Prospect Capital Corporation (NASDAQ:PSEC) Q2 2023 Earnings Conference Call February 9, 2023 9:30 AM ET

Company Participants

John Barry - Chairman and CEO

Grier Eliasek - President and COO

Kristin Van Dask - CFO

Conference Call Participants

Operator

Welcome to the Prospect Capital Second Fiscal Quarter Earnings Release and Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Mr. John Barry, Chairman and CEO. Please go ahead.

John Barry

Thank you, Sara. Good morning, everyone.

Joining me on the call today are Grier Eliasek, our President and Chief Operating Officer; and Kristin Van Dask, our Chief Financial Officer. Kristin?

Kristin Van Dask

Thanks, John. This call is the property of Prospect. Unauthorized use is prohibited.

This call contains forward-looking statements that are intended to be subject to Safe Harbor protection. Actual developments and results are highly likely to vary materially and we do not undertake to update our forward-looking statements unless required by law. For additional disclosure, see our earnings press release and 10-Q filed previously and available on our website, prospectstreet.com.

Now I'll turn the call back over to John.

John Barry

Thank you, Kristin. In the December quarter our net investment income, or NII was $106.7 million, or basic NII of $0.23 per common share, exceeding our distribution rate per common share by $0.05. Our basic NII coverage of our common distribution is now 128%. Our annualized basic NII yield is 9.3% on a booked basis and 12.3% based on our February 7 stock close. Our basic net income applicable to common stockholders was $55.6 million or $0.14 per common share.

Our NAV stood at $9.94 per common share in December, down $0.07 and 0.7% from the prior quarter, largely due to unrealized mark-to-market depreciation from macro conditions. Over the 11 quarters from the pre-pandemic December 2019 quarter to the September 2022 quarter, Prospect delivered the highest growth in the business development company industry in net asset value per common share, with NAV per common share increasing by 15.6% over that time period.

Since inception in 2004, Prospect has invested $19.9 billion across 407 investments, exiting 275 of these investments. We have outperformed our peers during past periods of macro volatility as a direct result of our previous derisking, not chasing leverage, as well as other risk management controls, including avoidance of cyclical industries and utilization of longer dated flexible financing.