Financial Results - Prospect Capital Corporation reported a net investment income (NII) of $90,888,000 for the quarter ended December 31, 2025, an increase from $79,350,000 in the previous quarter and $86,431,000 in the same quarter last year [2] - The NII per common share was $0.19, compared to $0.17 in the previous quarter and $0.20 a year ago [2] - The company experienced a net loss applicable to common shareholders of $(6,576,000), a decrease from a profit of $48,087,000 in the previous quarter and a loss of $(30,993,000) in the same quarter last year [2] - Total assets decreased to $6,534,578,000 from $6,641,870,000 in the previous quarter and $7,234,855,000 a year ago [2] - The net asset value (NAV) per common share was $6.21, down from $6.45 in the previous quarter and $7.84 a year ago [2] Investment Activity - The company has invested over $22 billion across more than 450 investments since its initial public offering in July 2004, exiting over 350 of these investments [6] - The gross internal rate of return (IRR) on exited investments is approximately 12%, with total proceeds from exited investments amounting to approximately $16.7 billion against $13.1 billion invested [7] - In the middle market lending sector, the exited investments yielded a gross IRR of approximately 14.5%, with an annualized realized loss rate of 0.2% [8] - For companies with less than $50 million in EBITDA, the gross IRR reached approximately 17.2%, with an annualized net realized loss rate of 0.1% [9] Portfolio Composition - As of December 31, 2025, the portfolio included 91 companies across 32 industries, with total investments valued at $6,441,536,000 [18] - The first lien debt represented 71.4% of the total investments, while second lien debt accounted for 12.7% [19] - The company’s real estate property portfolio at National Property REIT Corp. constituted 14.1% of investments, yielding an income of 5.4% for the quarter [16] Capital and Liquidity - The company has a diversified funding profile, including a $2.1 billion revolving credit facility and various debt instruments [21] - As of December 31, 2025, the weighted average cost of unsecured debt financing was 4.68% [25] - The balance sheet cash and undrawn revolving credit facility commitments totaled $1,647,216,000 [24] Dividend Information - Prospect Capital Corporation declared monthly cash distributions of $0.045 per share for February, March, and April 2026 [4][5] - Cumulative distributions to common shareholders since inception amount to approximately $4.7 billion, equating to $21.93 per share [5]

Investment Activity - For the three months ended December 31, 2025, the company acquired $13,290 in new investments and completed follow-on investments totaling approximately $37,818, resulting in gross investment originations of $80,434[575]. - The company received full repayments totaling $17,200 and additional repayments of approximately $79,266 during the same period, with no sales of investments[576]. - As of December 31, 2025, the company had $6,441,536, or 217.7% of its net assets applicable to common shares, invested in 91 portfolio investments and CLOs[586]. - The company focused on secured lending, with total investments in portfolio companies for the six months ended December 31, 2025, at $172,001 million, down from $425,595 million in the same period of 2024[596]. - Total investments repaid or sold during the six months ended December 31, 2025, were $313,926 million, compared to $665,691 million in the prior year, indicating a substantial reduction[596]. Portfolio Valuation - As of December 31, 2025, the total investments amount to $6,389,615, with a fair value of $6,441,536, showing a slight decrease from $6,693,501 and $6,673,516 as of June 30, 2025[591]. - The total valuation of the company's investments was $6,441,536, determined through various valuation techniques including discounted cash flow models[607]. - The fair value of the investment in NPRC had an amortized cost of $903,670 and a fair value of $1,173,262 as of December 31, 2025[619]. - The fair value of NPRC's real estate portfolio was $1,164,472, comprising various multi-family and commercial properties[619]. - The company recorded fluctuations in valuations of controlled companies during the six months ended December 31, 2025, due to changes in operating results and market multiples[609]. Debt and Financing - The total outstanding debt as of December 31, 2025, was $1,868,140, with a net carrying value of $1,847,696[639]. - The company issued approximately $167,637 in aggregate principal amount of the 5.50% 2030 Notes, generating net proceeds of approximately $159,531[581]. - The company issued $325,000 aggregate principal amount of unsecured notes maturing on January 22, 2026, with total proceeds of $317,720[647]. - The company issued $300,000 aggregate principal amount of 3.364% 2026 Notes, with net proceeds of $293,283 after costs[651]. - The company amended several loan agreements, extending maturity dates for key loans, including the National Property REIT Corp. to March 31, 2027, and USG Intermediate, LLC to February 9, 2029[598][599]. Income and Expenses - Total investment income for the six months ended December 31, 2025 was $333,626, down from $381,774 in the same period of 2024[665]. - Total operating expenses for the three months ended December 31, 2025, were $85,114, down from $99,035 in 2024, indicating a reduction of 14.1%[676]. - Interest expense for the three months ended December 31, 2025, was $27,559, compared to $32,508 in 2024, showing a decrease of 15.1%[683]. - The weighted average interest rate earned on performing interest-bearing investments increased to 10.26% for the three months ended December 31, 2025, up from 9.40% for the same period in 2024[668]. - Non-recurring income for the three months ended December 31, 2025, was $26,896, up from $16,967 in 2024, reflecting a $9,929 increase driven by higher dividend income[673]. Preferred Stock and Equity - The company is offering up to 90,000,000 shares of preferred stock with a liquidation preference of $25.00 per share[710]. - The Series A Preferred Stock ranks senior to common stock and on parity with other series of preferred stock regarding dividend payments and liquidation rights[728]. - The company has adopted a preferred stock dividend reinvestment plan allowing holders to reinvest dividends at a price of $25.00 for certain preferred stocks[713]. - The company has covenanted to waive redemption limits for the Floating Rate Preferred Stock, allowing additional redemption capacity[720]. - The company filed a registration statement on Form N-2 to issue an indeterminate amount of securities, including common and preferred stock[709]. Changes in Net Asset Value - The net asset value applicable to common stockholders decreased by $30,017, resulting in a net asset value per common share of $6.21 as of December 31, 2025[664]. - The common stockholders' equity accounts reflect cumulative shares issued, net of shares previously repurchased, as of December 31, 2025, and June 30, 2025[754]. - Stockholders authorized the company to sell shares of common stock below net asset value per share, with conditions that sales do not exceed 25% of outstanding common stock on any given date[756]. - The company has reserved 550,000,000 shares of common stock for issuance upon conversion of the 5.50% and 6.50% Preferred Stock[757]. - The company did not exercise any option to convert other series of outstanding preferred stock to common stock while the Series A Preferred Stock is outstanding[751].

