Pennantpark Floating Rate Capital (PFLT) investor relations material

Executive summary

• Core net investment income for the quarter was $0.28 per share, with both GAAP and core NII matching this figure.

• Investment portfolio grew to $2.8 billion as of September 30th, up from $2.4 billion in the prior quarter and $1.98 billion a year earlier, with 164 companies and a focus on first lien secured debt.

• Net investment income for the year was $107.2 million ($1.16 per share), up from $77.7 million ($1.18 per share) the prior year, driven by portfolio expansion.

• Completed a $250 million portfolio acquisition and launched a new joint venture (PSSL2) with Hamilton Lane, targeting a $500 million initial portfolio.

• Distributions declared totaled $1.23 per share for the year, supported by stable NII and spillover income.

Financial highlights

• Net asset value per share was $10.83 at year-end, down 1.2% from the prior quarter.

• Net realized and unrealized loss on investments was $10 million for the quarter; annual net realized losses were $(5.9) million and net unrealized depreciation was $(34.6) million.

• Debt to equity ratio was 1.6x at quarter end, reduced to 1.4x post quarter via asset sales; regulatory debt to equity ratio was 1.66x at year-end, reduced to 1.41x post quarter-end.

• Weighted average yield on debt investments was 10.2% at quarter-end.

• Annualized weighted average cost of debt was 6.8%, down from 8.5% the previous year.

Outlook and guidance

• Run rate NII projected to approximate current dividend as PSSL2 ramps; NII expected to exceed dividend as JV grows.

• Dividend policy expected to remain stable, with support from growing NII and spillover income.

• Recent asset acquisitions and JV projected to add $0.01-$0.02 per share NII quarterly once fully ramped.

• Market environment shows increased transaction activity, expected to drive higher loan origination volumes.

• Management confident in covering dividend even with potential SOFR reductions.