PSEC 10-Q Q3 2015
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
ý
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2015
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number: 814-00659 
PROSPECT CAPITAL CORPORATION
(Exact name of Registrant as specified in its charter)
Maryland
43-2048643
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
10 East 40th Street, 42nd Floor
 
New York, New York
10016
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (212) 448-0702

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes o    No o
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ý
Accelerated filer o
Non-accelerated filer o
Smaller reporting company o
 (Do not check if a smaller reporting company)
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o    No ý
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.
Class of Common Stock
 
Outstanding at May 5, 2015
$0.001 par value
 
358,793,412




PROSPECT CAPITAL CORPORATION
Table of Contents
 
 
Page
 
PART I
FINANCIAL INFORMATION
 
 
 
 
 
 
 
PART II
OTHER INFORMATION
 
 



FORWARD-LOOKING STATEMENTS
This report contains information that may constitute “forward-looking statements.” Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future—including statements relating to volume growth, share of sales and earnings per share growth, and statements expressing general views about future operating results—are forward-looking statements. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in Part II, “Item 1A. Risk Factors” and elsewhere in this report and in our Annual Report on Form 10-K for the year ended June 30, 2014, and those described from time to time in our future reports filed with the Securities and Exchange Commission.

1


PART I. FINANCIAL INFORMATION
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, 2015
 
June 30, 2014
 
(Unaudited)
 
(Audited)
Assets
 

 
 

Investments at fair value:
 

 
 

Control investments (amortized cost of $1,792,504 and $1,719,242, respectively)
$
1,828,211

 
$
1,640,454

Affiliate investments (amortized cost of $45,370 and $31,829, respectively)
46,273

 
32,121

Non-control/non-affiliate investments (amortized cost of $4,752,152 and $4,620,451, respectively)
4,728,287

 
4,581,164

Total investments at fair value (amortized cost of $6,590,026 and $6,371,522, respectively)
6,602,771

 
6,253,739

Cash and cash equivalents
63,624

 
134,225

Receivables for:
 
 
 
Interest, net
24,369

 
21,997

Other
1,604

 
2,587

Prepaid expenses
1,860

 
2,828

Deferred financing costs
60,918

 
61,893

Total Assets 
6,755,146

 
6,477,269

 
 
 
 
Liabilities 
 

 
 

Revolving Credit Facility (Notes 4 and 8)
317,700

 
92,000

Convertible Notes (Notes 5 and 8)
1,239,500

 
1,247,500

Public Notes (Notes 6 and 8)
648,045

 
647,881

Prospect Capital InterNotes® (Notes 7 and 8)
778,718

 
785,670

Dividends payable
29,887

 
37,843

Due to Prospect Administration (Note 13)
2,544

 
2,208

Due to Prospect Capital Management (Note 13)
1,391

 
3

Accrued expenses
3,335

 
4,790

Interest payable
35,386

 
37,459

Other liabilities
4,052

 
3,733

Total Liabilities 
3,060,558

 
2,859,087

Net Assets 
$
3,694,588

 
$
3,618,182

 
 
 
 
Components of Net Assets 
 

 
 

Common stock, par value $0.001 per share (1,000,000,000 common shares authorized; 358,661,441 and 342,626,637 issued and outstanding, respectively) (Note 9)
$
359

 
$
343

Paid-in capital in excess of par (Note 9)
3,972,249

 
3,814,634

Accumulated (overdistributed) underdistributed net investment income
(20,864
)
 
42,086

Accumulated net realized loss on investments and extinguishment of debt
(269,901
)
 
(121,098
)
Net unrealized appreciation (depreciation) on investments
12,745

 
(117,783
)
Net Assets 
$
3,694,588

 
$
3,618,182

 
 
 
 
Net Asset Value Per Share (Note 16) 
$
10.30

 
$
10.56



See notes to consolidated financial statements.
2


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

 
Three Months Ended 
 March 31,
 
Nine Months Ended 
 March 31,
 
2015
 
2014
 
2015
 
2014
Investment Income
 

 
 

 
 
 
 
Interest income:
 

 
 

 
 
 
 
Control investments
$
50,418

 
$
38,129

 
$
146,230

 
$
107,848

Affiliate investments
973

 
727

 
2,814

 
3,622

Non-control/non-affiliate investments
94,556

 
85,811

 
290,665

 
243,343

CLO fund securities
39,046

 
31,709

 
118,238

 
87,087

Total interest income
184,993

 
156,376

 
557,947

 
441,900

Dividend income:
 
 
 
 
 
 
 
Control investments
1,346

 
7,575

 
4,756

 
23,527

Affiliate investments

 

 
778

 

Non-control/non-affiliate investments
24

 

 
46

 
12

Money market funds
1

 
15

 
27

 
32

Total dividend income
1,371

 
7,590

 
5,607

 
23,571

Other income:
 
 
 
 
 
 
 
Control investments
1,620

 
12,431

 
10,352

 
39,580

Affiliate investments

 
5

 
226

 
12

Non-control/non-affiliate investments
3,366

 
13,925

 
18,122

 
24,388

Total other income (Note 10)
4,986

 
26,361

 
28,700

 
63,980

Total Investment Income
191,350

 
190,327

 
592,254

 
529,451

Operating Expenses
 
 
 
 
 
 
 
Investment advisory fees:
 
 
 
 
 
 
 
Base management fee (Note 13)
33,679

 
28,709

 
100,878

 
76,829

Income incentive fee (Note 13)
21,860

 
24,631

 
68,307

 
68,269

Total investment advisory fees
55,539

 
53,340

 
169,185

 
145,098

Interest and credit facility expenses
42,213

 
31,747

 
127,371

 
88,410

Legal fees
(4
)
 
