8-K
0001504619false00015046192022-11-162022-11-16

 

 

 

UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 

 

 

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

 Securities Exchange Act of 1934

 

Date of Report: November 16, 2022

 (Date of earliest event reported)

 

PennantPark Floating Rate Capital Ltd.

 (Exact name of registrant as specified in its charter)

 

 

Maryland

(State or Other Jurisdiction of Incorporation)

814-00891

(Commission File Number)

27-3794690

(IRS Employer Identification Number)

 

 

1691 Michigan Avenue

Miami, Florida

(Address of Principal Executive Offices)

 

33139

(Zip Code)

 

(786) 297-9500

(Registrant's telephone number, including area code)

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, par value $0.001 per share

PFLT

The New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR § 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR § 240.12b-2).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

 

 

 


 

 

 

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition

 

On November 16, 2022, PennantPark Floating Rate Capital Ltd., or the Company, issued a press release announcing its financial results for the fourth fiscal quarter ended September 30, 2022. A copy of the press release is furnished as Exhibit 99.1 to this report pursuant to Item 2.02 on Form 8-K and Regulation FD. A copy of the Company's schedule of investments as of September 30, 2022 and 2021 are furnished as Exhibit 99.2 to this report pursuant to Item 2.02 on Form 8-K and Regulation FD.

 

The information in this report on Form 8-K, including Exhibits 99.1 and 99.2 furnished herewith, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities of such section. The information in this report on Form 8-K shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Act, or under the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Forward-Looking Statements

 

This report on Form 8-K, including Exhibits 99.1 and 99.2 furnished herewith, may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act and Section 21E(b)(2)(B) of the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports the Company files under the Exchange Act. All statements other than statements of historical facts included in this report on Form 8-K are forward-looking statements and are not guarantees of future performance or results, and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission as well as changes in the economy and risks associated with possible disruption in the Company’s operations or the economy generally due to terrorism, natural disasters or pandemics such as COVID-19. The Company undertakes no duty to update any forward-looking statement made herein. You should not place undue influence on such forward-looking statements as such statements speak only as of the date on which they are made.

 

The Company may use words such as “anticipates,” “believes,” “expects,” “intends,” “seeks,” “plans,” “estimates” and similar expressions to identify forward-looking statements. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from its historical experience and present expectations.

 

Item 9.01. Financial Statements and Exhibits

 

(a) Financial statements:

             None

(b) Pro forma financial information:

             None

(c) Shell company transactions:

             None

(d) Exhibits

             99.1 Press Release of PennantPark Floating Rate Capital Ltd. dated November 16, 2022

   99.2 Schedule of Investments as of September 30, 2022 and 2021

    104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 


Dated: November 16, 2022

 

PENNANTPARK FLOATING RATE CAPITAL LTD.

 

By:  /s/ Richard T. Allorto, Jr.

      Richard T. Allorto, Jr.

Chief Financial Officer & Treasurer

 

 

 

 

 

 

 

 

 

 

 

 


EX-99.1

EXHIBIT 99.1

https://cdn.kscope.io/be72ade8f17f89391842cf8336ed370f-img78587047_0.jpg
 

PennantPark Floating Rate Capital Ltd. Announces Financial Results for the Fourth Quarter and Fiscal Year Ended September 30, 2022

 

Miami, FL (GLOBE NEWSWIRE November 16, 2022) PennantPark Floating Rate Capital Ltd. (NYSE: PFLT) (TASE: PFLT) announced today financial results for the fourth quarter and fiscal year ended September 30, 2022.

 

HIGHLIGHTS

Quarter ended September 30, 2022

($ in millions, except per share amounts)

 

Assets and Liabilities:

 

 

 

 

 

 

Investment portfolio (1)

 

 

 

 

$

1,164.3

 

Net assets

 

 

 

 

$

527.1

 

GAAP net asset value per share

 

 

 

 

$

11.62

 

Quarterly decrease in GAAP net asset value per share

 

 

 

 

 

(4.8

)%

Adjusted net asset value per share (2)

 

 

 

 

$

11.59

 

Quarterly decrease in adjusted net asset value per share (2)

 

 

 

 

 

(3.6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Facility

 

 

 

 

$

167.6

 

2023 Notes

 

 

 

 

$

96.8

 

2026 Notes

 

 

 

 

$

182.3

 

2031 Asset-Backed Debt

 

 

 

 

$

226.1

 

Regulatory Debt to Equity

 

 

 

 

