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 DECEMBER 31, 2025
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 February 9, 2026 was 99,217,896.
FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 2025
TABLE OF CONTENTS
PART I. CONSOLIDATED FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
4
Consolidated Statements of Assets and Liabilities as of December 31, 2025 (unaudited) and September 30, 2025
Consolidated Statements of Operations for the three months ended December 31, 2025 and 2024 (unaudited)
5
Consolidated Statements of Changes in Net Assets for the three months ended December 31, 2025 and 2024 (unaudited)
6
Consolidated Statements of Cash Flows for the three months ended December 31, 2025 and 2024 (unaudited)
7
Consolidated Schedules of Investments as of December 31, 2025 (unaudited) and September 30, 2025
8
Notes to Consolidated Financial Statements (unaudited)
27
Report of Independent Registered Public Accounting Firm (PCAOB ID 49)
53
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
55
Item 3. Quantitative and Qualitative Disclosures About Market Risk
76
Item 4. Controls and Procedures
77
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
78
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
79
SIGNATURES
80
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; “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 Notes 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 borrowing issuance of AAA(sf) Class A-1 floating rate loans. (the "Class A-1 Loans" with the 2036-Secured Notes.); “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)
December 31, 2025
September 30, 2025
(unaudited)
Assets
Investments at fair value
Non-controlled, non-affiliated investments (amortized cost— $2,226,700 and $2,458,018, respectively)
$
2,238,775
2,491,360
Controlled, affiliated investments (amortized cost— $457,000 and $361,375, respectively)
366,572
281,968
Total investments (amortized cost— $2,683,700 and $2,819,393, respectively)
2,605,347
2,773,328
Cash equivalents (cost— $40,143 and $40,729, respectively)
40,143
40,729
Cash (cost— $55,121 and $81,955, respectively)
55,125
81,959
Interest receivable
13,017
13,832
Receivable for investments sold
37
1,369
Due from affiliate
239
321
Prepaid expenses and other assets
2,174
2,143
Total assets
2,716,082
2,913,681
Liabilities
Credit Facility payable, at fair value (cost— $488,855 and $683,855, respectively)
488,859
683,837
2026 Notes payable, net (par—$185,000) (unamortized deferred financing costs of $197 and $391, respectively)
184,803
184,609
2036 Asset-Backed Debt, net (par—$287,000) (unamortized deferred financing costs of $2,238 and $2,373, respectively)
284,762
284,627
2036-R Asset-Backed Debt, net (par— $287,000 and $266,000) (unamortized deferred financing costs of $439 and $634, respectively)
286,561
265,366
2037 Asset-Backed Debt, net (par— $389,500 and $361,000) (unamortized deferred financing costs of $2,475 and $2,669, respectively)
387,025
358,331
Payable for investments purchased
—
14,852
Interest payable on debt
16,109
19,172
Distributions payable
10,170
Base management fee payable
6,814
6,549
Incentive fee payable
6,660
6,883
Accounts payable and accrued expenses
2,662
2,166
Deferred tax liability
1,228
1,864
Due to affiliate
-
739
Total liabilities
1,675,653
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
(179,172
)
(145,085
Total net assets
1,040,429
1,074,516
Total liabilities and net assets
Net asset value per share
10.49
10.83
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended December 31,
2025
2024
Investment income:
From non-controlled, non-affiliated investments:
Interest
56,531
47,463
Dividend
577
Other income
761
1,480
From controlled, affiliated investments:
7,845
12,808
4,944
4,375
306
Total investment income
70,089
67,009
Expenses:
Interest and expenses on debt
27,154
22,361
Performance-based incentive fee
7,492
Base management fee
5,264
General and administrative expenses
1,200
Administrative services expenses
900
500
Expenses before amendment costs and provision for taxes
42,728
36,817
Provision for taxes on net investment income
225
Credit Facility amendment costs
498
Total expenses
43,451
37,042
Net investment income
26,638
29,967
Realized and unrealized gain (loss) on investments and debt:
Net realized gain (loss) on:
Non-controlled, non-affiliated investments
1,457
1,181
Non-controlled and controlled, affiliated investments
25,493
Provision for taxes on realized gain (loss) on investments
(73
Net realized gain (loss) on investments
26,601
Net change in unrealized appreciation (depreciation) on:
(21,266
2,943
(11,021
(31,904
Provision for taxes on unrealized appreciation (depreciation) on investments
636
632
Debt appreciation (depreciation)
(22
90
Net change in unrealized appreciation (depreciation) on investments and debt
(31,673
(28,239
Net realized and unrealized gain (loss) from investments and debt
(30,216
(1,638
Net increase (decrease) in net assets resulting from operations
(3,578
28,329
Net increase (decrease) in net assets resulting from operations per common share (See Note 7)
(0.04
0.35
Net investment income per common share
0.27
0.37
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(in thousands, except share issue data)
Net increase (decrease) in net assets from operations:
26,674
Net change in unrealized appreciation (depreciation) on investments
(32,287
(28,961
Net change in provision for taxes on realized and unrealized appreciation (depreciation) on investments
559
Net change in unrealized appreciation (depreciation) on debt
Distributions to stockholders:
Distribution of net investment income
(30,509
(25,181
Total distributions to stockholders
Capital transactions
Public offering
82,708
Offering costs
(499
Net increase in net assets resulting from capital transactions
82,209
Net increase (decrease) in net assets
(34,087
85,357
Net assets:
Beginning of period
877,294
End of period
962,651
Capital share activity:
Shares issued from public offering
7,276,000
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
32,287
28,961
22
(90
Net realized (gain) loss on investments
(1,457
(26,674
Net accretion of discount and amortization of premium
(1,632
(5,687
Purchases of investments
(205,415
(606,916
Payment-in-kind interest
(1,627
(1,378
Proceeds from dispositions of investments
345,821
401,300
Amortization of deferred financing costs
718
362
(Increase) decrease in:
815
(857
Receivable from investment sold
1,332
(29,090
Distribution receivable
58
(31
(4,828
82
(21
Increase (decrease) in:
(14,852
(19,892
(3,063
(1,327
265
676
(223
4,303
(636
(632
Due to affiliates
(739
Account payable and accrued expenses
496
733
Net cash provided by (used in) operating activities
148,585
(232,670
Cash flows from financing activities:
Proceeds from public offering
(496
Borrowings of 2037 Asset-Backed Debt
28,500
Borrowings of 2036-R Asset-Backed Debt
21,000
Distributions paid to stockholders
(30,510
(24,317
Borrowings under Credit Facility
27,000
165,001
Repayments under Credit Facility
(222,000
Net cash provided by (used in) financing activities
(176,010
222,896
Net increase (decrease) in cash and cash equivalents
(27,425
(9,774
Effect of exchange rate changes on cash
(14
Cash and cash equivalents, beginning of period
122,688
112,050
Cash and cash equivalents, end of period
95,268
102,262
Supplemental disclosures:
Interest paid
29,499
23,326
Taxes paid
32
Non-cash purchases and disposition of investments
95,625
CONSOLIDATED SCHEDULE OF INVESTMENTS
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 - 215.2% (3), (4)
First Lien Secured Debt - 195.4% of Net Assets
ACP Avenu Buyer, LLC
10/2/2023
10/02/2029
IT Services
8.41
%
3M SOFR+ 475
29,965
29,672
29,891
ACP Avenu Buyer, LLC - Unfunded Term Loan (8)
04/21/2027
10,872
ACP Avenu Buyer, LLC - Unfunded Revolver (6), (8)
7,612
(19
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
8,135
8,117
Ad.net Acquisition, LLC - Unfunded Revolver (6), (8)
1,244
Aechelon Technology, Inc.
8/16/2024
08/16/2029
Aerospace and Defense
9.48
1M SOFR+ 575
13,300
13,196
Aechelon Technology, Inc. - Unfunded Revolver (8)
4,719
AFC-Dell Holding Corp.
2/22/2024
04/09/2027
Distributors
8.84
3M SOFR+ 500
20,005
19,980
AFC-Dell Holding Corp. - Unfunded Term Loan (8)
7,213
AFC-Dell Holding Corp. - Unfunded Revolver (8)
10/09/2028
2,095
Alpine Acquisition Corp II (10)
8/27/2025
11/30/2026
Containers and Packaging
4,044
2,903
1,860
Amsive Holdings Corporation
3/2/2020
12/10/2026
9.92
3M SOFR+ 625
19,222
19,140
19,030
Aphix Buyer, Inc.
7/17/2025
07/17/2031
Business Services
8.48
9,615
9,555
Aphix Buyer, Inc. - Unfunded Term Loan (8)
07/16/2027
15,341
96
Aphix Buyer, Inc. - Unfunded Revolver (8)
3,995
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
(34
Anteriad, LLC (f/k/a MeritDirect, LLC)
5/21/2019
06/30/2026
9.57
3M SOFR+ 590
12,012
11,982
Anteriad, LLC (f/k/a MeritDirect, LLC) - Incremental Term Loan
1,956
1,952
Anteriad, LLC (f/k/a MeritDirect, LLC) - Unfunded Revolver (8)
2,869
Arcfield Acquisition Corp.
10/28/2024
10/28/2031
19,344
19,325
19,248
Arcfield Acquisition Corp. - Unfunded Revolver (6), (8)
3,547
(18
Archer Lewis, LLC
8/28/2024
08/28/2029
Healthcare Technology
9.42
3M SOFR+ 575
26,475
26,260
Archer Lewis, LLC - Unfunded Term Loan (8)
08/28/2026
13,292
133
Archer Lewis, LLC - Funded Revolver
3,252
Argano, LLC
9/13/2024
09/13/2029
9.23
3M SOFR+ 550
55,679
55,194
56,235
Argano, LLC – Unfunded Revolver (8)
1,421
Azureon, LLC (F/K/A Tpcn Midco, LLC)
6/26/2024
06/26/2029
Diversified Consumer Services
9.43
22,412
22,205
21,515
Azureon, LLC (F/K/A Tpcn Midco, LLC) - Unfunded Term Loan (8)
11/26/2027
13,499
(439
Azureon, LLC (F/K/A Tpcn Midco, LLC) - Funded Revolver
9.44
1,079
1,035
Azureon, LLC (F/K/A Tpcn Midco, LLC) - Unfunded Revolver (8)
2,696
(108
Beacon Behavioral Support Services, LLC
6/21/2024
06/21/2029
9.17
21,335
21,103
Beacon Behavioral Support Services, LLC - Unfunded Term Loan (8)
12/13/2026
5,945
59
Beacon Behavioral Support Services, LLC - Unfunded Term Loan - 3rd Amendment (8)
06/21/2027
23,451
235
Beacon Behavioral Support Services, LLC - Unfunded Revolver (8)
2,104
Best Practice Associates, LLC
11/7/2024
11/08/2029
10.52
3M SOFR+ 675
58,648
57,916
58,208
Best Practice Associates, LLC - Unfunded Revolver (8)
5,732
(43
Beta Plus Technologies, Inc.
2/29/2024
07/02/2029
Internet Software and Services
32,658
31,979
32,331
Big Top Holdings, LLC
03/01/2030
Construction & Engineering
8.92
3M SOFR+ 525
27,739
27,429
Big Top Holdings, LLC - Unfunded Revolver (8)
02/28/2030
4,479
Bioderm, Inc.
01/31/2028
Healthcare Equipment and Supplies
10.36
1M SOFR+ 650
990
982
977
Bioderm, Inc. - Funded Revolver
1/30/2023
1,071
1,058
CONSOLIDATED SCHEDULE OF INVESTMENTS-(Continued)
Blackhawk Industrial Distribution, Inc.
6/27/2022
09/17/2026
9.07
3M SOFR+ 540
8,106
8,084
7,944
Blackhawk Industrial Distribution, Inc. - Funded Revolver (6)
1,941
1,902
Blackhawk Industrial Distribution, Inc. - Unfunded Revolver (8)
(39
BLC Holding Company, Inc.
11/20/2024
11/20/2030
8.20
3M SOFR+ 450
19,305
19,187
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
8.72
6,036
5,977
5,975
Blue Cloud Pediatric Surgery Centers LLC - Unfunded Term Loan (8)
07/30/2027
4,469
Boss Industries, LLC
12/27/2024
12/27/2030
Independent Power and Renewable Electricity Producers
8.71
12,053
11,977
Boss Industries, LLC - Unfunded Revolver (8)
2,744
Burgess Point Purchaser Corporation
8/12/2024
07/25/2029
Auto Components
9.19
3M SOFR+ 535
18,674
17,589
15,766
By Light Professional IT Services, LLC
7/15/2025
07/15/2031
High Tech Industries
9.22
1M SOFR+ 550
20,843
20,790
By Light Professional IT Services, LLC - Unfunded Revolver (6), (8)
3,671
(37
Capital Construction, LLC
6/30/2025
10/22/2026
Consumer Services
9.56
7,980
7,940
7,880
Carisk Buyer, Inc.