306

 
1,554

 
483

Valuation services
401

 
490

 
1,310

 
1,378

Audit, compliance and tax related fees
648

 
336

 
2,239

 
1,704

Allocation of overhead from Prospect Administration (Note 13)
2,984

 
3,986

 
8,414

 
11,958

Insurance expense
121

 
90

 
373

 
273

Directors’ fees
94

 
81

 
282

 
231

Excise tax
(793
)
 
1,000

 
982

 
3,000

Other general and administrative expenses
2,706

 
428

 
7,315

 
3,841

Total Operating Expenses
103,909

 
91,804

 
319,025

 
256,376

Net Investment Income
87,441

 
98,523

 
273,229

 
273,075

Net realized gains (losses) on investments
4,704

 
(1,600
)
 
(150,973
)
 
(3,482
)
Net change in unrealized (depreciation) appreciation on investments
(9,775
)
 
(14,822
)
 
130,528

 
(22,230
)
Net realized and unrealized losses on investments
(5,071
)
 
(16,422
)
 
(20,445
)
 
(25,712
)
Net realized losses on extinguishment of debt
(878
)
 

 
(1,214
)
 

Net Increase in Net Assets Resulting from Operations
$
81,492

 
$
82,101

 
$
251,570

 
$
247,363

Net increase in net assets resulting from operations per share
$
0.23

 
$
0.26

 
$
0.71

 
$
0.86

Dividends declared per share
$
(0.28
)
 
$
(0.33
)
 
$
(0.94
)
 
$
(0.99
)

See notes to consolidated financial statements.
3


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

 
Nine Months Ended March 31,
 
2015
 
2014
Operations
 

 
 

Net investment income
$
273,229

 
$
273,075

Net realized losses on investments
(150,973
)
 
(3,482
)
Net change in unrealized appreciation (depreciation) on investments
130,528

 
(22,230
)
Net realized losses on extinguishment of debt
(1,214
)
 

Net Increase in Net Assets Resulting from Operations 
251,570

 
247,363

 
 
 
 
Distributions to Shareholders
 
 
 
Distribution from net investment income
(331,863
)
 
(289,875
)
Distribution of return of capital

 

Net Decrease in Net Assets Resulting from Distributions to Shareholders
(331,863
)
 
(289,875
)
 
 
 
 
Common Stock Transactions 
 
 
 
Issuance of common stock, net of underwriting costs
146,085

 
890,331

Less: Offering costs from issuance of common stock
(585
)
 
(1,187
)
Value of shares issued to acquire controlled investments

 
45,914

Value of shares issued through reinvestment of dividends
11,199

 
12,336

Net Increase in Net Assets Resulting from Common Stock Transactions 
156,699

 
947,394

 
 
 
 
Total Increase in Net Assets 
76,406

 
904,882

Net assets at beginning of period
3,618,182

 
2,656,494

Net Assets at End of Period
$
3,694,588

 
$
3,561,376

 
 
 
 
Common Stock Activity
 
 
 
Shares sold
14,845,556

 
80,343,264

Shares issued to acquire controlled investments

 
4,224,636

Shares issued through reinvestment of dividends
1,189,248

 
1,094,996

Total shares issued due to common stock activity
16,034,804

 
85,662,896

Shares issued and outstanding at beginning of period
342,626,637

 
247,836,965

Shares Issued and Outstanding at End of Period
358,661,441

 
333,499,861

 


See notes to consolidated financial statements.
4


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


 
Nine Months Ended March 31,
 
2015
 
2014
Operating Activities
 
 
 
Net increase in net assets resulting from operations
$
251,570

 
$
247,363

Net realized losses on extinguishment of debt
1,214

 

Net realized losses on investments
150,973

 
3,482

Net change in unrealized (appreciation) depreciation on investments
(130,528
)
 
22,230

Amortization of discounts and premiums, net
64,200

 
31,837

Accretion of discount on Public Notes (Note 6)
164

 
133

Amortization of deferred financing costs
9,601

 
7,810

Payment-in-kind interest
(16,485
)
 
(13,043
)
Structuring fees
(18,055
)
 
(40,064
)
Change in operating assets and liabilities:
 
 
 
Payments for purchases of investments
(1,594,481
)
 
(2,409,231
)
Proceeds from sale of investments and collection of investment principal
1,195,344

 
617,352

(Increase) decrease in interest receivable, net
(2,372
)
 
1,771

Decrease in other receivables
983

 
1,433

Decrease (increase) in prepaid expenses
968

 
(153
)
Decrease in due to broker

 
(43,588
)
Increase in due to Prospect Administration
336

 
509

Increase in due to Prospect Capital Management
1,388

 
21,412

(Decrease) increase in accrued expenses
(1,455
)
 
1,291

Decrease in interest payable
(2,073
)
 
(1,612
)
Increase in other liabilities
319

 
3,240

Net Cash Used in Operating Activities 
(88,389
)
 
(1,547,828
)
 
 
 
 
Financing Activities
 
 
 
Borrowings under Revolving Credit Facility (Note 4)
1,187,000

 
986,500

Principal payments under Revolving Credit Facility (Note 4)
(961,300
)
 
(381,500
)
Repurchase of Convertible Notes, net (Note 5)
(7,658
)
 

Issuance of Prospect Capital InterNotes® (Note 7)
74,967

 
407,208

Redemptions of Prospect Capital InterNotes®, net (Note 7)
(83,475
)
 
(3,341
)
Financing costs paid and deferred
(8,626
)
 
(10,423
)
Proceeds from issuance of common stock, net of underwriting costs
146,085

 
890,331

Offering costs from issuance of common stock
(585
)
 
(1,187
)
Dividends paid
(328,620
)
 
(268,028
)
Net Cash Provided by Financing Activities
17,788

 
1,619,560

 
 
 
 
