UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 814-00891
PENNANTPARK FLOATING RATE CAPITAL LTD.
(Exact name of registrant as specified in its charter)
MARYLAND
27-3794690
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
1691 Michigan Avenue
Miami Beach, Florida
33139
(Address of principal executive offices)
(Zip Code)
(786) 297-9500
(Registrant’s Telephone Number, Including Area Code)
None
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share
PFLT
The New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☑
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding as of May 7, 2026 was 99,217,896.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2026
TABLE OF CONTENTS
PART I. CONSOLIDATED FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
4
Consolidated Statements of Assets and Liabilities as of March 31, 2026 (unaudited) and September 30, 2025
Consolidated Statements of Operations for the three and six months ended March 31, 2026 and 2025 (unaudited)
5
Consolidated Statements of Changes in Net Assets for the three and six months ended March 31, 2026 and 2025 (unaudited)
6
Consolidated Statements of Cash Flows for the six months ended March 31, 2026 and 2025 (unaudited)
7
Consolidated Schedules of Investments as of March 31, 2026 (unaudited) and September 30, 2025
8
Notes to Consolidated Financial Statements (unaudited)
27
Report of Independent Registered Public Accounting Firm (PCAOB ID 49)
54
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
56
Item 3. Quantitative and Qualitative Disclosures About Market Risk
78
Item 4. Controls and Procedures
79
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
80
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
81
SIGNATURES
82
2
PART I—CONSOLIDATED FINANCIAL INFORMATION
We are filing this Quarterly Report on Form 10-Q, or the Report, in compliance with Rule 13a-13 as promulgated by the Securities and Exchange Commission, or the SEC, under the Securities Exchange Act of 1934, as amended, or the Exchange Act. In this Report, except where the context suggests otherwise, the terms “Company,” “we,” “our” or “us” refers to PennantPark Floating Rate Capital Ltd. and its wholly owned consolidated subsidiaries; “Funding I” refers to PennantPark Floating Rate Funding I, LLC; “Taxable Subsidiary” refers to collectively our consolidated subsidiaries PFLT Investment Holdings II, LLC and PFLT Investment Holdings, LLC; “PSSL” refers to PennantPark Senior Secured Loan Fund I LLC, an unconsolidated joint venture; “PTSF” refers to PennantPark-TSO Senior Loan Fund, LP, a consolidated limited partnership; “PTSF’s GP” refers to PennantPark-TSO Senior Loan Fund GP, LLC a wholly owned subsidiary; "PSSL II” refers to PennantPark Senior Secured Loan Fund II LLC, an unconsolidated joint venture; "2037 Securitization Issuer" refers to PennantPark CLO 11, LLC, a consolidated Delaware limited liability company, “PennantPark Investment Advisers” or “Investment Adviser” refers to PennantPark Investment Advisers, LLC; “PennantPark Investment Administration” or “Administrator” refers to PennantPark Investment Administration, LLC; “2023 Notes” refers to our 4.3% Series A notes due 2023; “2026 Notes” refers to our 4.25% Notes due 2026; “2029 Notes” refers to our 6.75% Notes due 2029; “1940 Act” refers to the Investment Company Act of 1940, as amended; “SBCAA” refers to the Small Business Credit Availability Act; “Code” refers to the Internal Revenue Code of 1986, as amended; “RIC” refers to a regulated investment company under the Code; “BDC” refers to a business development company under the 1940 Act; “Credit Facility” refers to our multi-currency senior secured revolving credit facility, as amended from time to time, with Truist Bank and other lenders, or the “Lenders,” entered into on August 12, 2021; “Securitization Issuer” refers to PennantPark CLO I, Ltd.; “Securitization Issuers” refers to the Securitization Issuer and PennantPark CLO I, LLC; “Debt Securitization” refers to the $301.4 million term debt securitization completed by the Securitization Issuers; “2031 Asset-Backed Debt” refers to (i) the issuance of the Class A-1 Senior Secured Floating Rate Notes due 2031, the Class A-2 Senior Secured Fixed Rate Notes due 2031, the Class B-1 Senior Secured Floating Rate Notes due 2031, the Class B-2 Senior Secured Fixed Rate Notes due 2031, the Class C-1 Secured Deferrable Floating Rate Notes due 2031, the Class C-2 Secured Deferrable Fixed Rate Notes due 2031, and the Class D Secured Deferrable Floating Notes due 2031 and (ii) the borrowing of the Class A‑1 Senior Secured Floating Rate Notes due 2031 by the Securitization Issuers in connection with the Debt Securitization; and “Depositor” refers to PennantPark CLO I Depositor, LLC. 2036 Securitization Issuer refers to PennantPark CLO VIII, LLC; “2036-Debt Securitization” refers to the $350.6 million term debt securitization completed by the "2036 Securitization Issuers"; “2036 Asset-Backed Debt” refers to the issuance of the AAA(sf) Class A-1 Notes, AAA(sf) Class A-2 Notes, AA(sf) Class B Notes, A(sf) Class C Notes, BBB-(sf) Class D Notes, and the issuance of AAA(sf) Class A-1 floating rate loans. (the "Class A-1 Loans" with the 2036-Secured Notes.);“2038-R Securitization Issuers” refers to Securitization Issuer and PennantPark CLO VIII LLC; “2038-R Indenture” refers to that certain indenture, dated February 22, 2024, by and among the 2038-R Securitization Issuers and Wilmington Trust, National Association, as amended by the supplemental indenture, dated February 24, 2026; “2038-R Asset-Backed Debt” refers to the issuance by the 2038-R Securitization Issuers of the following classes of notes pursuant the 2038-R Indenture (i) $80 million of A-1-R Loan, which bear interest at the three-month secured overnight financing rate (“SOFR”) plus 1.43%, (ii) $123 million of A-1-R Notes, which bear interest at three-month SOFR plus 1.43%, (iii) $14 million of Class A-2-R Notes, which bear interest at three-month SOFR plus 1.60%, (iv) $24.5 million of C-R Notes, which bear interest at three-month SOFR plus 2.15% and (v) $19.250 million of D-R Notes, which bear interest at three-month SOFR plus 3.20% (collectively, the “Secured Notes 2038”), (B) the issuance by a 2038-R Securitization Issuer of $69.450 million of subordinated notes pursuant to the 2038-R Indenture (the “Subordinated Notes 2038”), (C) the borrowing by the Securitization Issuer of $26.250 million of Class B-R Loans, which bear interest at three-month SOFR plus 1.75% (the “Class B-R 2038 Loans”),“2036-R Securitization Issuers” refers to Securitization Issuer and PennantPark CLO I LLC; “2036-R Indenture” refers to that certain indenture, dated September 19, 2019, by and among the 2036-R Securitization Issuers and U.S. Bank Trust Company, National Association, as amended by the second supplemental indenture, dated June 25, 2024; “2036-R Asset-Backed Debt” refers to the issuance by the 2036-R Securitization Issuers of the following classes of notes pursuant the 2036-R Indenture (i) $203 million of A-1-R Notes, which bear interest at the three-month secured overnight financing rate (“SOFR”) plus 1.75%, (ii) $10.5 million of A-2-R Notes, which bear interest at three-month SOFR plus 1.90%, (iii) $12 million of Class B-R Notes, which bear interest at three-month SOFR plus 2.05%, (iv) $28.0 million of C-R Notes, which bear interest at three-month SOFR plus 2.75% and (v) $21 million of D-R Notes, which bear interest at three-month SOFR plus 4.30% (collectively, the “Secured Notes”), (B) the issuance by a 2036-R Securitization Issuer of $64 million of subordinated notes pursuant to the 2036-R Indenture (the “Subordinated Notes”), (C) the borrowing by the Securitization Issuer of $12.5 million of Class B-R Loans, which bear interest at three-month SOFR plus 2.05% (the “Class B-R Loans”); “2037 Debt Securitization” refers to the $474.6 million term debt securitization completed by 2037 Securitization Issuer; “2037 Credit Agreement” refers to that certain credit agreement, dated as of February 20, 2025 by and among 2037 Securitization Issuer, as borrower, the various financial institutions party thereto, as lenders, and Western Alliance Trust Company, National Association, as collateral agent and as loan agent; “2037 Indenture” refers to that certain indenture, dated as of February 20, 2025 by and between 2037 Securitization Issuer and Western Alliance Trust Company, National Association; “2037 Asset-Backed Debt” refers to (A) the issuance by 2037 Securitization Issuer of the following classes of notes pursuant to the 2037 Indenture: (i) $220.5 million of AAA(sf) Class A-1 Notes, which bear interest at three-month SOFR plus 1.49%, (ii) $19.0 million of AAA(sf) Class A-2 Notes, which bear interest at three-month SOFR plus 1.60%, (iii) $28.5 million of AA(sf) Class B Notes, which bear interest at three-month SOFR plus 1.75%, (iv) $38.0 million of A(sf) Class C Notes, which bear interest at three-month SOFR plus 2.20%, (v) $28.5 million of BBB-(sf) Class D Notes (the “2037 Class D Notes”), which bear interest at three-month SOFR plus 3.60%, (collectively, the “2037 Secured Notes”), and (vi) $85.1 million of subordinated notes (“2037 Subordinated Notes” and, together with the 2037 Secured Notes, the “2037 Notes”) and (B) the borrowing by the Issuers of $10.0 million under AAA(sf) Class A-1L-A floating rate loans and $45.0 million under AAA(sf) Class A-1L-B floating rate loans (together, the “2037 Asset-Backed Loans”), which bear interest at three-month SOFR plus 1.49%. References to our portfolio, our investments, our multi-currency, senior secured revolving credit facility, as amended and restated, or the Credit Facility, and our business includes investments we make through our subsidiaries.
3
PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except share and per share data)
March 31, 2026
September 30, 2025
(unaudited)
Assets
Investments at fair value
Non-controlled, non-affiliated investments (amortized cost— $2,151,925 and $2,458,018, respectively)
$
2,189,011
2,491,360
Controlled, affiliated investments (amortized cost— $494,500 and $361,375, respectively)
391,270
281,968
Total investments (amortized cost— $2,646,425 and $2,819,393, respectively)
2,580,281
2,773,328
Cash equivalents (cost— $31,427 and $40,729, respectively)
31,427
40,729
Cash (cost— $90,446 and $81,955, respectively)
90,444
81,959
Interest receivable
12,611
13,832
Distributions receivable
900
—
Receivable for investments sold
30,052
1,369
Due from affiliates
136
321
Prepaid expenses and other assets
2,085
2,143
Total assets
2,747,936
2,913,681
Liabilities
Credit Facility payable, at fair value (cost— $328,355 and $683,855, respectively)
328,333
683,837
2026 Notes payable, net (par—$185,000) (unamortized deferred financing costs of $2 and $391, respectively)
184,998
184,609
2029 Notes payable, net (par—$200,000 and $0) (unamortized deferred financing costs of $4,132 and $0, respectively)
195,868
2036 Asset-Backed Debt, net (par—$0 and $287,000) (unamortized deferred financing costs of $0 and $2,373, respectively)
284,627
2036-R Asset-Backed Debt, net (par— $287,000 and $266,000) (unamortized deferred financing costs of $415 and $634, respectively)
286,585
265,366
2037 Asset-Backed Debt, net (par— $389,500 and $361,000) (unamortized deferred financing costs of $2,355 and $2,669, respectively)
387,145
358,331
2038-R Asset-Backed Debt, net (par—$287,000 and $0) (unamortized deferred financing costs of $2,230 and $0, respectively)
284,770
Payable for investments purchased
14,852
Interest payable on debt
15,407
19,172
Distributions payable
10,170
Base management fee payable
6,427
6,549
Incentive fee payable
6,437
6,883
Accounts payable and accrued expenses
1,581
2,166
Deferred tax liability
1,558
1,864
Due to affiliates
739
Total liabilities
1,709,279
1,839,165
Commitments and contingencies (See Note 11)
Net assets
Common stock, 99,217,896 and 99,217,896 shares issued and outstanding, respectively Par value $0.001 per share and 200,000,000 shares authorized
99
Paid-in capital in excess of par value
1,219,502
Accumulated deficit
(180,944
)
(145,085
Total net assets
1,038,657
1,074,516
Total liabilities and net assets
Net asset value per share
10.47
10.83
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended March 31,
Six Months Ended March 31,
2026
2025
Investment income:
From non-controlled, non-affiliated investments:
Interest
50,735
49,215
107,265
96,678
Dividend
33
369
41
946
Other income
386
634
1,148
2,114
From controlled, affiliated investments:
8,652
7,345
16,497
20,153
6,150
4,375
11,094
8,750
306
Total investment income
65,956
61,938
136,045
128,947
Expenses:
Interest and expenses on debt
24,139
22,529
51,293
44,890
Performance-based incentive fee
6,258
13,097
13,750
Base management fee
5,604
13,241
10,868
General and administrative expenses
1,200
2,400
Administrative services expenses
650
1,800
1,150
Expenses before amendment costs, debt issuance costs and provision for taxes
39,103
36,241
81,831
73,058
Provision for taxes on net investment income
25
225
250
450
Credit Facility amendment and debt issuance costs
1,080
442
1,578
Total expenses
40,208
36,908
83,659
73,950
Net investment income
25,748
25,030
52,386
54,997
Realized and unrealized gain (loss) on investments and debt:
Net realized gain (loss) on:
Non-controlled, non-affiliated investments
(7,535
(795
(6,079
Non-controlled and controlled, affiliated investments
(2,682
22,811
Provision for taxes on realized gain (loss) on investments
(21
(94
Debt extinguishment
(1,380
Net realized gain (loss) on investments and debt
(8,915
(3,498
(7,459
23,103
Net change in unrealized appreciation (depreciation) on:
25,010
(9,630
3,744
(6,688
(12,802
(11,146
(23,823
(43,050
Provision for taxes on unrealized appreciation (depreciation) on investments
(329
468
307
1,100
Debt appreciation (depreciation)
26
1
91
Net change in unrealized appreciation (depreciation) on investments and debt
11,905
(20,307
(19,768
(48,547
Net realized and unrealized gain (loss) from investments and debt
2,990
(23,805
(27,227
(25,444
Net increase (decrease) in net assets resulting from operations
28,738
1,225
25,159
29,553
Net increase (decrease) in net assets resulting from operations per common share (See Note 7)
0.29
0.01
0.25
0.34
Net investment income per common share
0.26
0.28
0.53
0.64
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(in thousands, except share issue data)
Net increase (decrease) in net assets from operations:
Net realized gain (loss) on investments
(3,477
23,197
Net realized loss on debt extinguishment
Net change in unrealized appreciation (depreciation) on investments
12,208
(20,776
(20,079
(49,738
Net change in provision for taxes on realized and unrealized appreciation (depreciation) on investments
447
1,006
Net change in unrealized appreciation (depreciation) on debt
Distributions to stockholders:
Distribution of net investment income
(30,510
(27,699
(61,018
(52,879
Total distributions to stockholders
Capital transactions
Public offering
131,103
213,811
Offering costs
(149
(648
Net increase in net assets resulting from capital transactions
130,954
213,163
Net increase (decrease) in net assets
(1,772
104,480
(35,859
189,837
Net assets:
Beginning of period
1,040,429
962,651
877,294
End of period
1,067,131
Capital share activity:
Shares issued from public offering
11,562,000
18,838,000
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Cash flows from operating activities:
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:
Net change in unrealized (appreciation) depreciation on investments
20,079
49,738
(4
(91
Net realized (gain) loss on investments
6,079
(23,197
1,380
Net accretion of discount and amortization of premium
(3,603
(7,430
Purchases of investments
(462,714
(900,239
Payment-in-kind interest
(3,140
(3,076
Proceeds from dispositions of investments
636,347
523,668
Amortization of deferred financing costs
2,221
779
(Increase) decrease in:
1,221
1,073
(28,683
(2,048
Distribution receivable
(900
(311
58
(2,070
Due from affiliate
185
209
Increase (decrease) in:
(14,852
(20,363
(3,765
557
(122
1,016
(446
3,069
(306
(1,100
(739
(585
(523
Net cash provided by (used in) operating activities
172,870
(350,786
Cash flows from financing activities:
Proceeds from public offering
Issuance of 2037 Asset-Backed Debt
361,000
Capitalized borrowing costs for the 2037 Asset-Backed Debt
(2,971
Issuance of 2029 Notes
200,000
Capitalized borrowing costs for the 2029 Notes
(4,132
Issuance of 2038-R Asset-Backed Debt
287,000
Capitalized borrowing costs for the 2038-R Asset-Backed Debt
(2,536
Borrowings of 2037 Asset-Backed Debt
28,500
Borrowings of 2036-R Asset-Backed Debt
21,000
Repayment of 2036 Asset-Backed Debt
(287,000
Distributions paid to stockholders
(61,019
(51,086
Borrowings under Credit Facility
141,500
235,001
Repayments under Credit Facility
(497,000
(405,000
Net cash provided by (used in) financing activities
(173,687
350,107
Net increase (decrease) in cash and cash equivalents
(817
(679
Effect of exchange rate changes on cash
(13
Cash and cash equivalents, beginning of period
122,688
112,050
Cash and cash equivalents, end of period
121,871
111,358
Supplemental disclosures:
Interest paid
52,837
43,554
Taxes paid
790
Non-cash exchanges and conversions
2,030
551
Non-cash purchases and disposition of investments
133,131
CONSOLIDATED SCHEDULE OF INVESTMENTS
MARCH 31, 2026
Issuer Name
Acquisition
Maturity
Industry
Current Coupon
Basis Point Spread Above Index (1)
Par / Shares
Cost
Fair Value (2)
Investments in Non-Controlled, Non-Affiliated Portfolio Companies - 210.8% (3), (4)
First Lien Secured Debt - 187.6% of Net Assets
ACP Avenu Buyer, LLC
10/2/2023
10/02/2029
IT Services
8.69
%
3M SOFR+ 500
23,872
23,668
23,275
ACP Avenu Buyer, LLC - Unfunded Term Loan (8)
04/21/2027
10,872
(217
ACP Avenu Buyer, LLC - Unfunded Revolver (6), (8)
7,612
(190
ACP Falcon Buyer, LLC - Unfunded Revolver (6), (8)
7/26/2023
08/01/2029
Professional Services
3,096
Ad.net Acquisition, LLC
5/4/2021
05/07/2026
Media
9.93
3M SOFR+ 626
8,113
8,109
Ad.net Acquisition, LLC - Funded Revolver
05/08/2028
9.96
747
Ad.net Acquisition, LLC - Unfunded Revolver (6), (8)
498
Aechelon Technology, Inc.
8/16/2024
08/16/2029
Aerospace and Defense
9.42
1M SOFR+ 575
14,854
14,747
15,003
Aechelon Technology, Inc. - Funded Revolver
2,776
Aechelon Technology, Inc. - Unfunded Revolver (8)
1,943
AFC-Dell Holding Corp.
2/22/2024
04/09/2027
Distributors
8.67
19,994
19,975
AFC-Dell Holding Corp. - Unfunded Term Loan (8)
7,213
AFC-Dell Holding Corp. - Funded Revolver
10/09/2028
299
AFC-Dell Holding Corp. - Unfunded Revolver (8)
1,795
Alpine Acquisition Corp II - Second Out Term Loan
8/27/2025
01/14/2031
Containers and Packaging
322
Alpine Acquisition Corp II - Third Out Term Loan
8.92
3M SOFR+ 525
430
Alpine Acquisition Corp II - Unfunded Term Loan (8)
12/29/2030
32
Alpine Acquisition Corp II - Unfunded Revolver (8)
129
Amsive Holdings Corporation
3/2/2020
12/10/2026
9.95
3M SOFR+ 625
19,171
19,128
18,979
Aphix Buyer, Inc.
7/17/2025
07/17/2031
Business Services
8.42
3M SOFR+ 475
12,797
12,719
12,733
Aphix Buyer, Inc. - Unfunded Term Loan (8)
07/16/2027
12,127
15
Aphix Buyer, Inc. - Unfunded Revolver (8)
3,995
(20
APT OPCO, LLC - Unfunded Term Loan (8)
9/29/2025
09/30/2027
Healthcare Providers and Services
2,729
17
APT OPCO, LLC - Unfunded Revolver (8)
09/30/2031
Anteriad, LLC (f/k/a MeritDirect, LLC)
5/21/2019
12/31/2027
9.60
3M SOFR+ 590
11,817
11,800
11,729
Anteriad, LLC (f/k/a MeritDirect, LLC) - Incremental Term Loan
1,928
1,926
1,914
Anteriad, LLC (f/k/a MeritDirect, LLC) - Funded Revolver (6)
11.50
Prime + 475
410
407
Anteriad, LLC (f/k/a MeritDirect, LLC) - Unfunded Revolver (8)
2,460
(18
Arcfield Acquisition Corp.
10/28/2024
10/28/2031
15,306
15,292
15,229
Arcfield Acquisition Corp. - Unfunded Revolver (6), (8)
3,547
Archer Lewis, LLC
8/28/2024
08/28/2029
Healthcare Technology
9.45
3M SOFR+ 575
26,408
26,209
25,880
Archer Lewis, LLC - Unfunded Term Loan (8)
08/28/2026
13,292
(133
Archer Lewis, LLC - Funded Revolver
3,252
3,187
Argano, LLC
9/13/2024
09/13/2029
9.18
3M SOFR+ 550
40,928
40,608
40,518
Argano, LLC - Unfunded Term Loan (8)
06/03/2027
1,596
Argano, LLC – Unfunded Revolver (8)
1,421
(14
Azureon, LLC (F/K/A Tpcn Midco, LLC)
6/26/2024
06/26/2029
Diversified Consumer Services
22,355
22,165
22,020
Azureon, LLC (F/K/A Tpcn Midco, LLC) - Unfunded Term Loan (8)
11/26/2027
13,499
(101
Azureon, LLC (F/K/A Tpcn Midco, LLC) - Funded Revolver
9.44
3,505
3,453
Azureon, LLC (F/K/A Tpcn Midco, LLC) - Unfunded Revolver (8)
270
Beacon Behavioral Support Services, LLC
6/21/2024
06/21/2029
9.20
27,728
27,447
Beacon Behavioral Support Services, LLC - Unfunded Term Loan - 3rd Amendment (8)
06/21/2027
19,638
196
Beacon Behavioral Support Services, LLC. - Funded Revolver
11.25
1,262
Beacon Behavioral Support Services, LLC - Unfunded Revolver (8)
841
Best Practice Associates, LLC
11/7/2024
11/08/2029
10.42
3M SOFR+ 675
58,500
57,819
57,183
Best Practice Associates, LLC - Unfunded Revolver (8)
5,732
(129
Beta Plus Technologies, Inc.
2/29/2024
07/02/2029
Internet Software and Services
22,599
22,111
22,260
Big Top Holdings, LLC
02/28/2030
Construction & Engineering
8.95
21,663
21,416
CONSOLIDATED SCHEDULE OF INVESTMENTS-(Continued)
Big Top Holdings, LLC - Unfunded Revolver (8)
4,479
Bioderm, Inc.
01/31/2028
Healthcare Equipment and Supplies
10.17
1M SOFR+ 650
987
984
973
Bioderm, Inc. - Funded Revolver
1/30/2023
1,071
1,055
Blackhawk Industrial Distribution, Inc.
6/27/2022
09/17/2026
9.10
3M SOFR+ 540
8,086
8,073
7,844
Blackhawk Industrial Distribution, Inc. - Funded Revolver (6)
2,233
Blackhawk Industrial Distribution, Inc. - Unfunded Revolver (8)
1,650
(50
BLC Holding Company, Inc.
11/20/2024
11/20/2030
8.17
3M SOFR+ 450
19,256
19,147
BLC Holding Company, Inc. - Unfunded Term Loan (8)
11/20/2026
10,994
BLC Holding Company, Inc. - Unfunded Revolver (8)
4,398
Blue Cloud Pediatric Surgery Centers LLC
8/12/2025
01/21/2031
7,713
7,643
7,598
Blue Cloud Pediatric Surgery Centers LLC - Unfunded Term Loan (8)
07/30/2027
2,759
Boss Industries, LLC
12/27/2024
12/27/2030
Independent Power and Renewable Electricity Producers
8.45
12,023
11,953
Boss Industries, LLC - Unfunded Revolver (8)
2,744
Burgess Point Purchaser Corporation
8/12/2024
07/25/2029
Auto Components
9.02
3M SOFR+ 535
18,625
17,605
16,158
By Light Professional IT Services, LLC
7/15/2025
07/15/2031
High Tech Industries
9.17
1M SOFR+ 550
23,403
23,229
23,052
By Light Professional IT Services, LLC - Unfunded Revolver (6), (8)
3,671
(55
Capital Construction, LLC
6/30/2025
10/22/2026
Consumer Services
9.56
7,960
7,934
7,841
Carisk Buyer, Inc.
11/27/2023
12/03/2029
5,390
5,336
5,403
Carisk Buyer, Inc. - Unfunded Term Loan (8)
4,813
60
Carisk Buyer, Inc. - Unfunded Term Loan - 1st Amendment (8)
3,056
31
Carisk Buyer, Inc. - Unfunded Revolver (6), (8)
1,750
Carnegie Dartlet, LLC
2/7/2024
02/07/2030
33,636
33,256
33,383
Carnegie Dartlet, LLC - Unfunded Revolver (8)
5,405
(41
Cartessa Aesthetics, LLC
6/1/2022
06/14/2028
9.70
3M SOFR+ 600
15,640
15,552
15,562
Cartessa Aesthetics, LLC - Unfunded Revolver (6), (8)
1,438
(7
Case Works, LLC
10/1/2024
10/01/2029
8.93
15,914
15,812
15,755
Case Works, LLC - Funded Revolver
3,102
3,071
Case Works, LLC - Unfunded Revolver (8)
1,007
(10
Cf512, Inc.
8/17/2021
08/20/2026
9.86
3M SOFR+ 619
10,246
10,221
10,143
Cf512, Inc. - Funded Revolver
09/01/2026
9.69
3M SOFR+ 602
86
85
Cf512, Inc. - Unfunded Revolver (6), (8)
869
(9
CJX Borrower, LLC
7/8/2021
07/13/2027
3M SOFR+ 576
8,380
8,297
8,255
CJX Borrower, LLC - Unfunded Term Loan (8)
224
38
CJX Borrower, LLC - Funded Revolver
691
681
CJX Borrower, LLC - Unfunded Revolver (8)
543
(8
Coolsys, Inc.
08/11/2028
Commercial Services & Supplies
8.66
3M SOFR+ 501
2,279
1,999
1,885
Commercial Fire Protection Holdings, LLC
9/23/2024
09/23/2030
8.20
28,937
28,766
Commercial Fire Protection Holdings, LLC - Unfunded Term Loan (8)
09/23/2026
9,592
72
Commercial Fire Protection Holdings, LLC - Unfunded Revolver (8)
5,014
Confluent Health, LLC
3/25/2024
11/30/2028
7.79
1M SOFR+ 411
4,783
4,453
4,059
Confluent Health, LLC - Amendment No.4 Term Loan
1M SOFR+ 500
6,860
6,730
Cornerstone Advisors of Arizona, LLC
5/13/2025
05/13/2032
Consulting Services
6,269
6,239
6,237
Cornerstone Advisors of Arizona, LLC - Unfunded Revolver (8)
1,705
Crane 1 Services, Inc.
8/11/2021
08/16/2027
9.53
3M SOFR+ 586
4,210
4,185
4,147
Crane 1 Services, Inc. - Unfunded Revolver (6), (8)
502
C5MI Acquisition, LLC
7/31/2024
07/31/2029
9.67
39,340
38,939
C5MI Acquisition, LLC - Funded Revolver
3,637
9
C5MI Acquisition, LLC - Unfunded Revolver (8)
5,456
DRI Holding Inc.
5/23/2024
12/21/2028
1M SOFR+ 535
13,100
12,898
12,636
DRS Holdings III, Inc.
10/29/2019
11/01/2028
Chemicals, Plastics and Rubber
6,560
6,532
6,625
DRS Holdings III, Inc. - Unfunded Revolver (6), (8)
Personal Products
487
Duggal Acquisition, LLC
9/30/2024
09/30/2030
Marketing Services
12,401
12,305
Duggal Acquisition, LLC - Unfunded Term Loan (8)
09/30/2026
2,235
22
Duggal Acquisition, LLC - Unfunded Revolver (8)
5,605
DX Electric Company, LLC
10/1/2025
10/01/2031
Electronic Equipment, Instruments, and Components
8.94
7,029
6,980
DX Electric Company, LLC - Unfunded Revolver (8)
1,257
Dynata, LLC - First Out Term Loan
7/15/2024
07/17/2028
8.91
3M SOFR+ 526
2,353
2,266
2,296
Dynata, LLC - Last Out Term Loan
10/16/2028
9.41
14,598
14,132
7,372
Emergency Care Partners, LLC
10/18/2024
10/18/2027
7,900
7,869
Emergency Care Partners, LLC - Unfunded Term Loan (8)
10/19/2026
4,320
Emergency Care Partners, LLC - Unfunded Revolver (8)
1,810
EDS Buyer, LLC
12/19/2022
01/10/2029
10,512
10,426
EDS Buyer, LLC. - Unfunded Revolver (6), (8)
2,298
Efficient Collaborative Retail Marketing Company, LLC
10/23/2018
Media: Diversified and Production
10.68
3M SOFR+ 701
8,734
8,756
7,337
(PIK 2.5%)
ETE Intermediate II, LLC
5/24/2023
05/29/2029
1,647
1,638
ETE Intermediate II, LLC - Funded Revolver
110
ETE Intermediate II, LLC - Unfunded Revolver (8)
1,546
Eval Home Care Solutions Intermediate, LLC
5/10/2024
05/10/2030
Healthcare, Education and Childcare
17,313
17,145
Eval Home Care Solutions Intermediate, LLC - Unfunded Revolver (8)
2,640
Exigo Intermediate II, LLC
03/15/2027
Software
10.02
1M SOFR+ 635
4,762
4,524
Exigo Intermediate II, LLC - Unfunded Revolver (8)
3/10/2022
689
(34
Express Wash Acquisition Company, LLC
4/10/2025
04/10/2031
Automobiles
9.90
34,848
34,695
33,889
Express Wash Acquisition Company, LLC - Unfunded Revolver (8)
2,139
(59
First Medical MSO, LLC
6/13/2025
06/13/2031
7,743
7,674
7,588
First Medical MSO, LLC - Unfunded Term Loan (8)
06/13/2027
4,700
(47
First Medical MSO, LLC - Unfunded Revolver (6) (8)
1,000
Five Star Buyer, Inc.