1.29x

 

GAAP Net Debt to Equity (3)

 

 

 

 

1.19x

 

Weighted average yield on debt investments at quarter-end

 

 

 

 

 

10.0

%

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

Year Ended

 

 

 

September 30, 2022

 

 

September 30, 2022

 

 

 

 

 

 

 

 

Operating Results:

 

 

 

 

 

 

Net investment income

 

$

12.7

 

 

$

48.6

 

Net investment income per share (GAAP)

 

$

0.29

 

 

$

1.18

 

Credit facility amendment costs per share

 

$

0.01

 

 

$

0.01

 

Core net investment income per share (4)

 

$

0.30

 

 

$

1.18

 

Distributions declared per share

 

$

0.285

 

 

$

1.14

 

 

 

 

 

 

 

 

Portfolio Activity:

 

 

 

 

 

 

Purchases of investments

 

$

54.7

 

 

$

607.8

 

Sales and repayments of investments

 

$

98.0

 

 

$

495.2

 

 

 

 

 

 

 

 

PSSL Portfolio data:

 

 

 

 

 

 

PSSL investment portfolio

 

 

 

 

$

754.7

 

Purchases of investments

 

$

50.2

 

 

$

278.8

 

Sales and repayments of investments

 

$

33.2

 

 

$

102.4

 

 

(1)
Includes investments in PennantPark Senior Secured Loan Fund I LLC, or PSSL, an unconsolidated joint venture, totaling $239.6 million, at fair value.
(2)
This is a non-GAAP financial measure. The Company believes that this number provides useful information to investors and management because it reflects the Company’s financial performance excluding the impact of the $1.5 million unrealized loss on our multi-currency senior secured revolving credit facility, as amended and restated, with Truist Bank (formerly SunTrust Bank) and other lenders, or the Credit Facility, and our 4.3% Series A notes due 2023, or the 2023 Notes. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.
(3)
This is a non-GAAP financial measure. The Company believes that this number provides useful information to investors and management because it reflects the Company’s financial performance including the impact of the $1.5 million unrealized loss on the Credit Facility and the 2023 Notes net of $47.9 million of cash and cash equivalents. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.
(4)
Core net investment income is a non-GAAP financial measure. The Company believes that core net investment income provides useful information to investors and management because it reflects the Company’s financial performance excluding a one-time expense of $0.4 million associated with the upsized value of our multi-currency senior secured revolving credit facility with Truist Bank and other lenders on September 15, 2022 and the associated incentive fee reduction of $0.1 million. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.

 

 


CONFERENCE CALL AT 9:00 A.M. ET ON NOVEMBER 17, 2022

PennantPark Floating Rate Capital Ltd. (“we,” “our,” “us” or the “Company”) will also host a conference call at 9:00 a.m. (Eastern Time) on Thursday November 17, 2022 to discuss its financial results. All interested parties are welcome to participate. You can access the conference call by dialing toll-free (888) 394-8218 approximately 5-10 minutes prior to the call. International callers should dial (646) 828-8193. All callers should reference conference ID #7682895 or PennantPark Floating Rate Capital Ltd. An archived replay will also be available through December 1, 2022 on a webcast link located on the home page of the Investor section of PennantPark’s website.

PORTFOLIO AND INVESTMENT ACTIVITY

“We are pleased with the underlying credit performance of our portfolio this quarter. With our primary focus on lower risk, first lien senior secured floating rate loans to U.S. companies, we are positioned to preserve capital and protect against rising inflation and interest rates,” said Art Penn, Chairman and CEO. “We believe that the combination of rising base rates, higher spreads on new loan originations, and a growing PSSL joint venture create multiple pathways for income growth. We are looking forward to investing in the late 2022 and 2023 vintage of new loans that should benefit from more conservative structures at higher yields.”

As of September 30, 2022, our portfolio totaled $1,164.3 million and consisted of $1,009.6 million of first lien secured debt (including $190.2 million in PSSL), $0.1million of second lien secured debt and $154.5 million of preferred and common equity (including $49.4 million in PSSL). Our debt portfolio consisted of 100% variable-rate investments. As of September 30, 2022, we had two portfolio companies on non-accrual, representing 0.9% and zero percent of our overall portfolio on a cost and fair value basis, respectively. Overall, the portfolio had net unrealized depreciation of $8.7 million. Our overall portfolio consisted of 125 companies with an average investment size of $9.3 million, had a weighted average yield on debt investments of 10.0%.

