Sunbury OH Partners, LLCColumbus, OH9/30/201413,000 16,558 
10Heatherbridge OH Partners, LLCBlacklick, OH9/30/201418,416 23,656 
11Jefferson Chase OH Partners, LLCBlacklick, OH9/30/201413,551 18,426 
12Goldenstrand OH Partners, LLCHilliard, OH10/29/20147,810 11,229 
13SSIL I, LLCAurora, IL11/5/201534,500 25,028 
14Vesper Tuscaloosa, LLCTuscaloosa, AL9/28/201654,500 42,032 
15Vesper Iowa City, LLCIowa City, IA9/28/201632,750 24,239 
16Vesper Corpus Christi, LLCCorpus Christi, TX9/28/201614,250 10,545 
17Vesper Campus Quarters, LLCCorpus Christi, TX9/28/201618,350 13,841 
18Vesper College Station, LLCCollege Station, TX9/28/201641,500 31,302 
19Vesper Kennesaw, LLCKennesaw, GA9/28/201657,900 49,852 
20Vesper Statesboro, LLCStatesboro, GA9/28/20167,500 7,480 
21Vesper Manhattan KS, LLCManhattan, KS9/28/201623,250 14,679 
229220 Old Lantern Way, LLCLaurel, MD1/30/2017187,250 153,580 
237915 Baymeadows Circle Owner, LLCJacksonville, FL 10/31/201795,700 90,290 
248025 Baymeadows Circle Owner, LLCJacksonville, FL 10/31/201715,300 15,704 
2523275 Riverside Drive Owner, LLCSouthfield, MI11/8/201752,000 54,411 
2623741 Pond Road Owner, LLCSouthfield, MI11/8/201716,500 18,852 
27150 Steeplechase Way Owner, LLCLargo, MD1/10/201844,500 36,608 
28Olentangy Commons Owner LLCColumbus, OH6/1/2018113,000 92,876 
29Villages of Wildwood Holdings LLCFairfield, OH7/20/201846,500 58,393 
30Falling Creek Holdings LLCRichmond, VA8/8/201825,000 25,374 
31Crown Pointe Passthrough LLCDanbury, CT8/30/2018108,500 89,400 
32Lorring Owner LLCForestville, MD10/30/201858,521 47,680 
33Hamptons Apartments Owner, LLCBeachwood, OH1/9/201996,500 79,520 
345224 Long Road Holdings, LLCOrlando, FL6/28/201926,500 21,200 
35Druid Hills Holdings LLCAtlanta, GA7/30/201996,000 79,104 
36Bel Canto NPRC Parcstone LLCFayetteville, NC10/15/201945,000 42,793 
37Bel Canto NPRC Stone Ridge LLCFayetteville, NC10/15/201921,900 21,545 
38Sterling Place Holdings LLCColumbus, OH10/28/201941,500 34,196 
39SPCP Hampton LLCDallas, TX11/2/202036,000 38,843 
40Palmetto Creek Holdings LLCNorth Charleston, SC11/10/202033,182 25,865 
41Valora at Homewood Holdings LLCHomewood, AL11/19/202081,250 63,844 
42NPRC Fairburn LLCFairburn, GA12/14/202052,140 43,900 
43NPRC Grayson LLCGrayson, GA12/14/202047,860 40,500 
44NPRC Taylors LLCTaylors, SC1/27/202118,762 14,075 
45Parkside at Laurel West Owner LLCSpartanburg, SC2/26/202157,005 42,025 
46Willows at North End Owner LLCSpartanburg, SC2/26/202123,255 19,000 
47SPCP Edge CL Owner LLCWebster, TX3/12/202134,000 25,496 
48Jackson Pear Orchard LLCRidgeland, MS6/28/202150,900 42,975 
49Jackson Lakeshore Landing LLCRidgeland, MS6/28/202122,600 17,955 
50Jackson Reflection Pointe LLCFlowood, MS6/28/202145,100 33,203 
51Jackson Crosswinds LLCPearl, MS6/28/202141,400 38,601 
52Elliot Apartments Norcross, LLCNorcross, GA11/30/2021128,000 102,301 
53Orlando 442 Owner, LLC (West Vue Apartments)Orlando, FL12/30/202197,500 73,000 
54NPRC Wolfchase LLCMemphis, TN3/18/202282,100 60,000 
55NPRC Twin Oaks LLCHattiesburg. MS3/18/202244,850 34,242 
56NPRC Lancaster LLCBirmingham, AL3/18/202237,550 28,650 
57NPRC Rutland LLCMacon, GA3/18/202229,750 22,768 
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No.Property NameCityAcquisition DatePurchase PriceMortgage Outstanding
58Southport Owner LLC (Southport Crossing)Indianapolis, IN3/29/202248,100 36,075 
59TP Cheyenne, LLCCheyenne, WY5/26/202227,500 17,656 
60TP Pueblo, LLCPueblo, CO5/26/202231,500 20,166 
61TP Stillwater, LLCStillwater, OK5/26/202226,100 15,328 
62TP Kokomo, LLCKokomo, IN5/26/202220,500 12,753 
63Terraces at Perkins Rowe JV LLCBaton Rouge, LA11/14/202241,400 29,566 
$2,672,726 $2,237,608 
The fair value of our investment in NPRC increased to $1,594,673 as of March 31, 2023, a premium of $686,407 from its amortized cost basis compared to a fair value of $1,615,737 as of June 30, 2022, representing a premium of $752,541. The decrease in premium is primarily driven by a decrease in like-for-like property values due to a rise in discount rates and terminal capitalization rates, partially offset by an increase in market interest rates and growth in net operating income in our real estate portfolio.

Universal Turbine Parts, LLC

On December 10, 2018, UTP Holdings purchased all of the voting stock of UTP and appointed a new Board of Directors to UTP Holdings, consisting of three employees of the Investment Advisor. At the time UTP Holdings acquired UTP, UTP Holdings (f/ k/a Harbortouch Holdings of Delaware) was a wholly-owned holding company controlled by Prospect and therefore Prospect’s investment in UTP is classified as a control investment as of June 30, 2019.

The fair value of our investment in UTP increased to $42,541 as of March 31, 2023, a discount of $22,651 from its amortized cost basis, compared to a fair value of $31,147 as of June 30, 2022, representing a discount of $34,069 to it amortized cost. The decrease in discount to amortized cost was driven by an increase in financial performance.

USES Corp.

Prospect owns 99.96% of the equity of USES Corp. as of March 31, 2023 and June 30, 2022. USES provides industrial, environmental, and maritime services in the Gulf States region.

The fair value of our investment in USES decreased to $16,267 as of March 31, 2023, a discount of $58,482 from its amortized cost basis, compared to a fair value of $22,395 as of June 30, 2022, representing a discount of $45,823 to it amortized cost. The increase in discount to amortized cost resulted from a decline in financial performance.

Our controlled investments, including those discussed above, are valued at $595,503 above their amortized cost as of March 31, 2023.

Affiliate and Non-Control Company Investments

We hold two affiliate investments at March 31, 2023 (Nixon, Inc. and RGIS Services, LLC, (“RGIS”)) with a total fair value of $7,944, a discount of $1,052 from their combined amortized cost. We held four affiliate investments at June 30, 2022 (Nixon, Inc., RGIS, Targus Cayman HoldCo Limited (“Targus”), and PGX Holdings, Inc. (“PGX”)) with a total fair value of $393,264, representing a $151,163 premium to its amortized cost. The decrease in premium is primarily driven by our equity sale of Targus and the restructuring of PGX, which drove a transfer of PGX’s investment classification from affiliate to non-control/non-affiliate as of March 31, 2023.

With the non-control/non-affiliate investments, generally, there is less volatility related to our total investments because our equity positions tend to be smaller than with our control/affiliate investments, and debt investments are generally not as susceptible to large swings in value as equity investments. For debt investments, the fair value is generally limited on the high side to each loan’s par value, plus any prepayment premium that could be imposed. As of March 31, 2023, our non-control/non-affiliate portfolio is valued at a discount to amortized cost primarily due to our CLO investment portfolio, which is valued at a $268,609 discount to amortized cost. Additionally, as of March 31, 2023, five of our non-control/ non-affiliate investments, United Sporting Companies, Inc. (“USC”), PGX, Engine Group, Inc. (“Engine”), Curo Group Holdings Corp. (“Curo”), and K&N (“K&N Parent, Inc.), are valued at discounts to amortized cost of $82,161, $65,969,$28,425, $27,626, and $24,509, respectively. Of these five investments, PGX experienced a significant change in value during the current period. Leading into March 2023, PGX was undergoing a litigation process commenced by the Consumer Financial Protection Bureau regarding the legality of PGX’s billing practices when using telemarketing to acquire new business. Due to recent rulings issued by the courts in these legal proceedings, PGX determined it needed to move away from a telemarketing model to an online model to attract new customers. As a result of this material change to PGX’s business model (which will take time to develop) and other impacts from the court rulings, our investment in PGX decreased.
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Our largest non-control/non-affiliate investment is Town & Country Holdings, Inc. (“Town & Country”), which is valued at $38,370 above its amortized cost and represents approximately 5.9% of our Net Asset Value as of March 31, 2023. Town & Country is a supplier of home textiles and accessories to retailers throughout North America.

Capitalization
Our investment activities are capital intensive and the availability and cost of capital is a critical component of our business. We capitalize our business with a combination of debt and equity. Our debt as of March 31, 2023 consists of: a Revolving Credit Facility availing us of the ability to borrow debt subject to borrowing base determinations; Convertible Notes which we issued in March 2019; Public Notes which we issued in March 2013, October 2018, January 2021, May 2021 and September 2021; and Prospect Capital InterNotes® which we issue from time to time. As of March 31, 2023, our equity capital is comprised of common and preferred equity.
The following table shows our outstanding debt as of March 31, 2023:
 Principal OutstandingUnamortized Discount & Debt Issuance CostsNet Carrying ValueFair ValueEffective Interest Rate
Revolving Credit Facility$888,405 $14,842 $888,405 $888,405 1M SOFR +2.05%
2025 Notes156,168 1,802 154,366 153,833 6.63%
Convertible Notes156,168 154,366 153,833 
6.375% 2024 Notes81,240 161 81,079 81,065 6.57%
2026 Notes400,000 5,720 394,280 354,504 3.98%
3.364% 2026 Notes300,000 5,059 294,941 252,930 3.60%
3.437% 2028 Notes300,000 7,325 292,675 230,055 3.64%
Public Notes1,081,240 1,062,975 918,554 
Prospect Capital InterNotes®355,464 6,817 348,647 314,017 5.76%
Total$2,481,277 $2,454,393 $2,274,809 
The following table shows our outstanding debt as of June 30, 2022:
Principal OutstandingUnamortized Discount & Debt Issuance CostsNet Carrying ValueFair ValueEffective Interest Rate
Revolving Credit Facility$839,464 $10,801 $839,464 $839,464 1ML +2.05 %
2022 Notes60,501 18 60,483 60,753 5.63%
2025 Notes156,168 2,459 153,709 158,094 6.63%
Convertible Notes216,669 214,192 218,847 
2023 Notes284,219 600 283,619 286,101 6.07%
6.375% 2024 Notes81,240 299 80,941 82,084 6.57%
2026 Notes400,000 7,134 392,866 355,316 3.98%
3.364% 2026 Notes300,000 6,026 293,974 254,931 3.60%
3.437% 2028 Notes300,000 8,222 291,778 229,866 3.64%
Public Notes1,365,459 1,343,178 1,208,298 
0
Prospect Capital InterNotes®347,564 7,122 340,442 285,822 5.71%
Total$2,769,156 $2,737,276 $2,552,431 
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The following table shows the contractual maturities by fiscal year of our Revolving Credit Facility, Convertible Notes, Public Notes and Prospect Capital InterNotes® as of March 31, 2023:
Payments Due by Fiscal Year ending June 30,
TotalRemainder of 20232024202520262027After 5 Years
Revolving Credit Facility$888,405 $— $— $— $— $— $888,405 
Convertible Notes156,168 — — 156,168 — — — 
Public Notes1,081,240 — 81,240 — 400,000 300,000 300,000 
Prospect Capital InterNotes®355,464 — 662 1,499 36,657 74,632 242,014 
Total Contractual Obligations$2,481,277 $— $81,902 $157,667 $436,657 $374,632 $1,430,419 
We may from time to time seek to cancel or purchase our outstanding debt through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions or otherwise. The amounts involved may be material. In addition, we may from time to time enter into additional debt facilities, increase the size of existing facilities or issue additional debt securities, including secured debt, unsecured debt and/or debt securities convertible into common stock. Any such purchases or exchanges of outstanding debt would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors.
Historically, we have funded a portion of our cash needs through borrowings from banks, issuances of senior securities, including secured, unsecured and convertible debt securities, or issuances of common equity. For flexibility, we maintain a universal shelf registration statement that allows for the public offering and sale of our debt securities, common stock, preferred stock, subscription rights, and warrants and units to purchase such securities up to an indeterminate amount. We may from time to time issue securities pursuant to the shelf registration statement or otherwise pursuant to private offerings. The issuance of debt or equity securities will depend on future market conditions, funding needs and other factors and there can be no assurance that any such issuance will occur or be successful.