NEW YORK, Feb. 09, 2026 (GLOBE NEWSWIRE) -- Prospect Enhanced Yield Fund (the “Fund”, CUSIP “PAYIX”), a debt-focused structured credit interval fund with daily net asset value and quarterly mandatory liquidity, has announced recent performance results. For the three month period ended January 31, 2026, since fully deploying the Fund’s anchor capital, the Fund has delivered an annualized total gross return of 10.6% (total net return of 10.6%i) based on net asset value, reflecting strong performance on an abs ...

Industry Overview - The private credit market has grown significantly, reaching approximately $2 trillion in 2020 and projected to grow by roughly 50% by early 2025, potentially reaching close to $5 trillion by 2029 [1] Concerns and Warnings - Experts, including Jeffery Gundlach and Jamie Dimon, have raised concerns about the quality of loans in the private credit market, with warnings about potential credit issues in the event of an economic downturn [1] - Wall Street is sounding alarms regarding a possible collapse in the private credit market, particularly affecting ultra-high-yield business development company (BDC) stocks [1] Company-Specific Insights - Prospect Capital (NASDAQ: PSEC) is highlighted as a BDC showing potential cracks, despite its long history and attractive forward dividend yield of 19.7%. However, its net asset value (NAV) has significantly eroded, and it relies heavily on issuing perpetual preferred stock, increasing fixed-payment obligations [3][4] - FS KKR Capital (NYSE: FSK) also presents problematic signs, with a forward dividend yield of 20.3% and non-accruals at 5% of its total investment portfolio as of Q3 2025. Fitch has lowered its outlook on FS KKR Capital to negative due to persistently elevated non-accruals [5] - Ares Capital (NASDAQ: ARCC) is presented as a more resilient direct lender that may weather potential market storms better than its peers [5]

Core Viewpoint - Priority Income Fund, Inc. will redeem 790,000 of its 6.000% Series J Term Preferred Stock due 2028 at a price of $25 per share, with the redemption date set for February 25, 2026 [1][2]. Group 1: Redemption Details - The redemption price includes accrued but unpaid dividends from December 31, 2025, until the redemption date [1]. - Dividends on the redeemed shares will cease to accumulate after the redemption date, and holders will only retain the right to receive the redemption price [2]. - The shares will be redeemed according to the procedures of The Depository Trust Company, selected by lot [3]. Group 2: Fund Structure - After the redemption, the Fund will have outstanding shares of 7.00% Series D Term Preferred Stock due 2029, 7.000% Series K Cumulative Preferred Stock, and 6.375% Series L Term Preferred Stock due 2029 [4]. Group 3: Company Overview - Priority Income Fund, Inc. is a registered closed-end fund focused on acquiring and growing a portfolio of senior secured loans and collateralized loan obligations (CLOs) [5]. - The Fund is managed by Priority Senior Secured Income Management, LLC, which is part of Prospect Capital Management L.P., an investment adviser with 38 years of experience in high-yielding debt and equity investments [6].

