PROSPECT CAPITAL CORP

Previous wording

Prospect is a financial services company that primarily lends to and invests in middle market privately-held companies. We are a closed-end investment company incorporated in Maryland. We have elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). As a BDC, we have elected to be treated as a regulated investment company (“RIC”), under Subchapter M of the Internal Revenue Code of 1986 (the “Code”). We were organized on April 13, 2004, and were funded in an initial public offering completed on July 27, 2004.

Current wording

Prospect is a financial services company that primarily lends to and invests in middle market privately-held companies. We are a closed-end investment company incorporated in Maryland. We have elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). As a BDC, we have elected to be treated as a regulated investment company (“RIC”), under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). We were organized on April 13, 2004, and were funded in an initial public offering completed on July 27, 2004.

Previous wording

•Lending to Companies - We make directly-originated, agented loans to companies, including companies which are controlled by private equity sponsors and companies that are not controlled by private equity sponsors (such as companies that are controlled by the management team, the founder, a family or public shareholders). This debt can take the form of first lien, second lien, unitranche or unsecured loans. These loans typically have equity subordinate to our loan position. We may also purchase selected equity co-investments in such companies. In addition to directly-originated, agented loans, we also invest in senior and secured loans syndicated loans and high yield bonds that have been sold to a club or syndicate of buyers, both in the primary and secondary markets. These investments are often purchased with a long term, buy-and-hold outlook, and we often look to provide significant input to the transaction by providing anchoring orders. Historically, this strategy has comprised approximately 40%-60% of our portfolio.

Current wording

•Lending to Companies - We make directly-originated, agented loans to companies, including companies which are controlled by private equity sponsors and companies that are not controlled by private equity sponsors (such as companies that are controlled by the management team, the founder, a family or public shareholders). This debt can take the form of first lien, second lien, unitranche or unsecured loans. These loans typically have equity subordinate to our loan position. We may also purchase selected equity co-investments in such companies. In addition to directly-originated, agented loans, we also invest in senior and secured loans syndicated loans and high yield bonds that have been sold to a club or syndicate of buyers, both in the primary and secondary markets. These investments are often purchased with a long term, buy-and-hold outlook, and we often look to provide significant input to the transaction by providing anchoring orders.

Previous wording

•Lending to Companies and Purchasing Controlling Equity Positions in Such Companies - This strategy involves purchasing senior and secured yield-producing debt and controlling equity positions in operating companies across various industries. We believe this strategy provides enhanced certainty of closure to sellers and the opportunity for management to continue on in their current roles. These investments are often structured in tax-efficient partnerships, enhancing returns. Historically, this strategy has comprised approximately 15%-25% of our portfolio.

Current wording

•Lending to Companies and Purchasing Controlling Equity Positions in Such Companies - This strategy involves purchasing senior and secured yield-producing debt and controlling equity positions in operating companies across various industries. We believe this strategy provides enhanced certainty of closing to sellers and the opportunity for management to continue on in their current roles. These investments are often structured in tax-efficient partnerships, enhancing returns.

Previous wording

•Purchasing Controlling Equity Positions and Lending to Real Estate Companies - We purchase debt and controlling equity positions in tax-efficient real estate investment trusts (“REIT” or “REITs”). The real estate investments of National Property REIT Corp. (“NPRC”) are in various classes of developed and occupied real estate properties that generate current yields, including multi-family properties, and student housing. NPRC seeks to identify properties that have historically significant occupancy rates and recurring cash flow generation. NPRC generally co-invests with established and experienced property management teams that manage such properties after acquisition. Additionally, NPRC makes investments in rated secured structured notes (primarily debt of structured credit). NPRC also purchases loans originated by certain consumer loan facilitators. It purchases each loan in its entirety (i.e., a “whole loan”). The borrowers are consumers, and the loans are typically serviced by the facilitators of the loans. Historically, this overall investment strategy has comprised approximately 10%-20% of our business.

Current wording

•Purchasing Controlling Equity Positions and Lending to Real Estate Companies - We purchase debt and controlling equity positions in tax-efficient real estate investment trusts (“REIT” or “REITs”). The real estate investments of National Property REIT Corp. (“NPRC”) are in various classes of developed and occupied real estate properties that generate current yields, including multi-family properties, student housing and senior living. NPRC seeks to identify properties that have historically significant occupancy rates and recurring cash flow generation. NPRC generally co-invests with established and experienced property management teams that manage such properties after acquisition. Additionally, NPRC makes investments in rated secured structured notes (primarily debt of structured credit). NPRC also purchases loans originated by certain consumer loan facilitators. It purchases each loan in its entirety (i.e., a “whole loan”). The borrowers are consumers, and the loans are typically serviced by the facilitators of the loans.