11/27/2023
12/03/2029
8.67
5,404
5,345
5,444
Carisk Buyer, Inc. - Unfunded Term Loan (8)
7,868
130
Carisk Buyer, Inc. - Unfunded Revolver (6), (8)
1,750
13
Carnegie Dartlet, LLC
2/7/2024
02/07/2030
33,721
33,313
33,384
Carnegie Dartlet, LLC - Unfunded Term Loan (8)
02/09/2026
12,430
Carnegie Dartlet, LLC - Unfunded Revolver (8)
5,405
(54
Cartessa Aesthetics, LLC
6/1/2022
06/14/2028
9.67
3M SOFR+ 600
15,681
15,586
Cartessa Aesthetics, LLC - Unfunded Revolver (6), (8)
1,438
Case Works, LLC
10/1/2024
10/01/2029
8.97
15,954
15,841
15,683
Case Works, LLC - Funded Revolver
2,383
2,342
Case Works, LLC - Unfunded Revolver (8)
1,725
(29
Cf512, Inc.
8/17/2021
08/20/2026
9.98
3M SOFR+ 619
10,273
10,228
Cf512, Inc. - Funded Revolver
9.74
3M SOFR+ 602
86
85
Cf512, Inc. - Unfunded Revolver (6), (8)
869
(9
CJX Borrower, LLC
7/8/2021
07/13/2027
9.70
3M SOFR+ 576
8,290
8,213
CJX Borrower, LLC - Unfunded Term Loan (8)
335
62
CJX Borrower, LLC - Funded Revolver
543
CJX Borrower, LLC - Unfunded Revolver (8)
691
Coolsys, Inc.
08/11/2028
Commercial Services & Supplies
8.63
3M SOFR+ 501
2,245
1,939
1,984
Commercial Fire Protection Holdings, LLC
9/23/2024
09/23/2030
8.22
35,028
34,801
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
7.83
1M SOFR+ 400
11,673
11,171
11,121
Cornerstone Advisors of Arizona, LLC
5/13/2025
05/13/2032
Consulting Services
8.42
12,801
12,737
Cornerstone Advisors of Arizona, LLC - Unfunded Revolver (8)
1,705
Crane 1 Services, Inc.
8/11/2021
08/16/2027
9.08
4,221
4,191
4,189
Crane 1 Services, Inc. - Unfunded Revolver (6), (8)
502
(4
C5MI Acquisition, LLC
7/31/2024
07/31/2029
28,638
28,299
C5MI Acquisition, LLC - Funded Revolver
3,637
C5MI Acquisition, LLC - Unfunded Revolver (8)
5,456
DRI Holding Inc.
5/23/2024
12/21/2028
1M SOFR+ 535
13,134
12,911
12,871
DRS Holdings III, Inc.
10/29/2019
11/01/2028
Chemicals, Plastics and Rubber
6,613
6,585
6,679
DRS Holdings III, Inc. - Unfunded Revolver (6), (8)
Personal Products
487
Duggal Acquisition, LLC
9/30/2024
09/30/2030
Marketing Services
10,192
10,107
9
Duggal Acquisition, LLC - Unfunded Term Loan (8)
09/30/2026
4,470
45
Duggal Acquisition, LLC - Unfunded Revolver (8)
5,605
DX Electric Company, LLC
10/1/2025
10/01/2031
Electronic Equipment, Instruments, and Components
7,046
6,994
DX Electric Company, LLC - Unfunded Revolver (8)
1,257
Dynata, LLC - First Out Term Loan
7/15/2024
07/17/2028
9.14
3M SOFR+ 526
2,359
2,263
2,337
Dynata, LLC - Last Out Term Loan
10/16/2028
9.64
14,635
14,130
8,873
Emergency Care Partners, LLC
10/18/2024
10/18/2027
7,920
7,881
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
8.49
10,539
10,444
10,565
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
8,392
8,413
6,713
(PIK 2.5%)
ETE Intermediate II, LLC
5/24/2023
05/29/2029
1,651
1,642
ETE Intermediate II, LLC - Unfunded Revolver (8)
05/25/2029
2,429
Eval Home Care Solutions Intermediate, LLC
5/10/2024
05/10/2030
Healthcare, Education and Childcare
9.47
17,357
17,177
Eval Home Care Solutions Intermediate, LLC - Unfunded Revolver (8)
2,640
Exigo Intermediate II, LLC
03/15/2027
Software
10.12
1M SOFR+ 635
4,775
4,751
Exigo Intermediate II, LLC - Unfunded Revolver (8)
3/10/2022
689
(3
Express Wash Acquisition Company, LLC
4/10/2025
04/10/2031
Automobiles
10.18
34,936
34,769
33,363
Express Wash Acquisition Company, LLC - Unfunded Revolver (8)
2,139
(96
First Medical MSO, LLC
6/13/2025
06/13/2031
7,763
7,689
7,685
First Medical MSO, LLC - Unfunded Term Loan (8)
06/13/2027
4,700
First Medical MSO, LLC - Unfunded Revolver (6) (8)
1,000
(10
Five Star Buyer, Inc.
2/21/2023
02/23/2028
Hotels, Restaurants and Leisure
12.98
3M SOFR+ 915
5,199
5,147
5,069
(PIK 1.00%)
Five Star Buyer, Inc. - Unfunded Revolver (8)
370
Gauge ETE Blocker, LLC
05/21/2029
12.56
285
GGG Midco, LLC
9/27/2024
09/27/2030
24,921
24,706
GGG Midco, LLC - Unfunded Term Loan (8)
9,574
GGG Midco, LLC – Unfunded Revolver (8)
1,311
Global Holdings InterCo, LLC
3/11/2021
03/16/2026
Diversified Financial Services
9.33
1M SOFR+ 560
8,715
8,638
Graffiti Buyer, Inc.
8/9/2021
08/10/2027
Trading Companies & Distributors
9.29
3M SOFR+ 560
5,503
5,428
5,380
Graffiti Buyer, Inc. - Unfunded Term Loan (8)
984
(15
Graffiti Buyer, Inc. - Unfunded Revolver (6), (8)
865
Hancock Roofing and Construction, LLC
12/23/2020
12/31/2026
Insurance
9.27
3,916
3,895
3,721
Hancock Roofing and Construction, LLC - Funded Revolver (6)
9.32
750
713
Halo Buyer, Inc.
2/7/2025
08/07/2029
Consumer products
9.72
1M SOFR+ 600
10,572
10,478
Halo Buyer, Inc. - Funded Revolver
975
Halo Buyer, Inc. - Unfunded Revolver (8)
1,747
10
Harris & Co. LLC
8/9/2024
08/09/2030
88,129
87,407
87,468
Harris & Co. LLC. - Unfunded Term Loan B (8)
1,542
Harris & Co. LLC - Unfunded Term Loan C (8)
08/18/2027
4,192
Harris & Co. LLC - Funded Revolver
1M SOFR+ 500
1,924
1,910
Harris & Co. LLC - Unfunded Revolver (8)
7,696
(58
HEC Purchaser Corp.
7/25/2024
06/17/2029
9,430
9,344
Help/Systems Holdings, Inc.
9.97
3M SOFR+ 610
1,440
1,357
1,299
Hills Distribution, Inc.
11/2/2023
18,613
18,438
18,427
Hills Distribution, Inc. - Unfunded Term Loan (8)
12/05/2027
2,384
(12
HW Holdco, LLC
1/9/2019
05/11/2026
9.62
12,177
12,165
HW Holdco, LLC - Unfunded Revolver (6), (8)
1,452
IG Investments Holdings, LLC (6)
11/23/2021
09/22/2028
9,533
9,462
9,485
IG Investments Holdings, LLC - Unfunded Revolver (6), (8)
722
Imagine Acquisitionco, Inc. - Unfunded Revolver (8)
11/4/2021
11/16/2027
1,193
Impact Advisors, LLC
3/21/2025
03/19/2032
8.17
16,476
16,397
Impact Advisors, LLC - Unfunded Term Loan (8)
03/21/2027
9,723
49
Impact Advisors, LLC - Unfunded Revolver (8)
1,945
Infinity Home Services Holdco, Inc.
12/21/2022
12/28/2028
14,818
14,738
Infinity Home Services Holdco, Inc. (CAD)
CAD 1,700
1,229
1,240
Infinity Home Services Holdco, Inc. - Unfunded Term Loan (8)
10/30/2026
7,069
35
Infinity Home Services Holdco, Inc. - Unfunded Revolver (8)
1,292
Inovex Information Systems Incorporated
12/17/2024
12/17/2030
Inovex Information Systems Incorporated - Unfunded Term Loan (8)
12/17/2026
2,800
Inovex Information Systems Incorporated - Funded Revolver
11.25
3M SOFR+ 425
2,695
Inovex Information Systems Incorporated - Unfunded Revolver (8)
805
Infolinks Media Buyco, LLC
11/02/2026
10,153
10,129
9,849
Inventus Power, Inc.
6/29/2023
01/15/2026
11.33
3M SOFR+ 761
4,875
4,874
Inventus Power, Inc. - Unfunded Revolver (8)
1,729
Keel Platform, LLC
1/26/2024
01/20/2031
Metals and Mining
14,601
14,440
14,455
Keel Platform, LLC - Unfunded Term Loan (8)
3,260
(8
Kinetic Purchaser, LLC
11/8/2021
11/10/2027
9.82
3M SOFR+ 615
17,955
17,672
14,589
Kinetic Purchaser, LLC - Funded Revolver
11/10/2026
2,172
1,765
Kinetic Purchaser, LLC - Unfunded Revolver (6), (8)
1,262
(237
Lash OpCo, LLC
8/16/2021
02/18/2027
8.82
1M SOFR+ 510
16,378
16,260
15,969
(PIK 5.10%)
Lash OpCo, LLC - Funded Revolver (6)
08/16/2026
264
258
Lash OpCo, LLC - Unfunded Revolver (6) (8)
2,738
(68
LAV Gear Holdings, Inc.
7/31/2025
Capital Equipment
9.65
1M SOFR+ 595
9,642
9,651
9,967
LAV Gear Holdings, Inc. - Incremental TL
1M SOFR+ 594
1,105
1,075
1,343
LAV Gear Holdings, Inc. - Unfunded Revolver (6) (8)
703
Ledge Lounger, Inc.
2/7/2022
11/09/2026
Leisure Products
11.32
3M SOFR+ 765
8,070
7,890
6,496
Ledge Lounger, Inc. - Funded Revolver
702
565
Lightspeed Buyer, Inc.
1/21/2020
02/03/2027
22,860
22,781
Lightspeed Buyer, Inc. - Unfunded Revolver (6), (8)
2,499
LJ Avalon Holdings, LLC
1/18/2023
02/01/2030
8.29
11,785
11,741
LJ Avalon Holdings, LLC - Unfunded Term Loan (8)
02/08/2027
4,873
24
LJ Avalon Holdings, LLC - Unfunded Revolver (6), (8)
02/01/2029
2,883
11
Loving Tan Intermediate II, Inc.
05/31/2028
57,803
57,257
57,514
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
8.69
2,217
2,206
Loving Tan Intermediate II, Inc. - Unfunded Revolver (8)
5,173
(26
MAG DS Corp.
9/21/2020
04/01/2027
12,171
11,984
12,106
Marketplace Events Acquisition, LLC
12/19/2024
12/19/2030
8.95
64,780
64,216
Marketplace Events Acquisition, LLC - Funded Revolver
8.99
Marketplace Events Acquisition, LLC - Unfunded Revolver (8)
4,158
MBS Holdings, Inc.
04/16/2027
3M SOFR+ 510
499
497
MBS Holdings, Inc. - Unfunded Revolver (6), (8)
4/14/2021
1,157
MDI Buyer, Inc.
3/16/2023
07/25/2028
Commodity Chemicals
8.46
6,650
6,597
MDI Buyer, Inc. - Unfunded Term Loan (8)
2,815
21
MDI Buyer, Inc. - Funded Revolver
7/19/2022
11.50
3M SOFR+ 400
1,307
MDI Buyer, Inc. - Unfunded Revolver (6), (8)
571
Meadowlark Acquirer, LLC
12/9/2021
12/10/2027
3M SOFR+ 565
4,333
4,290
Meadowlark Acquirer, LLC - Funded Revolver
339
Meadowlark Acquirer, LLC - Unfunded Revolver (8)
1,354
Medina Health, LLC
10/16/2023
10/20/2028
9.95
17,480
17,291
Medina Health, LLC - Unfunded Revolver (8)
5,187
Megawatt Acquisitionco, Inc.