Each of our Convertible Notes, Public Notes and Prospect Capital InterNotes® (collectively, our “Unsecured Notes”) are our general, unsecured obligations and rank equal in right of payment with all of our existing and future unsecured indebtedness and will be senior in right of payment to any of our subordinated indebtedness that may be issued in the future. The Unsecured Notes are effectively subordinated to our existing secured indebtedness, such as our credit facility, and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally subordinated to any existing and future liabilities and other indebtedness of any of our subsidiaries.
Revolving Credit Facility
On May 15, 2007, we formed our wholly owned subsidiary, Prospect Capital Funding LLC (“PCF”), a Delaware limited liability company and a bankruptcy remote special purpose entity, which holds certain of our portfolio loan investments that are used as collateral for the revolving credit facility at PCF. Since origination of the revolving credit facility, we have renegotiated the terms and extended the commitments of the revolving credit facility several times. Most recently, effective September 15, 2022, we completed an extension and upsizing of the revolving credit facility (the “2022 Facility” or the “Revolving Credit Facility”). The lenders have extended commitments of $1,777,500 as of March 31, 2023. The 2022 Facility includes an accordion feature which allows commitments to be increased up to $2,000,000 in the aggregate. The extension and upsizing of the Revolving Credit Facility extends the maturity date to September 15, 2027 and the revolving period through September 15, 2026, followed by an additional one-year amortization period, with distributions allowed to Prospect after the completion of the revolving period. During such one-year amortization period, all principal payments on the pledged assets will be applied to reduce the balance. At the end of the one-year amortization period, the remaining balance will become due.
As of March 31, 2023 and June 30, 2022, we had $609,101 and $660,536, respectively, available to us for borrowing under the Revolving Credit Facility, net of $888,405 and $839,464 outstanding borrowings as of the respective balance sheet dates. Refer to Note 4. Revolving Credit Facility within our consolidated financial statements for additional details.
Convertible Notes
On April 11, 2017, we issued $225,000 aggregate principal amount of convertible notes that mature on July 15, 2022 (the “Original 2022 Notes”), unless previously converted or repurchased in accordance with their terms. The Original 2022 Notes bear interest at a rate of 4.95% per year, payable semi-annually on January 15 and July 15 each year, beginning July 15, 2017. Total proceeds from the issuance of the Original 2022 Notes, net of underwriting discounts and offering costs, were $218,010. On May 18, 2018, we issued an additional $103,500 aggregate principal amount of convertible notes that mature on July 15,
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2022 (the “Additional 2022 Notes,” and together with the Original 2022 Notes, the “2022 Notes”), unless previously converted or repurchased in accordance with their terms. The Additional 2022 Notes were a further issuance of, and are fully fungible and rank equally in right of payment with, the Original 2022 Notes and bear interest at a rate of 4.95% per year, payable semi-annually on January 15 and July 15 each year, beginning July 15, 2018. Total proceeds from the issuance of the Additional 2022 Notes, net of underwriting discounts and offering costs, were $100,749.
As of June 30, 2022, the outstanding principal amount of the 2022 Notes was $60,501. Following maturity during the nine months ended March 31, 2023, none of the 2022 Notes remain outstanding.
On March 1, 2019, we issued $175,000 aggregate principal amount of senior convertible notes that mature on March 1, 2025 (the “2025 Notes”), unless previously converted or repurchased in accordance with their terms. We granted the underwriters a 13-day over-allotment option to purchase up to an additional $26,250 aggregate principal amount of the 2025 Notes. The underwriters fully exercised the over-allotment option on March 11, 2019 and we issued $26,250 aggregate principal amount of 2025 Notes at settlement on March 13, 2019. The 2025 Notes bear interest at a rate of 6.375% per year, payable semi-annually on March 1 and September 1 each year, beginning September 1, 2019. Total proceeds from the issuance of the 2025 Notes, net of underwriting discounts and offering costs, were $198,674.

As of March 31, 2023 and June 30, 2022, the outstanding principal amount of the 2025 Notes were $156,168 and $156,168, respectively. Refer to Note 5. Convertible Notes within our consolidated financial statements for additional details.

Public Notes
On March 15, 2013, we issued $250,000 aggregate principal amount of unsecured notes that mature on March 15, 2023 (the “Original 2023 Notes”). The Original 2023 Notes bear interest at a rate of 5.875% per year, payable semi-annually on March 15 and September 15 of each year, beginning September 15, 2013. Total proceeds from the issuance of the Original 2023 Notes, net of underwriting discounts and offering costs, were $243,641. On June 20, 2018, we issued an additional $70,000 aggregate principal amount of unsecured notes that mature on March 15, 2023 (the “Additional 2023 Notes”, and together with the Original 2023 Notes, the “2023 Notes”). The Additional 2023 Notes were a further issuance of, and are fully fungible and rank equally in right of payment with, the Original 2023 Notes and bear interest at a rate of 5.875% per year, payable semi-annually on March 15 and September 15 of each year, beginning September 15, 2018. Total proceeds from the issuance of the Additional 2023 Notes, net of underwriting discounts, were $69,403.
Following the maturity of the 2023 Notes during the nine months ended March 31, 2023, none of the 2023 Notes remained outstanding.
On October 1, 2018, we issued $100,000 aggregate principal amount of unsecured notes that mature on January 15, 2024 (the “6.375% 2024 Notes”). The 6.375% 2024 Notes bear interest at a rate of 6.375% per year, payable semi-annually on January 15 and July 15 of each year, beginning January 15, 2019. Total proceeds from the issuance of the 6.375% 2024 Notes, net of underwriting discounts and offering costs, were $98,985.
As of March 31, 2023 and June 30, 2022, the outstanding aggregate principal amount of the 6.375% 2024 Notes was $81,240 and $81,240, respectively.
On January 22, 2021, we issued $325,000 aggregate principal amount of unsecured notes that mature on January 22, 2026 (the “Original 2026 Notes”). The Original 2026 Notes bear interest at a rate of 3.706% per year, payable semi-annually on July 22, and January 22 of each year, beginning on July 22, 2021. Total proceeds from the issuance of the 2026 Notes, net of underwriting discounts and offering costs, were $317,720. On February 19, 2021, we issued an additional $75,000 aggregate principal amount of unsecured notes that mature on January 22, 2026 (the “Additional 2026 Notes”, and together with the Original 2026 Notes, the “2026 Notes”). The Additional 2026 Notes were a further issuance of, and are fully fungible and rank equally in right of payment with, the Original 2026 Notes and bear interest at a rate of 3.706% per year, payable semi-annually on July 22 and January 22 of each year, beginning July 22, 2021. Total proceeds from the issuance of the Additional 2026 Notes, net of underwriting discounts and offering costs, were $74,061.
As of March 31, 2023 and June 30, 2022, the outstanding aggregate principal amount of the 2026 Notes was $400,000 and $400,000, respectively.

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On May 27, 2021, we issued $300,000 aggregate principal amount of unsecured notes that mature on November 15, 2026 (the “3.364% 2026 Notes”). The 3.364% 2026 Notes bear interest at a rate of 3.364% per year, payable semi-annually on November 15, and May 15 of each year, beginning on November 15, 2021. Total proceeds from the issuance of the 3.364% 2026 Notes, net of underwriting discounts and offering costs, were $293,283.
As of March 31, 2023 and June 30, 2022, the outstanding aggregate principal amount of the 3.364% 2026 Notes was $300,000 and $300,000, respectively.
On September 30, 2021, we issued $300,000 aggregate principal amount of unsecured notes that mature on October 15, 2028 (the “3.437% 2028 Notes”). The 3.437% 2028 Notes bear interest at a rate of 3.437% per year, payable semi-annually on April 15 and October 15 of each year, beginning on April 15, 2022. Total proceeds from the issuance of the 3.437% 2028 Notes, net of underwriting discounts and offering costs, were $291,798.
As of March 31, 2023 and June 30, 2022, the outstanding aggregate principal amount of the 3.437% 2028 Notes was $300,000 and $300,000, respectively.
The 2023 Notes, the 6.375% 2024 Notes, 2026 Notes, the 3.364% 2026 Notes, and the 3.437% 2028 Notes (collectively, the “Public Notes”) are direct unsecured obligations and rank equally with all of our unsecured indebtedness from time to time outstanding. Refer to Note 6. Public Notes within our consolidated financial statements for additional details.
Prospect Capital InterNotes®
On February 13, 2020, we entered into a new selling agent agreement with InspereX LLC (formerly known as “Incapital LLC”)(the “Selling Agent Agreement”), authorizing the issuance and sale from time to time of up to $1,000,000 of Prospect Capital InterNotes® (collectively with previously authorized selling agent agreements, the “InterNotes® Offerings”). Additional agents may be appointed by us from time to time in connection with the InterNotes® Offering and become parties to the Selling Agent Agreement.
We have, from time to time, repurchased certain notes issued through the InterNotes® Offerings and, therefore, as of March 31, 2023 and June 30, 2022, the aggregate principal amount of Prospect Capital InterNotes® outstanding were $355,464 and $347,564, respectively. Refer to Note 7. Prospect Capital InterNotes® within our consolidated financial statements for additional details.
Net Asset Value Applicable to Common Stockholders
During the nine months ended March 31, 2023, our net asset value applicable to common shares decreased by $319,829 or $1.00 per common share. The decrease was primarily attributable to a decrease in net realized and net change in unrealized losses of $417,326, or $1.05 per basic weighted average common share. During the nine months ended March 31, 2023, net investment income of $308,150, or $0.78 per basic weighted average common share exceeded distributions to common and preferred stockholders of $264,098, or $0.66 per basic weighted average common share, resulting in a net increase of $0.12 per basic weighted average common share. The increase was partially offset by $0.06 of dilution per common share related to common stock issuances through our dividend reinvestment program for the nine months ended March 31, 2023. The following table shows the calculation of net asset value per common share as of March 31, 2023 and June 30, 2022:
 March 31, 2023June 30, 2022
Net assets available to common stockholders$3,799,294 $4,119,123 
Shares of common stock issued and outstanding400,833,873 393,164,437 
Net asset value per common share$9.48 $10.48 

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Results of Operations
Operating results for the three and nine months ended March 31, 2023 and March 31, 2022 were as follows:
Three Months Ended March 31,Nine Months Ended March 31,
2023202220232022
Investment income$215,120 $181,431 $630,710 $526,281 
Operating expenses112,940 94,426 322,560 272,350 
Net investment income102,180 87,005 308,150 253,931 
Net realized (losses) from investments(32,213)(2,254)(39,092)(12,082)
Net change in unrealized (losses) gains from investments(158,923)80,486 (378,096)398,340 
Net realized (losses) on extinguishment of debt(58)(941)(138)(10,149)
Net (decrease) increase in net assets resulting from operations(89,014)164,296 (109,176)630,040 
Preferred stock dividend19,933 7,139 49,347 16,748 
Net (Decrease) Increase in Net Assets Resulting from Operations applicable to Common Stockholders$(108,947)$157,157 $(158,523)$613,292 
        
While we seek to maximize gains and minimize losses, our investments in portfolio companies can expose our capital to risks greater than those we may anticipate. These companies typically do not issue securities rated investment grade, and have limited resources, limited operating history, and concentrated product lines or customers. These are generally private companies with limited operating information available and are likely to depend on a small core of management talents. Changes in any of these factors can have a significant impact on the value of the portfolio company. These changes, along with those discussed in Investment Valuation above, can cause significant fluctuations in our net change in unrealized gains (losses) from investments, and therefore our net increase (decrease) in net assets resulting from operations applicable to common stockholders, quarter over quarter.

Investment Income
We generate revenue in the form of interest income on the debt securities that we own, dividend income on any common or preferred stock that we own, and fees generated from the structuring of new deals. Our investments, if in the form of debt securities, will typically have a term of one to ten years and bear interest at a fixed or floating rate. To the extent achievable, we will seek to collateralize our investments by obtaining security interests in our portfolio companies’ assets. We also may acquire minority or majority equity interests in our portfolio companies, which may pay cash or in-kind dividends on a recurring or otherwise negotiated basis. In addition, we may generate revenue in other forms including prepayment penalties and possibly consulting fees. Any such fees generated in connection with our investments are recognized as earned.
Investment income consists of interest income, including accretion of loan origination fees and prepayment penalty fees, dividend income and other income, including settlement of net profits interests, overriding royalty interests and structuring fees.


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The following table describes the various components of investment income and the related levels of debt investments:
 Three Months Ended March 31, Nine Months Ended March 31,
 2023202220232022
Interest income$198,136 $142,489 $563,330 $430,933 
Dividend income1,928 5,306 7,046 12,277 
Other income15,056 33,636 60,334 83,071 
Total investment income$215,120 $181,431 $630,710 $526,281 
Average debt principal of performing interest bearing investments(1)
$7,205,384 $6,371,203 $7,114,627 $6,052,339 
Weighted average interest rate earned on performing interest bearing investments(1)
11.00 %8.95 %10.40 %9.35 %
Average debt principal of all interest bearing investments(2)
$7,520,238 $6,658,993 $7,432,964 $6,335,575 
Weighted average interest rate earned on all interest bearing investments(2)
10.54 %8.56 %9.96 %8.94 %
(1) Excludes equity investments and non-accrual loans.
(2) Excludes equity investments.
The average interest earned on interest bearing performing assets increased to 11.00% for the three months ended March 31, 2023 from 8.95% for the three months ended March 31, 2022. The average interest earned on all interest bearing assets increased to 10.54% for the three months ended March 31, 2023 from 8.56% for the three months ended March 31, 2022. The weighted average interest rate earned on our portfolio increased by 2.05%, primarily due to an increase in the weighted average interest rate earned on our portfolio primarily due to LIBOR/SOFR rates rising above our floors amongst our interest-bearing investments, for which interest income increased to $172,759 from $123,976, for the three months ended March 31, 2023 and 2022, respectively. The weighted average interest rate also increased for our structured credit investments which was due to an increase in income to $24,039 from $17,612, for the three months ended March 31, 2023 and 2022, respectively which was caused by a decrease in the reinvestment price.

