What Is Going On With Prospect Capital Corporation (NASDAQ:PSEC)?

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Prospect Capital Corporation (NASDAQ:PSEC) issued financial report for its first fiscal quarter closed September 30, 2017. For the reported quarter, the company recorded net investment income of $63.7 million, in line with company’s current dividend rate.

The details

Continuing with its plan to reduce risk and preserve capital, avoid “chasing yield” via investments appeared extremely risky with a poor risk/return profile at this juncture of the economic cycle, the firm remain committed to its remarkable credit discipline with originations in the respective quarter steady as compared to the levels in the preceding quarter. The company has a strong pipeline of potential investments in its target range for yield and credit quality. They consider their disciplined plan to credit will serve them well in the imminent years, just as that it has served them well in previous years.

In the September 2017 quarter, Prospect Capital maintained a net debt to equity ratio of 71.6%, a drop of 2% from September 2016. Net income came at $11.97 million, a drop of $0.11 from the previous quarter. Unrealized depreciation within company’s structured credit investments and a reduced interest-earning asset base in the reported period over the previous led to decreased NI.

Prospect Capital interest income as a fraction of total investment income came at 93.4% in the September quarter. The company has poured money in structured credit investments with discrete standalone financings non-recourse to company and with their risk limited in each instance to net investment amount.

In the last trading session, the stock price of Prospect Capital gained more than 2% to close the day at $6.16. The gains came at a share volume of 6.80 million compared to average share volume of 3.77 million. After the recent gains, the market cap of firm was noted at $2.22 billion. The stock is trading closer to its 52-week low of $5.51.

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