3/1/2024
9,825
9,538
Megawatt Acquisitionco, Inc. - Unfunded Revolver (8)
3,250
MOREgroup Holdings, Inc.
1/9/2024
01/16/2030
8.94
26,944
26,657
MOREgroup Holdings, Inc. - Unfunded Term Loan (8)
01/16/2026
11,056
111
MOREgroup Holdings, Inc. - Unfunded Revolver (8)
6,634
MES Intermediate, Inc.
9/23/2021
10/01/2027
13,996
13,931
MES Intermediate, Inc. - Funded Revolver
237
MES Intermediate, Inc. - Unfunded Revolver (6) (8)
1,066
NBH Group, LLC
8/29/2025
08/19/2026
9.71
1M SOFR+ 585
2,564
NBH Group, LLC - Unfunded Revolver (6), (8)
1,677
NORA Acquisition, LLC
8/22/2023
08/31/2029
10.02
3M SOFR+ 635
20,691
20,415
20,070
NORA Acquisition, LLC - Funded Revolver
2,466
2,392
NORA Acquisition, LLC - Unfunded Revolver (6), (8)
3,013
North American Rail Solutions, LLC
08/29/2031
Manufacturing/Basic Industry
30,424
30,272
North American Rail Solutions, LLC - Unfunded Term Loan (8)
08/29/2027
4,231
North American Rail Solutions, LLC - Funded Revolver
8.47
1,015
1,010
North American Rail Solutions, LLC - Unfunded Revolver (8)
4,908
(25
Omnia Exterior Solutions, LLC
12/29/2023
12/31/2029
23,457
23,299
23,163
Omnia Exterior Solutions, LLC - Unfunded Term Loan (8)
8,705
(33
Omnia Exterior Solutions, LLC - Funded Revolver
1M SOFR+ 525
2,240
2,212
Omnia Exterior Solutions, LLC - Unfunded Revolver (6), (8)
1,960
One Stop Mailing, LLC
5/26/2021
05/07/2027
Air Freight and Logistics
10.08
3M SOFR+ 636
12,866
12,813
ORL Acquisition, Inc. (6)
9/1/2021
09/03/2027
Consumer Finance
13.07
3M SOFR+ 940
7,891
7,629
6,155
(PIK 7.50%)
ORL Acquisition, Inc. - Unfunded Revolver (6), (8)
215
(47
OSP Embedded Purchaser, LLC
12/11/2023
12/17/2029
29,734
29,443
28,188
OSP Embedded Purchaser, LLC - Funded Revolver
9.75
293
278
OSP Embedded Purchaser, LLC - Unfunded Revolver (8)
2,639
(137
Output Services Group, Inc. - First-out Term Loan
11/30/2023
12.16
3M SOFR+ 843
828
12
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
4,900
4,839
4,782
Pacific Purchaser, LLC - Unfunded Revolver (8)
1,799
PAR Excellence Holdings, Inc.
9/3/2024
09/03/2030
8.74
20,379
20,212
20,023
PAR Excellence Holdings, Inc. - Unfunded Revolver (8)
4,692
(82
Paving Lessor Corp.
7/1/2025
07/01/2031
11,206
11,124
11,150
Paving Lessor Corp. - Unfunded Term Loan (8)
07/01/2027
8,632
Paving Lessor Corp. - Unfunded Revolver (8)
5,755
Peninsula Pacific Entertainment, LLC
8/15/2025
08/22/2032
Gaming
15,002
14,854
15,040
Peninsula Pacific Entertainment, LLC - Unfunded Term Loan (8)
08/25/2027
3,516
26
Penta Group Holdings, Inc.
07/31/2031
10,000
9,950
Penta Group Holdings, Inc. - Unfunded Term Loan (8)
07/31/2027
6,056
Penta Group Holdings, Inc. - Funded Revolver
946
942
Penta Group Holdings, Inc. - Unfunded Revolver (8)
568
PCS MIDCO, Inc.
9,205
9,110
9,251
PCS MIDCO, Inc. - Unfunded Term Loan (8)
03/02/2026
2,087
31
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)
10/14/2030
276
(2
Pink Lilly Holdco, LLC (10)
11/5/2021
11/09/2027
Textiles, Apparel and Luxury Goods
9,949
8,425
Pink Lilly Holdco, LLC - Funded Revolver (10)
611
Pink Lilly Holdco, LLC - Unfunded Revolver (8) (10)
534
(467
Podean Buyer, LLC
8/4/2025
08/04/2031
9.66
2,993
2,963
Podean Buyer, LLC - Unfunded Revolver (8)
1,579
(16
Project Granite Buyer, Inc.
12/31/2024
12/31/2030
7,852
7,999
Project Granite Buyer, Inc. - Unfunded Term Loan (8)
1,708
34
Project Granite Buyer, Inc. - Unfunded Revolver (8)
2,846
28
Puget Collision, LLC
10/3/2025
10/03/2031
8.43
6,144
6,106
Puget Collision, LLC - Unfunded Term Loan (8)
10/03/2027
24,766
Puget Collision, LLC - Funded Revolver
609
605
Puget Collision, LLC - Unfunded Revolver (8)
3,451
Pragmatic Institute, LLC (10)
3/28/2025
03/28/2030
587
573
357
Rancho Health MSO, Inc.
12/20/2024
06/20/2029
2,417
2,409
Rancho Health MSO, Inc. - Unfunded Term Loan (8)
3,034
Rancho Health MSO, Inc. - Unfunded Revolver (6), (8)
3,300
Recteq, LLC
1/27/2021
01/29/2026
10.07
3M SOFR+ 640
3,810
3,807
Recteq, LLC - Funded Revolver
9.84
583
Recteq, LLC - Unfunded Revolver (6), (8)
Rosco Parent, LLC
9/9/2025
09/12/2031
11,471
11,389
11,385
Rosco Parent, LLC - Funded Revolver
744
Rosco Parent, LLC - Unfunded Revolver (8)
2,133
Riverpoint Medical, LLC
6/19/2019
9,278
9,234
Riverpoint Medical, LLC - Unfunded Revolver (6), (8)
909
Ro Health, LLC
1/16/2025
01/17/2031
15,295
15,196
Ro Health, LLC - Funded Revolver
2,329
Ro Health, LLC - Unfunded Revolver (8)
5,435
RRA Corporate, LLC
8/15/2024
08/15/2029
25,827
25,600
25,026
RRA Corporate, LLC - Unfunded Term Loan (8)
08/17/2026
7,119
(149
RRA Corporate, LLC - Funded Revolver
4,265
4,133
RRA Corporate, LLC - Unfunded Revolver (8)
2,452
(76
RTIC Subsidiary Holdings, LLC
5/3/2024
05/03/2029
42,233
41,718
41,811
RTIC Subsidiary Holdings, LLC - Unfunded Revolver (8)
9,417
(94
Rural Sourcing Holdings, Inc.
6/8/2023
06/15/2029
2,224
2,188
2,002
Rural Sourcing Holdings, Inc. - Funded Revolver
438
Rural Sourcing Holdings, Inc. - Unfunded Revolver (6), (8)
373
Sabel Systems Technology Solutions, LLC
10/31/2024
10/31/2030
Government Services
59,624
59,064
Sabel Systems Technology Solutions, LLC - Unfunded Revolver (8)
4,978
Safe Haven Defense US, LLC
05/23/2029
Building Products
9.28
19,790
19,635
19,296
Safe Haven Defense US, LLC - Funded Revolver
876
854
Safe Haven Defense US, LLC - Unfunded Revolver (8)
2,044
(51
Sales Benchmark Index, LLC
12/23/2019
07/07/2026
9.87
3M SOFR+ 620
2,497
2,494
Sales Benchmark Index, LLC - Funded Revolver
431
Sales Benchmark Index, LLC - Unfunded Revolver (6), (8)
646
Sath Industries, LLC
Event Services
7,856
Sath Industries, LLC - Unfunded Revolver (8)
Schlesinger Global, Inc.
10/24/2019
03/31/2027
8,248
8,237
7,836
(PIK 5.85%)
Schlesinger Global, Inc. - Funded Revolver
1,691
1,606
Schlesinger Global, Inc. - Unfunded Revolver (6), (8)
401
(20
Seacoast Service Partners NA, LLC
12/20/2029
12,122
12,031
11,564
Seacoast Service Partners NA, LLC - Unfunded Term Loan (8)
12/21/2026
4,097
(153
Seacoast Service Partners NA, LLC - Funded Revolver
1,125
1,073
Seacoast Service Partners NA, LLC - Unfunded Revolver (8)
998
(46
Seaway Buyer, LLC
06/13/2029
9.88
1,877
1,861
1,792
Sigma Defense Systems, LLC
11/30/2021
12/20/2027
10.62
3M SOFR+ 690
21,777
21,517
21,559
Sigma Defense Systems, LLC - Unfunded Term Loan
5,031
Sigma Defense Systems, LLC - Unfunded Revolver (6), (8)
3,311
Smile Brands, Inc.
10/4/2018
10/12/2027
Healthcare and Pharmaceuticals
9.77
1M SOFR+ 610
4,616
4,361
4,057
(PIK 1.50%)
Smile Brands, Inc. - Funded Revolver
1,580
1,389
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
8.87
3M SOFR+ 515
3,722
3,701
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
789
705
671
STG Distribution, LLC - Second Out Term Loans (10)
1,824
541
137
SV-Aero Holdings, LLC
11/01/2030
15,178
15,114
SV-Aero Holdings, LLC - Unfunded Term Loan (8)
7,259
36
Symplr Software, Inc.
8.44
3M SOFR+ 460
679
626
575
Systems Planning And Analysis, Inc.
10/12/2021
39,256
39,018
39,138
Systems Planning And Analysis, Inc. - Funded Revolver
8.50
3,098
3,089
Systems Planning And Analysis, Inc. - Unfunded Term Loan (8)
06/12/2027
2,131
Systems Planning And Analysis, Inc. - Unfunded Revolver (8)
5,266
TCG 3.0 Jogger Acquisitionco, Inc.