2/21/2023
02/23/2028
Hotels, Restaurants and Leisure
12.82
3M SOFR+ 915
5,184
5,139
5,067
(PIK 1.00%)
Five Star Buyer, Inc. - Unfunded Revolver (8)
370
Galt Newco, LLC
3/27/2026
03/27/2032
9.21
10,236
10,172
Galt Newco, LLC - Unfunded Revolver (8)
4,387
Gauge ETE Blocker, LLC
05/21/2029
12.56
304
GGG Midco, LLC
9/27/2024
09/27/2030
31,108
30,845
31,398
GGG Midco, LLC - Unfunded Term Loan (8)
809
16
GGG Midco, LLC – Unfunded Revolver (8)
1,311
Global Holdings InterCo, LLC
3/11/2021
09/16/2027
Diversified Financial Services
9.27
1M SOFR+ 560
4,511
4,467
Graffiti Buyer, Inc.
8/9/2021
08/10/2027
Trading Companies & Distributors
9.29
3M SOFR+ 560
5,489
5,427
5,338
Graffiti Buyer, Inc. - Unfunded Term Loan (8)
Graffiti Buyer, Inc. - Unfunded Revolver (6), (8)
865
(24
Hancock Roofing and Construction, LLC
12/23/2020
12/31/2026
Insurance
3,916
3,903
3,662
Hancock Roofing and Construction, LLC - Funded Revolver (6)
750
701
Halo Buyer, Inc.
2/7/2025
08/07/2029
Consumer products
1M SOFR+ 600
10,546
10,458
10,493
Halo Buyer, Inc. - Funded Revolver
839
835
Halo Buyer, Inc. - Unfunded Revolver (8)
1,883
Harris & Co. LLC
8/9/2024
08/09/2030
84,526
83,877
10
Harris & Co. LLC - Unfunded Term Loan C (8)
08/18/2027
1,564
14
Harris & Co. LLC - Funded Revolver
5,772
Harris & Co. LLC - Unfunded Revolver (8)
3,848
Harvest Group Topco Buyer, LLC
3/2/2026
03/02/2032
8.40
33,893
33,724
33,723
Harvest Group Topco Buyer, LLC - Unfunded Term Loan (8)
03/02/2028
8,499
Harvest Group Topco Buyer, LLC - Unfunded Revolver (8)
6,799
HEC Purchaser Corp.
7/25/2024
06/17/2029
8.70
9,126
9,048
Help/Systems Holdings, Inc.
11/30/2026
9.76
3M SOFR+ 610
1,437
1,355
1,234
Highwire Public Relations, LLC
1/12/2026
01/12/2031
15,000
14,913
14,850
Highwire Public Relations, LLC - Unfunded Term Loan (8)
01/12/2028
7,875
(30
Highwire Public Relations, LLC - Unfunded Revolver (8)
2,625
(26
Hills Distribution, Inc.
11/2/2023
9.19
17,474
17,318
Hills Distribution, Inc. - Unfunded Term Loan (8)
12/05/2027
2,384
12
HW Holdco, LLC
1/9/2019
05/10/2027
9.52
3M SOFR+ 585
12,177
12,175
HW Holdco, LLC - Unfunded Revolver (6), (8)
05/11/2026
1,452
IG Investments Holdings, LLC (6)
11/23/2021
09/22/2028
4,431
4,397
4,332
IG Investments Holdings, LLC - Unfunded Revolver (6), (8)
722
(16
Imagine Acquisitionco, Inc. - Unfunded Revolver (8)
11/4/2021
11/16/2027
1,193
Impact Advisors, LLC
3/21/2025
03/19/2032
7,384
7,352
Impact Advisors, LLC - Unfunded Term Loan (8)
03/21/2027
9,665
48
Impact Advisors, LLC - Funded Revolver
10.25
1,167
Impact Advisors, LLC - Unfunded Revolver (8)
778
Infinity Home Services Holdco, Inc.
12/21/2022
12/28/2028
14,780
14,708
Infinity Home Services Holdco, Inc. (CAD)
CAD 1,695
1,227
1,215
Infinity Home Services Holdco, Inc. - Unfunded Term Loan (8)
10/30/2026
7,069
35
Infinity Home Services Holdco, Inc. - Funded Revolver
11.75
323
Infinity Home Services Holdco, Inc. - Unfunded Revolver (8)
969
Infolinks Media Buyco, LLC
11/02/2026
10,152
10,137
9,746
Inovex Information Systems Incorporated
12/17/2024
12/17/2030
Prime + 525
7,852
7,782
Inovex Information Systems Incorporated - Unfunded Term Loan (8)
12/17/2026
2,800
(42
Inovex Information Systems Incorporated - Funded Revolver
11.00
3M SOFR+ 425
490
483
Inovex Information Systems Incorporated - Unfunded Revolver (8)
3,009
(45
Integrity Health Purchaser, LLC
2/2/2026
02/02/2032
3,990
3,952
3,950
Integrity Health Purchaser, LLC - Unfunded Revolver (8)
800
Inventus Power, Inc.
6/29/2023
06/30/2026
11.29
3M SOFR+ 761
4,863
4,858
Inventus Power, Inc. - Unfunded Revolver (8)
807
Keel Platform, LLC
1/26/2024
01/20/2031
Metals and Mining
8.44
14,937
14,783
14,825
Keel Platform, LLC - Unfunded Term Loan (8)
2,924
Kinetic Purchaser, LLC (10)
11/8/2021
11/10/2027
18,483
17,755
10,119
Kinetic Purchaser, LLC - Funded Revolver (10)
11/10/2026
2,247
2,172
1,230
Kinetic Purchaser, LLC - Unfunded Revolver (6) (8) (10)
(571
Lash OpCo, LLC
8/16/2021
09/17/2027
8.77
1M SOFR+ 510
16,425
16,338
16,137
(PIK 5.10%)
Lash OpCo, LLC - Funded Revolver (6)
08/16/2026
266
261
Lash OpCo, LLC - Unfunded Revolver (6) (8)
2,765
(48
LAV Gear Holdings, Inc.
7/31/2025
Capital Equipment
9.61
1M SOFR+ 595
8,177
6,951
LAV Gear Holdings, Inc. - Incremental TL
1M SOFR+ 594
2,636
2,616
LAV Gear Holdings, Inc. - Funded Revolver
141
LAV Gear Holdings, Inc. - Unfunded Revolver (6) (8)
563
Ledge Lounger, Inc.
2/7/2022
11/09/2026
Leisure Products
11.35
3M SOFR+ 765
8,298
8,173
6,410
11
Ledge Lounger, Inc. - Funded Revolver
558
LJ Avalon Holdings, LLC
1/18/2023
02/01/2030
11,771
11,700
11,653
LJ Avalon Holdings, LLC - Unfunded Term Loan (8)
02/17/2028
3,332
(17
LJ Avalon Holdings, LLC - Unfunded Revolver (6), (8)
02/01/2029
2,883
(29
Loving Tan Intermediate II, Inc.
05/31/2028
57,511
57,014
57,223
Loving Tan Intermediate II, Inc. - Unfunded Term Loan (8)
6,365
Loving Tan Intermediate II, Inc. - Unfunded Term Loan - 2nd Amendment (8)
9,172
Loving Tan Intermediate II, Inc. - Funded Revolver
2,217
2,206
Loving Tan Intermediate II, Inc. - Unfunded Revolver (8)
5,173
MAG DS Corp.
9/21/2020
04/01/2027
9.30
12,137
11,988
12,069
Marketplace Events Acquisition, LLC
12/19/2024
12/20/2030
34,602
34,381
34,343
Marketplace Events Acquisition, LLC - Unfunded Revolver (8)
3,364
(25
MBS Holdings, Inc.
04/16/2027
3M SOFR+ 510
497
496
MBS Holdings, Inc. - Unfunded Revolver (6), (8)
4/14/2021
1,157
MDI Buyer, Inc.
3/16/2023
07/25/2028
Commodity Chemicals
6,633
6,586
MDI Buyer, Inc. - Unfunded Term Loan (8)
2,815
21
MDI Buyer, Inc. - Funded Revolver
7/19/2022
10.50
Prime+ 350
1,307
MDI Buyer, Inc. - Unfunded Revolver (6), (8)
571
Meadowlark Acquirer, LLC
12/9/2021
12/10/2027
9.35
3M SOFR+ 565
4,322
4,283
Meadowlark Acquirer, LLC - Unfunded Revolver (8)
1,693
Medina Health, LLC
10/16/2023
10/20/2028
24,367
24,153
Medina Health, LLC - Unfunded Term Loan (8)
03/31/2028
7,249
45
Medina Health, LLC - Unfunded Revolver (8)
5,187
Megawatt Acquisitionco, Inc.
3/1/2024
03/01/2030
9,800
9,525
9,604
Megawatt Acquisitionco, Inc. - Unfunded Revolver (8)
3,250
(65
MOREgroup Holdings, Inc.
1/9/2024
01/16/2030
19,672
19,473
MOREgroup Holdings, Inc. - Unfunded Revolver (8)
6,634
MES Intermediate, Inc.
9/23/2021
10/01/2027
8.41
5,673
5,644
5,662
MES Intermediate, Inc. - Funded Revolver
Prime+ 475
142
MES Intermediate, Inc. - Unfunded Revolver (6) (8)
1,161
(2
NBH Group, LLC
8/29/2025
08/19/2026
1M SOFR+ 585
2,557
2,429
NBH Group, LLC - Unfunded Revolver (6), (8)
1,677
(84
NORA Acquisition, LLC
8/22/2023
08/31/2029
10.05
3M SOFR+ 635
20,638
20,374
19,761
NORA Acquisition, LLC - Funded Revolver
2,466
2,361
NORA Acquisition, LLC - Unfunded Revolver (6), (8)
3,013
(128
North American Rail Solutions, LLC
08/29/2031
Manufacturing/Basic Industry
24,345
24,232
24,223
North American Rail Solutions, LLC - Unfunded Term Loan (8)
08/29/2027
4,231
North American Rail Solutions, LLC - Funded Revolver
508
505
North American Rail Solutions, LLC - Unfunded Revolver (8)
5,415
(27
Omnia Exterior Solutions, LLC
12/29/2023
12/31/2029
26,597
26,423
26,132
Omnia Exterior Solutions, LLC - Unfunded Term Loan (8)
5,473
Omnia Exterior Solutions, LLC - Funded Revolver
1,120
Omnia Exterior Solutions, LLC - Unfunded Revolver (6), (8)
3,080
(54
One Stop Mailing, LLC
5/26/2021
05/07/2027
Air Freight and Logistics
10.03
3M SOFR+ 636
12,031
11,992
ORL Acquisition, Inc. (6)
9/1/2021
09/03/2027
Consumer Finance
13.10
3M SOFR+ 940
7,930
7,700
4,679
(PIK 7.50%)
ORL Acquisition, Inc. - Funded Revolver
11.06
Prime+ 740
216
128
OSP Embedded Purchaser, LLC
12/11/2023
12/17/2029
29,659
29,391
29,214
OSP Embedded Purchaser, LLC - Funded Revolver
11.40
3M SOFR+ 465
293
289
OSP Embedded Purchaser, LLC - Unfunded Revolver (8)
2,639
(40
Output Services Group, Inc. - First-out Term Loan
11/30/2023
12.16
3M SOFR+ 843
828
Output Services Group, Inc. - Last-out Term Loan
05/30/2028
10.41
3M SOFR+ 668
1,681
Pacific Purchaser, LLC
10/02/2028
9.85
4,888
4,832
Pacific Purchaser, LLC - Unfunded Revolver (8)
1,799
PAR Excellence Holdings, Inc.
9/3/2024
09/03/2030
20,328
20,172
19,921
PAR Excellence Holdings, Inc. - Unfunded Revolver (8)
4,692
Paving Lessor Corp.
7/1/2025
07/01/2031
6,391
6,348
Paving Lessor Corp. - Unfunded Term Loan (8)
07/01/2027
8,632
65
Paving Lessor Corp. - Unfunded Revolver (8)
5,755
Peninsula Pacific Entertainment, LLC
8/15/2025
10/01/2032
Gaming
18,519
18,378
18,426
PN Buyer, Inc. - Unfunded Term Loan (8)
07/31/2027
6,056
PN Buyer, Inc. - Funded Revolver
07/31/2031
937
PN Buyer, Inc. - Unfunded Revolver (8)
568
(6
PCS MIDCO, Inc.
8,711
8,626
PCS MIDCO, Inc. - Unfunded Term Loan (8)
06/01/2026
1,874
19
PCS MIDCO, Inc. - Unfunded Term Loan - 3rd Amendment (8)
03/24/2028
34
PCS MIDCO, Inc. - Unfunded Revolver (8)
1,770
PD Tri-State Holdco, LLC - Unfunded Term Loan (8)
10/14/2025
10/14/2027
4,140
PD Tri-State Holdco, LLC - Unfunded Revolver (8)
10/15/2030
276
Podean Buyer, LLC
8/4/2025
08/04/2031
6,483
6,421
6,418
Podean Buyer, Inc - Unfunded Term Loan (8)
04/14/2028
5,333
Podean Buyer, LLC - Unfunded Revolver (8)
1,579
Project Granite Buyer, Inc.
12/31/2024
12/31/2030
7,837
Pragmatic Institute, LLC (10)
3/28/2025
03/28/2030
599
572
282
Project Granite Buyer, Inc. - Unfunded Term Loan (8)
1,708
Project Granite Buyer, Inc. - Unfunded Revolver (8)
2,846
Puget Collision, LLC
10/3/2025
10/03/2030
5,635
5,554
5,579
Puget Collision, LLC - Unfunded Term Loan (8)
10/03/2027
24,116
(90
Puget Collision, LLC - Funded Revolver
1,218
1,206
Puget Collision, LLC - Unfunded Revolver (8)
2,842
(28
Rancho Health MSO, Inc.
12/20/2024
06/20/2029
2,411
2,404
Rancho Health MSO, Inc. - Unfunded Term Loan (8)
3,034
28
Rancho Health MSO, Inc. - Unfunded Revolver (6), (8)
3,300
Real Life Intermediate Holdings LLC
1/16/2026
01/16/2031
Real Estate Management and Development
2,261
2,240
2,239
Real Life Intermediate Holdings LLC - Unfunded Term Loan (8)
01/16/2028
3,854
39
Real Life Intermediate Holdings LLC - Unfunded Revolver (8)
385
Rosco Parent, LLC
9/9/2025
09/12/2031
11,443
11,366
Rosco Parent, LLC - Funded Revolver
2,479
Rosco Parent, LLC - Unfunded Revolver (8)
404
Riverpoint Medical, LLC
6/19/2019
9,053
9,017
Riverpoint Medical, LLC - Unfunded Revolver (6), (8)
909
Ro Health, LLC
1/16/2025
01/17/2031
15,254
15,162
Ro Health, LLC - Funded Revolver
8.18
1,165
Ro Health, LLC - Unfunded Revolver (8)
6,600
RRA Corporate, LLC
8/15/2024
08/15/2029
25,762
25,558
24,731
RRA Corporate, LLC - Unfunded Term Loan (8)
08/17/2026
7,119
(214
RRA Corporate, LLC - Funded Revolver
940
903
RRA Corporate, LLC - Unfunded Revolver (8)
5,776
(231
RTIC Subsidiary Holdings, LLC
5/3/2024
05/03/2029
42,126
41,660
41,494
RTIC Subsidiary Holdings, LLC - Funded Revolver
6,356
6,261
RTIC Subsidiary Holdings, LLC - Unfunded Revolver (8)
3,060
(46
Rural Sourcing Holdings, Inc.
6/8/2023
06/15/2029
2,248
2,213
1,871
13
Rural Sourcing Holdings, Inc. - Funded Revolver
406
Rural Sourcing Holdings, Inc. - Unfunded Revolver (6), (8)
373
(62
Sabel Systems Technology Solutions, LLC
10/31/2024
10/31/2030
Government Services
43,016
42,635
Sabel Systems Technology Solutions, LLC– Funded Revolver
Prime+ 500
249
Sabel Systems Technology Solutions, LLC - Unfunded Revolver (8)
4,729
Safe Haven Defense US, LLC
05/23/2029
Building Products
19,736
19,596
19,292
Safe Haven Defense US, LLC - Funded Revolver
Prime+ 450
234
228
Safe Haven Defense US, LLC - Unfunded Revolver (8)
2,687
(60
Sales Benchmark Index, LLC
12/23/2019
07/07/2026
9.87
3M SOFR+ 620
2,489
2,488
Sales Benchmark Index, LLC - Funded Revolver
431
Sales Benchmark Index, LLC - Unfunded Revolver (6), (8)
646
Sath Industries, LLC
Event Services
Sath Industries, LLC - Unfunded Revolver (8)
Schlesinger Global, Inc.
10/24/2019
03/31/2027
9.82
8,124
8,120
7,718
(PIK 5.85%)
Schlesinger Global, Inc. - Funded Revolver
1,608
Schlesinger Global, Inc. - Unfunded Revolver (6), (8)
401
SCP Clinical Research Intermediate Holdings, LLC
1/2/2026
01/02/2032
6,494
6,465
6,462
SCP Clinical Research Intermediate Holdings. LLC - Unfunded Term Loan (8)
01/02/2028
13,753
SCP Clinical Research Intermediate Holdings. LLC - Unfunded Revolver (8)
5,132
Seacoast Service Partners NA, LLC
12/20/2029
12,091
12,009
11,728
Seacoast Service Partners NA, LLC - Unfunded Term Loan (8)
12/21/2026
4,097
(87
Seacoast Service Partners NA, LLC - Funded Revolver
1,295
1,256
Seacoast Service Partners NA, LLC - Unfunded Revolver (8)
Seaway Buyer, LLC
06/13/2029
3M SOFR+ 615
1,918
1,902
Sigma Defense Systems, LLC
11/30/2021
12/20/2027
10.07
3M SOFR+ 640
18,193
17,979
18,011
Sigma Defense Systems, LLC - Unfunded Term Loan
5,031
Sigma Defense Systems, LLC - Funded Revolver
891
883
Sigma Defense Systems, LLC - Unfunded Revolver (6), (8)
2,420
Smile Brands, Inc.
10/4/2018
10/12/2027
Healthcare and Pharmaceuticals
9.77
1M SOFR+ 610
4,622
4,392
3,688
(PIK 1.50%)
Smile Brands, Inc. - Funded Revolver
1,585
1,265
Smile Brands, Inc. - Unfunded Revolver (6), (8)
Smile Brands, Inc. - Unfunded Revolver - LC (6) (8)
100
Spendmend Holdings, LLC
3/1/2022
03/01/2028
8.85
3M SOFR+ 515
3,712
3,694
Spendmend Holdings, LLC - Unfunded Term Loan (8)
11/25/2026
Spendmend Holdings, LLC - Funded Revolver
149
Spendmend Holdings, LLC - Unfunded Revolver (8)
743
STG Distribution, LLC - First Out New Money Term Loans (10)
10/03/2029
811
705
STG Distribution, LLC - Second Out Term Loans (10)
1,855
541
STG Distribution, LLC - New Money Term Loan
07/14/2026
8.00
529
SV-Aero Holdings, LLC
11/01/2030
15,081
15,025
SV-Aero Holdings, LLC - Unfunded Term Loan (8)
7,259
36
Symplr Software, Inc.
8.27
3M SOFR+ 460
677
630
474
Systems Planning And Analysis, Inc.
10/12/2021
33,173
33,003
Systems Planning And Analysis, Inc. - Unfunded Term Loan (8)
06/12/2027
2,131
Systems Planning And Analysis, Inc. - Unfunded Revolver (8)
8,364
TCG 3.0 Jogger Acquisitionco, Inc.
1/23/2024
01/23/2029
10.20
3M SOFR+ 650
9,298
9,224
9,042
TCG 3.0 Jogger Acquisitionco, Inc. - Funded Revolver
12.25
Prime+ 550
1,844
1,793
TCG 3.0 Jogger Acquisitionco, Inc. - Unfunded Revolver (8)
582
The Bluebird Group, LLC
7/22/2021
07/28/2026
9.57
7,209
7,196
The Bluebird Group, LLC - Unfunded Revolver (6), (8)
862
The Vertex Companies, LLC (6)
8/25/2021
08/31/2028
14,741
14,659
14,668
The Vertex Companies, LLC - Funded Revolver
2,554
2,541
The Vertex Companies, LLC - Unfunded Revolver (6), (8)
2,919
(15
TMII Enterprises, LLC
12/22/2028
1,555
1,541
TMII Enterprises, LLC - Unfunded Revolver (6), (8)
748
TPC US Parent, LLC
11/15/2019
04/20/2026
Food Products
11,804
TransGo, LLC
12/29/2028
20,935
20,754
20,621
TransGo, LLC - Funded Revolver
2,933
2,889
TransGo, LLC - Unfunded Revolver (6), (8)
2,566
(38
Tyto Athene, LLC
3/26/2021
8.56
3M SOFR+ 490
11,875
11,808
11,548
Walker Edison Furniture Company, LLC - New Money DIP
03/01/2029
Wholesale
10.00
243
254
Walker Edison Furniture Company, LLC - Unfunded Term Loan (8)
195
Watchtower Buyer, LLC
11/29/2023
12,707
12,594
12,580
Watchtower Buyer, LLC - Funded Revolver
1,890
Watchtower Buyer, LLC - Unfunded Revolver (8)
4,410
(44
Wash & Wax Systems, LLC
4/30/2025
04/30/2028
6,569
6,662
6,694
Wash & Wax Systems, LLC - Funded Revolver
565
Wash & Wax Systems, LLC - Unfunded Revolver (6) (8)
Total First Lien Secured Debt
1,982,553
1,948,853
Subordinate Debt - 1.8% of Net Assets
Beacon Behavioral Holdings, LLC
06/21/2030
15.00
5,633
5,585
Integrative Nutrition, LLC - Promissory Note #1
4/17/2025
04/15/2030
2,623
2,311
2,282
Integrative Nutrition, LLC - Promissory Note #2
04/15/2033
5,064
2,763
2,026
ORL Holdco, Inc. - Convertible Notes
8/2/2024
03/08/2028
18.00
ORL Holdco, Inc. - Unfunded Convertible Notes (8)
OSP Embedded Purchaser, LP - Convertible Note
11/6/2024
05/08/2030
12.00
47
471
Schlesinger Global, LLC - Promissory Note
2/21/2024
3M SOFR+ 860
66
StoicLane, Inc. - Convertible Notes
3,051
3,052
3,661
Wash & Wax Systems, LLC - Subordinate Debt
07/30/2028
4,601
Total Subordinate Debt
18,866
18,813
Preferred Equity - 2.4% of Net Assets(5)
Accounting Platform Holdings, Inc. - Preferred Equity - Series A
1,075,900
1,076
Ad.Net Holdings, Inc. - Preferred Equity
7,453
745
399
AFC Acquisitions, Inc. Preferred Equity - Series F-2 (7)
12/7/2023
825
1,068
AFC Acquisitions, Inc. Preferred Equity - Series G-2 (7)
18
AFC Acquisitions, Inc. Preferred Equity - Series H-2 (7)
20
AFC Acquisitions, Inc. Preferred Equity - Series I-2 (7)
AFC Acquisitions, Inc. Preferred Equity - Series J-2 (7)
AFC Acquisitions, Inc. - Preferred Equity - Series K-2 (7)
74
52
48Forty TopCo - Preferred Equity
215
1,278
Anteriad Holdings, LP (f/k/a MeritDirect Holdings, LP) - Preferred Equity (6), (7)
2,018
1,906
BioDerm Holdings, LP - Preferred Equity
1,313
Cartessa Aesthetics, LLC - Preferred Equity (7)
1,437,500
3,460
Connatix Parent, LLC
5,311
Consello Pacific Aggregator, LLC - Preferred Equity (7)
1,025,476
1,250
C5MI Holdco, LLC - Preferred Equity (7)
228,900
223
238
EvAL Home Health Solutions, LLC (7)
876,386
1,455
1,402
Five Star Parent Holdings, LLC - Preferred (Class P)
384
130
Gauge Schlesinger Coinvest, LLC - Preferred Equity
4/22/2020
64
Hancock Claims Consultants Investors, LLC - Preferred Equity (7)
116,588
76
Harvest Group Topco Intermediate, LLC - Preferred Equity
1,771
HPA SPQ Aggregator, LP - Preferred Equity
52,353
Imagine Topco. LP - Preferred Equity
1,236,027
1,236
1,523
KL Stockton Intermediate, LLC - Preferred Equity - Class C (7)
7/16/2021
Energy Equipment and Services
24,414
24
334
Knexus Holdco, LLC - Preferred Equity (7)
1/14/2026
90,111
90
93
Magnolia Topco, LP - Preferred Equity - Class A (7)
7/25/2023
Magnolia Topco, LP - Preferred Equity - Class A-1 (7)
Magnolia Topco, LP - Preferred Equity - Class B (7)
Megawatt Acquisition Partners, LLC - Preferred Equity - Class A
6/28/2024
9,360
936
NORA Parent Holdings, LLC -Series A Preferred Equity (7)
1/27/2026
536
236
NXOF Holdings, Inc. - Preferred Equity
9/25/2018
1,935
1,634
ORL Holdco, Inc. - Preferred Equity
1,327
133
Podean Intermediate II, LLC - Preferred Equity
570
575
RTIC Parent Holdings, LLC - Preferred Equity - Class A (7)
RTIC Parent Holdings, LLC - Preferred Equity - Class C (7)
18,450
RTIC Parent Holdings, LLC - Preferred Equity - Class D (7)
19,584
291
SP L2 Holdings, LLC - Preferred Equity
135,240
SP L2 Holdings, LLC - Unfunded Preferred Equity (8)
77,280
(19
TPC Holding Company, LP - Preferred Equity
12/4/2019
409
476
TWD Parent Holdings, LLC - Preferred Equity
61
UniTek Global Services, Inc. - Super Senior Preferred Equity
1/13/2015
Telecommunications
20.00
320,711
797
UniTek Global Services, Inc. - Senior Preferred Equity
19.00
448,851
449
UniTek Global Services, Inc. - Preferred Equity
13.50
1,047,317
670
Total Preferred Equity
22,551
24,479
Common Equity/Warrants - 19.0% of Net Assets(5)
A1 Garage Equity, LLC - Common Equity (7)
647,943
648
1,460
ACP Big Top Holdings, LP - Common Equity
3,000,500
5,426
Ad.Net Holdings, Inc. - Common Equity
8,281
83
Aechelon InvestCo, LP
29,506
2,992
45,284
Aechelon InvestCo, LP - Unfunded Common Equity (8)
31,675
Aftermarket Drivetrain Products Holdings, LLC - Common Equity
2,632
4,999
AG Investco - Common Equity (6), (7)
11/5/2018
7,785
805
AG Investco - Unfunded Common Equity (7), (8)
1,948
(189
48Forty TopCo LLC - Class A-1 Common Equity
Anteriad Holdings, LP (f/k/a MeritDirect Holdings, LP) - Common Equity (7)
Athletico Holdings, LLC - Common Equity (7)
2/4/2022
4,678
5,000
3,397
Aphix Topco, Inc. - Common Equity
819,190
819
735
APT Holdings, LLC - Common Equity (7)
855,110
1,152
1,340
Azureon Holdings, LLC (7)
1,130,707
1,131
717
BioDerm Holdings, LP - Common Equity
Burgess Point Holdings, LP - Common Equity
7/21/2022
112
114
104
By Light Investco LP - Common Equity (7)
5/15/2017
23,169
211
12,727
Carisk Parent, LP - Common Equity
239,680
240
327
Carnegie HoldCo, LLC (7)
2,719,600
2,599
2,230
Connatix Parent, LLC - Common Equity
182,141
421
116
Crane 1 Acquisition Parent Holdings, LP - Common Equity
120
202
C5MI Holdco, LLC - Common Equity (7)
1,659,050
1,659
2,007
Delta InvestCo, LP - Common Equity (7)
12/16/2020
5,499
763
1,273
Delta InvestCo, LP - Unfunded Common Equity (7), (8)
2,003
Duggal Equity, LP - Common Equity
686
644
EDS Topco, LP - Common Equity
1,125,000
1,125
2,080
Events TopCo, LP - Common Equity
1,016,800
1,017
1,037
Exigo, LLC - Common Equity
541,667
542
FedHC InvestCo, LP - Common Equity (7)
8/26/2021
23,742
810
2,344
FedHC InvestCo, LP - Unfunded Common Equity (7), (8)
3,665
First Medical Holdings, LLC - Common Equity (7)
75,000
533
Five Star Parent Holdings, LLC - Common Equity
655,714
656
Galt Intermediate, LLC - Common Equity
877,358
877
Gauge ETE Blocker, LLC - Common Equity
374,444
374
375
Gauge Lash Coinvest, LLC - Common Equity
1,485,953
227
2,432
Gauge Lash Coinvest, LLC - Common Equity - Class AA Units
108,546
586
178
Gauge Lash Coinvest, LLC - Common Equity - Class AAA Units
462,888
776
758
Gauge Loving Tan, LP - Common Equity
2,914,701
2,915
3,616
Gauge Schlesinger Coinvest, LLC - Common Equity
465
GCP Boss Holdco, LLC
2,194,800
2,195
3,292
GCOM InvestCo, LP - Common Equity
6/22/2021
19,184
3,342
2,490
GGG Topco, LLC (7)
2,759,800
2,760
6,463
GMP Hills, LP - Common Equity
4,430,843
6,691
Hancock Claims Consultants Investors, LLC - Common Equity (7)
450,000
448
Harvest Group Topco Intermediate, LLC - Common Equity
HPA SPQ Aggregator, LP - Common Equity
750,399
HV Watterson Holdings, LLC - Common Equity
6/13/2022
100,000
Icon Partners V C, LP - Common Equity
12/20/2021
2,002,138
2,002
1,427
Icon Partners V C, LP - Unfunded Common Equity (8)
497,862
(143
Imagine Topco. LP - Common Equity
Integrity Health Intermediate, LLC - Common Equity (7)
80,000
IHS Parent Holdings, LP - Common Equity
1,218,045
1,462
ITC Infusion Co-invest, LP - Common Equity (7)
2/16/2022
116,032
1,229
Kinetic Purchaser, LLC - Common Equity - Class A
1,734,775
1,735
Kinetic Purchaser, LLC - Common Equity - Class AA
153,339
179
KL Stockton Co-Invest, LP - Common Equity (7)
382,353
(1
Knexus Holdco, LLC - Common Equity (7)
231,658
232
231
Lightspeed Investment Holdco, LLC - Common Equity (6)
1/21/2020
585,587
2,766
LJ Avalon, LP - Common Equity
1,638,043
2,817
Marketplace Events Acquisition, LLC - Common Equity
40,990
4,099
5,244
Magnolia Topco, LP - Common Equity - Class A (7)
46,974
Magnolia Topco, LP - Common Equity - Class B (7)
30,926
MDI Aggregator, LP - Common Equity
11,078
1,124
1,170
Meadowlark Title, LLC - Common Equity (7)
819,231
806
336
Megawatt Acquisition Partners, LLC - Common Equity - Class A
1,040
Municipal Emergency Services, Inc. - Common Equity
9/28/2021
1,973,370
2,005
3,828
NEPRT Parent Holdings, LLC - Common Equity (7)
1/27/2021
1,494
495
New Insight Holdings, Inc. (6)
203,819
3,565
2,322
New Medina Health, LLC - Common Equity (7)
2,672,646
2,673
6,300
NFS - CFP Holdings LLC - Common Equity
1,337,017
1,337
1,859
NORA Parent Holdings, LLC - Common Equity (7)
2,544
2,525
North Haven Saints Equity Holdings, LP - Common Equity (7)
2/25/2022
223,602
226
NXOF Holdings, Inc. - Common Equity
37,561
OceanSound Discovery Equity, LP - Common Equity
3/28/2024
211,940
2,119
2,446
OES Co-Invest, LP - Common Equity - Class A
5/31/2024
1,560
1,580
OHCP V BC COI, LP - Common Equity
12/13/2021
1,178,682
1,179
731
OHCP V BC COI, LP - Unfunded Common Equity (8)