As of September 30, 2021, our portfolio totaled $1,081.6 million, and consisted of $934.4 million of first lien secured debt (including $140.9 million in PSSL), $8.9 million of second lien secured debt and $138.3 million of preferred and common equity (including $44.9 million in PSSL). Our debt portfolio consisted of 99% variable-rate investments. As of September 30, 2021, we had two portfolio companies on non-accrual, representing 2.7% and 2.6% of our overall portfolio on a cost and fair value basis, respectively. Overall, the portfolio had net unrealized depreciation of $11.0 million. Our overall portfolio consisted of 110 companies with an average investment size of $9.8 million, had a weighted average yield on debt investments of 7.4%.

 

For the three months ended September 30, 2022, we invested $54.7 million in five new and 25 existing portfolio companies with a weighted average yield on debt investments of 8.9%. Sales and repayments of investments for the same period totaled $98.0 million. This compares to the three months ended September 30, 2021, in which we invested $185.7 million in 16 new and 18 existing portfolio companies with a weighted average yield on debt investments of 7.3%. Sales and repayments of investments for the same period totaled $136.6 million.

 

For the year ended September 30, 2022, we invested $607.8 million in 34 new and 129 existing portfolio companies with a weighted average yield on debt investments of 7.8%. Sales and repayments of investments for the same period totaled $495.2 million.

 

For the year ended September 30, 2021, we invested $661.1 million in 35 new and 68 existing portfolio companies with a weighted average yield on debt investments of 7.4%. Sales and repayments of investments for the same period totaled $702.1 million.

 

PennantPark Senior Secured Loan Fund I LLC

As of September 30, 2022, PSSL’s portfolio totaled $754.7 million, consisted of 95 companies with an average investment size of $8.0 million and had a weighted average yield on debt investments of 9.6%. As of September 30, 2021, PSSL’s portfolio totaled $564.8 million, consisted of 74 companies with an average investment size of $7.6 million and had a weighted average yield on debt investments of 7.1%.

For the three months ended September 30, 2022, PSSL invested $50.2 million in nine new and five existing portfolio companies with a weighted average yield on debt investments of 8.8%. PSSL’s sales and repayments of investments for the same period totaled $33.2 million. For the three months ended September 30, 2021, PSSL invested $76.6 million in 12 new and three existing portfolio companies with a weighted average yield on debt investments of 7.3%. PSSL’s sales and repayments of investments for the same period totaled $36.7 million.



For the year ended September 30, 2022, PSSL invested $278.8 million (of which $270.6 million was purchased from the Company) in 34 new and 20 existing portfolio companies with a weighted average yield on debt investments of 8.1 %. PSSL’s sales and repayments of investments for the same period totaled $102.4 million.



For the year ended September 30, 2021, PSSL invested $354.4 million (of which $285.7 million was purchased from the Company) in


42 new and 29 existing portfolio companies with a weighted average yield on debt investments of 7.2%. PSSL’s sales and repayments of investments for the same period totaled $185.7 million.

 

RESULTS OF OPERATIONS

Set forth below are the results of operations for the three months and years ended September 30, 2022 and 2021.

 

Investment Income

 

Investment income for the three months ended September 30, 2022 and 2021 was $28.8 million and $21.6 million, respectively, and was attributable to $25.1 million and $18.6 million from first lien secured debt and $3.7 million and $3.0 million from other investments, respectively.

 

Investment income for the year ended September 30, 2022 was $105.5 million and was attributable to $89.1 million from first lien secured debt and $16.4 million from other investments. Investment income for the year ended September 30, 2021 was $82.7 million and was attributable to $72.1 million from first lien secured debt and $10.6 million from other investments. The increase in investment income compared to the same periods in the prior year was primarily due to an increase in LIBOR and SOFR base rates and an increase in the size of our interest bearing portfolio.

 

Expenses

 

Expenses for the three months ended September 30, 2022 and 2021 totaled $16.1 million and $12.3 million, respectively. Base management fee totaled $3.0 million and $2.7 million, incentive fee totaled $3.2 million and $0.6 million, debt related interest and expenses totaled $9.0 million (including $0.4 million attributable to fees associated with the upsizing of the credit facility) and $8.5 million (including $2.9 million attributable to fees associated with entering into the new credit facility), general and administrative expenses totaled $0.9 million and $0.4 million and provision for taxes totaled $0.1 million and $0.1 million, respectively, for the same periods.