1/23/2024
01/23/2029
10.17
3M SOFR+ 650
9,321
9,241
9,182
TCG 3.0 Jogger Acquisitionco, Inc. - Funded Revolver
12.25
1,165
1,147
TCG 3.0 Jogger Acquisitionco, Inc. - Unfunded Revolver (8)
Team Services Group, LLC
2/23/2024
9.09
15,713
15,568
15,645
The Bluebird Group, LLC
7/22/2021
07/28/2026
9.60
7,252
7,227
The Bluebird Group, LLC - Unfunded Revolver (6), (8)
862
The Vertex Companies, LLC (6)
8/25/2021
08/31/2028
15,521
15,422
15,428
The Vertex Companies, LLC - Funded Revolver
1,632
14
The Vertex Companies, LLC - Unfunded Revolver (6), (8)
3,831
(23
TMII Enterprises, LLC
12/22/2028
1,559
1,544
TMII Enterprises, LLC - Unfunded Revolver (6), (8)
748
TPC US Parent, LLC
11/15/2019
02/23/2026
Food Products
12,227
12,220
12,215
TransGo, LLC
12/29/2028
9.51
10,269
10,158
TransGo, LLC - Unfunded Revolver (6), (8)
4,440
Tyto Athene, LLC
3/26/2021
04/03/2028
8.56
3M SOFR+ 490
11,875
11,799
11,400
Walker Edison Furniture Company, LLC - New Money DIP
03/01/2029
Wholesale
10.00
243
253
Walker Edison Furniture Company, LLC - Unfunded Term Loan (8)
347
Watchtower Buyer, LLC
11/29/2023
12,739
12,622
Watchtower Buyer, LLC - Funded Revolver
9.69
1,050
Watchtower Buyer, LLC - Unfunded Revolver (8)
5,250
Wash & Wax Systems, LLC
4/30/2025
04/30/2028
9.34
6,431
6,532
6,559
Wash & Wax Systems, LLC - Funded Revolver
564
Wash & Wax Systems, LLC - Unfunded Revolver (6) (8)
282
Total First Lien Secured Debt
2,058,943
2,033,217
Second Lien Secured Debt - 0.1% of Net Assets
Team Services Group, LLC - 2nd Lien
12/18/2028
13.10
3M SOFR+ 926
996
995
Total Second Lien Secured Debt
Subordinate Debt - 1.8% of Net Assets
Beacon Behavioral Holdings, LLC
06/21/2030
15.00
5,429
5,379
Integrative Nutrition, LLC - Promissory Note #1
4/17/2025
04/15/2030
2,623
2,294
2,243
Integrative Nutrition, LLC - Promissory Note #2
04/15/2033
2,763
ORL Holdco, Inc. - Convertible Notes
8/2/2024
03/08/2028
18.00
ORL Holdco, Inc. - Unfunded Convertible Notes (8)
(13
OSP Embedded Purchaser, LP - Convertible Note
11/6/2024
05/08/2030
12.00
47
471
539
Schlesinger Global, LLC - Promissory Note
2/21/2024
3M SOFR+ 860
66
136
StoicLane, Inc. - Convertible Notes
3,051
3,585
Wash & Wax Systems, LLC - Subordinate Debt
07/30/2028
4,467
Total Subordinate Debt
18,504
19,149
Preferred Equity - 2.1% 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
AFC Acquisitions, Inc. Preferred Equity - Series F-2 (7)
12/7/2023
825
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)
19
16
AFC Acquisitions, Inc. Preferred Equity - Series J-2 (7)
17
Anteriad Holdings, LP (f/k/a MeritDirect Holdings, LP) - Preferred Equity (6), (7)
2,018
2,199
BioDerm Holdings, LP - Preferred Equity
1,313
1,314
Cartessa Aesthetics, LLC - Preferred Equity (7)
1,437,500
4,313
Connatix Parent, LLC
5,311
Consello Pacific Aggregator, LLC - Preferred Equity (7)
1,025,476
973
708
C5MI Holdco, LLC - Preferred Equity (7)
228,900
223
238
EvAL Home Health Solutions, LLC (7)
876,386
1,455
1,306
Five Star Parent Holdings, LLC - Preferred (Class P)
384
38
107
Gauge Schlesinger Coinvest, LLC - Preferred Equity
4/22/2020
64
Hancock Claims Consultants Investors, LLC - Preferred Equity (7)
116,588
HPA SPQ Aggregator, LP - Preferred Equity
52,353
52
Imagine Topco. LP - Preferred Equity
8.00
1,236,027
1,236
1,723
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
1,052
NXOF Holdings, Inc. - Preferred Equity
9/25/2018
1,935
1,415
ORL Holdco, Inc. - Preferred Equity
1,327
Pink Lily Holdco, LLC - Preferred Equity - Class A-1 (7)
122
Podean Intermediate II, LLC - Preferred Equity
570
582
RTIC Parent Holdings, LLC - Preferred Equity - Class A (7)
RTIC Parent Holdings, LLC - Preferred Equity - Class C (7)
18,450
1,215
2,602
RTIC Parent Holdings, LLC - Preferred Equity - Class D (7)
19,584
196
SP L2 Holdings, LLC - Preferred Equity
135,240
33
SP L2 Holdings, LLC - Unfunded Preferred Equity (8)
77,280
TPC Holding Company, LP - Preferred Equity
12/4/2019
409
447
15
TWD Parent Holdings, LLC - Preferred Equity
41
39
60
UniTek Global Services, Inc. - Super Senior Preferred Equity
1/13/2015
Telecommunications
20.00
320,711
322
675
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
19,199
21,942
Common Equity/Warrants - 15.7% of Net Assets(5)
A1 Garage Equity, LLC - Common Equity (7)
647,943
648
1,463
48Forty Intermediate Holdings, Inc. - Common Equity
529
ACP Big Top Holdings, LP - Common Equity
3,000,500
5,258
Ad.Net Holdings, Inc. - Common Equity
8,281
83
Aechelon InvestCo, LP
29,917
2,992
8,204
Aechelon InvestCo, LP - Unfunded Common Equity (8)
33,433
Aftermarket Drivetrain Products Holdings, LLC - Common Equity
2,632
4,518
AG Investco - Common Equity (6), (7)
11/5/2018
8,052
AG Investco - Unfunded Common Equity (7), (8)
1,948
(179
Altamira Parent Holdings, LLC - Common Equity
7/23/2019
1,323
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
3,546
Aphix Topco, Inc. - Common Equity
819,190
819
786
APT Holdings, LLC - Common Equity (7)
855,110
1,152
1,261
Azureon Holdings, LLC (7)
1,130,707
1,131
BioDerm Holdings, LP - Common Equity
Burgess Point Holdings, LP - Common Equity
7/21/2022
112
114
121
By Light Investco LP - Common Equity (7)
5/15/2017
22,789
13,452
Carisk Parent, LP - Common Equity
239,680
240
295
Carnegie HoldCo, LLC (7)
2,719,600
2,599
1,958
Connatix Parent, LLC - Common Equity
182,141
421
186
Crane 1 Acquisition Parent Holdings, LP - Common Equity
120
244
C5MI Holdco, LLC - Common Equity (7)
1,659,050
1,659
2,306
Delta InvestCo, LP - Common Equity (7)
12/16/2020
804,615
763
1,712
Delta InvestCo, LP - Unfunded Common Equity (7), (8)
200,255
Duggal Equity, LP - Common Equity
686
640
EDS Topco, LP - Common Equity
1,125,000
2,193
Events TopCo, LP - Common Equity
1,016,800
1,017
1,219
Exigo, LLC - Common Equity
541,667
542
226
FedHC InvestCo, LP - Common Equity (7)
8/26/2021
22,671
810
3,137
FedHC InvestCo, LP - Unfunded Common Equity (7), (8)
3,665
First Medical Holdings, LLC - Common Equity (7)
75,000
770
Five Star Parent Holdings, LLC - Common Equity
655,714
656
Gauge ETE Blocker, LLC - Common Equity
374,444
374
375
Gauge Lash Coinvest, LLC - Common Equity
2,057,387
1,588
3,144
Gauge Loving Tan, LP - Common Equity
5/25/2023
2,914,701
2,915
3,460
Gauge Schlesinger Coinvest, LLC - Common Equity
465
476
176
GCP Boss Holdco, LLC
2,194,800
2,195
3,292
GCOM InvestCo, LP - Common Equity
6/22/2021
19,184
3,342
5,122
GGG Topco, LLC (7)
2,759,800
2,760
3,664
GMP Hills, LP - Common Equity
4,430,843
4,431
5,627
Hancock Claims Consultants Investors, LLC - Common Equity (7)
450,000
448
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
1,490
Icon Partners V C, LP - Unfunded Common Equity (8)
497,862
(127
Imagine Topco. LP - Common Equity
IHS Parent Holdings, LP - Common Equity
1,218,045
1,218
1,608
Ironclad Holdco, LLC - Common Equity
6,355
668
1,658
ITC Infusion Co-invest, LP - Common Equity (7)
2/16/2022
116,032
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)
7/16/2021
Energy Equipment and Services
382,353
386
538
Lightspeed Investment Holdco, LLC - Common Equity (6)
585,587
586
LJ Avalon, LP - Common Equity
1,638,043
1,638
2,752
Marketplace Events Acquisition, LLC - Common Equity
40,990
4,099
5,319
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
1,122
1,084
Meadowlark Title, LLC - Common Equity (7)
819,231
806
328
Megawatt Acquisition Partners, LLC - Common Equity - Class A
1,040
104
Municipal Emergency Services, Inc. - Common Equity
9/28/2021
1,973,370
2,005
4,539
NEPRT Parent Holdings, LLC - Common Equity (7)
1,494
390
New Insight Holdings, Inc. (6)
203,819
3,565
2,322
New Medina Health, LLC - Common Equity (7)
2,672,646
2,673
5,263
NFS - CFP Holdings LLC - Common Equity
1,337,017
1,337
2,033
NORA Parent Holdings, LLC - Common Equity (7)
2,544
2,525
593
North Haven Saints Equity Holdings, LP - Common Equity (7)
2/25/2022
223,602
224
NXOF Holdings, Inc. - Common Equity
37,561
OceanSound Discovery Equity, LP - Common Equity (7)
3/28/2024
211,940
2,119
2,855
OES Co-Invest, LP - Common Equity - Class A
5/31/2024
1,560
1,888
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
(27
ORL Holdco, Inc. - Common Equity
1,474
OSP Embedded Aggregator, LP - Common Equity
1,728
1,978
Output Services Group, Inc. - Common Equity (6)
127,369
1,155
OSP PAR Aggregator, LP - Common Equity
3,160
3,171
2,741
Paving Parent, LLC - Common Equity (7)
3,057
3,434
Penta Group Holdings, Inc. - Common Equity
1,901,412
1,901
1,844
PCS Parent, LP
423,247
423
466
Pink Lily Holdco, LLC - Common Equity (7)
6/16/2017
Podean Intermediate II, LLC - Common Equity
11/18/2025
Pragmatic Holdco, Inc. - Common Equity
Project Granite Holdings, LLC
1,139
1,210
Quad (U.S.) Co-Invest, LP - Common Equity
235,194
QuantiTech InvestCo, LP - Common Equity (7)
700
97
QuantiTech InvestCo, LP - Unfunded Common Equity (7) (8)
10/3/2022
955
QuantiTech InvestCo II, LP - Common Equity (7)
5/1/2020
40
RFMG Parent, LP - Common Equity
1,050,000
1,230
Ro Health Holdings, Inc. - Common Equity
536,400
536
Rosco Topco, LLC - Common Equity
1,517,241
1,517
1,502
Safe Haven Defense Holdco, LLC - Common Equity (7)
641
SBI Holdings Investments, LLC - Common Equity
64,634
501
Sabel InvestCo, LP. - Common Equity (7)
89,712
2,271
2,746
Sabel InvestCo, LP. - Unfunded Common Equity (7), (8)
131,286
Seaway Topco, LP - Common Equity
296
89
Seacoast Service Partners, LLC - Common Equity
429
549
404
SP L2 Holdings, LLC - Common Equity
6/8/2022
52,821,386
SP DXE Holdings, LLC - Common Equity (7)
553,592
554
581
SSC Dominion Holdings, LLC - Common Equity - Class B (US Dominion, Inc.) (6)
807
StellPen Holdings, LLC (CF512, Inc.) - Common Equity
161,538
162
118
SV-Aero Holdings, LLC - Common Equity (7)
7/11/2018
61
489
1,460
TAC Lifeport Holdings, LLC - Common Equity (7)
533,833
1,036
TCG 3.0 Jogger Co-Invest, LP - Common Equity
12/6/2023
9,108
1,760
1,023
Tower Arch Infolinks Media, LP - Common Equity (7)
2/24/2021
224,698
142
Tower Arch Infolinks Media, LP - Unfunded Common Equity (7) (8)
1/22/2024
140,908
(52
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)
4,594
4,923
UniTek Global Services, Inc. - Common Equity
213,739
UniVista Insurance - Common Equity (7)
10/29/2024
400
113
Wash & Wax Group, LP - Common Equity (7)
2,747
4,941
3,435
Watchtower Holdings, LLC - Common Equity (7)
6/14/2021
12,419
1,242
1,404
WCP Ivyrehab Coinvestment, LP - Common Equity - Incremental (7)
208
WCP Ivyrehab Coinvestment, LP - Common Equity (7)
3,754
3,853
5,299
WCP Ivyrehab Coinvestment, LP - Unfunded Common Equity (7) (8)
246
White Tiger Newco, LLC - Common Equity (6)
38,019
2,899
280
Unitek Global Services, Inc. - Warrants
23,889
Kentucky Racing Holdco, LLC - Warrants (7)
87,345
949
Total Common Equity/Warrants
129,058
163,472
Total Investments in Non-Controlled, Non-Affiliated Portfolio Companies
2,226,700
Investments in Controlled, Affiliated Portfolio Companies - 35.2% of Net Assets (3), (4)
First Lien Secured Debt - 22.8% of Net Assets
PennantPark Senior Secured Loan Fund I, LLC (6), (9)
8/10/2020
05/07/2029
Financial Services
11.88
3M SOFR+ 800
237,650
PennantPark Senior Secured Loan Fund II, LLC (6), (9)
08/08/2032
11.89
39,375
277,025
Equity Interests - 8.6% of Net Assets
PennantPark Senior Secured Loan Fund I LLC - Common Equity (6), (9)
163,100
72,690
PennantPark Senior Secured Loan Fund II LLC - Common Equity (6), (9)
16,875
16,857
Total Equity Interests
179,975
89,547
Total Investments in Controlled, Affiliated Portfolio Companies
457,000
Total Investments - 250.4% of Net Assets (11), (12)
2,683,700
Cash Equivalents - 3.9% of Net Assets
BlackRock Federal FD Institutional 30 (Money Market Fund)
3.69
7,722
Blackrock Liq Fedfund Gov CL Inst (Money Market Fund)
3.64
15,536
JPMorgan US Dollar Liquidity Inst (Money Market Fund)
3.81
4,129
JPMorgan U.S. Government (Money Market Fund)
3.61
3,948
Goldman Sachs Financial Square Government Fund (Money Market Fund)
3.71
8,808
Total Cash Equivalents
Cash - 5.3% of Net Assets
Cash
55,121
Total Cash
Total Investments, Cash Equivalents, and Cash - 259.6% of Net Assets
2,778,964
2,700,615
Liabilities in Excess of Other Assets - (159.6)% of Net Assets
(1,660,186
Net Assets - 100%
—————
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
ACP Falcon Buyer, Inc.
