10-Q 1 psec10-qq32014.htm 10-Q PSEC 10-Q Q3 2014
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the Quarter Ended March 31, 2014
 
 
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission File Number: 814-00659 

PROSPECT CAPITAL CORPORATION

(Exact name of registrant as specified in its charter)
 
 
Maryland
43-2048643
 
 
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
 
 
10 East 40th Street
 
44th Floor
 
New York, New York
10016
 
 
(Address of principal executive offices)
(Zip Code)
 
 
(212) 448-0702
 
 
(Registrant’s telephone number, including area code)
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes    o No
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). oYes    o No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act.
 
Large Accelerated Filer ý  Accelerated Filer  o  Non-Accelerated Filer o
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). oYes    ý No
 
The number of shares of the registrant’s common stock, $0.001 par value, outstanding as of May 5, 2014 was 342,399,896.




PROSPECT CAPITAL CORPORATION
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2014
TABLE OF CONTENTS
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 


2


PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

 PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
March 31, 2014 and June 30, 2013
(in thousands, except share and per share data)
 
March 31, 2014
 
June 30, 2013
 
(Unaudited)
 
(Audited)
Assets
 

 
 

Investments at fair value:
 

 
 

Control investments (amortized cost of $1,655,363 and $830,151, respectively)
$
1,559,214

 
$
811,634

Affiliate investments (amortized cost of $31,979 and $49,189, respectively)
31,799

 
42,443

Non-control/non-affiliate investments (amortized cost of $4,424,017 and $3,376,438, respectively)
4,415,190

 
3,318,775

Total investments at fair value (amortized cost of $6,111,359 and $4,255,778, respectively)
6,006,203

 
4,172,852

Cash and cash equivalents
274,968

 
203,236

Receivables for:
 
 
 
Interest, net
21,092

 
22,863

Other
2,964

 
4,397

Prepaid expenses
693

 
540

Deferred financing costs
46,942

 
44,329

Total Assets 
6,352,862

 
4,448,217

 
 
 
 
Liabilities 
 

 
 

Revolving Credit Facility (Notes 4 and 8)
729,000

 
124,000

Senior Convertible Notes (Notes 5 and 8)
847,500

 
847,500

Senior Unsecured Notes (Notes 6 and 8)
347,858

 
347,725

Prospect Capital InterNotes® (Notes 7 and 8)
767,644

 
363,777

Due to broker

 
43,588

Dividends payable
36,810

 
27,299

Due to Prospect Administration (Note 12)
1,875

 
1,366

Due to Prospect Capital Management (Note 12)
26,736

 
5,324

Accrued expenses
3,636

 
2,345

Interest payable
22,772

 
24,384

Other liabilities
7,655

 
4,415

Total Liabilities 
2,791,486

 
1,791,723

Net Assets 
$
3,561,376

 
$
2,656,494

 
 
 
 
Components of Net Assets 
 

 
 

Common stock, par value $0.001 per share (500,000,000 common shares authorized; 333,499,861 and 247,836,965 issued and outstanding, respectively) (Note 9)
$
333

 
$
248

Paid-in capital in excess of par (Note 9)
3,687,173

 
2,739,864

Undistributed net investment income
60,284

 
77,084

Accumulated realized losses on investments
(81,258
)
 
(77,776
)
Unrealized depreciation on investments
(105,156
)
 
(82,926
)
Net Assets 
$
3,561,376

 
$
2,656,494

 
 
 
 
Net Asset Value Per Share (Note 15) 
$
10.68

 
$
10.72



See notes to consolidated financial statements.
3


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended March 31, 2014 and 2013
(in thousands, except share and per share data)
(Unaudited)


 
Three Months Ended March 31,
 
Nine Months Ended March 31,
 
2014
 
2013
 
2014
 
2013
Investment Income
 

 
 

 
 

 
 

Interest income:
 

 
 

 
 

 
 

Control investments
$
38,129

 
$
26,598

 
$
107,848

 
$
77,756

Affiliate investments
727

 
1,599

 
3,622

 
4,944

Non-control/non-affiliate investments
85,811

 
58,187

 
243,343

 
161,727

CLO fund securities
31,709

 
23,228

 
87,087

 
60,361

Total interest income
156,376

 
109,612

 
441,900

 
304,788

Dividend income:
 
 
 
 
 
 
 
Control investments
7,575

 
75

 
23,527

 
65,042

Non-control/non-affiliate investments

 

 
12

 
3,185

Money market funds
15

 
8

 
32

 
19

Total dividend income
7,590

 
83

 
23,571

 
68,246

Other income: (Note 10)
 
 
 
 
 
 
 
Control investments
12,431

 
2,656

 
39,580

 
7,753

Affiliate investments
5

 
5

 
12

 
618

Non-control/non-affiliate investments
13,925

 
7,839

 
24,388

 
28,461

Total other income
26,361

 
10,500

 
63,980

 
36,832

Total Investment Income
190,327

 
120,195

 
529,451

 
409,866

 
 
 
 
 
 
 
 
Operating Expenses
 
 
 
 
 
 
 
Investment advisory fees:
 
 
 
 
 
 
 
Base management fee (Note 12)
28,709

 
18,966

 
76,829

 
48,500

Income incentive fee (Note 12)
24,631

 
14,896

 
68,269

 
58,207

Total investment advisory fees
53,340

 
33,862

 
145,098

 
106,707

Interest and credit facility expenses
31,747

 
20,854

 
88,410

 
50,779

Legal fees
306

 
395

 
483

 
1,652

Valuation services
490

 
420

 
1,378

 
1,167

Audit, compliance and tax related fees
336

 
200

 
1,704

 
1,010

Allocation of overhead from Prospect Administration (Note 12)
3,986

 
2,957

 
11,958

 
7,280

Insurance expense
90

 
88

 
273

 
259

Directors’ fees
81

 
75

 
231

 
225

Excise tax
1,000

 
1,000

 
3,000

 
5,500

Other general and administrative expenses
428

 
759

 
3,841

 
2,459

Total Operating Expenses
91,804

 
60,610

 
256,376

 
177,038

Net Investment Income
98,523

 
59,585

 
273,075

 
232,828

 
 
