Prospect Capital Corp (PSEC) 2024 Q1 法說會逐字稿

Hello, and welcome to the Prospect Capital First Quarter Fiscal Year 2024 Earnings Release and Conference Call. (Operator Instructions) Please note this event is being recorded.

您好，歡迎來到 Prospect Capital 2024 財年第一季財報發布和電話會議。 （操作員說明）請注意此事件正在被記錄。

I would now like to turn the conference over to John Barry, Chairman and CEO. Please go ahead.

現在我想將會議交給董事長兼執行長約翰·巴里 (John Barry)。請繼續。

Thank you, MJ. Joining me on the call today are Grier Eliasek, our President and COO; and Kristin Van Dask, our Chief Financial Officer. Kristin?

謝謝你，喬丹。今天和我一起參加電話會議的是我們的總裁兼營運長 Grier Eliasek；以及我們的財務長 Kristin Van Dask。克里斯汀？

Thanks, John. This call contains forward-looking statements that are not intended to be subject to safe harbor protection. Future results are highly likely to vary materially. We do not undertake to update our forward-looking statements. For additional disclosure, see our earnings press release and 10-Q filed previously and available on our website, prospectstreet.com.

謝謝，約翰。本次電話會議包含前瞻性陳述，無意受到安全港保護。未來的結果很可能會發生重大變化。我們不承諾更新我們的前瞻性陳述。如需更多披露信息，請參閱我們之前提交的收益新聞稿和 10-Q，並可在我們的網站prospecttreet.com 上獲取。

Now I'll turn the call back over to John.

現在我將把電話轉回給約翰。

Thank you, Kristin. In the September quarter, our net investment income, or NII, was $125.6 million, or basic NII of $0.25 per common share, exceeding our distribution rate per common share by $0.07. Our basic NII coverage of our common distribution is now 139%. Our annualized basic NII yield is 10.8% on a book basis and 18.7% based on our November 7 stock price close. Our NAV stood at $9.25 per common share in September, up $0.01 or 0.1% from the prior quarter.

謝謝你，克里斯汀。在 9 月季度，我們的淨投資收入 (NII) 為 1.256 億美元，或每股普通股的基本 NII 為 0.25 美元，比我們的每股普通股分配率高出 0.07 美元。我們共同分配的基本 NII 覆蓋率目前為 139%。我們的年化基本 NII 收益率以帳面計算為 10.8%，根據 11 月 7 日收盤價計算為 18.7%。 9 月份，我們的資產淨值為每股普通股 9.25 美元，比上一季上漲 0.01 美元，或 0.1%。

Since inception in 2004, Prospect has invested $20.4 billion across 419 investments, exiting 283 of these investments. We have outperformed our peers during past periods of macro volatility as a direct result of our previous derisking, not chasing leverage, as well as other risk management controls, including avoidance of cyclical industries and utilization of longer-dated and unsecured flexible financing.

自 2004 年成立以來，Prospect 已在 419 項投資中投資了 204 億美元，其中退出了 283 項投資。在過去的宏觀波動時期，我們的表現優於同行，這是我們之前去風險、不追逐槓桿以及其他風險管理控制的直接結果，包括避開週期性行業和利用較長期、無擔保的靈活融資。

We are staying true to the strategy that has served us well since 1988: controlling and reducing portfolio and balance sheet risk both to protect the capital entrusted to us and to protect the ability of such capital to generate earnings for our shareholders.

我們堅持自 1988 年以來一直為我們服務的策略：控制和降低投資組合和資產負債表風險，既保護委託給我們的資本，也保護這些資本為股東創造收益的能力。

In the September quarter, our net debt-to-equity ratio was 46.5%, down 27.6 percentage points from March 2020 and down 2.3 percentage points from the June 2023 quarter, as we continue to run an underleveraged balance sheet, which has been the case for us over multiple quarters and years.

在 9 月季度，我們的淨負債股本率為 46.5%，較 2020 年 3 月下降 27.6 個百分點，較 2023 年 6 月季度下降 2.3 個百分點，因為我們的資產負債表仍處於槓桿化不足的狀態。為我們提供了多個季度和多年的服務。

On the cash shareholder distribution front, we are pleased to report the Board's declaration of continued steady monthly distributions. We are announcing monthly cash common shareholder distributions of $0.06 per share for each of November, December and January. These 3 months represent the 75th, 76th and 77th consecutive $0.06 per share cash distributions. Consistent with past practice, we plan on announcing our next set of shareholder distributions in February.

在現金股東分配方面，我們很高興地報告董事會宣布繼續穩定的每月分配。我們宣布 11 月、12 月和 1 月的每月現金普通股股東分配為每股 0.06 美元。這三個月代表連續第 75、76 和 77 次每股 0.06 美元現金分配。與過去的做法一致，我們計劃在二月宣布下一組股東分配。

Since our IPO nearly 20 years ago to January 2024 distribution at the current share count, we will have distributed $20.58 per common share to original shareholders, representing 2.2x September common NAV per share, and aggregating over $4.10 billion in cumulative distributions to all common shareholders.

自近20 年前的首次公開募股以來，到2024 年1 月按當前股數分配，我們將向原始股東分配每股普通股20.58 美元，相當於9 月份每股普通股資產淨值的2.2 倍，向所有普通股股東累計分配的金額超過41 億美元。

Since October 2017, our NII per common share, less preferred dividends, has aggregated $4.89, while our common shareholder distributions per common share have aggregated $4.32, with our NII exceeding distributions during this period by $0.57 per share and representing 113% coverage.

自2017 年10 月以來，我們的每股普通股NII（扣除優先股股息）總計為4.89 美元，而我們每股普通股的普通股股東分配總計為4.32 美元，其中我們在此期間的NII 超出每股分配0.57 美元，覆蓋率達113%。

I will now turn the call over to Grier.