Previous wording

•Investing in Structured Credit - We make investments in structured credit, often taking a significant position in subordinated structured notes (equity) and rated secured structured notes (debt). The underlying portfolio of each structured credit investment is diversified across approximately 100 to 200 broadly syndicated loans and does not have direct exposure to real estate, mortgages, or consumer-based credit assets. The structured credit portfolios in which we invest are managed by established collateral management teams with many years of experience in the industry. Historically, this overall strategy has comprised approximately 10%-20% of our portfolio.

Current wording

•Investing in Structured Credit - We make investments in structured credit, often taking a significant position in subordinated structured notes (equity). The underlying portfolio of each structured credit investment is diversified across approximately 100 to 200 broadly syndicated loans and does not have direct exposure to real estate, mortgages, or consumer-based credit assets. The structured credit portfolios in which we invest are managed by established collateral management teams with many years of experience in the industry.

Previous wording

We hold many of our control investments in a two-tier structure consisting of a holding company and one or more related operating companies for tax purposes. These holding companies serve various business purposes including concentration of management teams, optimization of third-party borrowing costs, improvement of supplier, customer, and insurance terms, and enhancement of co-investments by the management teams. In these cases, our investment, which is generally equity in the holding company, the holding company’s equity investment in the operating company and any debt from us directly to the operating company structure represents our total exposure for the investment. As of March 31, 2024, as shown in our Consolidated Schedule of Investments, the cost basis and fair value of our investments in controlled companies was $3,222,326 and $3,814,119, respectively. This structure gives rise to several of the risks described in our public documents and highlighted elsewhere in this Quarterly Report. We consolidate all wholly owned and substantially wholly owned holding companies formed by us for the purpose of holding our controlled investments in operating companies. There is no significant effect of consolidating these holding companies as they hold minimal assets other than their investments in the controlled operating companies. Investment company accounting prohibits the consolidation of any operating companies.

Current wording

We hold many of our control investments in a two-tier structure consisting of a holding company and one or more related operating companies for tax purposes. These holding companies serve various business purposes including concentration of management teams, optimization of third-party borrowing costs, improvement of supplier, customer, and insurance terms, and enhancement of co-investments by the management teams. In these cases, our investment, which is generally equity in the holding company, the holding company’s equity investment in the operating company and any debt from us directly to the operating company structure represents our total exposure for the investment. As of September 30, 2024, as shown in our Consolidated Schedule of Investments, the cost basis and fair value of our investments in controlled companies was $3,326,598 and $3,744,510, respectively. This structure gives rise to several of the risks described in our public documents and highlighted elsewhere in this Quarterly Report. We consolidate all wholly owned and substantially wholly owned holding companies formed by us for the purpose of holding our controlled investments in operating companies. There is no significant effect of consolidating these holding companies as they hold minimal assets other than their investments in the controlled operating companies. Investment company accounting prohibits the consolidation of any operating companies.

Previous wording

We seek to be a long-term investor with our portfolio companies. During the three months ended March 31, 2024 we acquired $56,500 of new investments, completed follow-on investments in existing portfolio companies totaling approximately $125,954, funded $4,371 of revolver advances, and recorded PIK interest of $32,690, resulting in gross investment originations of $219,515. During the three months ended March 31, 2024 we received full repayments totaling $31,874, received $47,022 in sales, received $2,046 of revolver paydowns, and received $33,530 in partial prepayments, scheduled principal amortization payments, and return of capital distributions, resulting in repayments of $73,677, net of $40,795 realized losses associated with such dispositions.

Current wording

We seek to be a long-term investor with our portfolio companies. During the three months ended September 30, 2024 we acquired$213,056 of new investments, completed follow-on investments in existing portfolio companies totaling approximately$32,875, funded$6,219 of revolver advances, and recorded PIK interest of $38,489, resulting in gross investment originations of$290,639. During the three months ended September 30, 2024 we received full repayments totaling $255,646, received$0 in sales, received $616 of revolver paydowns, and received $26,066 in partial prepayments, scheduled principal amortization payments, and return of capital distributions, resulting in repayments of approximately$282,328.

Previous wording

During the three months ended March 31, 2024 we repaid $2,965 aggregate principal amount of Prospect Capital InterNotes® at par in accordance with the Survivor’s Option, as defined in the InterNotes® Offering prospectus. As a result of these transactions, we recorded a loss in the amount of the unamortized debt issuance costs. The net loss on the extinguishment of Prospect Capital InterNotes® in the three months ended March 31, 2024 was $68.