The average interest earned on interest bearing performing assets increased to 10.40% for the nine months ended March 31, 2023 from 9.35% for the nine months ended March 31, 2022. The average interest earned on all interest bearing assets increased to 9.96% for the nine months ended March 31, 2023 from 8.94% for the nine months ended March 31, 2022. The weighted average interest rate earned on our portfolio increased by 1.05%, primarily due to a increase in the weighted average interest rate earned on our portfolio primarily due to LIBOR/SOFR rates rising above our floors amongst our interest-bearing investments, for which interest income increased to $485,563 from $355,077, for the nine months ended March 31, 2023 and 2022, respectively. This was partially offset by a decline in early repayments, which caused an increase in accelerated income and prepayment premium income in the prior year, resulting in a decline in interest income to $4,785 from $17,154, for the nine months ended March 31, 2023 and 2022, respectively. The weighted average interest rate also increased for our structured credit investments which was due to an increase in income to $72,982 from $58,702, for the nine months ended March 31, 2023 and 2022, respectively which was caused by a decrease in the reinvestment price.

Investment income is also generated from dividends and other income which is less predictable than interest income. The following table describes dividend income earned for the three and nine months ended March 31, 2023 and March 31, 2022, respectively:
 Three Months Ended March 31,Nine Months Ended March 31,
 2023202220232022
Dividend income
NMMB, Inc.$800 $3,988 $2,510 $7,034 
Valley Electric Company, Inc.— 809 547 2,509 
RGIS Services, LLC— — 1,374 — 
Nationwide Loan Company LLC— 400 — 2,150 
R-V Industries, Inc.— — — 441 
Other, net1,128 109 2,615 143 
Total dividend income$1,928 $5,306 $7,046 $12,277 

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Other income is comprised of structuring fees, amendment fees, royalty interests, settlement of net profits interests, settlement of residual profits interests, administrative agent fees and other miscellaneous and sundry cash receipts. The following table describes other income earned for the three and nine months ended March 31, 2023 and March 31, 2022, respectively:
 Three Months Ended March 31,Nine Months Ended March 31,
 2023202220232022
Structuring and amendment fees
NH Kronos Buyer, Inc.$— $— $2,063 $— 
Faraday Buyer, LLC— — 2,012 $— 
WatchGuard Technologies, Inc.— — 2,275 — 
Burgess Point Purchaser Corporation— — 1,200 — 
USG Intermediate, LLC— 687 600 687 
PGX Holdings, Inc.— — — 3,779 
Magnate Worldwide, LLC— 666 — 3,516 
PeopleConnect Intermediate, LLC— — — 2,495 
Broder— — — 2,239 
DRI Holding Inc.— — — 2,238 
BCPE Osprey Buyer, Inc.— — — 1,812 
Belnick, LLC— 1,750 — 1,750 
BCPE North Star US Holdco 2, Inc.— — — 1,463 
National Property REIT Corp.— 1,593 — 2,815 
Global Tel*Link— 1,500 — 1,500 
SEOTownCenter, Inc.— 1,040 — 1,040 
First Tower Finance Company LLC— 664 — 7,898 
Victor Technology, LLC— — — 600 
Medical Solutions Holdings, Inc.— — — 530 
Other, net145 2,249 1,725 4,601 
Total structuring and amendment fees$145 $10,149 $9,875 $38,963 
Royalty and residual profit interests
National Property REIT Corp.$14,540 $23,112 $49,474 $43,052 
Other, net200 173 553 527 
Total royalty and net revenue interests$14,740 $23,285 $50,027 $43,579 
Administrative agent fees
Other, net$171 $202 $432 $529 
Total administrative agent fees$171 $202 $432 $529 
Total other income$15,056 $33,636 $60,334 $83,071 
Other income for the three months ended March 31, 2023 decreased by $18,580 compared to the three months ended March 31, 2022 primarily due to a $10,004 decrease in structuring and amendment fees from less origination activity and transaction related services that would qualify as structuring and amendment fee income. The remaining decrease in other income during the three months ended March 31, 2023 is driven by a $8,572 decline in residual profit interest from NPRC as a result of fluctuations in real estate activity.
Other income for the nine months ended March 31, 2023 decreased by $22,737 compared to the nine months ended March 31, 2022 primarily due to a $29,088 decrease in structuring and amendment fees from less origination activity and transaction related services that would qualify as structuring and amendment fee income. This decrease is partially offset by a $6,422 increase in residual profit interests from NPRC as a result of increased real estate activity during the nine months ended March 31, 2023 compared to the prior year period.
Income recognized from dividend income, prepayment premium from early repayments, structuring fees and amendment fees related to specific loan positions is considered to be non-recurring income. For the three months ended March 31, 2023 and March 31, 2022, we recognized $2,073 and $15,524 of non-recurring income, respectively. The $13,451 decrease in non-recurring income during three months ended March 31, 2023 is primarily due to the $10,004 decrease in structuring and amendment fees discussed above. The remaining decline in the three months ended March 31, 2023 non-recurring income compared to the prior period is due to decreases of $3,378 in dividend income and $69 in prepayment premium income.
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Income recognized from dividend income, prepayment premium from early repayments, structuring fees and amendment fees related to specific loan positions is considered to be non-recurring income. For the nine months ended March 31, 2023 and March 31, 2022, we recognized $17,491 and $56,823 of non-recurring income, respectively. The $39,332 decrease in non-recurring income during nine months ended March 31, 2023 is primarily due to the $29,088 decrease in structuring and amendment fees due to decreases in origination activity and transaction related services that would qualify as structuring and amendment fee income. The remaining decline in the nine months ended March 31, 2023 non-recurring income compared to the prior period is due decreases of $5,231 in dividend income and a decrease of $5,013 in prepayment premium income.

Operating Expenses
Our primary operating expenses consist of investment advisory fees (base management and income incentive fees), borrowing costs, legal and professional fees, overhead-related expenses and other operating expenses. These expenses include our allocable portion of overhead under the Administration Agreement with Prospect Administration under which Prospect Administration provides administrative services and facilities for us. Our investment advisory fees compensate the Investment Adviser for its work in identifying, evaluating, negotiating, closing and monitoring our investments. We bear all other costs and expenses of our operations and transactions.
The following table describes the various components of our operating expenses:

Three Months Ended March 31,Nine Months Ended March 31,
2023202220232022
Base management fee$38,980 $36,426 $116,176 $102,472 
Income incentive fee20,561 19,967 64,692 59,296 
Interest and credit facility expenses37,517 29,235 109,170 86,952 
Allocation of overhead from Prospect Administration9,773 4,126 16,490 10,891 
Audit, compliance and tax related fees1,495 994 4,032 1,940 
Directors’ fees131 131 393 360 
Other general and administrative expenses4,483 3,547 11,607 10,439 
Total operating expenses$112,940 $94,426 $322,560 $272,350 
Total gross and net base management fee was $38,980 and $36,426 for the three months ended March 31, 2023 and March 31, 2022, respectively. The increase in total gross base management fee is directly related to an increase in average total assets.
Total gross base management fee was $116,176 and $102,472 for the nine months ended March 31, 2023 and March 31, 2022, respectively. The increase in total gross base management fee is directly related to a increase in average total assets.
For the three months ended March 31, 2023 and March 31, 2022, we incurred $20,561 and $19,967 of income incentive fees, respectively. This increase was driven by a corresponding increase in pre-incentive fee net investment income (net of preferred stock dividends) to $102,808 for the three months ended March 31, 2023 from $99,833 for the three months ended March 31, 2022. No capital gains incentive fee has yet been incurred pursuant to the Investment Advisory Agreement.
For the nine months ended March 31, 2023 and March 31, 2022, we incurred $64,692 and $59,296 of income incentive fees, respectively. This increase was driven by a corresponding increase in pre-incentive fee net investment income (net of preferred stock dividends) to $323,495 for the nine months ended March 31, 2023 from $296,479 for the nine months ended March 31, 2022. No capital gains incentive fee has yet been incurred pursuant to the Investment Advisory Agreement.
During the three months ended March 31, 2023 and March 31, 2022, we incurred $37,517 and $29,235 respectively, of interest and credit facility expenses related to our Revolving Credit Facility, Convertible Notes, Public Notes and Prospect Capital InterNotes® (collectively, our “Notes”). During the nine months ended March 31, 2023 and March 31, 2022, we incurred $109,170 and $86,952, respectively, of interest expenses related to our Notes. These expenses are related directly to the leveraging capacity put into place for each of those periods and the levels of indebtedness actually undertaken in those periods.
The table below describes the various expenses of our Notes and the related indicators of leveraging capacity and indebtedness during these years:
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 Three Months Ended March 31,Nine Months Ended March 31,
 2023202220232022
Interest on borrowings$33,489 $25,131 $98,555 $74,668 
Amortization of deferred financing costs1,773 2,137 5,255 6,242 
Accretion of discount on unsecured debt765 744 2,304 2,063 
Facility commitment fees1,490 1,223 3,056 3,979 
Total interest and credit facility expenses$37,517 $29,235 $109,170 $86,952 
Average principal debt outstanding$2,658,938 $2,657,523 $2,782,599 $2,469,905 
Annualized weighted average stated interest rate on borrowings(1)
5.04 %3.78 %4.72 %4.03 %
Annualized weighted average interest rate on borrowings(2)
5.64 %4.40 %5.23 %4.69 %
(1)Includes only the stated interest expense.
(2)Includes the stated interest expense, amortization of deferred financing costs, accretion of discount on Public Notes and commitment fees on the undrawn portion of our Revolving Credit Facility.
Interest expense was $33,489 and $25,131 for the three months ended March 31, 2023 and March 31, 2022, respectively. The weighted average stated interest rate on borrowings (excluding amortization, accretion and undrawn facility fees) was 5.04% and 3.78% for the three months ended March 31, 2023, and March 31, 2022, respectively. The weighted average interest rate on borrowings was 5.64% and 4.40% for the three months ended March 31, 2023 and March 31, 2022, respectively. Both increases are primarily due to an increase of interest expense from increased LIBOR/SOFR rates for our Revolving Credit Facility partially before offset by a decrease of interest expense from repurchases of our Convertible Notes and 2023 Notes.
Interest expense was $98,555 and $74,668 for the nine months ended March 31, 2023 and March 31, 2022, respectively. The weighted average stated interest rate on borrowings (excluding amortization, accretion and undrawn facility fees) was 4.72% and 4.03% for the nine months ended March 31, 2023 and March 31, 2022, respectively. The weighted average interest rate on borrowings was 5.23% and 4.69% for the nine months ended March 31, 2023 and March 31, 2022, respectively. Both increases are primarily due to an increase of interest expense from increased LIBOR/SOFR rates for our Revolving Credit Facility partially before offset by a decrease of interest expense from redemptions of our Prospect Capital InterNotes® and issuances of these notes at lower rates, as well as repurchases of our Convertible Notes, June 2029 Baby Bond, and 2023 Notes.
The allocation of net overhead expense from Prospect Administration was $9,773 and $4,126 for the three months ended March 31, 2023 and March 31, 2022, respectively. Prospect Administration received estimated payments of $918 and $807 directly from our portfolio companies, and certain funds managed by the Investment Adviser for legal, tax, and other administrative services during the three months ended March 31, 2023 and March 31, 2022, respectively. We were given a credit for these payments as a reduction of the administrative services cost payable by us to Prospect Administration. Had Prospect Administration not received these payments, Prospect Administration’s charges for its administrative services would have increased by this amount. The $5,647 increase in the allocated net overhead expense for the three months ended March 31, 2023 compared to the prior year period is primarily due to increased managerial assistance and administrative allocations.
The allocation of net overhead expense from Prospect Administration was $16,490 and $10,891 for the nine months ended March 31, 2023 and March 31, 2022, respectively. Prospect Administration received estimated payments of $1,808 and $4,869 directly from our portfolio companies, and certain funds managed by the Investment Adviser for legal, tax, and other administrative services during the nine months ended March 31, 2023 and March 31, 2022, respectively. In addition, we were given a credit in the amount of $1,212 for legal expenses incurred on behalf of our portfolio companies that were remitted to Prospect Administration during the nine months ended March 31, 2023. The $5,599 increase in the allocated net overhead expense for the nine months ended March 31, 2023 compared to the prior year period is primarily due to increased managerial assistance and administrative allocations.
Total operating expenses, excluding investment advisory fees, interest and credit facility expenses, and allocation of overhead from Prospect Administration (“Other Operating Expenses”), net of any expense reimbursements, were $6,109 and $4,672 for the three months ended March 31, 2023 and March 31, 2022, respectively. The increase was primarily attributable to an increase in audit, compliance and tax related fees as well as other general and administrative expenses.
Total operating expenses, excluding investment advisory fees, interest and credit facility expenses, and allocation of overhead from Prospect Administration (“Other Operating Expenses”), net of any expense reimbursements, were $16,032 and $12,739
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for the nine months ended March 31, 2023 and March 31, 2022, respectively. The increase was primarily attributable to an increase in audit, compliance and tax related fees as well as other general and administrative expenses.
Net Realized Gains (Losses)
The following table details net realized gains (losses) from investments for the three months ended March 31, 2023 and March 31, 2022:
Three Months Ended March 31,
Portfolio Company20232022
NMMB Inc.$(799)$5,294 
Strategic Materials Holding Corp.(82)— 
Halcyon Loan Advisors Funding 2013-1 Ltd.(19,979)— 
Halcyon Loan Advisors Funding 2014-1 Ltd.(11,425)— 
Sudbury Mill CLO, Ltd.— 516 
Brookside Mill CLO— (7,683)
Dunn Paper, Inc.— (385)
Other, net72 
Net realized (losses) gains$(32,213)$(2,254)
The following table details net realized gains (losses) from investments for the nine months ended March 31, 2023 and March 31, 2022:
Nine Months Ended March 31,
Portfolio Company20232022
Venio LLC$(14,472)$— 
Dunn Paper, Inc.(8,791)(385)
NMMB Inc.(2,510)5,294 
Strategic Materials Holding Corp.(82)
Targus Group International, Inc.16,143 — 
Halcyon Loan Advisors Funding 2013-1 Ltd.(19,979)
Halcyon Loan Advisors Funding 2014-1 Ltd.(11,425)
Sudbury Mill CLO, Ltd.1,065 (8,890)
Voya CLO 2012-2, Ltd.433 — 
Voya CLO 2012-3, Ltd.440 — 
Brookside Mill CLO— (7,683)
Other, net86 (418)
Net realized (losses)$(39,092)$(12,082)
Net Realized Loss from Extinguishment of Debt
During the three months ended March 31, 2023 and March 31, 2022, we recorded a net realized loss from the extinguishment of debt of $58 and $941, respectively. During the nine months ended March 31, 2023 and March 31, 2022, we recorded a net realized loss from the extinguishment of debt of $138 and $10,149, respectively. Refer to Capitalization for additional discussion.
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Change in Unrealized Gains (Losses)
The following table details net change in unrealized (losses) gains for our portfolio for the nine months ended March 31, 2023 and March 31, 2022, respectively:
Three Months Ended March 31,Nine Months Ended March 31,
2023202220232022
Control investments$(41,162)$96,162 $(109,909)$352,558 
Affiliate investments— (11,610)(89,034)26,016 
Non-control/non-affiliate investments(117,761)(4,066)(179,153)19,766 
Net change in unrealized gains (losses) $(158,923)$80,486 $(378,096)$398,340 
The following table reflects net change in unrealized gains (losses) on investments for the three months ended March 31, 2023:
Net Change in Unrealized Gains (Losses)
Subordinated Structured Notes$28,946 
InterDent, Inc.20,534 
R-V Industries, Inc.6,520 
USES Corp.(10,380)
CP Energy Services Inc.(14,455)
National Property REIT Corp.(17,563)
Other, net(20,276)
First Tower Finance Company LLC(28,034)
PGX Holdings, Inc.(124,215)
Net change in unrealized losses$(158,923)
The following table reflects net change in unrealized gains (losses) on investments for the three months ended March 31, 2022:
Net Change in Unrealized Gains (Losses)
National Property REIT Corp.$149,967 
CP Energy Services Inc.31,164 
Subordinated Structured Notes18,874 
Other, net4,367 
Curo Group Holdings Corp.(6,254)
Credit Central Loan Company, LLC(6,531)
K&N Parent, Inc.(8,110)
Pacific World Corporation(9,258)
NMMB, Inc.(10,540)
PGX Holdings, Inc.(12,636)
Echelon Transportation, LLC(17,588)
InterDent, Inc.(52,969)
Net change in unrealized gains$80,486 
The following table reflects net change in unrealized gains (losses) on investments for the nine months ended March 31, 2023:
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Net Change in Unrealized Gains (Losses)
Town & Country Holdings, Inc.$38,370 
InterDent, Inc.30,267 
Subordinated Structured Notes17,665 
United Sporting Companies, Inc.15,462 
Universal Turbine Parts, LLC11,418 
R-V Industries, Inc.9,726 
The RK Logistics Group, Inc.8,072 
Dunn Paper, Inc.6,493 
Valley Electric Company, Inc.(6,959)
Redstone Holdco 2 LP(7,232)
Echelon Transportation, LLC(8,285)
Research Now Group, Inc. & Survey Sampling International LLC(10,279)
Rising Tide Holdings, Inc.(10,548)
Precisely Software Incorporated (f/k/a Vision Solutions, Inc.)(10,610)
Curo Group Holdings Corp.(11,147)
USES Corp.(12,659)
Credit Central Loan Company, LLC(13,007)
Securus Technologies Holdings, Inc.(13,455)
CP Energy Services Inc.(16,760)
K&N HoldCo, LLC(23,149)
First Tower Finance Company LLC(26,711)
Targus Cayman HoldCo Limited(33,202)
Other, net(64,523)
National Property REIT Corp.(66,134)
PGX Holdings, Inc.(180,909)
Net change in unrealized losses$(378,096)
The following table reflects net change in unrealized gains (losses) on investments for the nine months ended March 31, 2022:
Net Change in Unrealized Gains (Losses)
National Property REIT Corp.$348,536 
Subordinated Structured Notes46,619 
CP Energy Services Inc.32,471 
First Tower Finance Company LLC29,024 
NMMB, Inc.21,363 
PGX Holdings, Inc.14,189 
Targus Cayman HoldCo Limited10,331 
MITY, Inc.6,432 
R-V Industries, Inc.4,062 
Other, net(5,257)
USES Corp.(7,899)
K&N Parent, Inc.(8,189)
Curo Group Holdings Corp.(8,565)
Pacific World Corporation(24,173)
Echelon Transportation, LLC(26,927)
InterDent, Inc.(33,677)
Net change in unrealized gains$398,340 
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Financial Condition, Liquidity and Capital Resources
For the nine months ended March 31, 2023 and March 31, 2022, our operating activities used $101,244 and $589,727 of cash, respectively. The $488,483 decrease is primarily driven by a $1,169,850 decrease in originations offset by a $638,440 decrease in repayments for the nine months ended March 31, 2023 compared to the nine months ended March 31, 2022. There were no investing activities for the nine months ended March 31, 2023 and March 31, 2022. Financing activities provided $130,972 and $562,519 of cash during the nine months ended March 31, 2023 and March 31, 2022, respectively, which included dividend payments of $222,123 and $199,697, respectively. The $431,547 decrease in cash provided by our financing activities is primarily driven by a $636,051 decrease in net debt issuances, offset by a $228,046 increase in issuance of preferred stock, for the nine months ended March 31, 2023 compared to the nine months ended March 31, 2022.