71,318
ORL Holdco, Inc. - Common Equity
1,474
OSP Embedded Aggregator, LP - Common Equity
1,728
1,786
Output Services Group, Inc. - Common Equity (6)
127,369
1,155
693
OSP PAR Aggregator, LP - Common Equity
3,160
3,171
Paving Parent, LLC - Common Equity (7)
3,057
4,598
PN Buyer, Inc. - Common Equity
1,901,412
1,901
1,426
PCS Parent, LP
423,247
423
466
PLB Brands LLC - Common Equity
3/25/2026
Textiles, Apparel and Luxury Goods
694,989
695
Podean Intermediate II, LLC - Common Equity
11/18/2025
Pragmatic Holdco, Inc. - Common Equity
11/5/2021
Project Granite Holdings, LLC
1,139
625
Quad (U.S.) Co-Invest, LP - Common Equity
235,194
235
QuantiTech InvestCo, LP - Common Equity (7)
696
98
QuantiTech InvestCo, LP - Unfunded Common Equity (7) (8)
10/3/2022
1,667
QuantiTech InvestCo II, LP - Common Equity (7)
5/1/2020
40
Real Life Intermediate, LLC - Common Equity
1/26/2026
451,284
672
690
RFMG Parent, LP - Common Equity
1,050,000
1,050
1,615
Ro Health Holdings, Inc. - Common Equity
536,400
855
Rosco Topco, LLC - Common Equity
1,517,241
1,517
Safe Haven Defense Holdco LLC - Common Equity- Class A-1 (7)
596
46
Safe Haven Defense Holdco LLC - Common Equity- Class A-2
SBI Holdings Investments, LLC - Common Equity
64,634
645
Sabel InvestCo, LP. - Common Equity (7)
89,712
2,271
3,218
Sabel InvestCo, LP. - Unfunded Common Equity (7) (8)
131,286
Seaway Topco, LP - Common Equity
296
Seacoast Service Partners, LLC - Common Equity
429
549
464
SP L2 Holdings, LLC - Common Equity
6/8/2022
52,821,386
SP DXE Holdings, LLC - Common Equity (7)
553,592
554
StellPen Holdings, LLC (CF512, Inc.) - Common Equity
161,538
162
SV-Aero Holdings, LLC - Common Equity (7)
7/11/2018
489
1,713
TAC Lifeport Holdings, LLC - Common Equity (7)
533,833
1,190
TCG 3.0 Jogger Co-Invest, LP - Common Equity
12/6/2023
9,108
1,760
789
Tower Arch Infolinks Media, LP - Common Equity (7)
2/24/2021
247,428
23
Tower Arch Infolinks Media, LP - Unfunded Common Equity (7) (8)
1/22/2024
118,179
TPC Holding Company, LP - Common Equity
10/27/2021
21,527
TWD Parent Holdings, LLC - Common Equity
824
Tinicum Space Coast Co-Invest, LLC (7)
4,508
5,698
UniTek Global Services, Inc. - Common Equity
213,739
UniVista Insurance - Common Equity (7)
10/29/2024
400
Wash & Wax Group, LP - Common Equity (7)
2,747
4,941
1,721
Watchtower Holdings, LLC - Common Equity (7)
6/14/2021
12,419
1,242
WCP Ivyrehab Coinvestment, LP - Common Equity - Incremental (7)
204
208
288
WCP Ivyrehab Coinvestment, LP - Common Equity (7)
3,651
3,853
5,146
WCP Ivyrehab Coinvestment, LP - Unfunded Common Equity (7) (8)
188
White Tiger Newco, LLC - Common Equity (6)
38,019
2,899
Unitek Global Services, Inc. - Warrants
23,889
Kentucky Racing Holdco, LLC - Warrants (7)
87,345
879
Total Common Equity/Warrants
127,955
196,866
Total Investments in Non-Controlled, Non-Affiliated Portfolio Companies
2,151,925
Investments in Controlled, Affiliated Portfolio Companies - 37.7% of Net Assets (3), (4)
First Lien Secured Debt - 29.2% of Net Assets
PennantPark Senior Secured Loan Fund I, LLC (6), (9)
8/10/2020
05/07/2029
Financial Services
11.68
3M SOFR+ 800
237,650
PennantPark Senior Secured Loan Fund II, LLC (6), (9)
08/08/2032
11.66
65,625
303,275
Equity Interests - 8.5% of Net Assets
PennantPark Senior Secured Loan Fund I LLC - Common Equity (6), (9)
163,100
60,116
PennantPark Senior Secured Loan Fund II LLC - Common Equity (6), (9)
28,125
27,879
Total Equity Interests
191,225
87,995
Total Investments in Controlled, Affiliated Portfolio Companies
494,500
Total Investments - 248.4% of Net Assets (11), (12)
2,646,425
Cash Equivalents - 3.0% of Net Assets
BlackRock Federal FD Institutional 30 (Money Market Fund)
3.54
Blackrock Liq Fedfund Gov CL Inst (Money Market Fund)
9,159
JPMorgan US Dollar Liquidity Inst (Money Market Fund)
3.65
4,870
JPMorgan U.S. Government (Money Market Fund)
3.46
2,652
Goldman Sachs Financial Square Government Fund (Money Market Fund)
3.56
14,728
Total Cash Equivalents
Cash - 8.7% of Net Assets
Cash
90,446
Total Cash
Total Investments, Cash Equivalents, and Cash - 260.2% of Net Assets
2,768,298
2,702,152
Liabilities in Excess of Other Assets - (160.2)% of Net Assets
(1,663,495
Net Assets - 100%
—————
SEPTEMBER 30, 2025
Investments in Non-Controlled, Non-Affiliated Portfolio Companies - 231.9% (3), (4)
First Lien Secured Debt - 211.8% of Net Assets
42,247
41,879
41,824
(76
ACP Falcon Buyer, Inc.
9.79
818
827
10.26
6,583
6,570
426
9.91
13,440
13,331
10.66
1,666
3,054
19,768
19,739
19,669
7,460
(37
Alpine Acquisition Corp II (10)
08/09/2025
4,044
2,903
2,103
10.35
19,273
19,166
19,080
9,639
9,579
9,591
15,341
APT OPCO, LLC
9.00
17,500
17,391
14,707
14,644
1,985
1,979
9.31
19,393
19,374
19,296
2,874
9.75
32,675
32,401
Archer Lewis, LLC - Unfunded Revolver (8)
9.89
50,851
50,401
50,088
10/02/2026
7,449
16,854
16,673
16,365
1,032
1,002
1,548
9.50
31,929
31,585
Beacon Behavioral Support Services, LLC - Unfunded Term Loan (8)
12/22/2025
7,749
77
23,451
2,104
10.91
58,796
58,047
58,355
(43
32,742
32,027
32,415
34,812
34,384
10.77
992
981
980
1,058
9.40
8,126
8,095
7,984
1,747
1,717
2,135
8.50
23,155
23,007
BLC Holding Company, Inc. - Funded Revolver
484
3,914
9.48
4,988
4,938
5,517
17,952
17,833
9.51
18,722
17,573
16,184
9.66
41,446
41,135
8,000
7,950
7,920
Capital Construction, LLC - Unfunded Term Loan (8)
12/30/2025
14,459
(36
11,309
11,234
7,868
71
33,807
33,385
33,469
Carnegie Dartlet, LLC - Unfunded Term Loan (8)
02/09/2026
12,430
15,721
15,614
Cartessa Aesthetics, LLC - Funded Revolver (6)
511
927
9.25
20,486
20,336
19,564
3,727
205
10.19
10,300
10,240
10,197
10.18
10.08
8,201
8,135
446
593
642
9.34
2,251
1,920
1,984
38,329
38,070
13,370
Compex Legal Services, Inc.
1/27/2020
02/07/2026
9.55
3M SOFR+ 555
10,720
10,716
Compex Legal Services, Inc. - Funded Revolver
Compex Legal Services, Inc. - Unfunded Revolver (6), (8)
422
8.28
1M SOFR+ 400
11,703
11,165
11,391
8.75
12,833
12,769
6,756
6,703
6,705
28,710
28,357
9,093
13,168
12,931
12,905
11/03/2025
6,714
6,707
6,781
10,218
10,130
4,470
9.46
2,365
2,354
14,672
14,131
11,946
15,484
15,412
12,545
12,449
12,577
11.01
8,357
8,379
6,686
(PIK 3.75%)
9.16
2,633
05/25/2029
166
2,264
17,758
17,568
10.51
4,787
10.58
35,023
34,852
34,183
(51
7,481
7,408
7,406
11.46
3M SOFR+ 715
5,214
5,155
5,110
285
36,984
36,653
09/27/2026
5,830
03/16/2026
9.74
9,134
8,967
5,518
5,431
5,407
(12
Graffiti Buyer, Inc. - Funded Revolver
829
3,891
3,877
10.16
10,599
10,502
522
2,200
80,066
79,412
79,365
Harris & Co. LLC. - Unfunded Term Loan B (8)
16,832
4,192
1,683
1,669
7,936
(69
6/17/2024
8.87
17,457
17,326
3M SOFR+ 410
1,953
1,839
10.32
18,294
18,121
11/07/2025
1,514
12,283
12,265
9,557
9,477
9,509
16,517
16,436
9,723
49
1,945
14,855
14,770
CAD 1,704
1,231
161
1,130
7,940
7,885
3,499
10,155
10,125
10,104
01/15/2026
11.78
4,880
Inventus Power, Inc. - Funded Revolver
11.76
403
1,325
14,601
14,437
14,455
3,260
Kinetic Purchaser, LLC
17,955
17,641
15,262
Kinetic Purchaser, LLC - Funded Revolver
10.15
1,846
Kinetic Purchaser, LLC - Unfunded Revolver (6), (8)
02/18/2027
1M SOFR+ 785
16,168
16,026
15,763
945
10.10
9,581
9,930
(PIK 3.44%)
1,098
1,067
1,353
703
11.65
7,605
7,380
5,932
663
518
Lightspeed Buyer, Inc.
02/03/2027
22,918
22,824
Lightspeed Buyer, Inc. - Unfunded Revolver (6), (8)
2,499
11,815
11,770
02/08/2027
4,873
53,637
53,066
07/12/2026
10,823
108
3,559
1,780
Lucky Bucks, LLC - First-Out Term Loan
12.01
1M SOFR+ 765
256
Lucky Bucks, LLC - Last-Out Term Loan
12,205
11,985
12,155
12/19/2030
56,198
55,699
Marketplace Events Acquisition, LLC - Unfunded Term Loan (8)
06/19/2026
8,717
87
Marketplace Events Acquisition, LLC - Funded Revolver
610
5,486
4/7/2025
5,632
5,630
5,066
5,021
4,416
3M SOFR+ 375
1,524
353
9.65
4,344
4,295
Meadowlark Acquirer, LLC - Funded Revolver
339
1,354
10.31
20,795
20,600
20,899
9,850
9,545
9,377
Megawatt Acquisitionco, Inc. - Funded Revolver
387
2,844
(137
32,013
31,653
MOREgroup Holdings, Inc. - Unfunded Term Loan (8)
01/16/2026
11,056
111
Municipal Emergency Services, Inc.
9.15
9,998
9,959
Municipal Emergency Services, Inc. - Unfunded Term Loan (8)
1,574
Municipal Emergency Services, Inc. - Unfunded Revolver (6), (8)
947
10.12
2,571
20,743
20,443
20,588
2,447
(23
55,000
54,725
1,467
4,456
23,484
23,315
23,014
8,705
(98
1M SOFR+ 525
2,520
2,470
1,680
10.53
12,941
12,881
13.70
7,710
6,823
ORL Acquisition, Inc. - Unfunded Revolver (6), (8)
36,810
36,445
36,294
2,932
12.71
10.96
7,123
7,034
7,095
9.32
27,431
27,186
26,951
(82
21,390
21,231
21,230
08/22/2032
15,002
14,965
Peninsula Pacific Entertainment, LLC - Unfunded Term Loan (8)
08/25/2027
3,516
Penta Group Holdings, Inc.
14,925
Penta Group Holdings, Inc. - Unfunded Term Loan (8)
Penta Group Holdings, Inc. - Funded Revolver
492
Penta Group Holdings, Inc. - Unfunded Revolver (8)
1,022
(5
11,843
11,755
03/02/2026
2,087
Pink Lilly Holdco, LLC (12)
11/09/2027
4.35
9,780
8,422
3,912
Pink Lilly Holdco, LLC - Funded Revolver (12)
4.27
611
244
Pink Lilly Holdco, LLC - Unfunded Revolver (8) (12)
534
(321
PlayPower, Inc.
08/28/2030
32,086
31,893
PlayPower, Inc. - Unfunded Revolver (8)
3,981
11,894
11,790
12,013
Pragmatic Institute, LLC
7/5/2022
417
9,310
9,291
Rancho Health MSO, Inc. - Funded Revolver (6)
880
Recteq, LLC
01/29/2026
10.40
3,820
3,809
3,810
Recteq, LLC - Funded Revolver
10.46
360
359
Recteq, LLC - Unfunded Revolver (6), (8)
8.81
22,000
21,835
9,728
9,682
15,337
15,235
2,329
5,435
17,699
17,546
17,593
15,312
3,090
3,627
(22
47,340
46,734
46,867
3,296
3,263
6,121
(61
2,201
2,161
1,981
438
26,649
26,417
Sabel Systems Technology Solutions, LLC - Funded Revolver
12.75
182
3,452
19,845
19,681
19,746
2,920
2,504
2,501
3M SOFR+ 520
9.54
11,295
11,198
10/24/2025
12.76
8,169
7,761
1,674
1,591
9.01
10,596
10,515
10,162
5,653
(182
892
1,882
1,755
26,344
26,096
10.90
3M SOFR+ 690
764
2,548
Smartronix, LLC
2/6/2025
02/06/2032
1M SOFR+ 450
5,970
5,914
5,992
10.43
4,609
4,323
3,978
1,047
531
(73
2,949
2,929
2,922
STG Distribution, LLC - First Out New Money Term Loans
12.57
1M SOFR+ 835
784
700
698
STG Distribution, LLC - Second Out Term Loans (12)
5.32
1,814
145
15,275
15,211
680
622
46,315
46,011
45,944
Systems Planning And Analysis, Inc. - Funded Revolver
8.90
774
768
7,590
10.52
9,345
9,259
437
435
1,990
Team Services Group, LLC
2/23/2024
15,753
15,590
15,687
13,608
13,569
1M SOFR+ 495
22,561
22,428
22,448
8.99
1,996
3,466
3,543
3,527
11/24/2025
12,259
12,251
12,161
10,904
10,785
10,985
4,440
04/03/2028
16,500
16,304
16,088
US Fertility Enterprises, LLC
10/7/2024
10/11/2031
8.80
2,039
2,040
Urology Management Holdings, Inc.
06/15/2027
5,550
5,530
Urology Management Holdings, Inc. - Unfunded Term Loan (8)
09/03/2026
3/1/2023
590
12,772
12,643
12,644
(63
9.81
6,446
6,559
6,568
830
2,289,071
2,275,982
Second Lien Secured Debt - 0.1% of Net Assets
Team Services Group, LLC - 2nd Lien
12/18/2028
13.57
3M SOFR+ 926
995
Total Second Lien Secured Debt
Subordinate Debt - 1.7% of Net Assets
5,229
5,176
2,276
2,243
5,975
547
01/08/2026
2,288
StoicLane, Inc. - Unfunded Convertible Notes (8)
115
4,334
17,387
17,986
Preferred Equity - 1.9% of Net Assets(5)
6,720
602
1,308
1,315
164
134
1,689
43
2,021
Pink Lily Holdco, LLC - Preferred Equity - Class A-1 (7)
122
2,246
264
441
18,556
20,652
Common Equity/Warrants - 16.4% of Net Assets(5)
48Forty Intermediate Holdings, Inc. - Common Equity
7,467
75
29,917
11,379
33,433
4,899
8,052
(177
Altamira Parent Holdings, LLC - Common Equity
7/23/2019
1,335
3,449
868
961
121
22,789
15,662
210
1,526
804,615
1,557
200,255
629
1,297
22,671
3,006
3,721
First Medical Holdings, LLC - Common Equity
773
2,057,387
1,588
5/25/2023
3,755
3,182
5,115
3,586
5,494
194
1,973
Ironclad Holdco, LLC - Common Equity
6,355
668
1,450
1,195
3,156
638
2,129
2,621
Lucky Bucks Holdco, LLC - Common Equity
73,870
2,062
392
4,848
1,122
1,054
4,105
3,055
4,161
1,622
1,238
OceanSound Discovery Equity, LP - Common Equity (7)
2,643
1,326
1,166,407
1,166
83,593
1,046
3,037
Paving Parent, LLC - Common Equity
2,863
Penta Group Holdings, Inc. - Common Equity
Pink Lily Holdco, LLC - Common Equity (7)
1,191
364
96
955
1,292
Safe Haven Defense Holdco, LLC - Common Equity (7)
641
233
724
3,007
Sabel InvestCo, LP. - Unfunded Common Equity (7), (8)
413
360,103
SSC Dominion Holdings, LLC - Common Equity - Class B (US Dominion, Inc.) (6)
1,159
513
1,504
1,260
1,182
223,849
103
263
141,758
4,702
5,196
113
Urology Partners Co., LP - Common Equity
1/20/2023
694,444
694
2,910
5,062
1,107
268
3,754
4,841
246
2,901
2,663
4/16/2019
993
132,009
175,745
2,458,018
Investments in Controlled, Affiliated Portfolio Companies - 26.2% of Net Assets (3), (4)
First Lien Secured Debt - 22.1% of Net Assets
12.29
Equity Interests - 4.1% of Net Assets
6/16/2017
123,725
44,318
361,375
Total Investments - 258.1% of Net Assets (11), (13)
2,819,393
Cash Equivalents - 3.8% of Net Assets
BlackRock Federal FD Institutional 81 (Money Market Fund)
4.11
13,478
4.02
4,907
4.10
5,651
6,132
4.18
10,561
Cash - 7.6% of Net Assets
81,955
Total Investments, Cash Equivalents and Cash - 269.5% of Net Assets
2,942,077
2,896,016
Liabilities in Excess of Other Assets - (169.5)% of Net Assets
(1,821,500
______________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
PennantPark Floating Rate Capital Ltd. (the "Company", "we," "our" or "us") was organized as a Maryland corporation in October 2010. We are a closed-end, externally managed, non-diversified investment company that has elected to be treated as a BDC under the 1940 Act. On April 14, 2022, trading of the Company’s common stock commenced on the New York Stock Exchange after the Company voluntarily withdrew the principal listing of its common stock from the Nasdaq Stock Market LLC.
Our principal investment objectives are to generate both current income and capital appreciation while seeking to preserve capital. We seek to achieve our principal investment objective by investing primarily in floating rate loans, and other investments made to U.S. middle-market private companies whose debt is rated below investment grade. Floating rate loans pay interest at variable rates, which are determined periodically, on the basis of a floating base lending rate such as SOFR, with or without a floor, plus a fixed spread. Under normal market conditions, we generally expect that at least 80% of the value of our managed assets will be invested in floating rate loans and other investments bearing a variable rate of interest, which may include, from time to time, variable rate derivative instruments. We generally expect that first lien secured debt will represent at least 65% of our overall portfolio. We generally expect to invest up to 35% of our overall portfolio opportunistically in other types of investments, including second lien secured debt, subordinated debt, and, to a lesser extent, equity investments.
We execute our investment strategy directly and through our wholly owned subsidiaries, our unconsolidated joint venture and unconsolidated limited partnership. The term “subsidiary” means entities that primarily engage in investment activities in securities or other assets and are wholly owned by us. The Company does not intend to create or acquire primary control of any entity which primarily engages in investment activities of securities or other assets other than entities wholly owned by the Company. We comply with the provisions of Section 18 of the 1940 Act governing capital structure and leverage on an aggregate basis with our subsidiaries. Our subsidiaries comply with the provisions of Section 17 of the 1940 Act related to affiliated transactions and custody. To the extent that the Company forms a subsidiary advised by an investment adviser other than the Investment Adviser, the investment adviser to such subsidiaries will comply with the provisions of the 1940 Act relating to investment advisory contracts, including but not limited to, Section 15, as if it were an investment adviser to the Company under Section 2(a)(20) of the 1940 Act.
We have entered into an investment management agreement, (the "Investment Management Agreement"), with PennantPark Investment Advisers LLC (the "Investment Adviser"), an external adviser that manages our day-to-day operations. We have also entered into an administration agreement, (the "Administration Agreement"), with PennantPark Investment Administration LLC (the "Administrator"), which provides the administrative services necessary for us to operate.
Funding I, our wholly owned subsidiary and a special purpose entity, was organized in Delaware as a limited liability company in May 2011. We formed Funding I in order to establish a credit facility. The Investment Adviser serves as the collateral manager to Funding I and has irrevocably directed that any management fee owed with respect to such services is to be paid to us so long as the Investment Adviser remains the collateral manager. This arrangement does not increase our consolidated management fee.
We have formed and expect to continue to form certain taxable subsidiaries, including the Taxable Subsidiary, which are subject to tax as corporations. These taxable subsidiaries allow us to hold equity securities of certain portfolio companies treated as pass-through entities for U.S. federal income tax purposes while facilitating our ability to qualify as a RIC under the Code.
In May 2017, we and a subsidiary of Kemper Corporation (NYSE: KMPR), Trinity Universal Insurance Company, ("Kemper"), formed PSSL, an unconsolidated joint venture. PSSL invests primarily in middle-market and other corporate debt securities consistent with our strategy. PSSL is a Delaware limited liability company. See Note 4.
In August 2025, we and Hamilton Lane ("HL") formed PSSL II, an unconsolidated joint venture. PSSL II invests primarily in middle-market and other corporate debt securities consistent with our strategy. PSSL II is a Delaware limited liability company. See Note 4.
In September 2019, the Securitization Issuers completed the Debt Securitization. The 2031 Asset-Backed Debt was secured by a carefully constructed portfolio of the Securitization Issuer consisting primarily of middle market loans and participation interests in middle market loans. The 2031 Asset-Backed Debt was to mature on October 15, 2031. On the closing date of the Debt Securitization, in consideration of our transfer to the Securitization Issuer of the initial closing date loan portfolio, which included loans distributed to us by certain of our wholly owned subsidiaries, the Securitization Issuer transferred to us 100% of the Preferred Shares of the Securitization Issuer, 100% of the Class D Secured Deferrable Floating Rate Notes issued by the Securitization Issuer, and a portion of the net cash proceeds received from the sale of the 2031 Asset-Backed Debt. See Note 10.
In July 2024, the 2031 Asset-Backed Debt was refinanced through a $351.0 million debt securitization in the form of a collateralized loan obligation, or the "2036-R Asset-Backed Debt". The Company initially retained $85.0 million of the debt securitization. In October 2025, the Company sold $21.0 million of the previously retained debt securitization. The 2036-R Asset-Backed Debt is secured by a carefully constructed portfolio of primarily middle market loans and participation interest in middle market loans. The 2036-R Asset-Backed Debt matures in July 2036.
On February 22, 2024, the 2036 Securitization Issuer completed the 2036 Debt Securitization. The 2036 Asset-Backed Debt is secured by a carefully constructed portfolio of the 2036-Securitization Issuer consisting primarily of middle market loans and participation interests in middle market loans. The 2036 Asset-Backed Debt matures in April 2036. On the closing date of the 2036 Debt Securitization, in consideration of our transfer to the 2036 Securitization Issuer of the initial closing date loan portfolio it included loans distributed to us by certain wholly owned subsidiaries. See Note 10.
In February 2026, the 2036 Asset-Backed Debt was refinanced through a $356.5 million debt securitization in the form of a collateralized loan obligation, or the "2038-R Asset-Backed Debt". The Company retained $69.5 million of the debt securitization. The replacement debt matures in April 2038. The replacement debt was 100% funded at closing. The 2038-R Asset-Backed Debt is secured by a carefully constructed portfolio of the 2038-R Securitization Issuer consisting primarily of middle market loans and participation interests in middle market loans. See Note 10.
In February 2025, the 2037 Securitization Issuer completed a $474.6 million term debt securitization (the “2037 Debt Securitization”). The Company initially retained $85.1 million of subordinated notes and $28.5 million of BBB-(sf) Class D Notes of the debt securitization issued by the 2037 Securitization Issuer. In November 2025, the Company sold $28.5 million of the previously retained Class D Notes. The 2037 Asset-Backed Debt is secured by a carefully constructed portfolio of the 2037-Securitization Issuer consisting primarily of middle market loans and participation interests in middle market loans. The 2037 Asset-Backed Debt matures on April 20, 2037. See Note 10.
In March 2021 and October 2021, we issued $100.0 million and $85.0 million, respectively, in aggregate principal amount of our 2026 Notes at a public offering
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
price per note of 99.4% and 101.5% respectively. Interest on the 2026 Notes is paid semiannually on April 1 and October 1 of each year, at a rate of 4.25% per year, commencing October 1, 2021. The effective interest rate is 4.15%. The 2026 Notes mature on April 1, 2026 and may be redeemed in whole or in part at our option subject to a make-whole premium if redeemed more than three months prior to maturity. The 2026 Notes are our general, unsecured obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness. The 2026 Notes are effectively subordinated to our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, financing vehicles, or similar facilities. We do not intend to list the 2026 Notes on any securities exchange or automated dealer quotation system. The 2026 Notes were repaid in full on April 1, 2026.
In March 2026, we issued $200.0 million in aggregate principal amount of our 2029 Notes at a public offering price per note of 99.3%. Interest on the 2029 Notes is paid semiannually on March 4 and September 4 of each year, at a rate of 6.75% per year, commencing September 4, 2026. The effective interest rate is 7.00%. The 2029 Notes mature on March 4, 2029 and may be redeemed in whole or in part at our option subject to make whole premium if redeemed more than three months prior to maturity. The 2029 Notes, are our general, unsecured obligations and rank equal in right of payment with all of our existing and future unsecured indebtedness. The 2029 Notes are effectively subordinated to our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, financing vehicles, or similar facilities. We do not intend to list the 2029 Notes on any securities exchange or automated dealer quotation system.
