Prospect Capital

PSEC

Market cap $1.13B

We take a look at the action in business development companies through the fourth week of May and highlight some of the key themes we are watching. BDC sector saw a -2.5% average return this week, with sentiment and valuations near 1-year lows despite stable credit metrics. Median NII declined nearly 6% in Q1, but the downward trend is expected to moderate as spreads widen and deal activity recovers.

NEW YORK, May 27, 2026 (GLOBE NEWSWIRE) -- Prospect Capital Corporation (NASDAQ: PSEC) (“Prospect”) a leading business development company focused on investing in middle-market businesses, today announced the successful sale of Prospect's portfolio company Valley Electric Company, Inc. (“Valley Electric”) to MYR Group Inc. (“MYR”), a leading specialty contractor serving the electric utility infrastructure, commercial, and industrial construction markets.

In the article I list all monthly-paying BDCs. This list is then reduced to a handful of BDCs. These remaining BDCs, in my view, are the one with the strongest prospect to generate durable income without permanent NAV decay.

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Prospect Capital maintains a 'Strong Buy' rating as its investment thesis, although controversial, remains intact after Q3'26 earnings. PSEC's portfolio quality remained stable at 0.7%, outperforming peers, with first liens rising to 72%. The dividend was reset to $0.035 per-share monthly due to pressure from preferred stock offerings.

Prospect Capital Corporation is reiterated as a sell due to ongoing financial deterioration despite a 59% discount to NAV and double-digit yield. PSEC's Q3 saw net investment income and total investment income decline, with NAV dropping sequentially and year-over-year, underperforming peers. Management's portfolio shift to first-lien loans and reduced real estate exposure are positive but not expected to offset near-term financial weakness.

Prospect Capital NASDAQ: PSEC reported net investment income of $78 million, or $0.16 per common share, for its March quarter, as management emphasized a continuing shift toward first-lien senior secured middle-market lending and away from structured notes, real estate and other targeted equity-linked assets.

Prospect Capital Corporation (PSEC) Q3 2026 Earnings Call Transcript

NEW YORK, May 07, 2026 (GLOBE NEWSWIRE) -- Prospect Capital Corporation (NASDAQ: PSEC) (“Prospect”, “our”, or “we”) today announced financial results for our fiscal quarter ended March 31, 2026.

NEW YORK, May 06, 2026 (GLOBE NEWSWIRE) -- Prospect Capital Corporation (NASDAQ: PSEC) (the “Company” or “Prospect”) today announced it expects to file with the Securities and Exchange Commission its report on Form 10-Q containing results for the fiscal quarter ended March 31, 2026 and to issue its earnings press release on Thursday, May 7, 2026, after the close of the markets. The Company will host a conference call on Friday, May 8, 2026 at 9:00 a.m.