 

Expenses for the year ended September 30, 2022 and 2021 totaled $56.9 million and $43.1 million, respectively. Base management fee for the same period totaled $11.9 million and $10.7 million, incentive fee totaled $11.6 million and $5.3 million, debt related interest and expenses totaled $29.8 million (including $0.4 million attributable to fees associated with the upsizing of the credit facility) and $24.5 million (including $2.9 million attributable to fees associated with entering into the new credit facility amendment fees), general and administrative expenses totaled $3.2 million and $2.1 million, and provision for taxes totaled $0.4 million and $0.4 million, respectively, for the same periods. The increase in expenses compared to the prior year was primarily due to an increase in base management fees under our Investment Management Agreement with the Investment Advisor and debt related interest and expenses.

 

Net Investment Income

 

Net investment income totaled $12.7 million, or $0.28 per share, and $9.3 million, or $0.24 per share, for the three months ended September 30, 2022 and 2021, respectively.

 

Net investment income totaled $48.6 million, or $1.18 per share, and $39.6 million, or $1.02 per share, for the years ended September 30, 2022 and 2021, respectively. The increase in net investment income compared to the prior year was primarily due to an increase in the size of our portfolio as well as the increase in LIBOR and SOFR base interest rates.

 

Net Realized Gains or Losses



Net realized gains (losses) on sales and repayments of investments totaled $0.5 million and $2.5 million, respectively for the three months ended September 30, 2022 and 2021.



Net realized gains (losses) on sales and repayments of investments totaled $(11.1) million and $12.8 million, respectively for the years ended September 30, 2022 and 2021. The change in realized gains (losses) was primarily due to changes in market conditions of our investments and the values at which they were realized, caused by the fluctuations in the market and in the economy.

 


Unrealized Appreciation or Depreciation on Investments, the Credit Facility and the 2023 Notes

 


For the three months ended September 30, 2022 and 2021, we reported a net change in unrealized appreciation (depreciation) appreciation on investments of $(20.9) million and $(7.5) million, respectively.

 

For the years ended September 30, 2022 and 2021, we reported net change in unrealized appreciation (depreciation) on investments of $(24.5) million and $41.3 million, respectively. As of September 30, 2022 and 2021, our net unrealized appreciation (depreciation) on investments totaled $(13.1) million and $11.0 million, respectively. The net change in unrealized appreciation/depreciation on our investments for the year ended September 30, 2022 compared to the prior year was primarily due to changes in the capital market conditions of our investments and the values at which they were realized, caused by the fluctuations in the market and in the economy.



For the three months ended September 30, 2022 and 2021, our Credit Facility and 2023 Notes had a net change in unrealized (appreciation) depreciation of $(6.2) million and $(0.3) million, respectively.

 

For the year ended September 30, 2022 and 2021, the Credit Facility or Prior Credit Facility, as applicable, and the 2023 Notes had a net change in unrealized (appreciation) depreciation of $(4.9) million and $(11.6) million and, respectively. As of September 30, 2022 and 2021, our net unrealized depreciation on the Credit Facility or our Prior Credit Facility, as applicable, and the 2023 Notes totaled $2.3 million and $7.2 million, respectively. The net change in unrealized depreciation for the year ended September 30, 2022 compared to the prior year was primarily due to changes in the capital markets, with the economic instability negatively affecting the value.

 

Net Change in Net Assets Resulting from Operations

 

Net change in net assets resulting from operations totaled $(13.1) million, or $(0.34) per share, and $4.0 million, or $0.10 per share, for the three months ended September 30, 2022 and 2021, respectively.

 

Net change in net assets resulting from operations totaled $3.5 million, or $0.08 per share, and $56.5 million, or $1.46 per share, for the years ended September 30, 2022 and 2021, respectively. The decrease in net assets from operations for the year ended September 30, 2022 compared to the prior year was primarily due to depreciation of the portfolio primarily driven by changes in market conditions.

LIQUIDITY AND CAPITAL RESOURCES

Our liquidity and capital resources are derived primarily from proceeds of securities offerings, debt capital and cash flows from operations, including investment sales and repayments, and income earned. Our primary use of funds from operations includes investments in portfolio companies and payments of fees and other operating expenses we incur. We have used, and expect to continue to use, our debt capital, proceeds from the rotation of our portfolio and proceeds from public and private offerings of securities to finance our investment objectives.

