Large business development company (BDC) Prospect Capital (PSEC) is on deck to announce earnings for the quarter ending 6/30/2022 on Monday.
PSEC is an unloved BDC, but is large, with $7.5 billion in assets and had rescheduled their report release from the 24th to the 29th.
I am watching the company balance sheet for changes in net assets as I have noted some weakness in some other BDC’s in recent earnings releases primarily because of ‘unrealized’ and ‘realized’ losses which have contributed to reductions in net asset values. PSEC has marked up assets substantially in recent quarters and it will be interesting to see what they have done last quarter–BDC Buzz believes that PSEC uses pretty aggressive valuations when assigning values to Level 3 assets (values of assets which can not be directly observed–I like to call them ‘trust us’ assets).
PSEC has a 5.35% perpetual preferred outstanding (PSEC-A) as well as a 5.50% non exchange traded preferred.
BDC Buzz has an article on Prospect which was posted on 8/21/2022 which outlines the good, the bad and the ugly of this unloved BDC.