9.79
818
827
10.26
6,583
6,570
Ad.net Acquisition, LLC - Funded Revolver
426
9.91
13,440
13,331
Aechelon Technology, Inc. - Funded Revolver
10.66
1,666
3,054
19,768
19,739
19,669
7,460
08/09/2025
2,103
10.35
19,273
19,166
19,080
8.91
9,639
9,579
9,591
APT OPCO, LLC
9.00
17,500
17,391
9.90
14,707
14,644
1,985
1,979
Anteriad, LLC (f/k/a MeritDirect, LLC) - Funded Revolver (6)
410
2,460
9.31
19,393
19,374
2,874
32,675
32,401
Archer Lewis, LLC - Unfunded Revolver (8)
9.89
50,851
50,401
50,088
Argano, LLC - Unfunded Term Loan (8)
10/02/2026
7,449
16,854
16,673
16,365
1,032
1,002
1,548
(45
9.50
31,929
31,585
12/22/2025
7,749
10.91
58,796
58,047
58,355
32,742
32,027
32,415
34,812
34,384
10.77
992
981
980
9.40
8,126
8,095
7,984
1,717
2,135
23,155
23,007
BLC Holding Company, Inc. - Funded Revolver
484
3,914
4,988
4,938
5,517
17,952
17,833
18,722
17,573
16,184
41,446
41,135
(28
10.20
8,000
7,950
Capital Construction, LLC - Unfunded Term Loan (8)
12/30/2025
14,459
(36
11,309
11,234
71
33,807
33,385
33,469
15,721
15,614
Cartessa Aesthetics, LLC - Funded Revolver (6)
511
927
9.25
20,486
20,336
19,564
3,903
3,727
205
10.19
10,300
10,240
10,197
8,201
446
642
2,251
1,920
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
11,703
11,165
11,391
8.75
12,833
12,769
10.03
6,756
6,703
6,705
28,710
28,357
9,093
13,168
12,931
12,905
11/03/2025
9.41
6,714
6,707
6,781
10,218
10,130
9.46
2,365
2,261
2,354
9.96
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
ETE Intermediate II, LLC - Funded Revolver
166
2,264
17,758
17,568
10.51
4,787
10.58
35,023
34,852
34,183
7,481
7,408
7,406
11.46
3M SOFR+ 715
5,214
5,155
5,110
(7
36,984
36,653
09/27/2026
5,830
9,134
8,967
5,518
5,431
5,407
Graffiti Buyer, Inc. - Funded Revolver
829
3,891
3,877
9.76
10.16
10,599
10,502
522
2,200
80,066
79,412
79,365
16,832
1,683
1,669
7,936
(69
6/17/2024
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
14,855
14,770
14,825
CAD 1,704
1,231
1,225
Infinity Home Services Holdco, Inc. - Funded Revolver
161
1,130
7,885
3,499
10,155
10,125
10,104
11.78
4,888
4,880
Inventus Power, Inc. - Funded Revolver
11.76
403
1,325
14,437
17,641
15,262
10.15
1,846
(189
1M SOFR+ 785
16,168
16,026
15,763
969
945
2,026
10.10
9,581
9,930
(PIK 3.44%)
1,098
1,067
1,353
11.65
7,605
7,380
5,932
663
518
22,918
22,824
11,815
11,770
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
56,198
55,699
Marketplace Events Acquisition, LLC - Unfunded Term Loan (8)
06/19/2026
8,717
87
610
5,486
4/7/2025
9.30
5,632
5,630
5,066
5,021
4,416
3M SOFR+ 375
1,524
353
4,344
4,295
10.31
20,795
20,600
20,899
9,850
9,545
9,377
Megawatt Acquisitionco, Inc. - Funded Revolver
406
387
2,844
32,013
31,653
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
2,571
20,743
20,443
20,588
2,447
55,000
54,725
1,467
4,456
23,484
23,315
23,014
(98
2,520
2,470
1,680
10.53
12,941
12,881
13.70
7,710
6,823
36,810
36,445
36,294
2,932
(41
12.71
10.96
10.42
7,123
7,034
7,095
27,431
27,186
26,951
21,390
21,231
21,230
9.02
14,965
15,000
14,925
492
490
1,022
(5
11,843
11,755
Pink Lilly Holdco, LLC (12)
4.35
9,780
8,422
3,912
Pink Lilly Holdco, LLC - Funded Revolver (12)
4.27
Pink Lilly Holdco, LLC - Unfunded Revolver (8) (12)
(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)
2,420
880
10.40
3,820
3,809
10.46
360
359
8.81
22,000
21,835
9,728
9,682
15,337
15,235
17,699
17,546
17,593
15,312
3,090
3,071
3,627
47,340
46,734
46,867
RTIC Subsidiary Holdings, LLC - Funded Revolver
3,296
3,263
6,121
(61
2,201
2,161
1,981
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
9.20
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
855
(50
1,882
1,755
26,344
26,096
Sigma Defense Systems, LLC - Funded Revolver
10.90
764
2,548
Smartronix, LLC
2/6/2025
02/06/2032
8.66
1M SOFR+ 450
5,970
5,914
5,992
10.43
4,609
4,323
3,978
1,047
903
531
2,949
2,929
2,922
STG Distribution, LLC - First Out New Money Term Loans
12.57
1M SOFR+ 835
784
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
8.90
774
768
(6
7,590
9,345
9,259
9,298
437
435
1,990
15,753
15,590
15,687
13,608
13,569
1M SOFR+ 495
22,561
22,428
22,448
2,007
1,996
3,466
3,543
3,527
11/24/2025
12,259
12,251
12,161
10,904
10,785
10,985
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
2,400
3/1/2023
228
590
12,772
12,643
12,644
6,300
(63
9.81
6,446
6,568
830
2,289,071
2,275,982
13.57
Subordinate Debt - 1.7% of Net Assets
5,229
5,176
2,276
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
672
602
1,380
1,308
790
1,315
164
134
1,689
43
2,021
1
23
2,246
441
18,556
20,652
Common Equity/Warrants - 16.4% of Net Assets(5)
1,150
7,467
75
11,379
4,899
(177
1,335
3,449
868
961
15,662
210
254
1,526
1,557
629
1,297
3,006
First Medical Holdings, LLC - Common Equity
773
288
4,059
3,755
3,182
5,115
3,586
5,494
194
46
1,973
1,450
1,195
3,156
385
638
2,129
2,621
Lucky Bucks Holdco, LLC - Common Equity
73,870
2,062
392
4,848
1,054
4,105
236
3,055
4,161
1,622
1,238
2,643
1,326
1,166,407
1,166
83,593
(38
1,046
3,037
Paving Parent, LLC - Common Equity
2,863
1,191
364
233
724
3,007
413
360,103
1,159
513
1,504
1,260
1,182
223,849
103
263
141,758
4,702
5,196
Urology Partners Co., LP - Common Equity
1/20/2023
694,444
694
2,910
5,062
1,107
268
4,841
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
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
______________
25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2025
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 intendto 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 theCompany. We comply with the provisions of Section 18 of the 1940 Act governing capital structure and leverage on an aggregate basis with our subsidiaries. Oursubsidiaries 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 subsidiaryadvised by an investment adviser other than the Investment Adviser, the investment adviser to such subsidiaries will comply with the provisions of the 1940 Act relatingto 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 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 in 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 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
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
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.
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 months ended December 31, 2025 we did not issue any shares of our common stock under the ATM Programs. During the three months ended December 31, 2024 we issued 7,276,000 shares of our common stock under the ATM Programs. During the three months ended December 31, 2024, shares were issued at a weighted average price of $11.30 per share, resulting in net proceeds of $82.2 million after commissions to the sales agents and inclusive of proceeds from the Investment Adviser to ensure that all shares were sold at or above NAV. During the quarter ended December 31, 2025 and 2024, we incurred zero and less than $0.1 million, respectively, of legal and other offering costs associated with establishing the ATM Programs. As of December 31, 2025 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 Advisor 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 December 31, 2025, we had four portfolio companies on non-accrual status, representing 0.5% and 0.1% 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 months ended December 31, 2025 and 2024, we recorded a provision for taxes on net investment income of $0.2 million and $0.2 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 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 months ended December 31, 2025, the Company recorded a provision for taxes of $0.6 million on unrealized appreciation (depreciation) on investments by the Taxable Subsidiary. For the three months ended December 31, 2024, the Company recorded a provision for taxes of $0.6 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 December 31, 2025, and September 30, 2025, $1.2 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 months ended December 31, 2025 and 2024, the Company recorded a provision for taxes of zero and $0.1 million relating to realized gain (loss) on investments held by the Taxable Subsidiary. During the three months ended December 31, 2025 and 2024, the Company paid zero and zero in taxes 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.
29
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 sale of our shares of common stock, with an aggregate offering price of up to $500.0 million under an at-the-market offering program (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, 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 March 2020, the FASB issued Accounting Standards Update, or ASU, No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and
30
other transactions, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The FASB approved an (optional) two year extension to December 31, 2024, for transitioning away from LIBOR. The Company adopted ASU 2020-04, the effect of which was not material to the consolidated financial statements and the notes to the consolidated financial statements.
In June 2022, the FASB issued Accounting Standards Update No. 2022-03, or ASU, 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, or ASU 2022-03, which changed the fair value measurement disclosure requirements of ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820. The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods therein. Early application is permitted. The Company has adopted the new accounting standard, the effect of which was not material to the consolidated financial statements and the notes thereto.
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 2025. 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 months ended December 31, 2025 and 2024, we recorded a base management fee of $6.8 million and $5.3 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 months ended December 31, 2025 and 2024, we recorded $6.7 million and $7.5 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 months ended December 31, 2025 and 2024, 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 months ended December 31, 2025 and 2024 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 2025. 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 months ended December 31, 2025 and 2024, we recorded administrative expenses of $0.7 million and $0.4 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 months ended December 31, 2025 and 2024.
For the three months ended December 31, 2025 and 2024, we sold $132.5 million and $187.7 million in investments to PSSL at fair value, respectively, and recognized $0.3 million and $(0.1) million of net realized gain (losses).
For the three months ended December 31, 2025 and 2024, we sold $196.5 million and zero in investments to PSSL II at fair value, respectively, and recognized $0.4 million and zero of net realized gain (losses).
For the three months ended December 31, 2025 and 2024, we sold no investments to PTSF.
As of December 31, 2025 and September 30, 2025, the Company had a receivable from the Administrator of $0.2 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 December 31, 2025 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 months ended December 31, 2025 and 2024, purchases of investments, including payment-in-kind ("PIK") interest totaled $302.7 million and $608.3 million, respectively. Sales and repayments of investments for the three months ended December 31, 2025 and 2024, totaled $441.4 million and $401.3 million, respectively.