 
 
 
 
 
 
Net realized loss on investments (Note 3)
(1,600
)
 
(6,014
)
 
(3,482
)
 
(12,362
)
Net change in unrealized depreciation on investments (Note 3)
(14,822
)
 
(9,142
)
 
(22,230
)
 
(82,299
)
Net Increase in Net Assets Resulting from Operations
$
82,101

 
$
44,429

 
$
247,363

 
$
138,167

 
 
 
 
 
 
 
 
Net increase in net assets resulting from operations per share
$
0.26

 
$
0.20

 
$
0.86

 
$
0.71

Dividends declared per share
$
(0.33
)
 
$
(0.33
)
 
$
(0.99
)
 
$
(0.95
)


See notes to consolidated financial statements.
4


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
For the Nine Months Ended March 31, 2014 and 2013
(in thousands, except share data)
(Unaudited)


 
Nine Months Ended March 31,
 
2014
 
2013
Operations
 

 
 

Net investment income
$
273,075

 
$
232,828

Net realized loss on investments
(3,482
)
 
(12,362
)
Net change in unrealized depreciation on investments
(22,230
)
 
(82,299
)
Net Increase in Net Assets Resulting from Operations 
247,363

 
138,167

 
 
 
 
Dividends to Shareholders
 
 
 
Distribution of net investment income
(289,875
)
 
(190,308
)
Distribution of return of capital

 

Net Decrease in Net Assets Resulting from Dividends to Shareholders
(289,875
)
 
(190,308
)
 
 
 
 
Common Stock Transactions 
 
 
 
Issuance of common stock, net of underwriting costs
890,331

 
1,025,937

Less: Offering costs from issuance of common stock
(1,187
)
 
(1,570
)
Value of shares issued to acquire controlled investments
45,914

 
59,251

Value of shares issued through reinvestment of dividends
12,336

 
12,137

Net Increase in Net Assets Resulting from Common Stock Transactions 
947,394

 
1,095,755

 
 
 
 
Total Increase in Net Assets 
904,882

 
1,043,614

Net assets at beginning of period
2,656,494

 
1,511,974

Net Assets at End of Period 
$
3,561,376

 
$
2,555,588

 
 
 
 
Common Stock Activity
 
 
 
Shares sold
80,343,264

 
92,408,899

Shares issued to acquire controlled investments
4,224,636

 
5,507,381

Shares issued through reinvestment of dividends
1,094,996

 
1,077,887

Total shares issued due to common stock activity
85,662,896

 
98,994,167

Shares issued and outstanding at beginning of period
247,836,965

 
139,633,870

Shares Issued and Outstanding at End of Period 
333,499,861

 
238,628,037

 


See notes to consolidated financial statements.
5


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended March 31, 2014 and 2013
(in thousands, except share data)
(Unaudited)


 
Nine Months Ended March 31,
 
2014
 
2013
Operating Activities
 

 
 

Net increase in net assets resulting from operations
$
247,363

 
$
138,167

Net realized loss on investments
3,482

 
12,362

Net change in unrealized depreciation on investments
22,230

 
82,299

Amortization of discounts and premiums, net
31,837

 
(13,624
)
Amortization of deferred financing costs
7,810

 
5,878

Payment-in-kind interest
(13,043
)
 
(7,025
)
Structuring fees
(40,064
)
 
(33,578
)
Change in operating assets and liabilities:
 
 
 
Payments for purchases of investments
(2,409,331
)
 
(2,204,603
)
Proceeds from sale of investments and collection of investment principal
617,452

 
609,919

Decrease (increase) in interest receivable, net
1,771

 
(4,216
)
Decrease in other receivables
1,433

 
320

(Increase) decrease in prepaid expenses
(153
)
 
211

Decrease in due to broker
(43,588
)
 
(1,572
)
Increase in due to Prospect Administration
509

 
674

Increase (decrease) in due to Prospect Capital Management
21,412

 
(7,040
)
Increase (decrease) in accrued expenses
1,291

 
(366
)
(Decrease) increase in interest payable
(1,612
)
 
8,545

Increase in other liabilities
3,240

 
5,376

Net Cash Used in Operating Activities 
(1,547,961
)
 
(1,408,273
)
 
 
 
 
Financing Activities
 
 
 
Borrowings under Revolving Credit Facility (Note 4)
986,500

 
99,000

Principal payments under Revolving Credit Facility (Note 4)
(381,500
)
 
(195,000
)
Issuance of Senior Convertible Notes (Note 5)

 
400,000

Issuance of Senior Unsecured Notes (Note 6)

 
247,682

Issuance of Prospect Capital InterNotes® (Note 7)
407,208

 
178,763

Redemptions of Prospect Capital InterNotes® (Note 7)
(3,341
)
 

Amortization of discount on Senior Unsecured Notes (Note 6)
133

 

Financing costs paid and deferred
(10,423
)
 
(23,591
)
Proceeds from issuance of common stock, net of underwriting costs
890,331

 
1,025,937

Offering costs from issuance of common stock
(1,187
)
 
(1,570
)
Dividends paid
(268,028
)
 
(166,084
)
Net Cash Provided by Financing Activities
1,619,693

 
1,565,137

 
 
 
 
Total Increase in Cash and Cash Equivalents
71,732

 
156,864

Cash and cash equivalents at beginning of period
203,236

 
121,194

Cash and Cash Equivalents at End of Period 
$
274,968

 
$
278,058

 
 
 
 
Supplemental Disclosures
 
 
 
Cash paid for interest
$
78,344

 
$
32,757

 
 
 
 
Non-Cash Financing Activities
 
 
 
Value of shares issued through reinvestment of dividends
$
12,336

 
$
12,137

Value of shares issued to acquire controlled investments
$
45,914

 
$
59,251

 

See notes to consolidated financial statements.
6


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS
March 31, 2014 (Unaudited) and June 30, 2013 (Audited)
(in thousands, except share data)



 
 
 
March 31, 2014 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS:
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(45)
 
 
 
