Published: 2023-05-11 00:00:00 ET

 

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023

OR

 

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER: 814-00736

PENNANTPARK INVESTMENT CORPORATION

(Exact name of registrant as specified in its charter)

 

MARYLAND		20-8250744
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1691 Michigan Avenue, Miami Beach, Florida		33139
(Address of principal executive offices)		(Zip Code)

 

(786) 297-9500

(Registrant’s Telephone Number, Including Area Code)

 

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	PNNT	The New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer		☐		Accelerated filer		☐
Non-accelerated filer		☑		Smaller reporting company		☐
Emerging growth company		☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding as of May 11, 2023 was 65,224,500.

 

 

 

 

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PENNANTPARK INVESTMENT CORPORATION

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2023

TABLE OF CONTENTS

 

PART I. CONSOLIDATED FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Statements of Assets and Liabilities as of March 31, 2023 (unaudited) and September 30, 2022		4
Consolidated Statements of Operations for the three and six months ended March 31, 2023 and 2022 (unaudited)		5
Consolidated Statements of Changes in Net Assets for the three and six months ended March 31, 2023 and 2022 (unaudited)		6
Consolidated Statements of Cash Flows for the six months ended March 31, 2023 and 2022 (unaudited)		7
Consolidated Schedules of Investments as of March 31, 2023 (unaudited) and September 30, 2022		8
Notes to Consolidated Financial Statements (unaudited)		19
Report of Independent Registered Public Accounting Firm (PCAOB ID 49)		36
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		38
Item 3. Quantitative and Qualitative Disclosures About Market Risk		53
Item 4. Controls and Procedures		53
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		54
Item 1A. Risk Factors		54
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		55
Item 3. Defaults Upon Senior Securities		55
Item 4. Mine Safety Disclosures		55
Item 5. Other Information		55
Item 6. Exhibits		56
SIGNATURES		57

 

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PART I—CONSOLIDATED FINANCIAL INFORMATION

 

We are filing this Quarterly Report on Form 10-Q, or the Report, in compliance with Rule 13a-13 as promulgated by the Securities and Exchange Commission, or the SEC, under the Securities Exchange Act of 1934, as amended, or the Exchange Act. In this Report, except where context suggest otherwise, the terms “Company,” “we,” “our” or “us” refers to PennantPark Investment Corporation and its consolidated subsidiaries; “PennantPark Investment” refers to only PennantPark Investment Corporation; “our SBIC Fund” refers collectively to our consolidated subsidiaries, PennantPark SBIC II LP, or SBIC II, and its general partner, PennantPark SBIC GP II, LLC; “Funding I” refers to PennantPark Investment Funding I, LLC, a wholly-owned subsidiary prior to deconsolidation on July 31, 2020; “Taxable Subsidiary” refers to PNNT Investment Holdings, LLC; “PSLF” refers to PennantPark Senior Loan Fund, LLC, an unconsolidated joint venture; “PTSF II” refers to PennantPark-TSO Senior Loan Fund II, LP, an unconsolidated limited partnership; “PennantPark Investment Advisers” or “Investment Adviser” refers to PennantPark Investment Advisers, LLC; “PennantPark Investment Administration” or “Administrator” refers to PennantPark Investment Administration, LLC; “SBA” refers to the Small Business Administration; “SBIC” refers to a small business investment company under the Small Business Investment Act of 1958, as amended, or the “1958 Act”; “BNP Credit Facility” refers to our revolving credit facility with BNP Paribas prior to deconsolidation of Funding I; “Truist Credit Facility” refers to our multi-currency, senior secured revolving credit facility with Truist Bank (formerly SunTrust Bank), as amended and restated; “2024 Notes” refers to our 5.50% Notes due 2024; “2026 Notes” refers to our 4.50% Notes due May 2026; “2026 Notes-2” refers to our 4.00% Notes due November 2026; “BDC” refers to a business development company under the Investment Company Act of 1940, as amended, or the “1940 Act”; “SBCAA” refers to the Small Business Credit Availability Act; “Code” refers to the Internal Revenue Code of 1986, as amended; and “RIC” refers to a regulated investment company under the Code. References to our portfolio, our investments and our business include investments we make through SBIC II and other consolidated subsidiaries.