In April 2021, we formed PennantPark-TSO Senior Loan Fund LP ("PTSF"), an unconsolidated limited partnership, organized as a Delaware limited liability partnership. We sold $81.4 million in investments to a wholly owned subsidiary of PTSF in exchange for cash in the amount of $69.5 million and an $11.9 million equity interest in PTSF representing 23.08% of the total outstanding Class A Units of PTSF. We recognized $0.4 million of realized gain upon the formation of PTSF.
In August 2025, in connection with the winding down of PTSF, an unconsolidated limited partnership, the Company acquired a portfolio of approximately $250 million of assets, including from TSO Puma SPV, LLC, an affiliate of Towerbrook Capital Partners. This portfolio includes assets with which the Company's Investment Adviser is familiar. The average spread and credit statistics are generally in-line with PFLT's existing portfolio. The Company acquired these assets at their most recent fair market value as of the date of the transaction. As of August 27, 2025, PFLT was the only remaining partner in PTSF, and as a result the entity became a wholly owned consolidated subsidiary as of that date.
On February 4, 2022, we formed PFLT Investment Holdings II, LLC, a Delaware limited liability company (“Holdings II”), as a wholly owned subsidiary. On December 31, 2022, we contributed 100% of our interests in PFLT Investment Holdings, LLC ( “Holdings”) to Holdings II. Effective as of January 1, 2024, Holdings II elected to be treated as a corporation for U.S. federal income tax purposes. On January 3, 2024, we purchased an equity interest in Holdings from Holdings II and Holdings became a partnership for U.S. federal income tax purposes. The Company and Holdings II entered into a limited liability company agreement with respect to Holdings that provides for certain payments and the sharing of income, gain, loss and deductions attributable to Holdings’ investments.
In July 2024, the Company established a $500.0 million at-the-market offering program (the "2024 ATM Program") and terminated the existing $250.0 million at-the-market offering program (the "2022 ATM Program" and, together "with the 2024 ATM Program, the "ATM Programs").
During the three and six months ended March 31, 2026, we did not issue any shares of our common stock under the ATM Programs. During the three and six months ended March 31, 2025 we issued 11,562,000 shares and 18,838,000 shares of our common stock under the ATM Programs, respectively, at an average price of $11.34 per share and $11.35 per share raising $131.0 million and $213.2 million of net proceeds after commissions to Sales Agents (as defined below) and inclusive of proceeds from the Investment Adviser to ensure that all shares were sold at or above NAV, respectively. During the three and six months ended March 31, 2026, we did not incur any legal and other offering costs associated with establishing the ATM Programs. During the three and six months ended March 31, 2025, we incurred $0.2 million and $0.2 million of legal and other offering costs associated with establishing the ATM Programs. As of March 31, 2026 and September 30, 2025, we had $192.2 million and $192.2 million, respectively, of our common stock available to be sold under the ATM Programs.
The Investment Adviser has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act of 1936, as amended (the "Commodity Exchange Act"). The Investment Adviser intends to continue to affirm the exclusion on an annual basis and therefore, does not expect to be subject to registration or regulation as a commodity pool operator under the Commodity Exchange Act.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of our consolidated financial statements, in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amount of our assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reported periods. In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair presentation of financial statements have been included. Changes in the economic and regulatory environment, financial markets, the creditworthiness of our portfolio companies, and any other parameters used in determining these estimates and assumptions could cause actual results to differ from these estimates and assumptions. We may reclassify certain prior period amounts to conform to the current period presentation. We have eliminated all intercompany balances and transactions. References to the Financial Accounting Standards Board’s ("FASB’s"), Accounting Standards Codification, as amended ("ASC"), serve as a single source of accounting literature. Subsequent events are evaluated and disclosed as appropriate for events occurring through the date the Consolidated financial statements are issued.
Our consolidated financial statements are prepared in accordance with GAAP, consistent with ASC Topic 946, Financial Services – Investment Companies, and pursuant to the requirements for reporting on Form 10-K/Q and Articles 6, 10 and 12 of Regulation S-X, as appropriate. In accordance with Article 6-09 of Regulation S-X, we have provided a consolidated statement of changes in net assets in lieu of a Consolidated Statement of Changes in Stockholders’ Equity.
Our significant accounting policies consistently applied are as follows:
(a) Investment Valuations
We expect that there may not be readily available market values for many of the investments, which are or will be in our portfolio. We value such investments at fair value as determined in good faith by or under the direction of our board of directors using a documented valuation policy and a consistently applied valuation process, as described in this Report. With respect to investments for which there is no readily available market value, the factors that the board of directors may take into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings
and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate or revise our
valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and the difference may be material. See Note 5.
Our portfolio generally consists of illiquid securities, including debt and equity investments. With respect to investments for which market quotations are not readily available, or for which market quotations are deemed not reflective of the fair value, our board of directors undertakes a multi-step valuation process each quarter, as described below:
Our board of directors may use market quotations to assess the value of our investments for which market quotations are readily available. We obtain such market values from independent pricing services or at bid prices obtained from at least two brokers or dealers, if available, or otherwise from a principal market maker or a primary market dealer. The Investment Adviser assesses the source and reliability of bids from brokers or dealers. If the board of directors has a bona fide reason to believe any such market quote does not reflect the fair value of an investment, it may independently value such investments by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available.
(b) Security Transactions, Revenue Recognition, and Realized/Unrealized Gains or Losses
Security transactions are recorded on a trade-date basis. We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, using the specific identification method, without regard to unrealized appreciation or depreciation previously recognized, but considering prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in the fair values of our portfolio investments, and the Credit Facility during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.
We record interest income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt investments with contractual PIK interest, which represents interest accrued and added to the loan balance that generally becomes due at maturity, we will generally not accrue PIK interest when the portfolio company valuation indicates that such PIK interest is not collectable. We do not accrue as a receivable interest on loans and debt investments if we have reason to doubt our ability to collect such interest. Loan origination fees, original issue discount ("OID"), market discount or premium and deferred financing costs on liabilities, which we do not fair value, are capitalized and then accreted or amortized using the effective interest method as interest income or, in the case of deferred financing costs, as interest expense. We record prepayment penalties earned on loans and debt investments as income. Dividend income, if any, is recognized on an accrual basis on the ex-dividend date to the extent that we expect to collect such amounts. From time to time, the Company receives certain fees from portfolio companies, which may or may not be non-recurring in nature. Such fees include loan prepayment penalties, structuring fees, amendment fees and agency fees, and are recorded as other investment income when earned. Litigation settlements are accounted for in accordance with the gain contingency provisions of ASC Subtopic 450-30, Gain Contingencies, or ASC 450-30.
Loans are placed on non-accrual status when principal or interest payments are past due 30 days or more and/or if there is reasonable doubt that principal or interest will be collected. Accrued interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current. As of March 31, 2026, we had three portfolio companies on non-accrual status, representing 0.8% and 0.5% of our overall portfolio on a cost and fair value basis, respectively. As of September 30, 2025, we had three portfolio companies on non-accrual status, representing 0.4% and 0.2% of our overall portfolio on a cost and fair value basis, respectively.
(c) Income Taxes
We have complied with the requirements of Subchapter M of the Code and have qualified to be treated as a RIC for federal income tax purposes. In this regard, we account for income taxes using the asset and liability method prescribed by ASC Topic 740, Income Taxes ("ASC 740"). Under this method, income taxes are provided for amounts currently payable and for amounts deferred as tax assets and liabilities based on differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. Based upon our qualification and election to be treated as a RIC for U.S. federal income tax purposes, we typically do not incur material U.S. federal income taxes. However, we may choose to retain a portion of our calendar year income, which may result in the imposition of a federal excise tax, or we may incur taxes through our taxable subsidiaries, including the Taxable Subsidiary.
For the three and six months ended March 31, 2026, we recorded a provision for taxes on net investment income of less than $0.1 million and $0.3 million, respectively, pertaining to federal excise tax. For the three and six months ended March 31, 2025, we recorded a provision for taxes on net investment income of $0.2 million and $0.5 million, respectively, pertaining to federal excise tax.
We recognize the effect of a tax position in our Consolidated Financial Statements in accordance with ASC 740 when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by the applicable tax authority. Tax positions not considered to satisfy the “more-likely-than-not” threshold would be recorded as a tax expense or benefit. Penalties or interest, if applicable, that may be assessed relating to income taxes would be classified as other operating expenses in the financial statements. There were no tax accruals relating to uncertain tax positions and no amounts accrued for any related interest or penalties with respect to the periods presented herein. The Company’s determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors including, but
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not limited to, an ongoing analysis of tax laws, regulations and interpretations thereof. Although the Company files both federal and state income tax returns, the Company’s major tax jurisdiction is federal.
For the three and six months ended March 31, 2026, the Company recorded a provision for taxes of $(0.3) million and $0.3 million on unrealized appreciation (depreciation) on investments by the Taxable Subsidiary. For the three and six months ended March 31, 2025, the Company recorded a provision for taxes of $0.5 million and $1.1 million on unrealized appreciation (depreciation) on investments by the Taxable Subsidiary. The provision for taxes on unrealized appreciation (depreciation) on investments is the result of netting (i) the expected tax liability on gains from sales of investments and (ii) the expected tax benefit from the use of losses in the current year. As of March 31, 2026, and September 30, 2025, $1.6 million and $1.9 million, respectively, was accrued as a deferred tax liability on the Consolidated Statements of Assets and Liabilities relating to unrealized gain on investments held by the Taxable Subsidiary. During the three and six months ended March 31, 2026, the Company recorded a provision for taxes of zero, respectively, relating to realized gain (loss) on investments held by the Taxable Subsidiary. During the three and six months ended March 31, 2025, the Company recorded a provision for taxes of less than $(0.1) million and $(0.1) million relating to realized gain (loss) on investments held by the Taxable Subsidiary. During the three and six months ended March 31, 2026 and 2025, the Taxable Subsidiary did not make any federal tax payments on realized gains on the sale of investments held by the Taxable Subsidiary.
We operate in a manner to maintain our election to be subject to tax as a RIC and to eliminate corporate-level U.S. federal income tax (other than the 4% excise tax) by distributing sufficient investment company taxable income and capital gain net income (if any). As a result, we will have an effective tax rate equal to 0% before the excise tax and income taxes incurred by the Taxable Subsidiary. As such, a reconciliation of the differences between our reported income tax expense and its tax expense at the federal statutory rate of 21% is not meaningful.
Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and net realized gains recognized for financial reporting purposes. Differences between tax regulations and GAAP may be permanent or temporary. Permanent differences are reclassified among capital accounts in the Consolidated Statements of Assets and Liabilities to reflect their tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.
(d) Distributions and Capital Transactions
Distributions to holders of our common stock are recorded on the ex-dividend date. The amount to be paid, if any, as a distribution is determined by the board of directors each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, may be distributed at least annually. The tax attributes for distributions will generally include ordinary income and capital gains but may also include certain tax-qualified dividends and/or a return of capital.
Capital transactions through offerings of our common stock are recorded when issued and offering costs are charged as a reduction of capital upon issuance of our common stock.
On July 17, 2024, we entered into equity distribution agreements (together, the "Equity Distribution Agreements") with Citizens JMP Securities, LLC, Raymond James & Associates, Inc. and Truist Securities, Inc. as the sales agents (collectively the "Sales Agents" and each a "Sales Agent") in connection with the 2024 ATM Program. The Equity Distribution Agreements provide that we may offer and sell shares of our common stock from time to time through the Sales Agents in amounts and at times to be determined by us. Actual sales will depend on a variety of factors to be determined by us from time to time, including, market conditions and the trading price of our common stock. The Investment Adviser may, from time to time, in its sole discretion, pay some or all of the commissions payable under the Equity Distribution Agreements or make additional supplemental payments to ensure that the sales price per share of our common stock in connection with all of the 2024 ATM Program offerings, net of any commissions of the Sale Agents, will not be less than our then current NAV per share. Any such payments made by the Investment Adviser will not be subject to reimbursement by us. In connection with the entry into the Equity Distribution Agreements, the Company terminated the equity distribution agreements with each of Citizens JMP Securities LLC, Raymond James & Associates, Inc. and Truist Securities, Inc. in connection with the 2022 ATM Program.
(e) Foreign Currency Translation
Our books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:
Although net assets and fair values are presented based on the applicable foreign exchange rates described above, we do not isolate that portion of the results of operations due to changes in foreign exchange rates on investments, other assets and debt from the fluctuations arising from changes in fair value of investments and liabilities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments and liabilities.
Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices to be more volatile than those of comparable U.S. companies or U.S. government securities.
(f) Consolidation
As permitted under Regulation S-X and as explained by ASC paragraph 946-810-45-3, we will generally not consolidate our investment in a company other than an investment company wholly owned subsidiary or a controlled operating company whose business consists of providing services to us. Accordingly, we have consolidated the results of our taxable subsidiaries, including the Taxable Subsidiary, Funding I, 2036 Securitization Issuers, the 2036-R Securitization Issuers, 2037 Securitization Issuer, the
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2038-R Securitization Issuers and PTSF and PTSF's GP (effective, August 27, 2025; see Note 1) in our Consolidated Financial Statements. We do not consolidate our non-controlling interest in PSSL or PSSL II. See further description of our investment in PSSL and PSSLII in Note 4.
(g) Asset Transfers and Servicing
Asset transfers that do not meet requirements for sale accounting treatment are reflected in the Consolidated Statements of Assets and Liabilities and the Consolidated Schedules of Investments as investments. The creditors of Funding I have received a security interest in all of its assets and such assets are not intended to be available to our creditors or any of our affiliates.
(h) Segment Reporting
In accordance with ASC Topic 280 - Segment Reporting, the Company has determined that it has a single reporting segment and operating unit structure. As a result, the Company's segment accounting policies are the same as described herein and the Company does not have any intra-segment sales and transfers of assets. See Note 12 for additional information on the Company's segment accounting policies.
(i) Recent Accounting Pronouncements
In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. ASU 2023-07 expands public entities' segment disclosure by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (the "CODM") and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosure of a reportable segment's profit or loss and assets. All disclosure requirements of ASU 2023-07 are required for entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods for fiscal years beginning December 15, 2024, and should be applied on a retrospective basis to all periods presented, noting early adoption is permitted. The Company has adopted ASU 2023-07 effective September 30, 2025 and concluded that the application of this guidance did not have a material impact on its consolidated financial statements.
In December 2023, the FASB issued ASU 2023 - 09 "Improvements to Income Tax Disclosures" ("ASU 2023 - 09"). ASU 2023 - 09 intends to improve the transparency of income tax disclosures. ASU 2023 - 09 is effective for fiscal years beginning after December 15, 2024 and is to be adopted on a prospective basis with the option to apply retrospectively. We are currently assessing the impact of this guidance, however, we do not expect a material impact to our financial statements.
3. AGREEMENTS AND RELATED PARTY TRANSACTIONS
(a) Investment Management Agreement
The Investment Management Agreement was reapproved by our board of directors, including a majority of our directors who are not interested persons of us or the Investment Adviser, in May 2026. Under the Investment Management Agreement, the Investment Adviser, subject to the overall supervision of our board of directors, manages the day-to-day operations of and provides investment advisory services to us. For providing these services, the Investment Adviser receives a fee from us consisting of two components - a base management fee and an incentive fee. The Investment Adviser serves as the collateral manager to Funding I and has irrevocably directed that any management fee owed with respect to such services is to be paid to the Company so long as the Investment Adviser remains the collateral manager. This arrangement does not increase our consolidated management fee.
Base Management Fee
The base management fee is calculated at an annual rate of 1.00% of our “average adjusted gross assets,” which equals our gross assets (net of U.S. Treasury Bills, temporary draws under any credit facility, cash and cash equivalents, repurchase agreements or other balance sheet transactions undertaken at the end of a fiscal quarter for purposes of preserving investment flexibility for the next quarter and unfunded commitments, if any) and is payable quarterly in arrears. The base management fee is calculated based on the average adjusted gross assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for any share issuances or repurchases during the current calendar quarter. For example, if we sold shares on the 45th day of a quarter and did not use the proceeds from the sale to repay outstanding indebtedness, our gross assets for such quarter would give effect to the net proceeds of the issuance for only 45 days of the quarter during which the additional shares were outstanding. For the three and six months ended March 31, 2026, we recorded a base management fee of $6.4 million and $13.2 million, respectively, paid by us to the Investment Adviser. For the three and six months ended March 31, 2025, we recorded a base management fee of $5.6 million and $10.9 million, respectively, paid by us to the Investment Adviser.
Incentive Fee
The incentive fee has two parts, as follows:
One part is calculated and payable quarterly in arrears based on our Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter. For this purpose, Pre-Incentive Fee Net Investment Income means interest income, dividend income and any other income, including any other fees (other than fees for providing managerial assistance), such as amendment, commitment, origination, prepayment penalties, structuring, diligence and consulting fees or other fees received from portfolio companies, accrued during the calendar quarter, minus our operating expenses for the quarter (including the base management fee, any expenses payable under the Administration Agreement and any interest expense or amendment fees under any credit facility and distribution paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero-coupon securities), accrued income not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, computed net of all realized capital losses or unrealized capital appreciation or depreciation. Pre-Incentive Fee Net Investment Income, expressed as a percentage of the value of our net assets at the end of the immediately preceding calendar quarter, is compared to the hurdle rate of 1.75% per quarter (7.00% annualized). We pay the Investment Adviser an incentive fee with respect to our Pre-Incentive Fee Net Investment Income in each calendar quarter as follows: (1) no incentive fee in any calendar
quarter in which our Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate of 1.75%, (2) 50% of our Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than 2.9167% in any calendar quarter (11.67% annualized) (we refer to this portion of our Pre-Incentive Fee Net Investment Income (which exceeds the hurdle but is less than 2.9167%) as the “catch-up,” which is meant to provide our Investment Adviser with 20% of our Pre-Incentive Fee Net Investment Income, as if a hurdle did not apply, if this net investment income exceeds 2.9167% in any calendar quarter), and (3) 20% of the amount of our Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.9167% in any calendar quarter. These calculations are pro-rated
for any share issuances or repurchases during the relevant quarter, if applicable. For the three and six months ended March 31, 2026, we recorded $6.4 million and $13.1 million, respectively, related to incentive fees on net investment income, paid by us to the Investment Adviser. For the three and six months ended March 31, 2025, we recorded $6.3 million and $13.8 million, respectively, related to incentive fees on net investment income, paid by us to the Investment Adviser.
The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Management Agreement, as of the termination date) and equals 20% of our realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. For the three and six months ended March 31, 2026 and 2025, the Company did not pay an incentive fee on capital gains.
Under GAAP, we are required to accrue a capital gains incentive fee based upon net realized capital gains and net unrealized capital appreciation and depreciation on investments held at the end of each period. In calculating the capital gains incentive fee accrual, we considered the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Management Agreement. This accrual is calculated using the aggregate cumulative realized capital gains and losses and cumulative unrealized capital appreciation or depreciation. If such amount is positive at the end of a period, then we record a capital gains incentive fee equal to 20% of such amount, less the aggregate amount of actual capital gains related to incentive fees paid in all prior years. If such amount is negative, then there is no accrual for such year. There can be no assurance that such unrealized capital appreciation will be realized in the future. The incentive fee accrued for, but not payable, under GAAP on our unrealized and realized capital gains for the three and six months ended March 31, 2026 and 2025 was zero.
(b) Administration Agreement
The Administration Agreement with the Administrator was reapproved by our board of directors, including a majority of the directors who are not interested persons of us, in May 2026. Under the Administration Agreement, the Administrator provides administrative services and office facilities to us. For providing these services, facilities and personnel, we have agreed to reimburse the Administrator for its allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including rent and our allocable portion of the costs of compensation and related expenses of our Chief Financial Officer, Chief Compliance Officer, Corporate Counsel and their respective staffs. The amount billed by the Administrator may include credits related to its administrative agreement with PSSL. The Administrator also offers, on our behalf, significant managerial assistance to portfolio companies to which we are required to offer such assistance. Reimbursement for certain of these costs is included in administrative services expenses in the Consolidated Statements of Operations. For the three and six months ended March 31, 2026, we recorded administrative expenses of $0.7 million and $1.4 million, related to expenses the Company incurred for services described above, respectively. For the three and six months ended March 31, 2025, we recorded administrative expenses of $0.5 million and $0.9 million related to expenses the Company incurred for services described above, respectively.
Under the Administration Agreement the Administrator may be reimbursed by the Company for the costs and expenses to be borne by the Company set forth above to include the costs and expenses allocable with respect to the provision of in-house legal, tax, or other professional advice and/or services to the Company, including performing due diligence on its prospective portfolio companies as deemed appropriate by the Administrator, where such in-house personnel perform services that would be paid by the Company if outside service providers provided the same services, subject to the Board's oversight.
(c) Other Related Party Transactions
The Company, the Investment Adviser and certain other affiliates have been granted an order for exemptive relief by the SEC for the Company to co-invest with other funds managed by the Investment Adviser. If we co-invest with other affiliated funds, our Investment Adviser will not receive compensation except to the extent permitted by the exemptive order and applicable law, including the limitations set forth in Section 57(k) of the 1940 Act.
There were no transactions subject to Rule 17a-7 under the 1940 Act during each of the three and six months ended March 31, 2026 and 2025.
For the three and six months ended March 31, 2026, we sold $56.9 million and $189.4 million in investments to PSSL at fair value, respectively, and recognized $(0.1) million and $0.2 million of net realized gain (losses). For the three and six months ended March 31, 2025, we sold $52.9 million and $240.6 million in investments to PSSL at fair value, respectively, and recognized zero and $(0.1) million of net realized gain (losses).
For the three and six months ended March 31, 2026, we sold $148.1 million and $344.6 million in investments to PSSL II at fair value, respectively, and recognized $0.5 million and $1.0 million of net realized gain (losses). For the three and six months ended March 31, 2025, we sold zero investments to PSSL II at fair value and recognized zero net realized gain (losses).
For the three and six months ended March 31, 2026 and 2025, we sold no investments to PTSF.
As of March 31, 2026 and September 30, 2025, the Company had a receivable from the Administrator of $0.1 million and $0.3 million, respectively, presented as due from affiliate on the Consolidated Statements of Assets and Liabilities. This amount relates to agency fees collected on behalf of the Company.
As of March 31, 2026 and September 30, 2025, the Company had a receivable from PSSL II of $0.9 million and zero, respectively, presented as a distribution receivable on the Consolidated Statements of Assets and Liabilities. This amount relates to a dividend distribution.
As of March 31, 2026 and September 30, 2025, PFLT had a payable to PSSL and the Investment Adviser of zero and $0.7 million, respectively, presented as a Due to Affiliates on the consolidated statement of assets and liabilities. These amounts are related to cash owed to PSSL and the Investment Adviser from the Company in connection with trades between the funds and wind down of PTSF.
4. INVESTMENTS
For the three and six months ended March 31, 2026, purchases of investments, including payment-in-kind ("PIK") interest totaled $296.3 million and $599.0 million, respectively. Sales and repayments of investments for the three and six months ended March 31, 2026, totaled $328.0 million and $769.5 million, respectively. For the three and six months ended March 31, 2025, purchases of investments, including payment-in-kind ("PIK") interest totaled $295.0 million and $903.3 million, respectively. Sales and repayments of the investments for the three and six months ended March 31, 2025, totaled $122.4 million and $523.7 million, respectively.
Investments and cash and cash equivalents consisted of the following:
($ in thousands)
Investment Classification
Fair Value
First lien
First lien in PSSL
First Lien in PSSL II
Second Lien
Subordinate debt
Equity
150,506
221,345
150,565
196,397
Equity interests in PSSL
Equity interests in PSSL II
Total investments
Cash and cash equivalents
121,873
122,684
Total investments and cash and cash equivalents
The table below describes investments by industry classification by cost and fair value and enumerates the percentage of the total net asset value in such industries:
Industry Classification
March 31, 2026 (1)
September 30, 2025 (1)
Fair Value Percentage
Net asset value Percentage
$205,014
$251,979
12%
24%
$222,607
$236,703
10%
22%
221,792
219,229
21%
252,226
248,621
23%
186,885
184,864
8%
18%
169,182
169,013
7%
16%
160,133
160,893
15%
195,695
199,549
19%
132,306
133,846
6%
13%
121,706
120,861
5%
11%
130,206
123,494
171,987
169,086
105,340
103,905
123,257
125,392
102,180
93,547
4%
9%
99,851
99,069
79,729
84,981
84,194
88,795
All Other
89,371
79,719
112,159
102,794
3%
74,366
78,455
106,806
110,299
66,085
67,515
103,230
105,500
56,072
57,924
70,373
73,060
60,176
57,691
97,385
95,499
50,234
51,287
2%
43,733
44,241
45,155
46,483
28,870
29,837
1%
44,038
44,733
31,104
32,224
41,550
40,511
34,935
34,207
23,440
35,724
56,769
27,648
27,841
36,349
36,530
29,777
25,730
28,840
28,878
24,740
24,701
56,192
24,609
24,041
39,660
40,012
19,625
21,690
29,575
31,850
19,982
20,092
19,307
19,365
20,471
19,510
20,322
19,964
14,974
17,672
15,708
17,716
17,453
14,148
15,315
20,028
21,134
14,447
13,736
13,416
14,122
13,785
12,478
11,534
12,231
12,280
12,681
12,602
11,297
11,319
11,024
11,121
0%
Total
$2,151,925
$2,189,011
100%
211%
$2,458,018
$2,491,360
232%
(1) Excludes investments in PSSL and PSSL II
PennantPark Senior Secured Loan Fund I LLC
In May 2017, we and Kemper formed PSSL, an unconsolidated joint venture. PSSL invests primarily in middle-market and other corporate debt securities consistent with our strategy. PSSL was formed as a Delaware limited liability company. As of March 31, 2026 and September 30, 2025, PSSL had total assets of $1,248.8 million and $1,153.7 million, respectively, and its investment portfolio consisted of investments in 120 and 117 portfolio companies, respectively. As of March 31, 2026, at fair value, the largest investment in a single portfolio company in PSSL was $24.9 million and the five largest investments totaled $111.9 million. As of September 30, 2025, at fair value,
the largest investment in a single portfolio company in PSSL was $20.9 million and the five largest investments totaled $99.3 million. PSSL invests in portfolio companies in the same industries in which we may directly invest.
We and Kemper provide capital to PSSL in the form of first lien secured debt and equity interests. As of March 31, 2026 and September 30, 2025, we and Kemper owned 87.5% and 12.5%, respectively, of each of the outstanding first lien secured debt and equity interests. As of the same dates, our investment in PSSL consisted of first lien secured debt of $237.7 million (zero remaining unfunded) and $237.7 million (zero remaining unfunded), respectively, and equity interests of $163.1 million ($26.3 million remaining unfunded) and $123.7 million ($65.6 remaining unfunded), respectively. During the three and six months ended March 31, 2026, the Company made capital contributions of zero and approximately $39.4 million of assets at their most recent fair market value as of the date of the transaction.
We and Kemper each appointed two members to PSSL’s four-person board of directors and investment committee. All material decisions with respect to PSSL, including those involving its investment portfolio, require unanimous approval of a quorum of the board of directors or investment committee. Quorum is defined as (i) the presence of two members of the board of directors or investment committee, provided that at least one individual is present that was elected, designated or appointed by each member; (ii) the presence of three members of the board of directors or investment committee, provided that the individual that was elected, designated or appointed by the member with only one individual present shall be entitled to cast two votes on each matter; and (iii) the presence of four members of the board of directors or investment committee constitutes a quorum, provided that two individuals are present that were elected, designated or appointed by each member.
In December 2024, PSSL entered into a $325.0 million (increased from $260.0 million) senior secured revolving credit facility which bears interest at SOFR plus 225 basis points (including a spread adjustment) with Ally Bank through its wholly owned subsidiary, PennantPark Senior Secured Loan Facility LLC II, or PSSL Subsidiary II, subject to leverage and borrowing base restrictions.
In January 2021, PSSL completed a $300.7 million debt securitization in the form of a collateralized loan obligation, or the “2032 Asset-Backed Debt”. The 2032 Asset-Backed Debt is secured by a carefully constructed portfolio of PennantPark CLO II, Ltd., a wholly owned and consolidated subsidiary of PSSL, consisting primarily of middle market loans and participation interests in middle market loans. The 2032 Asset-Backed Debt matures in January 2032. On the closing date of the transaction, in consideration of PSSL’s transfer to PennantPark CLO II, Ltd. of the initial closing date loan portfolio, which included loans distributed to PSSL by certain of its wholly owned subsidiaries and us, PennantPark CLO II, Ltd. transferred to PSSL 100% of the Preferred Shares of PennantPark CLO II, Ltd. and 100% of the Class E Notes issued by PennantPark CLO II, Ltd.
In May 2024, PSSL completed the refinancing of the 2032 Asset-Backed Debt through a $300.7 million debt securitization in the form of a collateralized loan obligation, or the "2036 PSSL Asset-Backed Debt". The 2036 PSSL Asset-Backed Debt is secured by a carefully constructed portfolio of PennantPark CLO II, Ltd., a wholly owned subsidiary of PSSL, consisting primarily of middle market loans and participation interest in middle market loans. The 2036 PSSL Asset-Backed Debt matures in April 2036. PSSL retained the preferred shares and Class E-R Notes through a consolidated subsidiary as of March 31, 2026.
In April 2023, PSSL completed a $297.8 million debt securitization in the form of a collateralized loan obligation, or the “2035 Asset-Backed Debt”. The 2035 Asset-Backed Debt is secured by a carefully constructed portfolio of PennantPark CLO VI, LLC, a wholly owned and consolidated subsidiary of PSSL, consisting primarily of middle market loans and participation interests in middle market loans. The 2035 Asset-Backed Debt matures in April 2035. On the closing date of the transaction, in consideration of PSSL’s transfer to PennantPark CLO VI, LLC of the initial closing date loan portfolio, which included loans distributed to PSSL by certain of its wholly owned subsidiaries and us, PennantPark CLO VI, LLC transferred to PSSL 100% of the Preferred Shares of CLO VI, LLC, all of which were held by PSSL.
