Prospect Capital Corporation (NASDAQ:PSEC) released financial report for its fourth fiscal quarter closed June 30, 2017. For the quarter, the company recorded net investment income of $69.7 million, carrying out company’s plan to lower structuring fees, management fees and risk decreased originations. Executing company’s plan to preserve capital, lower risk, and avoid “chasing yield” via investments deemed extremely risky with a poor risk/return profile at this juncture in the economic cycle, they lowered originations this quarter to around half the levels of the previous quarter.
The company remain committed to its historic credit discipline. It currently has a strong pipeline of prospective investments in their target range for yield and credit quality. They consider their disciplined approach to credit will serve them well in the coming years, like it has served well in past years.
In the June 2017 quarter, Prospect Capital implemented their objective to lessen risk by lowering their net debt to equity ratio to 70.5% from 75.6% at March 2017 at June 2017. For the quarter, net income was $51.2 million, a jump of $0.09 over the March 2017 quarter. Improvement in unrealized depreciation in consumer finance, structured credit and Lower management fees investments and lower management fees contributed to increased net income.
The interest income as a fraction of total investment income surged to 96.3% in the quarter, further lowering the contribution of one-time structuring costs in favor of recurring interest income. For FY2017, NII came at $306.1 million while net income came at $252.9 million.
Prospect announced payout of $0.06 a share for record holders between September 2017 and September 29, 2017 with payment date of October 19, 2017. Also, it announced $0.06 a share for October 2017 to October 31 record holders with payment date of November 22, 2017. These payouts mark company’s 110th and 111th successive cash distributions to shareholders.