Total (Decrease) Increase in Cash and Cash Equivalents
(70,601
)
 
71,732

Cash and cash equivalents at beginning of period
134,225

 
203,236

Cash and Cash Equivalents at End of Period
$
63,624

 
$
274,968

 
 
 
 
Supplemental Disclosures
 
 
 
Cash paid for interest
$
119,679

 
$
78,344

 
 
 
 
Non-Cash Financing Activities
 
 
 
Value of shares issued through reinvestment of dividends
$
11,199

 
$
12,336

Value of shares issued to acquire controlled investments
$

 
$
45,914

 

See notes to consolidated financial statements.
5


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


 
 
 
March 31, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(47)
 
 
 
 
 
 
 
 
 
 
 
American Property REIT Corp.(32)
Various / Real Estate
Senior Secured Term Loan (6.00% (LIBOR + 4.00% with 2.00% LIBOR floor) plus 5.50% PIK, due 4/1/2019)(4)
$
106,686

$
106,686

$
106,686

2.9%
Common Stock (272,116 shares)
 
24,769

26,236

0.7%
Net Operating Income Interest (5% of Net Operating Income)
 

10,594

0.3%
 
 
 
 
131,455

143,516

3.9%
Arctic Energy Services, LLC(30)
Wyoming / Oil & Gas Production
Senior Secured Term Loan (12.00% (LIBOR + 9.00% with 3.00% LIBOR floor), due 5/5/2019)(3)(4)
31,640

31,640

31,640

0.9%
Senior Subordinated Term Loan (14.00% (LIBOR + 11.00% with 3.00% LIBOR floor), due 5/5/2019)(3)(4)
20,230

20,230

20,230

0.5%
Class A Units (700 units)
 
9,006

10,046

0.3%
 
 
 
 
60,876

61,916

1.7%
CCPI Inc.(33)
Ohio / Manufacturing
Senior Secured Term Loan A (10.00%, due 12/31/2017)(3)
16,875

16,875

16,875

0.5%
Senior Secured Term Loan B (12.00% plus 7.00% PIK, due 12/31/2017)
8,691

8,691

8,691

0.2%
Common Stock (14,857 shares)
 
8,553

11,308

0.3%
 
 
 
 
34,119

36,874

1.0%
CP Energy Services Inc.(38)
Oklahoma / Oil & Gas Production
Senior Secured Term Loan A to CP Well Testing, LLC (7.00% (LIBOR + 5.00% with 2.00% LIBOR floor), due 4/1/2019)(4)
11,035

11,035

11,035

0.3%
Senior Secured Term Loan B to CP Well Testing, LLC (10.00% (LIBOR + 8.00% with 2.00% LIBOR floor) plus 7.50% PIK, due 4/1/2019)(3)(4)
73,099

73,099

73,099

2.0%
Second Lien Term Loan to CP Well Testing, LLC (9.00% (LIBOR + 7.00% with 2.00% LIBOR floor) plus 9.00% PIK, due 4/1/2019)(4)
15,214

15,214

15,214

0.4%
Common Stock (2,924 shares)
 
15,227

2,290

0.1%
 
 
 
 
114,575

101,638

2.8%
Credit Central Loan Company, LLC(34)
Ohio / Consumer Finance
Subordinated Term Loan (10.00% plus 10.00% PIK, due 6/26/2019)(22)
36,333

36,333

36,333

1.0%
Class A Shares (7,500,000 shares)(22)
 
11,633

10,766

0.3%
Net Revenues Interest (25% of Net Revenues)(22)
 

4,443

0.1%
 
 
 
 
47,966

51,542

1.4%
Echelon Aviation LLC
New York / Aerospace & Defense
Senior Secured Term Loan (11.75% (LIBOR + 9.75% with 2.00% LIBOR floor) plus 2.25% PIK, due 3/31/2022)(4)
40,808

40,808

40,808

1.1%
Class A Shares (11,335,318 shares)
 
19,907

28,133

0.8%
 
 
 
 
60,715

68,941

1.9%
First Tower Finance Company LLC(29)
Mississippi / Consumer Finance
Subordinated Term Loan to First Tower, LLC (10.00% plus 12.00% PIK, due 6/24/2019)(22)
251,246

251,246

251,246

6.8%
Class A Shares (83,729,323 shares)(22)
 
66,473

103,884

2.8%
 
 
 
 
317,719

355,130

9.6%
Freedom Marine Solutions, LLC(8)
Louisiana / Energy
Senior Secured Note to Vessel Company, LLC (18.00%, due 12/12/2016)
3,500

3,500

3,500

0.1%
Senior Secured Note to Vessel Company II, LLC (13.00%, due 11/25/2018)
13,000

12,504

9,499

0.3%
Senior Secured Note to Vessel Company III, LLC (13.00%, due 12/3/2018)
16,000

16,000

14,342

0.4%
Membership Interest (100%)
 
7,807

1,260

—%
 
 
 
 
39,811

28,601

0.8%

See notes to consolidated financial statements.
6


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

 
 
 
March 31, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(47)
 
 
 
 
 
 
 
 
 
 
 
Gulf Coast Machine & Supply Company
Texas / Manufacturing
Senior Secured Term Loan (10.50% (LIBOR + 8.50% with 2.00% LIBOR floor), in non-accrual status effective 1/1/2015, due 10/12/2017)(4)
$
23,196

$
23,000

$
8,199

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


—%
 
 
 
 
48,950

8,199

0.2%
Harbortouch Payments, LLC(43)
Pennsylvania / Business Services
Senior Secured Term Loan A (9.00% (LIBOR + 7.00% with 2.00% LIBOR floor), due 9/30/2017)(3)(4)
129,663

129,663

129,663

3.5%
Senior Secured Term Loan B (5.50% (LIBOR + 4.00% with 1.50% LIBOR floor) plus 5.50% PIK, due 3/31/2018)(4)
137,226