Our primary uses of funds have been to continue to invest in portfolio companies, through both debt and equity investments, repay outstanding borrowings and to make cash distributions to our stockholders.

Our primary sources of funds have historically been issuances of debt and equity. We have and may continue to fund a portion of our cash needs through repayments and opportunistic sales of our existing investment portfolio. We may also securitize a portion of our investments in unsecured or senior secured loans or other assets. Our objective is to put in place such borrowings in order to enable us to expand our portfolio. During the nine months ended March 31, 2023, we borrowed 1,224,900 and we made repayments totaling 1,175,959 under the Revolving Credit Facility. As of March 31, 2023, our outstanding balance on the Revolving Credit Facility was $888,405. As of March 31, 2023, we had, net of unamortized discount and debt issuance costs, $154,366 outstanding on the Convertible Notes, $1,062,975 outstanding on the Public Notes and $348,647 outstanding on the Prospect Capital InterNotes® (See “Capitalization” above).
Undrawn committed revolvers and delayed draw term loans to our portfolio companies incur commitment and unused fees ranging from 0.00% to 7.25%. As of March 31, 2023 and June 30, 2022, we had $54,133 and $43,934, respectively, of undrawn revolver and delayed draw term loan commitments to our portfolio companies. The fair value of our undrawn committed revolvers and delayed draw term loans was zero as of March 31, 2023 and June 30, 2022, as they were all floating rate instruments that repriced frequently.
On February 13, 2020, we filed a registration statement on Form N-2 (File No. 333-236415) that was effective upon filing pursuant to Rule 462(e) under the Securities Act as permitted under the Small Business Credit Availability Act. The registration statement permits us to issue, through one or more transactions, an indeterminate amount of securities, consisting of common stock, preferred stock, debt securities, subscription rights to purchase our securities, warrants representing rights to purchase our securities or separately tradable units combining two or more of our securities.
Preferred Stock
On August 3, 2020, we entered into a Dealer Manager Agreement with Preferred Capital Securities, LLC (“PCS”), as amended on June 9, 2022, October 7, 2022, and February 10 2023, pursuant to which PCS has agreed to serve as the Company’s agent, principal distributor and dealer manager for the Company’s offering of up to 72,000,000 shares, par value $0.001 per share, of preferred stock, with a liquidation preference of $25.00 per share. Such preferred stock will initially be issued in multiple series, including the 5.50% Series A1 Preferred Stock (“Series A1 Preferred Stock”), the 5.50% Series M1 Preferred Stock (“Series M1 Preferred Stock”), the 5.50% Series M2 Preferred Stock (“Series M2 Preferred Stock”), the 6.50% Series A3 Preferred Stock (“Series A3 Preferred Stock”), and the 6.50% Series M3 Preferred Stock (“Series M3 Preferred Stock”). In connection with such offering, on August 3, 2020, June 9, 2022 and Octoebr 11, 2022, we filed Articles Supplementary with the State Department of Assessments and Taxation of Maryland (“SDAT”), reclassifying and designating 120,000,000, 60,000,000, 120,000,000, and 60,000,000 shares, respectively, of the Company’s authorized and unissued shares of common stock into shares of preferred stock as “Convertible Preferred Stock.”
On October 30, 2020, and as amended on February 18, 2022, October 7, 2022, and February 10 2023, we entered into a Dealer Manager Agreement with InspereX LLC, pursuant to which InspereX LLC has agreed to serve as the Company’s agent and dealer manager for the Company’s offering of up to 10,000,000 shares, par value $0.001 per share, of preferred stock, with a liquidation preference of $25.00 per share. Such preferred stock will initially be issued in multiple series, including the 5.50% Series AA1 Preferred Stock (the “Series AA1 Preferred Stock”), the 5.50% Series MM1 Preferred Stock (the “Series MM1 Preferred Stock”), the 6.50% Series AA2 Preferred Stock (the “Series AA2 Preferred Stock”), and the 6.50% Series MM2 Preferred Stock (the “Series MM2 Preferred Stock” and together with the Series M1 Preferred Stock, the Series M2 Preferred Stock, and the Series M3 Preferred Stock, the “Series M Preferred Stock” and the Series MM2 Preferred Stock, together with the Series AA2 Preferred Stock, the Series A3 Preferred Stock and the Series M3 Preferred Stock, the “6.50% Preferred Stock”). In connection with such offering, on October 30, 2020, February 17, 2022 and October 11, 2022, we filed Articles Supplementary with the SDAT, reclassifying and designating an additional 80,000,000 shares of the Company’s authorized and
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unissued shares of common stock into shares of preferred stock as Convertible Preferred Stock. On May 19, 2021, we entered into an Underwriting Agreement with UBS Securities LLC, relating to the offer and sale of 187,000 shares, par value $0.001 per share, of 5.50% Series A2 Preferred Stock, with a liquidation preference of $25.00 per share (the “Series A2 Preferred Stock”, and together with the Series A1 Preferred Stock, Series M1 Preferred Stock, Series M2 Preferred Stock, Series AA1 Preferred Stock, and Series MM1 Preferred Stock, the “5.50% Preferred Stock”). The issuance of the Series A2 Preferred Stock settled on May 26, 2021. In connection with such offering, on May 19, 2021, we filed Articles Supplementary with the SDAT, reclassifying and designating an additional 1,000,000 shares of the Company’s authorized and unissued shares of common stock into shares of preferred stock as Convertible Preferred Stock.

In connection with the offerings of the 5.50% Preferred Stock and the 6.50% Preferred Stock, we adopted and amended, respectively, a preferred stock dividend reinvestment plan (the “Preferred Stock Plan” or the “Preferred Stock DRIP”), pursuant to which holders of the 5.50% Preferred Stock and the 6.50% Preferred Stock will have dividends on their 5.50% Preferred Stock and 6.50% Preferred Stock automatically reinvested in additional shares of such 5.50% Preferred Stock and 6.50% Preferred Stock, at a price per share of $25.00, if they elect.

