fiscal quarter ended September 30, 2026
Filed Nov 4, 2026Prospect Capital Announces September 2026 Results and $200 Million Common Share Repurchase Program
Net investment income remained positive at $76,359, but net income applicable to common shareholders was a loss of $(53,448), NAV per common share declined to $5.36, and the quarterly common distribution exceeded NII per common share. Liquidity and leverage metrics improved, non-accrual exposure declined, and the Board authorized up to $200.0 million of common-share repurchases.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net Investment Income (NII), quarter ended September 30, 2026 (in $000's)other | $76.36M | – | – |
| NII per Common Share, quarter ended September 30, 2026other | $0.15 | – | – |
| Total Investment Income, three months ended September 30, 2026 (in thousands)other | $151.7M | – | – |
| Total interest income, three months ended September 30, 2026 (in thousands)other | $132.6M | – | – |
| Total interest income excluding PIK interest income, three months ended September 30, 2026 (in thousands)other | $116.2M | – | – |
| Total PIK Interest Income, three months ended September 30, 2026 (in thousands)other | $16.45M | – | – |
| Total dividend income, three months ended September 30, 2026 (in thousands)other | $5.47M | – | – |
| Total other income, three months ended September 30, 2026 (in thousands)other | $13.66M | – | – |
| Interest as % of Total Investment Income, quarter ended September 30, 2026other | 87.4% | – | – |
| Total Operating Expenses, three months ended September 30, 2026 (in thousands)other | $78.63M | – | – |
| Reimbursement of Administration Expenses, three months ended September 30, 2026 (in thousands)other | −$3.25M | – | – |
| Total Net Operating Expenses, three months ended September 30, 2026 (in thousands)other | $75.38M | – | – |
| Net Realized and Net Change in Unrealized Gains (Losses) from Investments, three months ended September 30, 2026 (in thousands)other | −$98.64M | – | – |
| Net realized gains (losses), three months ended September 30, 2026 (in thousands)other | −$71.61M | – | – |
| Net change in unrealized gains (losses), three months ended September 30, 2026 (in thousands)other | −$27.03M | – | – |
| Net Increase (Decrease) in Net Assets Resulting from Operations, three months ended September 30, 2026 (in thousands)other | −$21.55M | – | – |
| Preferred Stock dividends, three months ended September 30, 2026 (in thousands)other | −$26.12M | – | – |
| Net Increase (Decrease) in Net Assets Resulting from Operations applicable to Common Stockholders, three months ended September 30, 2026 (in thousands)other | −$53.45M | – | – |
| Net Income (Loss) Applicable to Common Shareholders, quarter ended September 30, 2026 (in $000's)other | −$53.45M | – | – |
| Net Income (Loss) per Common Share, quarter ended September 30, 2026other | $(0.10) | – | – |
| Distributions to Common Shareholders, quarter ended September 30, 2026 (in $000's)other | $55.26M | – | – |
| Distributions per Common Share, quarter ended September 30, 2026other | $0.105 | – | – |
| Total Assets, September 30, 2026 (in $000's)other | $6.04B | – | – |
| Total Liabilities, September 30, 2026 (in $000's)other | $1.61B | – | – |
| Perpetual Preferred Stock, September 30, 2026 (in $000's)other | $1.55B | – | – |
| Net Asset Value to Common Shareholders, September 30, 2026 (in $000's)other | $2.88B | – | – |
| NAV per Common Share, September 30, 2026other | $5.36 | – | – |
| Balance Sheet Cash + Undrawn Revolving Credit Facility Commitments, September 30, 2026 (in $000's)other | $1.87B | – | – |
| Cash and cash equivalents, September 30, 2026 (in thousands)other | $38.02M | – | – |
| Total investments at fair value, September 30, 2026 (in $000's)other | $5.94B | – | – |
| Total Investments at Cost, September 30, 2026 (in $000's)other | $5.94B | – | – |
| Net of Cash Debt to Total Assets, September 30, 2026other | 25.0% | – | – |
| Net of Cash Debt to Total Equity Ratio, September 30, 2026other | 33.9% | – | – |
| Net of Cash Asset Coverage of Debt Ratio, September 30, 2026other | 395% | – | – |
| Interest Coverage, September 30, 2026other | 375% | – | – |
| Non-Accrual Loans as % of Total Investments at Cost, September 30, 2026other | 1.8% | – | – |
| Non-Accrual Loans as % of Total Investments at Fair Value, September 30, 2026other | 0.2% | – | – |
| Number of Portfolio Companies, September 30, 2026other | 85 | – | – |
| Number of Industries, September 30, 2026other | 31 | – | – |
| Total Originations, quarter ended September 30, 2026 (in $000's)other | $90.48M | – | – |
| Total Repayments and Sales, quarter ended September 30, 2026 (in $000's)other | $257.4M | – | – |
| Originations, Net of Repayments and Sales, quarter ended September 30, 2026 (in $000's)other | −$166.9M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- Prospect declared monthly cash common shareholder distributions of $0.0350 per share for November 2026, December 2026, and January 2027.