 
 
 
 
 
 
 
 
AMU Holdings, Inc.(27)
Pennsylvania / Property Management
Senior Secured Term Loan to AIRMALL USA Holdings, Inc. (12.00% (LIBOR + 9.00% with 3.00% LIBOR floor), due 6/30/2015)(3)(4)
$
27,734

$
27,734

$
27,734

0.8%
Senior Subordinated Term Loan to AMU Holdings, Inc. (12.00% plus 6.00% PIK, due 12/31/2015)
19,993

19,993

19,993

0.5%
Series A Preferred Stock of AMU Holdings, Inc.(9,919.684 shares)
 
9,920

234

—%
Common Stock of AMU Holdings, Inc. (100 shares)
 


—%
 
 
 
 
57,647

47,961

1.3%
APH Property
Holdings, LLC(32)
Florida /
Real Estate
Senior Term Loan to APH Property Holdings, LLC (6.00% (LIBOR + 4.00% with 2.00% LIBOR floor) plus 5.50% PIK, due 10/24/2020)(4)
167,162

167,162

167,162

4.7%
Membership Interest in APH Property Holdings, LLC
 
33,304

35,242

1.0%
 
 
 
 
200,466

202,404

5.7%
ARRM Holdings Inc.(42)
South Carolina / Manufacturing
Senior Secured Note to Ajax Rolled Ring & Machine, LLC (10.50% (LIBOR + 7.50% with 3.00% LIBOR floor), due 3/30/2018)(4)
19,437

19,437

18,978

0.5%
Series B Preferred Stock of ARRM Holdings Inc. (25,000 shares)
 
25,000


—%
Series A Convertible Preferred Stock of ARRM Holdings Inc. (6,142.60 shares)
 
6,057


—%
Common Stock of ARRM Holdings Inc. (6.00 shares)
 


—%
 
 
 
 
50,494

18,978

0.5%
AWCNC, LLC(19)
North Carolina / Machinery
Members Units – Class A (1,800,000 units)
 


—%
Members Units – Class B-1 (1 unit)
 


—%
Members Units – Class B-2 (7,999,999 units)
 


—%
 
 
 
 


—%
BXC Holding
Company(20)
Georgia /
Textiles, Apparel & Luxury Goods
Senior Secured Term Loan A to Boxercraft Incorporated (10.00% plus 1.00% PIK, in non-accrual status effective 1/1/2014, due 9/15/2015)
1,625

1,621

1,625

—%
Senior Secured Term Loan B to Boxercraft Incorporated (10.00% plus 1.00% PIK, in non-accrual status effective 1/1/2014, due 9/15/2015)
4,930

4,917

1,712

0.1%
Senior Secured Term Loan C to Boxercraft Incorporated (10.00% plus 1.00% PIK, in non-accrual status effective 1/1/2014, due 9/15/2015)
2,389

2,383


—%
Senior Secured Term Loan to Boxercraft Incorporated (10.00% plus 1.00% PIK, in non-accrual status effective 1/1/2014, due 9/15/2015)
8,389

8,228


—%
Series A Preferred Stock of BXC Holding Company (1,000,000 shares)
 


—%
Common Stock of BXC Holding Company
(10,000 shares)
 


—%
Warrant (to purchase 15% of all classes of equity of BXC Holding Company, expires 8/31/2022)
 


—%
 
 
 
 
17,149

3,337

0.1%
 
 
 
 
 
 
 

See notes to consolidated financial statements.
7


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
March 31, 2014 (Unaudited) and June 30, 2013 (Audited)
(in thousands, except share data)

 
 
 
March 31, 2014 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS:
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(45)
 
 
 
 
 
 
 
 
 
 
 
CCPI Holdings Inc.(33)
Ohio / Manufacturing
Senior Secured Note to CCPI Inc. (10.00%, due 12/31/2017)(3)
$
17,325

$
17,325

$
17,325

0.5%
Senior Secured Note to CCPI Holdings Inc. (12.00% plus 7.00% PIK, due 6/30/2018)
8,216

8,216

8,216

0.2%
Common Stock of CCPI Holdings Inc. (100 shares)
 
8,581

8,098

0.2%
Net Revenue Interest in CCPI Holdings Inc.
(4% of Net Revenue)
 

194

—%
 
 
 
 
34,122

33,833

0.9%
CP Holdings
of Delaware LLC(38)
Oklahoma /
Oil & Gas Production
Senior Secured Note to CP Energy Services Inc. (9.00% (LIBOR + 7.00% with 2.00% LIBOR floor) plus 9.00% PIK, due 8/2/2018)(4)
75,773

75,773

75,773

2.1%
Senior Secured Note to CP Well Testing Holding Company LLC (11.00% (LIBOR + 9.00% with 2.00% LIBOR floor), due 8/2/2018)(4)
22,500

22,500

22,500

0.6%
Membership Interest in CP Holdings of Delaware LLC
 
15,228

21,357

0.6%
 
 
 
 
113,501

119,630

3.3%
Credit Central Holdings of Delaware, LLC(22)(34)
Ohio /
Consumer Finance
Senior Secured Revolving Credit Facility to Credit Central Holdings of Delaware, LLC – $60,000 Commitment (20.00% (LIBOR + 18.50% with 1.50% LIBOR floor), due 12/31/2022)(4)(25)
40,207

40,207

40,207

1.1%
Membership Interest in Credit Central Holdings of Delaware, LLC
 
9,956

6,591

0.2%
Net Revenue Interest in Credit Central Holdings of Delaware, LLC (5% of Net Revenue)
 

1,996

0.1%
 
 
 
 
50,163

48,794

1.4%
Echelon Aviation LLC
New York / Aerospace & Defense
Senior Secured Revolving Credit Facility to Echelon Aviation LLC – $150,000 Commitment (11.75% (LIBOR + 9.75% with 2.00% LIBOR floor) plus 2.25% PIK, due 3/31/2022)(4)
78,521

78,521

78,521

2.2%
Membership Interest in Echelon Aviation LLC
 
14,107

14,107

0.4%
 
 
 
