FINANCIAL RESULTS
All amounts in $000's exceptper share amounts (on weighted average basis for period numbers)
Quarter Ended
Quarter Ended
Quarter Ended
December 31, 2025
September 30, 2025
December 31, 2024
Net Investment Income ("NII")
$90,888
$79,350
$86,431
NII per Common Share
$0.19
$0.17
$0.20
Interest as % of Total Investment Income
84.7%
96.7%
91.0%
Net Income (Loss) Applicable to Common Shareholders
$(6,576)
$48,087
$(30,993)
Net Income (Loss) per Common Share
$(0.01)
$0.10
$(0.07)
Distributions to Common Shareholders
$63,894
$62,393
$65,554
Distributions per Common Share
$0.135
$0.135
$0.15
Cumulative Paid and Declared Distributions to Common Shareholders(1)
$4,699,764
$4,633,799
$4,445,060
Cumulative Paid and Declared Distributions per Common Share(1)
$21.93
$21.79
$21.39
Total Assets
$6,534,578
$6,641,870
$7,234,855
Total Liabilities
$1,952,326
$2,012,561
$2,164,305
Perpetual Preferred Stock
$1,623,497
$1,624,519
$1,630,514
Net Asset Value ("NAV") to Common Shareholders
$2,958,755
$3,004,790
$3,440,036
NAV per Common Share
$6.21
$6.45
$7.84
Balance Sheet Cash + Undrawn Revolving Credit Facility Commitments
$1,647,216
$1,524,462
$1,879,738
Net of Cash Debt to Total Assets
28.2%
28.2%
28.1%
Net of Cash Debt to Total Equity Ratio(2)
39.9%
39.9%
39.8%
Net of Cash Asset Coverage of Debt Ratio(2)
350%
350%
351%
Interest Coverage(3)
426%
339%
363%
Unsecured Debt + Perpetual Preferred Equity as % of Total Debt + Perpetual Preferred Equity
85.3%
80.8%
91.9%
Unsecured and Non-Recourse Debt as % of Total Debt
100.0%
100.0%
100.0%
(1) Declared dividends are through the April 2026 distribution. February 2026 through April 2026 distributions are estimated based on shares outstanding as of 2/6/2026.(2) Including our perpetual preferred stock as equity.(3) Calculated as (Net Investment Income + Interest Expense + Incentive Fees) / Interest Expense.
CASH COMMON SHAREHOLDER DISTRIBUTION DECLARATION
Prospect is declaring distributions to common shareholders as follows:
Monthly Cash Common Shareholder Distribution
Record Date
Payment Date
Amount ($ per share)
February 2026
2/25/2026
3/19/2026
$0.0450
March 2026
3/27/2026
4/21/2026
$0.0450
April 2026
4/28/2026
5/19/2026
$0.0450
Taking into account past distributions and our current share count for declared distributions, since inception through our April 2026 declared distribution, Prospect will have distributed $21.93 per share to original common shareholders, aggregating approximately $4.7 billion in cumulative distributions to all common shareholders.
Since Prospect's initial public offering in July 2004 through December 31, 2025, Prospect has invested over $22 billion across over 450 investments, exiting over 350 of these investments.
Since Prospect's initial public offering in July 2004 through December 31, 2025, Prospect's exited investments resulted in an investment level exited gross internal rate of return ("IRR") of approximately 12% (based on total capital invested of approximately $13.1 billion and total proceeds from such exited investments of approximately $16.7 billion).
In Prospect's primary business of middle market lending over the same more than 21-year time period, Prospect's exited investments resulted in an investment level exited gross IRR of approximately 14.5% (based on total capital invested of approximately $11.2 billion and total proceeds from such exited investments of approximately $14.3 billion), with an annualized realized loss rate of 0.2%.
In Prospect's core targeted business of middle market lending to companies with less than $50 million of EBITDA over the same more than 21-year time period, Prospect's exited investments resulted in an investment level exited gross IRR of approximately 17.2% (based on total capital invested of approximately $6.3 billion and total proceeds from such exiting investments of approximately $8.3 billion), with an annualized net realized loss rate of 0.1%.
Prospect's EBITDA to interest coverage for our primary business of middle market lending is approximately 210%, which grows to approximately 230% for Prospect's core targeted middle market lending to companies with less than $50 million of EBITDA.