Investments and cash and cash equivalents consisted of the following:
($ in thousands)
Investment Classification
Fair Value
First lien
First lien in PSSL
First Lien in PSSL II
Second Lien
Subordinate debt
Equity
148,257
185,414
150,565
196,397
Equity interests in PSSL
Equity interests in PSSL II
Total investments
Cash and cash equivalents
122,684
Total investments and cash and cash equivalents
2,778,968
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
December 31, 2025 (1)
September 30, 2025 (1)
Fair Value Percentage
Net asset value Percentage
$222,290
$219,021
10%
21%
$252,226
$248,621
23%
203,104
212,795
222,607
236,703
22%
177,221
176,321
8%
17%
169,182
169,013
7%
16%
150,158
151,589
15%
195,695
199,549
19%
152,611
147,692
14%
171,987
169,086
124,871
122,810
5%
12%
121,706
120,861
11%
104,780
107,216
123,257
125,392
102,259
98,606
4%
99,851
99,069
9%
88,616
94,571
84,194
88,795
87,455
91,726
106,806
110,299
88,972
91,481
103,230
105,500
All Other
81,318
67,204
3%
85,819
74,927
1%
62,433
65,927
6%
70,373
73,060
61,335
62,370
28,870
29,837
57,965
56,422
97,385
95,499
49,483
51,275
2%
43,733
44,241
41,517
39,994
34,935
34,207
34,205
56,769
34,478
34,193
39,660
40,012
31,287
31,257
56,192
30,493
30,674
31,104
32,224
27,976
28,093
36,349
36,530
29,502
27,911
28,840
28,878
19,852
21,858
29,575
31,850
21,152
20,103
20,322
19,964
19,904
19,157
17,716
17,453
14,172
15,345
20,028
21,134
15,066
14,974
14,447
14,326
14,406
19,307
19,365
14,059
13,674
14,122
13,785
12,728
0%
12,761
12,651
12,662
12,681
12,602
13,625
12,397
13,571
15,106
12,512
12,032
12,478
11,534
11,453
11,547
11,024
Total
$2,226,704
$2,238,775
100%
215%
$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 December 31, 2025 and September 30, 2025, PSSL had total assets of $1,235.2 million and $1,153.7 million, respectively, and its investment portfolio consisted of investments in 120 and 117 portfolio companies, respectively. As of December 31, 2025, at fair value, the largest investment in a single portfolio company in PSSL was $25.0 million and the five largest investments totaled $110.0 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 December 31, 2025 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 months ended December 31, 2025, the Company made capital contributions of 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 December 31, 2025.
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 December 31, 2025. 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:
1,195,016
1,084,649
Weighted average cost yield on income producing investments
9.6
10.1
Number of portfolio companies in PSSL
117
Largest portfolio company investment
24,965
20,901
Total of five largest portfolio company investments
110,044
99,270
Below is a listing of PSSL’s individual investments as of December 31, 2025 (Par and $ in thousands):
Basis PointSpread AboveIndex (1)
Par or Numberof Shares
First Lien Secured Debt - 1,422.7% of Net Assets
10/6/2023
10/2/2029
8.74%
SOFR+475
19,963
19,743
19,913
8/1/2029
9.49%
SOFR+550
18,526
18,271
18,711
9/30/2031
8.67%
SOFR+500
12,469
12,402
12,313
5/24/2021
5/7/2026
9.93%
SOFR+626
12,749
12,713
8/16/2029
9.47%
SOFR+575
11,520
12/23/2024
4/9/2027
8.84%
7,601
7,573
9/3/2025
7/17/2031
8.47%
8,978
8,928
Alpine Acquisition Corp II (4)
10/11/2022
13,128
12,990
6,039
6/30/2026
Media: Advertising, Printing & Publishing
9.57%
SOFR+590
11,136
11,075
11/11/2024
5,940
5,931
5,910
11/22/2024
8/28/2029
9.42%
14,862
14,786
1/9/2025
9/13/2029
9.22%
12,369
12,255
12,493
6/26/2029
4,962
4,859
4,764
10/9/2024
6/21/2029
9.17%
24,781
11/8/2029
10.47%
SOFR+675
14,887
14,756
14,776
7/2/2029
4,838
4,784
4,789
3/1/2030
8.92%
SOFR+525
14,633
14,430
BioDerm, Inc.
2/28/2023
1/31/2028
10.36%
SOFR+650
8,775
8,714
8,665
6/30/2022
9/17/2026
9.07%
SOFR+540
14,699
14,481
8.17%
SOFR+450
4,939
4,894
7/25/2029
Automotive
9.19%
SOFR+535
416
369
8/28/2025
7/15/2031
18,446
18,345
18,261
3/7/2025
7/31/2029
9.67%
SOFR+600
14,813
14,640
9.89%
4,263
4,241
4,210
10/16/2024
12/3/2029
9,900
9,843
9,974
4/11/2025
2/7/2030
15,052
14,865
14,901
4/11/2023
6/14/2028
10/1/2029
14,850
14,749
14,598
CF512, Inc.
12/27/2021
8/20/2026
9.98%
SOFR+619
6,466
6,439
6,401
11/26/2024
9/23/2030
19,787
19,701
1/12/2024
11.22%
SOFR+750
6,619
6,472
5,858
7/29/2021
7/13/2027
9.70%
SOFR+576
3,725
8/16/2027
9.08%
SOFR+536
2,041
2,029
9/15/2022
2,567
2,432
2,516
11/1/2028
Consumer Goods: Durable
8.97%
4,420
4,413
4,464
9/30/2030
8.42%
4,898
Dynata, LLC - First Out Term Loan (5)
7/17/2028
9.14%
1,276
1,331
9.64%
8,333
5,052
1/10/2029
8,753
8,677
7,184
7,157
11/21/2022
3/15/2027
10.07%
SOFR+635
12,384
12,312
12,322
6/12/2023
5/29/2029
8.72%
12,093
11,929
EvAL Home Care Solutions Intermediate, LLC
7/10/2024
5/10/2030
8,623
8,511
GGG MIDCO, LLC
9/27/2030
24,511
24,433
6/8/2021
3/16/2026
9.33%
SOFR+560
3,344
3/15/2022
8/10/2027
3,675
3,653
3,593
5/22/2025
8/7/2029
Consumer Products
9.72%
6,451
6,332
Hancock Roofing And Construction, LLC
9.27%
2,112
2,102
Harris & Co, LLC
8/9/2030
19,750
19,601
19,602
6/17/2029
8.87%
6,602
8,230
8,148
5/11/2026
9.80%
3,441
3,433
Imagine Acquisitionco, Inc.
8.98%
SOFR+510
9,036
8,948
5,952
5,882
3/3/2025
8,122
8,069
7/11/2023
1/15/2026
11.33%
SOFR+761
8,060
8,059
9.82%
SOFR+615
13,492
13,358
10,962
10/14/2021
2/18/2027
10.94%
SOFR+710
15,710
15,619
15,317
LAV Gear Holdings, Inc. - Takeback TL (5)
9.65%
SOFR+594
7,660
LAV Gear Holdings, Inc. - Priority TL (5)
2,424
2,396
2,945
2/3/2027
16,191
16,153
2/1/2030
Environmental Industries
8.46%
2,527
2,491
10/25/2023
5/31/2028
12,098
12,144
9/27/2023
4/1/2027
2,187
2,147
2,176
1/13/2025
9.12%
16,873
16,732
4/16/2027
8,223
8,173
7/25/2028
8.57%
6,235
6,171
1/29/2022
9.32%
SOFR+565
2,317
2,300
11/6/2023
9.92%
SOFR+625
18,833
18,628
4/29/2024
15,474
15,302
3/22/2024
1/16/2030
17,890
17,750
MES Internediate, Inc.
10/1/2027
3,351
3,328
8/19/2026
Healthcare, Education & Childcare
9.71%
SOFR+585
10,325
10,288
8/31/2029
10.02%
21,005
20,731
20,375
8/29/2031
17,456
17,383
17,369
11/1/2024
16,915
16,787
16,704
5/7/2027
10.08%
SOFR+636
15,394
15,283
ORL Acquisition, Inc. (5)
9/3/2027
13.07%
SOFR+940
2,284
2,275
1,782
11/19/2024
14,668
14,090
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
1,667
3,823
3,781
3,842
10/2/2028
9.85%
11,788
11,649
11,505
10/16/24
9/3/2030
8.77%
10,905
10,815
10,714
Paving Lessor Corp. First Lien -Term Loan
7/1/2031
8.94%
19,877
19,744
19,777
PN Buyer, Inc.
9/8/2025
7/31/2031
9,954
Pink Lilly Holdco, LLC (4),(5)
11/9/2027
8,503
8,414
1,063
8/4/2031
9.66%
4,942
Pragmatic Institute, LLC (4)
3/28/2030
Education
4,292
4,190
2,608
6,361
6,516
10/3/2031
14,918
14,906
8/15/2029
7,681
7,622
7,443
5/3/2029
14,837
14,679
14,689
6/20/2029
8.99%
18,718
18,657
1/29/2026
SOFR+640
4,763
4,761
1/17/2031
10,490
10,422
9/12/2031
10,500
10,432
10,421
9/6/2023
6/15/2029
4,349
4,296
5,955
5,905
9/19/2024
5/23/2029
Construction and Building
9,837
9,726
7/7/2026
9.87%
SOFR+620
9,158
9,146
10,280
10,193
9/30/2021
3/31/2027
SOFR+610
6,711
6,376
6/13/2029
4,794
4,620
10.62%
SOFR+690
20,221
20,281
9.77%
12,341
12,256
10,848
3/1/2028
9.15%
SOFR+515
4,018
3,983
STG Distribution, LLC - First Out New Money Term Loans (4)(5)
10/24/2024
10/3/2029
1,887
STG Distribution, LLC - Second Out Term Loans (4),(5)
4,559
2,562
342
11/1/2030
14,625
14,563
14,400
14,317
14,357
8.22%
2,866
2,831
4/26/2024
1/23/2029
10.17%
19,380
19,146
19,089
10/4/2022
9.09%
5,314
5,292
7/28/2026
7,214
7,187
The Vertex Companies, LLC
8/31/2028
Construction and Engineering
8.75%
17,438
17,283
17,333
2/23/2026
Consumer Goods: Non-Durable
16,313
16,302
16,297
Transgo, LLC
1/19/2024
15,830
15,657
5/5/2021
4/3/2028
8.88%
SOFR+490
14,604
14,545
14,015
Walker Edison Furniture Company, LLC - Unfunded Term Loan (3),(5)
3/1/2029
Walker Edison Furniture Company, LLC - New Money DIP (5)
10.00%
146
151
5/20/2024
12,036
11,895
Wash & Wax Systems LLC (5)
4/30/2028
9.34%
5,833
5,924
5,950
1,206,530
1,181,870
Subordinate Debt - 9.2% of Net Assets
Integrative Nutrition, LLC
4/15/2030
1,641
1,605
4/15/2033
4,275
1,977
Wash & Wax Systems LLC
7/30/2028
12.00%
4,052
4,053
7,671
7,634
Equity Securities - 6.6% of Net Assets
11/5/2024
1,722
New Insight Holdings, Inc. - Common Equity
116,055
2,031
1,322
Output Services Group, Inc. - Common Equity
126,324
1,012
808
Wash & Wax Group, LP - Common Equity
2,493
4,449
3,118
White Tiger Newco, LLC - Common Equity (5)
35,834
2,734
Total Equity Securities
10,226
5,512
Total Investments - 1,438.5% of Net Assets (6)(7)
1,224,427
Cash Equivalents - 22.7% of Net Assets
BlackRock Federal FD Institutional 81 ( Money Market Fund)
3,715
Blackrock Liquidity Fed Fund Inst (Money Market Fund)
3,635
JP Morgan USD Liquidity Inst (Money Market Fund)
4,293
JP Morgan US Government Fund (Money Market Fund)
18,863
Cash - 17.9% of Net Assets
14,853
Total Investments, Cash Equivalents, and Cash —1,479.1% of Net Assets
1,258,143
1,228,732
Liabilities in Excess of Other Assets — (1,379.1)% of Net Assets
(1,145,657
Members' Equity—100.0%
83,075
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
8.91%
9,000
8,951
8,955
13,154
13,012
6,840
9.90%
4,434
4,357
4,360
9.31%
5,946
5,925
9.75%
9,821
9,819
9,752
4,975
4,865
4,831
9.50%
17,748
17,549
10.91%
14,792
4,850
4,802
9.25%
14,671
14,458
10.77%
8,798
8,730
8,688
9.40%
14,816
14,714
14,557
8.50%
4,952
9.00%
4,904
9.51%
378
4,963
14,670
4,236
4,220
9,925
9,863
15,090
14,897
14,939
9,441
9,359
14,783
14,218
6,483
6,447
6,418
19,837
11.66%
6,637
6,479
6,206
3,735
3,708
10.03%
SOFR+586
2,046
2,034
2,574
2,522
11/3/2025
9.41%
4,487
4,532
4,950
4,909
9.46%
SOFR+526
1,347
1,273
1,341
9.96%
8,354
6,802
8,776
8,694
8,797
5,911
10.51%
12,416
12,335
9.16%
12,124
11,950
8,822
8,704
19,573
19,491
9.74%
3,505
3,503
3,685
3,660
3,611
10.16%
6,468
6,344
9.60%
2,100
2,091
19,800
19,650
19,627
3,606
3,572
10.32%
8,867
8,761
3,431
11/15/2027
9,060
8,961
5,968
5,891
8,143
8,087
11.78%
8,081
8,062
10.15%
13,344
11,468
SOFR+785
15,508
15,400
15,120
10.10%
2,381
2,967
16,232
16,187
2,533
12,279
12,164
Lucky Bucks, LLC - First-Out Term Loan (5)
Hotel, Gaming and Leisure
SOFR+765
2,146
2,184
16,769
9.30%
8,244
8,186
8.95%
6,251
6,181
2,323
2,303
10.25%
18,927
15,514
15,338
14,769
12,935
12,788
3,360
3,332
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
1,975
9.76%
14,900
14,695
14,691
12.71%
SOFR+843
10.96%
SOFR+668
3,833
3,787
10.42%
11,818
11,669
10,933
10,836
10,741
9,963
9,896
9,888
8.81%
4,979
Pink Lily Holdco, LLC (5),(7)
4.35%
8,359
8,323
3,343
4,200
3,045
6,467
6,375
18,781
18,717
10.40%
4,768
10,518
10,449
7,700
7,639
7,654
9,875
9,758
9,776
4,245
3,873
9,864
9,747
9,815
10.20%
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
1,871
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
8.66%
2,873
2,835
10.52%
19,429
19,179
19,332
9.56%
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
14,530
14,238
6/15/2027
6,753
6,718
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
1,628
3,932
7,537
7,514
Equity Securities - 20.3% of Net Assets
1,740
Lucky Bucks, LLC - Common Equity
1,037
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
14,682
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—$1,224,427 and $1,103,716, respectively)
Cash equivalents (cost—$18,863 and $47,870, respectively)
Cash (cost—$14,853 and $13,690, respectively)
4,177
4,138
838
2,142
2,296
1,235,184
1,153,689
Credit facility payable
130,500
74,500
2036 Asset-backed debt, net (par—$246,000) (unamortized deferred financing costs of $1,269 and $1,341, respectively)
244,731
244,659
2037 Asset-backed debt, net (par—$246,000) (unamortized deferred financing costs of $1,818 and $1,904, respectively)
244,182
244,096
2037-R Asset-backed debt, net (par—$246,000) (unamortized deferred financing costs of $2,407 and $2,518, respectively)
243,593
243,481
Notes payable to members
271,600
Interest payable on credit facility and asset backed debt
9,802
16,868
Interest payable on notes to members
6,545
6,788
Accrued expenses
997
50
1,152,108
1,103,039
Members' equity
83,076
Total liabilities and members' equity
Below are the Consolidated Statements of Operations for PSSL ($ in thousands):
29,167
29,425
29,473
30,008
Expenses:(1)
Interest and expense on credit facility and asset-backed debt
14,302
14,085
Interest expense on notes to members
8,312
8,853
Administration fees
758
463
493
23,835
24,099
5,638
Realized and unrealized gain (loss) on investments:
(2,176
1,333
(10,386
(10,890
Net realized and unrealized gain (loss) on investments
(12,562
(9,557
Net increase (decrease) in members' equity resulting from operations
(6,924
(3,648
(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 December 31, 2025, PSSL II had total assets of $201.7 million and its investment portfolio consisted of investments in 41 portfolio companies. As of December 31, 2025, at fair value, the largest investment in a single portfolio company in PSSL II was $7.0 million and the five largest investments totaled $34.9 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 the 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 December 31, 2025, our investment in PSSL II consisted of secured notes of $39.4 million ($65.6 million remaining unfunded) and equity interests of $16.9 million ($28.1 million remaining unfunded). During the three months ended December 31, 2025, the Company made capital contributions of approximately $56.2 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 through its wholly owned subsidiary, PSSL II SPV LLC, subject to leverage and borrowing base restrictions.