我現在將把電話轉給格里爾。

Thank you, John. Our scale platform with nearly $9 billion of assets and undrawn credit at Prospect Capital Corporation continues to deliver solid performance in the current dynamic environment. Our experienced team consists of over 120 professionals, representing one of the largest middle market investment groups in the industry. With our scale, longevity, experience and deep bench, we continue to focus on a diversified investment strategy that spans third-party private equity sponsor-related lending, direct non-sponsor lending, Prospect-sponsored operating and financial buyouts, structured credit, and real estate yield investing.

謝謝你，約翰。我們的規模平台擁有近 90 億美元的資產和 Prospect Capital Corporation 的未提取信貸，在當前的動態環境中繼續提供穩健的績效。我們經驗豐富的團隊由 120 多名專業人士組成，代表著業界最大的中間市場投資集團之一。憑藉我們的規模、悠久的歷史、經驗和深厚的基礎，我們繼續專注於多元化的投資策略，涵蓋第三方私募股權贊助商相關貸款、直接非贊助商貸款、前景贊助的營運和財務收購、結構性信貸和房地產收益投資。

Consistent with past cycles, we expect during the next downturn to see an increase in secondary opportunities, coupled with wider spread primary opportunities with a pullback from other investment groups, particularly highly leveraged ones. Unlike many other groups, we have maintained and continued to maintain significant dry powder and balance sheet flexibility that we expect will enable us to capitalize on such attractive opportunities as they arise.

與過去的周期一致，我們預計在下一次經濟低迷期間，二次投資機會將會增加，同時主要投資機會也會擴大，而其他投資集團（尤其是高槓桿投資集團）也會出現撤退。與許多其他集團不同，我們一直並將繼續保持顯著的乾粉和資產負債表靈活性，我們預計這將使我們能夠在出現這些有吸引力的機會時利用它們。

This diversity of origination approaches allows us to source a broad range and high volume of opportunities, then select in a disciplined bottoms-up manner the opportunities we deem to be the most attractive on a risk-adjusted basis. Our team typically evaluates thousands of opportunities annually and invests in a disciplined manner in a low single-digit percentage of such opportunities.

這種多樣化的發起方法使我們能夠尋找廣泛且大量的機會，然後以嚴格的自下而上的方式選擇我們認為在風險調整的基礎上最具吸引力的機會。我們的團隊通常每年評估數千個機會，並以嚴格的方式對此類機會中較低的個位數百分比進行投資。

Our nonbank structure gives us the flexibility to invest in multiple levels of the corporate capital stack, with a preference for secured lending and senior loans. Consistent with our investment strategy, our secured lending and first-lien mix has continued to increase.

我們的非銀行結構使我們能夠靈活地投資於多個層面的企業資本結構，並優先考慮擔保貸款和優先貸款。與我們的投資策略一致，我們的擔保貸款和第一留置權組合持續增加。

As of September 2023, our portfolio at fair value comprised 57.3% first-lien debt, that's up 0.8% from the prior quarter; 15.9% second-lien debt, that's down 0.5% from the prior quarter; 8.1% subordinated structured notes with underlying secured first-lien collateral, that's down 0.5% from the prior quarter; and 18.7% unsecured debt and equity investments, up 0.2% from the prior quarter. Resulting in 81.3% of our investments being assets with underlying secured debt benefiting from borrower pledged collateral, down 0.2% from the prior quarter.

截至 2023 年 9 月，我們以公允價值計算的投資組合包含 57.3% 的第一留置權債務，較上一季成長 0.8%；第二留置權債務率為 15.9%，較上一季下降 0.5%； 8.1% 的次級結構性票據，帶有基礎有擔保第一留置權抵押品，比上一季下降 0.5%；無擔保債務和股權投資佔 18.7%，較上季成長 0.2%。因此，我們 81.3% 的投資是具有受益於借款人質押抵押品的基礎擔保債務的資產，比上一季下降 0.2%。

Prospect's approach is one that generates attractive risk-adjusted yields. And our performing interest-bearing investments were generating an annualized yield of 12.7% as of September 2023. We also hold equity positions in certain investments that can act as yield enhancers or capital gains contributors as such positions generate distributions. We've continued to prioritize senior and secured debt with our originations to protect against downside risk, while still achieving above-market yields through credit selection discipline and a differentiated origination approach.

Prospect 的方法能夠產生有吸引力的風險調整效益。截至2023 年9 月，我們的計息投資的年化收益率為12.7%。我們也持有某些投資的股權頭寸，這些投資頭寸可以作為收益增強劑或資本收益貢獻者，因為這些頭寸會產生分配。我們繼續優先考慮我們的發起債務和擔保債務，以防範下行風險，同時仍透過信貸選擇紀律和差異化發起方法實現高於市場的收益率。

As of September 2023, we held 128 portfolio companies, a decrease of 2 from the prior quarter, with a fair value of $7.7 billion, an increase of approximately $12 million. We also continue to invest in a diversified fashion across many different portfolio company industries with a preference for avoiding cyclicality and with no significant industry concentration. The largest is 18.2%. As of September, our asset concentration in the energy industry stood at 1.6%; for hotels, restaurant and leisure sector 0.3%; and retail industry 0.3%. Nonaccruals as a percentage of total assets stood at approximately 0.2% in September of 2023, that's down 0.9% from the prior quarter.