In May 2025, PSSL through its wholly owned and consolidated subsidiary, PennantPark CLO VI, LLC closed the refinancing of the 2035 Asset-Backed Debt through a four year reinvestment period, twelve-year final maturity $315.8 million debt securitization or the "2037-R Asset-Backed Debt." The debt in this securitization is structured in the following manner: (i) $228.0 million of Class A-R Loans, which bears interest at three-month SOFR plus 1.85%, (ii) $18.0 million of Class B-R Loans, which bears interest at three-month SOFR plus 4.50%, (iii) $18.0 million of Class C-R Loans and (iv) $51.8 million of subordinated notes. PSSL retained all of the subordinated notes and Class C-R Loans through a consolidated subsidiary. The maturity of the replacement debt and existing subordinated notes was extended to April 2037.
In April 2025, PSSL through its wholly owned and consolidated subsidiary, PennantPark CLO 12, LLC closed a four-year reinvestment period, twelve-year final maturity $301.0 million debt securitization in the form of a collateralized loan obligation or the "2037 Asset-Backed Debt." The debt in this securitization is structured in the following manner: (i) $30.0 million of Class A-1 Loans, which bear interest at three-month SOFR plus 1.45%, (ii) $141.0 million of Class A-1 Notes, which bear interest at three-month SOFR plus 1.45%, (iii) $12.0 million of Class A-2 Notes, which bear interest at a three-month SOFR plus 1.60%, (iv) $21.0 million of Class B notes, which bears interest at three-month SOFR plus 1.85%, (v) $24.0 million of Class C notes, which bears interest at three-month SOFR plus 2.30%, (vi) $18.0 million Class D notes, which bears interest at three-month SOFR plus 3.30%, (vii) $55.0 million of subordinated notes. PSSL retained all of the subordinated notes through a consolidated subsidiary as of March 31, 2026. The reinvestment period for the term debt securitization ends in April 2029 and the debt matures in April 2037. The proceeds from the debt repaid a portion of PSSL's $325.0 million secured credit facility.
Below is a summary of PSSL’s portfolio at fair value:
1,209,044
1,084,649
Weighted average cost yield on income producing investments
9.5
10.1
Number of portfolio companies in PSSL
117
Largest portfolio company investment
24,874
20,901
Total of five largest portfolio company investments
111,858
99,270
Below is a listing of PSSL’s individual investments as of March 31, 2026 (Par and $ in thousands):
Basis PointSpread AboveIndex (1)
Par or Numberof Shares
First Lien Secured Debt - 1,737.2% of Net Assets
10/6/2023
10/2/2029
8.66%
SOFR+500
19,912
19,709
19,414
8/1/2029
9.16%
SOFR+550
18,478
18,247
10/23/2025
9/30/2031
8.70%
12,438
12,377
5/24/2021
5/7/2026
9.96%
SOFR+626
12,716
8/16/2029
9.42%
SOFR+575
11,400
11,514
12/23/2024
4/9/2027
8.67%
7,594
7,573
9/3/2025
7/17/2031
8.42%
SOFR+475
8,955
8,906
8,910
Alpine Acquisition Corp II - Second out Term Loan
1/14/2031
1,048
Alpine Acquisition Corp II - Third out Term Loan
1,398
Alpine Acquisition Corp II - Unfunded Term Loan
419
-
Alpine Acquisition Corp II - Unfunded Revolver
105
Media: Advertising, Printing & Publishing
9.60%
SOFR+590
10,962
10,931
10,880
11/11/2024
5,925
5,917
5,895
11/22/2024
8/28/2029
9.45%
14,754
14,528
1/9/2025
9/13/2029
9.17%
22,313
22,071
22,090
6/26/2029
4,950
4,855
4,876
10/9/2024
6/21/2029
9.20%
11/8/2029
10.42%
SOFR+675
14,727
14,516
7/2/2029
14,799
14,563
14,577
2/28/2030
8.95%
SOFR+525
14,594
14,407
BioDerm, Inc.
2/28/2023
1/31/2028
10.17%
SOFR+650
8,753
8,703
8,621
6/30/2022
9/17/2026
9.10%
SOFR+540
14,737
14,694
14,295
8.20%
SOFR+450
4,929
8.45%
4,886
7/25/2029
Automotive
9.02%
SOFR+535
378
8/28/2025
7/15/2031
18,399
18,278
18,124
3/7/2025
7/31/2029
9.70%
SOFR+600
14,775
14,621
9.59%
4,252
4,238
4,188
10/16/2024
12/3/2029
9,875
9,821
9,900
4/11/2025
2/7/2030
15,014
14,839
14,901
4/11/2023
6/14/2028
9,392
9,325
10/1/2029
14,812
14,721
14,664
CF512, Inc.
12/27/2021
8/20/2026
9.86%
SOFR+619
6,449
6,434
6,384
11/26/2024
9/23/2030
19,737
19,658
1/12/2024
7.78%
SOFR+750
6,602
6,468
5,603
7/29/2021
7/13/2027
9.41%
SOFR+576
3,715
3,695
3,659
8/16/2027
9.53%
SOFR+536
2,036
2,027
9/15/2022
2,560
2,435
11/1/2028
Consumer Goods: Durable
8.92%
4,384
4,378
4,428
9/30/2030
4,925
Dynata, LLC - First Out Term Loan (5)
7/17/2028
8.91%
1,277
8,312
4,198
1/10/2029
8,731
8,662
7,166
7,145
11/21/2022
3/15/2027
10.02%
SOFR+635
12,351
12,297
11,734
6/12/2023
5/29/2029
12,062
11,912
EvAL Home Care Solutions Intermediate, LLC
7/10/2024
5/10/2030
8,601
8,496
GGG MIDCO, LLC
9/27/2030
24,449
24,377
24,644
6/8/2021
9/16/2027
9.28%
SOFR+560
3,344
3,334
3/15/2022
8/10/2027
9.27%
3,666
3,648
5/22/2025
8/7/2029
Consumer Products
9.67%
6,435
6,324
6,403
Hancock Roofing And Construction, LLC
9.30%
2,112
2,105
1,975
Harris & Co, LLC
8/9/2030
19,700
3/2/2032
10,000
9,958
9,950
6/17/2029
6,419
1/12/2031
9,852
9.21%
8,230
8,145
5/11/2026
3,441
3,439
Imagine Acquisitionco, Inc.
11/15/2027
8.75%
SOFR+510
9,013
8,939
8,833
5,937
5,871
3/3/2025
8,102
8,053
7,980
7/11/2023
6/30/2026
11.29%
SOFR+761
8,040
8,026
Kinetic Purchaser, LLC (4)
13,960
13,380
10/14/2021
9/17/2027
10.77%
SOFR+710
15,693
15,479
LAV Gear Holdings, Inc. - Takeback TL (5)
Leisure, Amusement, Motion Pictures, Entertainment
9.61%
SOFR+594
7,707
6,551
LAV Gear Holdings, Inc. - Priority TL (5)
2,439
2,413
2/1/2030
Environmental Industries
8.15%
2,495
10/25/2023
5/31/2028
12,130
12,039
12,070
9/27/2023
4/1/2027
2,181
2,149
2,169
1/13/2025
8.99%
16,830
16,700
16,704
4/16/2027
8.77%
8,163
7/25/2028
6,219
6,162
1/29/2022
9.35%
SOFR+565
2,295
11/6/2023
9.95%
SOFR+625
18,833
18,648
4/29/2024
3/1/2030
15,435
15,269
15,126
3/22/2024
1/16/2030
17,844
17,714
10/1/2027
3,343
3,321
3,336
8/19/2026
Healthcare, Education & Childcare
9.52%
SOFR+585
10,298
10,278
9,784
8/31/2029
10.05%
20,952
20,689
20,061
8/29/2031
Road and Rail
17,413
17,346
17,325
11/1/2024
16,864
16,748
16,569
5/7/2027
10.03%
SOFR+636
14,395
14,313
ORL Acquisition, Inc. (5)
9/3/2027
13.10%
SOFR+940
2,287
11/19/2024
14,645
14,602
Output Services Group, Inc. - First-Out Term Loan
12/1/2023
12.16%
SOFR+842
821
Output Services Group, Inc. - Last-Out Term Loan
5/30/2028
10.41%
SOFR+667
3,434
10/2/2028
9.99%
11,758
11,633
10/16/24
9/3/2030
10,878
10,794
10,660
Paving Lessor Corp. First Lien -Term Loan
7/1/2031
19,877
19,755
PN Buyer, Inc.
11/19/2025
7/31/2031
8.17%
9,975
9,933
11/4/2025
8/4/2031
Education
4,980
4,930
Pragmatic Institute, LLC (4)
3/28/2030
4,381
4,180
2,059
6,350
10/3/2030
14,963
14,888
14,813
8/15/2029
7,661
7,609
7,355
5/3/2029
14,800
14,657
14,578
6/20/2029
8.69%
18,660
18,608
1/17/2031
10,462
10,399
10,448
10,384
9/6/2023
6/15/2029
9.85%
4,395
4,345
1/2/2032
9,962
13,406
13,359
9/19/2024
5/23/2029
Construction and Building
9.22%
9,810
9,710
9,590
7/7/2026
9.90%
SOFR+620
9,131
10,254
10,174
9/30/2021
3/31/2027
SOFR+610
6,611
6,280
6/13/2029
9.84%
SOFR+615
4,944
4,902
10.10%
SOFR+690
20,393
20,133
20,189
9.77%
12,327
12,252
9,837
3/1/2028
8.85%
SOFR+515
4,008
3,977
STG Distribution, LLC - First Out New Money Term Loans (4)(5)
10/24/2024
10/3/2029
2,028
1,858
STG Distribution, LLC - Second Out Term Loans (4),(5)
4,637
2,562
STG Distribution, LLC - Final initial New Money TL
7/14/2026
8.00%
1,324
1,232
11/1/2030
14,531
14,476
14,363
14,293
2,859
2,827
4/26/2024
1/23/2029
10.20%
19,331
19,118
18,799
7/28/2026
7,171
7,157
The Vertex Companies, LLC
8/31/2028
Construction and Engineering
8.68%
17,393
17,266
17,306
4/20/2026
Consumer Goods: Non-Durable
9.56%
15,751
15,745
Transgo, LLC
1/19/2024
15,780
15,616
15,543
5/5/2021
4/3/2028
8.56%
SOFR+490
14,604
14,547
14,202
Walker Edison Furniture Company, LLC - Litigation DIP (5)
3/1/2029
10.00%
146
151
Walker Edison Furniture Company, LLC - Unfunded Term Loan (5),(3)
5/20/2024
12,005
11,870
11,885
Wash & Wax Systems LLC (5)
4/30/2028
5,959
6,043
6,078
1,215,640
1,193,499
Subordinate Debt - 10.6% of Net Assets
4/15/2030
1,877
1,654
1,633
4/15/2033
3,623
1,977
1,449
Wash & Wax Systems LLC
7/30/2028
12.00%
4,174
7,805
7,256
Equity Securities - 12.1% of Net Assets
48Forty Intermediate Holdings, Inc. - Preferred Equity
11/5/2024
699
4,158
New Insight Holdings, Inc. - Common Equity
116,055
2,031
1,322
Output Services Group, Inc. - Common Equity
126,324
1,012
687
PLB Brands, LLC - Common Equity
3/5/2026
560,239
560
Wash & Wax Group, LP - Common Equity
2,493
4,449
1,562
White Tiger Newco, LLC - Common Equity (5)
35,834
2,734
Total Equity Securities
14,944
8,289
Total Investments - 1,759.8% of Net Assets (6)(7)
1,238,389
Cash Equivalents - 26.2% of Net Assets
BlackRock Federal FD Institutional 81 ( Money Market Fund)
3.54%
470
Blackrock Liquidity Fed Fund Inst (Money Market Fund)
3,739
JP Morgan USD Liquidity Inst (Money Market Fund)
3.65%
JP Morgan US Government Fund (Money Market Fund)
3.46%
3,014
3.56%
9,316
18,001
Cash - 23.3% of Net Assets
15,997
Total Investments, Cash Equivalents, and Cash —1,809.3% of Net Assets
1,272,387
1,243,042
Liabilities in Excess of Other Assets — (1,709.3)% of Net Assets
(1,174,338
Members' Equity—100.0%
68,704
37
Below is a listing of PSSL’s individual investments as of September 30, 2025 (Par and $ in thousands):
First Lien Secured Debt - 2,106.3% of Net Assets
9.29%
14,649
14,677
9.79%
18,573
18,304
18,759
10.26%
11,610
11,566
9.91%
11,640
9.83%
7,608
7,576
7,570
9,000
8,951
Alpine Acquisition Corp II (4)
10/11/2022
13,154
13,012
6,840
4,434
4,357
4,360
9.31%
5,955
5,946
9.75%
9.89%
9,819
9,752
4,975
4,865
4,831
9.50%
17,748
17,549
10.91%
14,792
4,850
4,794
4,802
9.25%
14,671
14,458
8,798
8,730
8,688
9.40%
14,816
14,714
14,557
8.50%
4,952
9.00%
4,904
9.51%
416
9.66%
4,963
14,670
4,263
4,236
4,220
9,925
9,863
15,090
14,897
14,939
9,441
9,359
14,887
14,218
10.36%
6,447
19,837
11.66%
6,637
6,479
6,206
10.08%
3,735
3,708
SOFR+586
2,046
2,034
2,574
2,522
11/3/2025
4,487
4,532
4,909
9.46%
SOFR+526
1,347
1,341
8,354
6,802
8,776
8,694
8,797
5,940
5,911
10.51%
12,416
12,335
12,124
11,950
8,822
8,704
19,573
19,491
3/16/2026
9.74%
3,503
9.80%
3,685
3,660
3,611
10.16%
6,344
2,100
2,091
19,800
19,650
19,627
8.87%
3,606
3,572
10.32%
8,867
8,761
3,431
9,060
8,961
5,968
5,891
8,143
8,087
1/15/2026
11.78%
8,081
8,062
10.15%
13,492
13,344
11,468
2/18/2027
SOFR+785
15,508
15,400
15,120
2,409
2,381
2,967
2/3/2027
16,232
16,187
2,533
2,497
12,279
12,164
Lucky Bucks, LLC - First-Out Term Loan (5)
Hotel, Gaming and Leisure
SOFR+765
2,193
2,146
2,184
9.12%
16,915
16,769
8,244
8,186
6,251
6,181
9.65%
2,323
2,303
10.25%
18,613
18,927
15,514
15,338
14,769
12,935
12,788
9.15%
3,360
10.12%
10,352
10,304
10.35%
21,059
20,761
9.26%
16,958
16,824
16,619
10.53%
15,358
13.70%
2,231
2,220
9.76%
14,900
14,695
14,691
12.71%
SOFR+843
10.96%
SOFR+668
3,833
3,787
11,818
11,669
10,933
10,836
10,741
9,963
9,896
9,888
9/8/2025
8.81%
4,979
Pink Lily Holdco, LLC (5),(7)
11/9/2027
4.35%
8,359
8,323
4,200
3,045
6,467
6,375
18,781
18,717
1/29/2026
10.40%
SOFR+640
4,775
4,768
4,763
10,518
10,449
7,639
7,654
9,758
9,776
9.92%
4,303
4,245
3,873
5,905
9,864
9,747
9,815
9,186
10,306
10,213
Schlesinger Global, Inc. (6)
12.76%
SOFR+860
6,647
6,315
4,523
10.31%
18,078
17,812
12,294
12,212
10,609
4,029
3,989
STG Distribution, LLC - First Out New Money Term Loans (5)
12.57%
SOFR+835
1,961
1,745
STG Distribution, LLC - Second Out Term Loans (5),(7)
5.32%
4,535
363
14,719
14,656
14,438
14,345
14,322
2,873
2,835
10.52%
19,429
19,179
19,332
10/4/2022
5,327
5,141
5,305
7,985
7,943
8.93%
17,482
17,309
17,395
10.19%
16,355
16,341
16,224
15,880
15,694
16,005
9.19%
14,530
14,238
6/15/2027
6,753
6,718
Walker Edison Furniture Company, LLC - Unfunded Term Loan (3),(5)
Walker Edison Furniture Company, LLC - New Money DIP (5)
12,066
11,914
9.81%
5,847
5,947
5,964
1,083,891
1,066,863
Subordinate Debt - 14.8% of Net Assets
Integrative Nutrition, LLC
1,628
1,605
4,275
3,932
7,537
7,514
Equity Securities - 20.3% of Net Assets
1,722
1,740
Lucky Bucks, LLC - Common Equity
4,593
2,510
12,288
10,272
Total Investments - 2,141.5% of Net Assets (6)(8)
1,103,716
Cash Equivalents - 94.5% of Net Assets
12,475
4,265
14,682
10,539
5,909
47,870
Cash - 27.0% of Net Assets
13,690
Total Investments, Cash Equivalents, and Cash —2,263.0% of Net Assets
1,165,276
1,146,209
Liabilities in Excess of Other Assets — (2,163.0)% of Net Assets
(1,095,559
50,650
Below are the Consolidated Statements of Assets and Liabilities for PSSL ($ in thousands):
Investments at fair value (amortized cost—$1,238,389 and $1,103,716, respectively)
Cash equivalents (cost—$18,001 and $47,870, respectively)
Cash (cost—15,997 and $13,690, respectively)
3,782
4,138
838
1,881
1,248,767
1,153,689
Credit facility payable
158,500
74,500
2036 Asset-backed debt, net (par—$246,000 and $246,000, respectively and unamortized deferred financing costs of $1,197 and $1,341, respectively)
244,803
244,659
2037 Asset-backed debt, net (par—$246,000 and $246,000, respectively and unamortized deferred financing costs of $1,732 and $1,904, respectively)
244,268
244,096
2037-R Asset-backed debt, net (par—$246,000 and $246,000, respectively and unamortized deferred financing costs of $2,296 and $2,518, respectively)
243,704
243,481
Notes payable to members
271,600
Interest payable on credit facility and asset backed debt
9,361
16,868
Interest payable on notes to members
6,788
Accrued expenses
1,314
997
Due to affiliate
262
50
1,180,063
1,103,039
Members' equity
Total liabilities and members' equity
Below are the Consolidated Statements of Operations for PSSL ($ in thousands):
28,992
27,350
58,159
56,776
218
524
788
29,210
27,555
58,683
57,564
Expenses:(1)
Interest and expense on credit facility and asset-backed debt
13,914
13,731
28,216
27,816
Interest expense on notes to members
8,393
16,296
17,247
Administration fees
795
1,553
1,385
633
414
1,096
906
23,326
23,255
47,161
47,354
5,884
4,300
11,522
10,210
Realized and unrealized gain (loss) on investments:
(14,364
(7,788
(16,540
(6,455
(4,252
(10,278
(15,142
Net realized and unrealized gain (loss) on investments
(14,256
(12,040
(26,818
(21,597
Net increase (decrease) in members' equity resulting from operations
(8,372
(7,740
(15,296
(11,387
(1) No management or incentive fees are payable by PSSL. If any fees were to be charged, they would be separately disclosed in the Consolidated Statement of Operations. PSSL pays the Administrator an annual fee of 0.25% of average gross assets under management on a quarterly basis.
PennantPark Senior Secured Loan Fund II LLC
In August 2025, we and Hamilton Lane ("HL") formed PSSL II, an unconsolidated joint venture. PSSL II invests primarily in middle-market and other corporate debt securities consistent with our strategy. PSSL II was formed as a Delaware limited liability company. PSSL II invests in portfolio companies in the same industries in which we may directly invest. PSSL II commenced operations on November 18, 2025. As of March 31, 2026, PSSL II had total assets of $357.5 million and its investment portfolio consisted of investments in 54 portfolio companies. As of March 31, 2026, at fair value, the largest investment in a single portfolio company in PSSL II was $13.0 million and the five largest investments totaled $64.8 million. PSSL II invests in portfolio companies in the same industries in which we may directly invest.
We and HL have committed to invest up to $200.0 million in the aggregate in PSSL II, with the Company committing to invest up to $150.0 million and HL committing to invest up to $50.0 million. Investments by each of the Company and HL are made in the form of membership interests and secured notes. The Company's commitment consists of $105.0 million in secured notes and $45.0 million in membership interests. HL's commitment consists of $35.0 million in secured notes and $15.0 million in membership interests. All material decisions regarding PSSL II must be submitted to its board of managers, which is comprised of an equal number of representatives from
each of the Company and HL. Further, all portfolio and other material decisions require the affirmative vote of at least one board member designated by the Company and one board member from HL.
We and HL provide capital to PSSL II in the form of secured notes and equity interests. As of March 31, 2026, our investment in PSSL II consisted of secured notes of $65.6 million ($39.4 million remaining unfunded) and equity interests of $28.1 million ($16.9 million remaining unfunded). During the three and six months ended March 31, 2025, the Company made capital contributions of approximately $37.5 million and $93.8 million of assets at their most recent fair market value as of the date of the transaction.
In November 2025, PSSL II entered into a $150.0 million revolving credit facility which bears all-in interest rate at SOFR plus 1.85% with Goldman Sachs Bank USA as administrative agent, through its wholly owned subsidiary, PSSL II SPV LLC, subject to leverage and borrowing base restrictions. In February 2026, the revolving credit facility was upsized to $250.0 million.
Below is a summary of PSSL II's portfolio at fair value:
339,929
8.9
Number of portfolio companies in PSSL II
12,989
64,847
42
Below is a listing of PSSL II’s individual investments as of March 31, 2026 (Par and $ in thousands):
First Lien Secured Debt - 914.5% of Net Assets
13,000
12,675
814
822
Healthcare Providers & Services
4,918
2/3/2026
3,971
3,970
1,128
1,105
9.18%
4,987
5,037
8,362
8,317
12,966
5,839
6,982
6,932
6,878
5,862
5,876
4,468
4,424
12,967
5/13/2032
6,501
6,471
2,511
2,496
2,473
1,970
6,250
9,458
9,546
2/12/2026
4,204
4,090
12,925
3/31/2026
7,963
Health Care Equipment & supplies
4,839
1/28/2026
3,500
3,479
3,465
2,609
2,598
IG Investments Holdings, LLC
2/11/2026
9/22/2028
5,077
5,053
3/19/2032
8.19%
12/2/2025
7,883
5,106
1/6/2026
7,204
3,314
3,323
12,984
12,958
North American Rail Solutions
12,908
12,903
6,965
6,864
2,343
PD Tri-State Holdco, LLC.
10/14/2030
2,963
2,939
1/9/2026
9,929
2,199
2,179
6,902
6,826
8.94%
4,815
4,793
3,934
3,972
8,078
8,043
6,841
1/31/2025
8,977
3,338
10,422
10,388
10,318
2/6/2032
5,919
5,841
1,969
5,012
7,705
7,692
7,666
7,927
7,860
4,626
4,497
340,545
Total Investments - 914.5% of Net Assets (3)(4)
Cash Equivalents - 14.4% of Net Assets
Dreyfus Govt CM INST 289
5,320
Cash - 24.7% of Net Assets
9,169
Total Investments, Cash Equivalents, and Cash —953.5% of Net Assets
355,034
354,418
Liabilities in Excess of Other Assets — (853.5)% of Net Assets
(317,246
37,172
——————————————————
Below are the Consolidated Statements of Assets and Liabilities for PSSL II ($ in thousands):
Investments at fair value (amortized cost—$340,545)
Cash equivalents (cost—$5,320)
Cash (cost—$9,169)
904
357,509
226,000
87,500
Interest payable on credit facility
3,247
1,644
Distribution payable to members
746
320,337
—————————————————
Below are the Consolidated Statements of Operations for PSSL II ($ in thousands):
Three Months Ended March 31, 2026
For the period November 18, 2025 (commencement of operations) through March 31, 2026
6,333
8,535
6,351
8,560
Interest and expense on credit facility
2,659
3,487
2,238
3,019
294
156
239
Expenses before debt issuance costs
5,286
7,039
Debt issuance costs
1,488
(135
(616
897
872
(1) No management or incentive fees are payable by PSSL II. If any fees were to be charged, they would be separately disclosed in the Consolidated Statement of Operations. PSSL II pays the Administrator an annual fee of 0.25% of the total assets under management on a quarterly basis.
5. FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value, as defined under ASC 820, is the price that we would receive upon selling an investment or pay to transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment or liability. ASC 820 emphasizes that valuation techniques maximize the use of observable market inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing an asset or liability based on market data obtained from sources independent of us. Unobservable inputs reflect the assumptions market participants would use in pricing an asset or liability based on the best information available to us on the reporting period date.
ASC 820 classifies the inputs used to measure these fair values into the following hierarchies:
Level 1:
Inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities, accessible by us at the measurement date.
Level 2:
Inputs that are quoted prices for similar assets or liabilities in active markets, or that are quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term, if applicable, of the financial instrument.
44
Level 3:
Inputs that are unobservable for an asset or liability because they are based on our own assumptions about how market participants would price the asset or liability.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Generally, most of our investments, including our 2036 Asset-Backed Debt, 2036-R, Asset-Backed Debt, 2037 Asset-Backed Debt, 2038-R Asset Backed Debt and our Credit Facility are classified as Level 3. Our 2026 Notes and 2029 Notes are classified as Level 2 as they are financial instruments with readily observable market inputs. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and those differences may be material.
The inputs into the determination of fair value may require significant management judgment or estimation. Even if observable market data is available, such information may be the result of consensus pricing information, disorderly transactions or broker quotes which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence was available. Corroborating evidence that would result in classifying these non-binding broker/dealer bids as a Level 2 asset includes observable orderly market-based transactions for the same or similar assets or other relevant observable market-based inputs that may be used in pricing an asset.
Our investments are generally structured as floating rate loans, mainly first lien secured debt, but also may include second lien secured debt, subordinated debt and equity investments. The transaction price, excluding transaction costs, is typically the best estimate of fair value at inception. Ongoing reviews by our Investment Adviser and independent valuation firms are based on an assessment of each underlying investment, incorporating valuations that consider the evaluation of financing and sale transactions with third parties, expected cash flows and market-based information including comparable transactions, performance multiples and yields, among other factors. These non-public investments valued using unobservable inputs are included in Level 3 of the fair value hierarchy.
A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in our ability to observe valuation inputs may result in a reclassification for certain financial assets or liabilities.
In addition to using the above inputs to value cash equivalents, investments, our 2026 Notes, our 2029 Notes, our 2036 Asset-Backed Debt, 2036-R Asset-Backed Debt, our 2037 Asset-Backed Debt, our 2038-R Asset-Backed Debt and our Credit Facility, we employ the valuation policy approved by our board of directors that is consistent with ASC 820. Consistent with our valuation policy, we evaluate the source of inputs, including any markets in which our investments are trading, in determining fair value. See Note 2.
As outlined in the table below, some of our Level 3 investments use a market-based valuation technique which values such assets using the average of the bids from brokers or dealers. The bids include a disclaimer, may not have corroborating evidence, may be the result of a disorderly transaction and may be the result of consensus pricing. The Investment Adviser assesses the source and reliability of bids from brokers or dealers. If the board of directors has a bona fide reason to believe any such bids do not reflect the fair value of an investment, it may independently value such investment by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available. In accordance with ASC 820, we do not categorize any investments for which fair value is measured using net asset value per share as a practical expedient within the fair value hierarchy.
The remainder of our investment portfolio and our long-term Credit Facility are valued using a market comparable or an enterprise market value technique. With respect to investments for which there is no readily available market value, the factors that the board of directors may take into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly traded securities, discounted for lack of marketability and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the pricing indicated by the external event, excluding transaction costs, is used to corroborate the valuation. When using earnings multiples to value a portfolio company, the multiple used requires the use of judgment and estimates in determining how a market participant would price such an asset. These non-public investments using unobservable inputs are included in Level 3 of the fair value hierarchy. Generally, the sensitivity of unobservable inputs or combination of inputs such as industry comparable companies, market outlook, consistency, discount rates and reliability of earnings and prospects for growth, or lack thereof, affects the multiple used in pricing an investment. As a result, any change in any one of those factors may have a significant impact on the valuation of an investment. Generally, an increase in a market yield will result in a decrease in the valuation of a debt investment, while a decrease in a market yield will have the opposite effect. Generally, an increase in earnings before interest, taxes, depreciation and amortization, or EBITDA, multiple will result in an increase in the valuation of an investment, while a decrease in an EBITDA multiple will have the opposite effect.
