8-K
false000150461900015046192023-05-102023-05-10

 

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: May 10, 2023

 (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 Beach, 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 May 10, 2023, PennantPark Floating Rate Capital Ltd. (the "Company"), issued a press release announcing its financial results for the second fiscal quarter ended March 31, 2023 and an increase of its monthly distribution. 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 PennantPark Floating Rate Capital Ltd.'s schedule of investments as of March 31, 2023 and September 30, 2022 is 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, 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 PennantPark Floating Rate Capital Ltd. files under the Exchange Act. All statements other than statements of historical facts included in this report on Form 8-K, including Exhibits 99.1 and 99.2 furnished herewith, 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 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.

 

PennantPark Floating Rate Capital Ltd. 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 May 10, 2023

             99.2 Schedule of Investments as of March 31, 2023 and September 30, 2022

   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: May 10, 2023

 

PENNANTPARK FLOATING RATE CAPITAL LTD.

 

By:  /s/ Richard T. Allorto, Jr.

      Richard T. Allorto, Jr.

Chief Financial Officer & Treasurer

 

 

 

 

 


EX-99

EXHIBIT 99.1

https://cdn.kscope.io/9166abc4e1d95a0f97fb01364df4056a-img78587047_0.jpg
 

PennantPark Floating Rate Capital Ltd. Announces 2.5% Increase of Its Monthly Distribution to $0.1025 Per Share and Financial Results for the Quarter Ended March 31, 2023

 

Miami, FL (GLOBE NEWSWIRE May 10, 2023) PennantPark Floating Rate Capital Ltd. (NYSE: PFLT) (TASE: PFLT) announced today its financial results for the second quarter ended March 31, 2023.

 

HIGHLIGHTS

Quarter ended March 31, 2023 (unaudited)

($ in millions, except per share amounts)

 

Assets and Liabilities:

 

 

 

 

 

Investment portfolio (1)

 

 

 

$

1,164.0

 

Net assets

 

 

 

$

554.7

 

GAAP net asset value per share

 

 

 

$

11.15

 

Quarterly decrease in GAAP net asset value per share

 

 

 

 

(1.3

)%

Adjusted net asset value per share (2)

 

 

 

$

11.10

 

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

 

 

 

 

(1.1

)%

 

 

 

 

 

 

 

 

 

 

 

 

Credit Facility

 

 

 

$

147.7

 

2023 Notes

 

 

 

$

77.0

 

2026 Notes

 

 

 

$

182.7

 

2031 Asset-Backed Debt

 

 

 

$

226.4

 

Regulatory Debt to Equity

 

 

 

1.17x

 

Weighted average yield on debt investments at quarter-end

 

 

 

 

11.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating Results:

 

 

 

 

 

Net investment income

 

 

 

$

16.7

 

Net investment income per share

 

 

 

$

0.35

 

Non-core investment income per share

 

 

 

$

(0.01

)

Core net investment income per share (3)

 

 

 

$

0.34

 

Distributions declared per share

 

 

 

$

0.29

 

 

 

 

 

 

 

Portfolio Activity:

 

 

 

 

 

Purchases of investments

 

 

 

$

85.4

 

Sales and repayments of investments

 

 

 

$

62.6

 

 

 

 

 

 

 

PSSL Portfolio data:

 

 

 

 

 

PSSL investment portfolio

 

 

 

$

771.4

 

Purchases of investments

 

 

 

$

31.0

 

Sales and repayments of investments

 

 

 

$

9.2

 

 

(1)
Includes investments in PennantPark Senior Secured Loan Fund I LLC, or PSSL, an unconsolidated joint venture, totaling $261.7 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 $2.6 million, or $0.05 per share, 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)
Core net investment income (“Core NII”) 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 one-time or non-recurring investment income and expenses. 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. For the quarter ended March 31, 2023, Core NII excluded; i) $0.4 million of accelerated amortization income associated with the early repayment of one of our loans; and ii) and an addback of $0.1 million of incentive fee expense.

 

 


CONFERENCE CALL AT 9:00 A.M. ET ON MAY 11, 2023

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 May 11, 2023 to discuss its financial results. All interested parties are welcome to participate. You can access the conference call by dialing toll-free (888) 256-1007 approximately 5-10 minutes prior to the call. International callers should dial (929) 477-0448. All callers should reference conference ID #9075273 or PennantPark Floating Rate Capital Ltd. An archived replay will also be available on a webcast link located on the Quarterly Earnings page in the Investor section of PennantPark’s website.