截至2023年9月，我們持有128家投資組合公司，較上季減少2家，公允價值為77億美元，增加約1,200萬美元。我們也繼續以多元化的方式投資於許多不同的投資組合公司產業，傾向於避免週期性且產業集中度不高。最大的是18.2%。截至9月份，能源產業資產集中度為1.6%；飯店、餐廳和休閒產業 0.3%；零售業0.3%。 2023 年 9 月，非應計費用佔總資產的百分比約為 0.2%，比上一季下降 0.9%。

Our weighted average middle market portfolio net leverage stood at 5.3x EBITDA, substantially below reporting peers. Our weighted average EBITDA per portfolio company stood at $111 million. Originations in the September quarter aggregated $131 million. We also experienced $301 million of repayments, sales and exits, as a validation of our capital preservation objective, resulting in net repayments of $170 million, as we continue to take a cautious approach toward new credit underwriting given macroeconomic conditions.

我們的加權平均中間市場投資組合淨槓桿率為 5.3 倍 EBITDA，遠低於報告同業。我們每家投資組合公司的加權平均 EBITDA 為 1.11 億美元。 9 月季度的發起總額為 1.31 億美元。我們也經歷了 3.01 億美元的還款、銷售和退出，作為我們資本保值目標的驗證，導致淨還款達到 1.7 億美元，因為我們在宏觀經濟條件下繼續對新的信貸承銷採取謹慎的態度。

During the September quarter, our originations comprised 48.5% real estate, 40.6% middle market lending, and 10.9% middle market lending and buyouts. To date, we've deployed significant capital in the real estate arena through our private REIT strategy, largely focused on multifamily, workforce, stabilized yield acquisitions, and in the past year, expansion into senior living, with attractive in-place 5- to 12-year financing. To date, on a cumulative basis, we've acquired $3.8 billion in 105 properties across multifamily 81 properties, student housing 8 properties, self-storage 12 properties, and senior living 4 properties.

在 9 月的季度中，我們的起源包括 48.5% 的房地產、40.6% 的中間市場貸款以及 10.9% 的中間市場貸款和收購。迄今為止，我們已透過私人房地產投資信託基金策略在房地產領域部署了大量資本，主要關注多戶型、勞動力、穩定收益收購，並在過去一年擴展到老年生活領域，推出有吸引力的就地5至12年融資。迄今為止，我們已累積斥資 38 億美元收購了 105 處房產，其中包括多戶住宅 81 處、學生宿舍 8 處、自倉儲 12 處以及老年住宅 4 處。

In the current higher financing cost environment, we're focusing on preferred equity structures with significant third-party capital support underneath our investment attachment points. NPRC, our private REIT, has real estate properties that have benefited over the last several years and, more recently, from rising rents, showing the inflation hedge nature of this business segment, strong occupancies, high collections, suburban work-from-home dynamics, high-returning value-added renovation programs, and attractive financing recapitalizations resulting in an increase in cash yields as a validation of this income growth business, alongside our corporate credit businesses.

在當前較高的融資成本環境下，我們專注於優先股權結構，並在我們的投資附著點下提供大量第三方資本支援。 NPRC，我們的私人房地產投資信託基金，擁有的房地產在過去幾年中受益，最近還受益於租金上漲，顯示了該業務領域的通膨對沖性質、強勁的入住率、高收藏量、郊區在家工作的動態、高回報的增值改造計劃以及有吸引力的融資資本重組，導致現金收益率增加，與我們的企業信貸業務一起，作為收入成長業務的驗證。

NPRC as of September, and not including partially exited deals where we have received back more than our capital invested from distributions and recapitalizations, has exited completely 45 properties, at an average net realized IRR to NPRC of 25.2% and average realized cash multiple of invested capital of 2.5x, with an objective to redeploy capital into new property acquisitions, including with repeat property manager relationships.

截至9 月份，NPRC 已完全退出45 處房產，不包括部分退出的交易，其中我們從分配和資本重組中收到的回報超過了我們的投資資本，NPRC 的平均已實現淨IRR 為25.2%，投資的平均已實現現金倍數資本為 2.5 倍，目標是將資本重新部署到新的物業收購中，包括與重複的物業經理關係。

Our structured credit business has delivered attractive cash yields, demonstrating the benefits of pursuing majority stakes, working with world-class management teams, and providing strong collateral underwriting through primary issuance, as well as focusing on favorable risk-adjusted opportunities.

我們的結構性信貸業務帶來了有吸引力的現金收益率，展示了追求多數股權、與世界一流的管理團隊合作、透過首次發行提供強大的抵押品承銷以及專注於有利的風險調整機會的好處。

As of September, we held $627 million across 33 nonrecourse subordinated structured notes investments. We maintained a relatively static to slightly declining signs for subordinated structured notes portfolio on a dollar basis, electing to grow our other investment strategies, and resulting in the structured notes portfolio of now comprising 8% of our investment portfolio. These underlying structured credit portfolios comprised nearly 1,600 loans. In the September quarter, this portfolio generated a GAAP yield of 10.7% and a cash yield of 17.5%, with the difference representing an amortization of our cost basis.

截至 9 月，我們持有 33 項無追索權次級結構性票據投資，金額達 6.27 億美元。我們以美元為基礎的次級結構性票據投資組合保持相對穩定或略有下降的跡象，選擇發展我們的其他投資策略，導致結構性票據投資組合目前占我們投資組合的 8%。這些基礎結構性信貸投資組合包括近 1,600 筆貸款。在 9 月季度，該投資組合的 GAAP 收益率為 10.7%，現金收益率為 17.5%，其差額代表我們成本基礎的攤銷。

As of September, our current subordinated structured credit portfolio has generated $1.4 billion in cumulative cash distributions to us, representing over 116% of our original investment. Through September, we've also exited 15 investments with an average realized IRR of 12% and cash-on-cash multiple of 1.3x.