137,226

137,226

3.7%
Senior Secured Term Loan C (13.00% (LIBOR + 9.00% with 4.00% LIBOR floor), due 9/29/2018)(4)
24,011

24,011

24,011

0.6%
Class C Shares (535 shares)
 
8,739

39,372

1.1%
 
 
 
 
299,639

330,272

8.9%
MITY, Inc.(17)
Utah / Durable Consumer Products
Senior Secured Note A (10.00% (LIBOR + 7.00% with 3.00% LIBOR floor), due 3/19/2019)(3)(4)
18,250

18,250

18,250

0.5%
Senior Secured Note B (10.00% (LIBOR + 7.00% with 3.00% LIBOR floor) plus 10.00% PIK, due 3/19/2019)(4)
15,896

15,896

15,896

0.4%
Subordinated Unsecured Note to Broda Enterprises ULC (10.00%, due on demand)(22)
7,200

7,200

7,200

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

13,685

0.4%
 
 
 
 
48,195

55,031

1.5%
National Property REIT Corp.(40)
Various / Real Estate
Senior Secured Term Loan A (6.00% (LIBOR + 4.00% with 2.00% LIBOR floor) plus 5.50% PIK, due 4/1/2019)(4)
172,403

172,403

172,403

4.7%
Senior Secured Term Loan A to ACL Loan Holdings, Inc. (6.00% (LIBOR + 4.00% with 2.00% LIBOR floor) plus 5.50% PIK, due 4/1/2019)(4)
79,462

79,462

79,462

2.1%
Senior Secured Term Loan B to ACL Loan Holdings, Inc. (14.00% (LIBOR + 12.00% with 2.00% LIBOR floor) plus 3.00% PIK, due 4/1/2019)(4)
47,050

47,050

47,050

1.3%
Common Stock (84,567 shares)
 
68,757

70,665

1.9%
Net Operating Income Interest (5% of Net Operating Income)
 

20,221

0.5%
 
 
 
 
367,672

389,801

10.5%
Nationwide Acceptance LLC(36)
Illinois / Consumer Finance
Subordinated Term Loan (10.00% plus 10.00% PIK, due 6/18/2019)(22)
14,820

14,820

14,820

0.4%
Class A Shares (24,029,326 shares)(22)
 
12,919

15,304

0.4%
 
 
 
 
27,739

30,124

0.8%
NMMB, Inc.(24)
New York / Media
Senior Secured Note (14.00%, due 5/6/2016)
3,714

3,714

3,147

0.1%
Senior Secured Note to Armed Forces Communications, Inc. (14.00%, due 5/6/2016)
7,000

7,000

5,931

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


—%
Series B Preferred Stock (5,669 shares)
 
5,669


—%
 
 
 
 
23,583

9,078

0.3%
R-V Industries, Inc.
Pennsylvania / Manufacturing
Senior Subordinated Note (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 6/12/2018)(3)(4)
30,411

30,411

30,411

0.8%
Common Stock (545,107 shares)
 
5,087

8,287

0.2%
Warrant (to purchase 200,000 shares of Common Stock, expires 6/30/2017)
 
1,682

3,041

0.1%
 
 
 
 
37,180

41,739

1.1%

See notes to consolidated financial statements.
7


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

 
 
 
March 31, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(47)
 
 
 
 
 
 
 
 
 
 
 
United Property REIT Corp.(41)
Various / Real Estate
Senior Term Loan (6.00% (LIBOR + 4.00% with 2.00% LIBOR floor) plus 5.50% PIK, due 4/1/2019)(4)
$
58,219

$
58,219

$
58,219

1.6%
Common Stock (70,689 shares)
 
11,946

12,783

0.3%
Net Operating Income Interest (5% of Net Operating Income)
 

10,916

0.3%
 
 
 
 
70,165

81,918

2.2%
Valley Electric Company, Inc.(35)
Washington / Construction & Engineering
Senior Secured Note to Valley Electric Co. of Mt. Vernon, Inc. (8.00% (LIBOR + 5.00% with 3.00% LIBOR floor) plus 2.50% PIK, due 12/31/2017)(3)(4)
10,275

10,275

10,275

0.3%
Senior Secured Note (10.00% plus 8.50% PIK, due 12/31/2018)
21,835

21,835

21,835

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


—%
 
 
 
 
58,314

32,110

0.9%
Vets Securing America, Inc.(9)
North Carolina / Contracting
Secured Promissory Notes to The Healing Staff, Inc. and Vets Securing America, Inc. (15.00%, in non-accrual status effective 12/22/2010, past due)
1,688

1,686


—%
Senior Demand Note to The Healing Staff, Inc. (15.00%, in non-accrual status effective 11/1/2010, past due)
1,170

1,170


—%
Common Stock of The Healing Staff, Inc. (1,000 shares)
 


—%
Common Stock of Vets Securing America, Inc. (1 share)
 
975


—%
 
 
 
 
3,831


—%
Wolf Energy, LLC(12)
Kansas / Oil & Gas Production
Senior Secured Promissory Note secured by assets formerly owned by H&M (18.00%, in non-accrual status effective 4/15/2013, due 4/15/2018)(37)
29,434


1,759

—%
Membership Interest (100%)
 


—%
Net Profits Interest (8% of Equity Distributions)(7)
 

22

—%
 
 
 
 

1,781

—%
Total Control Investments
 
$
1,792,504

$
1,828,211

49.5%
Affiliate Investments (5.00% to 24.99% voting control)(48)
 
 
 
 
 
 
 
 
 
 
 
BNN Holdings Corp.
Michigan / Healthcare
Senior Term Loan A (6.50% (LIBOR + 5.50% with 1.00% LIBOR floor), due 8/29/2019)(3)(4)
$
21,348