 

INCREASE OF QUARTERLY DISTRIBUTION TO $0.1025 PER SHARE

On May 9, 2023, the Company declared a distribution of $0.1025 per share, an increase of 2.5% from the most recent distribution. The distribution is payable on July 3, 2023 to stockholders of record as of June 15, 2023. The distribution is expected to be paid from taxable net investment income.

“We are pleased to announce an increase in our monthly dividend based on the continued strong underlying credit performance of our portfolio in this environment. With our primary focus on lower risk senior secured floating rate loans to U.S. companies, we are positioned to preserve capital and protect against rising interest rates and inflation," said Arthur Penn, Chairman and CEO. "We have a visible pathway to continue to optimize the balance sheets at both PFLT and PennantPark Senior Secured Loan Fund I LLC over the coming quarters, which we believe will increase net investment income.”

PORTFOLIO AND INVESTMENT ACTIVITY

PennantPark Floating Rate Capital Ltd.

As of March 31, 2023, our portfolio totaled $1,164.0 million, and consisted of $1,006.7 million of first lien secured debt (including $210.1 million in PSSL), $0.1 million of second lien secured debt and $157.2 million of preferred and common equity (including $51.6 million in PSSL). Our debt portfolio consisted of 100% variable-rate investments. As of March 31, 2023, we had four portfolio companies on non-accrual, representing 2.0% and zero percent of our overall portfolio on a cost and fair value basis, respectively. As of March 31, 2023, the portfolio had net unrealized depreciation of $34.1 million. Our overall portfolio consisted of 130 companies with an average investment size of $9.0 million and a weighted average yield on debt investments of 11.8%.

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. As of September 30, 2022, the portfolio had net unrealized depreciation of $13.1 million. Our overall portfolio consisted of 125 companies with an average investment size of $9.3 million and a weighted average yield on debt investments of 10.0%.

For the three months ended March 31, 2023, we invested $85.4 million in five new and 38 existing portfolio companies with a weighted average yield on debt investments of 12.2%. For the three months ended March 31, 2023 sales and repayments of investments totaled $62.6 million. For the six months ended March 31, 2023, we invested $151.2 million in nine new and 67 existing portfolio companies with a weighted average yield on debt investments of 11.8%. For the six months ended March 31, 2023 sales and repayments of investments totaled $125.6 million.

For the three months ended March 31, 2022, we invested $113.2 million in seven new and 29 existing portfolio companies with a weighted average yield on debt investments of 7.2%. For the three months ended March 31, 2022 sales and repayments of investments totaled $103.9 million. For the six months ended March 31, 2022, we invested $448.4 million in 23 new and 65 existing portfolio companies with a weighted average yield on debt investments of 7.7%. For the six months ended March 31, 2022 sales and repayments of investments totaled $342.2 million.

PennantPark Senior Secured Loan Fund I LLC

As of March 31, 2023, PSSL’s portfolio totaled $771.4 million and consisted of 103 companies with an average investment size of $7.5 million and had a weighted average yield on debt investments of 11.4%.

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%.

For the three months ended March 31, 2023, PSSL invested $31.0 million (including $27.1 million purchased from the Company) in four new and two existing portfolio companies with a weighted average yield on debt investments of 11.5%. For the three months ended March 31, 2023 sales and repayments of investments totaled $9.2 million. For the six months ended March 31, 2023, PSSL invested $60.6 million (including $45.9 million purchased from the Company) in 11 new and nine existing portfolio companies with a weighted average yield on debt investments of 11.3%. For the six months ended March 31, 2023 sales and repayments of investments totaled $38.0 million.

For the three months ended March 31, 2022, PSSL invested $67.5 million (including $57.7 million purchased from the Company) in nine new and two existing portfolio companies with a weighted average yield on debt investments of 7.2%. For the three months ended March 31, 2022 sales and repayments of investments totaled $5.3 million. For the six months ended March 31, 2022, PSSL


invested $197.1 million (including $180.4 million purchased from the Company) in 21 new and eight existing portfolio companies with a weighted average yield on debt investments of 7.8%. For the six months ended March 31, 2022 sales and repayments of investments totaled $55.7 million.

RESULTS OF OPERATIONS

Set forth below are the results of operations for the three and six months ended March 31, 2023 and 2022.