截至 9 月份，我們目前的次級結構性信貸投資組合已為我們帶來了 14 億美元的累積現金分配，占我們原始投資的 116% 以上。截至 9 月份，我們也退出了 15 項投資，平均實現 IRR 為 12%，現金現金倍數為 1.3 倍。

Our subordinated structured credit portfolio consists entirely of majority-owned positions. Those positions can enjoy significant benefits compared to minority holdings in the same tranche. In many cases, we receive fee rebates because of our majority position. As majority holder, we control the ability to call a transaction in our sole discretion in the future. And we believe such options add substantial value to our portfolio. We have the option of waiting years to call a transaction in an optimal fashion rather than when loan asset valuations might be temporarily low.

我們的次級結構性信貸投資組合完全由多數股權組成。與同一批次的少數股權相比，這些職位可以享受顯著的好處。在許多情況下，我們會因為我們的多數地位而獲得費用回扣。身為多數持有者，我們控制未來自行決定發起交易的能力。我們相信這些選擇可以為我們的投資組合帶來巨大的價值。我們可以選擇等待數年以最佳方式進行交易，而不是在貸款資產估值可能暫時較低的情況下進行。

We, as a majority investor, can refinance liabilities on more advantageous terms, remove bond baskets in exchange for better terms from debt investors in the deal, and extend or reset the investment period to enhance value. We've completed 32 refinancings and resets since December of 2017. So far in the current December 2023 quarter, across our overall business, we booked $57 million in originations and experienced $1.7 million of repayments for over $55 million of net originations. Those originations have consisted of 53.5% real estate, 24.5% structured notes and 22% middle market lending.

作為主要投資者，我們可以以更優惠的條件對負債進行再融資，取消債券籃子以換取交易中債務投資者的更好條件，並延長或重置投資期限以提高價值。自2017 年12 月以來，我們已完成32 次再融資和重置。到目前為止，在2023 年12 月當前季度，在我們的整體業務中，我們預訂了5700 萬美元的發起資金，並為超過5500 萬美元的淨發起資金償還了170 萬美元。這些來源包括 53.5% 的房地產、24.5% 的結構性票據和 22% 的中間市場貸款。

Thank you. I'll now turn the call over to Kristin. Kristin?

謝謝。我現在將把電話轉給克里斯汀。克里斯汀？

Thanks, Grier. We believe our prudent leverage, diversified access to matched book funding, substantial majority of unencumbered assets, weighting toward unsecured fixed rate debt, avoidance of unfunded asset commitments, and lack of near-term maturities demonstrate both balance sheet strength as well as substantial liquidity to capitalize on attractive opportunities. Our company has locked in a ladder of liabilities extending 29 years into the future.

謝謝，格里爾。我們認為，我們審慎的槓桿率、多元化的匹配賬簿融資渠道、絕大多數無負擔資產、偏向無擔保固定利率債務、避免無資金支持的資產承諾以及缺乏近期到期日，都表明資產負債表實力以及大量流動性，可以幫助我們實現資產負債表的穩健成長。利用有吸引力的機會。我們公司已經鎖定了未來 29 年的負債階梯。

Our total unfunded eligible commitments to portfolio companies totals approximately $27 million, representing approximately 0.3% of our assets. Our combined balance sheet cash and undrawn revolving credit facility commitments currently stand at approximately $968 million.

我們對投資組合公司的無資金資助合格承諾總額約為 2,700 萬美元，約占我們資產的 0.3%。我們的合併資產負債表現金和未提取的循環信貸額度承諾目前約為 9.68 億美元。

We're a leader and innovator in our marketplace. We were the first company in our industry to issue a convertible bond, develop a notes program, issue under a bond and equity ATM, acquire another BDC, and many other lists of firsts. In 2020, we also added our programmatic perpetual preferred issuance to that list of firsts, followed in 2021 by our listed perpetual preferred as another first in the industry.

我們是市場的領導者和創新者。我們是業內第一家發行可轉換債券、開發票據計劃、在債券和股票 ATM 下發行、收購另一個 BDC 以及許多其他第一的公司。 2020 年，我們也將程序化永續優先股發行加入了該首創名單中，隨後在 2021 年，我們上市的永續優先股成為業界的另一個首創。

Shareholders and unsecured creditors alike should appreciate the thoughtful approach differentiated in our industry, which we have taken toward construction of the right-hand side of our balance sheet. As of September 2023, we held over $4.8 billion of our assets as unencumbered assets, representing over 61% of our portfolio. The remaining assets are pledged to Prospect Capital Funding, a nonrecourse SPV, where in September 2022, we completed an upsizing and extension of our revolver to a refreshed 5-year maturity. We currently have $1.95 billion of commitments from 53 banks, an increase of 11 lenders from August 2022 and demonstrating strong support of our company from the lender community, with a diversified unmatched -- diversity unmatched by any other company in our industry.

股東和無擔保債權人都應該欣賞我們行業中獨特的深思熟慮的方法，我們為構建資產負債表的右側而採取了這種方法。截至 2023 年 9 月，我們持有超過 48 億美元的資產作為未支配資產，占我們投資組合的 61% 以上。剩餘的資產被質押給 Prospect Capital Funding，這是一家無追索權 SPV，我們於 2022 年 9 月完成了左輪手槍的規模擴大和延期，期限達到更新的 5 年期。目前，我們已獲得53 家銀行的19.5 億美元承諾，自2022 年8 月起增加了11 家貸方，這表明我們公司得到了貸方界的大力支持，其多元化程度是我們行業中任何其他公司都無法比擬的。

Shortly after the well-publicized bank failures in March, we added 2 new banks and upsized an existing bank within our credit facility. The facility revolves until September 2026, followed by a year of amortization, with interest distributions continuing to be allowed to us. Our drawn pricing is now SOFR plus 2.05%.

