Prospect Capital Corporation · NASDAQ:PSEC
Prospect Capital — Q4 2025 Earnings Presentation
25 slides from Prospect Capital's earnings presentation, Aug 27, 2025
Slide 1: Prospect Capital Corporation
PROSPECT CAPITAL CORPORATION NASDAQ: PSEC MIDDLE MARKET FINANCE 1
Slide 2: Forward-Looking Statements and Disclaimers
FORWARD-LOOKING STATEMENTS AND DISCLAIMERS Certain statements made by us in this presentation that are not historical facts or that relate to future plans, events or performances are forward- looking statements within the meaning of the federal securities laws. Forward-looking statements predict or
Slide 3: Prospect Capital Corporation (PSEC)
PROSPECT CAPITAL CORPORATION (“PSEC”) Over $22B Manager founded in 1988 with same 125+ 20+ Years Invested Since 2004 Employees PSEC History Over 350 senior leadership for Investment Exits past 25 Years(1) 97 12% Investments 0.3% 3.6x Exited Gross IRR Non-Accrual Loan LTM Interest Since Inception(2)
Slide 4: PSEC Overview
PSEC OVERVIEW PSEC is the One of the Longest Running and Largest Listed BDCs PSEC Highlights Investment Approach Operating History 20+ Years ►Primarily focused on senior and secured debt investments, sometimes with Assets $6.8 billion, including 97 equity-linked investments made alongside such debt
Slide 5: PSEC Overview
PSEC OVERVIEW PSEC is the One of the Longest Running and Largest Listed BDCs ►Strategy focused on risk reduction, capital preservation, and avoidance of “yield chasing” investments ►Drivers focused on optimizing our business include: • Rotation of assets into and increased focus on core business of
Slide 6: PSEC Overview
PSEC OVERVIEW PSEC is the One of the Longest Running and Largest Listed BDCs ►95% of total investment income for Q4 FY 2025 from interest income INVESTMENT ►Non-accrual loans remain low at 0.3%(1) PORTFOLIO ►Payment-in-kind interest income reduced by >50% in the 6/30/2025 quarter year over year ►Int
Slide 7: Experienced and Broad Team
EXPERIENCED AND BROAD TEAM With Over 125 Professionals, Prospect has One of the Largest Teams Focused on the Middle Market SENIOR EXECUTIVES John Barry – Chairman and CEO Grier Eliasek – President and COO Kristin Van Dask – CFO Daria Becker – Head of Administration ► Co-founder of PSEC ► Co-founder
Slide 8: Middle-Market Lending Investment Strategy
MIDDLE-MARKET LENDING INVESTMENT STRATEGY Focus on Capital Preservation and Attractive Current Yields ►U.S. companies with EBITDA typically up to $150M • Current focus on sub-$50M EBITDA as less competitive than large-cap direct / syndicated loans MIDDLE ►Sponsor-owned and non-sponsor-owned companie
Slide 9: Middle-Market Lending Select Recent Investments
MIDDLE-MARKET LENDING SELECT RECENT INVESTMENTS Verify Diagnostics INDUSTRY Consumer Finance Healthcare Services Textiles, Apparel & Luxury Goods Pharmaceuticals Sells shoes, sneakers, boots, and Provides advanced molecular Provides comprehensive BUSINESS DESCRIPTION Provides consumer credit sandals
Slide 10: Superior Deal Flow and Disciplined Execution
SUPERIOR DEAL FLOW AND DISCIPLINED EXECUTION 3,000+ Opportunities Sourced Annually with <2% of Initially Screened Investments Advancing to Closing SYSTEMATIC COLD-CALLING MANAGEMENT CONTACT IN-BOUND CALLING EFFORT EFFORT RELATIONSHIPS DATABASE OPPORTUNITIES ► PE sponsors ► Small-to-mid cap ► From pa
Slide 11: Portfolio Overview
PORTFOLIO OVERVIEW ► $6.8 billion total assets, including 97 investments ► 85% of portfolio in senior and secured investments (majority first lien) (1) ► 12.2% annualized current yield across performing interest bearing investments ► 9.6% annualized current yield across all investments ► 95% interes
Slide 12: Rigorous and Independent Valuation Process
RIGOROUS AND INDEPENDENT VALUATION PROCESS ►Every investment valued quarterly and has been valued since inception at fair value by a third-party INDEPENDENT THIRD-PARTY ►Third-party valuation agents complete a review of all investments on an independent basis (i.e., not VALUATION merely on a “positi
Slide 13: Highlights
PROSPECT CAPITAL HIGHLIGHTS
Slide 14: Highlights