Below is a summary of PSSL II's portfolio at fair value:
193,151
9.0
Number of portfolio companies in PSSL II
6,983
34,905
42
Below is a listing of PSSL II’s individual investments as of December 31, 2025 (Par and $ in thousands):
First Lien Secured Debt - 859.4% of Net Assets
11/19/2025
7,000
6,943
816
Healthcare Providers & Services
4,926
4,925
5,079
5,030
6,982
3,791
8.71%
5,853
6,947
6,930
11/21/2025
5,877
5,921
4,480
4,379
4,404
11/18/2005
2,517
2,500
2,498
1,980
11/20/2025
6,282
Health Care Equipment & supplies
12/2/2025
1,501
1,500
1,486
5,132
3,314
3,323
4,691
North American Rail Solutions
Road and Rail
6,966
6,965
6,874
11/25/2025
2,615
2,628
PD Tri-State Holdco, LLC.
2,970
2,944
2,952
2,205
2,182
2,152
6,915
6,860
3,944
6,957
6,956
6,862
3,346
6,969
6,899
12/3/2025
2/6/2032
5,885
6,997
6,945
6,976
5,042
8.82%
6,941
594
597
11/26/2025
4,626
4,520
4,441
193,632
Total Investments - 859.4% of Net Assets (3)(4)
Cash Equivalents - 0.1% of Net Assets
BlackRock Federal FD Instl 81
Cash - 30.2% of Net Assets
6,775
Total Investments, Cash Equivalents, and Cash —889.6% of Net Assets
200,409
199,928
Liabilities in Excess of Other Assets — (789.6)% of Net Assets
(177,453
22,475
——————————————————
Below are the Consolidated Statements of Assets and Liabilities for PSSL II ($ in thousands):
Investments at fair value (amortized cost—$193,632)
Cash equivalents (cost—$2)
Cash (cost—$6,775)
201,676
125,000
52,500
Interest payable on credit facility
777
780
144
179,201
—————————————————
Below are the Consolidated Statements of Operations for PSSL II ($ in thousands):
For the period November 18, 2025 (commencement of operations) through December 31, 2025
2,208
781
1,752
456
(481
(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.
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.
44
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 and our Credit Facility are classified as Level 3. Our 2026 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 2036 Asset-Backed Debt, 2036-R Asset-Backed Debt, our 2037 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 December 31, 2025
Valuation Technique
Unobservable Input
Range of Input(Weighted Average) (1)
105,885
Market Comparable
Broker/Dealer bids or quotes
N/A
2,185,345
Market yield
4.0% - 27.3% (10.1%)
18,160
Enterprise Market Value
EBITDA multiple
7.5x - 8.0x (7.7x)
852
Revenue multiple
0.3x
Subordinated debt
18,610
1.4% - 25.3% (17.7%)
14.5x
0.3x - 16.8x (11.0x)
Total Level 3 investments
2,515,800
Long-Term Credit Facility
5.3%
____________________________________________
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, 2031 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 December 31, 2025
Description
Level 1
Level 2
Level 3
Measured at NetAsset Value (1)
2,310,242
Second Lien and Subordinate debt
20,144
274,961
Cash equivalents
Total investments and cash equivalents
2,645,490
Long Term Credit Facility payable
2026 Notes payable(2)
2036 Asset-Backed Debt(2)
2036-R Asset-Backed Debt(2)
2037 Asset-Backed Debt (2)
Total debt
1,632,010
1,447,207
———————————————
Fair Value at September 30, 2025
2,513,631
Second lien and Subordinate debt
18,981
240,716
2,814,057
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):
Three Months Ended December 31, 2025
First Lien
Second lien,subordinateddebt and equityinvestments
Totals
Beginning balance
215,379
Net realized gain (loss)
871
1,468
Net change in unrealized appreciation (depreciation)
(12,638
(8,632
(21,270
Purchases, PIK interest, net discount accretion and non-cash exchanges
150,963
152,423
Sales, repayments and non-cash exchanges
(342,311
(3,520
(345,831
Transfers in and/or out of Level 3
Ending balance
205,558
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.
(12,483
(7,973
(20,456
Three Months Ended December 31, 2024
1,746,697
171,142
1,917,839
634
26,040
(7,513
(13,600
(21,113
597,859
16,121
613,980
(373,901
(27,399
(401,300
1,963,776
172,304
2,136,080
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.
(2,261
6,964
4,703
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):
Three Months ended December 31,
Beginning balance (cost – $683,855 and $443,855, respectively)
443,880
Net change in unrealized (depreciation) appreciation included in earnings
(89
Borrowings
165,000
Repayments
Ending balance (cost – $488,855 and $608,855, respectively)
608,791
As of December 31, 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 December 31, 2025 (CAD and $ in thousands):
Foreign Currency
AmountBorrowed
Borrowing Cost
Current Value
Reset Date
Unrealized appreciation (depreciation)
Canadian Dollar
CAD 2,000
1,459
1/2/26
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):
1,437
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 $0.5 million of expenses relating to amendment costs on the Credit Facility for the three months ended December 31, 2025 and we did not incur any expenses relating to amendment costs on the Credit Facility during the three months ended December 31, 2024. 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, 2036 Asset-Backed Debt, 2036-R Asset-Backed Debt, and the 2037 Asset-Backed Debt.
For the three months ended December 31, 2025, the Credit Facility had a net change in unrealized appreciation (depreciation) of less than ($0.1) million. For the three months ended December 31, 2024, the Credit Facility had a net change in unrealized appreciation (depreciation) of $0.1 million. As of December 31, 2025 and September 30, 2025, the net unrealized appreciation (depreciation) on the Credit Facility totaled zero, respectively. We use a nationally recognized independent valuation service to measure the fair value of the Credit Facility in a manner consistent with the valuation process that our board of directors uses to value our investments.
6. TRANSACTIONS WITH AFFILIATED COMPANIES
An affiliated portfolio company is a company in which we have ownership of 5% or more of its voting securities. A portfolio company is generally presumed to be a non-controlled affiliate when we own at least 5% but less than 25% of its voting securities and a controlled affiliate generally when we own more than 25% of its voting securities. Transactions related to our funded investments with both controlled and non-controlled affiliates for the three months ended December 31, 2025 and 2024 were as follows ($ 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 **
$—
$56,250
$(18)
$56,232
$572
PennantPark Senior Secured Loan Fund I LLC *
(11,003)
310,340
7,273
Total Controlled Affiliates
$281,968
$95,625
$(11,021)
$366,572
$7,845
$4,944
48
* 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 December 31, 2024
Marketplace Events, LLC**
57,107
4,214
(62,477
(24,337
PennantPark Senior Secured
Loan Fund I LLC *
294,128
(7,567
7,746
351,235
4,681
* 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
81,663,331
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 December 31, 2025, cash and cash equivalents consisted of money market funds and non-money market fund in the amounts of $40.1 million and $55.1 million, respectively. 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)
(0.30
(0.02
Net increase (decrease) in net assets resulting from operations (1), (7)
Distributions to stockholders (1), (2)
(0.31
Accretive effect of common stock issuance
(0.01
Net asset value, end of period (7)
11.34
Per share market value, end of period
10.93
Total return *(3)
7.79
-2.87
Shares outstanding at end of period
84,855,896
Ratios** / Supplemental Data:
Ratio of operating expenses to average net assets** (4)
5.94
6.34
Ratio of debt related expenses to average net assets** (5)
10.25
Ratio of total expenses to average net assets** (5)
16.19
16.00
Ratio of net investment income to average net assets** (5)
12.95
Net assets at end of period
Weighted average debt outstanding
1,746,661
1,277,742
Weighted average debt per share (1)
17.60
15.65
Asset coverage per unit (6)
1,635
1,714
Portfolio turnover rate*
11.28
17.69
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 three months ended December 31, 2025 and 2024, inclusive of the fee on the undrawn commitment on the Credit Facility, amendment costs and debt issuance costs, was 6.2% and 7.0%, 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 December 31, 2025 and September 30, 2025, our asset coverage ratio, as computed in accordance with the 1940 Act, was 164% and 160%, respectively.
Credit Facility
As of December 31, 2025, 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 December 31, 2025 and September 30, 2025, Funding I had $488.9 million and $683.9 million of outstanding borrowings under the Credit Facility, respectively. The Credit Facility had a weighted average interest rate of 5.9% and 6.3%, exclusive of the fee on undrawn commitments as of December 31, 2025 and September 30, 2025, respectively. As of December 31, 2025 and September 30, 2025, Funding I had $279.1 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 December 31, 2025, 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.
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 twelve-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 December 31, 2025, the Company no longer consolidates the D-R Notes. As of December 31, 2025 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 5.9% and 6.2%, respectively. As of December 31, 2025 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.
2036 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
51
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.
The 2036 Asset-Backed Debt is included in the Consolidated Statement of Assets and Liabilities as debt of the Company and the Subordinated Notes of the 2036-Securitization Issuer were eliminated in consolidation. As of December 31, 2025 and September 30, 2025, the Company had $287.0 million of 2036 Asset-Backed Debt outstanding with a weighted average interest rate of 6.7% and 7.1%, respectively. As of December 31, 2025, and September 30, 2025, the unamortized fees on the 2036 Asset-Backed Debt were $2.2 million and $2.4 million, respectively.