$
21,348

$
21,348

0.6%
Senior Term Loan B (11.50% (LIBOR + 10.50% with 1.00% LIBOR floor), due 8/29/2019)(3)(4)
21,795

21,795

21,795

0.6%
Series A Preferred Stock (9,925.455 shares)(13)
 
1,779

2,582

—%
Series B Preferred Stock (1,753.636 shares)(13)
 
448

548

—%
 
 
 
 
45,370

46,273

1.2%
Total Affiliate Investments
 
$
45,370

$
46,273

1.2%

See notes to consolidated financial statements.
8


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

 
 
 
March 31, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
Aderant North America, Inc.
Georgia / Software & Computer Services
Second Lien Term Loan (10.00% (LIBOR + 8.75% with 1.25% LIBOR floor), due 6/20/2019)(4)(16)
$
7,000

$
6,924

$
7,000

0.2%
 
 
 
 
6,924

7,000

0.2%
AFI Shareholder, LLC
(f/k/a Aircraft Fasteners International, LLC)
California / Machinery
Class A Units (32,500 units)
 
396

498

—%
 
 
 
 
396

498

—%
Airmall Inc.(27)
Pennsylvania / Property Management
Escrow Receivable
 
5,880

3,752

0.1%
 
 
 
 
5,880

3,752

0.1%
Ajax Rolled Ring & Machine, LLC(42)
South Carolina / Manufacturing
Escrow Receivable
 

1,731

—%
 
 
 
 

1,731

—%
ALG USA Holdings, LLC
Pennsylvania / Hotels, Restaurants & Leisure
Second Lien Term Loan (10.25% (LIBOR + 9.00% with 1.25% LIBOR floor), due 2/28/2020)(4)(16)
12,000

11,814

12,000

0.3%
 
 
 
 
11,814

12,000

0.3%
American Broadband Holding Company and Cameron Holdings of NC, Inc.
North Carolina / Telecommunication Services
Senior Secured Term Loan B (11.00% (LIBOR + 9.75% with 1.25% LIBOR floor), due 9/30/2018)(3)(4)
74,654

74,654

74,654

2.0%
 
 
 
 
74,654

74,654

2.0%
American Gilsonite Company
Utah / Metal Services & Minerals
Second Lien Term Loan (11.50%, due 9/1/2017)(16)
38,500

38,500

34,133

0.9%
Membership Interest (99.9999%)(15)
 

3,976

0.1%
 
 
 
 
38,500

38,109

1.0%
Apidos CLO IX
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 21.95%)(11)(22)
23,525

20,540

22,521

0.6%
 
 
 
 
20,540

22,521

0.6%
Apidos CLO XI
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 15.67%)(11)(22)
38,340

32,222

33,143

0.9%
 
 
 
 
32,222

33,143

0.9%
Apidos CLO XII
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 17.54%)(11)(22)
44,063

38,864

40,105

1.1%
 
 
 
 
38,864

40,105

1.1%
Apidos CLO XV
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 14.97%)(11)(22)
36,515

34,883

31,891

0.9%
 
 
 
 
34,883

31,891

0.9%
Arctic Glacier U.S.A., Inc.
Minnesota / Food Products
Second Lien Term Loan (10.50% (LIBOR + 9.25% with 1.25% LIBOR floor), due 11/10/2019)(3)(4)
150,000

150,000

148,436

4.0%
 
 
 
 
150,000

148,436

4.0%
Ark-La-Tex Wireline Services, LLC
Louisiana / Oil and Gas Production
Senior Secured Term Loan A (6.50% (LIBOR + 5.50% with 1.00% LIBOR floor), due 4/8/2019)(4)
26,325

26,325

24,497

0.7%
Senior Secured Term Loan B (10.50% (LIBOR + 9.50% with 1.00% LIBOR floor), due 4/8/2019)(4)
26,325

26,325

23,762

0.6%
 
 
 
 
52,650

48,259

1.3%
Armor Holding II LLC
New York / Diversified Financial Services
Second Lien Term Loan (10.25% (LIBOR + 9.00% with 1.25% LIBOR floor), due 12/26/2020)(3)(4)(16)
7,000

6,884

6,538

0.2%
 
 
 
 
6,884

6,538

0.2%

See notes to consolidated financial statements.
9


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

 
 
 
March 31, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
Atlantis Health Care Group (Puerto Rico), Inc.
Puerto Rico / Healthcare
Revolving Line of Credit – $4,000 Commitment (13.00% (LIBOR + 11.00% with 2.00% LIBOR floor), due 8/21/2016)(4)(25)(26)
$
2,350

$
2,350

$
2,350

0.1%
Senior Term Loan (10.00% (LIBOR + 8.00% with 2.00% LIBOR floor), due 2/21/2018)(3)(4)
38,660

38,660

35,340

0.9%
 
 
 
 
41,010

37,690

1.0%
Babson CLO Ltd. 2014-III
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 13.47%)(11)(22)
52,250

51,465

49,927

1.3%
 
 
 
 
51,465

49,927

1.3%
Blue Coat Systems, Inc.
Massachusetts / Software & Computer Services
Second Lien Term Loan (9.50% (LIBOR + 8.50% with 1.00% LIBOR floor), due 6/28/2020)(3)(4)(16)
11,000

10,911

11,000

0.3%
 
 
 
 
10,911

11,000

0.3%
Broder Bros., Co.
Pennsylvania / Textiles, Apparel & Luxury Goods
Senior Secured Notes (10.25% (LIBOR + 9.00% with 1.25% LIBOR floor), due 4/8/2019)(3)(4)(46)
253,675

253,675

253,675

6.9%
 
 
 
 
253,675

253,675

6.9%
Brookside Mill CLO Ltd.
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 19.42%)(11)(22)
26,000