 
92,628

92,628

2.6%
Energy Solutions Holdings Inc.(8)
Texas / Energy
Senior Secured Note to Vessel Holdings, LLC (18.00%, due 12/12/2016)
3,500

3,500

3,500

0.1%
Senior Secured Note to Vessel Holdings II, LLC (13.00%, in non-accrual status, due 11/25/2018)
13,000

12,504

12,504

0.4%
Senior Secured Note to Vessel Holdings III, LLC (13.00%, due 12/3/2018)
16,000

16,000

16,000

0.4%
Senior Secured Note to Yatesville Coal Holdings, LLC (in non-accrual status effective 1/1/2009, past due)
1,449

1,449


—%
Common Stock of Energy Solutions Holdings Inc. (100 shares)
 
8,293

2,905

0.1%
 
 
 
 
41,746

34,909

1.0%
First Tower Holdings of Delaware LLC(22)(29)
Mississippi / Consumer Finance
Senior Secured Revolving Credit Facility to First Tower Holdings of Delaware LLC – $400,000 Commitment (20.00% (LIBOR + 18.50% with 1.50% LIBOR floor), due 6/30/2022)(4)(25)
273,260

273,260

273,260

7.7%
Membership Interest in First Tower Holdings of Delaware LLC
 
44,693

39,703

1.1%
Net Revenue Interest in First Tower Holdings of Delaware LLC (5% of Net Revenue)
 

17,600

0.5%
 
 
 
 
317,953

330,563

9.3%

See notes to consolidated financial statements.
8


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
March 31, 2014 (Unaudited) and June 30, 2013 (Audited)
(in thousands, except share data)

 
 
 
March 31, 2014 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS:
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(45)
 
 
 
 
 
 
 
 
 
 
 
Gulf Coast Machine & Supply Company
Texas / Manufacturing
Senior Secured Term Loan to Gulf Coast Machine & Supply Company (10.50% (LIBOR + 8.50% with 2.00% LIBOR floor), due 10/12/2017)(4)
$
17,500

$
17,500

$
11,842

0.3%
Series A Convertible Preferred Stock of Gulf Coast Machine & Supply Company (99,900 shares)
 
25,950


—%
 
 
 
 
43,450

11,842

0.3%
Harbortouch Holdings
of Delaware Inc.(44)
Pennsylvania / Business Services
Senior Secured Term Loan to Harbortouch Payments, LLC (9.00% (LIBOR + 7.00% with 2.00% LIBOR floor), due 9/30/2017)(4)
130,796

130,796

130,796

3.7%
Senior Secured Note to Harbortouch Holdings of Delaware Inc. (10.00% (LIBOR + 8.00% with 2.00% LIBOR floor) plus 6.00% PIK, due 3/31/2019)(4)
123,000

123,000

123,000

3.4%
Common Stock of Harbortouch Holdings of Delaware Inc. (1 share)
 
24,898

20,100

0.6%
Net Revenue Interest in Harbortouch Holdings of Delaware Inc. (5% of Net Revenue)
 

4,798

0.1%
 
 
 
 
278,694

278,694

7.8%
The Healing Staff, Inc.(9)
North Carolina / Contracting
Secured Promissory Notes to The Healing Staff, Inc. and Vets Securing America, Inc. (joint borrowers) (15.00%, in non-accrual status effective 12/22/2010, past due)
1,688

1,686


—%
Senior Demand Note to The Healing Staff, Inc. (15.00%, in non-accrual status effective 11/1/2010, past due)
1,170

1,170


—%
Common Stock of The Healing Staff, Inc.
(1,000 shares)
 
975


—%
 
 
 
 
3,831


—%
Manx Energy, Inc.(12)
Kansas /
Oil & Gas Production
Senior Secured Note to Manx Energy, Inc. (13.00%, in non-accrual status effective 1/19/2010, past due)
225

225


—%
Series A-1 Preferred Stock of Manx Energy, Inc. (6,635 shares)
 


—%
Common Stock of Manx Energy, Inc. (17,082 shares)
 


—%
 
 
 
 
225


—%
MITY Holdings
of Delaware Inc.(17)
Utah /
Durable Consumer Products
Senior Secured Note to MITY Holdings of Delaware Inc. (9.00% (LIBOR + 7.00% with 2.00% LIBOR floor) plus 9.00% PIK, due 9/19/2019)(4)
22,968

22,968

22,968

0.7%
Senior Secured Note to MITY Enterprises, Inc. (10.00% (LIBOR + 7.00% with 3.00% LIBOR floor), due 3/19/2019)(3)(4)
18,250

18,250

18,250

0.5%
Common Stock of MITY Holdings of Delaware Inc. (100 shares)
 
6,943

8,165

0.2%
 
 
 
 
48,161

49,383

1.4%
Nationwide Acceptance Holdings LLC(22)(36)
Illinois /
Consumer Finance
Senior Secured Revolving Credit Facility to Nationwide Acceptance Holdings LLC – $30,000 Commitment (20.00% (LIBOR + 18.50% with 1.50% LIBOR floor), due 1/31/2023)(4)(25)
24,708

24,708

24,708

0.7%
Membership Interest in Nationwide Acceptance Holdings LLC
 
4,443

4,443

0.1%
Net Revenue Interest in Nationwide Acceptance Holdings LLC (5% of Net Revenue)
 

1,601

0.1%
 
 
 
 
29,151

30,752

0.9%
NMMB Holdings, Inc.(24)
New York / Media
Senior Secured Note to NMMB Acquisition, Inc. (14.00%, due 5/6/2016)
10,714

10,714

9,715

0.3%
Series B Convertible Preferred Stock of NMMB Holdings, Inc. (8,086 shares)
 
12,486


—%
 
 
 
 
23,200

9,715

0.3%

See notes to consolidated financial statements.
9


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
March 31, 2014 (Unaudited) and June 30, 2013 (Audited)
(in thousands, except share data)

 
 
 
March 31, 2014 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS:
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(45)
 
 
 
 
 
 
 
 
 
 
 
