Dividend maintenance in focus on Prospect Capital earnings call

|About: Prospect Capital Corpora... (PSEC)|By:, SA News Editor

Noting this quarter's earnings report contained no usual announcement of future distributions, one caller asks whether a dividend cut is in the cards (the company has previously announced payouts of about $0.11 per month for the rest of the year).

Another analyst notes there have been several consecutive quarters now when NII didn't match the dividend, and by his calculations, the portfolio yield (now at 12.1%, down from 12.5% the previous quarter) would need to rise 100 basis points for NII to rise to the level of the payout. Will a return of capital be necessary to fund the dividend? Management responds that it wants to fund the dividend out of income, and earlier in the call noted - without giving numbers - that the company still has spillover income to help fund payouts.

Also noted by management as ways to boost income would be higher leverage, cutting costs, and finding deals with higher yields.

Previously: Prospect Capital results hurt by slow origination activity

Down more than 5% earlier, PSEC has been bouncing through the call, now off 2.7%