Our Investment Adviser serves as collateral manager to the 2036-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 December 31, 2025, the Company no longer consolidates the BBB-(sf) Class D Notes.
As of December 31, 2025 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 5.6% and 5.9%, respectively. As of December 31, 2025 and September 30, 2025, the unamortized fees on the 2037 Asset-Backed Debt were $2.5 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 December 31, 2025 and September 30, 2025, we had $594.0 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 December 31, 2025 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 $93.8 million to PSSL II as of December 31, 2025, 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 appreciationthrough 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.
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 StatementsWe 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 December 31, 2025, the related consolidated statements of operations and changes in net assets for the three-month periods ended December 31, 2025 and 2024, and cash flows for the three month periods ended December 31, 2025 and 2024, 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 ResultsThese 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
February 9, 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 December 31, 2025 and 2024, as indicated in our report dated February 9, 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 December 31, 2025, 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.
54
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:
56
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 December 31, 2025, our portfolio totaled $2,605.3 million, and consisted of $2,310.2 million of first lien secured debt (including $237.7 million in PSSL and $39.4 million in PSSL II), $20.1 million of second lien secured debt and subordinated debt and $275.0 million of preferred and common equity (including $72.7 million in PSSL and $16.9 million in PSSL II). As of December 31, 2025, our debt portfolio consisted of approximately 99% variable-rate investments. As of December 31, 2025, we had four portfolio companies on non-accrual, representing 0.5% and 0.1% of our overall portfolio on a cost and fair value basis, respectively. As of December 31, 2025, the portfolio had net unrealized depreciation of $78.4 million. Our overall portfolio consisted of 160 companies with an average investment size of $16.3 million and had a weighted average yield on debt investments of 9.9%, and was invested 89%in first lien secured debt (including 9% in PSSL and 2% in PSSL II), less than 1% in second lien and subordinate debt and 11% in preferred and common equity (including 3% in PSSL and 1% in PSSL II). As of December 31, 2025, over 98% of the investments held by PSSL were first lien secured debt. As of December 31, 2025, 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 December 31, 2025, we invested $301.0 million in four new and 51 existing portfolio companies at a weighted average yield on debt investments of 10.0%. For the three months ended December 31, 2025, sales and repayments of investments totaled $441.4 million, including $132.5 million of sales to PSSL and $196.5 million of sales to PSSL II.
For the three months ended December 31, 2024, we invested $606.9 million in 11 new and 58 existing portfolio companies at a weighted average yield on debt investments of 10.3%. For the three months ended December 31, 2024, sales and repayments of investments totaled $401.3 million, including $187.7 million of sales to PSSL.
As of December 31, 2025, PSSL’s portfolio totaled $1,195.0 million and consisted of 120 companies with an average investment size of $10.0 million and at a weighted average yield on debt investments of 9.6%. 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 December 31, 2025, PSSL invested $133.8 million (including $132.5 million purchased from the Company) in four new and 17 existing portfolio companies at a weighted average yield on debt investments of 9.4%. Sales and repayments of investments for the three months ended December 31, 2025 totaled $12.4 million.
For the three months ended December 31, 2024, PSSL invested $224.9 million (including $187.7 million purchased from the Company) in 17 new and eight existing portfolio companies at a weighted average yield on debt investments of 10.3%. For the three months ended December 31, 2024, sales and repayments of investments totaled
$86.6 million.
As of December 31, 2025, PSSL II’s portfolio totaled $193.2 million and consisted of 41 companies with an average investment size of $4.7 million and at a weighted average yield on debt investments of 9.0%.
For the three months ended December 31, 2025, PSSL II invested $196.5 million (including $196.5 million purchased from the Company) in 42 new and zero existing portfolio companies at a weighted average yield on debt investments of 9.3%. Sales and repayments of investments for the three months ended December 31, 2025 totaled $2.9 million.
At-the-Market Offering
57
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 December 31, 2025.
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.
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, 2036-R Asset-Backed Debt, 2037 Asset-Backed Debt, and our Credit Facility are classified as Level 3. Our 2026 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 2031 Asset-Backed Debt, our 2036 Asset-Backed Debt, our 2036-R Asset-Backed Debt, our 2037 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 $0.5 million of expenses relating to amendment costs on the Credit Facility during the three months ended December 31, 2025 and we did not incur expenses relating to amendment costs on the Credit Facility during the three months ended, December 31, 2024. 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, the 2036 Asset-Backed Debt, the 2036-R Asset-Backed Debt, and the 2037 Asset-Backed Debt.
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 months ended December 31, 2025, we recorded a provision for taxes on net investment income of $0.2 million pertaining to federal excise tax. For the three months ended December 31, 2024, we recorded a provision for taxes on net investment income of $0.2 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 months ended December 31, 2025 and 2024.
Investment Income
For the three months ended December 31, 2025, investment income was $70.1 million, which was attributable to $64.2 million from first lien secured debt and $5.9 million from other investments, respectively. For the three months ended December 31, 2024, investment income was $67.0 million, which was attributable to $61.0 million from first lien secured debt and $6.0 million from other investments, respectively. The increase in investment income for the three months ended December 31, 2025, was primarily due to the increase in the size of our debt portfolio.
For the three months ended December 31, 2025, expenses totaled $43.5 million and were comprised of: $27.2 million of debt related interest and expenses, $6.8 million of base management fees, $6.7 million of performance-based incentive fees, and $2.1 million of general and administrative expenses, $0.2 million of taxes and $0.5 million in Credit Facility amendment costs. For the three months ended December 31, 2024, expenses totaled $37.0 million and were comprised of; $22.4 million of debt related interest and expenses, $5.3 million of base management fee, $7.5 million of performance-based incentive fee, $1.7 million of general and administrative expenses, $0.2 million of taxes. The increase in expenses for the three months ended December 31, 2025, 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 months ended December 31, 2025, net investment income totaled $26.6 million or $0.27 per share. For the three months ended December 31, 2024, net investment income totaled $30.0 million or $0.37 per share. The decrease in net investment income for the three months ended December 31, 2025, was primarily due to an increase in interest expense and one time credit facility amendment costs.
Net Realized Gains or Losses
For the three months ended December 31, 2025, net realized gains (losses) totaled $1.5 million. For the three months ended December 31, 2024, net realized gains (losses) totaled $26.7 million. 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 months ended December 31, 2025, we reported net change in unrealized appreciation (depreciation) on investments of $(32.3) million. For the three months ended December 31, 2024, we reported net change in unrealized appreciation (depreciation) on investments of $(29.0) million. As of December 31, 2025 and September 30, 2025, our net unrealized appreciation (depreciation) on investments totaled $(78.4) 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 months ended December 31, 2025, our Credit Facility had a net change in unrealized appreciation (depreciation) of less than $(0.1) million. For the three months ended December 31, 2024, our Credit Facility had a net change in unrealized appreciation (depreciation) of $0.1 million. As of December 31, 2025 and September 30, 2025, the net unrealized appreciation (depreciation) on the Credit Facility totaled 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 months ended December 31, 2025, net increase (decrease) in net assets resulting from operations totaled $(3.6) million or $(0.04) per share. For the three months ended December 31, 2024, net increase (decrease) in net assets resulting from operations totaled $28.3 million or $0.35 per share. The net increase or (decrease) from operations for the three months ended December 31, 2025, 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 December 31, 2025, 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 December 31, 2025 and September 30, 2025, our asset coverage ratio, as computed in accordance with the 1940 Act, was 164% and 160%, respectively.
As of December 31, 2025, 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 December 31, 2025 and September 30, 2025, Funding I had $488.9 million and $683.9 million of outstanding borrowings under the Credit Facility, respectively. The Credit Facility had a weighted average interest rate of 5.9% and 6.3%, exclusive of the fee on undrawn commitments as of December 31, 2025 and September 30, 2025, respectively.
For the three months ended December 31, 2025 and 2024, 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 6.2% and 7.0%, respectively. As of December 31, 2025 and September 30, 2025, we had $279.1 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 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 December 31, 2025, 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.
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. As of December 31, 2025 and September 30, 2025, the Company had zero of 2031 Asset-Backed Debt outstanding.
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 December 31, 2025, the Company no longer consolidates the D-R Notes.
As of December 31, 2025 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 5.9% and 6.2%, respectively. As of December 31, 2025 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.
The 2036 Asset-Backed Debt is included in the Consolidated Statement of Assets and Liabilities as debt of the Company and the Preferred Shares of the 2036-Securitization Issuer were eliminated in consolidation. As of December 31, 2025 and September 30, 2025, the Company had $287.0 million of 2036 Asset-Backed Debt outstanding with a weighted average interest rate of 6.7% and 7.1%, respectively. As of December 31, 2025, and September 30, 2025, the unamortized fees on the 2036 Asset-Backed Debt were $2.2 million and $2.4 million, respectively.
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 December 31, 2025, 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 2025, 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 2025, the Administrator furnishes us with office facilities and administrative services necessary to conduct our day-to-day operations. The Administration Agreement was amended on July 1, 2022. 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 December 31, 2025 and September 30, 2025, we had cash and cash equivalents of $95.3 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.
63
For the three months ended December 31, 2025, our operating activities provided cash of $148.6 million and our financing activities used cash of $176.0 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 and $21.0 million of 2036-R Asset-Backed Debt D-R Notes to third parties.
For the three months ended December 31, 2024, our operating activities used cash of $232.7 million and our financing activities provided cash of $222.9 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 and proceeds from the public offerings under our ATM program.
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 $325 million secured credit facility.
65
67
——————————————————————
68
69
70
Below are the consolidated statements of assets and liabilities for PSSL ($ in thousands):
———————————————————
* As of December 31, 2025 and September 30, 2025, PSSL had unfunded commitments to fund investments of $0.2 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.
73
74
Below are the consolidated statements of assets and liabilities for PSSL II ($ in thousands):
* As of December 31, 2025 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 months ended December 31, 2025, we declared distributions of $0.3075 per share for total distributions of $30.5 million. During the three months ended December 31, 2024, we declared distributions of $0.3075 per share for total distributions of $25.2 million. 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 March 2020, the FASB issued Accounting Standards Update, or ASU, No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The FASB approved an (optional) two year extension to December 31, 2024, for transitioning away from LIBOR. The Company adopted ASU 2020-04, the effect of which was not material to the consolidated financial statements and the notes to the consolidated financial statements.
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 December 31, 2025, 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%
(21,283
(0.21
Down 2%
(17,725
(0.18
Down 1%
(8,862
(0.09
Up 1%
8,862
0.09
Up 2%
17,725
0.18
Up 3%
26,587
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 quarter ended December 31, 2025, 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 quarter ended December 31, 2025 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 December 31, 2025 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.
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).
Fourth Amendment to Revolving Credit and Security Agreement, dated April 16, 2025, by and among PennantPark Floating Rate Funding I, LLC as borrower, PennantPark Investment Advisers, LLC as collateral manager, the lenders from time to time party thereto, Truist Bank, as administrative agent for the secured parties and swingline lender, Fifth Third Bank, National Association as Documentation Agent and U.S Bank Trust Company, National Association, as collateral agent, collateral administrator and back-up collateral administrator (Incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 814-00891). filed on April 22, 2025).
10.2
Fifth Amendment to Revolving Credit and Security Agreement, dated August 04, 2025, by and among PennantPark Floating Rate Funding I, LLC as borrower, PennantPark Investment Advisers, LLC as collateral manager, the lenders from time to time party thereto, Truist Bank, as administrative agent for the secured parties and swingline lender, Fifth Third Bank, National Association as Documentation Agent and U.S Bank Trust Company, National Association, as collateral agent, collateral administrator and back-up collateral administrator.
10.3*
Sixth Amendment to Revolving Credit and Security Agreement, dated November 13, 2025, by and among PennantPark Floating Rate Funding I, LLC as borrower, PennantPark Investment Advisers, LLC as collateral manager, the lenders from time to time party thereto, Truist Bank, as administrative agent for the secured parties and swingline lender, Fifth Third Bank, National Association as Documentation Agent and U.S Bank Trust Company, National Association, as collateral agent, collateral administrator and back-up collateral administrator.
10.4
Non-Recourse Carveout Guaranty Agreement, dated as of November 20, 2025, by and among PennantPark Floating Rate Capital Ltd., PennantPark Senior Secured Loan Fund II LLC and Goldman Sachs Bank USA.
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: February 9, 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)