NPH Property
Holdings, LLC(40)
Texas /
Real Estate
Senior Term Loan to NPH Property Holdings, LLC (6.00% (LIBOR + 4.00% with 2.00% LIBOR floor) plus 5.50% PIK, due 10/24/2020)(4)
$
104,441

$
104,441

$
104,441

2.9%
Membership Interest in NPH Property Holdings, LLC
 
21,040

19,772

0.6%
 
 
 
 
125,481

124,213

3.5%
R-V Industries, Inc.
Pennsylvania / Manufacturing
Senior Subordinated Note to R-V Industries, Inc. (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 6/12/2018)(3)(4)
30,411

30,411

30,411

0.9%
Common Stock of R-V Industries, Inc. (545,107 shares)
 
5,087

19,551

0.5%
Warrant (to purchase 200,000 shares of Common Stock of R-V Industries, Inc., expires 6/30/2017)
 
1,682

7,174

0.2%
 
 
 
 
37,180

57,136

1.6%
STI Holding, Inc.
(f/k/a Borga, Inc.)(21)
California / Manufacturing
Revolving Line of Credit to Borga, Inc. – $1,150 Commitment (5.00% (PRIME + 1.75%) plus 3.00% default interest, in non-accrual status effective 3/2/2010, past due)(4)(25)
1,150

1,095

503

—%
Senior Secured Term Loan B to Borga, Inc. (8.50% (PRIME + 5.25%) plus 3.00% default interest, in non-accrual status effective 3/2/2010, past due)(4)
1,612

1,501


—%
Senior Secured Term Loan C to Borga, Inc. (12.00% plus 4.00% PIK plus 3.00% default interest, in non-accrual status effective 3/2/2010, past due)
10,040

707


—%
Common Stock of STI Holding, Inc. (100 shares)
 


—%
Warrant (to purchase 33,750 shares of Common Stock of STI Holding, Inc., expires 5/6/2015)
 


—%
 
 
 
 
3,303

503

—%
UPH Property
Holdings, LLC(41)
Georgia /
Real Estate
Senior Term Loan to UPH Property Holdings, LLC (6.00% (LIBOR + 4.00% with 2.00% LIBOR floor) plus 5.50% PIK, due 10/24/2020)(4)
19,027

19,027

19,027

0.5%
Membership Interest in UPH Property Holdings, LLC
 
3,707

5,392

0.2%
 
 
 
 
22,734

24,419

0.7%
Valley Electric
Holdings I, Inc.(35)
Washington / Construction & Engineering
Senior Secured Note to Valley Electric Holdings I, Inc. (9.00% (LIBOR + 6.00% with 3.00% LIBOR floor) plus 9.00% PIK, due 12/31/2018)(4)
36,450

36,450

25,199

0.7%
Senior Secured Note to Valley Electric Co. of Mt. Vernon, Inc. (8.00% (LIBOR + 5.00% with 3.00% LIBOR floor) plus 2.50% PIK, due 12/31/2017)(3)(4)
10,067

10,067

10,067

0.3%
Common Stock of Valley Electric Holdings I, Inc. (100 shares)
 
9,526


—%
Net Revenue Interest in Valley Electric Holdings I, Inc. (5% of Net Revenue)
 

495

—%
 
 
 
 
56,043

35,761

1.0%

See notes to consolidated financial statements.
10


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
March 31, 2014 (Unaudited) and June 30, 2013 (Audited)
(in thousands, except share data)

 
 
 
March 31, 2014 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS:
 
 
 
 
 
 
 
 
 
 
 
Control Investments (greater than 25.00% voting control)(45)
 
 
 
 
 
 
 
 
 
 
 
Wolf Energy
Holdings Inc.(12)
Kansas /
Oil & Gas Production
Senior Secured Promissory Note to Wolf Energy, LLC secured by assets formerly owned by H&M (18.00%, in non-accrual status effective 4/15/2013, due 4/15/2018)(37)
$
22,000

$

$
3,529

0.1%
Senior Secured Note to Appalachian Energy Holdings, LLC (8.00%, in non-accrual status effective 1/19/2010, past due)
2,808

2,000


—%
Senior Secured Note to Appalachian Energy Holdings, LLC (8.00%, in non-accrual status, past due)
55

50

6

—%
Senior Secured Note to Coalbed, LLC (8.00%, in non-accrual status effective 1/19/2010, past due)(6)
8,424

5,991


 
Common Stock of Wolf Energy Holdings Inc.
(100 shares)
 


—%
Net Profits Interest in Wolf Energy, LLC
(8% of Equity Distributions)(7)
 

224

—%
 
 
 
 
8,041

3,759

0.1%
Total Control Investments
 
$
1,655,363

$
1,559,214

43.7%
Affiliate Investments (5.00% to 24.99% voting control)(46)
 
 
 
 
 
 
 
 
 
 
 
BNN Holdings Corp.
(f/k/a Biotronic NeuroNetwork)
Michigan / Healthcare
Senior Secured Note (10.00% (LIBOR + 8.00% with 2.00% LIBOR floor), due 12/17/2017)(3)(4)
29,100

29,100

29,100

0.8%
Series A Preferred Stock (9,925.455 shares)(13)
 
2,300

2,222

0.1%
Series B Preferred Stock (1,753.636 shares)(13)
 
579

477

—%
 
 
 
 
31,979

31,799

0.9%
Total Affiliate Investments
 
$
31,979

$
31,799

0.9%

See notes to consolidated financial statements.
11


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
March 31, 2014 (Unaudited) and June 30, 2013 (Audited)
(in thousands, except share data)

 
 
 
March 31, 2014 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS:
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
Aderant North
America, Inc.(16)
Georgia /
Software & Computer Services
Second Lien Term Loan (10.00% (LIBOR + 8.75% with 1.25% LIBOR floor), due 6/20/2019)(4)
$
7,000

$
6,910

$
7,000

0.2%
 
 
 
 
6,910

7,000

0.2%
Aircraft Fasteners International, LLC
California / Machinery
Class A Units (32,500 units)
 
396

505

—%
 
 
 
