Prospect Capital: Repayments Exceed Originations in Fiscal 1Q18
Prospect Capital (PSEC) witnessed a marginal fall in its total originations in fiscal 1Q18 compared to fiscal 4Q17. In fiscal 1Q18, originations were as follows.
- agented sponsor debt: 47%
- non-agented debt: 34%
- real estate: 2%
- online lending: 17%
Interested in AINV? Don't miss the next report.
Receive e-mail alerts for new research on AINV
Prospect Capital recorded total investment originations amounting to $222.2 million in fiscal 1Q18, compared to $223.2 million in fiscal 4Q17. The company has prioritized secured lending and has deployments on first-lien loans.
Prospect Capital delivered a return of 5.46% on its equity over the last 12 months or on an LTM basis. On the other hand, peers (XLF) Apollo Investment (AINV), BlackRock Capital Investment (BKCC), and Capitala Finance (CPTA) delivered returns of 5.30%, 3.37%, and 0.72%, respectively, on their equity on an LTM basis.
In fiscal 1Q18, Prospect Capital recorded total repayments amounting to $310.9 million, reflecting higher repayments than investment originations. The company managed to report an annualized current yield of 11.8% in fiscal 1Q18, compared to 12.2% in fiscal 4Q17, in performing interest garnering assets. However, these assets exclude loans (non-accrual) and equity-related investments.
The sequential fall in the annualized current yield was mostly because of the company’s collateralized loan obligations or CLOs and a rise in the asset base (non-accrual).
Prospect Capital has protected itself from falling markets, as it has more unencumbered assets compared to encumbered assets in fiscal 1Q18.
Prospect Capital had unencumbered assets of $4.5 billion and encumbered assets of $1.5 billion in fiscal 1Q18.