Current wording

During the three months ended September 30, 2024 we repaid $2,500 aggregate principal amount of Prospect Capital InterNotes® at par in accordance with the Survivor’s Option, as defined in the InterNotes® Offering prospectus. As a result of these transactions, we recorded a loss in the amount of the unamortized debt issuance costs. The net loss on the extinguishment of Prospect Capital InterNotes® in the three months ended September 30, 2024 was $59.

Previous wording

During the three months ended March 31, 2024 we issued $55,573 aggregate principal amount of Prospect Capital InterNotes® with a weighted average stated interest rate of 6.97%, to extend our borrowing base. The newly issued notes mature between January 15, 2027 and March 15, 2034 and generated net proceeds of $54,736.

Current wording

During the three months ended September 30, 2024 we issued$101,734 aggregate principal amount of Prospect Capital InterNotes® with a weighted average stated interest rate of 7.14%, to extend our borrowing base. The newly issued notes mature between July 15, 2027 and October 15, 2034 and generated net proceeds of$100,266.

Previous wording

On January 18, 2024, February 20, 2024 and March 20, 2024, we issued 561,852,578,398, and 632,893 shares of our common stock in connection with the dividend reinvestment plan, respectively.

Current wording

On July 18, 2024, August 21, 2024 and September 19, 2024 we issued 571,807, 650,357, and 611,918 shares of our common stock in connection with the dividend reinvestment plan, respectively.

Previous wording

During the three months ended March 31, 2024, 245,219 shares of our Series A1 Preferred Stock, 47,269 shares of our Series A3 Preferred Stock, 67,259 shares of our Series M1 Preferred Stock, and 22,468 shares of our Series M3 Preferred Stock were converted to 1,583,622 shares of our common stock, in connection with Holder Optional Conversions and Optional Redemptions Following Death of a Holder, resulting in a loss from redemption of preferred stock of $1,192.

Current wording

During the three months ended September 30, 2024, 683,012 shares of our Series A1 Preferred Stock, 308,914 shares of our Series A3 Preferred Stock,292,649 shares of our Series M1 Preferred Stock, and 217,979 shares of our Series M3 Preferred Stock were converted to 6,879,683 shares of our common stock, in connection with Holder Optional Conversions and Optional Redemptions Following Death of a Holder, resulting in a loss from redemption of preferred stock of $1,688.

Previous wording

During the three months ended March 31, 2024 we issued 856,668 shares of our Series A3 Preferred Stock for net proceeds of $19,275, 100,886 shares of our Series M3 Preferred Stock for net proceeds of $2,446, 1,580,456 shares of Series A4 Preferred Stock for net proceeds of $35,560, 237,810 shares of Series M4 Preferred Stock for net proceeds of $5,767, each excluding offering costs and preferred stock dividend reinvestment.

Current wording

During the three months ended September 30, 2024 we issued 87,237 shares of our Series A3 Preferred Stock for net proceeds of$1,963,17,000 shares of our Series M3 Preferred Stock for net proceeds of $412, 2,033,017 shares of Series A4 Preferred Stock for net proceeds of$45,743, 234,027 shares of Series M4 Preferred Stock for net proceeds of$5,680, each excluding offering costs and preferred stock dividend reinvestment.

Previous wording

In connection with our Preferred Stock Dividend Reinvestment Plan, we issued additional Series A1 Preferred Stock, Series A3 Preferred Stock, Series M1 Preferred Stock, and Series M3 Preferred Stock of 12,618, 12,716, and 12,846 throughout January, Februrary, and March.

Current wording

In connection with our Preferred Stock Dividend Reinvestment Plan, we issued additional Series A1 Preferred Stock, Series A3 Preferred Stock, Series A4 Preferred Stock, Series M1 Preferred Stock, Series M3 Preferred Stock, and Series M4 Preferred Stock of 13,432, 12,954, and 13,771 throughout July, August, and September , respectively.

Previous wording

At March 31, 2024, we have $7,806,712, or 208.6%, of our net assets applicable to common shares invested in 122 long-term portfolio investments and CLOs.

Current wording

At September 30, 2024, we have $7,476,641, or 213.0%, of our net assets applicable to common shares invested in 117 long-term portfolio investments and CLOs.

Previous wording

Our annualized current yield was 12.1% and 13.3% as of March 31, 2024 and June 30, 2023, respectively, across all performing interest bearing investments, excluding equity investments and non-accrual loans. Our annualized current yield was 9.7% and 10.7% as of March 31, 2024 and June 30, 2023, respectively, across all investments. In many of our portfolio companies we hold equity positions, ranging from minority interests to majority stakes, which we expect over time to contribute to our investment returns. Some of these equity positions include features such as contractual minimum internal rates of returns, preferred distributions, flip structures and other features expected to generate additional investment returns, as well as contractual protections and preferences over junior equity, in addition to the yield and security offered by our cash flow and collateral debt protections.