 
396

505

—%
ALG USA
Holdings, LLC(16)
Pennsylvania / Hotels, Restaurants & Leisure
Second Lien Term Loan (10.25% (LIBOR + 9.00% with 1.25% LIBOR floor), due 2/28/2020)(4)
12,000

11,785

12,000

0.3%
 
 
 
 
11,785

12,000

0.3%
Allied Defense
Group, Inc.
Virginia / Aerospace & Defense
Common Stock (10,000 shares)
 
5


—%
 
 
 
 
5


—%
American Broadband Holding Company and Cameron Holdings of NC, Inc.
North Carolina / Telecommunication Services
Senior Secured Term Loan B (11.00% (LIBOR + 9.75% with 1.25% LIBOR floor), due 9/30/2018)(3)(4)
74,654

74,654

74,654

2.1%
 
 
 
 
74,654

74,654

2.1%
American Gilsonite Company
Utah /
Metal Services & Minerals
Second Lien Term Loan (11.50%, due 9/1/2017)
38,500

38,500

38,500

1.1%
Membership Interest(15)
 

2,299

0.1%
 
 
 
 
38,500

40,799

1.2%
Apidos CLO IX(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
20,525

18,781

19,979

0.6%
 
 
 
 
18,781

19,979

0.6%
Apidos CLO XI(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
38,340

34,733

38,035

1.1%
 
 
 
 
34,733

38,035

1.1%
Apidos CLO XII(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
44,063

42,529

42,505

1.2%
 
 
 
 
42,529

42,505

1.2%
Apidos CLO XV(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
36,515

37,837

37,004

1.0%
 
 
 
 
37,837

37,004

1.0%
Arctic Glacier
U.S.A., Inc.
Minnesota /
Food Products
Second Lien Term Loan (10.50% (LIBOR + 9.25% with 1.25% LIBOR floor), due 11/10/2019)(3)(4)
150,000

150,000

150,000

4.2%
 
 
 
 
150,000

150,000

4.2%
Armor Holding
II LLC(16)
New York / Diversified Financial Services
Second Lien Term Loan (10.25% (LIBOR + 9.00% with 1.25% LIBOR floor), due 12/26/2020)(3)(4)
7,000

6,871

6,871

0.2%
 
 
 
 
6,871

6,871

0.2%
Atlantis Health Care Group (Puerto Rico), Inc.
Puerto Rico / Healthcare
Revolving Line of Credit – $3,000 Commitment (13.00% (LIBOR + 11.00% with 2.00% LIBOR floor), due 8/21/2014)(4)(25)(26)
2,350

2,350

2,350

0.1%
Senior Term Loan (10.00% (LIBOR + 8.00% with 2.00% LIBOR floor), due 2/21/2018)(3)(4)
39,056

39,056

34,068

1.0%
 
 
 
 
41,406

36,418

1.1%
 
 
 
 
 
 
 

See notes to consolidated financial statements.
12


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
March 31, 2014 (Unaudited) and June 30, 2013 (Audited)
(in thousands, except share data)

 
 
 
March 31, 2014 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS:
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
Babson CLO Ltd.
2011-I(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
$
35,000

$
33,965

$
35,326

1.0%
 
 
 
 
33,965

35,326

1.0%
Babson CLO Ltd.
2012-I(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
29,075

23,867

27,435

0.8%
 
 
 
 
23,867

27,435

0.8%
Babson CLO Ltd.
2012-II(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
27,850

27,344

27,879

0.8%
 
 
 
 
27,344

27,879

0.8%
Blue Coat
Systems, Inc.(16)
Massachusetts / Software & Computer Services
Second Lien Term Loan (9.50% (LIBOR + 8.50% with 1.00% LIBOR floor), due 6/28/2020)(3)(4)
11,000

10,899

11,000

0.3%
 
 
 
 
10,899

11,000

0.3%
Broder Bros., Co.
Pennsylvania / Textiles, Apparel & Luxury Goods
Senior Secured Notes (10.25% (LIBOR + 9.00% with 1.25% LIBOR floor), due 4/8/2019)(3)(4)
258,875

258,875

258,875

7.3%
 
 
 
 
258,875

258,875

7.3%
Brookside Mill
CLO Ltd.(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
26,000

23,043

25,338

0.7%
 
 
 
 
23,043

25,338

0.7%
Byrider Systems Acquisition Corp.(22)
Indiana / Auto Finance
Senior Subordinated Notes (12.00% plus 2.00% PIK, due 11/3/2016)(3)
11,083

11,083

11,083

0.3%
 
 
 
 
11,083

11,083

0.3%
Caleel + Hayden, LLC(14)(31)
Colorado / Personal & Nondurable Consumer Products
Membership Interest
 

168

—%
Escrow Receivable
 

92

—%
 
 
 
 

260

—%
Capstone Logistics, LLC
Georgia / Commercial Services
Senior Secured Term Loan A (6.50% (LIBOR + 5.00% with 1.50% LIBOR floor), due 9/16/2016)(4)
95,466

95,466

95,466

2.7%
Senior Secured Term Loan B (11.50% (LIBOR + 10.00% with 1.50% LIBOR floor), due 9/16/2016)(3)(4)
100,000

100,000

100,000

2.8%
 
 
 
 
195,466

195,466

5.5%
Cent CLO 17 Limited(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
24,870

22,548

24,945

0.7%
 
 
 
 
22,548

24,945

0.7%
Cent CLO 20 Limited(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
40,275

41,101

40,592

1.1%
 
 
 
 
41,101

40,592

1.1%
CIFC Funding
2011-I, Ltd.(22)
Cayman Islands / Diversified Financial Services
Class D Senior Secured Notes (5.24% (LIBOR + 5.00%, due 1/19/2023)(4)
19,000

15,233

18,233

0.5%
Class E Subordinated Notes (7.24% (LIBOR + 7.00%, due 1/19/2023)(4)
15,400

12,769

15,321

0.4%
 
 
 
 
28,002

33,554

0.9%
CIFC Funding
2013-III, Ltd.(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
44,100

42,898

43,780

1.2%
 
 
 
 
42,898

43,780

1.2%

See notes to consolidated financial statements.
13


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
March 31, 2014 (Unaudited) and June 30, 2013 (Audited)
(in thousands, except share data)