21,956

24,131

0.7%
 
 
 
 
21,956

24,131

0.7%
Caleel + Hayden, LLC
Colorado / Personal & Nondurable Consumer Products
Membership Interest(31)
 

237

—%
 
 
 
 

237

—%
Capstone Logistics Acquisition, Inc.
Georgia / Business Services
Second Lien Term Loan (8.75% (LIBOR + 7.75% with 1.00% LIBOR floor), due 10/7/2022)(3)(4)
65,000

64,377

64,377

1.7%
 
 
 
 
64,377

64,377

1.7%
Cent CLO 17 Limited
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 13.90%)(11)(22)
24,870

20,642

21,432

0.6%
 
 
 
 
20,642

21,432

0.6%
Cent CLO 20 Limited
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 11.98%)(11)(22)
40,275

36,541

36,505

1.0%
 
 
 
 
36,541

36,505

1.0%
Cent CLO 21 Limited
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 12.80%)(11)(22)
48,528

44,488

42,781

1.2%
 
 
 
 
44,488

42,781

1.2%
CIFC Funding 2011-I, Ltd.
Cayman Islands / Diversified Financial Services
Class D Senior Secured Notes (5.25% (LIBOR + 5.00%, due 1/19/2023)(4)(22)
19,000

15,526

18,538

0.5%
Class E Subordinated Notes (7.25% (LIBOR + 7.00%, due 1/19/2023)(4)(22)
15,400

12,959

14,420

0.4%
 
 
 
 
28,485

32,958

0.9%
CIFC Funding 2013-III, Ltd.
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 15.47%)(11)(22)
44,100

36,654

39,473

1.1%
 
 
 
 
36,654

39,473

1.1%
CIFC Funding 2013-IV, Ltd.
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 14.38%)(11)(22)
45,500

37,174

39,114

1.1%
 
 
 
 
37,174

39,114

1.1%

See notes to consolidated financial statements.
10


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

 
 
 
March 31, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
CIFC Funding 2014-IV Investor, Ltd.
Cayman Islands / Diversified Financial Services
Income Notes (Residual Interest, current yield 13.30%)(11)(22)
$
41,500

$
36,256

$
37,237

1.0%
 
 
 
 
36,256

37,237

1.0%
Cinedigm DC Holdings, LLC
New York / Software & Computer Services
Senior Secured Term Loan (11.00% (LIBOR + 9.00% with 2.00% LIBOR floor) plus 2.50% PIK, due 3/31/2021)(4)
67,967

67,917

67,967

1.8%
 
 
 
 
67,917

67,967

1.8%
The Copernicus Group, Inc.
North Carolina / Healthcare
Escrow Receivable
 

121

—%
 
 
 
 

121

—%
Coverall North America, Inc.
Florida / Commercial Services
Senior Secured Term Loan (11.50% (LIBOR + 8.50% with 3.00% LIBOR floor), due 12/17/2017)(3)(4)
50,244

50,244

50,244

1.4%
 
 
 
 
50,244

50,244

1.4%
Crosman Corporation
New York / Manufacturing
Second Lien Term Loan (12.00% (LIBOR + 10.50% with 1.50% LIBOR floor), due 12/30/2019)(3)(4)
40,000

40,000

38,166

1.0%
 
 
 
 
40,000

38,166

1.0%
Deltek, Inc.
Virginia / Software & Computer Services
Second Lien Term Loan (10.00% (LIBOR + 8.75% with 1.25% LIBOR floor), due 10/10/2019)(3)(4)(16)
12,000

11,868

11,868

0.3%
 
 
 
 
11,868

11,868

0.3%
Diamondback Operating, LP
Oklahoma / Oil & Gas Production
Net Profits Interest (15% of Equity Distributions)(7)
 


—%
 
 
 
 


—%
Edmentum, Inc.
Minnesota / Consumer Services
Second Lien Term Loan (12.00% (PRIME + 8.75%), in non-accrual status effective 1/1/2015, due 5/17/2019)(3)(4)(16)
50,000

48,623

25,329

0.7%
 
 
 
 
48,623

25,329

0.7%
Empire Today, LLC
Illinois / Durable Consumer Products
Senior Secured Note (11.375%, due 2/1/2017)(16)
15,700

15,492

13,491

0.4%
 
 
 
 
15,492

13,491

0.4%
Fischbein, LLC
North Carolina / Machinery
Escrow Receivable
 

123

—%
 
 
 
 

123

—%
Fleetwash, Inc.
New Jersey / Business Services
Senior Secured Term Loan A (6.50% (LIBOR + 5.50% with 1.00% LIBOR floor), due 4/30/2019)(4)
24,625

24,625

24,625

0.6%
Senior Secured Term Loan B (10.50% (LIBOR + 9.50% with 1.00% LIBOR floor), due 4/30/2019)(3)(4)
25,000

25,000

25,000

0.7%
Delayed Draw Term Loan – $15,000 Commitment (expires 4/30/2019)(25)



—%
 
 
 
 
49,625

49,625

1.3%
Focus Brands, Inc.
Georgia / Consumer Services
Second Lien Term Loan (10.25% (LIBOR + 9.00% with 1.25% LIBOR floor), due 8/21/2018)(4)(16)
18,000

17,810

18,000

0.5%
 
 
 
 
17,810

18,000

0.5%
Galaxy XV CLO, Ltd.
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 15.33%)(11)(22)
35,025

28,142

30,191

0.8%
 
 
 
 
28,142

30,191

0.8%
Galaxy XVI CLO, Ltd.
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 13.35%)(11)(22)
22,575

19,360

19,523

0.5%
 
 
 
 
19,360

19,523

0.5%

See notes to consolidated financial statements.
11


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

 
 