The annualized weighted average cost of debt for the years ended September 30, 2022 and 2021, inclusive of the fee on the undrawn commitment on the Credit Facility or Prior Credit Facility, as applicable, amendment costs and debt issuance costs, was 4.5% and 3.9%, respectively. As of September 30, 2022, we maintained a $366 million Credit Facility, which was recently increased from $300 million during September 2022, and matures in August 2026. As of September 30, 2022 and 2021, we had $197.2 million and $80.6 million of unused borrowing capacity under the Credit Facility or our Prior Credit Facility, as applicable, respectively, subject to leverage and borrowing base restrictions.

As of September 30, 2022 and 2021, our wholly owned subsidiary, PennantPark Floating Rate Funding I, LLC, borrowed $168.8 million and $219.4 million under the Credit Facility or Prior Credit Facility, as applicable, respectively. The Credit Facility had a weighted average interest rate of 4.9% and 2.3%, exclusive of the fee on undrawn commitments as of September 30, 2022 and 2021, respectively.

As of September 30, 2022 and 2021, we had cash equivalents of $47.9 million and $49.8 million, respectively, available for investing and general corporate purposes. We believe our liquidity and capital resources are sufficient to allow us to efficiently operate the business.

Our operating activities used cash of $50.0 million for the year ended September 30, 2022, and our financing activities provided cash of $47.7 million for the same period. Our operating activities used cash primarily for our investment activities and our financing activities used cash primarily for paying down the Credit Facility and paying distributions to stockholders.



Our operating activities provided cash of $49.6 million for the year ended September 30, 2021, and our financing activities used cash of $56.3 million for the same period. Our operating activities used cash primarily for our investment activities and our financing activities used cash primarily for paying down the Credit Facility and paying distributions to stockholders.

 

DISTRIBUTIONS


During the three months and year ended September 30, 2022, we declared distributions of $0.285 and $1.14 per share, respectively, for total distributions of $12.6 and $46.7 million, respectively. During the three months and year ended September 30, 2021, we declared distributions of $0.285 and $1.14 per share, respectively, for total distributions of $11.0 and $44.2 million, respectively. We monitor available net investment income to determine if a return of capital for tax purposes may occur for the fiscal year. To the extent our taxable earnings fall below the total amount of our distributions for any given fiscal year, stockholders will be notified of the portion of those distributions deemed to be a tax return of capital. Tax characteristics of all distributions will be reported to stockholders subject to information reporting on Form 1099-DIV after the end of each calendar year and in our periodic reports filed with the SEC.

 

AVAILABLE INFORMATION

The Company makes available on its website its Quarterly Report on Form 10-K filed with the SEC, and stockholders may find such report on its website at www.pennantpark.com.

 

 

 

 


PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

September 30, 2022

 

 

September 30, 2021

 

Assets

 

 

 

 

 

 

Investments at fair value

 

 

 

 

 

 

Non-controlled, non-affiliated investments (cost—$882,570 and $824,542, respectively)

 

$

893,249

 

 

$

856,806

 

Non-controlled, affiliated investments (cost— zero and $22,380, respectively)

 

 

 

 

 

7,433

 

Controlled, affiliated investments (cost— $294,787 and $223,714, respectively)

 

 

271,005

 

 

 

217,380

 

Total of investments (cost—$1,177,357 and $1,070,636, respectively)

 

 

1,164,254

 

 

 

1,081,619

 

Cash and cash equivalents (cost—$47,917 and $49,826, respectively)

 

 

47,880

 

 

 

49,826

 

Interest receivable

 

 

7,543

 

 

 

5,446

 

Receivable for investments sold

 

 

3,441

 

 

 

33,965

 

Prepaid expenses and other assets

 

 

748

 

 

 

 

Total assets

 

 

1,223,866

 

 

 

1,170,856

 

Liabilities

 

 

 

 

 

 

Distributions payable

 

 

4,308

 

 

 

3,690

 

Payable for investments purchased

 

 

 

 

 

13,546

 

Credit Facility payable, at fair value (cost—$168,830 and $219,400, respectively)

 

 

167,563

 

 

 

218,851

 

2023 Notes payable, at fair value (par—$97,006 and $117,793, respectively)

 

 

96,812

 

 

 

111,114

 

2026 Notes payable, net (par—$185,000 and $100,000, respectively)

 

 

182,276

 

 

 

97,171

 

2031 Asset-Backed Debt, net (par—$228,000)

 

 

226,128

 

 

 

225,497

 

Interest payable on debt

 

 

8,163

 

 

 

5,455

 

Base management fee payable

 

 

3,027

 

 