HIGHLIGHTS I.1 SIGNIFICANT SCALE PROVIDES COMPETITIVE ADVANTAGE I.2 BROAD PORTFOLIO ACROSS 33 DIFFERENT INDUSTRIES I.3 LOW NON-ACCRUALS I.4 STRONG EQUITY CAPITALIZATION AND FLEXIBLE FUNDING I.5 RESPONSIBLE LONG-TERM, MATCHED-BOOK FUNDING I.6 SIGNIFICANT UNENCUMBERED ASSETS I.7 DISCIPLINED FINANCIAL
Slide 15: Significant Scale Provides Competitive Advantage
SIGNIFICANT SCALE PROVIDES COMPETITIVE ADVANTAGE PSEC is One of the Longest Running and Largest Listed BDCs with $8.1 Billion of Capital (1) Total Assets Total Equity(2) $6.8B $4.6B $3.4B $1.6B Listed Peer Average PSEC Listed Peer Average PSEC Source: PSEC analysis of S&P Capital IQ data and company
Slide 16: Broad Portfolio Across 33 Different Industries
BROAD PORTFOLIO ACROSS 33 DIFFERENT INDUSTRIES PSEC’s Portfolio at Cost (6/30/2025) Real Estate 13.8% Other 20.2% Health Care Providers & Automobile Components 1.7% Services 11.5% Media 1.8% Pharmaceuticals 1.9% Health Care Technology 2.0% Food Products 2.2% Software 2.7% Consumer Finance 11.1% Air
Slide 17: Low Non-Accruals
LOW NON-ACCRUALS PSEC’s Non-Accrual Loans Have Remained Low at 0.3% as of 6/30/2025 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.2% 0.2% 0.4% 0.3% 0.5% 0.4% 0.6% 0.3% 0.0% Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 Mar-25 Jun-25 Source: Company filings, management. As a percentage o
Slide 18: Strong Equity Capitalization and Flexible Funding
STRONG EQUITY CAPITALIZATION AND FLEXIBLE FUNDING Capitalization MULTIPLE INVESTOR BASES ►$2.1 billion credit facility from 48 lenders $0.9B Secured Debt ►Institutional bondholders and retail bondholders ►Listed and non-listed perpetual preferred holders $1.2B Unsecured Notes FLEXIBLE FUNDING ►$4.6
Slide 19: Responsible Long-Term, Matched-Book Funding
RESPONSIBLE LONG-TERM, MATCHED-BOOK FUNDING ►Repaid $156M March 2025 convertible note at maturity ►Repaid remaining January 2026 institutional note ($400M original) in June 2025 ►$2.1B credit facility does not mature until June 2029 ►$1.3B undrawn credit facility plus cash and cash equivalents $6,00
Slide 20: Significant Unencumbered Assets
SIGNIFICANT UNENCUMBERED ASSETS $4.2 Billion of Unencumbered Assets (62% of Total Assets) Prospect Capital Corporation (PSEC) • Unencumbered assets • Unsecured debt Prospect Capital Funding LLC (SPV credit facility borrower) • Encumbered assets Unecumbered Assets Encumbered Assets • Secured debt Sou
Slide 21: Disciplined Financial Policy with Low Leverage and High Equity
DISCIPLINED FINANCIAL POLICY WITH LOW LEVERAGE AND HIGH EQUITY 69% Capitalization from Preferred Equity and Common Equity as of 6/30/2025 Net Debt 0.49x 0.47x 0.46x 0.46x 0.45x 0.44x 0.40x 0.41x 0.44x Leverage(1) Capitalization (% of Total) 100% 7% 4% 7% 13% 12% 11% 12% 10% 13% 90% 24% 25% 23% 31% 8
Slide 22: Lower Leverage Than Listed BDC Peers
LOWER LEVERAGE THAN LISTED BDC PEERS PSEC has Lower Debt and Higher Book Value of Total Equity Relative to its Listed BDC Peers Net Debt / Total Equity(1) % of Total Capitalization Total Debt Total Debt 1.04x 50% 31% Total Equity 69% Total Equity 0.44x 50% Listed Peer Average PSEC Listed Peer Averag
Slide 23: Successful Track Record of Repaying Unsecured Bondholders
SUCCESSFUL TRACK RECORD OF REPAYING UNSECURED BONDHOLDERS PSEC Has Repaid $5.1 Billion of Unsecured Bond Tranches over Its 20+ Year History $5,099M 881 Tranches $1,722M 865 Tranches $1,782M 8 Tranches $1,594M 8 Tranches Unsecured Debt Repaid Non-Convertible Notes Convertible Notes InterNotes Source:
Slide 24: Significant Insider Ownership
SIGNIFICANT INSIDER OWNERSHIP PSEC has Significant Insider Ownership Compared to the Listed BDC Peer Group Insider Ownership – Percentage of Common Stock Insider Ownership – Based on NAV 28.5% $852.6M 4.1% $30.8M Listed Peer Average PSEC Listed Peer Average PSEC Source: For PSEC as of 6/30/2025 and
Slide 25: $4.6B Common Dividends Declared Since IPO
$4.6B COMMON DIVIDENDS DECLARED SINCE IPO $5,000 $4,570 $4,500 $4,366 $4,072 $4,000 $3,780 $3,497 $3,500 $3,217 $2,947 $3,000 $2,683 Millions $2,421 $2,500 $2,094 $2,000 $1,737 $1,500 $1,370 $918 $1,000 $577 $500 $388 $264 $101 $156 $1 $23 $55 $6 $0 Source: Company filings, management. Includes past