Each series of 5.50% Preferred Stock and 6.50% Preferred Stock ranks (with respect to the payment of dividends and rights upon liquidation, dissolution or winding up) (a) senior to our common stock, (b) on parity with each other series of our preferred stock, and (c) junior to our existing and future secured and unsecured indebtedness. See Note 8, Fair Value and Maturity of Debt Outstanding for further discussion on our senior securities.
At any time prior to the listing of the 5.50% Preferred Stock and 6.50% Preferred Stock on a national securities exchange, shares of the 5.50% Preferred Stock are convertible, at the option of the holder of the 5.50% Preferred Stock and the 6.50% Preferred Stock (the “Holder Optional Conversion”). We will settle any Holder Optional Conversion by paying or delivering, as the case may be, (A) any portion of the Settlement Amount (as defined below) that we elect to pay in cash and (B) a number of shares of our common stock at a conversion rate equal to (1) (a) the Settlement Amount, minus (b) any portion of the Settlement Amount that we elect to pay in cash, divided by (2) the arithmetic average of the daily volume weighted average price of shares of our common stock over each of the five consecutive trading days ending on the Holder Conversion Exercise Date (such arithmetic average, the “5-day VWAP”). For the Series A1 Preferred Stock, the Series A3 Preferred Stock, the Series AA1 Preferred Stock, the Series AA2 Preferred Stock and the Series A2 Preferred Stock, “Settlement Amount” means (A) $25.00 per share (the “Stated Value”), plus (B) unpaid dividends accrued to, but not including, the Holder Conversion Exercise Date, minus (C) the applicable Holder Optional Conversion Fee for the respective Holder Conversion Deadline. For the Series M Preferred Stock, “Settlement Amount” means (A) the Stated Value, plus (B) unpaid dividends accrued to, but not including, the Holder Conversion Exercise Date, minus (C) the applicable Series M Clawback, if any. “Series M Clawback”, if applicable, means an amount equal to the aggregate amount of all dividends, whether paid or accrued, on such share of Series M Stock in the three full months prior to the Holder Conversion Exercise Date. Subject to certain limited exceptions, we will not pay any portion of the Settlement Amount in cash (other than cash in lieu of fractional shares of our common stock) until the five year anniversary of the date on which a share of 5.50% Preferred Stock or 6.50% Preferred Stock has been issued. Beginning on the five year anniversary of the date on which a share of 5.50% Preferred Stock is issued, we may elect to settle all or a portion of any Holder Optional Conversion in cash without limitation or restriction. The right of holders to convert a share of 5.50% Preferred Stock or 6.50% Preferred Stock will terminate upon the listing of such share on a national securities exchange.
Subject to certain limited exceptions allowing earlier redemption, beginning on the earlier of the five year anniversary of the date on which a share of 5.50% Preferred Stock or 6.50% Preferred Stock has been issued, or, for listed shares of 5.50% Preferred Stock, five years from the earliest date on which any series that has been listed was first issued (the earlier of such dates, the “Redemption Eligibility Date”), such share of 5.50% Preferred Stock or 6.50% Preferred Stock may be redeemed at any time or from time to time at our option (the “Issuer Optional Redemption”), at a redemption price of 100% of the Stated Value of the shares of 5.50% Preferred Stock or 6.50% Preferred Stock to be redeemed plus unpaid dividends accrued to, but not including, the date fixed for redemption.
Subject to certain limitations, each share of 5.50% Preferred Stock or 6.50% Preferred Stock may be converted at our option (the “Issuer Optional Conversion”). We will settle any Issuer Optional Conversion by paying or delivering, as the case may be, (A) any portion of the IOC Settlement Amount (as defined below) that we elect to pay in cash and (B) a number of shares of our common stock at a conversion rate equal to (1) (a) the IOC Settlement Amount, minus (b) any portion of the IOC Settlement Amount that we elect to pay in cash, divided by (2) the 5-day VWAP, subject to our ability to obtain or maintain any stockholder approval that may be required under the 1940 Act to permit us to sell our common stock below net asset value if the 5-day VWAP represents a discount to our net asset value per share of common stock. For the 5.50% Preferred Stock and 6.50% Preferred Stock, “IOC Settlement Amount” means (A) the Stated Value, plus (B) unpaid dividends accrued to, but not including, the date fixed for conversion. In connection with an Issuer Optional Conversion, we will use commercially reasonable efforts to obtain or maintain any stockholder approval that may be required under the 1940 Act to permit us to sell
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our common stock below net asset value. If we do not have or obtain any required stockholder approval under the 1940 Act to sell our common stock below net asset value and the 5-day VWAP is at a discount to our net asset value per share of common stock, we will settle any conversions in connection with an Issuer Optional Conversion by paying or delivering, as the case may be, (A) any portion of the IOC Settlement Amount that we elect to pay in cash and (B) a number of shares of our common stock at a conversion rate equal to (1) (a) the IOC Settlement Amount, minus (b) any portion of the IOC Settlement Amount that we elect to pay in cash, divided by (2) the NAV per share of common stock at the close of business on the business day immediately preceding the date of conversion. We will not pay any portion of the IOC Settlement Amount from an Issuer Optional Conversion in cash (other than cash in lieu of fractional shares of our common stock) until the Redemption Eligibility Date. Beginning on the Redemption Eligibility Date, we may elect to settle any Issuer Optional Conversion in cash without limitation or restriction. In the event that we exercise an Issuer Optional Conversion with respect to any shares of 5.50% Preferred Stock, the holder of such 5.50% Preferred Stock may instead elect a Holder Optional Conversion with respect to such 5.50% Preferred Stock or 6.50% Preferred Stock provided that the date of conversion for such Holder Optional Conversion would occur prior to the date of conversion for an Issuer Optional Conversion.
On July 12, 2021, we entered into an underwriting agreement by and among us, Prospect Capital Management L.P., Prospect Administration LLC, and Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and UBS Securities LLC, as representatives of the underwriters, relating to the offer and sale of 6,000,000 shares, or $150,000 in aggregate liquidation preference, of our 5.35% Series A Fixed Rate Cumulative Perpetual Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock” or “5.35% Preferred Stock”), at a public offering price of $25.00 per share. Pursuant to the Underwriting Agreement, we also granted the underwriters a 30-day option to purchase up to an additional 900,000 shares of Series A Preferred Stock solely to cover over-allotments. The offer settled on July 19, 2021, and no additional shares of the Series A Preferred Stock were issued pursuant to the option. In connection with such offering, on July 15, 2021, we filed Articles Supplementary with SDAT, reclassifying and designating 6,900,000 shares of the Company’s authorized and unissued shares of Common Stock into shares of Series A Preferred Stock.
The Series A Preferred Stock ranks (with respect to the payment of dividends and rights upon liquidation, dissolution or winding up) (a) senior to our common stock, (b) on parity with each other series of our preferred stock, and (c) junior to our existing and future secured and unsecured indebtedness. See Note 8, Fair Value and Maturity of Debt Outstanding for further discussion on our senior securities.
Subject to certain limited exceptions allowing earlier redemption, at any time after the close of business on July 19, 2026 (any such date, an “Optional Redemption Date”), at our sole option, we may redeem the Series A Preferred Stock in whole or, from time to time, in part, out of funds legally available for such redemption, at a price per share equal to the liquidation preference of $25.00 per share, plus an amount equal to all unpaid dividends on such shares (whether or not earned or declared, but excluding interest thereon) accumulated up to, but excluding, the date fixed for redemption. We may also redeem the Series A Preferred Stock at any time, in whole or, from time to time, in part, including prior to the Optional Redemption Date, pro rata, based on liquidation preference, with all other series of our then outstanding preferred stock, in the event that our Board determines to redeem any series of our preferred stock, in whole or, from time to time, in part, because such redemption is deemed necessary by the Board to comply with the asset coverage requirements of the 1940 Act or for us to maintain RIC status.
In the event of a Change of Control Triggering Event (as defined below), we may, at our option, exercise our special optional redemption right to redeem the Series A Preferred Stock, in whole or in part, within 120 days after the first date on which such Change of Control Triggering Event has occurred by paying the liquidation preference, plus an amount equal to all unpaid dividends on such shares (whether or not earned or declared, but excluding interest thereon) accumulated up to, but excluding, the date fixed for such redemption. To the extent that we exercise our optional redemption right or our special optional redemption right relating to the Series A Preferred Stock, the holders of Series A Preferred Stock will not be permitted to exercise the conversion right described below in respect of their shares called for redemption.
Except to the extent that we have elected to exercise our optional redemption right or our special optional redemption right by providing notice of redemption prior to the Change of Control Conversion Date (as defined below), upon the occurrence of a Change of Control Triggering Event, each holder of Series A Preferred Stock will have the right to convert some or all of the Series A Preferred Stock held by such holder on the Change of Control Conversion Date into a number of our shares of common stock per Series A Preferred Stock to be converted equal to the lesser of:
the quotient obtained by dividing (i) the sum of the Liquidation Preference per share plus an amount equal to all unpaid dividends thereon (whether or not earned or declared, but excluding interest thereon) accumulated up to, but excluding, the Change of Control Conversion Date (unless the Change of Control Conversion Date is after a Record Date for a Series A Preferred Stock dividend payment and prior to the corresponding Series A Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividends will be included in this sum) by (ii) the Common Stock Price (as defined below); and
6.03865, subject to certain adjustments,
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subject, in each case, to provisions for the receipt of alternative consideration upon conversion as described in the applicable prospectus supplement.
If we have provided or provide a redemption notice with respect to some or all of the Series A Preferred Stock, holders of any Series A Preferred Stock that we have called for redemption will not be permitted to exercise their Change of Control Conversion Right in respect of any of their Series A Preferred Stock that have been called for redemption, and any Series A Preferred Stock subsequently called for redemption that have been tendered for conversion will be redeemed on the applicable date of redemption instead of converted on the Change of Control Conversion Date.
For purposes of the foregoing discussion of a redemption upon the occurrence of a Change of Control Triggering Event, the following definitions are applicable:
“Change of Control Triggering Event” means the occurrence of any of the following:
the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation and other than an Excluded Transaction) in one or a series of related transactions, of all or substantially all of the assets of the Company and its Controlled Subsidiaries taken as a whole to any “person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act) (other than to any Permitted Holders); provided that, for the avoidance of doubt, a pledge of assets pursuant to any of our secured debt instruments or the secured debt instruments of our Controlled Subsidiaries shall not be deemed to be any such sale, lease, transfer, conveyance or disposition; or
the consummation of any transaction (including, without limitation, any merger or consolidation and other than an Excluded Transaction) the result of which is that any “person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act) (other than any Permitted Holders) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of our outstanding Voting Stock, measured by voting power rather than number of shares.
Notwithstanding the foregoing, the consummation of any of the transactions referred to in the bullet points above will not be deemed a Change of Control Triggering Event if we or the acquiring or surviving consolidated entity has or continues to have a class of common securities (or ADRs representing such securities) listed on the NYSE, the NYSE American or NASDAQ, or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE American or NASDAQ, or is otherwise listed or quoted on a national securities exchange.
The “Change of Control Conversion Date” is the date the shares of Series A Preferred Stock are to be converted, which will be a business day selected by us that is no fewer than 20 days nor more than 35 days after the date on which we provide the notice described above to the holders of Series A Preferred Stock.
The “Common Stock Price” will be (i) if the consideration to be received in the Change of Control Triggering Event by the holders of our common stock is solely cash, the amount of cash consideration per share of our common stock or (ii) if the consideration to be received in the Change of Control Triggering Event by holders of our common stock is other than solely cash (x) the average of the closing sale prices per share of our common stock (or, if no closing sale price is reported, the average of the closing bid and ask prices or, if more than one in either case, the average of the average closing bid and the average closing ask prices) for the ten consecutive trading days immediately preceding, but not including, the effective date of the Change of Control Triggering Event as reported on the principal U.S. securities exchange on which our common stock is then traded, or (y) the average of the last quoted bid prices for our common stock in the over-the-counter market as reported by OTC Markets Group Inc. or similar organization for the ten consecutive trading days immediately preceding, but not including, the effective date of the Change of Control Triggering Event, if our common stock is not then listed for trading on a U.S. securities exchange.
“Controlled Subsidiary” means any of our subsidiaries, 50% or more of the outstanding equity interests of which are owned by us and our direct or indirect subsidiaries and of which we possess, directly or indirectly, the power to direct or cause the direction of the management or policies, whether through the ownership of voting equity interests, by agreement or otherwise.
“Excluded Transaction” means (i) any transaction that does not result in any reclassification, conversion, exchange or cancellation of all or substantially all of the outstanding shares of our Voting Stock; (ii) any changes resulting from a subdivision or combination or a change solely in par value; (iii) any transaction where the shares of our Voting Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving “person” (as that term is used in Section 13(d)(3) of the Exchange Act) or any direct or indirect parent company of the surviving “person” (as that term is used in Section 13(d)(3) of the Exchange Act) immediately after giving effect to such transaction; (iv) any transaction if (A) we become a direct or indirect wholly-owned subsidiary of a holding company and (B)(1) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of our Voting Stock immediately prior to that transaction or (2) immediately following that transaction no “person” (as that term is used in Section 13(d)(3) of the Exchange Act) is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of such holding company; or (v) any transaction primarily for the purpose of changing our jurisdiction of incorporation or form of organization.
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“Permitted Holders” means (i) us, (ii) one or more of our Controlled Subsidiaries and (iii) Prospect Capital Management or any affiliate of Prospect Capital Management that is organized under the laws of a jurisdiction located in the United States of America and in the business of managing or advising clients.
“Voting Stocks” as applied to stock of any person, means shares, interests, participations or other equivalents in the equity interest (however designated) in such person having ordinary voting power for the election of the directors (or the equivalent) of such person, other than shares, interests, participations or other equivalents having such power only by reason of the occurrence of a contingency.
Except as provided above in connection with a Change of Control Triggering Event, the Series A Preferred Stock is not convertible into or exchangeable for any other securities or property.
For so long as the Series A Preferred Stock is outstanding, we will not exercise any option we have to convert any other series of our outstanding preferred stock to common stock, including the Issuer Optional Conversion, or any other security ranking junior to such preferred stock. As a result, and in accordance with ASC 480, we have presented both our 5.50% Preferred Stock and Series A Preferred Stock within temporary equity on our Consolidated Statement of Assets and Liabilities as of September 30, 2022.
We determined the estimated value as of March 31, 2023 of our 5.50% Preferred Stock and 6.50% Preferred Stock, with a $25.00 stated value per share. We engaged a third-party valuation service to assist in our determination based on the calculation resulting from the total equity on our Consolidated Statements of Assets and Liabilities in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 (the “Form 10-Q”), which was prepared in accordance with U.S. generally accepted accounting principles in the United States of America, adjusted for the fair value of our investments (i.e. from our Consolidated Schedule of Investments) and total liabilities, divided by the number of shares of our Preferred Stock outstanding. Based on this methodology and because the result from the calculation above is greater than the $25.00 per share stated value of our 5.50% Preferred Stock and 6.50% Preferred Stock, the estimated value of our 5.50% Preferred Stock and 6.50% Preferred Stock as of March 31, 2023 is $25.00 per share.
Common Stock
Our common stockholders’ equity accounts as of March 31, 2023 and June 30, 2022 reflect cumulative shares issued, net of shares repurchased, as of those respective dates. Our common stock has been issued through public offerings, a registered direct offering, the exercise of over-allotment options on the part of the underwriters, our dividend reinvestment plan and in connection with the acquisition of certain controlled portfolio companies and in connection with our 5.50%     and 6.50% Preferred Stock Holder Optional Conversion and Optional Redemption Following Death of a Holder. When our common stock is issued, the related offering expenses have been charged against paid-in capital in excess of par. All underwriting fees and offering expenses were borne by us.
We did not repurchase any shares of our common stock for the nine months ended March 31, 2023 or March 31, 2022. As of March 31, 2023, the approximate dollar value of shares that may yet be purchased under the Repurchase Program is $65,860.
On June 10, 2022, at a special meeting of stockholders, our stockholders authorized us to sell shares of our common stock (during the next 12 months) at a price or prices below our net asset value per share at the time of sale in one or more offerings, subject to certain conditions as set forth in the proxy statement relating to the special meeting (including that the number of shares sold on any given date does not exceed 25% of its outstanding common stock immediately prior to such sale).
Recent Developments
On May 9, 2023, we announced the declaration of monthly dividends for our 5.50% Preferred Stock for holders of record on the following dates based on an annual rate equal to 5.50% of the Stated Value of $25.00 per share as set forth in the Articles Supplementary for the Preferred Stock, from the date of issuance or, if later from the most recent dividend payment date (the first business day of the month, with no additional dividend accruing in July as a result), as follows:
Monthly Cash 5.50% Preferred Shareholder DistributionRecord DatePayment DateMonthly Amount ($ per share), before pro ration for partial periods
June 20236/21/20237/3/2023$0.114583
July 20237/19/20238/1/2023$0.114583
August 20238/16/20239/1/2023$0.114583
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On May 9, 2023, we announced the declaration of monthly dividends for our 6.50% Preferred Stock for holders of record on the following dates based on an annual rate equal to 6.50% of the Stated Value of $25.00 per share as set forth in the Articles Supplementary for the Preferred Stock, from the date of issuance or, if later from the most recent dividend payment date (the first business day of the month, with no additional dividend accruing in July as a result), as follows:
Monthly Cash 6.50% Preferred Shareholder Distribution
Record DatePayment DateMonthly Amount ($ per share), before pro ration for partial periods
June 20236/21/20237/3/2023$0.135417
July 20237/19/20238/1/2023$0.135417
August 20238/16/20239/1/2023$0.135417
On May 9, 2023, we announced the declaration of quarterly dividends for our 5.35% Preferred Stock for holders of record on the following dates based on an annual rate equal to 5.35% of the Stated Value of $25.00 per share as set forth in the Articles Supplementary for the 5.35% Preferred Stock, from the date of issuance or, if later from the most recent dividend payment date, as follows:
Quarterly Cash 5.35% Preferred Shareholder DistributionRecord DatePayment DateAmount ($ per share)
May 2023 - July 20237/19/20238/1/2023$0.334375
On May 9, 2023, we announced the declaration of monthly dividends on our common stock as follows:
Monthly Cash Common Shareholder DistributionRecord DatePayment DateAmount ($ per share)
May 20235/26/20236/21/2023$0.0600
June 20236/28/20237/20/2023$0.0600
July 20237/27/20238/22/2023$0.0600
August 20238/29/20239/20/2023$0.0600

