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  • Prospect Capital: FQ4 2015 Results [View article]
    The end of the call addressed rising interest rates related to the CLO investments (discussed in the article before this). My take was that management believes rising interest rates are already taken into account with the current cash flows from the CLO investments.
    Aug 27, 2015. 12:24 PM | Likes Like |Link to Comment
  • Prospect Capital: Rising Interest Rates Could Drive Lower Earnings And NAV [View article]
    FYI - Quick update on this article as it relates to PSEC earnings call today. Clearly management read this article and discussed rising interest rates related to the CLO investments. My take was that management believes rising interest rates are already taken into account with the current cash flows from the CLO investments.
    Aug 27, 2015. 12:17 PM | Likes Like |Link to Comment
  • Prospect Capital: FQ4 2015 Results [View article]
    Quick Update from Call - The first question on the call was about the rights offerings and the company mentioned that they would not proceed unless the economics made sense. They also mentioned that only a portion of the CLOs would be part of this and that the total would account for less than 10% of assets as well as NAV and NII neutral.

    Next questions were related to stock repurchase and asset valuations. Management spent quite a bit of time talking about asset valuations.
    Aug 27, 2015. 11:36 AM | Likes Like |Link to Comment
  • Prospect Capital: FQ4 2015 Results [View article]
    You're taking the question too literally. Basically if there is a chance of the assets being valued lower through the transaction.

    Keep in mind that in order to be NAV neutral (to PSEC) the buyers of the rights need to pay the current fair value of the collateral contributed to PYLD.
    Aug 27, 2015. 08:29 AM | Likes Like |Link to Comment
  • Prospect Capital: FQ4 2015 Results [View article]
    TK - I think you are referring to the control premium?
    Aug 27, 2015. 04:14 AM | Likes Like |Link to Comment
  • Prospect Capital: FQ4 2015 Results [View article]
    Sinkerman - I use the same measuring stick of NII for all BDCs but then I also track accumulated undistributed income and gains for each as well. There are plenty of BDCs with 3 to 6 months worth of undistributed and many of these BDCs have been paying special dividends each year.
    Aug 27, 2015. 04:10 AM | Likes Like |Link to Comment
  • Prospect Capital: Rising Interest Rates Could Drive Lower Earnings And NAV [View article]
    ejmail - Thank you.
    Aug 26, 2015. 05:35 AM | Likes Like |Link to Comment
  • Prospect Capital: Q4 2015 Earnings Preview, 8 Key Issues And Questions [View article]
    To be honest, investors should mostly be concerned about the rights offerings - progress, timing and preserving NAV per share. On the last call they did not mention much especially with regards to being dilutive and they also did not allow enough questions so that it would come up like it did on the previous call.
    Aug 25, 2015. 07:41 PM | Likes Like |Link to Comment
  • Prospect Capital: Q4 2015 Earnings Preview, 8 Key Issues And Questions [View article]
    Cauchy - Thank you for sharing your thoughts and projections. If I have time I will do the same this week. Would like to see your breakdown of the operating expenses ($105,438) for the quarter.

    FYI - My income projections are a little higher but mostly due to non-interest items. Looks like you are projecting $5mm and I have $10mm which is anyone's guess. However, I have $106.4mm on the expenses which is close to yours with probably higher incentive from higher income so we are close.

    Again, thanks for the article.
    Aug 25, 2015. 05:23 PM | 1 Like Like |Link to Comment
  • Prospect Capital: Rising Interest Rates Could Drive Lower Earnings And NAV [View article]
    2 and 20 that does not take into account capital losses when calculating the 20. Win win for management to take on higher risk for higher yield.
    Aug 24, 2015. 05:55 PM | 5 Likes Like |Link to Comment
  • Prospect Capital: Rising Interest Rates Could Drive Lower Earnings And NAV [View article]
    Beckster - Thank you and you are correct on all accounts. Only 3 dividend paying BDCs use CLOs in a meaningful way and they are the all the higher yield lower NAV multiples ones. Not a coincidence.

    TICC and KCAP are the other two and the shoe has started to drop on both as they have been marking down these investments. PSEC has not done this yet. I will have an article coming up about it and hopefully we see some steps from PSEC this week.

    CLOs have had the perfect storm of low interest and default rates. If either or both of these increase, the CLO residuals could get hammered from an NII and NAV standpoint. This is probably why TICC is trying to change course and PSEC is trying to find a way to use a rights offering.
    Aug 24, 2015. 05:38 PM | 5 Likes Like |Link to Comment
  • Prospect Capital: Rising Interest Rates Could Drive Lower Earnings And NAV [View article]
    Zaks - I do provide that information offline and have been incorporating into the reports for each BDC. This information is usually not appreciated by readers on Seeking Alpha as you can see from the comments on this article.

    Here is the link:

    http://bit.ly/1UOVgcQ
    Aug 24, 2015. 05:30 PM | 6 Likes Like |Link to Comment
  • Prospect Capital: Rising Interest Rates Could Drive Lower Earnings And NAV [View article]
    zaks - Thank you and that was the point of the article. If the Fed does raise rates it will be slowly and over a long period of time as not to upset the markets. This means that it will be in the 25 to 100 basis points range through 2016 which could be painful for some BDCs that have 99% of their portfolio with floors over 1%.

    Clearly this article was written for longer term investors rather than day traders worried about the short-term. A lot can happen over the next three Fed meetings this year and the 8 next year.
    Aug 24, 2015. 05:23 PM | 3 Likes Like |Link to Comment
  • Prospect Capital: Rising Interest Rates Could Drive Lower Earnings And NAV [View article]
    FYI - Most of the comments are disregarding the following section of the article that was in the introduction:

    "At this point, most analysts, investors and economists are only expecting small rate increases through 2016."

    What this means is that there is a possibility of rates going up a total of 100 basis points over the next 11 Fed meetings.

    Also, this article was supposed to come out last week and just didn't get around to it.
    Aug 24, 2015. 03:55 PM | 7 Likes Like |Link to Comment
  • TriplePoint Venture Growth: Poised For Growth? [View article]
    CBA - BDCs are much more appropriate in IRA accounts due to tax treatment of dividends that is usually considered as income rather than LT cap gains or qualified dividends. It changes each year but BDCs like MAIN attempt to maximize positive tax treatment of dividends.

    Keep in mind that most BDCs are RICs designed to avoid double taxation at the corporate/federal level. "Conduit theory" to provide maximum returns to shareholders.
    Aug 17, 2015. 08:00 AM | Likes Like |Link to Comment
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