Business Context and Reporting Period
Company: Prospect Capital Corporation (PSEC)
Filing Type: Form 8-K (Current Report)
Date of Report: May 8, 2026
Event: Entry into a Material Definitive Agreement and Material Modification to Rights of Security Holders.
Key Financial Metrics and Capital Structure
This filing does not report operational financial metrics such as revenue, profit, cash flow, or margins. The primary financial data relates to a proposed capital raise:
- Proposed Offering Size: Up to $400,000,000 aggregate liquidation preference.
- Security Type: 5.35% Series A Fixed Rate Cumulative Perpetual Preferred Stock.
- Par Value: $0.001 per share.
- Commission: Sales Agents will receive up to 2.0% of the gross sales price.
- Common Stock Impact: Reclassification of 16,000,000 authorized common shares into Preferred Stock.
- Remaining Common Stock: Decreased from 1,248,117,104 to 1,232,117,104 shares.
Material Changes Versus Prior Period
The filing details a structural change to the company's capitalization rather than a change in operating performance:
- Capital Structure: Establishment of a new class of preferred stock (Series A) with a 5.35% fixed dividend rate.
- Authorized Shares: Reduction in the number of shares classified as Common Stock by 16,000,000 to accommodate the new Preferred Stock designation.
- Agreements: Execution of an Equity Distribution Agreement with Prospect Capital Management L.P., Prospect Administration LLC, and A.G.P. / Alliance Global Partners.
Guidance, Outlook, and Risks
Management Commentary and Outlook: The Company has no obligation to sell any shares under the agreement. Actual sales depend on market conditions, the trading price of the Series A Preferred Stock, and the Company's determination of its need for additional capital. The offering may be suspended at any time.
Risks and Contingencies:
- Market Dependency: Sales are contingent on prevailing market prices and conditions.
- Dilution: Issuance of preferred stock may affect the rights of common stockholders, though specific dilution impacts on earnings per share are not quantified in this filing.
- Regulatory: The report does not constitute an offer to sell securities in jurisdictions where such an offer would be unlawful prior to registration.
Important Facts for Investor Verification
- Verify the actual volume of shares sold under the $400 million "at-the-market" facility in subsequent filings.
- Confirm the impact of the 5.35% fixed dividend obligation on the Company's future cash flow and earnings available to common shareholders.
- Review the full text of the Equity Distribution Agreement (Exhibit 1.1) for specific termination provisions and conditions to the Sales Agents' obligations.
- Monitor the trading price of the Series A Preferred Stock (Symbol: PSEC PRA) to assess the success of the offering.