Middle-Market Lending Track Record
Overall
< $50 Million EBITDA
> $50 Million EBITDA
Investments
379
215
164
Total Capital Invested
$17.3 billion
$9.8 billion
$7.5 billion
Total Proceeds
$18.7 billion
$10.7 billion
$8.1 billion
Amount Remaining(1)
$5.3 billion
$3.0 billion
$2.3 billion
Total
$24.0 billion
$13.6 billion
$10.4 billion
Exited Track Record Since Inception
Investments
292
161
131
Total Capital Invested
$11.2 billion
$6.3 billion
$4.9 billion
Total Proceeds
$14.3 billion
$8.3 billion
$6.0 billion
Exited Gross IRR(2)
14.5%
17.2%
10.3%
Annualized Net Realized Loss Rate(3)
0.2%
0.1%
0.3%
Middle Market Lending Portfolio Cash Interest Coverage(4)
210%
230%
179%
(1) Amount remaining represents the fair value of investments and any additional interest receivable, net.(2) See "Internal Rate of Return" definition.(3) See "Annualized Net Realized Loss Rate" definition.(4) See "Middle Market Lending Portfolio Company EBITDA and Cash Interest Coverage".
Drivers focused on optimizing our business include:
(1) rotation of assets into and increased focus on our core business of first lien senior secured middle market loans (with our first lien mix increasing 728 basis points to 71.4% (based on cost) from June 2024), with selected equity linked investments, focusing on new investments in companies with less than $50 million of EBITDA, including companies with smaller funded private equity sponsors, independent sponsors, and no third party financial sponsors;
(2) reduction in our second lien senior secured middle market loans (with our second lien mix decreasing 371 basis points to 12.7% (based on cost) from June 2024);
(3) exit of our subordinated structured notes portfolio (with our subordinated structured notes mix decreasing 818 basis points to 0.2% (based on cost) from June 2024);
(4) exit of targeted equity linked assets, including real estate properties (with five additional properties sold in the current fiscal year) and certain corporate investments (such as the sale of significant assets within Echelon Transportation, LLC in July 2025 and December 2025), with other potential exits targeted;
(5) enhancement of portfolio company operating performance; and
(6) utilization of our cost efficient revolving floating rate credit facility (which significantly matches our majority floating rate assets).
In our middle market lending strategy, which represented 85% of our investments at cost as of December 31, 2025, we continued our focus on first lien senior secured loans during the quarter. Middle market investments comprised 100% of our $80.4 million of originations during the December 2025 quarter. Investments during the quarter included follow-on investments in existing portfolio companies to support acquisitions, working capital needs, organic growth initiatives, and other objectives.
As of December 31, 2025, our portfolio included 2.8% (based on cost) of investments in software companies, which is significantly less than the 22% average across business development companies with publicly traded unsecured bonds included in a February 2, 2026 Barclays fixed income research report.
Our real estate property portfolio at National Property REIT Corp. ("NPRC") totaled 14.1% of our investments at cost as of December 31, 2025 and continued its focus on already developed and occupied cash flow multifamily investments. Since the inception of this strategy in 2012 and through December 31, 2025, we have exited 56 property investments that have earned an unlevered investment-level gross cash IRR of 24% and cash on cash multiple of 2.4 times. We exited four property investments in the current fiscal year through December 31, 2025 that earned an unlevered investment-level gross cash IRR of 21% and cash on cash multiple of 2.4 times. NPRC exited one additional property investment after December 31, 2025, and has multiple additional properties in various stages of sale processes. The remaining real estate property portfolio as of December 31, 2025 included 54 properties and paid us an income yield of 5.4% for the quarter ended December 31, 2025, thereby providing opportunities to exit certain such investments and recycle into more and higher yielding first lien senior secured loans with selected equity linked investments. Our aggregate investment in NPRC included a $270 million unrealized gain as of December 31, 2025.
Our senior management team and employees own 27.9% of all common shares outstanding or approximately $0.8 billion of our common equity as measured at NAV.
PORTFOLIO UPDATE AND INVESTMENT ACTIVITY
All amounts in $000's exceptper unit amounts
As of
As of
As of
December 31, 2025
September 30, 2025
December 31, 2024
Total Investments(1)
$6,389,615
$6,532,842
$7,025,705
Total Investments(2)
$6,441,536
$6,513,456
$7,132,928
Number of Portfolio Companies
91
