Yahoo Finance

• Core Net Investment Income: $0.28 per share; adjusted for additional shares, $0.30 per share.

• Portfolio Growth: Grew to $2.3 billion, up 7% from the prior quarter.

• New Investments: $293 million invested in three new and 54 existing portfolio companies at a weighted average yield of 9.9%.

• Net Asset Value (NAV): $11.07 per share, down 2.4% from $11.34 per share last quarter.

• Debt-to-Equity Ratio: 1.3 times as of March 31.

• Weighted Average Yield on Debt Investments: 10.5%.

• Nonaccruals: Represent 2.2% of the portfolio at cost and 1.2% at market value; pro forma nonaccruals represent 1% at cost and 0.5% at market value.

• PIK Income: 3% of total interest income.

• Operating Expenses: Interest and expenses on debt were $23 million; base management and performance-based incentive fees were $11.9 million; general and administrative expenses were $1.85 million.

• Net Realized and Unrealized Change on Investments: Loss of $23.8 million.

• Portfolio Composition: 90% first lien senior secured debt, less than 1% subordinated debt, 3% equity of PSSL, 7% other equity.

• Debt-to-EBITDA Ratio: 4.2 times.

• Interest Coverage: 2.3 times.

• Warning! GuruFocus has detected 6 Warning Signs with PFLT.

Release Date: May 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• PennantPark Floating Rate Capital Ltd (NYSE:PFLT) reported a solid quarter despite market volatility, with a focus on supporting existing portfolio companies and private equity borrowers.

• Approximately 80% of originations came from existing borrowers, showcasing strong relationships and origination capabilities.

• The portfolio's weighted average yield on debt investments was 10.5%, with 100% of the debt portfolio being floating rate, which is beneficial in a rising interest rate environment.

• PFLT has taken significant steps to strengthen its balance sheet, increasing total leverage capacity by $750 million through various financing activities.

• The company has a diversified portfolio across 159 companies and 49 industries, with a focus on sectors that are recession resilient and generate strong free cash flow.

Negative Points

• Net realized and unrealized change on investments resulted in a loss of $23.8 million for the quarter ended March 31.

• The net asset value (NAV) per share decreased by 2.4% from the previous quarter, down to $11.07.

• Three new investments were added to nonaccrual status during the quarter, representing 2.2% of the portfolio at cost.

• Market uncertainty, particularly related to tariffs, has slowed down new M&A activity, impacting the deployment of capital.

• Despite a robust capital raise, the company is still underlevered with a debt-to-equity ratio of 1.3 times, below the target leverage of 1.5 times.