- November 2026 distribution record date: 11/25/2026; payment date: 12/21/2026.
- December 2026 distribution record date: 12/29/2026; payment date: 1/20/2027.
- January 2027 distribution record date: 1/27/2027; payment date: 2/17/2027.
- On November 3, 2026, the Board increased the amount of common shares that may be repurchased under the share repurchase program up to an aggregate of $200.0 million.
- Cumulative paid and declared distributions to common shareholders were $4,869,192, or $22.24 per common share, through the January 2027 distribution.
What drove it
- Middle-market investments represented 84% of investments at cost as of September 30, 2026, and comprised 83% of the $90.5 million of originations during the September 2026 quarter.
- First lien debt was 71.5% of total investments at cost, while second lien debt was 11.1%, as of September 30, 2026.
- First lien mix increased 740 basis points to 71.5% based on cost from June 2024; second lien mix decreased 534 basis points to 11.1%; subordinated structured notes mix decreased 837 basis points to 0.0%.
- Prospect sold Valley Electric on July 1, 2026 for total consideration of approximately $328 million, subject to post-closing adjustments and payments.
- Prospect signed a definitive agreement on October 27, 2026 to sell its approximately 8.3% equity stake in RGIS Services, LLC for approximately $22.0 million, with closing expected within 45 days of signing subject to customary and regulatory approvals.
- Six additional real estate properties were sold in the last twelve months ended September 30, 2026.
- Non-accrual loans as a percentage of total investments at cost were 1.8%, compared with 4.7% as of June 30, 2026.
Concerns
- Net realized and net change in unrealized losses from investments were $(98,637) for the three months ended September 30, 2026.
- Net income applicable to common shareholders was $(53,448), or $(0.10) per common share, for the quarter.
- NAV per common share was $5.36 at September 30, 2026, compared with $5.71 at June 30, 2026 and $6.45 at September 30, 2025.
- The quarterly distribution per common share of $0.105 was below the reported NII per common share of $0.15 only when compared as printed on differing decimal precision; no coverage ratio was reported.
- Total investments at fair value were $5,944,478 at September 30, 2026, compared with $6,342,558 at June 30, 2026.
- The real estate property portfolio at NPRC was 15.3% of investments at cost as of September 30, 2026.
What to watch
- Completion of the expected November 13, 2026 redemption of all $263.2 million aggregate principal amount of November 2026 Notes.
- Completion of the expected November 5, 2026 closing of the $300.0 million notes due 2031 offering and use of its expected approximately $283.4 million net proceeds.
- Closing of the proposed RGIS Services, LLC stake sale, expected within 45 days of the October 27, 2026 signing.
- Deployment of the $1,872,364 of balance sheet cash plus undrawn revolving credit facility commitments as of September 30, 2026.
- Progress in portfolio rotation toward first lien senior secured middle-market loans and targeted exits of real estate properties and lower-yielding equity-linked assets.
- The impact of AI and automation initiatives on portfolio company revenue and cost efficiencies.
Balance sheet and cash flow
- During the September 2026 quarter, Prospect reduced outstanding debt principal by $341.4 million, or 18% of total debt liabilities, to $1.5 billion from $1.9 billion.
- Asset coverage ratio on senior securities representing indebtedness was 387.7% as of September 30, 2026, compared with 339.4% as of June 30, 2026.
- Regulatory asset coverage ratio on senior securities, including preferred equity, was 184.9% as of September 30, 2026, compared with 177.6% as of June 30, 2026.