3 月廣為人知的銀行倒閉事件發生後不久，我們新增了 2 家銀行，並在我們的信貸額度內擴大了一家現有銀行的規模。該貸款期限到 2026 年 9 月為止，隨後進行一年的攤銷，我們繼續允許利息分配。我們的定價現在是 SOFR 加 2.05%。

Outside of our revolver and benefiting from our unencumbered assets, we've issued at Prospect Capital Corporation, including in the past few years, multiple types of investment-grade unsecured debt, including convertible bonds, institutional bonds, baby bonds and program notes. All of these types of unsecured debt have no financial covenants, no asset restrictions and no cross defaults with our revolver.

除了我們的左輪手槍和受益於我們的未支配資產之外，我們在Prospect Capital Corporation 發行了多種類型的投資級無擔保債務，包括在過去幾年中，包括可轉換債券、機構債券、嬰兒債券和計劃票據。所有這些類型的無擔保債務都沒有財務契約，沒有資產限制，也沒有與我們的左輪手槍交叉違約。

We enjoy an investment-grade BBB- rating from S&P, an investment-grade Baa3 rating from Moody's, an investment-grade BBB- rating from Kroll, an investment-grade BBB rating from Egan-Jones, and an investment-grade BBB Low rating from DBRS. In 2021, we received the ladder investment-grade rating, taking us to 5 investment-grade ratings more than any other company in our industry. All of these ratings have stable outlooks.

我們享有標準普爾投資級 BBB- 評級、穆迪投資級 Baa3 評級、Kroll 投資級 BBB- 評級、Egan-Jones 投資級 BBB 評級以及投資級 BBB Low 評級來自 DBRS。 2021 年，我們獲得了階梯投資等級評級，比業內任何其他公司多了 5 個投資等級評級。所有這些評級的展望均為穩定。

We have now tapped the unsecured term debt market on multiple occasions to ladder our maturities and to extend our liability duration out 29 years. Our debt maturities extend through 2052. With so many banks and debt investors across so many unsecured and nonrecourse debt tranches, we've substantially reduced our counterparty risk over the years.

我們現在已多次利用無擔保定期債務市場來提高我們的到期日並將我們的負債期限延長至 29 年。我們的債務期限延長至 2052 年。由於有如此多的銀行和債務投資者參與如此多的無擔保和無追索權債務部分，多年來我們已大幅降低了交易對手風險。

In the September 2023 quarter, we have continued utilizing our revolving credit and have continued with our weekly programmatic InterNotes issuance on an efficient funding basis. To date, we have raised nearly $1.7 billion in aggregate issuance of our perpetual preferred stock across our preferred programs and listed preferred, including $80 million in the September 2023 quarter and $32 million to date in the current December 2023 quarter. We have 5 separate unsecured debt issuances, aggregating $1.2 billion, not including our program notes, with maturities extending through October 2028.

在 2023 年 9 月季度，我們繼續利用循環信貸，並繼續在高效融資的基礎上每週進行程序性 InterNotes 發行。迄今為止，我們透過優先計畫和上市優先股發行的永久優先股總計籌集了近 17 億美元，其中 2023 年 9 月季度的 8,000 萬美元和 2023 年 12 月當前季度迄今的 3,200 萬美元。我們發行了 5 筆獨立的無擔保債務，總計 12 億美元（不包括我們的計畫票據），期限延長至 2028 年 10 月。

As of September 2023, we had $359 million of program notes outstanding, with staggered maturities through March 2052. At September 30, 2023, our weighted average cost of unsecured debt financing was 4.08%, an increase of 0.01% from June 30, 2023, and a decrease of 0.25% from September 30, 2022.

截至2023 年9 月，我們尚未償還的計畫票據為3.59 億美元，交錯到期日截至2052 年3 月。截至2023 年9 月30 日，我們的無擔保債務融資加權平均成本為4.08%，較2023年6 月30 日增加了0.01%。較2022年9月30日下降0.25%。

In 2020, we added a shareholder loyalty benefit to our dividend reinvestment plan, or DRIP, that allows for a 5% discount to the market price for DRIP participants. As many brokerage firms either do not make DRIPs automatic or have their own synthetic DRIPs with no such 5% discount benefit, we encourage any shareholder interested in DRIP participation to contact your broker. Make sure to specify you wish to participate in the Prospect Capital Corporation DRIP plan through DTC at a 5% discount, and obtain confirmation of same from your broker. Our preferred holders could also elect to DRIP at a 5% discount to the stated value per share of $25.

2020 年，我們在股息再投資計劃 (DRIP) 中增加了股東忠誠度福利，允許 DRIP 參與者享受市場價格 5% 的折扣。由於許多經紀公司要么不自動執行 DRIP，要么擁有自己的合成 DRIP，但沒有 5% 的折扣優惠，我們鼓勵任何對參與 DRIP 感興趣的股東聯繫您的經紀人。請務必明確表明您希望透過 DTC 以 5% 的折扣參與 Prospect Capital Corporation DRIP 計劃，並獲得您的經紀人的確認。我們的優先股持有人也可以選擇以每股 25 美元的規定價值 5% 的折扣進行 DRIP。

Now I'll turn the call back over to John.

現在我將把電話轉回給約翰。

Okay. Thank you, Kristin. Why don't we go ahead and answer questions?

好的。謝謝你，克里斯汀。我們為什麼不繼續回答問題呢？

We will now begin the question-and-answer session. (Operator Instructions)

我們現在開始問答環節。 （操作員說明）

Today's first question comes from Finian O'Shea with Wells Fargo.

今天的第一個問題來自富國銀行的 Finian O'Shea。

First question on NP REIT, trying to get a sense of the underlying mortgage liability profile. First, it looks like a lot of the rates have been stable or per your disclosures. But can you give a breakdown of, say, interest rate caps that might roll off soon or resets that are soon approaching that would lead to more pressure there?