Investment Income

For the three and six months ended March 31, 2023 investment income was $34.6 million and $65.9 million, respectively, which was attributable to $30.6 million and $58.2 million from first lien secured debt and $4.0 million and $7.7 million from other investments, respectively. For the three and six months ended March 31, 2022 investment income was $24.6 million and $51.0 million, respectively, which was attributable to $19.9 million and $42.9 million from first lien secured debt and $4.7 million and $8.1 million from other investments, respectively. The increase in investment income compared to the same periods in the prior year was primarily due to the increase in the cost yield of our debt portfolio.

Expenses

For the three and six months ended March 31, 2023, expenses totaled $17.8 million and $35.4 million, respectively and were comprised of; $9.8 million and $19.6 million of debt related interest and expenses, $2.9 million and $5.8 million of base management fees, $4.2 million and $7.6 million of incentive fees, $0.8 million and $1.7 million of general and administrative expenses and $0.2 million and $0.7 million of taxes. For the three and six months ended March 31, 2022, expenses totaled $13.3 million and $26.9 million, respectively and were comprised of; $6.7 million and $13.3 million of debt related interest and expenses, $2.9 million and $5.8 million of base management fees, $2.7 million and $5.9 million of incentive fees, $0.8 million and $1.6 million of administrative expenses and $0.1 million and $0.2 million of taxes. The increase in expenses compared to the same periods in the prior year was primarily due to the increase in financing costs of our debt liabilities.

Net Investment Income

For the three and six months ended March 31, 2023, net investment income totaled $16.7 million and $30.5 million, or $0.35 and $0.65 per share, respectively. For the three and six months ended March 31, 2022, net investment income totaled $11.4 million and $24.1 million, or $0.29 and $0.61 per share, respectively. The increase in net investment income was primarily due to an increase in investment income partially offset by an increase in expenses compared to the same period in the prior year.

Net Realized Gains or Losses

For the three and six months ended March 31, 2023, net realized gains (losses) totaled $(7.5) million and $(7.5) million, respectively. For the three and six months ended March 31, 2022, net realized gains (losses) totaled $(15.5) million and $(12.3) million, respectively. The change in net realized gains (losses) compared to the same periods in the prior year was primarily due to changes in the market conditions of our investments and the values at which they were realized.
 

Unrealized Appreciation or Depreciation on Investments and Debt

For the three and six months ended March 31, 2023, we reported net change in unrealized appreciation (depreciation) on investments of $(4.2) million and $(20.9) million, respectively. For the three and six months ended March 31, 2022, we reported net change in unrealized appreciation (depreciation) on investments of $17.5 million and $14.0 million, respectively. As of March 31, 2023 and September 30, 2022, our net unrealized appreciation (depreciation) on investments totaled $(34.1) million and $(13.1) million, respectively. The net change in unrealized appreciation or depreciation on investments compared to the same periods in the prior year was primarily due to the operating performance of the portfolio companies with the portfolio and changes in the capital market conditions of our investments.
 

For the three and six months ended March 31, 2023, our credit facility with Truist (the "Credit Facility") and the 2023 Notes had a net change in unrealized depreciation (appreciation) of $(1.2) million and $0.9 million, respectively. For the three and six months ended March 31, 2022, the Credit Facility and the 2023 Notes had a net change in unrealized (appreciation) depreciation of $(2.4) million and $1.2 million, respectively. As of March 31, 2023 and September 30, 2022, the net unrealized (appreciation) depreciation on the Credit Facility and the 2023 Notes totaled $(3.2) million and $(2.3) million, respectively. The net change in net unrealized appreciation or depreciation compared to the same periods in the prior year was primarily due to changes in the capital markets.

Net Increase (Decrease) in Net Assets Resulting from Operations

For the three and six months ended March 31, 2023, the net increase (decrease) in net assets resulting from operations totaled $7.2 million and $5.6 million or $0.15 and $0.12 per share, respectively. For the three and six months ended March 31, 2022, the net increase (decrease) in net assets resulting from operations totaled $7.2 million and $21.7 million or $0.18 and $0.55 per share, respectively.

LIQUIDITY AND CAPITAL RESOURCES


Our liquidity and capital resources are derived primarily from cash flows from operations, including income earned, proceeds from investment sales and repayments, and proceeds of securities offerings and debt financings. 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 our portfolio and proceeds from public and private offerings of securities to finance our investment objectives and operations.