Our Level 3 valuation techniques, unobservable inputs and ranges were categorized as follows for ASC 820 purposes ($ in thousands):
Asset Category
Fair value at March 31, 2026
Valuation Technique
Unobservable Input
Range of Input(Weighted Average) (1)
92,244
Market Comparable
Broker/Dealer bids or quotes
N/A
2,092,114
Market yield
7.0% - 20.1% (9.6%)
62,964
Enterprise Market Value
EBITDA multiple
6.5x - 17.9x (13.2x)
4,806
Revenue multiple
0.9x
Subordinated debt
12.0% - 25.0% (15.5%)
4,285
7.5% - 26.2% (24.3%)
1.3x - 28.0x (14.4x)
Total Level 3 investments
2,492,286
Long-Term Credit Facility
5.5%
____________________________________________
Fair value at September 30, 2025
114,625
2,377,201
Market Yield
4.0% - 24.5% (9.9%)
17,969
8.3x
3,836
Revenue Multiple
0.6x
17,439
7.0% - 25.4% (17.1%)
14.8x
196,398
0.6x - 28.3x (10.8x)
2,729,010
4.8%
Our investments, cash and cash equivalents, Credit Facility, 2026 Notes, 2029 Notes, 2038-R Asset-Backed Debt, 2036-R Asset-Backed Debt, 2036 Asset-Backed Debt, and 2037 Asset-Backed Debt were categorized as follows in the fair value hierarchy for ASC 820 purposes ($ in thousands):
Fair Value at March 31, 2026
Description
Level 1
Level 2
Level 3
Measured at NetAsset Value (1)
2,252,128
309,340
Cash equivalents
Total investments and cash equivalents
2,611,708
Long Term Credit Facility payable
2026 Notes payable(2)
2029 Notes payable (2)
2038-R Asset-Backed Debt(2)
2036-R Asset-Backed Debt(2)
2037 Asset-Backed Debt (2)
Total debt
1,667,699
380,866
1,286,833
———————————————
Fair Value at September 30, 2025
2,513,631
Second lien and Subordinate debt
18,981
240,716
2,814,057
2036 Asset-Backed Debt(2)
2037 Asset-Backed Debt(2)
1,776,770
1,592,161
The tables below show a reconciliation of the beginning and ending balances for fair valued investments measured using significant unobservable inputs (Level 3)
($ in thousands):
Six Months Ended March 31, 2026
First Lien
Second lien,subordinateddebt and equityinvestments
Totals
Beginning balance
215,379
Net realized gain (loss)
(8,012
(6,067
Net change in unrealized appreciation (depreciation)
(20,609
24,353
Purchases, PIK interest, net discount accretion and non-cash exchanges
394,789
7,167
401,956
Sales, repayments and non-cash exchanges
(627,671
(8,686
(636,357
Transfers in and/or out of Level 3
Ending balance
240,158
Net change in unrealized appreciation (depreciation) reported within the net change in unrealized appreciation (depreciation) on investments in our consolidated statements of operations attributable to our Level 3 assets still held at the reporting date.
(25,226
24,575
(651
Six Months Ended March 31, 2025
1,746,697
171,142
1,917,839
22,318
(18,852
(11,597
(30,449
870,397
18,472
888,869
(498,948
(24,720
(523,668
2,100,173
175,615
2,275,788
Net change in unrealized depreciation reported within the net change in unrealized depreciation on investments in our consolidated statements of operations attributable to our Level 3 assets still held at the reporting date.
(14,454
7,798
(6,656
The table below shows a reconciliation of the beginning and ending balances for liabilities recognized at fair value and measured using significant unobservable inputs (Level 3)($ in thousands):
Beginning balance (cost – $683,855 and $443,855, respectively)
443,880
Net change in unrealized (depreciation) appreciation included in earnings
Borrowings
Repayments
Ending balance (cost – $328,355 and $273,855, respectively)
273,790
As of March 31, 2026, we had outstanding non-U.S. dollar borrowings on our Credit Facility. The following table shows our non-U.S. dollar borrowings as of March 31, 2026 (CAD and $ in thousands):
Foreign Currency
AmountBorrowed
Borrowing Cost
Current Value
Reset Date
Unrealized appreciation (depreciation)
Canadian Dollar
CAD 2,000
1,433
4/1/26
As of September 30, 2025 we had outstanding non-U.S. dollar borrowings on our Credit Facility. The following table shows our non-U.S dollar borrowings as of September 30, 2025. (CAD and $ in thousands):
Generally, the carrying value of our consolidated financial liabilities approximates fair value. We have adopted the principles under ASC Subtopic 825-10, Financial Instruments, or ASC 825-10, which provides companies with an option to report selected financial assets and liabilities at fair value, and made an irrevocable election to apply ASC 825-10 to the Credit Facility. We elected to use the fair value option for the Credit Facility to align the measurement attributes of both our assets and liabilities while mitigating volatility in earnings from using different measurement attributes. Due to that election and in accordance with GAAP, we incurred zero and $0.5 million of expenses relating to amendment costs on the Credit Facility for the three and six months ended March 31, 2026 and we incurred $0.4 million relating to amendment costs on the Credit Facility during the three and six months ended March 31, 2025. ASC 825-10 establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities and to more easily understand the effect on earnings of a company’s choice to use fair value. ASC 825-10 also requires entities to display the fair value of the selected assets and liabilities on the face of the Consolidated Statements of Assets and Liabilities and changes in fair value of the Credit Facility are reported in our Consolidated Statements of Operations. We elected not to apply ASC 825-10 to any other financial assets or liabilities, including our 2026 Notes, our 2029 Notes, 2036-R Asset-Backed Debt, the 2037 Asset-Backed Debt and 2038-R Asset-Backed Debt, .
For the three and six months ended March 31, 2026, the Credit Facility had a net change in unrealized appreciation (depreciation) of less than $0.1 million and less than $0.1 million, respectively. For the three and six months ended March 31, 2025, the Credit Facility had a net change in unrealized appreciation (depreciation) of less than $0.1 million and $0.1 million, respectively. As of March 31, 2026 and September 30, 2025, the net unrealized appreciation (depreciation) on the Credit Facility totaled approximately zero and zero, respectively. We use a nationally recognized independent valuation service to measure the fair value of the Credit Facility in a manner consistent with the valuation process that our board of directors uses to value our investments.
6. TRANSACTIONS WITH AFFILIATED COMPANIES
An affiliated portfolio company is a company in which we have ownership of 5% or more of its voting securities. A portfolio company is generally presumed to be a non-controlled affiliate when we own at least 5% but less than 25% of its voting securities and a controlled affiliate generally when we own more than 25% of its voting securities. Transactions related to our funded investments with both controlled and non-controlled affiliates for the six months ended March 31, 2026 and 2025 were as follows ($ in thousands):
Name of Investment
Gross Additions
Gross Reductions
Net RealizedGains (Losses)
Net Change inUnrealizedAppreciation(Depreciation)
Interest Income
Dividend/Other Income
Controlled Affiliates
PennantPark Senior Secured Loan Fund II LLC **
$—
$93,750
$(246)
$93,504
$2,264
$900
PennantPark Senior Secured Loan Fund I LLC *
39,375
(23,577)
297,766
14,233
10,194
Total Controlled Affiliates
$281,968
$133,125
$(23,823)
$391,270
$16,497
$11,094
* We and Kemper are the members of PSSL, a joint venture formed as a Delaware limited liability company that is not consolidated by us for financial reporting purposes. The members of PSSL make investments in PSSL in the form of first lien secured debt and equity interests, and all portfolio and other material decisions regarding PSSL must be submitted to PSSL’s board of directors or investment committee, both of which are comprised of two members appointed by each of us and Kemper. Because management of PSSL is shared equally between us and Kemper, we do not believe we control PSSL for purposes of the 1940 Act or otherwise
** We and HL are the members of PSSL II, a joint venture formed as a Delaware limited liability company that is not consolidated by us for financial reporting purposes. The members of PSSL II make investments in PSSL II in the form of first lien secured debt and equity interests, and all portfolio and other material decisions regarding PSSL II must be submitted to PSSL II’s board of directors or investment committee, both of which are comprised of equal number of representatives from each the Company and HL. Because management of PSSL II is shared equally between us and HL, we do not believe we control PSSL II for purposes of the 1940 Act or otherwise.
Fair Value at September 30, 2024
Fair Value at March 31, 2025
Marketplace Events, LLC**
57,107
4,214
(59,795
(24,337
PennantPark Senior Secured
Loan Fund I LLC *
294,128
21,875
(18,713
297,290
15,091
351,235
26,089
9,056
* We and Kemper are the members of PSSL, a joint venture formed as a Delaware limited liability company that is not consolidated by us for financial reporting purposes. The members of PSSL make investments in PSSL in the form of first lien secured debt and equity interests, and all portfolio and other material decisions regarding PSSL must be submitted to PSSL’s board of directors or investment committee, both of which are comprised of two members appointed by each of us and Kemper. Because management of PSSL is shared equally between us and Kemper, we do not believe we control PSSL for purposes of the 1940 Act or otherwise.
** Marketplace was sold during the Q1 2025 quarter.
7. CHANGE IN NET ASSETS FROM OPERATIONS PER COMMON SHARE
The following information sets forth the computation of basic and diluted per share net increase in net assets resulting from operations
($ in thousands, except per share data):
Numerator for net increase in net assets resulting from operations
Denominator for basic and diluted weighted average shares
99,217,896
90,086,785
85,828,775
Basic and diluted net increase in net assets per share resulting from operations
8. CASH AND CASH EQUIVALENTS
Cash equivalents represent cash in money market funds pending investment in longer-term portfolio holdings and for other general purposes. Our portfolio may consist of temporary investments in U.S. Treasury Bills (of varying maturities), repurchase agreements, money market funds or repurchase agreement-like treasury securities. These temporary investments with original maturities of 90 days or less are deemed cash equivalents and are included in the Consolidated Schedule of Investments. At the end of each fiscal quarter, we may take proactive steps to preserve investment flexibility for the next quarter by investing in cash equivalents, which depends upon the composition of our total assets at quarter-end. We may accomplish this in several ways, including purchasing U.S. Treasury Bills and closing out positions on a net cash basis after quarter-end, temporarily drawing down on the Credit Facility, or utilizing repurchase agreements or other balance sheet transactions as are deemed appropriate for this purpose. These amounts are excluded from average adjusted gross assets for purposes of computing the Investment Adviser’s management fee. U.S. Treasury Bills with maturities greater than 60 days from the time of purchase are valued consistent with our valuation policy. As of March 31, 2026, cash and cash equivalents consisted of money market funds and non-money market fund in the amounts of $31.4 million and $90.4 million at fair value, respectively, for total cash and cash equivalents of $121.9 million as shown on the Consolidated Statement of Cash Flows for the period ended March 31, 2026. As of September 30, 2025, cash and cash equivalents consisted of money market funds and non-money market fund in the amounts of $40.7 million and $82.0 million at fair value, respectively.
9. FINANCIAL HIGHLIGHTS
Below are the financial highlights ($ in thousands, except per share data):
Per Share Data:
Net asset value, beginning of period
11.31
Net investment income (1)
Net change in realized and unrealized gain (loss) (1)
(0.27
(0.30
Net increase (decrease) in net assets resulting from operations (1), (7)
Distributions to stockholders (1), (2)
(0.62
Accretive effect of common stock issuance
0.04
Net asset value, end of period (7)
11.07
Per share market value, end of period
8.04
11.19
Total return *(3)
(3.11
%)
2.20
Shares outstanding at end of period
96,417,896
Ratios** / Supplemental Data:
Ratio of operating expenses to average net assets** (4)
5.84
5.88
Ratio of debt related expenses to average net assets** (5)
9.88
9.26
Ratio of total expenses to average net assets** (5)
15.72
15.14
Ratio of net investment income to average net assets** (5)
11.34
Net assets at end of period
Weighted average debt outstanding
1,708,987
1,330,975
Weighted average debt per share (1)
17.22
15.51
Asset coverage per unit (6)
1,619
1,777
Portfolio turnover rate*
22.74
21.14
Note: The expense and investment income ratios above do not reflect the Company's proportionate share of income and expenses of PSSL, PSSL II, and PTSF II (prior to becoming a wholly owned consolidated subsidiary)
* Not annualized for periods less than one year.
** Re-occurring investment income and expenses included in these ratios are annualized for periods less than one year.
10. DEBT
The annualized weighted average cost of debt for the six months ended March 31, 2026 and 2025, inclusive of the fee on the undrawn commitment on the Credit Facility, amendment costs and debt issuance costs, was 6.1% and 6.8%, respectively.
On April 5, 2018, our board of directors approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the Consolidated Appropriations Act of 2018 (which includes the Small Business Credit Availability Act, or SBCAA). As a result, the asset coverage requirement applicable to us for senior securities was reduced from 200% (i.e., $1 of debt outstanding for each $1 of equity) to 150% (i.e., $2 of debt outstanding for each $1 of equity), effective as of April 5, 2019, subject to compliance with certain disclosure requirements. As of March 31, 2026 and September 30, 2025, our asset coverage ratio, as computed in accordance with the 1940 Act, was 162% and 160%, respectively.
Credit Facility
As of March 31, 2026, the Credit Facility had commitments $768.0 million (increased from $718.0 million in November 2025) and an interest rate spread above SOFR (or an alternative risk-free floating interest rate index) of 200 basis points, a maturity date of August 2030 and a revolving period that ends in August 2028. As of March 31, 2026 and September 30, 2025, Funding I had $328.3 million and $683.9 million of outstanding borrowings under the Credit Facility, respectively. The Credit Facility had a weighted average interest rate of 5.7% and 6.3%, exclusive of the fee on undrawn commitments as of March 31, 2026 and September 30, 2025, respectively. As of March 31, 2026 and September 30, 2025, Funding I had $439.7 million and $34.1 million of unused borrowing capacity under the Credit Facility, respectively, subject to leverage and borrowing base restrictions. The Credit Facility is subject to satisfaction of certain conditions and the regulatory restrictions that the 1940 Act imposes on us as a BDC.
In April 2025, the Credit Facility was amended. The terms of the amendment decreased the aggregate commitment amounts of the lenders party to the Credit Facility from $736.0 million to $718.0 million, decreased pricing under the Credit Facility to SOFR plus 200 basis points from SOFR plus 225 basis points, extended the reinvestment period one year to August 2028 from August 2027, extended the maturity date of the Credit Facility by one year to August 2030 from August 2029, and increased the maximum first lien advance rate to 72.5% from 70.0%.
In November 2025, the Credit Facility was amended. The terms of the amendment increased the aggregate commitment amounts of the lenders party to the Credit Facility from $718.0 million to $768.0 million, pricing under the Credit Facility remains at SOFR plus 200 basis points.
The Credit Facility contains customary covenants, including, but not limited to, restrictions of loan size, industry requirements, average life of loans, geographic and individual portfolio concentrations, minimum portfolio yield and loan payment frequency. Additionally, the Credit Facility requires the maintenance of a minimum equity
investment in Funding I and income ratio as well as restrictions on certain payments and issuance of debt. The Credit Facility compliance reporting is prepared on a basis of accounting other than GAAP. As of March 31, 2026, we were in compliance with the covenants relating to the Credit Facility.
We own 100% of the equity interest in Funding I and treat the indebtedness of Funding I as our leverage. Our Investment Adviser serves as collateral manager to Funding I under the Credit Facility.
Our interest in Funding I (other than the management fee) is subordinate in priority of payment to every other obligation of Funding I and is subject to certain payment restrictions set forth in the Credit Facility. We may receive cash distributions on our equity interests in Funding I only after it has made all required payments of (1) cash interest and, if applicable, principal to the Lenders, (2) administrative expenses and (3) claims of other unsecured creditors of Funding I. The Investment Adviser has irrevocably directed that any management fee owed with respect to such services is to be paid to the Company so long as the Investment Adviser remains the collateral manager.
2026 Notes
In March 2021 and in October 2021, we issued $100.0 million and $85.0 million, respectively, in aggregate principal amount of $185.0 million of our 2026 Notes at a public offering price per note of 99.4% and 101.5%, respectively. Interest on the 2026 Notes is paid semiannually on April 1 and October 1 of each year, at a rate of 4.25% per year, commencing October 1, 2021. The effective interest rate is 4.15%. The 2026 Notes mature on April 1, 2026 and may be redeemed in whole or in part at our option subject to a make-whole premium if redeemed more than three months prior to maturity. The 2026 Notes are our general, unsecured obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness. The 2026 Notes are effectively subordinated to all of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally subordinated to all of our existing and future indebtedness and other obligations of any of our subsidiaries, financing vehicles, or similar facilities. We do not intend to list the 2026 Notes on any securities exchange or automated dealer quotation system. The 2026 Notes were repaid in full on April 1, 2026.
2029 Notes
2031 Asset-Backed Debt / 2036-R Asset-Backed Debt
In September 2019, the Company completed the $301.4 million term debt securitization. Term debt securitizations, also known as CLOs, are a form of secured financing incurred by the Company, which is consolidated by the Company and subject to the Company’s asset coverage requirements. The 2031 Asset-Backed Debt was issued by the Securitization Issuer. The 2031 Asset-Backed Debt is secured by the middle market loans, participation interests in middle market loans and other assets of the Securitization Issuer. The Debt Securitization was executed through (A) a private placement of: (i) $78.5 million Class A-1 Senior Secured Floating Rate Loans maturing 2031, which bear interest at the three-month SOFR plus 1.8%, (ii) $15.0 million Class A-2 Senior Secured Fixed Rate Notes due 2031, which bear interest at 3.7%, (iii) $14.0 million Class B-1 Senior Secured Floating Rate Notes due 2031, which bear interest at the three-month SOFR plus 2.9%, (iv) $16.0 million Class B-2 Senior Secured Fixed Rate Notes due 2031, which bear interest at 4.3%, (v) $19.0 million Class C‑1 Secured Deferrable Floating Rate Notes due 2031, which bear interest at the three-month SOFR plus 4.0%, (vi) $8.0 million Class C-2 Secured Deferrable Fixed Rate Notes due 2031, which bear interest at 5.4%, and (vii) $18.0 million Class D Secured Deferrable Floating Rate Loans due 2031, which bear interest at the three-month SOFR plus 4.8% and (B) the borrowing of $77.5 million Class A‑1 Senior Secured Floating Rate Notes due 2031, which bear interest at the three-month SOFR plus 1.8%, under a credit agreement by and among the Securitization Issuers, as borrowers, various financial institutions, as lenders, and U.S. Bank National Association, as collateral agent and as loan agent. The annualized interest on the 2031 Asset-Backed Debt will be paid, to the extent of funds available. The reinvestment period of the Debt Securitization ended on October 15, 2023 and the 2031 Asset-Backed Debt is scheduled to mature on October 15, 2031.
On the closing date of the Debt Securitization, in consideration of our transfer to the Securitization Issuer of the initial closing date loan portfolio, which included loans distributed to us by certain of our wholly owned subsidiaries, the Securitization Issuer transferred to us 100% of the Preferred Shares of the Securitization Issuer, 100% of the Class D Secured Deferrable Floating Rate Notes issued by the Securitization Issuer, and a portion of the net cash proceeds received from the sale of the 2031 Asset-Backed Debt. The Preferred Shares of the Securitization Issuer do not bear interest and had a stated value of approximately $55.4 million at the closing of the Debt Securitization.
On July 25, 2024, the Company closed the refinancing of the 2031Asset-Backed Debt and upsize of a four-year reinvestment period and 12-year final maturity $351.0 million debt securitization in the form of a collateralized loan obligation (the “2036-R Asset-Backed Debt”). The 2036-R Asset-Backed Debt was executed through: (A) the issuance by the Issuers of the following classes of notes pursuant that certain indenture, dated September 19, 2019, by and among the Issuers and U.S. Bank Trust Company, National Association, as amended by the second supplemental indenture, dated June 25, 2024): (i) $203.0 million of A-1-R Notes, which bear interest at the three-month SOFR plus 1.75%, (ii) $10.5 million of A-2-R Notes, which bear interest at three-month SOFR plus 1.90%, (iii) $12.0 million of Class B-R Notes, which bear interest at three-month SOFR plus 2.05%, (iv) $28.0 million of C-R Notes, which bear interest at three-month SOFR plus 2.75% and (v) $21.0 million of D-R Notes, which bear interest at three-month SOFR plus 4.30%, (B) the issuance by the Issuer of $64.0 million of subordinated notes pursuant to the Indenture and (C) the borrowing by the Issuer of $12.5 million of Class B-R Loans, which bear interest at three-month SOFR plus 2.05%, pursuant to a credit agreement, dated the closing date, by and among the Issuers, the various financial institutions and other persons party thereto, as lenders and U.S. Bank Trust Company, National Association, as loan agent and as trustee. The replacement debt matures in July 2036. The replacement debt was 100% funded at closing.
The obligations of the Issuers under the replacement are non-recourse to the Company. As of September 30, 2025, the Company retained the D-R Notes and the Subordinated Notes through a consolidated subsidiary. On October 29, 2025 the Company sold $21.0 million of initially retained D-R Notes, to a third party. As of March 31, 2026, the Company no longer consolidates the D-R Notes. As of March 31, 2026 and September 30, 2025, the Company had $287.0 million and $266.0 million, respectively of external, 2036-R Asset-Backed Debt outstanding with a weighted average interest rate of 5.7% and 6.2%, respectively. As of March 31, 2026 and September 30, 2025, the unamortized fees on the 2036-R Asset-Backed Debt were $0.4 million and $0.6 million, respectively.
Our Investment Adviser serves as collateral manager to the Securitization Issuer pursuant to the Collateral Management Agreement. For so long as our Investment Adviser serves as collateral manager, it will elect to irrevocably waive any collateral management fee to which it may be entitled under the Collateral Management Agreement.
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2036 Asset-Backed Debt / 2038-R Asset-Backed Debt
In February 2024, the Company completed the $350.6 million term debt securitization. Term debt securitizations, also known as CLOs, are a form of secured financing incurred by the Company, which is consolidated by the Company and subject to the Company’s asset coverage requirements. The 2036 Asset-Backed Debt was issued by the 2036 Securitization Issuer. The 2036 Asset-Backed Debt is secured by the middle market loans, participation interests in middle market loans and other assets of the 2036 Securitization Issuer. The Debt Securitization was executed through (A) a private placement of: (i) $139.5 million of AAA(sf) Class A-1 Notes, which bear interest at the three-month SOFR plus 2.30%, (ii) $14.0 million of AAA(sf) Class A-2 Notes, which bear interest at three-month SOFR plus 2.70%, (iii) $24.5 million of AA(sf) Class B Notes, which bear interest at three-month SOFR plus 2.90%, (iv) $28 million of A(sf) Class C Notes, which bear interest at three-month SOFR plus 3.90%, (v) $21.0 million of BBB-(sf) Class D Notes, which bear interest at three-month SOFR plus 5.90%, (together, the “Secured Notes”), and (vi) $63.6 million of subordinated notes (“Subordinated Notes”) and (B) the borrowing of $60.0 million AAA(sf) Class A-1 Senior Secured Floating Rate Loans (the “Class A-1 Loans” and together with the Secured Notes and Subordinated Notes, the “Debt”), which bear interest at three-month SOFR plus 2.30%, under a credit agreement (the “Credit Agreement”), dated as of the Closing Date, by and among the Issuer, as borrower, various financial institutions, as lenders, and Wilmington Trust, National Association, as collateral agent and as loan agent. The Debt is scheduled to mature on April 18, 2036.
In February 2026, the Company closed the refinancing of the 2036 Asset-Backed Debt and a four-year reinvestment period and 12-year final maturity $356.5 million debt securitization in the form of a collateralized loan obligation (the “2038-R Asset-Backed Debt”). The 2038-R Asset-Backed Debt was executed through: (A) the issuance by the Issuers of the following classes of notes pursuant that certain indenture, dated February 2026: (i) $123.0 million of A-1-R Notes, which bear interest at the three-month SOFR plus 1.43%, (ii) $80.0 million of A-1-R Loans, which bear interest at three-month SOFR plus 1.43%, (iii) $14.0 million of Class A-2-R Notes, which bear interest at three-month SOFR plus 1.60%, (iv) $26.3 million of B-R Loans, which bear interest at three-month SOFR plus 1.75% and (v) $24.5 million of C-R Notes, which bear interest at three-month SOFR plus 2.15%, (vi) $19.3 million of D-R Notes, which bear interest at three-month SOFR plus 3.20%, (B) the issuance by the Issuer of $69.5 million of subordinated notes pursuant to the Indenture. The replacement debt matures in April 2038. The replacement debt was 100% funded at closing. The Company retained the $69.5 million of the subordinated notes.
The 2038-R Asset-Backed Debt is included in the Consolidated Statement of Assets and Liabilities as debt of the Company and the Subordinated Notes of the 2038-R Securitization Issuer were eliminated in consolidation. As of March 31, 2026 and September 30, 2025, the Company had $287.0 million of 2038-R Asset-Backed Debt and 2036 Asset Backed Debt, respectively, outstanding with a weighted average interest rate of 5.3% and 7.1%, respectively. As of March 31, 2026, and September 30, 2025, the unamortized fees on the 2038-R Asset-Backed Debt and 2036 Asset Backed Debt, respectively, were $2.2 million and $2.4 million, respectively.
Our Investment Adviser serves as collateral manager to the 2038-R-Securitization Issuer pursuant to the Collateral Management Agreement. For so long as our Investment Adviser serves as collateral manager, it will elect to irrevocably waive any collateral management fee to which it may be entitled under the Collateral Management Agreement.
2037 Asset-Backed Debt
In February 2025, the Company completed the 2037 Debt Securitization. The 2037 Notes were issued by the 2037 Securitization Issuer and are backed by a portfolio of collateral obligations consisting of middle market loans and participation interests in middle market loans as well as by other assets of the 2037 Securitization Issuer. The transaction was executed through (A) a private placement of $220.5 million of AAA(sf) Class A-1 Notes, which bear interest at the three-month SOFR plus 1.49% (the “2037 Class A-1 Notes”), (ii) $19.0 million of AAA(sf) Class A-2 Notes, which bear interest at three-month SOFR plus 1.60% (the “2037 Class A-2 Notes”), (iii) $28.5 million of AA(sf) Class B Notes, which bear interest at three-month SOFR plus 1.75% (the “2037 Class B Notes”), (iv) $38.0 million of A(sf) Class C Notes, which bear interest at three-month SOFR plus 2.20% (the “2037 Class C Notes”), (v) $28.5 million of BBB-(sf) Class D Notes, which bear interest at three-month SOFR plus 3.60%, (the “2037 Class D Notes” and, collectively with the 2037 Class A-2 Notes, the 2037 Class B Notes and the 2037 Class D Notes, the “2037 Secured Notes”), and (vi) $85.1 million of subordinated notes (the “2037 Subordinated Notes” and, together with the 2037 Secured Notes, the “2037 Notes”) and (B) the borrowing by the 2037 Securitization Issuer of $10.0 million under AAA(sf) Class A-1L-A floating rate loans (the “2037 Class A-1L-A Loans”) and $45.0 million under AAA(sf) Class A-1L-B floating rate loans (the “2037 Class A-1L-B Loans” and, together with the Class A-1L-A Loans, the “2037 Asset-Backed Loans,” and collectively with the 2037 Secured Notes and 2037 Subordinated Notes, the “2037 Asset-Backed Debt”), which bear interest at three-month SOFR plus 1.49%. The 2037 Asset-Backed Debt is scheduled to mature on April 20, 2037.
The 2037 Asset-Backed Debt is included in the Consolidated Statement of Assets and Liabilities as debt of the Company and the 2037 Class D Notes and the 2037 Subordinated Notes of the 2037 Securitization Issuer were eliminated in consolidation. As of September 30, 2025, the Company retained the 2037 Class D Notes and the 2037 Subordinated Notes. A portion of the proceeds received by the 2037 Securitization Issuer from the loans securing the 2037 Asset-Backed Loans and the 2037 Secured Notes may be used to purchase additional middle market loans under the direction of the Investment Adviser through April 20, 2029.
In November 2025 the Company sold $28.5 million of initially retained BBB-(sf) Class D Notes, to a third party. As of March 31, 2026, the Company no longer consolidates the BBB-(sf) Class D Notes.
As of March 31, 2026 and September 30, 2025, the Company had $389.5 million and $361.0 million of 2037 Asset-Backed Debt outstanding with a weighted average interest rate of 5.4% and 5.9%, respectively. As of March 31, 2026 and September 30, 2025, the unamortized fees on the 2037 Asset-Backed Debt were $2.4 million and $2.7 million, respectively.
Our Investment Adviser serves as collateral manager to the 2037 Securitization Issuer pursuant to the Collateral Management Agreement. For so long as our Investment Adviser serves as collateral manager, it will elect to irrevocably waive any collateral management fee to which it may be entitled under the Collateral Management Agreement.
11. COMMITMENTS AND CONTINGENCIES
From time to time, we may be a party to legal proceedings, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations. Unfunded debt and equity investments, if any, are disclosed in the Consolidated Schedules of Investments. As of March 31, 2026 and September 30, 2025, we had $581.0 million and $603.7 million, respectively, in commitments to fund investments. Additionally, as described in Note 4, the Company had unfunded commitments of $26.3 million and $65.6 million to PSSL as of March 31, 2026 and September 30, 2025, respectively, that may be contributed primarily for the purpose of funding new investments approved by the PSSL board of directors or investment committee. Additionally, the Company had unfunded commitments of $56.3
million to PSSL II as of March 31, 2026, that may be contributed primarily for the purpose of funding new investments approved by the PSSL II board of directors or investment committee.
12. SEGMENT REPORTING
The Company operates through a single operating and reporting segment with a principal investment objective to generate both current income and capital appreciation through debt and equity investments. The CODM is comprised of the Company's Chief Executive Officer and Chief Financial Officer. The CODM assesses the performance and makes operating decisions of the Company on a consolidated basis primarily based on the Company's net increase (decrease) in net assets resulting from operations ("Net Income") and net investment income ("NII"). The CODM utilizes Net Income and NII as the key metrics in determining the amount of dividends to be distributed to the Company's stockholders. As the Company's operations comprise of single reporting segment, the segment assets are reflected on the accompanying consolidated statements of assets and liabilities as 'total assets" and significant segment expenses are listed on accompanying consolidated statements of operations.