關於 NP REIT 的第一個問題，試圖了解潛在的抵押貸款負債狀況。首先，看起來很多利率已經穩定或根據您的披露。但您能否詳細說明一下，例如可能很快取消的利率上限或即將到來的利率上限重置，這將導致更大的壓力？

And second part, given the headwinds on CRE debt that we all read about, seeing if you've needed to put more money in for any of your recent refinancings.

第二部分，考慮到我們都讀過的商業房地產債務的不利因素，看看您是否需要為最近的再融資投入更多資金。

Thanks, Finian, it's Grier, I'll take that. So our philosophy with real estate and multifamily as where we've significantly focused in the last several years, not exclusively, but significantly, is -- has been with cap rates at lower than historical averages, it behooves one as a purchaser to finance with a largely fixed rate funding in a matched book fashion in a very attractive when we put on that financing fashion as well.

謝謝，菲尼安，我是格里爾，我接受。因此，我們在過去幾年中重點關注的房地產和多戶住宅的理念，不僅是，而且是重要的，是——資本化率一直低於歷史平均水平，作為購買者，有必要通過以下方式進行融資：當我們採用這種融資方式時，以匹配帳本方式進行的基本上固定利率的融資非常有吸引力。

I would estimate here that 90% of the financing that we have utilized, perhaps more than that in our real estate portfolio company, NPRC, has utilized fixed rate funding. We've also had a philosophy of using long-term funding to reduce not just interest rate risk but maturity risk. And our typical deal done over the last decade plus, we've exited the vast bulk of the earlier vintages, utilized 10-year financing, in some cases, 12 years.

我估計，我們使用的融資中有 90%（可能比我們的房地產投資組合公司 NPRC 的融資還要多）都使用了固定利率融資。我們還有一個理念，利用長期融資不僅可以降低利率風險，還可以降低到期風險。我們在過去十年中完成的典型交易中，我們已經退出了大部分早期年份，利用了 10 年期融資，有時甚至是 12 年期。

Typically with interest-only IO period, at least 5 years and in some cases 7 years. Of course, these are investments where we deploy capital and enhance net operating income from value-add renovation programs at the unit level and the common areas, and that delevers investments over time through NOI growth. Then you've had on top of that, through inflationary forces, through shortages of workforce housing, which continues in many markets, strong rent growth in occupancy, to drive NOI further even beyond what the value-add programs have generated.

通常，只還利息 IO 期限至少為 5 年，在某些情況下為 7 年。當然，這些投資是我們部署資本並透過單位層級和公共區域的增值改造計畫提高營業淨收入的投資，並且隨著時間的推移，透過 NOI 的成長來減少投資。除此之外，透過通膨力量，透過在許多市場持續存在的勞動力住房短缺，以及入住率的強勁租金增長，進一步推動NOI甚至超出增值計劃所產生的水平。

So that's how we've been able to generate so many exits, to 25% IRR as we talked about. The extant book, I'm not aware of any deals where we've had to put in capital from a refinancing need. And we have years to run for the existing book as well.

這就是我們如何能夠產生如此多的退出，達到我們所說的 25% 的 IRR。在現有的書中，我不知道有任何我們必須從再融資需求中投入資金的交易。我們還有很多年的時間來爭取現有的書。

Right now, it's -- on the new deal front, is, of course, is tricky, because of high financing costs. But hey, that's true across the board in the corporate world too, not just real estate, if you're borrowing money at 12.5% for a first-lien loan in the corporate world and [worth] that, that's an 8x multiple, and you're an equity sponsor paying more than 8x to your company, you've got a negative arb or a negative spread in the corporate world, not just in real estate where it's talked about even more. Obviously, want to examine the underlying profit, your underlying business as the case may be, to make sure there's sufficient growth to justify if one were to be that sort of a sponsor.

目前，在新交易方面，由於融資成本高昂，當然很棘手。但是，嘿，這在企業界也是如此，不僅僅是房地產，如果你在企業界以 12.5% 的利率借錢獲得第一留置權貸款，並且[值得]，這是 8 倍，並且如果你是一個股權贊助商，向你的公司支付超過8 倍的費用，那麼你在企業界就有負套利或負利差，而不僅僅是在房地產領域，這一點被談論得更多。顯然，要檢查基本利潤，您的基本業務（視情況而定），以確保有足夠的成長來證明是否有資格成為此類贊助商。

Within real estate, we viewed it as more attractive to focus on sort of tweener capital, preferred equity solutions, or solutions where there's advantageous tax abatements or other type of situations where we can purchase through a pro forma cap rate that is attractive, to give ourselves a more advantageous spread. We're working on such deals right now.

在房地產領域，我們認為專注於中間資本、優先股解決方案或具有有利減稅或其他類型情況的解決方案更具吸引力，在這些情況下我們可以通過有吸引力的預計上限利率進行購買，以給予我們自己更有利的價差。我們現在正在進行此類交易。

Did I answer your questions, Finian?

我回答你的問題了嗎，菲尼安？

Yes, sure. That's helpful. Just drilling down a bit on adding new capital. The recent additional investment or loan to NP REIT was explained for CapEx and working capital for existing properties, normally, I think that would be handled at the property level. So is that a function of higher interest rates at the property level, say, for the smaller part of your book that's floating rate? And should we expect any more of that near term?

是的，當然。這很有幫助。只是深入了解增加新資本。最近對 NP REIT 的額外投資或貸款被解釋為現有物業的資本支出和營運資金，通常情況下，我認為這將在物業層面處理。那麼，這是否是房地產層級更高利率的函數，比如說，對於你帳簿中較小的浮動利率部分？我們是否應該對近期的情況抱持更多的期待？

There's 2 things going on. One is the financing the Prospect Capital Corporation has to NPRC, the portfolio company, so that's the dynamic that you saw in the last quarter.