 
March 31, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
Galaxy XVII CLO, Ltd.
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 12.87%)(11)(22)
$
39,905

$
34,322

$
34,222

0.9%
 
 
 
 
34,322

34,222

0.9%
Global Employment Solutions, Inc.
Colorado / Business Services
Senior Secured Term Loan (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 3/25/2019)(3)(4)
28,393

28,393

28,393

0.8%
 
 
 
 
28,393

28,393

0.8%
GTP Operations, LLC(10)
Texas / Software & Computer Services
Senior Secured Term Loan (10.00% (LIBOR + 5.00% with 5.00% LIBOR floor), due 12/11/2018)(3)(4)
119,683

119,683

119,683

3.2%
 
 
 
 
119,683

119,683

3.2%
Halcyon Loan Advisors Funding 2012-1 Ltd.
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 28.96%)(11)(22)
23,188

20,086

22,303

0.6%
 
 
 
 
20,086

22,303

0.6%
Halcyon Loan Advisors Funding 2013-1 Ltd.
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 20.69%)(11)(22)
40,400

35,921

39,889

1.1%
 
 
 
 
35,921

39,889

1.1%
Halcyon Loan Advisors Funding 2014-1 Ltd.
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 16.99%)(11)(22)
24,500

21,408

22,578

0.6%
 
 
 
 
21,408

22,578

0.6%
Halcyon Loan Advisors Funding 2014-2 Ltd.
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 18.24%)(11)(22)
41,164

36,035

38,777

1.0%
 
 
 
 
36,035

38,777

1.0%
Harley Marine Services, Inc.
Washington / Transportation
Second Lien Term Loan (10.50% (LIBOR + 9.25% with 1.25% LIBOR floor), due 12/20/2019)(3)(4)(16)
9,000

8,848

8,517

0.2%
 
 
 
 
8,848

8,517

0.2%
Hollander Sleep Products, LLC
Florida / Durable Consumer Products
Senior Secured Term Loan (9.00% (LIBOR + 8.00% with 1.00% LIBOR floor), due 10/21/2020)(3)(4)
22,500

22,500

22,500

0.6%
 
 
 
 
22,500

22,500

0.6%
ICON Health & Fitness, Inc.
Utah / Durable Consumer Products
Senior Secured Note (11.875%, due 10/15/2016)(16)
21,850

21,945

21,632

0.6%
 
 
 
 
21,945

21,632

0.6%
ICV-CSI Holdings, LLC
New York / Transportation
Membership Units (1.6 units)
 
1,639

2,539

0.1%
 
 
 
 
1,639

2,539

0.1%
IDQ Holdings, Inc.
Texas / Automobile
Senior Secured Note (11.50%, due 4/1/2017)(16)
12,500

12,381

12,500

0.3%
 
 
 
 
12,381

12,500

0.3%
Ikaria, Inc.
New Jersey / Healthcare
Second Lien Term Loan (8.75% (LIBOR + 7.75% with 1.00% LIBOR floor), due 2/12/2022)(4)(16)
20,000

19,470

20,008

0.5%
 
 
 
 
19,470

20,008

0.5%
Instant Web, LLC
Minnesota / Media
Senior Secured Term Loan A (5.50% (LIBOR + 4.50% with 1.00% LIBOR floor), due 3/28/2019)(4)
146,978

146,978

146,978

4.0%
Senior Secured Term Loan B (12.00% (LIBOR + 11.00% with 1.00% LIBOR floor), due 3/28/2019)(3)(4)
150,100

150,100

150,100

4.1%
Senior Secured Term Loan C (12.75% (LIBOR + 11.75% with 1.00% LIBOR floor), due 3/28/2019)(4)
27,000

27,000

27,000

0.7%
Delayed Draw Term Loan – $16,000 Commitment (expires 5/29/2016)(25)



—%
 
 
 
 
324,078

324,078

8.8%

See notes to consolidated financial statements.
12


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

 
 
 
March 31, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
InterDent, Inc.
California / Healthcare
Senior Secured Term Loan A (6.25% (LIBOR + 5.25% with 1.00% LIBOR floor), due 8/3/2017)(4)
$
125,694

$
125,694

$
125,694

3.4%
Senior Secured Term Loan B (11.25% (LIBOR + 10.25% with 1.00% LIBOR floor), due 8/3/2017)(3)(4)
131,125

131,125

131,125

3.5%
 
 
 
 
256,819

256,819

6.9%
JAC Holding Corporation
Michigan / Transportation
Senior Secured Note (11.50%, due 10/1/2019)(16)
3,000

3,000

3,000

0.1%
 
 
 
 
3,000

3,000

0.1%
JHH Holdings, Inc.
Texas / Healthcare
Second Lien Term Loan (11.25% (LIBOR + 10.00% with 1.25% LIBOR floor) plus 0.50% PIK, due 3/30/2019)(3)(4)
35,252

35,252

35,252

1.0%
 
 
 
 
35,252

35,252

1.0%
LaserShip, Inc.
Virginia / Transportation
Senior Secured Term Loan A (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor), due 3/18/2019)(3)(4)
35,391

35,391

33,110

0.9%
Senior Secured Term Loan B (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor), due 3/18/2019)(3)(4)
21,694

21,694

20,294

0.5%
Delayed Draw Term Loan – $6,000 Commitment (expires 12/31/2016)(25)



—%
 
 
 
 
57,085

53,404

1.4%
LCM XIV Ltd.
Cayman Islands / Diversified Financial Services
Income Notes (Residual Interest, current yield 16.33%)(11)(22)
26,500

23,232

23,722

0.6%
 
 
 
 
23,232

23,722

0.6%
LHC Holdings Corp.
Florida / Healthcare
Revolving Line of Credit – $750 Commitment (9.50% (LIBOR + 8.00% with 1.50% LIBOR floor), due 12/31/2015)(4)(25)(26)