Current wording

Our annualized current yield was 11.8% and 12.1% as of September 30, 2024 and June 30, 2024, respectively, across all performing interest bearing investments, excluding equity investments and non-accrual loans. Our annualized current yield was 9.7%and 9.8% as of September 30, 2024 and June 30, 2024, respectively, across all investments. In many of our portfolio companies we hold equity positions, ranging from minority interests to majority stakes, which we expect over time to contribute to our investment returns. Some of these equity positions include features such as contractual minimum internal rates of returns, preferred distributions, flip structures and other features expected to generate additional investment returns, as well as contractual protections and preferences over junior equity, in addition to the yield and security offered by our cash flow and collateral debt protections.

Previous wording

As of March 31, 2024, we own controlling interests in the following portfolio companies: CP Energy Services Inc. (“CP Energy”); Credit Central Loan Company, LLC (“Credit Central”); Echelon Transportation, LLC (“Echelon”); First Tower Finance Company LLC (“First Tower Finance”); Freedom Marine Solutions, LLC (“Freedom Marine”); InterDent, Inc. (“InterDent”); Kickapoo Ranch Pet Resort (“Kickapoo”); MITY, Inc. (“MITY”); NPRC; Nationwide Loan Company LLC (“Nationwide”); NMMB, Inc. (“NMMB”); Pacific World Corporation (“Pacific World”); R-V Industries, Inc. (“R-V”); Universal Turbine Parts, LLC (“UTP”); USES Corp. (“United States Environmental Services” or “USES”); and Valley Electric Company, Inc. (“Valley Electric”). In June 2019, CP Energy purchased a controlling interest of the common equity of Spartan Energy Holdings, Inc. (“Spartan Holdings”), which owns 100% of Spartan Energy Services, LLC (“Spartan”), a portfolio company of Prospect with $35,779 in senior secured term loans (the “Spartan Term Loan A”) due to us as of March 31, 2024. As a result of CP Energy’s purchase, and given Prospect’s controlling interest in CP Energy, we report our investments in Spartan as control investment. Spartan remains the direct borrower and guarantor to Prospect for the Spartan Term Loan A.

Current wording

As of September 30, 2024, we own controlling interests in the following portfolio companies: CP Energy Services Inc. (“CP Energy”); Credit Central Loan Company, LLC (“Credit Central”); Echelon Transportation, LLC (“Echelon”); First Tower Finance Company LLC (“First Tower Finance”); Freedom Marine Solutions, LLC (“Freedom Marine”); InterDent, Inc. (“InterDent”); Kickapoo Ranch Pet Resort (“Kickapoo”); MITY, Inc. (“MITY”); NPRC; Nationwide Loan Company LLC (“Nationwide”); NMMB, Inc. (“NMMB”); Pacific World Corporation (“Pacific World”); R-V Industries, Inc. (“R-V”); Universal Turbine Parts, LLC (“UTP”); USES Corp. (“United States Environmental Services” or “USES”); and Valley Electric Company, Inc. (“Valley Electric”). In June 2019, CP Energy purchased a controlling interest of the common equity of Spartan Energy Holdings, Inc. (“Spartan Holdings”), which owns 100% of Spartan Energy Services, LLC (“Spartan”), a portfolio company of Prospect with $43,321 and$41,177 in first lien term loans (the “Spartan Term Loan A”) due to us as of September 30, 2024 and June 30, 2024, respectively. As a result of CP Energy’s purchase, and given Prospect’s controlling interest in CP Energy, we report our investments in Spartan as control investment. Spartan remains the direct borrower and guarantor to Prospect for the Spartan Term Loan A.

Previous wording

(1) Our SSN investments do not have industry concentrations and as such have been separated in the tables above. As of March 31, 2024 and June 30, 2023, Structured Finance includes $254,129 and $236,248, respectively, of senior secured debt investments held through our investment in NPRC and its wholly-owned subsidiary.

Current wording

(1) Our SSN investments do not have industry concentrations and as such have been separated in the tables above. As of September 30, 2024 and June 30, 2024, Structured Finance includes $190,500 and $190,500, respectively, of senior secured term loan investments held through our investment in NPRC and its wholly-owned subsidiary related to its rated secured structured notes.