有兩件事正在發生。其中之一是 Prospect Capital Corporation 向投資組合公司 NPRC 提供的融資，這就是您在上個季度看到的動態。

But the second aspect is you'll typically see fundings each quarter that occurs from NPRC, the portfolio company, to individual properties. That's normal and expected because we're deploying CapEx dollars over time in our value-added renovation program, and then other uses for CapEx. So when you spend the CapEx moneys, it's over a multiyear period. You, of course, have occupied apartments, people live in those, and you're only going to renovate upgrade a particular unit when it turns over, of course, not when someone is actually living there.

但第二個方面是，您通常每季都會看到從 NPRC（投資組合公司）到個別資產的資金。這是正常的，也是預期的，因為隨著時間的推移，我們會在增值改造計畫中部署資本支出，然後將資本支出用於其他用途。因此，當您花費資本支出時，它會持續多年。當然，您已經佔用了公寓，人們住在其中，並且您只會在特定單元翻轉時對其進行翻新升級，當然，而不是在有人實際居住在那裡時。

Because of what's happened with individual housing and what the financing costs look like there, making it prohibitively expensive and causing a sharp downturn in housing volumes and purchasers, folks are staying in their apartments much longer. Our turnover is less -- far less, than in past years. So that's good news from an occupancy standpoint. That's good news from a rent growth standpoint. It does sometimes cause a slower rollout of the renovation programs, at least within the units separate from the common areas, because you do the upgrade when someone moves out. Is that helpful?

由於個人住房的情況以及那裡的融資成本，使其價格過高，並導致住房數量和購買者急劇下降，人們在公寓裡停留的時間要長得多。我們的營業額比過去幾年少得多。因此，從入住率的角度來看，這是個好消息。從租金成長的角度來看，這是個好消息。有時，它確實會導致裝修計劃的推出速度變慢，至少在與公共區域分開的單位內是如此，因為當有人搬出時，你就會進行升級。有幫助嗎？

Very much so. If I could do a bonus question. On the preferreds, the new issuances fallen quite a bit in recent quarters. So seeing if that's maybe a function of interest rates, if you might need to start offering higher rates there, or if you're happy with this level. And in that context, can you provide a reminder on the sort of target preferred stock composition and your capital structure?

非常如此。如果我能做一個獎勵問題就好了。在優先股方面，最近幾季的新發行量大幅下降。因此，看看這是否可能是利率的函數，您可能需要開始提供更高的利率，或者您是否對此水平感到滿意。在這種情況下，您能否提醒一下目標優先股的組成和您的資本結構？

Sure. The year-over-year comparisons are challenging or, let's say, not necessarily apples-to-apples for 2023 compared to 2022. There were a couple of significant liquidity events that happened in the nontraded channel for other issuers in 2022. And what happened was holders of that paper ended up recycling into Prospect's program since we're the #1 market leader and over 50% market share player, we picked up those volumes.

當然。同比比較具有挑戰性，或者說，2023 年與 2022 年相比不一定是同類比較。2022 年其他發行人的非交易管道發生了幾起重大流動性事件。發生了什麼該論文的持有者最終被回收到Prospect 的計劃中，因為我們是第一大市場領導者，並且擁有超過50% 的市場份額，因此我們獲得了這些卷。

There haven't been such liquidity events which actually occurred in the REIT space in 2023. I'm not aware of any significant ones expected. So comping that year-over-year means, of course, there's been a decline in volumes.

2023 年 REIT 領域並未實際發生過此類流動性事件。我不知道預計會發生任何重大事件。因此，與去年同期相比，當然意味著銷量有所下降。

And then the second point you mentioned is a continued increase in prevailing rates, which has also no doubt had an impact on volumes as well. We're not currently envisioning any changes to rates. We manage our cost of capital quite carefully, and we're very happy with our cost of capital, I think your unsecured debt cost of capital is around 4% right now. And even after you factor in the preferreds, we're 5 and change. We're seeing folks out there issue paper much more expensively than that. We're not in a position where we have to necessarily do that, with very little in the way of maturities coming up for the next couple of years.

您提到的第二點是現行利率的持續上升，這無疑也對交易量產生了影響。我們目前預計不會對費率進行任何更改。我們非常謹慎地管理我們的資本成本，我們對我們的資本成本非常滿意，我認為你們的無擔保債務資本成本現在約為 4%。即使考慮到偏好因素，我們還是 5，並且會改變。我們看到人們發行的論文比這要貴得多。我們並不處於必須這樣做的境地，因為未來幾年的到期日很少。

But as always, we'll examine what the various capital markets offer us for financing. Recall Prospect is the firm that pioneered the vast bulk of liability structures in the BDC industry, going back to being the first convertible bond issuer -- first institutional bond issuer about a decade ago. And then a pioneered medium-term notes, institutional bonds, ATM programs, preferreds, perpetual preferreds, nontraded preferred. So we don't necessarily have certain composition targets. What we do is we focus on the various markets and see what's most attractive for us as an issuer. And when we issue we want to do so as a choice and from a position of strength and also being opportunistic about the climate we find ourselves in.

但與往常一樣，我們將研究各種資本市場為我們提供的融資。 Recall Prospect 是 BDC 行業中大部分負債結構的先驅者，可以追溯到大約十年前的第一家可轉換債券發行人——第一家機構債券發行人。然後開創了中期票據、機構債券、ATM 計劃、優先股、永久優先股、非交易優先股。所以我們不一定有一定的成分目標。我們所做的就是關注各個市場，看看什麼對我們作為發行人最有吸引力。當我們發行股票時，我們希望將其作為一種選擇，並從強勢地位出發，並對我們所處的環境採取投機取巧的態度。

So we're very happy. A couple of years back in a low rate environment, we were quite proactive in doing 3 bond deals during that time period, and have not been so interested in chasing that market, unlike some of our peers who perhaps have done so out of necessity rather than balance sheet strength, choice. So hopefully, that helps with your bonus question, Finian. Thank you.