 

2,707

 

Performance-based incentive fee payable

 

 

3,164

 

 

 

624

 

Accrued other expenses

 

 

765

 

 

 

1,590

 

Deferred tax liability

 

 

4,568

 

 

 

 

Total liabilities

 

 

696,774

 

 

 

680,245

 

Commitments and contingencies

 

 

 

 

 

 

Net assets

 

 

 

 

 

 

Common stock, 45,345,638 and 38,880,728 shares issued and outstanding, respectively
   Par value $0.001 per share and 100,000,000 shares authorized

 

 

45

 

 

 

39

 

Paid-in capital in excess of par value

 

 

618,028

 

 

 

538,814

 

Accumulated deficit

 

 

(90,981

)

 

 

(48,242

)

Total net assets

 

$

527,092

 

 

$

490,611

 

Total liabilities and net assets

 

$

1,223,866

 

 

$

1,170,856

 

Net asset value per share

 

$

11.62

 

 

$

12.62

 

 

 


PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

 

 

Three Months Ended
September 30,

 

 

Year Ended
September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Investment income:

 

 

 

 

 

 

 

 

 

 

 

 

From non-controlled, non-affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

$

18,660

 

 

$

13,357

 

 

$

68,413

 

 

$

56,878

 

Dividend

 

 

577

 

 

 

 

 

 

2,308

 

 

 

 

Other income

 

 

483

 

 

 

1,619

 

 

 

4,278

 

 

 

4,153

 

From non-controlled, affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

 

 

 

1,029

 

 

112

 

 

1309

 

Other income

 

 

 

 

 

1

 

 

 

 

 

 

123

 

From controlled, affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

6,091

 

 

 

2,988

 

 

 

16,724

 

 

 

11,241

 

Dividend

 

 

2,975

 

 

 

2,625

 

 

 

13,650

 

 

 

8,794

 

Other Income

 

 

 

 

 

1

 

 

 

 

 

 

196

 

Total investment income

 

 

28,786

 

 

 

21,620

 

 

 

105,485

 

 

 

82,694

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Base management fee

 

 

3,026

 

 

 

2,706

 

 

 

11,930

 

 

 

10,678

 

Performance-based incentive fee

 

 

3,164

 

 

 

625

 

 

 

11,625

 

 

 

5,341

 

Interest and expenses on debt

 

 

9,042

 

 

 

5,625

 

 

 

29,755

 

 

 

21,650

 

Administrative services expenses

 

 

144

 

 

 

150

 

 

 

575

 

 

 

900

 

Other general and administrative expenses

 

 

654

 

 

 

201

 

 

 

2,618

 

 

 

1,201

 

Expenses before provision for taxes

 

 

16,030

 

 

 

9,307

 

 

 

56,503

 

 

 

39,770

 

Credit Facility amendment costs and debt issuance costs

 

 

 

 

 

2,898

 

 

 

 

 

 

2,898

 

Provision for taxes

 

 

100

 

 

 

100

 

 

 

400

 

 

 

400

 

Net expenses

 

 

16,130

 

 

 

12,305

 

 

 

56,903

 

 

 

43,068

 

Net investment income

 

 

12,656

 

 

 

9,315

 

 

 

48,582

 

 

 

39,626

 

Realized and unrealized gain (loss) on investments and debt:

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gain (loss) on investments and debt:

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

515

 

 

 

18,233

 

 

 

11,209

 

 

 

24,613

 

Non-controlled and controlled, affiliated investments

 

 

 

 

 

(15,769

)

 

 

(22,315

)

 

 

(37,409

)

Net realized gain (loss) on investments and debt

 

 

515

 

 

 

2,464

 

 

 

(11,106

)

 

 

(12,796

)

Net change in unrealized appreciation (depreciation) on:

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

(9,766

)

 

 

2,474

 

 

 

(22,009

)

 

 

30,881

 

Non-controlled and controlled, affiliated investments

 

 

(11,100

)

 

 

(9,956

)

 

 

(2,503

)

 

 

10,414

 

Provision for taxes on unrealized appreciation on investments

 

 

772

 

 

 

 

 

 

(4,568

)

 

 

 

Debt (appreciation) depreciation

 

 

(6,216

)

 

 

(292

)

 

 

(4,943

)

 

 

(11,609

)

Net change in unrealized appreciation (depreciation) on investments and debt

 

 

(26,310

)

 

 

(7,774

)

 

 

(34,023

)

 

 

29,686

 