As of March 31, 2023 and September 30, 2022, we had $151.7 million and $169.7 million in outstanding borrowings under the Credit Facility, respectively and the weighted average interest rate, exclusive of the fee on undrawn commitments, was 7.0% and 4.9%, respectively. As of March 31, 2023 and September 30, 2022, we had $214.3 million and $196.3 million of unused borrowing capacity under the Credit Facility, as applicable, respectively, subject to leverage and borrowing base restrictions.

As of March 31, 2023 and September 30, 2022, we had cash equivalents of $50.2 million and $47.9 million, respectively, available for investing and general corporate purposes. We believe our liquidity and capital resources are sufficient to take advantage of market opportunities.

For the six months ended March 31, 2023, our operating activities provided cash of $18.4 million and our financing activities used cash of $16.2 million. Our operating activities provided cash primarily from our investment activities and our financing activities used cash primarily to fund repayments under our Credit Facility and principal repayment of our 2023 Notes.

For the six months ended March 31, 2022, our operating activities used cash of $102.0 million and our financing activities provided cash of $101.6 million. Our operating activities used cash primarily to fund our investment activities and our financing activities provided cash primarily from the issuance of $85 million of our 2026 Add-on Notes, borrowings under our Credit Facility and proceeds from the issuance of common stock.


RECENT DEVELOPMENTS

On April 13, 2023 PSSL through its wholly-owned and consolidated subsidiary, PennantPark CLO VI, LLC (“CLO VI”) closed a $297.8 million debt securitization in the form of a collateralized loan obligation. PSSL retained all of the subordinated notes in the amount of $51.8 million through a consolidated subsidiary. The reinvestment period for the term debt securitization ends in April 2027 and the debt is scheduled to mature in April 2035.

On April 18, 2023, Dominion Voting Systems (“Dominion”) and Fox News Network (“Fox News”) agreed to settle the defamation lawsuit filed by Dominion against Fox News. As part of the settlement Fox News agreed to pay Dominion $787.5 million. Dominion is a portfolio company of PFLT, which holds a minority equity interest in the company. While Dominion may retain some of the settlement proceeds for corporate purposes, the company communicated its intention to distribute a substantial portion of the proceeds, net of estimated taxes and expenses, to its equity holders and PFLT’s portion is estimated to be approximately $4.0 million. The timing and amount of any distribution is uncertain and subject to change.

Guy Talarico resigned as the Company's Chief Compliance Officer, effective as of the close of business on May 9, 2023. Mr. Talarico's resignation is not a result of any disagreement with the Company’s operations, policies, practices or accounting matters.
 

On May 9, 2023, the Company’s Board of Directors appointed Frank Galea as Chief Compliance Officer of the Company, effective as of the close of business on May 9, 2023.
 

DISTRIBUTIONS

During the three and six months ended March 31, 2023, we declared distributions of $0.29 and $0.575 per share for total distributions of $14.0 million and $26.9 million, respectively. For the three and six months ended March 31, 2022, we declared distributions of $0.285 and $0.57 per share for total distributions of $11.3 million and $22.4 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.

AVAILABLE INFORMATION

The Company makes available on its website its Quarterly Report on Form 10-Q 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)

 

 

 

 

 

 

 

 

 

March 31, 2023
(Unaudited)

 

 

September 30, 2022

 

Assets

 

 

 

 

 

 

Investments at fair value

 

 

 

 

 

 

Non-controlled, non-affiliated investments (cost— $874,191 and $882,570, respectively)

 

$

869,595

 

 

$

893,249

 

Controlled, affiliated investments (cost— $323,905 and $294,787, respectively)

 

 

294,437

 

 

 

271,005

 

Total investments (cost— $1,198,096 and $1,177,357, respectively)

 

 

1,164,032

 

 

 

1,164,254

 

Cash and cash equivalents (cost— $50,168 and $47,916, respectively)

 

 

50,155

 

 

 

47,880

 

Interest receivable

 

 

8,825

 

 

 

7,543

 

Receivable for investments sold

 

 

 

 

 

3,441

 

Distributions receivable

 

 

635

 

 

 

 

Prepaid expenses and other assets

 

 

791

 

 

 

748

 

Total assets

 

 

1,224,439

 

 

 

1,223,866

 

Liabilities

 

 

 

 

 

 

Distributions payable

 

 

4,973

 

 

 

4,308

 

