Business Development Company / Private Credit / Alternative Finance
Strategic Profile
PSEC has successfully repositioned its business with a focus on first lien senior secured middle market loans, increasing its first lien mix to 71.1%. The company is concentrating on first lien senior secured middle market loans and targeting companies with less than $50 million in EBITDA, where there is less competition and better returns.
Cyborg Score Rationale
PSEC has a strong history of investment returns, with a 12% unlevered investment level gross cash IRR over two decades. The company has successfully rotated its assets into core business areas, increasing first lien mix to 71.4%. However, the net debt to total assets ratio stands at 28.2% and non-accruals as a percentage of total assets are approximately 0.7%.
Top Insights
PSEC reported net investment income of $91 million or $0.19 per common share for the December quarter with monthly common shareholder distributions of $0.045 per share
PSEC maintains a diversified portfolio with 91 companies across 32 industries, focusing primarily on senior and secured debt, which constitutes 84% of its portfolio at cost
Management and employees of Prospect Capital Management own approximately 29% of common equity, aligning interests with investors
PSEC's performing interest-bearing investments generated an annualized yield of 11.8% for the quarter ended September
Named Competitors
Middle Market Lending — BDC focused on lower middle market debt and equity investments
Business Development Company — Multi-strategy BDC with middle market and credit-focused investments
Private Credit — Leading multi-strategy BDC with large middle market portfolio
Recent Developments
(January 2026) Perpetual Preferred Stock Series A5 and M5 offerings now available on iCapital Marketplace with 7.50% per annum contractual dividend rate and nearly $2 billion raised to date
(February 2026) Reported net investment income of $91 million or $0.19 per common share for December quarter
(November 2025) Reported net investment income of $79.4 million or $0.17 per common share with monthly distributions of $0.045 per share
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