Previous wording

Our gross investment activity for the nine months ended March 31, 2024 and March 31, 2023 are presented below:

Current wording

Our gross investment activity for the three months ended September 30, 2024 and September 30, 2023 are presented below:

Previous wording

The Board of Directors looked at several factors in determining where within the range to value the asset including: recent operating and financial trends for the asset, independent ratings obtained from third parties, comparable multiples for recent sales of companies within the industry and discounted cash flow models for our investments in CLOs. The composite of all these various valuation techniques, applied to each investment, was a total valuation of $7,806,712.

Current wording

The Board of Directors looked at several factors in determining where within the range to value the asset including: recent operating and financial trends for the asset, independent ratings obtained from third parties, comparable multiples for recent sales of companies within the industry and discounted cash flow models for our investments in CLOs. The composite of all these various valuation techniques, applied to each investment, was a total valuation of $7,476,641.

Previous wording

Control investments offer increased risk and reward over straight debt investments. Operating results and changes in market multiples can result in dramatic changes in values from quarter to quarter. Significant downturns in operations can further result in our looking to recoveries on sales of assets rather than the enterprise value of the investment. Equity positions in our portfolio are susceptible to potentially significant changes in value, both increases as well as decreases, due to changes in operating results and market multiples. Our controlled companies discussed below experienced such changes and we recorded corresponding fluctuations in valuations during the nine months ended March 31, 2024.

Current wording

Control investments offer increased risk and reward over straight debt investments. Operating results and changes in market multiples can result in dramatic changes in values from quarter to quarter. Significant downturns in operations can further result in our looking to recoveries on sales of assets rather than the enterprise value of the investment. Equity positions in our portfolio are susceptible to potentially significant changes in value, both increases as well as decreases, due to changes in operating results and market multiples. Our controlled companies discussed below experienced such changes and we recorded corresponding fluctuations in valuations during the three months ended September 30, 2024.

Previous wording

The fair value of our investment in First Tower decreased to $590,436 as of March 31, 2024, representing a premium of $144,778 to its amortized cost basis compared to a fair value of $598,382 as of June 30, 2023, representing a premium of $171,310 to its amortized cost. The decrease in premium to amortized cost was driven by a decline in financial performance and increased debt in the capital structure.

Current wording

The fair value of our investment in InterDent was $403,727 as of September 30, 2024, a premium of $35,409 to its amortized cost basis compared to a fair value of $463,883 as of June 30, 2024, a premium of $102,337 to its amortized cost. The decrease in premium to amortized cost was driven by a decline in financial performance and increased debt in the capital structure.

Previous wording

During the nine months ended March 31, 2024, we provided $183,299 of debt financing and $4,600 of equity financing to NPRC to fund real estate capital expenditures, provide working capital, and to fund purchases of rated secured structured notes.

Current wording

During the three months ended September 30, 2024, we provided $21,615 of debt financing to NPRC to fund real estate capital expenditures, provide working capital, and to fund purchases of rated secured structured notes.

Previous wording

During the nine months ended March 31, 2024, we received partial repayments of $62,950 of our loans previously outstanding with NPRC and its wholly owned subsidiary.

Current wording

During the three months ended September 30, 2024, we received partial repayments of $14,000 of our loans previously outstanding with NPRC and its wholly owned subsidiary.

Previous wording

During the nine months ended March 31, 2023, we provided $132,071 of debt financing and $3,600 of equity financing to NPRC to fund capital expenditures for existing real estate properties, to provide working capital, and to fund purchases of rated secured structured notes.

Current wording

During the three months ended September 30, 2023, we provided $63,305 of debt financing to NPRC to fund real estate capital expenditures and provide working capital.

Previous wording

During the nine months ended March 31, 2023, we received partial repayments of $86,852 of our loans previously outstanding with NPRC and its wholly owned subsidiaries and $4,000 as a return of capital on our equity investment in NPRC.

Current wording

During the three months ended September 30, 2023, we received partial repayments of $13,450 of our loans previously outstanding with NPRC and its wholly owned subsidiary.

Previous wording

The rated secured structured note investments held by certain of NPRC’s wholly owned subsidiaries are subordinated debt interests in broadly syndicated loans managed by established collateral management teams with many years of experience in the industry. As of March 31, 2024, the outstanding investment in rated secured structured notes by certain of NPRC’s wholly owned subsidiaries was comprised of 111 investments with a fair value of $437,959 and face value of $465,567. The average outstanding note is approximately $4,194 with an expected maturity date ranging from January 2027 to June 2033 and weighted-average expected maturity of 6 years as of March 31, 2024. Coupons range from three-month SOFR (“3M”) plus 5.20% to 9.23%with a weighted-average coupon of 3M + 6.93%. As of March 31, 2024, our investment in NPRC and its wholly-owned subsidiaries relating to rated secured structured notes had a fair value of $254,129. As of March 31, 2024, based on outstanding notional balance, 10.5% of the portfolio was invested in Single - B rated tranches and 89.5% of the portfolio in BB rated tranches.