Payable for investments purchased

 

 

13,289

 

 

 

 

Credit Facility payable, at fair value (cost— $151,654 and $169,654, respectively)

 

 

147,698

 

 

 

167,563

 

2023 Notes payable, at fair value (par—$76,219 and $97,006, respectively)

 

 

76,981

 

 

 

96,812

 

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

 

 

182,665

 

 

 

182,276

 

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

 

 

226,443

 

 

 

226,128

 

Interest payable on debt

 

 

8,651

 

 

 

8,163

 

Base management fee payable

 

 

2,873

 

 

 

3,027

 

Performance-based incentive fee payable

 

 

4,186

 

 

 

3,164

 

Deferred tax liability

 

 

1,640

 

 

 

4,568

 

Accrued other expenses

 

 

370

 

 

 

765

 

Total liabilities

 

 

669,769

 

 

 

696,774

 

 

 

 

 

 

 

 

Net assets

 

 

 

 

 

 

Common stock, 49,731,815 and 45,345,638 shares issued and outstanding, respectively
   Par value $0.001 per share and 100,000,000 shares authorized

 

 

50

 

 

 

45

 

Paid-in capital in excess of par value

 

 

666,924

 

 

 

618,028

 

Accumulated deficit

 

 

(112,304

)

 

 

(90,981

)

Total net assets

 

$

554,669

 

 

$

527,092

 

Total liabilities and net assets

 

$

1,224,439

 

 

$

1,223,866

 

Net asset value per share

 

$

11.15

 

 

$

11.62

 

 

 


PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

 

Three Months Ended March 31,
(Unaudited)

 

 

Six Months Ended March 31,
(Unaudited)

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Investment income:

 

 

 

 

 

 

 

 

 

 

 

 

From non-controlled, non-affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

$

22,717

 

 

$

16,195

 

 

$

43,451

 

 

$

33,052

 

Dividend

 

 

635

 

 

 

577

 

 

 

1,212

 

 

 

1,154

 

Other income

 

 

586

 

 

 

686

 

 

 

727

 

 

 

3,510

 

From non-controlled, affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

 

 

 

 

 

 

 

 

 

112

 

Other income

 

 

 

 

 

 

 

 

 

 

 

 

From controlled, affiliated investments:

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

7,642

 

 

 

3,240

 

 

 

14,550

 

 

 

6,405

 

Dividend

 

 

2,975

 

 

 

3,938

 

 

 

5,950

 

 

 

6,738

 

Other Income

 

 

 

 

 

 

 

 

 

 

 

 

Total investment income

 

 

34,555

 

 

 

24,636

 

 

 

65,890

 

 

 

50,971

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Base management fee

 

 

2,873

 

 

 

2,945

 

 

 

5,804

 

 

 

5,841

 

Performance-based incentive fee

 

 

4,186

 

 

 

2,704

 

 

 

7,619

 

 

 

5,885

 

Interest and expenses on debt

 

 

9,752

 

 

 

6,705

 

 

 

19,610

 

 

 

13,344

 

Administrative services expenses

 

 

144

 

 

 

144

 

 

 

288

 

 

 

287

 

Other general and administrative expenses

 

 

705

 

 

 

655

 

 

 

1,410

 

 

 

1,309

 

Expenses before provision for taxes

 

 

17,660

 

 

 

13,153

 

 

 

34,731

 

 

 

26,666

 

Provision for taxes on net investment income

 

 

150

 

 

 

100

 

 

 

684

 

 

 

200

 

Total expenses

 

 

17,810

 

 

 

13,253

 

 

 

35,415

 

 

 

26,866

 

Net investment income

 

 

16,745

 

 

 

11,383

 

 

 

30,475

 

 

 

24,105

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gain (loss) on:

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

(7,518

)

 

 

6,920

 

 

 

(7,455

)

 

 

9,993

 

Non-controlled and controlled, affiliated investments

 

 

 

 

 

(22,380

)

 

 

 

 

 

(22,315

)

Provision for taxes on realized gain on investments

 

 

(300

)

 

 

 

 

 

(300

)

 

 

 

Net realized gain (loss) on investments

 

 

(7,818

)

 

 

(15,460

)

 

 

(7,755

)

 

 

(12,322

)

Net change in unrealized appreciation (depreciation) on:

 

 

 

 

 

 

 

 

 

 

 

 

Non-controlled, non-affiliated investments

 