所以我們很高興。幾年前，在低利率環境下，我們在這段時間內非常積極地進行了三筆債券交易，並且對追逐該市場並不那麼感興趣，不像我們的一些同行，他們可能是出於必要而不是這樣做比資產負債表的強度更重要的是選擇。希望這對你的額外問題有所幫助，菲尼安。謝謝。

The next question is from Sean-Paul Adams with Raymond James.

下一個問題是由肖恩·保羅·亞當斯和雷蒙德·詹姆斯提出的。

Touching back on the Series A fixed rate preferred stock. How did you guys quite arrive to the valuation of a 36% discount to par? I know you guys talked about anticipating the future perpetual stock offers to pay a higher dividend, but I mean, it implies like evaluate a dividend pay rate of closer to 8%.

回顧 A 系列固定利率優先股。你們是如何得出比面額折扣 36% 的估值的？我知道你們談論過預期未來的永續股要支付更高的股息，但我的意思是，這意味著評估接近 8% 的股息支付率。

You're referring to our existing tender offer or what we just announced for our traded perpetual preferred? Well, it's a balancing act. And it's an option, of course, not an obligation for any holder should they choose to utilize this option, as opposed to obtaining liquidity in a fairly limited volume issue.

您指的是我們現有的要約收購還是我們剛剛宣布的可交易的永久優先股？嗯，這是一個平衡的行為。當然，這是一種選擇，而不是任何持有人選擇使用此選擇時的義務，而不是在相當有限的發行量中獲得流動性。

And it's a balancing act. We think the premium offer to what was launched just attractive. But balancing that as an issuer, and it's a perpetual instrument, we want to make sure it's net investment income and net asset value accretive as well. So we struck what we thought was the right balance between the 2. And we'll see what folks think later this month.

這是一種平衡行為。我們認為，相對於已推出的產品而言，溢價優惠非常有吸引力。但作為發行人平衡這一點，並且它是一種永久工具，我們希望確保它的淨投資收入和淨資產價值也能增值。因此，我們在兩者之間取得了我們認為的正確平衡。本月晚些時候我們將看看人們的想法。

Okay. And turning to the NPRC portfolio. Are you anticipating the terminal cap rate, one used to value the common equity, to change materially? Relatively given that the public multifamily REITs are now trading in the 6.5% to 7% cap rate range and you're currently sitting at like a 5.8% terminal cap rate.

好的。並轉向 NPRC 投資組合。您是否預期用於對普通股進行估值的終端上限利率會發生重大變化？相對而言，公共多戶房地產投資信託基金目前的上限利率為 6.5% 至 7%，而目前的上限利率約為 5.8%。

Right. We're participants in the private markets, not the public markets. We don't purchase public REIT equity. We don't purchase public REIT securities really of any kind. It's a private equity, private capital investment strategy at NPRC, just like the rest of our business. We invest in private companies almost exclusively. Sometimes we'll make a loan to a microcap public company, but that's usually the exception, not the rule.

正確的。我們是私人市場的參與者，而不是公共市場的參與者。我們不購買公共房地產投資信託基金股權。我們實際上並未購買任何類型的公共房地產投資信託基金證券。與我們的其他業務一樣，這是 NPRC 的私募股權、私人資本投資策略。我們幾乎全部投資於私人公司。有時我們會向微型股上市公司提供貸款，但這通常是例外，而不是規則。

There's been a delta between private real estate properties and where they trade and the public REITs for as long as I can remember. But that's -- those aren't the markets in which we participate. And of course, there are other G&A and trading and other costs pertaining to public REITs. And lack of control as well, there's a control premium aspect that's advantageous, of course, when you buy one of these properties and you have the ability to effectuate change through a value-add renovation program like what I described to the last questioner.

從我記事起，私人房地產及其交易地點與公共房地產投資信託基金之間就一直存在著差異。但那就是──那些不是我們參與的市場。當然，還有其他一般管理費用、交易以及與公共房地產投資信託基金相關的其他成本。而且缺乏控制，當然，當您購買其中一處房產並且您有能力透過增值翻新計劃（就像我向上一個提問者描述的那樣）實現變革時，控制溢價方面是有利的。

We're also not in the prediction business for cap rates, for interest rates, for any of those types of markets. And what is arrived at there is all done on a third-party independent valuation basis approved by independent directors, independent auditors. We think we have best practice governance. And this is what we brought to the industry as the first company in our industry to use 100% every quarter since inception fair valuations in 2004 when we IPO-ed. That did not exist before Prospect Capital brought it to there, and we'll continue to utilize that best practice approach.

我們也不從事上限利率、利率以及任何此類市場的預測業務。而且所得的結果都是在獨立董事、獨立審計師所批准的第三方獨立評估基礎上完成的。我們認為我們擁有最佳實踐治理。這就是我們作為行業中第一家自 2004 年 IPO 成立以來每個季度都使用 100% 公平估值的公司為該行業帶來的成果。在 Prospect Capital 將其帶到那裡之前，這種情況並不存在，我們將繼續利用這種最佳實踐方法。

Thank you. This concludes our question-and-answer session. I would now like to hand the call back to John Barry for closing remarks.

謝謝。我們的問答環節到此結束。現在我想將電話轉回約翰·巴里（John Barry），讓他致閉幕詞。

Okay. Well, thank you, and have a wonderful afternoon, everyone. Bye now.

好的。好的，謝謝大家，祝大家有個愉快的下午。再見了。

Thank you all.

謝謝你們。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。