Current wording

The rated secured structured note investments held by certain of NPRC’s wholly owned subsidiaries are subordinated debt interests in broadly syndicated loans managed by established collateral management teams with many years of experience in the industry. As of September 30, 2024, the outstanding investment in rated secured structured notes by certain of NPRC’s wholly owned subsidiaries was comprised of 106 investments with a fair value of $403,258 and face value of $423,984. The average outstanding note is approximately $4,000 with an expected maturity date ranging from July 2028 to July 2034 and weighted-average expected maturity of 5 years as of September 30, 2024. Coupons range from three-month SOFR (“3M”) plus 5.20% to 9.23% with a weighted-average coupon of 3M + 6.90%. As of September 30, 2024, our senior secured term loan debt and common equity investments in NPRC and its wholly-owned subsidiaries relating to rated secured structured notes had a fair value of $243,364. As of September 30, 2024, based on outstanding notional balance, 34.9% of the portfolio was invested in Single - B or below rated tranches and 65.1% of the portfolio in BB or above rated tranches.

Previous wording

The online consumer loan investments held by certain of NPRC’s wholly owned subsidiaries are unsecured obligations of individual borrowers that are issued in amounts ranging from $10 to $50, with fixed terms ranging from 72 months to 84 months. As of March 31, 2024, the outstanding investments held by certain of NPRC’s wholly-owned subsidiaries was comprised of 13 individual loans valued at $37, residual interest in two securitizations valued at $2,691, one corporate bond valued at $17,733 and other assets valued at $1,506 for an aggregate fair value of $21,966.

Current wording

As of September 30, 2024, investments held by certain of NPRC’s wholly-owned subsidiaries was comprised of residual interest in two securitizations valued at $2,553, one corporate bond valued at $18,359 and other assets valued at $1,656 for an aggregate fair value of $22,568.

Previous wording

As of March 31, 2024, our investment in NPRC and its wholly owned subsidiaries had an amortized cost of$1,088,998 and a fair value of$1,664,510. The fair value of $1,388,416 related to NPRC’s real estate portfolio was comprised of fifty multi-family properties, seven student housing properties, four senior living properties, and three commercial properties. The following table shows the location, acquisition date, purchase price, and mortgage outstanding due to other parties for each of the properties held by NPRC as of March 31, 2024:

Current wording

As of September 30, 2024, our investment in NPRC and its wholly owned subsidiaries had an amortized cost of $1,116,839 and a fair value of $1,629,967. The fair value of $1,364,035 related to NPRC’s real estate portfolio was comprised of forty-nine multi-family properties, six student housing properties, four senior living properties, and two commercial properties. The following table shows the location, acquisition date, purchase price, and mortgage outstanding due to other parties for each of the properties held by NPRC as of September 30, 2024:

Previous wording

The fair value of our investment in NPRC was $1,664,510 as of March 31, 2024, a premium of $575,512 from its amortized cost basis, compared to a fair value of $1,659,976 as of June 30, 2023, representing a premium of $696,663. The decrease in premium is primarily driven by increased debt in the capital structure, offset by growth in net operating income in our real estate portfolio.

Current wording

The fair value of our investment in NPRC was $1,629,967 as of September 30, 2024, a premium of $513,128 from its amortized cost basis, compared to a fair value of $1,696,462 as of June 30, 2024, representing a premium of $588,151. The decrease in premium to amortized cost is primarily driven by a decrease in market interest rates and increased debt in the capital structure, offset by growth in net operating income in our real estate portfolio.

Previous wording

Prospect owns 100% of the common stock of Valley Holdings I, a Consolidated Holding Company. Valley Holdings I owns 100% of Valley Holdings II, a Consolidated Holding Company. Valley Holdings II owns 94.99% of Valley Electric, with Valley Electric management owning the remaining 5.01% of the equity. Valley Electric owns 100% of the equity of VE Company, Inc., which owns 100% of the equity of Valley Electric Co. of Mt. Vernon, Inc. (“Valley”) and Comet Electric, Inc (“Comet”), leading providers of specialty electrical services in the states of Washington and California. Valley and Comet are amongst the top electrical contractors in the United States.

Current wording

Prospect owns 100% of the common stock of Valley Holdings I, a Consolidated Holding Company. Valley Holdings I owns 100% of Valley Holdings II, a Consolidated Holding Company. Valley Holdings II owns 94.99% of Valley Electric Company, Inc. (“Valley Electric”), with Valley Electric management owning the remaining 5.01% of the equity. Valley Electric owns 100% of the equity of VE Company, Inc., which owns 100% of the equity of Valley Electric Co. of Mt. Vernon, Inc. (“Valley”) and Comet Electric, Inc (“Comet”), leading providers of specialty electrical services in the states of Washington and California. Valley and Comet are amongst the top electrical contractors in the United States.