 

(2,561

)

 

 

(5,425

)

 

 

(15,254

)

 

 

(1,038

)

Controlled and non-controlled, affiliated investments

 

 

(1,618

)

 

 

22,913

 

 

 

(5,682

)

 

 

15,029

 

Provision for taxes on unrealized appreciation (depreciation) on investments

 

 

3,654

 

 

 

(3,800

)

 

 

2,929

 

 

 

(5,340

)

Debt (appreciation) depreciation

 

 

(1,158

)

 

 

(2,363

)

 

 

909

 

 

 

1,247

 

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

 

 

(1,683

)

 

 

11,325

 

 

 

(17,098

)

 

 

9,898

 

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

 

 

(9,501

)

 

 

(4,135

)

 

 

(24,853

)

 

 

(2,424

)

Net increase (decrease) in net assets resulting from operations

 

 

7,244

 

 

 

7,248

 

 

$

5,622

 

 

 

21,681

 

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

 

$

0.15

 

 

$

0.18

 

 

$

0.12

 

 

$

0.55

 

Net investment income per common share

 

$

0.35

 

 

$

0.29

 

 

$

0.65

 

 

$

0.61

 

 

 

 


 

ABOUT PENNANTPARK FLOATING RATE CAPITAL LTD.

 

PennantPark Floating Rate Capital Ltd., or the Company, is a business development company that 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 $6.2 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 ("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 PennantPark Floating Rate Capital Ltd. files 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 SEC. 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.

The information contained herein is based on current tax laws, which may change in the future. The Company cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided in this publication or from any other source mentioned. The information provided in this material does not constitute any specific legal, tax or accounting advice. Please consult with qualified professionals for this type of advice.

 

CONTACT:

Richard T. Allorto, Jr.

 

PennantPark Floating Rate Capital Ltd.

 

(212) 905-1000

 

www.pennantpark.com

 


EX-99

Exhibit 99.2

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

MARCH 31, 2023

(in thousands, except share data)

(Unaudited)

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—156.8% (3), (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First Lien Secured Debt—138.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A1 Garage Merger Sub, LLC

 

12/22/2028

 

Commercial Services & Supplies

 

 

11.49

%

 

3M L+650

 

 

 

504

 

 

$

497

 

 

$

496

 

A1 Garage Merger Sub, LLC - Unfunded Term Loan

 

12/21/2024

 

Commercial Services & Supplies

 

 

 

 

 

 

 

 

1,552

 

 

 

 

 

 

 

A1 Garage Merger Sub, LLC LLC (Revolver) (7), (9)

 

12/22/2028

 

Commercial Services & Supplies

 

 

 

 

 

 

 

 

748

 

 

 

 

 

 

(11

)

Ad.net Acquisition, LLC

 

05/07/2026

 

Media

 

 

11.16

%

 

3M L+600

 

 

 

4,913

 

 

 

4,864

 

 

 

4,876

 

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

 

05/07/2026

 

Media

 

 

11.16

%

 

3M L+600

 

 

 

498

 

 

 

498

 

 

 

494

 

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

 

05/07/2026

 

Media

 

 

 

 

 

 

 

 

747

 

 

 

 

 

 

(6

)

Altamira Technologies, LLC

 

07/24/2025

 

IT Services

 

 

10.33

%

 

3M L+600

 

 

 

4,656

 

 

 

4,625

 

 

 

4,656

 

Altamira Technologies, LLC (Revolver) (7)

 

07/24/2025

 

IT Services

 

 

10.55

%

 

3M L+600

 

 

 

575

 

 

 

575

 

 

 

575

 

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

 

07/24/2025

 

IT Services

 

 

 

 

 

 

 

 

1,581

 

 

 

 

 

 

 

American Teleconferencing Services, Ltd.(7)

 

06/08/2023

 

Telecommunications

 

0.00%

 

(6)

 

 

 

 

7,986

 

 

 

7,915

 

 

 

90

 

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

 

04/07/2023

 

Telecommunications

 

0.00%

 

(6)

 

 

 

 

1,656

 

 

 

1,642

 

 

 

17

 

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

 

06/10/2025

 

Media

 

 

11.30

%

 

3M L+625

 

 

 

14,031

 

 

 

13,905

 

 

 

13,820

 

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

 

05/23/2024

 

Media

 

 

10.55

%

 

3M L+550

 

 

 

14,177

 

 