Critical Accounting Estimates
For discussion of critical accounting policies and estimates, refer to our Annual Report on Form 10-K for the year ended June 30, 2022.
Recent Accounting Pronouncements
For discussion of recent accounting pronouncements, refer to Note 2 within the accompanying notes to the consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are subject to financial market risks, including changes in interest rates and equity price risk. Uncertainty with respect to the economic effects of rising interest rates in response to inflation, the war in Russia and Ukraine and the ongoing geopolitical uncertainty has introduced significant volatility in the financial markets, and the effects of this volatility could materially impact our market risks, including those listed below. Concerning these risks and their potential impact on our business and our operating results, see Part I, Item 1A. Risk Factors, “Risks Relating to Our Business” in our Annual Report on Form 10-K.
Interest rate sensitivity refers to the change in our earnings that may result from changes in the level of interest rates impacting some of the loans in our portfolio which have floating interest rates. Additionally, because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. See Part I, Item 1A. Risk Factors, “Risks Relating to Our Business - Changes in interest rates may affect our cost of capital and net investment income” in our Annual Report on Form 10-K.
Our debt investments may be based on floating rates or fixed rates. For our floating rate loans the rates are determined from the LIBOR, EURO Interbank Offer Rate, the Federal Funds Rate, Secured Overnight Financing Rate (“SOFR”) or the Prime Rate. The floating interest rate loans may be subject to a LIBOR or SOFR floor. Our loans typically have durations of one, two, three, six or twelve months after which they reset to current market interest rates. As of March 31, 2023, 83.05% of the interest earning investments in our portfolio, at fair value, bore interest at floating rates.
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Interest on borrowings under the Revolving Credit Facility are based on a floating rate of one-month SOFR plus 205 basis points with no minimum SOFR floor and an outstanding balance of $888,405 as of March 31, 2023. Lender fees charged on the unused portion of the Revolving Credit Facility, the Convertible Notes, Public Notes, and Prospect Capital InterNotes® bear interest at fixed rates.
On March 5, 2021, the FCA announced that (i) 24 LIBOR settings would cease to exist immediately after December 31, 2021 (all seven euro LIBOR settings; all seven Swiss franc LIBOR settings; the Spot Next, 1-week, 2-month, and 12-month Japanese yen LIBOR settings; the overnight, 1-week, 2-month, and 12-month sterling LIBOR settings; and the 1-week and 2-month US dollar LIBOR settings); (ii) the overnight and 12-month US LIBOR settings would cease to exist after June 30, 2023; and (iii) the FCA would consult on whether the remaining nine LIBOR settings should continue to be published on a synthetic basis for a certain period using the FCA’s proposed new powers that the UK government is legislating to grant to them.
The following table shows the approximate annual impact on net investment income of base rate changes in interest rates (considering interest rate flows for floating rate instruments, excluding our investments in Subordinated Structured Notes) to our loan portfolio and outstanding debt as of March 31, 2023, assuming no changes in our investment and borrowing structure:
(in thousands)
Basis Point Change
Increase (Decrease) in Interest Income(Increase) Decrease in Interest ExpenseIncrease (Decrease) in Net Investment Income
Increase (Decrease) in Net Investment Income (1)
Up 300 basis points$138,268 $(26,652)$111,616 $89,293 
Up 200 basis points$92,734 $(17,768)$74,966 $59,973 
Up 100 basis points$47,200 $(8,884)$38,316 $30,653 
Down 100 basis points$(43,759)$42,643 $(1,116)$(893)
Down 200 basis points$(89,159)$42,643 $(46,516)$(37,213)
Down 300 basis points$(128,332)$42,643 $(85,689)$(68,551)
(1)Includes the impact of income incentive fees. See Note 13 in the accompanying Consolidated Financial Statements for more information on income incentive fees.

As of March 31, 2023, one, three, and six month LIBOR were 4.86%, 5.19% and 5.31%, respectively. As of March 31, 2023 the one, three, and six month SOFR were 4.80%, 4.91%, and 4.90% respectively.

We may hedge against interest rate fluctuations by using standard hedging instruments such as futures, options and forward contracts subject to the requirements of the 1940 Act. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of higher interest rates with respect to our portfolio of investments. During the period ended March 31, 2023, we did not engage in hedging activities.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of March 31, 2023, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the 1934 Act). Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that due to the material weaknesses in the Company’s internal control over financial reporting described in our Annual Report on Form 10-K, our disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives.
Notwithstanding the material weaknesses, management believes that the financial statements included in this Quarterly Report on Form 10-Q present fairly in all material respects the Company’s financial condition, results of its operations, changes in its net assets and temporary equity and its cash flows for the periods presented.
Changes in Internal Control Over Financial Reporting
We have begun the process of, and we are focused on, enhancing effective internal control measures to improve our internal control over financial reporting and remediate the material weaknesses. Our internal control remediation efforts include the following:
Enhancing existing controls that address the completeness and accuracy of underlying data used in the performance of management review controls over the valuation of CLOs;
Enhancing policies and procedures to retain adequate documentary evidence for certain management review controls over the valuation of CLOs, including precision of review and evidence of review procedures performed to demonstrate effective operation of such controls;
Enhancing policies and procedures to adequately demonstrate a commitment to improving our overall control environment and develop proper monitoring controls around timely evaluation and communication of internal control deficiencies to those parties responsible for taking corrective action, including senior management and the board of directors, as appropriate.
We believe our planned actions to enhance our processes and controls will address the material weaknesses, but these actions are subject to ongoing management evaluation, and we will need a period of execution to demonstrate remediation. We are committed to the continuous improvement of our internal control over financial reporting and will continue to diligently review our internal control over financial reporting.
There were no other changes in our internal control over financial reporting during the quarter ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II
Item 1. Legal Proceedings
(All figures in this item are in thousands except share, per share and other data.)
From time to time, we may become involved in various investigations, claims and legal proceedings that arise in the ordinary course of our business. These matters may relate to intellectual property, employment, tax, regulation, contract or other matters. The resolution of such matters as may arise will be subject to various uncertainties and, even if such claims are without merit, could result in the expenditure of significant financial and managerial resources.
We are not aware of any material legal proceedings as of March 31, 2023.
Item 1A. Risk Factors
In addition to the other information set forth in this report, you should carefully consider the factors discussed below and the risk factors in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2022, which could materially affect our business, financial condition or future results. The risks described in this report and in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. (All figures in this item are in thousands except share, per share and other data.)
Risks Relating to Our Investments
Investments in covenant-lite loans may expose us to different and increased risks.
Although we generally expect the transaction documentation of some portion of our investments to include covenants and other structural protections, a significant portion of our investments may be composed of so-called “covenant-lite loans.” Generally, covenant-lite loans do not have certain maintenance covenants that would require the issuer to maintain debt service or other financial ratios. Ownership of covenant-lite loans may expose us to different risks, including with respect to liquidity, price volatility and ability to restructure loans, than is the case with loans that have financial maintenance covenants. As a result, our exposure to losses from these loans may be increased. In addition, in the current economic environment, the market prices of covenant-lite loans may be depressed.
Risks Relating to Our Securities
Senior securities, including debt and preferred equity, expose us to additional risks, including the typical risks associated with leverage and could adversely affect our business, financial condition and results of operations.
We use our revolving credit facility to leverage our portfolio and we expect in the future to borrow from and issue senior debt securities to banks and other lenders and may securitize certain of our portfolio investments. We also have the Unsecured Notes outstanding and have launched a convertible preferred share offering program, which are forms of leverage and are senior in payment rights to our common stock.
Business development companies are generally able to issue senior securities such that their asset coverage, as defined in the 1940 Act, equals at least 200% of gross assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior securities. In March 2018, the Small Business Credit Availability Act added Section 61(a)(2) to the 1940 Act, a successor provision to Section 61(a)(1) referenced therein, which reduces the asset coverage requirement applicable to business development companies from 200% to 150% so long as the business development company meets certain disclosure requirements and obtains certain approvals. On May 5, 2020, the Company's stockholders voted to approve the application of the reduced asset coverage requirements in Section 61(a)(2) to the Company effective as of May 6, 2020. As a result of the stockholder approval, effective May 6, 2020, the asset coverage ratio under the 1940 Act applicable to the Company decreased to 150% from 200%. In other words, under the 1940 Act, the Company is now able to borrow $2 for investment purposes for every $1 of investor equity, as opposed to borrowing $1 for investment purposes for every $1 of investor equity. As a result, the Company will be able to incur additional indebtedness in the future and investors in the Company may face increased investment risk. In addition, the Company’s management fee payable to the Investment Adviser is based on the Company's average adjusted gross assets, which includes leverage and, as a result, if the Company incurs additional leverage, management fees paid to the Investment Adviser would increase.
With certain limited exceptions, as a BDC, we are only allowed to borrow amounts or otherwise issue senior securities such that our asset coverage, as defined in the 1940 Act, is at least 150% after such borrowing or other issuance. The amount of leverage
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that we employ will depend on the Investment Adviser’s and our Board of Directors’ assessment of market conditions and other factors at the time of any proposed borrowing. There is no assurance that a leveraging strategy will be successful. Leverage involves risks and special considerations for stockholders, any of which could adversely affect our business, financial condition and results of operations, including the following:
A likelihood of greater volatility in the net asset value and market price of our common stock;
Diminished operating flexibility as a result of asset coverage or investment portfolio composition requirements required by lenders or investors that are more stringent than those imposed by the 1940 Act;
The possibility that investments will have to be liquidated at less than full value or at inopportune times to comply with debt covenants or to pay interest or dividends on the leverage;
Increased operating expenses due to the cost of leverage, including issuance and servicing costs;
Convertible or exchangeable securities, such as the Convertible Notes outstanding or those issued in the future (including the Preferred Stock (as defined herein)) may have rights, preferences and privileges more favorable than those of our common stock including, the case of the Preferred Stock, the statutory right under the 1940 Act to vote, as a separate class, on the election of two of our directors and approval of certain fundamental transactions in certain circumstances;
Subordination to lenders’ superior claims on our assets as a result of which lenders will be able to receive proceeds available in the case of our liquidation before any proceeds will be distributed to our stockholders;
Difficulty meeting our payment and other obligations under the Unsecured Notes and our other outstanding debt or preferred equity;
The occurrence of an event of default if we fail to comply with the financial and/or other restrictive covenants contained in our debt agreements, including the credit agreement and each indenture governing the Unsecured Notes, which event of default could result in all or some of our debt becoming immediately due and payable;
Reduced availability of our cash flow to fund investments, acquisitions and other general corporate purposes, and limiting our ability to obtain additional financing for these purposes;
The risk of increased sensitivity to interest rate increases on our indebtedness with variable interest rates, including borrowings under our amended senior credit facility; and
Reduced flexibility in planning for, or reacting to, and increasing our vulnerability to, changes in our business, the industry in which we operate and the general economy.