Previous wording

Our controlled investments, including those discussed above, are valued at $591,793 above their amortized cost as of March 31, 2024.

Current wording

Our controlled investments, including those discussed above, are valued at $417,912 above their amortized cost as of September 30, 2024.

Previous wording

We hold two affiliate investments at March 31, 2024 (Nixon, Inc. and RGIS Services, LLC, (“RGIS”)) with a total fair value of $13,805, a premium of $3,643 from their combined amortized cost, compared to a fair value as $10,397 of June 30, 2023, representing a $1,542 premium to its amortized cost. The increase in premium to amortized cost was driven by an improvement in RGIS’s financial performance.

Current wording

We hold two affiliate investments at September 30, 2024 (Nixon, Inc. and RGIS Services, LLC, (“RGIS”)) with a total fair value of $21,658, a premium of $9,923 from their combined amortized cost, compared to a fair value as $18,069 of June 30, 2024, representing a $6,475 premium to its amortized cost. The increase in premium to amortized cost was driven by an improvement in RGIS’s financial performance.

Previous wording

With the non-control/non-affiliate investments, generally, there is less volatility related to our total investments because our equity positions tend to be smaller than with our control/affiliate investments, and debt investments are generally not as susceptible to large swings in value as equity investments. For debt investments, the fair value is generally limited on the high side to each loan’s par value, plus any prepayment premium that could be imposed. As of March 31, 2024, our non-control/non-affiliate portfolio is valued at a discount to amortized cost primarily due to our CLO investment portfolio, which is valued at a$291,797 discount to amortized cost. Additionally, as of March 31, 2024, five of our non-control/ non-affiliate investments, United Sporting Companies, Inc. (“USC”), Research Now Group, LLC and Dynata, LLC (collectively “Research Now”), K&N HoldCo, LLC (“K&N”), Rising Tide Holdings, Inc. (“West Marine”), and Credit.com Holdings, LLC, are valued at discounts to amortized cost of $79,884, $38,256, $24,651, $18,705, and $15,000, respectively.

Current wording

With the non-control/non-affiliate investments, generally, there is less volatility related to our total investments because our equity positions tend to be smaller than with our control/affiliate investments, and debt investments are generally not as susceptible to large swings in value as equity investments. For debt investments, the fair value is generally limited on the high side to each loan’s par value, plus any prepayment premium that could be imposed. Note that three of our non-control/non-affiliate investments, Credit.com Holdings, LLC, Town & Country Holdings, Inc. (“Town & Country”), and our CLO investment portfolio, have larger equity positions and are therefore more susceptible to changes in value than the rest of our non-control/non-affiliate investments. As of September 30, 2024, our non-control/non-affiliate portfolio is valued at a discount to amortized cost primarily due to our CLO investment portfolio, which is valued ata $69,429 discount to amortized cost.

Previous wording

Our largest non-control/non-affiliate investment is Town & Country Holdings, Inc. (“Town & Country”), which is valued at $39,833 above its amortized cost and represents approximately 6.8% of our Net Asset Value as of March 31, 2024. Town & Country is a supplier of home textiles and accessories to retailers throughout North America. Excluding those non-control/non-affiliate investments discussed above, our remaining non-control/non-affiliate portfolio is valued at a discount of $48,936 to amortized cost as of March 31, 2024.

Current wording

Our largest non-control/non-affiliate investment is Town & Country, which is valued at $13,022 above its amortized cost and represents approximately 6.9% of our net asset value as of September 30, 2024. Town & Country is a supplier of home textiles and accessories to retailers throughout North America.

Previous wording

On May 15, 2007, we formed our wholly owned subsidiary, PCF, a Delaware limited liability company and a bankruptcy remote special purpose entity, which holds certain of our portfolio loan investments that are used as collateral for the revolving credit facility at PCF. Since origination of the revolving credit facility, we have renegotiated the terms and extended the commitments of the revolving credit facility several times. Most recently, effective September 15, 2022, we completed an extension and upsizing of the revolving credit facility (the “Revolving Credit Facility”). The lenders have extended commitments of $1,954,500 as of March 31, 2024. The Revolving Credit Facility includes an accordion feature which allows commitments to be increased up to $2,000,000 in the aggregate. The extension and upsizing of the Revolving Credit Facility extends the maturity date to September 15, 2027 and the revolving period through September 15, 2026, followed by an additional one-year amortization period, with distributions allowed to Prospect after the completion of the revolving period. During such one-year amortization period, all principal payments on the pledged assets will be applied to reduce the balance. At the end of the one-year amortization period, the remaining balance will become due.