 

14,121

 

 

 

13,752

 

Anteriad, LLC (f/k/a MeritDirect, LLC) - Incremental Term Loan

 

05/23/2024

 

Media

 

 

11.46

%

 

3M L+650

 

 

 

7,268

 

 

 

7,123

 

 

 

7,123

 

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

 

05/23/2024

 

Media

 

 

 

 

 

 

 

 

2,869

 

 

 

 

 

 

(86

)

Any Hour Services

 

07/21/2027

 

Energy Equipment and Services

 

 

10.45

%

 

3M L+525

 

 

 

10,492

 

 

 

10,416

 

 

 

10,203

 

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

 

07/21/2027

 

Energy Equipment and Services

 

 

 

 

 

 

 

 

1,147

 

 

 

 

 

 

(31

)

Apex Service Partners, LLC

 

07/31/2025

 

Diversified Consumer Services

 

 

9.46

%

 

1M L+525

 

 

 

6,176

 

 

 

6,141

 

 

 

6,145

 

Apex Service Partners, LLC Term Loan B

 

07/31/2025

 

Diversified Consumer Services

 

 

10.75

%

 

1M L+550

 

 

 

295

 

 

 

295

 

 

 

293

 

Apex Service Partners, LLC Term Loan C

 

07/31/2025

 

Diversified Consumer Services

 

 

10.04

%

 

1M L+525

 

 

 

12,858

 

 

 

12,798

 

 

 

12,794

 

Apex Service Partners, LLC (Revolver) (7)

 

07/31/2025

 

Diversified Consumer Services

 

 

10.26

%

 

1M L+525

 

 

 

922

 

 

 

923

 

 

 

918

 

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

 

07/31/2025

 

Diversified Consumer Services

 

 

 

 

 

 

 

 

922

 

 

 

 

 

 

(5

)

API Holding III Corp.

 

05/11/2026

 

Electronic Equipment, Instruments, and Components

 

 

9.41

%

 

1M L+425

 

 

 

5,775

 

 

 

5,757

 

 

 

4,023

 

Applied Technical Services, LLC

 

12/29/2026

 

Commercial Services & Supplies

 

 

10.91

%

 

3M L+575

 

 

 

8,347

 

 

 

8,238

 

 

 

8,180

 

Applied Technical Services, LLC (Unfunded Term Loan)

 

04/21/2023

 

Commercial Services & Supplies

 

 

 

 

 

 

 

 

1,059

 

 

 

 

 

 

(9

)

Applied Technical Services, LLC (Revolver) (7)

 

12/29/2026

 

Commercial Services & Supplies

 

 

12.50

%

 

3M L+475

 

 

 

923

 

 

 

923

 

 

 

904

 

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

 

12/29/2026

 

Commercial Services & Supplies

 

 

 

 

 

 

 

 

350

 

 

 

 

 

 

(7

)

Arcfield Acquisition Corp. (Revolver) (9)

 

03/07/2028

 

Aerospace and Defense

 

 

 

 

 

 

 

 

887

 

 

 

 

 

 

(18

)

Beta Plus Technologies, Inc.

 

07/01/2029

 

Internet Software and Services

 

 

10.42

%

 

1M L+525

 

 

 

4,975

 

 

 

4,881

 

 

 

4,378

 

BioDerm, Inc. (Revolver) (9)

 

01/31/2028

 

Healthcare Equipment and Supplies

 

 

 

 

 

 

 

 

1,071

 

 

 

 

 

 

(16

)

Blackhawk Industrial Distribution, Inc.

 

09/17/2024

 

Distributors

 

 

10.04

%

 

3M L+500

 

 

 

212

 

 

 

211

 

 

 

207

 

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

 

09/17/2024

 

Distributors

 

 

 

 

 

 

 

 

3,045

 

 

 

 

 

 

(53

)

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

 

09/17/2024

 

Distributors

 

 

10.04

%

 

3M L+500

 

 

 

183

 

 

 

183

 

 

 

177

 

Blackhawk Industrial Distribution, Inc. (9)

 

09/17/2024

 

Distributors

 

 

 

 

 

 

 

 

2,561

 

 

 

 

 

 

(83

)

Broder Bros., Co.

 

12/04/2025

 

Textiles, Apparel and Luxury Goods

 

 

10.73

%

 

3M L+600

 

 

 

3,368

 

 

 

3,368

 

 

 

3,368