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Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors of PennantPark Floating Rate Capital Ltd. and its Subsidiaries
Results of Review of Interim Financial Statements
We have reviewed the accompanying consolidated statement of assets and liabilities of PennantPark Floating Rate Capital, Ltd. and its subsidiaries (the Company), including the consolidated schedule of investments, as of March 31, 2026, the related consolidated statements of operations and changes in net assets for the three and six month periods ended March 31, 2026 and 2025, and cash flows for the six month period ended March 31, 2026 and 2025, and the related notes to the consolidated financial statements (collectively, the interim financial information or financial statements). Based on our reviews, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statement of assets and liabilities of the Company, including the consolidated schedule of investments, as of September 30, 2025, and the related consolidated statements of operations, changes in net assets, and cash flows for the year then ended (not presented herein); and in our report dated November 24, 2025, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying consolidated statement of assets and liabilities, including the consolidated schedule of investments, as of September 30, 2025, is fairly stated, in all material respects, in relation to the consolidated statement of assets and liabilities, including the consolidated schedule of investments, from which it has been derived.
Basis for Review Results
These interim financial statements are the responsibility of the Company’s management. We conducted our reviews in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
/s/ RSM US LLP
New York, New York
May 7, 2026
Awareness Letter of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of PennantPark Floating Rate Capital Ltd. and its Subsidiaries
We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim financial information of PennantPark Floating Rate Capital Ltd. and its Subsidiaries for the periods ended March 31, 2026 and 2025, as indicated in our report dated May 7, 2026; because we did not perform an audit, we expressed no opinion on that information.
We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, is incorporated by reference in Registration Statement No.333-279726 on Form N-2.
We are also aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.
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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This Report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains statements that constitute forward-looking statements, which relate to us and our consolidated subsidiaries regarding future events or our future performance or future financial condition. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about our Company, our industry, our beliefs and our assumptions. The forward-looking statements contained in this Report involve risks and uncertainties, including statements as to:
We use words such as “anticipates,” “believes,” “expects,” “intends,” “seeks,” “plans,” “estimates” and similar expressions to identify forward-looking statements. You should not place undue influence on the forward-looking statements as our actual results could differ materially from those projected in the forward-looking statements for any reason, including the factors in “Risk Factors” and elsewhere in this Report.
Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions also could be inaccurate. Important assumptions include our ability to originate new loans and investments, certain margins and levels of profitability and the availability of additional capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Report should not be regarded as a representation by us that our plans and objectives will be achieved.
We have based the forward-looking statements included in this Report on information available to us on the date of this Report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements in this Report, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including reports on Form 10-Q/K and current reports on Form 8-K.
You should understand that under Section 27A(b)(2)(B) of the Securities Act and Section 21E(b)(2)(B) of the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act.
The following analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and the related notes thereto contained elsewhere in this Report.
Overview
PennantPark Floating Rate Capital Ltd. (the "Company," "we," "our" or "us") is a business development company ("BDC") whose principal objectives are to generate both current income and capital appreciation while seeking to preserve capital by investing primarily in floating rate loans and other investments made to U.S. middle-market companies.
We believe that floating rate loans to U.S. middle-market companies offer attractive risk-reward to investors due to a limited amount of capital available for such companies. We use the term “middle-market” to refer to companies with annual revenues between $50.0 million and $1.0 billion. Our investments are typically rated below investment grade. Securities rated below investment grade are often referred to as “leveraged loans,” “high yield” securities or “junk bonds” and are often higher risk compared
to debt instruments that are rated above investment grade and have speculative characteristics. However, when compared to junk bonds and other non-investment grade debt, senior secured floating rate loans typically have more robust capital-preserving qualities, such as historically lower default rates than junk bonds, represent the senior source of capital in a borrower’s capital structure and often have certain of the borrower’s assets pledged as collateral. Our debt investments may generally range in maturity from three to ten years and are made to U.S. and, to a limited extent, non-U.S. corporations, partnerships and other business entities which operate in various industries and geographical regions.
Under normal market conditions, we generally expect that at least 80% of the value of our managed assets will be invested in floating rate loans and other investments bearing a variable-rate of interest. We generally expect that first lien secured debt will represent at least 65% of our overall portfolio. We also generally expect to invest up to 35% of our overall portfolio opportunistically in other types of investments, including second lien secured debt and subordinated debt and, to a lesser extent, equity investments. We seek to create a carefully constructed portfolio by generally targeting an investment size between $5.0 million and $30.0 million, on average, although we expect that this investment size will vary proportionately with the size of our capital base.
Our investment activity depends on many factors, including the amount of debt and equity capital available to middle-market companies, the level of merger and acquisition activity for such companies, the general economic environment and the competitive environment for the types of investments we make. We have used, and expect to continue to use, our debt capital, proceeds from the rotation of our portfolio and proceeds from public and private offerings of securities to finance our investment objectives.
Organization and Structure of PennantPark Floating Rate Capital Ltd.
The Company, a Maryland corporation organized in October 2010, is a closed-end, externally managed, non-diversified investment company that has elected to be treated as a BDC under the 1940 Act. In addition, for federal income tax purposes we elected to be treated, and intend to qualify annually, as a RIC under the Code.
We execute our investment strategy directly and through our wholly owned subsidiaries, our unconsolidated joint venture and unconsolidated limited partnership. The term “subsidiary” means entities that primarily engage in investments activities in securities or other assets that are wholly owned by us. The Company does not intend to create or acquire primary control of an entity which primarily engages in investment activities of securities or other assets other than entities wholly owned by the Company. We comply with the provisions of Section 18 of the 1940 Act governing capital structure and leverage on an aggregate basis with our subsidiaries. Our subsidiaries comply with the provisions of Section 17 of the 1940 Act related to affiliated transactions and custody. To the extent that the Company forms a subsidiary advised by an investment adviser other than the Investment Adviser, the investment adviser to such subsidiaries will comply with the provisions of the 1940 Act relating to investment advisory contracts, including but not limited to, Section 15, as if it were an investment adviser to the Company under Section 2(a)(20) of the 1940 Act.
Our investment activities are managed by the Investment Adviser. Under our Investment Management Agreement, we have agreed to pay our Investment Adviser an annual base management fee based on our average adjusted gross assets as well as an incentive fee based on our investment performance. We have also entered into an Administration Agreement with the Administrator. Under our Administration Agreement, we have agreed to reimburse the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under our Administration Agreement, including rent and our allocable portion of the costs of compensation and related expenses of our Chief Financial Officer, Chief Compliance Officer, Corporate Counsel and their respective staffs. Our board of directors, a majority of whom are independent of us and the Investment Adviser, provides overall supervision of our activities, and the Investment Adviser supervises our day-to-day activities.
Revenues
We generate revenue in the form of interest income on the debt securities we hold and capital gains and dividends, if any, on investment securities that we may acquire in portfolio companies. Our debt investments, whether in the form of first lien secured debt, second lien secured debt or subordinated debt, typically have a term of three to ten years and bear interest at a floating or fixed rate. Interest on debt securities is generally payable quarterly or semiannually. In some cases, our investments provide for deferred interest payments or PIK interest. The principal amount of the debt securities and any accrued but unpaid interest generally becomes due at the maturity date. In addition, we may generate revenue in the form of amendment, commitment, origination, structuring or diligence fees, fees for providing significant managerial assistance and possibly consulting fees. Loan origination fees, OID and market discount or premium are capitalized and accreted or amortized using the effective interest method as interest income or, in the case of deferred financing costs, as interest expense. Dividend income, if any, is recognized on an accrual basis on the ex-dividend date to the extent that we expect to collect such amounts. From time to time, the Company receives certain fees from portfolio companies, which may or may not be non-recurring in nature. Such fees include loan prepayment penalties, structuring fees and amendment fees and agency fees, and are recorded as other investment income when earned. Litigation settlements are accounted for in accordance with the gain contingency provisions of ASC Subtopic 450-30, Gain Contingencies, or ASC 450-30.
Expenses
Our primary operating expenses include the payment of a management fee and the payment of an incentive fee to our Investment Adviser, if any, our allocable portion of overhead under our Administration Agreement and other operating costs as detailed below. Our management fee compensates our Investment Adviser for its work in identifying, evaluating, negotiating, consummating and monitoring our investments. Additionally, we pay interest expense on the outstanding debt and unused commitment fees on undrawn amounts under our various debt facilities. We bear all other direct or indirect costs and expenses of our operations and transactions, including:
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Generally, during periods of asset growth, we expect our general and administrative expenses to be relatively stable or to decline as a percentage of total assets and increase during periods of asset declines. Incentive fees, interest expense and costs relating to future offerings of securities would be additive to the expenses described above.
PORTFOLIO AND INVESTMENT ACTIVITY
PennantPark Floating Rate Capital Ltd.
As of March 31, 2026, our portfolio totaled $2,580.3 million, and consisted of $2,252.1 million of first lien secured debt (including $237.7 million in PSSL and $65.6 million in PSSL II), $18.8 million of subordinated debt and $309.3 million of preferred and common equity (including $60.1 million in PSSL and $27.9 million in PSSL II). As of March 31, 2026, our debt portfolio consisted of approximately 99% variable-rate investments. As of March 31, 2026, we had three portfolio companies on non-accrual, representing 0.8% and 0.5% of our overall portfolio on a cost and fair value basis, respectively. As of March 31, 2026, the portfolio had net unrealized depreciation of $66.1 million. Our overall portfolio consisted of 162 companies with an average investment size of $15.9 million and had a weighted average yield on debt investments of 9.8%, and was invested 87%in first lien secured debt (including 9% in PSSL and 3% in PSSL II), 1% in subordinate debt and 12% in preferred and common equity (including 2% in PSSL and 1% in PSSL II). As of March 31, 2026, over 98% of the investments held by PSSL were first lien secured debt. As of March 31, 2026, 100% of the investments held by PSSL II were first lien secured debt.
As of September 30, 2025, our portfolio totaled $2,773.3 million and consisted of $2,513.6 million of first lien secured debt (including $237.7 million in PSSL), $19.0 million of second lien secured debt and subordinated debt and $240.7 million of preferred and common equity (including $44.3 million in PSSL). Our debt portfolio consisted of approximately 99% variable-rate investments. As of September 30, 2025, we had three portfolio companies on non-accrual, representing 0.4% and 0.2% of our overall portfolio on a cost and fair value basis, respectively. As of September 30, 2025, the portfolio had net unrealized depreciation of $46.1 million. Our overall portfolio consisted of 164 companies with an average investment size of $16.9 million, had a weighted average yield on debt investments of 10.2%, and was invested 90% in first lien secured debt (including 9% in PSSL), 1% in second lien secured debt and subordinated debt and 9% in preferred and common equity (including 2% in PSSL). As of September 30, 2025, over 98% of the investments held by PSSL were first lien secured debt.
For the three months ended March 31, 2026, we invested $294.8 million in six new and 53 existing portfolio companies at a weighted average yield on debt investments of 9.3%. For the three months ended March 31, 2026, sales and repayments of investments totaled $328.0 million, including $56.9 million of sales to PSSL and $148.1 million of sales to PSSL II. For the six months ended March 31, 2026, we invested $595.8 million in 10 new and 74 existing portfolio companies at a weighted average yield on debt investments of 9.6%. For the six months ended March 31, 2026, sales and repayments of investments totaled $769.5 million, including $189.4 million of sales to PSSL and $344.6 million of sales to PSSL II.
For the three months ended March 31, 2025, we invested $293.3 million in three new and 54 existing portfolio companies at a weighted average yield on debt investments of 9.9%. For the three months ended March 31, 2025, sales and repayments of investments totaled $122.4 million, including $52.9 million of sales to PSSL. For the six months ended March 31, 2025, we invested $900.2 million in 14 new and 96 existing portfolio companies at a weighted average yield on debt investments of 10.2%. For the six months ended March 31, 2025, sales and repayments of investments totaled $523.7 million, including $240.6 million of sales to PSSL.
As of March 31, 2026, PSSL’s portfolio totaled $1,209.0 million and consisted of 120 companies with an average investment size of $10.1 million and at a weighted average yield on debt investments of 9.5%. As of September 30, 2025, PSSL’s portfolio totaled $1,084.6 million, consisted of 117 companies with an average investment size of $9.3 million and at a weighted average yield on debt investments of 10.1%.
For the three months ended March 31, 2026, PSSL invested $58.6 million (including $56.9 million purchased from the Company) in three new and five existing portfolio companies at a weighted average yield on debt investments of 9.2%. Sales and repayments of investments for the three months ended March 31, 2026 totaled $32.2 million. For the six months ended March 31, 2026, PSSL invested $192.4 million (including $189.4 million purchased from the Company) in seven new and 22 existing portfolio companies at a weighted average yield on debt investments of 9.3%. Sales and repayments of investments for the six months ended March 31, 2026 totaled $44.6 million.
For the three months ended March 31, 2025, PSSL invested $60.0 million (including $52.9 million purchased from the Company) in four new and five existing portfolio companies at a weighted average yield on debt investments of 9.8%. For the three months ended March 31, 2025, sales and repayments of investments totaled
$36.8 million. For the six months ended March 31, 2025, we invested $284.9 million (including $240.6 million purchased from the Company) in 21 new and 12 existing portfolio companies at a weighted average yield on debt investments of 10.2%. For the six months ended March 31, 2025, sales and repayments of investments totaled $123.4 million.
As of March 31, 2026, PSSL II’s portfolio totaled $339.9 million and consisted of 54 companies with an average investment size of $6.3 million and at a weighted average yield on debt investments of 8.9%.
For the three months ended March 31, 2026, PSSL II invested $148.1 million (including $148.1 million purchased from the Company) in 12 new and 15 existing portfolio companies at a weighted average yield on debt investments of 8.8%. Sales and repayments of investments for the three months ended March 31, 2026 totaled $1.3 million. For the six months ended March 31, 2026, PSSL II invested $344.6 million (including $344.6 million purchased from the Company) in 54 new and zero existing
portfolio companies at a weighted average yield on debt investments of 9.1%. Sales and repayments of investments for the six months ended March 31, 2026 totaled $4.2 million.
At-the-Market Offering
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of our Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of our assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of income and expenses during the reported periods. In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair presentation of financial statements have been included. Actual results could differ from these estimates due to changes in the economic and regulatory environment, financial markets and any other parameters used in determining such estimates and assumptions. We may reclassify certain prior period amounts to conform to the current period presentation. We have eliminated all intercompany balances and transactions. References to ASC serve as a single source of accounting literature. Subsequent events are evaluated and disclosed as appropriate for events occurring through the date the Consolidated Financial Statements are issued. In addition to the discussion below, we describe our critical accounting policies in the notes to our Consolidated Financial Statements. We discuss our critical accounting estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2025 Annual Report on Form 10-K. There have been no significant changes in our critical accounting estimates from those disclosed in our 2025 Annual Report on Form 10-K during the three months ended March 31, 2026.
Investment Valuations
We expect that there may not be readily available market values for many of our investments which are or will be in our portfolio, and we value such investments at fair value as determined in good faith by or under the direction of our board of directors using a documented valuation policy and a consistently applied valuation process, as described in this Report. With respect to investments for which there are no readily available market values, the factors that the board of directors may take into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate or revise our valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and the difference may be material.
Our board of directors generally uses market quotations to assess the value of our investments for which market quotations are readily available. We obtain these market values from independent pricing services or at the bid prices obtained from at least two brokers or dealers, if available, or otherwise from a principal market maker or a primary market dealer. The Investment Adviser assesses the source and reliability of bids from brokers or dealers. If the board of directors has a bona fide reason to believe any such market quote does not reflect the fair value of an investment, it may independently value such investments by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available.
Fair value, as defined under ASC 820, is the price that we would receive upon selling an investment or pay to transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment or liability. ASC 820 emphasizes that valuation techniques maximize the use of observable market inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including
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assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing an asset or liability based on market data obtained from sources independent of us. Unobservable inputs reflect the assumptions market participants would use in pricing an asset or liability based on the best information available to us on the reporting period date.
Level 1: Inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities, accessible by us at the measurement date.
Level 2: Inputs that are quoted prices for similar assets or liabilities in active markets, or that are quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term, if applicable, of the financial instrument.
Level 3: Inputs that are unobservable for an asset or liability because they are based on our own assumptions about how market participants would price the asset or liability.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Generally, most of our investments, our 2036 Asset-Backed Debt, our 2036-R Asset-Backed Debt, 2037 Asset-Backed Debt, 2038-R Asset-Backed Debt and our Credit Facility are classified as Level 3. Our 2026 Notes and 2029 Notes are classified as Level 2 as they are financial instruments with readily observable market inputs. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and those differences may be material.
On December 3, 2020, the SEC adopted Rule 2a-5 under the 1940 Act, which establishes an updated regulatory framework for determining fair value in good faith for purposes of the 1940 Act. The new rule clarifies how fund boards of directors can satisfy their valuation obligations and requires, among other things, the boards of directors to assess periodically material valuation risks and take steps to manage those risks. The rule also permits boards of directors, subject to board oversight and certain other conditions, to designate the fund’s investment adviser to perform fair value determinations. The new rule went into effect on March 8, 2021 and had a compliance date of September 8, 2022. We came into compliance with Rule 2a-5 under the 1940 Act before the compliance date. While our board of directors has not elected to designate the Investment Adviser as the valuation designee as of the date of this report, we have adopted certain revisions to our valuation policies and procedures in order comply with the applicable requirements of Rule 2a-5 under the 1940 Act.
In addition to using the above inputs to value cash equivalents, investments, our 2026 Notes, our 2029 Notes, our 2036 Asset-Backed Debt, our 2036-R Asset-Backed Debt, our 2037 Asset-Backed Debt, our 2038-R Asset-Backed Debt, and our Credit Facility, we employ the valuation policy approved by our board of directors that is consistent with ASC 820. Consistent with our valuation policy, we evaluate the source of inputs, including any markets in which our investments are trading, in determining fair value.
Generally, the carrying value of our consolidated financial liabilities approximates fair value. We have adopted the principles ASC Subtopic 825-10, Financial Instruments, or ASC 825-10, which provides companies with an option to report selected financial assets and liabilities at fair value, and made an irrevocable election to apply ASC 825-10 to the Credit Facility. We elected to use the fair value option for the Credit Facility to align the measurement attributes of both our assets and liabilities while mitigating volatility in earnings from using different measurement attributes. Due to that election and in accordance with GAAP, we incurred zero and $0.5 million of expenses relating to amendment costs on the Credit Facility during the three and six months ended March 31, 2026 and we incurred $0.4 million of expenses relating to amendment costs on the Credit Facility during the three and six months ended, March 31, 2025. ASC 825-10 establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities and to more easily understand the effect on earnings of a company’s choice to use fair value. ASC 825-10 also requires entities to display the fair value of the selected assets and liabilities on the face of the Consolidated Statements of Assets and Liabilities and changes in fair value of the Credit Facility are reported in our Consolidated Statements of Operations. We elected not to apply ASC 825-10 to any other financial assets or liabilities, including the 2026 Notes, 2029 Notes, the 2036 Asset-Backed Debt, the 2036-R Asset-Backed Debt, the 2037 Asset-Backed Debt and the 2038-R Asset-Backed Debt.
For the three and six months ended March 31, 2026, the Credit Facility had a net change in unrealized appreciation (depreciation) of less than $0.1 million and less than $0.1 million. For the three and six months ended March 31, 2025, the Credit Facility had a net change in unrealized appreciation (depreciation) of less than $0.1 million and $0.1 million. As of March 31, 2026 and September 30, 2025, the net unrealized appreciation (depreciation) on the Credit Facility totaled approximately zero and zero, respectively. We use a nationally recognized independent valuation service to measure the fair value of the Credit Facility in a manner consistent with the valuation process that our board of directors uses to value our investments.
Revenue Recognition
We record interest income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt investments with contractual PIK interest, which represents interest accrued and added to the loan balance that generally becomes due at maturity, we will generally not accrue PIK interest when the portfolio company valuation indicates that such PIK interest is not collectable. We do not accrue as a receivable interest on loans and debt investments if we have reason to doubt our ability to collect such interest. Loan origination fees, OID, market discount or premium and deferred financing costs on liabilities, which we do not fair value, are capitalized and then accreted or amortized using the effective interest method as interest income or, in the case of deferred financing costs, as interest expense. We record prepayment penalties on loans and debt investments as income. Dividend income, if any, is recognized on an accrual basis on the ex-dividend date to the extent that we expect to collect such amounts. From time to time, the Company receives certain fees from portfolio companies, which may or may not be non-recurring in nature. Such fees include loan prepayment penalties, structuring fees, amendment fees and agency fees, and are recorded as other investment income when earned.
Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation
We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, using the specific identification method, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in the fair values of our portfolio investments, our Credit Facility, during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.
Foreign Currency Translation
Payment -in-kind, or PIK Interest
We have investments in our portfolio which contain a PIK interest provision. PIK interest is added to the principal balance of the investment and is recorded as income. In order for us to maintain our ability to be subject to tax as a RIC, substantially all of this income must be paid out to stockholders in the form of dividends for federal income tax purposes, even though we may not have collected any cash with respect to interest on PIK securities.
Federal Income Taxes
We have elected to be treated and intend to qualify annually to maintain our election to be treated, as a RIC under Subchapter M of the Code. To maintain our RIC tax election, we must, among other requirements, meet certain annual source-of-income and quarterly asset diversification requirements. We also must annually distribute dividends for federal income tax purposes to our stockholders out of the assets legally available for distribution of an amount generally at least equal to 90% of the sum of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, or investment company taxable income, determined without regard to any deduction for dividends paid.
Although not required for us to maintain our RIC tax status, in order to preclude the imposition of a 4% nondeductible federal excise tax imposed on RICs, we must distribute dividends for U.S. federal income tax purposes to our stockholders in respect of each calendar year of an amount at least equal to the sum of (1) 98% of our net ordinary income (subject to certain deferrals and elections) for the calendar year, (2) 98.2% of our capital gain net income (i.e., the excess, if any, of our capital gains over capital losses), adjusted for certain ordinary losses, generally for the one-year period ending on October 31 of the calendar year plus (3) any net ordinary income or capital gain net income for the preceding years that was not distributed during such years on which we did not incur any corporate income tax, or the Excise Tax Avoidance Requirement. In addition, although we may distribute realized net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually, out of the assets legally available for such distributions in the manner described above, we have retained and may continue to retain such net capital gains or investment company taxable income, subject to maintaining our ability to be taxed as a RIC, in order to provide us with additional liquidity.
Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and net realized gain recognized for financial reporting purposes. Differences between tax regulations and GAAP may be permanent or temporary. Permanent differences are reclassified among capital accounts in the Consolidated Financial Statements to reflect their appropriate tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.
For the three and six months ended March 31, 2026, we recorded a provision for taxes on net investment income of less than $0.1 million and $0.3 million pertaining to federal excise tax. For the three and six months ended March 31, 2025, we recorded a provision for taxes on net investment income of $0.2 million and $0.5 million pertaining to federal excise tax.
We have formed and expect to continue to form certain taxable subsidiaries, including the Taxable Subsidiary, which are taxed as corporations. These taxable subsidiaries allow us to hold equity securities of certain portfolio companies treated as pass-through entities for U.S. federal income tax purposes while facilitating our ability to qualify as a RIC under the Code.
RESULTS OF OPERATIONS
Set forth below are the results of operations for the three and six months ended March 31, 2026 and 2025.
Investment Income
For the three and six months ended March 31, 2026, investment income was $66.0 million and $136.0 million, respectively, which was attributable to $58.6 million and $122.9 million from first lien secured debt and $7.3 million and $13.2 million from other investments, respectively. For the three and six months ended March 31, 2025, investment income was $61.9 million and $128.9 million, respectively, which was attributable to $56.2 million and $117.2 million from first lien secured debt and $5.7 million and $11.7 million from other investments, respectively. The increase in investment income for the three and six months ended March 31, 2026, was primarily due to the increase in the size of our debt portfolio.
For the three and six months ended March 31, 2026, expenses totaled $40.2 million and $83.7 million, respectively, and were comprised of: $24.1 million and $51.3 million of debt related interest and expenses, $6.4 million and $13.2 million of base management fees, $6.4 million and $13.1 million of performance-based incentive fees, $2.1 million and $4.2 million of general and administrative expenses, less than $0.1 million and $0.3 million of taxes and $1.1 million and $1.6 million in Credit Facility amendment and debt issuance costs. For the three and six months ended March 31, 2025, expenses totaled $36.9 million and $74.0 million, respectively, and were comprised of: $22.5 million and $44.9 million of debt related interest and expenses, $5.6 million and $10.9 million of base management fee, $6.3 million and $13.8 million of performance-based incentive fee, $1.9 million and $3.6 million of general and administrative expenses, $0.2 million and $0.5 million of taxes, and $0.4 million and $0.4 million in Credit Facility amendment costs. The increase in expenses for the three and six months ended March 31, 2026, was primarily due to the increase in interest expense from increased borrowings as a result of the increase in our investment portfolio.
Net Investment Income
For the three and six months ended March 31, 2026, net investment income totaled $25.8 million or $0.26 per share, and $52.4 million or $0.53 per share, respectively. For the three and six months ended March 31, 2025, net investment income totaled $25.0 million or $0.28 per share, and $55.0 million or $0.64 per share, respectively. The decrease in net investment income for the three and six months ended March 31, 2026, was primarily due to an increase in interest expense and one time credit facility amendment and debt issuance costs.
Net Realized Gains or Losses
For the three and six months ended March 31, 2026, net realized gains (losses) totaled $(8.9) million and $(7.5) million, respectively. For the three and six months ended March 31, 2025, net realized gains (losses) totaled $(3.5) million and $23.1 million, respectively. The change in net realized gains (losses) was primarily due to changes in the market conditions of our investments and the values at which investments were realized.
Unrealized Appreciation or Depreciation on Investments and Debt
For the three and six months ended March 31, 2026, we reported net change in unrealized appreciation (depreciation) on investments of $12.2 million and $(20.1) million, respectively. For the three and six months ended March 31, 2025, we reported net change in unrealized appreciation (depreciation) on investments of $(20.8) million and $(49.7) million, respectively. As of March 31, 2026 and September 30, 2025, our net unrealized appreciation (depreciation) on investments totaled $(66.1) million and $(46.1) million, respectively. The net change in unrealized appreciation (depreciation) on our investments was primarily due to the operating performance of the portfolio companies within our portfolio, changes in the capital market conditions of our investments, and realization of investments.
For the three and six months ended March 31, 2026, our Credit Facility had a net change in unrealized appreciation (depreciation) of less than $0.1 million and less than $0.1 million, respectively. For the three and six months ended March 31, 2025, our Credit Facility had a net change in unrealized appreciation (depreciation) of less than $0.1 million and $0.1 million, respectively. As of March 31, 2026 and September 30, 2025, the net unrealized appreciation (depreciation) on the Credit Facility totaled approximately zero and zero, respectively. The net change in net unrealized (appreciation) or depreciation was primarily due to changes in the capital markets.
Net Change in Net Assets Resulting from Operations
For the three and six months ended March 31, 2026, net increase (decrease) in net assets resulting from operations totaled $28.7 million or $0.29 per share and $25.2 million or $0.25 per share, respectively. For the three and six months ended March 31, 2025, net increase (decrease) in net assets resulting from operations totaled $1.2 million or $0.01 per share and $29.6 million or $0.34 per share, respectively. The net increase or (decrease) from operations for the three and six months ended March 31, 2026, was primarily due to operating performance of our portfolio and changes in capital market conditions of our investments along with change in size and cost yield of our debt portfolio and costs of financing.
LIQUIDITY AND CAPITAL RESOURCES
Our liquidity and capital resources are derived primarily from cash flows from operations, including income earned on our investments, proceeds from investment sales and repayments, and proceeds of securities offerings and debt financings. Our primary use of funds from operations includes investments in portfolio companies and payments of fees and other operating expenses we incur. We have used, and expect to continue to use, our debt capital, proceeds from our portfolio and proceeds from public and private offerings of securities to finance our investment objectives and operations. As of March 31, 2026, in accordance with the 1940 Act, with certain limited exceptions, we were only allowed to borrow amounts such that we were in compliance with a 150% asset coverage ratio requirement after such borrowing.
On April 5, 2018, our board of directors approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the Consolidated Appropriations Act of 2018 (which includes the SBCAA). As a result, the asset coverage requirement applicable to us for senior securities was reduced from 200% (i.e., $1 of debt outstanding for each $1 of equity) to 150% (i.e., $2 of debt outstanding for each $1 of equity), effective as of April 5, 2019, subject to compliance with certain disclosure requirements. As of March 31, 2026 and September 30, 2025, our asset coverage ratio, as computed in accordance with the 1940 Act, was 162% and 160%, respectively.
As of March 31, 2026, the Credit Facility had commitments $768.0 million (increased from $718.0 million in November 2025) and an interest rate spread above SOFR (or an alternative risk-free floating interest rate index) of 200 basis points, a maturity date of August 2030 and a revolving period that ends in August 2028. As of March 31, 2026 and September 30, 2025, Funding I had $328.3 million and $683.9 million of outstanding borrowings under the Credit Facility, respectively. The Credit Facility had a weighted average interest rate of 5.7% and 6.3%, exclusive of the fee on undrawn commitments as of March 31, 2026 and September 30, 2025, respectively.
For the six months ended March 31, 2026 and 2025, the annualized weighted average cost of debt, inclusive of the fee on the undrawn commitment on the Credit Facility, amendment costs and debt issuance costs, was 6.1% and 6.8%, respectively. As of March 31, 2026 and September 30, 2025, we had $439.7 million and $34.1 million of unused borrowing capacity under the Credit Facility, respectively, subject to leverage and borrowing base restrictions.
In April 2025, the Credit Facility was amended. The terms of the amendment decreased the aggregate commitment amounts of the lenders party to the Credit Facility from $736.0 million to $718.0 million, decreased pricing under the Credit Facility to SOFR plus 200 basis points from SOFR plus 225 basis points, extended the reinvestment period one year to August 2028 from August 2027, extended the maturity date one year to August 2030 from August 2029, and increased the maximum first lien advance rate to 72.5% from 70.0%.