Net realized and unrealized gain (loss) from investments and debt

 

 

(25,795

)

 

 

(5,310

)

 

 

(45,129

)

 

 

16,890

 

Net increase (decrease) in net assets resulting from operations

 

 

(13,139

)

 

 

4,005

 

 

$

3,453

 

 

 

56,516

 

Net increase (decrease) in net assets resulting from operations per common share

 

$

(0.34

)

 

$

0.10

 

 

$

0.08

 

 

$

1.46

 

Net investment income per common share

 

$

0.29

 

 

$

0.24

 

 

$

1.18

 

 

$

1.02

 

 

 

 


 

ABOUT PENNANTPARK FLOATING RATE CAPITAL LTD.

 

PennantPark Floating Rate Capital Ltd. is a business development company which primarily invests in U.S. middle-market companies in the form of floating rate senior secured loans, including first lien secured debt, second lien secured debt and subordinated debt. From time to time, the Company may also invest in equity investments. PennantPark Floating Rate Capital Ltd. is managed by PennantPark Investment Advisers, LLC.

 

ABOUT PENNANTPARK INVESTMENT ADVISERS, LLC

 

PennantPark Investment Advisers, LLC is a leading middle-market credit platform, managing $6.4 billion of investable capital, including potential leverage. Since its inception in 2007, PennantPark Investment Advisers, LLC has provided investors access to middle-market credit by offering private equity firms and their portfolio companies as well as other middle-market borrowers a comprehensive range of creative and flexible financing solutions. PennantPark Investment Advisers, LLC is headquartered in Miami and has offices in New York, Chicago, Houston, and Los Angeles.

FORWARD-LOOKING STATEMENTS

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act. All statements other than statements of historical facts included in this press release are forward-looking statements and are not guarantees of future performance or results, and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission as well as changes in the economy and risks associated with possible disruption in the Company’s operations or the economy generally due to terrorism, natural disasters or pandemics such as COVID-19. PennantPark Floating Rate Capital Ltd. undertakes no duty to update any forward-looking statement made herein. You should not place undue influence on such forward-looking statements as such statements speak only as of the date on which they are made.

We may use words such as “anticipates,” “believes,” “expects,” “intends,” “seeks,” “plans,” “estimates” and similar expressions to identify forward-looking statements. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations.

 

CONTACT:

Richard T. Allorto, Jr.

 

PennantPark Floating Rate Capital Ltd.

 

(212) 905-1000

 

www.pennantpark.com

 


EX-99.2

EXHIBIT 99.2


PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

SEPTEMBER 30, 2022

(in thousands, except share data)

Issuer Name

 

Maturity

 

Industry

 

Current
 Coupon

 

 

Basis Point
 Spread
 Above
 Index
(1)

 

 

Par /
 Shares

 

 

Cost

 

 

Fair Value (2)

 

Investments in Non-Controlled, Non-Affiliated Portfolio Companies—169.5% (3), (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Lien Secured Debt—149.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ad.net Acquisition, LLC

 

05/06/2026

 

Media

 

 

9.67

%

 

3M L+600

 

 

 

4,938

 

 

$

4,882

 

 

$

4,900

 

Ad.net Acquisition, LLC (Revolver) (7), (9)

 

05/06/2026

 

Media

 

 

 

 

 

 

 

 

1,244

 

 

 

 

 

 

(9

)

Altamira Technologies, LLC

 

07/24/2025

 

IT Services

 

 

10.81

%

 

3M L+800

 

 

 

4,794

 

 

 

4,756

 

 

 

4,626

 

Altamira Technologies, LLC (Revolver) (7)

 

07/24/2025

 

IT Services

 

 

11.67

%

 

3M L+800

 

 

 

575

 

 

 

575

 

 

 

555

 

Altamira Technologies, LLC (Revolver) (7), (9)

 

07/24/2025

 

IT Services

 

 

 

 

 

 

 

 

1,581

 

 

 

 

 

 

(55

)

American Insulated Glass, LLC

 

12/21/2023

 

Building Products

 

 

7.79

%

 

3M L+550

 

 

 

7,601

 

 

 

7,559

 

 

 

7,601

 

American Teleconferencing Services, Ltd.(7)

 

06/08/2023

 

Telecommunications

 

0.00%

 

(6)

 

 

 

 

7,986

 

 

 

7,915

 

 

 

90

 

American Teleconferencing Services, Ltd. (Revolver) (7)

 

12/08/2022

 

