FINANCIAL RESULTS
All amounts in $000's exceptper share amounts (on weighted averagebasis for period numbers)
Quarter Ended
Quarter Ended
Quarter Ended
March 31, 2026
December 31, 2025
March 31, 2025
Net Investment Income ("NII")
$78,457
$90,888
$83,489
NII per Common Share
$0.16
$0.19
$0.19
Interest as % of Total Investment Income
93.4%
84.7%
93.3%
Net Income (Loss) Applicable to Common Shareholders
$26,408
$(6,576)
$(171,331)
Net Income (Loss) per Common Share
$0.05
$(0.01)
$(0.39)
Distributions to Common Shareholders
$65,421
$63,894
$59,966
Distributions per Common Share
$0.135
$0.135
$0.135
Cumulative Paid and Declared Distributions to Common Shareholders(1)
$4,770,919
$4,699,764
$4,527,079
Cumulative Paid and Declared Distributions per Common Share(1)
$22.07
$21.93
$21.57
Total Assets
$6,383,972
$6,534,578
$6,996,312
Total Liabilities
$1,816,573
$1,952,326
$2,118,522
Perpetual Preferred Stock
$1,613,772
$1,623,497
$1,632,426
Net Asset Value ("NAV") to Common Shareholders
$2,953,627
$2,958,755
$3,245,364
NAV per Common Share
$6.05
$6.21
$7.25
Balance Sheet Cash + Undrawn Revolving Credit Facility Commitments
$1,752,375
$1,647,216
$1,716,035
Net of Cash Debt to Total Assets
27.0%
28.2%
28.7%
Net of Cash Debt to Total Equity Ratio(2)
37.6%
39.9%
40.8%
Net of Cash Asset Coverage of Debt Ratio(2)
366%
350%
345%
Interest Coverage(3)
356%
426%
343%
Unsecured Debt + Perpetual Preferred Equity as % of Total Debt + Perpetual Preferred Equity
88.0%
85.3%
87.5%
Unsecured and Non-Recourse Debt as % of Total Debt
100.0%
100.0%
100.0%
(1)
Declared dividends are through the August 2026 distribution. May 2026 through August 2026 distributions are estimated based on shares outstanding as of 5/6/2026.
(2)
Including our perpetual preferred stock as equity.
(3)
Calculated as (Net Investment Income + Interest Expense + Incentive Fees) / Interest Expense.
CASH COMMON SHAREHOLDER DISTRIBUTION DECLARATION
Prospect is declaring distributions to common shareholders as follows:
Monthly Cash Common Shareholder Distribution
Record Date
Payment Date
Amount ($ per share)
May 2026
5/27/2026
6/18/2026
$0.0350
June 2026
6/26/2026
7/22/2026
$0.0350
July 2026
7/29/2026
8/20/2026
$0.0350
August 2026
8/27/2026
9/17/2026
$0.0350
Taking into account past distributions and our current share count for declared distributions, since inception through our August 2026 declared distribution, Prospect will have distributed $22.07 per share to original common shareholders, aggregating approximately $4.8 billion in cumulative distributions to all common shareholders.
Since Prospect's initial public offering in July 2004 through March 31, 2026, Prospect has invested over $22 billion in more than 450 investments, exiting over 350 of these investments.
Since Prospect's initial public offering in July 2004 through March 31, 2026, 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 $13.4 billion and total proceeds from such exited investments of approximately $17.1 billion).
In Prospect's primary business of middle market lending since 2004, Prospect's exited investments resulted in an investment level exited gross IRR of approximately 14.4% (based on total capital invested of approximately $11.4 billion and total proceeds from such exited investments of approximately $14.7 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 since 2004, Prospect's exited investments resulted in an investment level exited gross IRR of approximately 16.9% (based on total capital invested of approximately $6.5 billion and total proceeds from such exiting investments of approximately $8.6 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 205%, 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
362
201
161
Total Capital Invested
$17.3 billion
$9.8 billion
$7.5 billion
Total Proceeds
$19.1 billion
$10.9 billion
$8.2 billion
Amount Remaining(1)
$5.2 billion
$2.9 billion
$2.3 billion
Total
$24.3 billion
$13.8 billion
$10.5 billion
Exited Track Record Since Inception
Investments
292
161
131
Total Capital Invested
$11.4 billion
$6.5 billion
$4.9 billion
Total Proceeds
$14.7 billion
$8.6 billion
$6.1 billion
Exited Gross IRR(2)
14.4%
16.9%
10.4%
Annualized Net Realized Loss Rate(3)
0.2%
0.1%
0.4%
Middle Market Lending Portfolio Cash Interest Coverage(4)
205%
230%
165%
(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 790 basis points to 72.0% (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 404 basis points to 12.4% (based on cost) from June 2024);
(3) exit of our subordinated structured notes portfolio (with our subordinated structured notes mix decreasing 837 basis points to 0.0% (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 through March 2026) and certain corporate investments (such as the exit of Echelon Transportation, LLC in February 2026), with other potential exits targeted and in process;
(5) enhancement of portfolio company operating performance and profitability, including through adoption of AI and automation initiatives focused on enhancing revenues and producing cost efficiencies; and
(6) utilization of our cost effective floating rate revolver (which significantly matches our majority floating rate assets).
In our middle market lending strategy, which represented 85% of our investments at cost as of March 31, 2026, we continued our focus on first lien senior secured loans during the quarter. Middle market investments comprised 94% of our $115.3 million of originations during the March 2026 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 March 31, 2026, our portfolio included 2.5% (based on fair market value) of investments in software companies, significantly lower than the 23% 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 14.3% of our investments at cost as of March 31, 2026 and continued its focus on already developed and occupied cash flow multifamily investments. Since the inception of this strategy in 2012 and through March 31, 2026, we have exited 57 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 five property investments in the current fiscal year through March 31, 2026 that earned an unlevered investment-level gross cash IRR of 18% and cash on cash multiple of 2.3 times. NPRC has multiple additional properties considering various stages of sale processes. The remaining real estate property portfolio as of March 31, 2026 included 53 properties and paid us an income yield of 5.2% for the quarter ended March 31, 2026. These properties provide from time to time 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 $229 million unrealized gain as of March 31, 2026.
Our senior management team and employees own 27.5% 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
March 31, 2026
December 31, 2025
March 31, 2025
Total Investments(1)
$6,192,901
$6,389,615
$6,955,011
Total Investments(2)
$6,302,465
$6,441,536
$6,901,364
Number of Portfolio Companies
89
91
114
Number of Industries
31
32
33
First Lien Debt
72.0%
71.4%
67.7%
Second Lien Debt
12.4%
12.7%
13.6%
Total Senior and Secured Debt
84.4%
84.1%
81.3%
Unsecured Debt
0.1%
0.1%
0.1%
Subordinated Structured Notes
—%
0.2%
5.9%
Equity Investments
15.5%
15.6%
12.7%
Total Investments(1)
100.0%
100.0%
100.0%
First Lien Debt
66.9%
67.0%
65.5%
Second Lien Debt
9.4%
9.9%
10.5%
Total Senior and Secured Debt