Core Viewpoint - Prospect Capital Corporation has expanded access to its Perpetual Preferred Stock Series A5 and M5 offerings through the iCapital Marketplace, aiming to enhance investment opportunities for various financial professionals and their clients [1][2]. Group 1: Offering Details - The ongoing offerings of Prospect Capital Corporation's perpetual preferred stock have raised nearly $2 billion and feature a fixed dividend rate of 7.50% per annum, intended to be paid monthly [2]. - The preferred stock has a stated value of $25.00 per share and requires a minimum investment of $5,000, with no upfront or ongoing fees for investors [5]. Group 2: Strategic Importance - The collaboration with iCapital Marketplace is expected to benefit Prospect's private wealth offerings by providing seamless investment access and enhancing diversification for investors [3]. - The management and employees of Prospect Capital Management own approximately 29% of the common equity, aligning their interests with those of the investors [4]. Group 3: Company Background - Prospect Capital Management is an SEC-registered investment adviser with 38 years of experience in high-yielding debt and equity investments, managing approximately $7.3 billion in regulatory assets as of September 30, 2025 [7]. - Prospect Capital Corporation primarily invests in middle-market privately-held companies, focusing on generating current income and long-term capital appreciation [8].

Group 1 - Prospect Capital Management's President and COO, Grier Eliasek, was featured in a Q&A discussing the firm's approach to private credit investing and market conditions [1][2] - The firm focuses on opportunities within the lower middle market, indicating a strategic interest in this segment [2] - Prospect Capital Management has 38 years of experience in managing high-yielding debt and equity investments, employing a team of 150 professionals [3] Group 2 - As of September 30, 2025, Prospect Capital Management has $7.3 billion in regulatory assets under management [3]

Core Viewpoint - Prospect Enhanced Yield Fund has declared monthly cash shareholder distributions for January, February, and March 2026, marking the fourth, fifth, and sixth distributions paid by the Fund [1] Distribution Details - The annualized total cash distribution is $2.28 per share, representing a 9.05% annualized rate based on the January 9, 2026 net asset value of $25.19 per common share [2] - The cash distribution will be payable monthly to common stockholders of record at the close of business each month, with a quarterly total of $0.57 [2] Monthly Distribution Schedule - January 2026: Record Date 01/29/2026, Payment Date 02/02/2026, Amount $0.19 per share [3] - February 2026: Record Date 02/26/2026, Payment Date 03/02/2026, Amount $0.19 per share [3] - March 2026: Record Date 03/30/2026, Payment Date 04/01/2026, Amount $0.19 per share [7] Fund Overview - Prospect Enhanced Yield Fund is a closed-end fund operating as an interval fund, focusing on acquiring and growing a portfolio of non-mortgage related structured credit instruments, including asset-backed securities and collateralized loan obligations [4] - The Fund is managed by Prospect Enhanced Yield Management, LLC, which comprises a team of investment professionals from Prospect Capital Management L.P. [4] Management Background - Prospect Capital Management L.P. is an SEC-registered investment adviser with over 30 years of experience in managing high-yielding debt and equity investments, employing a team of over 100 professionals [5] - As of September 30, 2025, Prospect and its affiliates manage $7.3 billion in assets [5]

Group 1 - The article discusses the search for investment opportunities with yields around 8% in the Business Development Companies (BDCs) sector, noting that such opportunities have become increasingly rare recently [1] - The only current example of a high-yield opportunity is mentioned in the context of Arbitrage Trader, led by Denislav Iliev, who has over 15 years of day trading experience and manages a team of 40 analysts [1] - The services offered by Denislav's investing group, Trade With Beta, include frequent picks for mispriced preferred stocks and baby bonds, weekly reviews of over 1200 equities, IPO previews, hedging strategies, and an actively managed portfolio [1]

Core Viewpoint - Priority Income Fund has declared monthly cash distributions for December 2025, January 2026, and February 2026, reflecting its ongoing commitment to return value to shareholders [1][4]. Distribution Details - The annualized total cash distribution is $1.05016 per share, representing a 20.71% annualized rate based on the net asset value of $5.07 per common share as of November 30, 2025 [2]. - The monthly cash distributions are as follows: - December 2025: $0.08056 per share, payable on December 31, 2025 [4] - January 2026: $0.10070 per share, payable on January 30, 2026 [4] - February 2026: $0.08056 per share, payable on February 27, 2026 [4] - Cumulative cash distributions since inception in January 2014 total $16.988225 per common share through February 2026 [4]. Investment Strategy - The Fund plans to allocate a greater percentage of its new originations in BB-rated debt tranches of Collateralized Loan Obligations (CLOs), which are expected to generate lower cash yields but provide greater downside protection against defaults compared to more junior CLO tranches [3]. Fund Overview - Priority Income Fund, Inc. is a registered closed-end fund focused on acquiring and growing an investment portfolio primarily consisting of senior secured loans or pools of senior secured loans known as CLOs [6]. - The Fund is managed by Priority Senior Secured Income Management, LLC, which is supported by a team from Prospect Capital Management L.P. [6]. Management Background - Prospect Capital Management L.P. has over 30 years of experience in managing high-yielding debt and equity investments, with $9.8 billion in assets under management as of September 30, 2025 [7].