—%
Senior Subordinated Debt (12.50% (LIBOR + 11.00% with 1.50% LIBOR floor), due 12/31/2015)(3)(4)
1,265

1,265

1,265

—%
Membership Interest (125 units)
 
216

193

—%
 
 
 
 
1,481

1,458

—%
Madison Park Funding IX, Ltd.
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 17.86%)(11)(22)
31,110

23,606

25,083

0.7%
 
 
 
 
23,606

25,083

0.7%
Matrixx Initiatives, Inc.
New Jersey / Pharmaceuticals
Senior Secured Term Loan A (7.50% (LIBOR + 6.00% with 1.50% LIBOR floor) plus 2.00% PIK, due 8/9/2018)(3)(4)
36,232

36,232

36,032

1.0%
Senior Secured Term Loan B (12.50% (LIBOR + 11.00% with 1.50% LIBOR floor) plus 2.00% PIK, due 8/9/2018)(3)(4)
40,562

40,562

40,562

1.1%
 
 
 
 
76,794

76,594

2.1%
Maverick Healthcare Equity, LLC
Arizona / Healthcare
Preferred Units (1,250,000 units)
 
1,252

1,997

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


—%
 
 
 
 
1,252

1,997

0.1%
Mountain View CLO 2013-I Ltd.
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest, current yield 18.13%)(11)(22)
43,650

38,274

41,698

1.1%
 
 
 
 
38,274

41,698

1.1%
Nathan's Famous, Inc.
New York / Food Products
Senior Secured Notes (10.00%, due 3/15/2020)(16)
3,000

3,000

3,000

0.1%
 
 
 
 
3,000

3,000

0.1%
NCP Finance Limited Partnership(23)
Ohio / Consumer Finance
Subordinated Secured Term Loan (11.00% (LIBOR + 9.75% with 1.25% LIBOR floor), due 9/30/2018)(3)(4)(16)(22)
16,346

16,098

16,346

0.4%
 
 
 
 
16,098

16,346

0.4%

See notes to consolidated financial statements.
13


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

 
 
 
March 31, 2015 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
New Century Transportation, Inc.
New Jersey / Transportation
Senior Subordinated Term Loan (12.00% (LIBOR + 10.00% with 2.00% LIBOR floor) plus 4.00% PIK, in non-accrual status effective 4/1/2014, due 2/3/2018)(4)
$
980

$
980

$

—%
 
 
 
 
980


—%
Nixon, Inc.
California / Durable Consumer Products
Senior Secured Term Loan (8.75% plus 2.75% PIK, due 4/16/2018)(3)(16)
13,828

13,641

13,641

0.4%
 
 
 
 
13,641

13,641

0.4%
Octagon Investment Partners XV, Ltd.
Cayman Islands / Diversified Financial Services
Income Notes (Residual Interest, current yield 22.03%)(11)(22)
26,901

23,438

24,764

0.7%
 
 
 
 
23,438

24,764

0.7%
Onyx Payments(44)
Texas / Diversified Financial Services
Revolving Line of Credit – $5,000 Commitment (9.00% (LIBOR + 8.00% with 1.00% LIBOR floor), due 9/10/2015)(4)(25)(26)
2,000

2,000

2,000

0.1%
Senior Secured Term Loan A (6.50% (LIBOR + 5.50% with 1.00% LIBOR floor), due 9/10/2019)(3)(4)
53,617

53,617

53,617

1.4%
Senior Secured Term Loan B (13.50% (LIBOR + 12.50% with 1.00% LIBOR floor), due 9/10/2019)(4)
59,389

59,389

59,389

1.6%
 
 
 
 
115,006

115,006

3.1%
Pacific World Corporation
California / Personal & Nondurable Consumer Products
Revolving Line of Credit – $15,000 Commitment (8.00% (LIBOR + 7.00% with 1.00% LIBOR floor), due 9/26/2020)(4)(25)(26)
2,500

2,500

2,500

0.1%
Senior Secured Term Loan A (6.00% (LIBOR + 5.00% with 1.00% LIBOR floor), due 9/26/2020)(4)
99,500

99,500

98,192

2.6%
Senior Secured Term Loan B (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 9/26/2020)(3)(4)
99,500

99,500

96,423

2.6%
 
 
 
 
201,500

197,115

5.3%
Pelican Products, Inc.
California / Durable Consumer Products
Second Lien Term Loan (9.25% (LIBOR + 8.25% with 1.00% LIBOR floor), due 4/9/2021)(4)(16)
17,500

17,483

17,399

0.5%
 
 
 
 
17,483

17,399

0.5%
PGX Holdings, Inc.(28)
Utah / Consumer Services
Second Lien Term Loan (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 9/29/2021)(3)(4)
135,000

135,000

135,000

3.7%
 
 
 
 
135,000

135,000

3.7%
Photonis Technologies SAS
France / Aerospace & Defense
First Lien Term Loan (8.50% (LIBOR + 7.50% with 1.00% LIBOR floor), due 9/18/2019)(4)(16)(22)
10,369

10,131

10,145

0.3%
 
 
 
 
10,131

10,145

0.3%
Pinnacle (US) Acquisition Co. Limited
Texas / Software & Computer Services
Second Lien Term Loan (10.50% (LIBOR + 9.25% with 1.25% LIBOR floor), due 8/3/2020)(4)(16)
7,037

6,885

6,321

0.2%
 
 
 
 
6,885

6,321

0.2%
PrimeSport, Inc.
Georgia / Hotels, Restaurants & Leisure
Revolving Line of Credit – $15,000 Commitment (9.50% (LIBOR + 8.50% with 1.00% LIBOR floor), due 7/31/2015)(4)(25)(26)
5,000