- Public Notes were $643,110, Prospect Capital InterNotes® were $591,263, and the Revolving Credit Facility was $287,152 as of September 30, 2026.
- Unencumbered Assets were $4,008,960, representing 66.4% of Total Assets, as of September 30, 2026.
- As of September 30, 2026, three separate unsecured debt issuances aggregated approximately $651.8 million outstanding, excluding program notes; $598.2 million of program notes were outstanding.
- Weighted average cost of unsecured debt financing was 4.84% at September 30, 2026, up from 4.54% since September 30, 2025.
- The October 29, 2026 offering was for $300.0 million aggregate principal amount of notes due 2031, with expected net proceeds of approximately $283.4 million; closing was expected on November 5, 2026.
Analysis
Prospect reported NII of $76,359, or $0.15 per common share, for the fiscal quarter ended September 30, 2026. NII was $77,692 in the June 2026 quarter and $79,350 in the September 2025 quarter. Total investment income was $151,741, comprising $132,608 of total interest income, $5,475 of dividend income, and $13,658 of other income. Interest represented 87.4% of total investment income, versus 90.1% in the June 2026 quarter and 96.7% in the September 2025 quarter.
The principal earnings pressure was investment valuation and realization activity. Net realized and net change in unrealized losses from investments were $(98,637), including $(71,607) of net realized losses and $(27,030) of net change in unrealized losses. Net increase or decrease in net assets resulting from operations was $(21,555). After $(26,120) of preferred stock dividends, $(3,730) of net loss on redemptions of preferred stock, and $(2,043) of accretion to redemption value of preferred stock, net income applicable to common shareholders was $(53,448), or $(0.10) per common share.
NAV to common shareholders was $2,875,089 and NAV per common share was $5.36 at September 30, 2026, compared with $2,928,846 and $5.71 at June 30, 2026. The portfolio contracted during the quarter, with total investments at fair value of $5,944,478 versus $6,342,558 at June 30, 2026. Repayments and sales of $257,372 exceeded originations of $90,477, producing originations net of repayments and sales of $(166,895). Credit indicators improved as non-accrual loans were 1.8% of total investments at cost and 0.2% of total investments at fair value, compared with 4.7% and 0.7%, respectively, at June 30, 2026.
The company strengthened liquidity and reduced leverage. Balance sheet cash plus undrawn revolving credit facility commitments were $1,872,364, and net of cash debt to total assets was 25.0%, compared with 28.6% at June 30, 2026. Prospect stated that it reduced outstanding debt principal by $341.4 million during the quarter to $1.5 billion from $1.9 billion. The company also announced a $300.0 million notes due 2031 offering, expected to close on November 5, 2026, and gave notice to redeem all $263.2 million of November 2026 Notes on or about November 13, 2026.
Capital allocation remains centered on distributions, portfolio rotation, and share repurchases. Prospect declared monthly distributions of $0.0350 per common share for each of November 2026 through January 2027 and expanded its common-share repurchase program to an aggregate of $200.0 million. The company continued to emphasize first lien middle-market lending, which represented 71.5% of investments at cost, while pursuing exits from selected real estate and equity-linked assets. No forward earnings, NII, NAV, investment-income, expense, leverage, or distribution guidance was provided.
Management, verbatim
Prospect is actively assessing and implementing the best use cases for artificial intelligence and automation within our critical business processes, in our investment processes and operations and in portfolio company operations.
John Barry, Prospect Chairman and Chief Executive Officer
AI is the most transformational game changer to come along in a generation, and we expect profit enhancing results within our businesses.
John Barry, Prospect Chairman and Chief Executive Officer
Not in the filing
stated, not guessed- Forward financial guidance, including revenue or investment income, NII, operating expenses, tax rate, NAV, leverage, originations, distributions, or earnings per share guidance.
- Prior-outlook comparison, because no previous outlook section was provided.
- GAAP and non-GAAP designations for the reported financial results.
- Operating cash flow and free cash flow.
- Gross margin.
- Segment revenue reporting.
- Current-quarter share-repurchase amount or shares repurchased under the repurchase program.
- Total common shares repurchased during the quarter.
- A reported common-share dividend coverage ratio.
- Explicit year-over-year and sequential percentage changes for the financial statement metrics.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.