Private Credit Portfolio Analysis | Prospect Capital Reports Q1 2025 Results with Net Loss and Declining NAV
- Editor
- Nov 8, 2024
- 2 min read
Updated: Jan 8
What's New: Prospect Capital Corp. reported its Q1 2025 results, revealing a net loss of $134.01 million for the quarter ended September 30, 2024, compared to a net income of $116.66 million in the same quarter of the previous year. The fund's net asset value (NAV) per share decreased to $8.10 as of September 30, 2024, down from $8.74 at the end of the previous quarter (June 30, 2024).
Portfolio Dynamics:
The fund's total investments at fair value decreased to $7.48 billion as of September 30, 2024, from $7.72 billion on June 30, 2024.
Unrealized losses on investments were $123.77 million for Q1 2025, compared to unrealized gains of $198.63 million in the same quarter of the previous year.
Realized losses on investments were $100.37 million in Q1 2025, compared to realized losses of $207.49 million in Q1 2024.
Investment Activity :
The fund made new investments totaling $255.98 million during Q1 2025, compared to $100.14 million in the same quarter of the previous year.
Proceeds from the disposition of investments were $289.20 million in Q1 2025, up from $93.45 million in Q1 2024.
Net reductions to subordinated structured notes and related investment cost were $21.35 million in Q1 2025, compared to $18.22 million in Q1 2024.
Capital Structure:
The fund's line of credit balance decreased to $547.23 million as of September 30, 2024, from $794.80 million on June 30, 2024.
Prospect Capital issued $101.73 million of unsecured debt through its Prospect Capital InterNotes program during Q1 2025.
The fund raised $53.80 million from the issuance of redeemable preferred stock in Q1 2025, compared to $72.65 million in Q1 2024.
Performance Profile:
Interest income from investments increased to $33.14 million in Q1 2025, up from $30.28 million in Q1 2024.
The fund paid dividends of $93.20 million during Q1 2025, slightly higher than the $92.80 million paid in Q1 2024.
Net cash provided by operating activities increased to $173.73 million in Q1 2025, up from $95.08 million in Q1 2024.
Risk & Quality:
Total assets decreased to $7.59 billion as of September 30, 2024, from $7.86 billion on June 30, 2024.
Total liabilities decreased to $2.47 billion as of September 30, 2024, from $2.56 billion on June 30, 2024.
The fund's cash and cash equivalents decreased to $57.02 million as of September 30, 2024, from $85.87 million on June 30, 2024.
The Wrap: Prospect Capital Corp. faced challenges in Q1 2025, with a significant net loss and declining NAV per share. While the fund increased its investment activity and saw higher interest income, it also experienced substantial unrealized and realized losses on investments. The fund's balance sheet contracted, with decreases in both assets and liabilities. Management's focus on debt issuance and preferred stock offerings suggests efforts to maintain liquidity and support investment activities in a challenging environment.
Comments