The Credit Facility contains covenants, including but not limited to, restrictions of loan size, currency types and amounts, industry requirements, average life of loans, geographic and individual portfolio concentrations, minimum portfolio yield and loan payment frequency. Additionally, the Credit Facility requires the maintenance of a
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minimum equity investment in Funding I and income ratio as well as restrictions on certain payments and issuance of debt. The Credit Facility compliance reporting is prepared on a basis of accounting other than GAAP. As of March 31, 2026 , we were in compliance with the covenants relating to our Credit Facility.
Our interest in Funding I (other than the management fee) is subordinate in priority of payment to every other obligation of Funding I and is subject to certain payment restrictions set forth in the Credit Facility. We may receive cash distributions on our equity interests in Funding I only after it has made (1) all required cash interest and, if applicable, principal payments to the Lenders, (2) required administrative expenses and (3) claims of other unsecured creditors of Funding I. We cannot assure you that there will be sufficient funds available to make any distributions to us or that such distributions will meet our expectations from Funding I. The Investment Adviser has irrevocably directed that the management fee owed with respect to such services is to be paid to the Company so long as the Investment Adviser remains the collateral manager.
In March 2021 and in October 2021, we issued $100.0 million and $85.0 million, respectively, in aggregate principal amount of our 2026 Notes at a public offering price per note of 99.4% and 101.5%, respectively. Interest on the 2026 Notes is paid semiannually on April 1 and October 1 of each year, at a rate of 4.25% per year, commencing October 1, 2021. The effective interest rate is 4.15%. The 2026 Notes mature on April 1, 2026 and may be redeemed in whole or in part at our option subject to a make-whole premium if redeemed more than three months prior to maturity. The 2026 Notes are our general, unsecured obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness. The 2026 Notes are effectively subordinated to all of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, financing vehicles, or similar facilities. We do not intend to list the 2026 Notes on any securities exchange or automated dealer quotation system. The 2026 Notes were repaid in full on April 1, 2026.
In September 2019, the Securitization Issuers completed the Debt Securitization. The 2031 Asset-Backed Debt is secured by the middle market loans, participation interests in middle market loans and other assets of the Securitization Issuer. The Debt Securitization was executed through (A) a private placement of: (i) $78.5 million Class A-1 Senior Secured Floating Rate Notes maturing 2031, which bear interest at the three-month SOFR plus 1.8%, (ii) $15.0 million Class A-2 Senior Secured Fixed Rate Notes due 2031, which bear interest at 3.7%, (iii) $14.0 million Class B-1 Senior Secured Floating Rate Notes due 2031, which bear interest at the three-month SOFR plus 2.9%, (iv) $16.0 million Class B-2 Senior Secured Fixed Rate Notes due 2031, which bear interest at 4.3%, (v) $19.0 million Class C‑1 Secured Deferrable Floating Rate Notes due 2031, which bear interest at the three-month SOFR plus 4.0%, (vi) $8.0 million Class C-2 Secured Deferrable Fixed Rate Notes due 2031, which bear interest at 5.4%, and (vii) $18.0 million Class D Secured Deferrable Floating Rate Notes due 2031, which bear interest at the three-month SOFR plus 4.8% and (B) the borrowing of $77.5 million Class A‑1 Senior Secured Floating Rate Loans due 2031, which bear interest at the three-month SOFR plus 1.8%, under a credit agreement by and among the Securitization Issuers, as borrowers, various financial institutions, as lenders, and U.S. Bank National Association, as collateral agent and as loan agent. The 2031 Asset-Backed Debt was scheduled to mature on October 15, 2031.
On the closing date of the Debt Securitization, in consideration of our transfer to the Securitization Issuer of the initial closing date loan portfolio, which included loans distributed to us by our wholly owned subsidiary, the Securitization Issuer transferred to us 100% of the Preferred Shares of the Securitization Issuer, 100% of the Class D Secured Deferrable Floating Rate Notes issued by the Securitization Issuer, and a portion of the net cash proceeds received from the sale of the 2031 Asset-Backed Debt. The Preferred Shares of the Securitization Issuer do not bear interest and had a stated value of $55.4 million at the closing of the Debt Securitization.
Our Investment Adviser serves as collateral manager to the Securitization Issuer pursuant to a collateral management agreement between our Investment Adviser and the Securitization Issuer, or the Collateral Management Agreement. For so long as our Investment Adviser serves as collateral manager, it will elect to irrevocably waive any collateral management fee to which it may be entitled under the Collateral Management Agreement.
In July 2024, the 2031 Asset-Backed Debt was refinanced through a $351.0 million debt securitization in the form of a collateralized loan obligation, or the "2036-R Asset-Backed Debt". The Company retained $85.0 million of the debt securitization. The 2036-R Asset-Backed Debt was executed through: (A) the issuance by the 2036-R Securitization Issuers of the following classes of notes pursuant that certain indenture, dated September 19, 2019, by and among the 2036-R Securitization Issuers and U.S. Bank Trust Company, National Association, as amended by the second supplemental indenture, dated June 25, 2024): (i) $203.0 million of A-1-R Notes, which bear interest at the three-month SOFR plus 1.75%, (ii) $10.5 million of A-2-R Notes, which bear interest at three-month SOFR plus 1.90%, (iii) $12.0 million of Class B-R Notes, which bear interest at three-month SOFR plus 2.05%, (iv) $28.0 million of C-R Notes, which bear interest at three-month SOFR plus 2.75% and (v) $21.0 million of D-R Notes, which bear interest at three-month SOFR plus 4.30%, (B) the issuance by the issuer of $64.0 million of subordinated notes pursuant to the Indenture and (C) the borrowing by one of the 2036-R Securitization Issuers of $12.5 million of Class B-R Loans, which bear interest at three-month SOFR plus 2.05%, pursuant to a credit agreement, by and among the 2036-R Securitization Issuers, the various financial institutions and other persons party thereto, as lenders and U.S. Bank Trust Company, National Association, as loan agent and as trustee. The 2036-R Asset-Backed Debt matures in July 2036. The company initially retained the D-R Notes and the subordinated Notes through a consolidated subsidiary. On October 29, 2025 the Company sold $21.0 million of D-R Notes, to a third party. As of March 31, 2026, the Company no longer consolidates the D-R Notes.
As of March 31, 2026 and September 30, 2025, the Company had $287.0 million and $266.0 million, respectively of external, 2036-R Asset-Backed Debt outstanding with a weighted average interest rate of 5.7% and 6.2%, respectively. As of March 31, 2026 and September 30, 2025, the unamortized fees on the 2036-R Asset-Backed Debt were $0.4 million and $0.6 million, respectively.
In February 2024, the Company completed the $350.6 million term debt securitization. Term debt securitizations, also known as CLOs, are a form of secured financing incurred by the Company, which is consolidated by the Company and subject to the Company’s asset coverage requirements. The 2036 Asset-Backed Debt was issued by the 2036 Securitization Issuer. The 2036 Asset-Backed Debt is secured by the middle market loans, participation interests in middle market loans and other assets of the 2036 Securitization Issuer. The Debt Securitization was executed through (A) a private placement of: (i) $139.5 million of AAA(sf) Class A-1 Notes, which bear interest at the three-month secured overnight financing rate published by the Federal Reserve Bank of New York (“SOFR”) plus 2.30%, (ii) $14.0 million of AAA(sf) Class A-2 Notes, which bear interest at three-month SOFR plus 2.70%, (iii) $24.5 million of AA(sf) Class B Notes, which bear interest at three-month SOFR plus 2.90%, (iv) $28.0 million of A(sf) Class C Notes, which bear interest at three-month SOFR plus 3.90%, (v) $21.0 million of BBB-(sf) Class D Notes, which bear interest at three-month SOFR plus 5.90%, (together, the “Secured Notes”), and (vi) $63.6 million of subordinated notes (“Subordinated Notes”) and (B) the borrowing of $60.0 million AAA(sf) Class A-1 Senior Secured Floating Rate Loans (the “Class A-1 Loans” and together with the Secured Notes and Subordinated Notes, the “Debt”), which bear interest at three-month SOFR plus 2.30%, under a credit agreement (the “Credit Agreement”), dated as of the Closing Date, by and among the Issuer, as borrower, various financial institutions, as lenders, and Wilmington Trust, National Association, as collateral agent and as loan agent. The Debt is scheduled to mature on April 18, 2036.
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In February 2026, the Company closed the refinancing of the 2036 Asset-Backed Debt and a four-year reinvestment period and 12-year final maturity $356.5 million debt securitization in the form of a collateralized loan obligation (the “2038-R Asset-Backed Debt”). The 2038-R Asset-Backed Debt was executed through: (A) the issuance by the Issuers of the following classes of notes pursuant that certain indenture, dated February 2026: (i) $123.0 million of A-1-R Notes, which bear interest at the three-month SOFR plus 1.43%, (ii) $80.0 million of A-1-R Loans, which bear interest at three-month SOFR plus 1.43%, (iii) $14.0 million of Class A-2-R Notes, which bear interest at three-month SOFR plus 1.60%, (iv) $26.3 million of B-R Loans, which bear interest at three-month SOFR plus 1.75% and (v) $24.5 million of C-R Notes, which bear interest at three-month SOFR plus 2.15%, (vi) $19.3 million of D-R Notes, which bear interest at three-month SOFR plus 3.20%, (B) the issuance by the Issuer of $69.5 million of subordinated notes pursuant to the Indenture. The replacement debt matures in April 2038. The replacement debt was 100% funded at closing.
Our Investment Adviser serves as collateral manager to the 2038-R Securitization Issuer and 2036 Asset Backed debt, respectively, pursuant to the Collateral Management Agreement. For so long as our Investment Adviser serves as collateral manager, it will elect to irrevocably waive any collateral management fee to which it may be entitled under the Collateral Management Agreement.
In February 2025, we completed the $474.6 million term debt securitization (the “2037 Debt Securitization”). The notes offered in the 2037 Debt Securitization were issued by the 2037 Securitization Issuer and are backed by a portfolio of collateral obligations consisting of middle market loans and participation interests in middle market loans as well as by other assets of the 2037 Securitization Issuer. The Company retained $113.6 million of the debt securitization issued by the 2037 Securitization Issuer. The transaction was executed through (A) a private placement of $220.5 million of AAA(sf) Class A-1 Notes, which bear interest at the three-month SOFR plus 1.49% (the “2037 Class A-1 Notes”), (ii) $19.0 million of AAA(sf) Class A-2 Notes, which bear interest at three-month SOFR plus 1.60% (the “2037 Class A-2 Notes”), (iii) $28.5 million of AA(sf) Class B Notes, which bear interest at three-month SOFR plus 1.75% (the “2037 Class B Notes”), (iv) $38.0 million of A(sf) Class C Notes, which bear interest at three-month SOFR plus 2.20% (the “2037 Class C Notes”), (v) $28.5 million of BBB-(sf) Class D Notes, which bear interest at three-month SOFR plus 3.60%, (the “2037 Class D Notes” and, collectively with the 2037 Class A-2 Notes, the 2037 Class B Notes and the 2037 Class D Notes, the “2037 Secured Notes”), and (vi) $85.1 million of subordinated notes (the “2037 Subordinated Notes”) and (B) the borrowing by 2037 Securitization Issuer of $10.0 million under AAA(sf) Class A-1L-A floating rate loans (the “2037 Class A-1L-A Loans”) and $45.0 million under AAA(sf) Class A-1L-B floating rate loans ( the “2037 Class A-1L-B Loans” and, together with the 2037 Class A-1L-A Loans, the “2037 Asset-Backed Loans,” and collectively with the 2037 Notes, the “2037 Asset-Backed Debt”), which bear interest at three-month SOFR plus 1.49%. The 2037 Class A-1 Loans and the 2037 Secured Notes are secured by the middle market loans, participation interests in middle market loans and other assets of the 2037 Securitization Issuer. The 2037 Asset-Backed Debt is scheduled to mature on April 20, 2037. The Company initially retained the 2037 Class D Notes and the 2037 Subordinated Notes. A portion of the proceeds received by the 2037 Securitization Issuer from the loans securing the 2037 Class A-1 Loans and the 2037 Secured Notes may be used to purchase additional middle market loans under the direction of the Investment Adviser through April 20, 2029. On November 25, 2025 the Company sold $28.5 million of BBB -(sf) Class D Notes, to a third party. As of March 31, 2026, the Company no longer consolidates the BBB-(sf) Class D Notes. The 2037 Asset-Backed Debt is included in the Consolidated Statement of Assets and Liabilities as debt of the Company and the 2037 Class D Notes and the 2037 Subordinated Notes of the 2037 Securitization Issuer were eliminated in consolidation.
We may raise equity or debt capital through both registered offerings off our shelf registration statement and private offerings of securities, securitizing a portion of our investments among other considerations or mergers and acquisitions. Furthermore, the Credit Facility availability depends on various covenants and restrictions as discussed in the preceding paragraphs. The primary use of existing funds and any funds raised in the future is expected to be for repayment of indebtedness, investments in portfolio companies, cash distributions to our stockholders or for other general corporate purposes.
We have entered into certain contracts under which we have material future commitments. Under our Investment Management Agreement, which was most recently reapproved by our board of directors, including a majority of our directors who are not interested persons of us or the Investment Adviser, in May 2026, PennantPark Investment Advisers serves as our investment adviser. Payments under our Investment Management Agreement in each reporting period are equal to (1) a management fee equal to a percentage of the value of our average adjusted gross assets and (2) an incentive fee based on our performance.
Under our Administration Agreement, which was most recently reapproved by our board of directors, including a majority of our directors who are not interested persons of us, in May 2026, the Administrator furnishes us with office facilities and administrative services necessary to conduct our day-to-day operations. If requested to provide significant managerial assistance to our portfolio companies, we or the Administrator will be paid an additional amount based on the services provided. Payment under our Administration Agreement is based upon our allocable portion of the Administrator’s overhead in performing its obligations under our Administration Agreement, including rent and our allocable portion of the costs of our Chief Financial Officer, Chief Compliance Officer, Corporate Counsel and their respective staffs.
If any of our contractual obligations discussed above are terminated, our costs under new agreements that we enter into may increase. In addition, we will likely incur significant time and expense in locating alternative parties to provide the services we expect to receive under our Investment Management Agreement and our Administration Agreement. Any new investment management agreement would also be subject to approval by our stockholders.
As of March 31, 2026 and September 30, 2025, we had cash and cash equivalents of $121.9 million and $122.7 million, respectively, available for investing and general corporate purposes. We believe our liquidity and capital resources are sufficient to take advantage of market opportunities.
For the six months ended March 31, 2026, our operating activities provided cash of $172.9 million and our financing activities used cash of $173.7 million. Our operating activities provided cash primarily due to our investment activities and our financing activities used cash primarily due to repayments of our Credit Facility offset by proceeds received from the sales of $28.5 million of 2037 Class D Notes, $21.0 million of 2036-R Asset-Backed Debt D-R Notes to third parties and the issuance of $200.0 million of our 2029 Notes.
For the six months ended March 31, 2025, our operating activities used cash of $350.8 million and our financing activities provided cash of $350.1 million. Our operating activities used cash primarily due to our investment activities and our financing activities provided cash primarily due to borrowings under our Credit Facility, proceeds from the 2037 Asset-Backed debt and proceeds from public offerings under our 2024 ATM Program.
In May 2017, we and Kemper formed PSSL, an unconsolidated joint venture. PSSL invests primarily in middle-market and other corporate debt securities consistent with our strategy. PSSL was formed as a Delaware limited liability company. As of March 31, 2026 and September 30, 2025, PSSL had total assets of $1,248.8 million and $1,153.7 million, respectively, and its investment portfolio consisted of investments in 120 and 117 portfolio companies, respectively. As of March 31, 2026, at fair value, the largest investment in a single portfolio company in PSSL was $24.9 million and the five largest investments totaled $111.9 million. As of September 30, 2025, at fair value, the largest investment in a single portfolio company in PSSL was $20.9 million and the five largest investments totaled $99.3 million. PSSL invests in portfolio companies in the same industries in which we may directly invest.
In May 2025, PSSL through its wholly owned and consolidated subsidiary, PennantPark CLO VI, LLC closed the refinancing of the 2035 Asset-Backed Debt through a four year reinvestment period, twelve-year final maturity $315.8 million debt securitization or the "2037-R Asset-Backed Debt." The debt in this securitization is structured in the following manner: (i) $228.0 million of Class A-R Loans, which bears interest at three-month SOFR plus 1.85%, (ii) $18.0 million of Class B-R Loans, which bears interest at three-month SOFR plus 4.50%, (iii) $18.0 million of Class C-R Loans and (iv) $51.8 million of subordinated notes. PSSL will continue to retain all of the subordinated notes and Class C-R Loans through a consolidated subsidiary. The maturity of the replacement debt and existing subordinated notes is now extended to April 2037.
In April 2025, PSSL through its wholly owned and consolidated subsidiary, PennantPark CLO 12, LLC closed a four-year reinvestment period, twelve-year final maturity $301 million debt securitization in the form of a collateralized loan obligation or the "2037 Asset-Backed Debt." The debt in this securitization is structured in the following manner: (i) $30.0 million of Class A-1 Loans, which bear interest at three-month SOFR plus 1.45%, (ii) $141.0 million of Class A-1 Notes, which bear interest at three-month SOFR plus 1.45%, (iii) $12.0 million of Class A-2 Notes, which bear interest at a three-month SOFR plus 1.60%, (iv) $21.0 million of Class B notes, which bears interest at three-month SOFR plus 1.85%, (v) $24.0 million of Class C notes, which bears interest at three-month SOFR plus 2.30%, (vi) $18.0 million Class D notes, which bears interest at three-month SOFR plus 3.30%, (vii) $55.0 million of subordinated notes. PSSL will continue to retain all of the subordinated notes through a consolidated subsidiary. The reinvestment period for the term debt securitization ends in April 2029 and the debt is scheduled to mature in April 2037. The proceeds from the debt repaid a portion of PSSL's $325 million secured credit facility.
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68
69
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73
Below are the consolidated statements of assets and liabilities for PSSL ($ in thousands):
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* As of March 31, 2026 and September 30, 2025, PSSL had unfunded commitments to fund investments of $0.6 million and $0.4 million, respectively.
Below are the consolidated statements of operations for PSSL ($ in thousands):
(1) Currently, no management or incentive fees are payable by PSSL. If any fees were to be charged, they would be separately disclosed in the Statements of Operations. PSSL pays the Administrator an annual fee of 0.25% of average gross assets under management on a quarterly basis.
We and HL have committed to invest up to $200.0 million in the aggregate in PSSL II, with the Company committing to invest up to $150.0 million and HL committing to invest up to $50.0 million. Investments by each of the Company and HL are made in the form of membership interests and secured notes. The Company's commitment consists of $105.0 million in secured notes and $45.0 million in membership interests. HL's commitment consists of $35.0 million in secured notes and $15.0 million in membership interests. All material decisions regarding PSSL II must be submitted to its board of managers, which is comprised of an equal number of representatives from each of the Company and HL. Further, all portfolio and other material decisions require the affirmative vote of at least one board member designated by the Company and one board member from HL.
Below are the consolidated statements of assets and liabilities for PSSL II ($ in thousands):
* As of March 31, 2026 PSSL II had unfunded commitments to fund investments of zero.
Below are the consolidated statements of operations for PSSL II ($ in thousands):
1) No management or incentive fees are payable by PSSL II. If any fees were to be charged, they would be separately disclosed in the Statements of Operations. PSSL II pays the Administrator an annual fee of 0.25% of the total assets under management on a quarterly basis.
Off-Balance Sheet Arrangements
We currently engage in no off-balance sheet arrangements other than our funding requirements for the unfunded investments described above.
Distributions
In order to be treated as a RIC for federal income tax purposes and to not be subject to corporate-level tax on undistributed income or gains, we are required, under Subchapter M of the Code, to annually distribute dividends for U.S. federal income tax purposes to our stockholders out of the assets legally available for distribution of an amount generally at least equal to 90% of our investment company taxable income, determined without regard to any deduction for dividends paid.
Although not required for us to maintain our RIC tax status, in order to preclude the imposition of a 4% nondeductible federal excise tax imposed on RICs, we must distribute dividends for federal income tax purposes to our stockholders in respect of each calendar year an amount at least equal to the Excise Tax Avoidance Requirement. In addition, although we may distribute realized net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually, out of the assets legally available for such distributions in the manner described above, we have retained and may continue to retain such net capital gains or investment company taxable income, subject to maintaining our ability to be taxed as a RIC, in order to provide us with additional liquidity.
During the three and six months ended March 31, 2026, we declared distributions of $0.3075 and $0.615 per share for total distributions of $30.5 million and $61.0 million, respectively. During the three and six months ended March 31, 2025, we declared distributions of $0.3075 and $0.615 per share for total distributions of $27.7 million and $52.9 million, respectively. We monitor available net investment income to determine if a return of capital for tax purposes may occur for the fiscal year. To the extent our taxable earnings fall below the total amount of our distributions for any given fiscal year, stockholders will be notified of the portion of those distributions deemed to be a tax return of capital. Tax characteristics of all distributions will be reported to stockholders subject to information reporting on Form 1099-DIV after the end of each calendar year and in our periodic reports filed with the SEC.
We intend to continue to make monthly distributions to our stockholders. Our monthly distributions, if any, are determined by our board of directors quarterly.
We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage ratio for borrowings applicable to us as a BDC under the 1940 Act and due to provisions in future credit facilities. If we do not distribute at least a certain percentage of our income annually, we could suffer adverse tax consequences, including possible loss of our ability to be subject to tax as a RIC. We cannot assure stockholders that they will receive any distributions at a particular level.
Recent Accounting Pronouncements
In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. ASU 2023-07 expands public entities' segment disclosure by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosure of a reportable segment's profit or loss and assets. All disclosure requirements of ASU 2023-07 are required for entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods for fiscal years beginning December 15, 2024, and should be applied on a retrospective basis to all periods presented, noting early adoption is permitted. The Company has adopted ASU 2023-07 effective September 30, 2025 and concluded that the application of this guidance did not have a material impact on its consolidated financial statements.
We are subject to financial market risks, including changes in interest rates. As of March 31, 2026, our debt portfolio consisted of approximately 99% variable-rate investments. The variable-rate loans are usually based on a SOFR (or an alternative risk-free floating interest rate index) rate and typically have durations of three months, after which they reset to current market interest rates. Variable-rate investments subject to a floor generally reset by reference to the current market index after one to nine months only if the index exceeds the floor. In regards to variable-rate instruments with a floor, we do not benefit from increases in interest rates until such rates exceed the floor and thereafter benefit from market rates above any such floor. In contrast, our cost of funds, to the extent it is not fixed, will fluctuate with changes in interest rates since it has no floor.
Assuming that the most recent Consolidated Statements of Assets and Liabilities was to remain constant, and no actions were taken to alter the existing interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates:
Change in Interest Rates
Change in Interest Income, Net of Interest Expense(in thousands)
Change in Interest Income,Net of InterestExpense Per Share
Down 3%
(23,770
(0.24
Down 2%
(19,690
(0.20
Down 1%
(9,845
(0.10
Up 1%
9,845
0.10
Up 2%
19,690
0.20
Up 3%
29,535
0.30
Although management believes that this measure is indicative of our sensitivity to interest rate changes, it does not adjust for potential changes in the credit market, credit quality, size and composition of the assets on the Consolidated Statements of Assets and Liabilities and other business developments that could affect net increase in net assets resulting from operations or net investment income. Accordingly, no assurances can be given that actual results would not differ materially from those shown above.
Because we borrow money to make investments, our net investment income is dependent upon the difference between the rate at which we borrow funds and the rate at which we invest these funds, as well as our level of leverage. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income or net assets.
We may hedge against interest rate and foreign currency fluctuations by using standard hedging instruments such as futures, options and forward contracts or our Credit Facility subject to the requirements of the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in interest rates and
foreign currencies, they may also limit our ability to participate in benefits of lower interest rates or higher exchange rates with respect to our portfolio of investments with fixed interest rates or investments denominated in foreign currencies. During the periods covered by this Report, we did not engage in interest rate hedging activities or foreign currency derivatives hedging activities.
As of the period ended March 31, 2026 , we including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13-a-15(e) of the Exchange Act). As disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, a material weakness was previously identified in the operation of controls related to our quarterly review of equity investment valuations with respect to the allocation of value of the portfolio company to the Company’s holdings. We have taken steps to remediate this material weakness, which steps have included (i) enhancing existing review controls of equity investments related to the allocation of the portfolio company’s enterprise value to the Company’s holdings to ensure allocations are consistent with the relevant and respective source document and (ii) enhancing policies and procedures to demonstrate a commitment to improving our overall control environment.
Taking the above efforts into consideration, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures for the period ended March 31, 2026 were effective and provided reasonable assurance that information required to be disclosed in our periodic filings with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.
Other than disclosed in this Item 4, there have been no changes in our internal controls over financial reporting that occurred during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Neither us, our Investment Adviser or our Administrator, is currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us, or against our Investment Adviser or Administrator. From time to time, we, our Investment Adviser or Administrator, may be a party to certain legal proceedings, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of these and any future legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.
In addition to the other information set forth in this Report, you should consider carefully the factors discussed below, as well as in Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 filed on November 24, 2025, which could materially affect our business, financial condition and/or operating results. The risks described as in our Annual Report on Form 10-K are not the only risks facing PennantPark Floating Rate Capital Ltd. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.
Middle East Conflict
The ongoing conflicts in the Middle East, including the involvement of the United States, Iran and other countries, as well as political and civil unrest related to the foregoing, could have severe adverse effects on regional and global economic markets. It is difficult to predict the conflicts’ impact on global and market conditions and, as a result, there is material uncertainty and risk with respect to us and our portfolio companies, and our ability and the ability of the portfolio companies to achieve their investment objectives.
We may be subject to risks related to investments in companies in the software industry.
The software industry can be significantly affected by intense competition, aggressive pricing, technological innovations, and product obsolescence. Companies in the software industry are subject to significant competitive pressures, such as aggressive pricing, new market entrants, competition for market share, short product cycles due to an accelerated rate of technological developments and the potential for limited earnings and/or falling profit margins. These companies also face the risks that new services, equipment or technologies will not be accepted by consumers and businesses or will become rapidly obsolete. These factors can affect the profitability of these companies and, as a result, the value of their securities. Also, patent protection is integral to the success of many companies in this industry, and profitability can be affected materially by, among other things, the cost of obtaining (or failing to obtain) patent approvals, the cost of litigating patent infringement and the loss of patent protection for products (which significantly increases pricing pressures and can materially reduce profitability with respect to such products) . In addition, many software companies have limited operating histories. Prices of these companies' securities historically have been more volatile than other securities, especially over the short term.
None.
Not applicable.
10b5-1 Disclosure
None of the officers or directors of the Company have adopted or terminated any Rule 10b5-1 trading arrangements applicable to them (if any) or the Company.
Unless specifically indicated otherwise, the following exhibits are incorporated by reference to exhibits previously filed with the SEC:
3.1
Articles of Amendment and Restatement of the Registrant (Incorporated by reference to Exhibit 99(A) to the Registrant's Pre-Effective Amendment No. 3 to the Registration Statement on Form N-2 (File No. 333-170243), filed on March 29, 2011).
3.2
Articles of Amendment to Articles of Amendment and Restatement of the Registrant (Incorporated by reference to Exhibit 3.2) to the Registrant's Quarterly Report on Form 10-Q (File No. 814-00891), filed on August 07, 2024).
3.3
Second Amended and Restated Bylaws of the Registrant (Incorporated by reference to Exhibit 3.2 to the Registrant's Quarterly Report on Form 10-Q (File No. 814-00891), filed on May 11, 2020).
4.1
Form of Share Certificate (Incorporated by reference to Exhibit 99(D) to the Registrant's Pre-Effective Amendment No. 5 to the Registration Statement on Form N-2 (File No. 333-170243), filed on April 5, 2011).
Supplemental Indenture, dated February 24, 2026, by and between PennantPark CLO VIII, LLC and Wilmington Trust, National Association). (File No. 814-00891), filed on February 27, 2026)
10.2
Credit Agreement, dated February 24, 2026, by and among PennantPark CLO VIII, LLC, the various financial institutions and other persons party thereto, and Wilmington Trust, National Association. (File No. 814-00891), filed on February 27, 2026)
10.3
Amended and Restated Master Loan Sale Agreement, dated February 24, 2026, by and between PennantPark Floating Rate Capital Ltd. and PennantPark CLO VIII, LLC. (File No. 814-00891), filed on February 27, 2026)
10.4
Amended and Restated Collateral Management Agreement, dated February 24, 2026, by and between PennantPark CLO VIII, LLC and PennantPark Investment Advisers, LLC. (File No. 814-00891), filed on February 27, 2026)
31.1*
Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.
31.2*
Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.
32.1*
Certification of Chief Executive Officer pursuant to section 906 of The Sarbanes-Oxley Act of 2002.
32.2*
Certification of Chief Financial Officer pursuant to section 906 of The Sarbanes-Oxley Act of 2002.
99.1
Privacy Policy of the Registrant (Incorporated by reference to Exhibit 99.1 to the Registrant’s Annual Report on Form 10-K (File No. 814-00891), filed on November 17, 2011).
101.INS*
Inline XBRL Instance Document-the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document
101.SCH*
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Cover Page formatted as Inline XBRL and contained in Exhibit 101
* Filed herewith.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 7, 2026
By:
/s/ Arthur H. Penn
Arthur H. Penn
Chief Executive Officer and Chairman of the Board of Directors
(Principal Executive Officer)
/s/ Richard T. Allorto, Jr.
Richard T. Allorto, Jr.
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)