Current wording

On May 15, 2007, we formed our wholly owned subsidiary, PCF, a Delaware limited liability company and a bankruptcy remote special purpose entity, which holds certain of our portfolio loan investments that are used as collateral for the revolving credit facility at PCF. Since origination of the revolving credit facility, we have renegotiated the terms and extended the commitments of the revolving credit facility several times. Most recently, effective June 28, 2024, we completed an extension and upsizing of the revolving credit facility (the “Revolving Credit Facility”). The lenders have extended commitments of $2,121,500 as of September 30, 2024. The Revolving Credit Facility includes an accordion feature which allows commitments to be increased up to $2,250,000 in the aggregate. The extension and upsizing of the Revolving Credit Facility extended the maturity date to June 28, 2029 andthe revolving period through June 28, 2028, foll owed by an additional one-year amortization period, with distributions allowed to Prospect after the completion of the revolving period. During such one-year amortization period, all principal payments on the pledged assets will be applied to reduce the balance. At the end of the one-year amortization period, the remaining balance will become due.

Previous wording

As of March 31, 2024 and June 30, 2023, wehad$798,303 and $697,325, respectively, available to us for borrowing under the Revolving Credit Facility, net of $906,376 and $1,014,703 outstanding borrowings as of the respective balance sheet dates. Refer to Note 4. Revolving Credit Facility within our consolidated financial statements for additional details.

Current wording

As of September 30, 2024 and June 30, 2024, we had $973,630 and $830,124, respectively, available to us for borrowing under the Revolving Credit Facility, net of $547,231 and $794,796 outstanding borrowings as of the respective balance sheet dates. Refer to Note 4. Revolving Credit Facility within our consolidated financial statements for additional details.

Previous wording

During the nine months ended March 31, 2024, we repaid the remaining outstanding principal amount of $81,240 of the 6.375% 2024 Notes, plus interest, at maturity.

Current wording

During the year ended June 30, 2024, we repaid the remaining outstanding principal amount of $81,240 of the 6.375% 2024 Notes, plus interest, at maturity.

Previous wording

We have, from time to time, repurchased certain notes issued through the InterNotes® Offerings and, therefore, as of March 31, 2024 and June 30, 2023, the aggregate principal amount of Prospect Capital InterNotes® outstanding were $442,953 and $358,105, respectively. Refer to Note 7. Prospect Capital InterNotes®within our consolidated financial statements for additional details.

Current wording

We have, from time to time, repurchased certain notes issued through the InterNotes® Offerings and, therefore, as of September 30, 2024 and June 30, 2024, the aggregate principal amount of Prospect Capital InterNotes® outstanding were $603,262 and $504,028, respectively. Refer to Note 7. Prospect Capital InterNotes®within our consolidated financial statements for additional details.

Previous wording

During the nine months ended March 31, 2024, net realized losses of $282,120, or $0.69 per common share, were offset by net unrealized gains of $193,705, or $0.47 per common share, resulting in a net decrease of $0.22 per basic weighted average share. During the nine months ended March 31, 2024, net investment income of $316,914, or $0.77 per basic weighted average common share exceeded distributions from earnings to common and preferred stockholders of $294,025, or $0.72 per basic weighted average common share, resulting in a net increase of $0.05 per basic weighted average common share. The increase was offset by $0.09 of dilution per common share related to common stock issuances for the nine months ended March 31, 2024. The following table shows the calculation of net asset value per common share as of March 31, 2024 and June 30, 2023:

Current wording

During the three months ended September 30, 2024, our net asset value applicable to common shares decreased by$200,920, or$0.64 per common share. During the three months ended September 30, 2024, the change in NAV was primarily due to net realized and unrealized losses of$227,789, or$0.53 per basic weighted average share, and$0.08 of dilution per common share related to issuances of common stock through our dividend reinvestment plan and through conversion of Preferred Stock, as applicable. Additionally, distributions to common and preferred stockholders of$104,515, or$0.24 per basic weighted average common share, exceeded net investment income of$89,877, or$0.21 per basic weighted average common share, resulting in a net decrease of$0.03 per basic weighted average common share. The following table shows the calculation of net asset value per common share as of September 30, 2024 and June 30, 2024:

Previous wording

Operating results for the three and nine months ended March 31, 2024 and March 31, 2023 were as follows:

Current wording

Operating results for the three months ended September 30, 2024 and September 30, 2023 were as follows: