Prospect Capital Corp (NASDAQ: PSEC) is a business development company (BDC) that lends to and invests in middle-market private companies across the United States. It generates income primarily through interest on debt investments, with additional returns from equity positions including common stock, preferred stock, and membership interests. The portfolio is externally managed by Prospect Capital Management L.P. and administered by Prospect Administration LLC. As of June 30, 2025, total investments at fair value were $6.67 billion, with first lien debt representing 65.7% of fair value and second lien debt 11.5%. The portfolio spans industries including consumer finance (14.2% of fair value), commercial services and supplies (7.6%), distributors (4.0%), and construction and engineering (5.3%), among others. Net asset value per common share was $6.56 as of June 30, 2025, down from $8.74 as of June 30, 2024. Investment income for the fiscal year ended June 30, 2025 was $719.4 million, against $861.7 million in the prior fiscal year.

Revenue model

Interest income on floating-rate and fixed-rate debt investments (first lien term loans, second lien term loans, revolving lines of credit, subordinated structured notes) forms the primary revenue stream. Additional income comes from dividends on preferred stock and equity appreciation or distributions from common stock and membership interest positions. Management and incentive fees are paid to the external adviser, Prospect Capital Management L.P.

Products and services

First lien term loans, first lien revolving lines of credit, second lien term loans, unsecured debt, subordinated structured notes, preferred stock investments, common stock investments, and membership interest positions in middle-market portfolio companies. As of June 30, 2025, first lien debt (term loans plus revolving credit) represented approximately 66.9% of fair value and second lien debt approximately 11.5% of fair value.

Customers and end markets

Middle-market private companies across diversified industries. Top industry exposures by fair value as of June 30, 2025 include consumer finance (14.2%), commercial services and supplies (7.6%), construction and engineering (5.3%), distributors (4.0%), and aerospace and defense (1.5%). The portfolio also includes multifamily real estate investments through National Property REIT Corp. Portfolio companies are primarily U.S.-based.

Value-chain role

Direct lender and equity co-investor to middle-market companies. PSEC originates, structures, and holds credit and equity investments rather than syndicating or distributing them. External investment management is provided by Prospect Capital Management L.P.; administrative services are provided by Prospect Administration LLC.

Geographic exposure

Primarily United States. Real estate-related portfolio investments are located across multiple U.S. states including Alabama, Georgia, Indiana, Wyoming, Colorado, Oklahoma, Louisiana, Ohio, and Mississippi, among others, as disclosed in the June 30, 2025 filing.

Source: SEC 10-K, filed 2025-08-26

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