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Item 1. Consolidated Financial Statements

 

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(In thousands, except share and per share data)

 

		March 31, 2023				September 30, 2022
		(unaudited)
Assets
Investments at fair value
Non-controlled, non-affiliated investments (cost—$876,705 and $882,513, respectively)		$	879,572			$	932,155
Non-controlled, affiliated investments (cost—$54,813 and $37,612, respectively)			51,807				34,760
Controlled, affiliated investments (cost—$233,082 and $381,904, respectively)			201,132				259,386
Total investments (cost—$1,164,600 and $1,302,029, respectively)			1,132,511				1,226,301
Cash and cash equivalents (cost—$63,105 and $52,844, respectively)			63,135				52,666
Interest receivable			4,419				3,593
Receivable for investments sold			—				29,494
Distribution receivable			4,834				2,420
Prepaid expenses and other assets			12,036				4,036
Total assets			1,216,935				1,318,510
Liabilities
Distributions payable			12,067				9,784
Payable for investments purchased			15,149				—
Truist Credit Facility payable, at fair value (cost—$377,420 and $385,920, respectively) (See Notes 5 and 10)			362,268				376,687
2026 Notes payable, net (par— $150,000) (See Notes 5 and 10)			147,218				146,767
2026 Notes-2 payable, net (par— $165,000) (See Notes 5 and 10)			161,800				161,373
SBA debentures payable, net (par—zero and $20,000, respectively) (See Notes 5 and 10)			—				19,686
Base management fee payable (See Note 3)			4,040				4,849
Incentive fee payable (See Note 3)			3,530				—
Interest payable on debt			6,093				6,264
Accrued expenses			9,055				6,639
Deferred tax liability			—				896
Total liabilities			721,220				732,945
Commitments and contingencies (See Note 11)
Net assets
Common stock, 65,224,500 shares issued and outstanding    Par value $0.001 per share and 100,000,000 shares authorized			65				65
Paid-in capital in excess of par value			748,169				748,169
Accumulated deficit			(252,519	)			(162,669	)
Total net assets		$	495,715			$	585,565
Total liabilities and net assets		$	1,216,935			$	1,318,510
Net asset value per share		$	7.60			$	8.98

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share data)

 

		Three Months Ended March 31,								Six Months Ended March 31,
		2023				2022				2023				2022
Investment income:
From non-controlled, non-affiliated investments:
Interest		$	26,759			$	14,543			$	48,990			$	30,083
Payment-in-kind			24				996				24				3,406
Dividend income			1,131				—				1,131				—
Other income			346				2,612				833				6,803
From non-controlled, affiliated investments:
Interest			81				—				81				—
From controlled, affiliated investments:
Interest			3,648				2,343				6,506				4,609
Payment-in-kind			658				1,425				1,789				3,551
Dividend income			3,702				2,420				6,958				4,235
Total investment income			36,349				24,339				66,312				52,687
Expenses:
Base management fee (See Note 3)			4,040				4,981				8,642				10,090
Incentive fee (See Note 3)			3,530				—				5,721				2,657
Interest and expenses on debt (See Note 10)			10,587				6,498				20,316				13,385
Administrative services expenses (See Note 3)			267				250				533				500
General and administrative expenses			835				723				1,676				1,446
Expenses before provision for taxes			19,259				12,452				36,888				28,078
Provision for taxes on net investment income			450				200				2,450				400
Total expenses			19,709				12,652				39,338				28,478
Net investment income			16,640				11,687				26,974				24,209
Realized and unrealized gain (loss) on investments and debt:
Net realized gain (loss) on investments and debt:
Non-controlled, non-affiliated investments			(14,613	)			1,889				(10,549	)			7,090
Non-controlled and controlled, affiliated investments			(133,098	)			140,898				(133,098	)			109,624
Debt extinguishment			(289	)			(1,132	)			(289	)			(2,801	)
Provision for taxes on realized gain on investments			(717	)			(5,060	)			(717	)			(5,060	)
Net realized gain (loss) on investments and debt			(148,717	)			136,595				(144,653	)			108,853
Net change in unrealized appreciation (depreciation) on:
Non-controlled, non-affiliated investments			3,950				(158,062	)			(46,567	)			(207,665	)
Non-controlled and controlled, affiliated investments			131,459				6,610				90,411				102,982
Provision for taxes on unrealized appreciation (depreciation) on investments			—				5,045				896				—
Debt appreciation (depreciation) (See Notes 5 and 10)			1,540				1,285				5,919				289
Net change in unrealized appreciation (depreciation) on investments and debt			136,949				(145,122	)			50,659				(104,394	)
Net realized and unrealized gain (loss) from investments and debt			(11,768	)			(8,527	)			(93,994	)			4,459
Net increase (decrease) in net assets resulting from operations		$	4,872			$	3,160			$	(67,020	)		$	28,668
Net increase (decrease) in net assets resulting from operations per common share (See Note 7)		$	0.07			$	0.05			$	(1.03	)		$	0.43
Net investment income per common share		$	0.26			$	0.18			$	0.41			$	0.36