 
 
 
March 31, 2014 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS:
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
CIFC Funding
2013-IV, Ltd.(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
$
45,500

$
41,136

$
40,964

1.2%
 
 
 
 
41,136

40,964

1.2%
Cinedigm DC
Holdings, LLC
New York / Software & Computer Services
Senior Secured Term Loan (11.00% (LIBOR + 9.00% with 2.00% LIBOR floor) plus 2.50% PIK, due 3/31/2021)(4)
68,454

68,454

68,454

1.9%
 
 
 
 
68,454

68,454

1.9%
The Copernicus
Group, Inc.
North Carolina / Healthcare
Escrow Receivable
 

137

—%
 
 
 
 

137

—%
Correctional Healthcare Holding Company, Inc.
Colorado / Healthcare
Second Lien Term Loan (11.25%, due 1/11/2020)(3)
27,100

27,100

27,100

0.8%
 
 
 
 
27,100

27,100

0.8%
Coverall North
America, Inc.
Florida / Commercial Services
Senior Secured Term Loan (11.50% (LIBOR + 8.50% with 3.00% LIBOR floor), due 12/17/2017)(3)(4)
52,661

52,661

52,661

1.5%
 
 
 
 
52,661

52,661

1.5%
Crosman Corporation
New York / Manufacturing
Second Lien Term Loan (11.00% (LIBOR + 9.50% with 1.50% LIBOR floor), due 12/30/2019)(3)(4)
40,000

40,000

40,000

1.1%
 
 
 
 
40,000

40,000

1.1%
CRT MIDCO, LLC
Wisconsin / Media
Senior Secured Term Loan (10.50% (LIBOR + 7.50% with 3.00% LIBOR floor), due 6/30/2017)(3)(4)
69,981

69,981

69,981

2.0%
 
 
 
 
69,981

69,981

2.0%
Deltek, Inc.(16)
Virginia /
Software & Computer Services
Second Lien Term Loan (10.00% (LIBOR + 8.75% with 1.25% LIBOR floor), due 10/10/2019)(3)(4)
12,000

11,847

12,240

0.3%
 
 
 
 
11,847

12,240

0.3%
Diamondback
Operating, LP
Oklahoma / Oil & Gas Production
Net Profits Interest (15% of Equity Distributions)(7)
 


—%
 
 
 
 


—%
Edmentum, Inc.
(f/k/a Archipelago Learning, Inc.)(16)
Minnesota / Consumer Services
Second Lien Term Loan (11.25% (LIBOR + 9.75% with 1.50% LIBOR floor), due 5/17/2019)(3)(4)
50,000

48,381

50,000

1.4%
 
 
 
 
48,381

50,000

1.4%
Empire Today, LLC
Illinois / Durable Consumer Products
Senior Secured Note (11.375%, due 2/1/2017)
15,700

15,397

15,700

0.4%
 
 
 
 
15,397

15,700

0.4%
Fischbein, LLC
North Carolina / Machinery
Escrow Receivable
 

237

—%
 
 
 
 

237

—%
Focus Brands, Inc.(16)
Georgia / Consumer Services
Second Lien Term Loan (10.25% (LIBOR + 9.00% with 1.25% LIBOR floor), due 8/21/2018)(4)
18,000

17,765

18,000

0.5%
 
 
 
 
17,765

18,000

0.5%
Focus Products Group International, LLC
(f/k/a FPG, LLC)
Illinois /
Durable Consumer Products
Senior Secured Term Loan (12.00% (LIBOR + 11.00% with 1.00% LIBOR floor), due 1/20/2017)(3)(4)
20,573

20,573

20,422

0.6%
Common Stock (5,638 shares)
 
27

20

—%
 
 
 
 
20,600

20,442

0.6%
Galaxy XII CLO, Ltd.(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
22,000

19,794

20,527

0.6%
 
 
 
 
19,794

20,527

0.6%

See notes to consolidated financial statements.
14


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
March 31, 2014 (Unaudited) and June 30, 2013 (Audited)
(in thousands, except share data)

 
 
 
March 31, 2014 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS:
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
Galaxy XV CLO, Ltd.(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
$
35,025

$
30,320

$
31,989

0.9%
 
 
 
 
30,320

31,989

0.9%
Galaxy XVI CLO, Ltd.(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
22,575

21,413

20,755

0.6%
 
 
 
 
21,413

20,755

0.6%
Global Employment Solutions, Inc.
Colorado / Business Services
Senior Secured Term Loan (10.00% (LIBOR + 9.00% with 1.00% LIBOR floor), due 3/25/2019)(4)
28,500

28,500

28,500

0.8%
 
 
 
 
28,500

28,500

0.8%
Grocery Outlet, Inc.(16)
California / Retail
Second Lien Term Loan (10.50% (LIBOR + 9.25% with 1.25% LIBOR floor), due 6/17/2019)(4)
14,456

14,156

14,456

0.4%
 
 
 
 
14,156

14,456

0.4%
GTP Operations, LLC
(f/k/a CI (Transplace) Holdings, LLC)(10)
Texas / Software & Computer Services
Senior Secured Term Loan (10.00% (LIBOR + 5.00% with 5.00% LIBOR floor), due 12/11/2018)(3)(4)
113,850

113,850

113,850

3.2%
 
 
 
 
113,850

113,850

3.2%
Halcyon Loan Advisors Funding 2012-1 Ltd.(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
23,188

20,792

22,540

0.6%
 
 
 
 
20,792

22,540

0.6%
Halcyon Loan Advisors Funding 2013-1 Ltd.(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
40,400

39,703

40,808

1.1%
 
 
 
 
39,703

40,808

1.1%
Halcyon Loan Advisors Funding 2014-1 Ltd.(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
24,500

23,196

23,198

0.7%
 
 
 
 
23,196

23,198

0.7%
Harley Marine
Services, Inc.(16)
Washington / Transportation
Second Lien Term Loan (10.50% (LIBOR + 9.25% with 1.25% LIBOR floor), due 12/20/2019)(4)
9,000