For example, the amount we may borrow under our revolving credit facility is determined, in part, by the fair value of our investments. If the fair value of our investments declines, we may be forced to sell investments at a loss to maintain compliance with our borrowing limits. Other debt facilities we may enter into in the future may contain similar provisions. Any such forced sales would reduce our net asset value and also make it difficult for the net asset value to recover. The Investment Adviser and our Board of Directors in their best judgment nevertheless may determine to use leverage if they expect that the benefits to our stockholders of maintaining the leveraged position will outweigh the risks.
In addition, our ability to meet our payment and other obligations of the Preferred Stock, the Unsecured Notes and our credit facility depends on our ability to generate significant cash flow in the future. This, to some extent, is subject to general economic, financial, competitive, legislative and regulatory factors as well as other factors that are beyond our control. We cannot provide assurance that our business will generate cash flow from operations, or that future borrowings will be available to us under our existing credit facility or otherwise, in an amount sufficient to enable us to meet our payment obligations under the Preferred Stock, the Unsecured Notes and our other debt and to fund other liquidity needs. If we are not able to generate sufficient cash flow to service our debt and preferred equity obligations, we may need to refinance or restructure our debt or preferred equity, including the Unsecured Notes, sell assets, reduce or delay capital investments, or seek to raise additional capital. If we are unable to implement one or more of these alternatives, we may not be able to meet our payment obligations under the Preferred Stock, the Unsecured Notes and our other debt.

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Illustration.   The following tables illustrate the effect of leverage on returns from an investment in our common stock assuming various annual returns, net of interest expense. The calculations in the tables below are hypothetical and actual returns may be higher or lower than those appearing below.
The below calculation assumes (i) $8.4 billion in total assets, (ii) an average cost of funds of 5.52% (including preferred dividend payments), (iii) $2.5 billion in debt outstanding, (iv) $0.9 billion in liquidation preference of 5.50% Preferred Stock outstanding, (v) $0.15 billion in 5.35% Preferred Stock outstanding, (vi) $1.2 billion in liquidation preference of 6.50% Preferred Stock outstanding, and (vi) $3.7 billion of common stockholders’ equity.
Assumed Return on Our Portfolio (net of expenses)(10)%(5)%0%5%10%
Corresponding Return to Common Stockholder(1)(29.7)%(18.4)%(7.0)%4.3%15.7%
The below calculation assumes (i) $8.4 billion in total assets, (ii) an average cost of funds of 5.09% (including preferred dividend payments), (iii) $2.5 billion in debt outstanding, (iv) $0.15 billion in 5.35% Preferred Stock outstanding, and (v) $5.8 billion of common stockholders’ equity.
Assumed Return on Our Portfolio (net of expenses)(10)%(5)%0%5%10%
Corresponding Return to Common Stockholder(2)(16.8)%(9.5)%(2.3)%5.0%12.2%

(1) Assumes no conversion of 5.50% Preferred Stock and 6.50% Preferred Stock to common stock.
(2) Assumes the conversion of $0.9 billion in 5.50% Preferred Stock and $1.2 billion in 6.50% Preferred Stock at a conversion rate based on the 5-day VWAP of our common stock on March 31, 2023, which was $6.89, and a Holder Optional Conversion Fee (as defined in the prospectus supplement relating to the applicable offering) of 9.00% on Series A1 Preferred Stock, Series A3 Preferred Stock, and Series AA2 Preferred Stock of the maximum public offering price disclosed within the applicable prospectus supplements. The actual 5-day VWAP of our common stock on a Holder Conversion Exercise Date may be more or less than $6.89, which may result in more or less shares of common stock issued.
The assumed portfolio return is required by regulation of the SEC and is not a prediction of, and does not represent, our projected or actual performance. Actual returns may be greater or less than those appearing in the table.
Pursuant to SEC regulations, this table is calculated as of March 31, 2023. As a result, it has not been updated to take into account any changes in assets or leverage since March 31, 2023.
General Risk Factors
We may experience fluctuations in our quarterly results.
We could experience fluctuations in our quarterly operating results due to a number of factors, including the level of structuring fees received, the interest or dividend rates payable on the debt or equity securities we hold, the default rate on debt securities, the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets, and general economic conditions. As a result of these factors, results for any period should not be relied upon as being indicative of performance in future periods.
The U.S. and global capital markets are subject to systemic risk that could adversely affect our business, financial condition and results of operations.
Issuers, national and regional banks, financial institutions and other participants in the U.S. and global capital markets are closely interrelated as a result of credit, trading, clearing, technology and other relationships. A significant adverse development (such as a bank run, insolvency, bankruptcy or default) with one or more national or regional banks, financial institutions or other participants in the financial or capital markets may spread to others and lead to significant concentrated or market-wide problems (such as defaults, liquidity problems, impairment charges, additional bank runs and/or losses) for other participants in these markets. Future developments, including actions taken by the U.S. Department of Treasury, FDIC, Federal Reserve Board, and systemic risk in the U.S. and global banking sectors and broader economies in general, are difficult to assess and quantify, and the form and magnitude of such developments or other actions of the U.S. Department of Treasury, FDIC and Federal Reserve Board may remain unknown for significant periods of time and could have an adverse effect on the Company.
For example, in response to the rapidly declining financial condition of regional banks Silicon Valley Bank (“SVB”) and Signature Bank (“Signature”), the California Department of Financial Protection and Innovation (the “CDFPI”) and the New York State Department of Financial Services (the “NYSDFS”) closed SVB and Signature on March 10, 2023 and March 12, 2023, respectively, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver for SVB and Signature. Similarly, on May 1, 2023 the FDIC announced that the CDFPI had closed First Republic Bank, the FDIC had seized its assets and JP Morgan Chase had agreed to purchase First Republic’s assets at auction. Although the U.S. Department of the Treasury, the Federal Reserve and the FDIC have taken measures to stabilize the financial system, uncertainty and liquidity concerns in
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the broader financial services industry remain. Additionally, should there be additional systemic pressure on the financial system and capital markets, we cannot assure you of the response of any government or regulator, and any response may not be as favorable to industry participants as the measures currently being pursued. In addition, highly publicized issues related to the U.S. and global capital markets in the past have led to significant and widespread investor concerns over the integrity of the capital markets. The current situation related to SVB and Signature could in the future lead to further rules and regulations for public companies, banks, financial institutions and other participants in the U.S. and global capital markets, and complying with the requirements of any such rules or regulations may be burdensome. Even if not adopted, evaluating and responding to any such proposed rules or regulations could results in increased costs and require significant attention from our Investment Adviser.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
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Item 5. Other Information
Our common stock is traded on the NASDAQ Global Select Market under the symbol “PSEC.”
The following table sets forth, for the quarterly reporting periods indicated, the net asset value per common share of our common stock and the high and low sales prices for our common stock, as reported on the NASDAQ Global Select Market. Our common stock historically has traded at prices both above and below its net asset value. There can be no assurance, however, that such premium or discount, as applicable, to net asset value will be maintained. See also “Item 1A. Risk Factors” in Part I of our Annual Report on Form 10-K for the year ended June 30, 2022 for additional information about the risks and uncertainties we face.

    Stock Price Premium (Discount)
of High to NAV
 Premium
(Discount)
of Low to NAV
 
  NAV(1) High(2) Low(2) 
Year Ended June 30, 2021          
First quarter $8.40  $5.17  $4.69  (38.5)% (44.2)% 
Second quarter 8.96  5.60  4.95  (37.5)% (44.8)% 
Third quarter9.38 7.98 5.51 (14.9)%(41.3)%
Fourth quarter  9.81  9.22 7.62  (6.0)% (22.3)% 
Year Ended June 30, 2022
First quarter$10.12 $8.46 $7.69 (16.4)%(24.0)%
Second quarter10.60 9.00 7.83 (15.1)%(26.1)%
Third quarter10.81 8.89 7.86 (17.8)%(27.3)%
Fourth quarter10.48 8.486.68 (19.1)%(36.3)%
Twelve Months Ending June 30, 2023
First quarter$10.01 $8.18 $6.11 (18.3)%(39.0)%
Second quarter9.94 7.82 6.39 (21.3)%(35.7)%
Third quarter9.48 7.66 6.67 (19.2)%(29.6)%
(1) Net asset value per common share is determined as of the last day in the relevant quarter and therefore may not reflect the net asset value per common share on the date of the high or low sales price. The NAVs shown are based on outstanding shares of our common stock at the end of each period.
(2) The High/Low Stock Price is calculated as of the closing price on a given day in the applicable quarter.
As of May 8, 2023, we had approximately 172 stockholders of record.
The below table sets forth each class of our outstanding securities as of May 8, 2023:
Title of ClassAmount AuthorizedAmount Held by Registrant or for its AccountAmount Outstanding
Common Stock1,552,100,000 — 402,169,399 
Preferred Stock447,900,000 — 59,947,840 
2025 Notes$201,250 — $156,168 
6.375% 2024 Notes$100,000 — $81,240 
2026 Notes$400,000 — $400,000 
3.364% 2026 Notes$300,000 — $300,000 
3.437% 2028 Notes$300,000 — $300,000 
Prospect Capital InterNotes®$1,000,000 — $358,099 
Recent Sales of Common Stock Below Net Asset Value
At our 2009, 2010, 2011, 2012 and 2013 annual meeting of stockholders, and at special meetings of stockholders held on June 12, 2020, June 11, 2021, and June 10, 2022 our stockholders approved our ability to sell shares of our common stock at a price or prices below our NAV per common share at the time of sale in one or more offerings. The current approval to sell shares of our common stock below our NAV per common share is valid until June 10, 2023 and subject to certain conditions as set forth in the proxy statement relating to the special meeting (including that the number of shares sold on any given date does not
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exceed 25% of our outstanding common stock immediately prior to such sale). Accordingly, we may make offerings of our common stock without any limitation on the total amount of dilution to stockholders. Our prospectus supplement and accompanying prospectus relating to this offering contains additional information about these offerings. Pursuant to the authority granted by our stockholders and the approval of our Board of Directors, we have made the following offerings:
Date of OfferingPrice Per Share to InvestorsShares IssuedEstimated Net Asset Value per Common Share(1)Percentage Dilution
June 15, 2020 to June 22, 2020(2)$5.29 - $5.401,158,222$7.93 - 7.940.10%
(1) The data for sales of common shares below NAV pursuant to our equity distribution agreements are estimates based on our last reported NAV prior to the respective period adjusted for capital events occurring during the period since the last calculated NAV. All amounts presented are approximations based on the best available data at the time of issuance.
(2) At the market offering. Dates of offering represent the sales dates of the stock. The settlement dates are two business days later than the sale dates.


On March 13, 2023, we filed a notice of meeting and definitive proxy statement in connection with a special meeting of our stockholders that is scheduled to be held on June 9, 2023 for the purpose of asking our stockholders to vote on a proposal to authorize us, with approval of our Board of Directors, to sell shares of our common stock (during the next 12 months) at a price or prices below our then current net asset value per share in one or more offerings subject to certain conditions as set forth in the proxy statement relating to the special meeting (including that the number of shares sold on any given date does not exceed 25% of our outstanding common stock immediately prior to such sale).
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FEES AND EXPENSES
The following tables are intended to assist you in understanding the costs and expenses that an investor in shares of common stock will bear directly or indirectly. We caution you that some of the percentages indicated in the table below are estimates and may vary. These tables are based on our assets and common stock outstanding as of March 31, 2023, except that we assume that we have issued $0.9 billion in 5.50% Preferred Stock paying dividends of 5.50% per annum, $1.2 billion in 6.50% Preferred Stock paying dividends of 6.50% per annum, in addition to our $0.15 billion of 5.35% Preferred Stock paying dividends of 5.35% per annum, and that we have borrowed $1.8 billion under our credit facility, which is the maximum amount available under the credit facility with the current levels of other debt, in addition to our other indebtedness of $1.6 billion. Except where the context suggests otherwise, any reference to fees or expenses paid by “you” or “us” or that “we” will pay fees or expenses, the Company will pay such fees and expenses out of our net assets and, consequently, you will indirectly bear such fees or expenses as an investor in the Company’s common stock. However, you will not be required to deliver any money or otherwise bear personal liability or responsibility for such fees or expenses.
Stockholder transaction expenses:A1 and A3 SharesM1, M2, and M3 SharesAA1 Shares, MM1 Shares, AA2 Shares, and MM2 Shares
Sales Load (as a percentage of offering price) 10.00% (1)3.00%(2)5.00% (3)
Offering expenses borne by the Company (as a percentage of offering price)(4)(4)(5)
Preferred Stock Dividend reinvestment plan expenses (6)NoneNoneNone
Total stockholder transaction expenses (as a percentage of offering price):11.5%4.5%6.0%
Annual expenses (as a percentage of net assets attributable to common stock):
Management fees (7)4.97%
Incentive fees payable under Investment Advisory Agreement (20% of realized capital gains and 20% of pre-incentive fee net investment income) (8)2.31%
Total advisory fees7.28%
Total interest expenses (9)5.29%
Other expenses (10)1.17%
Total annual expenses (8)(10)(11)13.74%
Dividends on Preferred Stock(12)3.57%
Total annual expenses after dividends on Preferred Stock (13)17.31%
Example
The following table demonstrates the projected dollar amount of cumulative expenses we would pay out of net assets and that you would indirectly bear over various periods with respect to a hypothetical investment in our common stock. In calculating the following expense amounts, we have assumed we have issued $0.9 billion in 5.50% Preferred Stock paying dividends of 5.50% per annum, $1.2 billion in 6.50% Preferred Stock paying dividends of 6.50% per annum, $0.15 billion in 5.35% Preferred Stock paying dividends of 5.35% per annum, we have borrowed $1.8 billion available under our line of credit, in addition to our other indebtedness of $1.6 billion, and that our annual operating expenses would remain at the levels set forth in the table above and that we would pay the costs shown in the table above.
  1 Year 3 Years 5 Years 10 Years
Ongoing Preferred Stock Offerings(1) - You would pay the following expenses on a $1,000 investment in shares of our common stock, assuming a 5% annual return on our portfolio*
 $200  $442  $637  $978 
Ongoing Preferred Stock Offerings(1) - You would pay the following expenses on a $1,000 investment in shares of our common stock, assuming a 5% annual return on our portfolio**
$210 $463 $663 $1,001 
* Assumes that we will not realize any capital gains computed net of all realized capital losses and unrealized capital depreciation on our portfolio.
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** Assumes no unrealized capital depreciation or realized capital losses and 5% annual return on our portfolio resulting entirely from net realized capital gains (and therefore subject to the capital gains incentive fee).
While the example assumes, as required by the SEC, a 5% annual return on our portfolio, our performance will vary and may result in a return greater or less than 5%. The income incentive fee under our Investment Advisory Agreement with Prospect Capital Management is unlikely to be material assuming a 5% annual return on our portfolio and is not included in the example. If we achieve sufficient returns on our portfolio, including through the realization of capital gains, to trigger an incentive fee of a material amount, our distributions to our common stockholders and our expenses would likely be higher. In addition, while the example assumes reinvestment of all dividends and other distributions at NAV, common stockholders that participate in our common stock dividend reinvestment plan will receive a number of shares of our common stock determined by dividing the total dollar amount of the distribution payable to a participant by 95% of the market price per share of our common stock at the close of trading on the valuation date for the distribution.
This example and the expenses in the table above should not be considered a representation of our future expenses. Actual expenses (including the cost of debt, if any, and other expenses) may be greater or less than those shown.

(1)    Includes up to a 7.0% selling commission on the $25.00 per share (the “Stated Value”) paid by the Company and a dealer manager fee equal to 3.0% of the Stated Value paid by the Company. Reductions in selling commissions will be reflected in reduced public offering prices as described in the “Plan of Distribution” section of the applicable prospectus supplement and the net proceeds to us will not be impacted by such reductions; therefore, we will bear a reduction in net proceeds to us up to 7.0% of the Stated Value on all A Shares although the selling commission compensation paid by us to our dealer manager may represent less than 7.0% of the Stated Value. We may, through the Holder Optional Conversion Fee, recoup a portion of the Sales Load if stockholders exercise a Holder Optional Conversion (as defined in the prospectus supplement relating to the applicable offering) of their Preferred Stock prior to the 5-year anniversary of the original issue date. The Holder Optional Conversion Fee is 9.00% of the maximum public offering price disclosed herein prior to the first anniversary of the issuance of such Preferred Stock, 8.00% of the maximum public offering price disclosed herein on or after the first anniversary but prior to the second anniversary, 7.00% of the maximum public offering price disclosed herein on or after the second anniversary but prior to the third anniversary, 6.00% of the maximum public offering price disclosed herein on or after the third anniversary but prior to the fourth anniversary, 5.00% of the maximum public offering price disclosed herein on or after the fourth anniversary but prior to the fifth anniversary and 0.00% on or after the fifth anniversary.

(2)    Includes a dealer manager fee equal to 3.0% of the Stated Value paid by the Company.

(3)     Includes up to a 4.875% selling commission on the $25.00 per share (the “Stated Value”) paid by the Company and a dealer manager fee equal to 0.125% of the Stated Value paid by the Company. For the AA1 Shares and AA2 Shares we may, through the Holder Optional Conversion Fee, recoup a portion of the Sales Load if stockholders exercise a Holder Optional Conversion (as defined in the prospectus supplement relating to the applicable offering) of their Preferred Stock prior to the 5-year anniversary of the original issue date. The Holder Optional Conversion Fee is 9.00% of the maximum public offering price disclosed herein prior to the first anniversary of the issuance of such Preferred Stock, 8.00% of the maximum public offering price disclosed herein on or after the first anniversary but prior to the second anniversary, 7.00% of the maximum public offering price disclosed herein on or after the second anniversary but prior to the third anniversary, 6.00% of the maximum public offering price disclosed herein on or after the third anniversary but prior to the fourth anniversary, 5.00% of the maximum public offering price disclosed herein on or after the fourth anniversary but prior to the fifth anniversary and 0.00% on or after the fifth anniversary.

(4)    The selling commission and dealer manager fee, when combined with organization and offering expenses (including due diligence expenses and fees for establishing servicing arrangements for new stockholder accounts), are not expected to exceed 11.5% of the gross offering proceeds. Our Board of Directors may, in its discretion, authorize the Company to incur underwriting and other offering expenses in excess of 11.5% of the gross offering proceeds. In no event will the combined selling commission, dealer manager fee and offering expenses exceed FINRA’s limit on underwriting and other offering expenses.

(5)    The selling commission and dealer manager fee, when combined with organization and offering expenses (including due diligence expenses), are not expected to exceed 6.0% of the gross offering proceeds. Our Board of Directors may, in its discretion, authorize the Company to incur underwriting and other offering expenses in excess of 6.0% of the gross offering proceeds. In no event will the combined selling commission, dealer manager fee and offering expenses exceed FINRA’s limit on underwriting and other offering expenses.

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(6)    The expenses of the Preferred DRIP are included in “other expenses.” See “Capitalization” in the applicable prospectus supplement.

(7)    Our base management fee is 2% of our gross assets (which include any amount borrowed, i.e., total assets without deduction for any liabilities, including any borrowed amounts for non-investment purposes, for which purpose we have not and have no intention of borrowing). Although no plans are in place to borrow the full amount under our line of credit, assuming that we borrowed $1.8 billion, the 2% management fee of gross assets equals approximately 4.97% of net assets.

(8)    Based on our net investment income and realized capital gains, less realized and unrealized capital losses, earned on our portfolio for the six months ended March 31, 2023, all of which consisted of an income incentive fee. This historical amount has been adjusted to reflect the issuance of 82,187,000 shares of combined 5.50% Preferred Stock and 6.50% Preferred Stock. The capital gain incentive fee is paid without regard to pre-incentive fee income. For a more detailed discussion of the calculation of the two-part incentive fee, see “Management Services-Investment Advisory Agreement” in the applicable prospectus.

(9)    As of March 31, 2023, we had $1.6 billion outstanding of Unsecured Notes (as defined below) in various maturities, ranging from January 15, 2024 to March 15, 2052, and interest rates, ranging from 1.50% to 6.625%, some of which are convertible into shares of the Company’s common stock at various conversion rates.

(10)    “Other expenses” are based on estimated amounts for the current fiscal year. The amount shown above represents annualized expenses during our six months ended March 31, 2023 representing all of our estimated recurring operating expenses (except fees and expenses reported in other items of this table) that are deducted from our operating income and reflected as expenses in our Statement of Operations. The estimate of our overhead expenses, including payments under an administration agreement with Prospect Administration, or the Administration Agreement is based on our projected allocable portion of overhead and other expenses incurred by Prospect Administration in performing its obligations under the Administration Agreement. See “Business-Management Services-Administration Agreement” in the applicable prospectus.

(11)    If all 82,187,000 shares of combined 5.50% Preferred Stock and 6.50% Preferred Stock were converted into common stock and assuming all the Series A1, Series A3, and Series AA2 Preferred Stock pay a Holder Optional Conversion Fee of 9.00% of the maximum public offering price disclosed within the applicable prospectus supplement and are converted at a conversion rate based on the 5-day VWAP of our common stock on March 31, 2023, which was $6.89, then management fees would be 3.21%, incentive fees payable under our Investment Advisory Agreement would be 1.49%, total advisory fees would be 4.70%, total interest expenses would be 3.41%, other expenses would be 0.75%, and total annual expenses would be 8.86% of net assets attributable to our common stock. The actual 5-day VWAP of our common stock on a conversion date may be more or less than $6.89, which may result in fees that are higher or lower than those described herein. These figures are based on the same assumptions described in the other notes to this fee table.

(12)    Based on the 5.50% per annum dividend rate applicable to the A1 Shares, M1 Shares, M2 Shares, AA1 Shares, MM1 Shares, and A2 Shares. Also based on the 5.35% per annum dividend rate applicable to the A Shares. Also based on the 6.50% per annum dividend rate applicable to the A3 Shares, M3 Shares, AA2 Shares, and MM2 Shares. Other series of preferred stock, including other series of preferred stock being sold in different offerings, may bear different annual dividend rates. No dividend will be paid on shares of Preferred Stock after they have been converted to shares of common stock.

(13)     The indirect expenses associated with the Company’s investments in collateralized loan obligations are not included in the fee table presentation, but if such expenses were included in the fee table presentation then the Company’s total annual expenses would have been 14.34%, or 17.91% after dividends on Preferred Stock.
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Financial Highlights
The financial highlights for each of the five years ended in the period ended June 30, 2022 are presented within Note 16. Financial Highlights within our consolidated financial statements. The following is a schedule of financial highlights for each of the fiscal years ended June 30, 2017, June 30, 2016, June 30, 2015, June 30, 2014, and June 30, 2013:
 Year Ended June 30,
 20172016201520142013
Per Share Data    
Net asset value at beginning of year$9.62 $10.31 $10.56 $10.72 $10.83 
Net investment income(1)0.85 1.04 1.03 1.19 1.57 
Net realized and change in unrealized (losses)(1)(0.15)(0.75)(0.05)(0.13)(0.50)
  Net increase from operations0.70 0.29 0.98 1.06 1.07 
Distributions of net investment income(1.00)(1.00)(1.19)(1.32)(1.28)
Common stock transactions(2)— (4)0.02 (0.04)0.10 0.10 
  Net asset value at end of year$9.32 $9.62 $10.31 $10.56 $10.72 
Per share market value at end of year$8.12 $7.82 $7.37 $10.63 $10.80 
Total return based on market value(3)16.80 %21.84 %(20.84 %)10.88 %6.24 %
Total return based on net asset value(3)8.98 %7.15 %11.47 %10.97 %10.91 %
Shares of common stock outstanding at end of year360,076,933 357,107,231 359,090,759 342,626,637 247,836,965 
Weighted average shares of common stock outstanding358,841,714 356,134,297 353,648,522 300,283,941 207,069,971 
Ratios/Supplemental Data  
Net assets at end of year$3,354,952 $3,435,917 $3,703,049 $3,618,182 $2,656,494 
Portfolio turnover rate23.65 %15.98 %21.89 %15.21 %29.24 %
Ratio of operating expenses to average net assets11.57 %11.95 %11.66 %11.11 %11.50 %
Ratio of net investment income to average net assets8.96 %10.54 %9.87 %11.18 %14.86 %
(1)Per share data amount is based on the weighted average number of common shares outstanding for the year/period presented (except for dividends to shareholders which is based on actual rate per share).
(2)Common stock transactions include the effect of our issuance of common stock in public offerings (net of underwriting and offering costs), shares issued in connection with our dividend reinvestment plan, shares issued to acquire investments and shares repurchased below net asset value pursuant to our Repurchase Program.
(3)Total return based on market value is based on the change in market price per share between the opening and ending market prices per share in each period and assumes that dividends are reinvested in accordance with our dividend reinvestment plan. Total return based on net asset value is based upon the change in net asset value per share between the opening and ending net asset values per share in each period and assumes that dividends are reinvested in accordance with our dividend reinvestment plan.
(4)Amount is less than $0.01.

Item 6. Exhibits
The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC (according to the number assigned to them in Item 601 of Regulation S-K):
Exhibit No.
3.1
3.2
3.3
3.4
3.5
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Exhibit No.
3.6
3.7
3.8
3.9
3.10
3.11
3.12
3.13
3.14
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
4.10
4.11
4.12
4.13
4.14
4.15
4.16
4.17
4.18
4.19
4.2
4.21
4.22
4.23
4.24
156


Exhibit No.
4.25
4.26
4.27
4.28
4.29
4.30
4.31
4.32
4.33
4.34
4.35
4.36
10.1
10.2
10.3
10.4
11
Computation of Per Share Earnings (included in the notes to the financial statements contained in this report)
12
Computation of Ratios (included in the notes to the financial statements contained in this report)
31.1
31.2
32.1
32.2
101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema Document.
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.
101.LABInline XBRL Taxonomy Extension Label Linkbase Document.
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
________________________
*
Filed herewith.
(1)
(2)
(3)
(4)
(5)
(6)
(7)
157


(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
(23)
(24)
(25)
(26)
(27)
(28)
(29)
(30)
(31)
(32)
    



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
PROSPECT CAPITAL CORPORATION
 
May 9, 2023By:/s/ JOHN F. BARRY III
Date John F. Barry III
 Chairman of the Board and Chief Executive Officer
May 9, 2023By:/s/ KRISTIN L. VAN DASK
Date Kristin L. Van Dask
 Chief Financial Officer