Seeking Alpha

Prospect Capital improves size and terms of credit facility

  • The revolving credit facility for subsidiary Prospect Capital (NASDAQ:PSEC) Funding LLC has been increased to $1.5B, with the term extended to 5.5 years from today, and the pricing cut 50 basis points to 30-day Libor plus 2.25%.
  • The facility has closed $800M in commitments to date.
  • Source: Press Release
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Comments (10)
  • auriolus
    , contributor
    Comments (6) | Send Message
     
    Great news, reducing costs by almost 20% for this $1.5bn credit facility...
    2 Sep, 07:44 AM Reply Like
  • zmarzz
    , contributor
    Comments (39) | Send Message
     
    This is a step in the right direction, but it does not even come close to making up the shortfall in net investment income.
    2 Sep, 08:58 AM Reply Like
  • auriolus
    , contributor
    Comments (6) | Send Message
     
    indeed, I think there will be more smaller steps like this rather than a single big leap that will save the dividend
    2 Sep, 09:20 AM Reply Like
  • germain
    , contributor
    Comments (8) | Send Message
     
    What was it before?
    2 Sep, 08:17 AM Reply Like
  • lstahler
    , contributor
    Comments (165) | Send Message
     
    A year back, PSEC hit a low qtr. of .25 cent per share, but covered .33 cents for smooth uninterrupted dividends. So, don't worry about January, etc.
    2 Sep, 08:32 AM Reply Like
  • asapco
    , contributor
    Comments (38) | Send Message
     
    Thanks for researching. Very helpful.
    2 Sep, 08:58 AM Reply Like
  • drmwsunner
    , contributor
    Comments (124) | Send Message
     
    This is a slam dunk through the end of the year. Then the future divy payout for PSEC will have to be rethought as to whether it is likely to continue at the current rate. Obviously, the next earnings report will tell the tale for 2015. I'm still sanguine about our prospects.
    2 Sep, 09:05 AM Reply Like
  • critterlitter
    , contributor
    Comments (419) | Send Message
     
    Yeah, right now, 2015 is on eggshells with regards to maintaining the dividend. The hurdle is in front of Prospect, but no one has a crystal ball. Maybe they'll get into a run of some smaller, less risky originations that bolster the portfolio.

     

    We've got to have faith in what they're doing or we'd be baling out. I'm thinking long-term and don't know if I want to try to sell and then buy again for a short-term strategy. Maybe weathering out the ominous weather won't be all that bad. Looking back two years from now will tell the story no matter what strategy is employed. Ahhhh, that ol' 20/20 hindsight that cannot be gained on the front end ...
    2 Sep, 10:19 AM Reply Like
  • jmkdog
    , contributor
    Comments (236) | Send Message
     
    I think they cut the management fee before they cut the dividend.
    A drop in the equity would be far more damaging to the wallets of management than a slight reduction in costs.

     

    This is a HUGE leap, to be followed by a few more very soon. Div is safe and this latest dip under NAV is one of several so far in 14 that offer new and old investors a chance at improving ROI.
    2 Sep, 11:53 AM Reply Like
  • drmwsunner
    , contributor
    Comments (124) | Send Message
     
    Trust but verify.
    3 Sep, 09:03 AM Reply Like
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