8,826

8,832

0.2%
 
 
 
 
8,826

8,832

0.2%
Hoffmaster
Group, Inc.(16)
Wisconsin / Personal & Nondurable Consumer Products
Second Lien Term Loan (11.00% (LIBOR + 9.50% with 1.50% LIBOR floor), due 1/3/2019)(3)(4)
20,000

19,848

20,000

0.6%
Second Lien Term Loan (10.25% (LIBOR + 9.00% with 1.25% LIBOR floor), due 1/3/2019)(3)(4)
1,000

992

1,000

—%
 
 
 
 
20,840

21,000

0.6%
ICON Health & Fitness, Inc.
Utah / Durable Consumer Products
Senior Secured Note (11.875%, due 10/15/2016)(3)
23,600

23,768

22,155

0.6%
 
 
 
 
23,768

22,155

0.6%
ICV-CSI Holdings, LLC (f/k/a Cargo Airport Services USA, LLC)
New York / Transportation
Common Equity (1.6 units)
 
1,639

874

—%
 
 
 
 
1,639

874

—%
IDQ Holdings, Inc.
Texas / Automobile
Senior Secured Note (11.50%, due 4/1/2017)
12,500

12,333

12,500

0.4%
 
 
 
 
12,333

12,500

0.4%
Ikaria, Inc.(16)
New Jersey / Healthcare
Second Lien Term Loan (8.75% (LIBOR + 7.75% with 1.00% LIBOR floor), due 2/12/2022)(4)
25,000

24,417

25,000

0.7%
 
 
 
 
24,417

25,000

0.7%
 
 
 
 
 
 
 

See notes to consolidated financial statements.
15


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
March 31, 2014 (Unaudited) and June 30, 2013 (Audited)
(in thousands, except share data)

 
 
 
March 31, 2014 (Unaudited)
Portfolio Company
Locale / Industry
Investments(1)
Principal Value
Cost
Fair
Value(2)
% of Net Assets
 
 
 
 
 
 
 
LEVEL 3 PORTFOLIO INVESTMENTS:
 
 
 
 
 
 
 
 
 
 
 
Non-Control/Non-Affiliate Investments (less than 5.00% voting control)
 
 
 
 
 
 
 
 
 
 
 
ING IM CLO
2012-2, Ltd.(22)
Cayman Islands / Diversified Financial Services
Income Notes (Residual Interest)
$
38,070

$
31,747

$
36,916

1.0%
 
 
 
 
31,747

36,916

1.0%
ING IM CLO
2012-3, Ltd.(22)
Cayman Islands / Diversified Financial Services
Income Notes (Residual Interest)
46,632

40,256

45,349

1.3%
 
 
 
 
40,256

45,349

1.3%
ING IM CLO
2012-4, Ltd.(22)
Cayman Islands / Diversified Financial Services
Income Notes (Residual Interest)
40,613

35,725

41,108

1.2%
 
 
 
 
35,725

41,108

1.2%
ING IM CLO
2014-1, Ltd.(22)
Cayman Islands / Diversified Financial Services
Subordinated Notes (Residual Interest)
32,383

32,619

32,594

0.9%
 
 
 
 
32,619

32,594

0.9%
Injured Workers Pharmacy, LLC
Massachusetts / Healthcare
Second Lien Term Loan (11.50% (LIBOR + 7.00% with 4.50% LIBOR floor) plus 1.00% PIK, due 5/31/2019)(3)(4)
22,620

22,620

22,620

0.6%
 
 
 
 
22,620

22,620

0.6%
Instant Web, LLC
Minnesota / Media
Senior Secured Term Loan A (5.50% (LIBOR + 4.50% with 1.00% LIBOR floor), due 3/28/2019)(4)
127,000

127,000

127,000

3.6%
Senior Secured Term Loan B (12.00% (LIBOR + 11.00% with 1.00% LIBOR floor), due 3/28/2019)(4)
128,000

128,000

128,000

3.6%
Senior Secured Term Loan C (12.75% (LIBOR + 11.75% with 1.00% LIBOR floor), due 3/28/2019)(4)
12,500

12,500

12,500

0.3%
 
 
 
 
267,500

267,500

7.5%
InterDent, Inc.
California / Healthcare
Senior Secured Term Loan A (7.25% (LIBOR + 5.75% with 1.50% LIBOR floor), due 8/3/2017)(4)
54,444

54,444

54,444

1.5%
Senior Secured Term Loan B (12.25% (LIBOR + 9.25% with 3.00% LIBOR floor), due 8/3/2017)(3)(4)
58,500

58,500

58,496

1.7%
 
 
 
 
112,944

112,940

3.2%
JHH Holdings, Inc.
Texas / Healthcare
Second Lien Term Loan (11.25% (LIBOR + 10.00% with 1.25% LIBOR floor) plus 0.50% PIK, due 3/30/2019)(3)(4)
35,075

35,075

35,075

1.0%
 
 
 
 
35,075

35,075

1.0%
LaserShip, Inc.
Virginia / Transportation
Revolving Line of Credit – $5,000 Commitment (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor), due 12/21/2014)(4)(25)



—%
Senior Secured Term Loan A (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor), due 3/18/2019)(3)(4)
36,328

36,328

36,328

1.0%
Senior Secured Term Loan B (10.25% (LIBOR + 8.25% with 2.00% LIBOR floor), due 3/18/2019)(4)
22,250

22,250

22,250

0.6%
Delayed Draw Term Loan – $6,000 Commitment (2.00%, due 12/31/2015)(4)(25)



—%
 
 
 
 
58,578

58,578

1.6%
LCM XIV Ltd.(22)
Cayman Islands / Diversified Financial Services
Income Notes (Residual Interest)
26,500

25,544

25,501

0.7%
 
 
 
 
25,544

25,501

0.7%
 
 
 
 
 
 
 

See notes to consolidated financial statements.
16


PROSPECT CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED SCHEDULES OF INVESTMENTS (CONTINUED)
March 31, 2014 (Unaudited) and June 30, 2013 (Audited)
(in thousands, except share data)