Telecommunications

 

0.00%

 

(6)

 

 

 

 

1,656

 

 

 

1,642

 

 

 

17

 

Amsive Holding Corporation (f/k/a Vision Purchaser Corporation)

 

06/10/2025

 

Media

 

 

9.85

%

 

3M L+625

 

 

 

14,104

 

 

 

13,951

 

 

 

13,892

 

Anteriad, LLC (f/k/a MeritDirect, LLC)

 

05/23/2024

 

Media

 

 

9.17

%

 

3M L+550

 

 

 

14,568

 

 

 

14,486

 

 

 

14,568

 

Anteriad, LLC (f/k/a MeritDirect, LLC) (Revolver) (7), (9)

 

05/23/2024

 

Media

 

 

 

 

 

 

 

 

2,869

 

 

 

 

 

 

 

Any Hour Services

 

07/21/2027

 

Energy Equipment and Services

 

 

7.43

%

 

3M L+525

 

 

 

10,536

 

 

 

10,432

 

 

 

10,326

 

Any Hour Services (Revolver) (7), (9)

 

07/21/2027

 

Energy Equipment and Services

 

 

 

 

 

 

 

 

1,147

 

 

 

 

 

 

(23

)

Apex Service Partners, LLC

 

07/31/2025

 

Diversified Consumer Services

 

 

6.72

%

 

1M L+525

 

 

 

6,208

 

 

 

6,166

 

 

 

6,177

 

Apex Service Partners, LLC Term Loan B

 

07/31/2025

 

Diversified Consumer Services

 

 

9.67

%

 

1M L+550

 

 

 

296

 

 

 

296

 

 

 

295

 

Apex Service Partners, LLC Term Loan C

 

07/31/2025

 

Diversified Consumer Services

 

 

7.75

%

 

1M L+525

 

 

 

12,906

 

 

 

12,814

 

 

 

12,841

 

Apex Service Partners, LLC (Revolver) (7), (9)

 

07/31/2025

 

Diversified Consumer Services

 

 

 

 

 

 

 

 

1,845

 

 

 

 

 

 

(9

)

API Holding III Corp.

 

05/11/2026

 

Electronic Equipment, Instruments, and Components

 

 

7.92

%

 

1M L+425

 

 

 

5,805

 

 

 

5,785

 

 

 

5,050

 

Applied Technical Services, LLC

 

12/29/2026

 

Commercial Services & Supplies

 

 

9.42

%

 

3M L+575

 

 

 

7,147

 

 

 

7,040

 

 

 

6,968

 

Applied Technical Services, LLC (Unfunded Term Loan)

 

04/21/2023

 

Commercial Services & Supplies

 

 

 

 

 

 

 

 

2,298

 

 

 

 

 

 

(32

)

Applied Technical Services, LLC (Revolver) (7)

 

12/29/2026

 

Commercial Services & Supplies

 

 

10.25

%

 

3M L+475

 

 

 

255

 

 

 

255

 

 

 

248

 

Applied Technical Services, LLC (Revolver) (7), (9)

 

12/29/2026

 

Commercial Services & Supplies

 

 

 

 

 

 

 

 

1,018

 

 

 

 

 

 

(25

)

Arcfield Acquisition Corp. (Revolver) (9)

 

03/07/2028

 

Aerospace and Defense

 

 

 

 

 

 

 

 

887

 

 

 

 

 

 

(18

)

Beta Plus Technologies, Inc.

 

07/01/2029

 

Internet Software and Services

 

 

7.76

%

 

1M L+525

 

 

 

5,000

 

 

 

4,901

 

 

 

4,900

 

Blackhawk Industrial Distribution, Inc.

 

09/17/2024

 

Distributors

 

 

8.33

%

 

3M L+500

 

 

 

25

 

 

 

25

 

 

 

25

 

Blackhawk Industrial Distribution, Inc. (7),(9)

 

09/17/2024

 

Distributors

 

 

 

 

 

 

 

 

3,232

 

 

 

 

 

 

(40

)

Blackhawk Industrial Distribution, Inc. (Revolver) (7)

 

09/17/2024

 

Distributors

 

 

8.87

%

 

3M L+500

 

 

 

549

 

 

 

549

 

 

 

533

 

Blackhawk Industrial Distribution, Inc. (9)

 

09/17/2024

 

Distributors

 

 

 

 

 

 

 

 

2,195

 

 

 

 

 

 

(62

)

Broder Bros., Co.

 

12/02/2022