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (Unaudited)

(In thousands)

 

		Three Months Ended March 31,								Six Months Ended March 31,
		2023				2022				2023				2022
Net increase (decrease) in net assets resulting from operations:
Net investment income		$	16,640			$	11,687			$	26,974			$	24,209
Net realized gain (loss) on investments and debt			(148,000	)			141,655				(143,936	)			113,913
Net change in unrealized appreciation (depreciation) on investments			135,409				(151,452	)			43,844				(104,683	)
Net change in provision for taxes on net realized gain (loss) on investments			(717	)			(5,060	)			(717	)			(5,060	)
Net change in provision for taxes on unrealized appreciation (depreciation) on investments			—				5,045				896				—
Net change in unrealized (appreciation) depreciation on debt			1,540				1,285				5,919				289
Net increase (decrease) in net assets resulting from operations			4,872				3,160				(67,020	)			28,668
Distributions to stockholders:			(12,066	)			(9,389	)			(22,830	)			(17,432	)
Capital Transactions:
Repurchase of common stock (See Note 13)			—				(7,055	)			—				(7,055	)
Net increase (decrease) in net assets			(7,194	)			(13,284	)			(89,850	)			4,181
Net assets:
Beginning of period			502,909				677,609				585,565				660,144
End of period		$	495,715			$	664,325			$	495,715			$	664,325
Capital share activity:
Shares of common stock repurchased			—				913,454				—				913,454

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)

 

		Six Months Ended March 31,
		2023				2022
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations			(67,020	)		$	28,668
Adjustments to reconcile net increase (decrease) in net assets resulting from    operations to net cash provided by (used in) operating activities:
Net change in net unrealized (appreciation) depreciation on investments			(43,844	)		$	104,683
Net change in unrealized appreciation (depreciation) on debt			(5,919	)		$	(289	)
Net realized (gain) loss on investments			143,647			$	(116,714	)
Debt extinguishment realized loss			289			$	2,801
Net accretion of discount and amortization of premium			(4,717	)		$	(3,515	)
Purchases of investments			(144,489	)		$	(473,128	)
Payment-in-kind income			(1,812	)		$	(7,688	)
Proceeds from dispositions of investments			144,780			$	537,695
Amortization of deferred financing costs			903			$	1,049
(Increase) or Decrease in:
Interest receivable			(826	)		$	1,565
Receivables from investments sold			29,494			$	12,793
Distribution receivable			(2,414	)		$	(726	)
Prepiad expenses and other assets			(8,000	)		$	—
Increase or (Decrease) in:
Payable for investments purchased			15,149			$	1,213
Interest payable on debt			(171	)		$	1,742
Base management fee payable, net			(809	)		$	401
Performance-based incentive fee payable, net			3,530			$	(575	)
Deferred tax liability			(896	)		$	—
Accrued other expenses			2,416			$	(221	)
Net cash provided by (used in) operating activities			59,291			$	89,754
Cash flows from financing activities:
Repurchase of common stock			-				(7,055	)
Distributions paid to stockholders			(20,546	)			(16,091	)
Net repayments of the 2024 Notes issuance			-				(86,250	)
Proceeds from 2026 Notes-2 issuance			-				160,519
Repayments under SBA debentures			(20,000	)			(36,358	)
Borrowings under Truist Credit Facility			75,500				496,841
Repayments under Truist Credit Facility			(84,000	)			(595,466	)
Net cash provided by (used in) financing activities			(49,046	)			(83,860	)
Net increase (decrease) in cash equivalents			10,245				5,894
Effect of exchange rate changes on cash			223				—
Cash and cash equivalents, beginning of period			52,666				20,357
Cash and cash equivalents, end of period			63,134			$	26,251
Supplemental disclosure of cash flow information:
Interest paid		$	19,584			$	10,594
Taxes paid		$	299			$	5,055
Non-cash exchanges and conversions		$	12,628			$	(31,274	)

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited)

MARCH 31, 2023

(In thousands, except share data)

 

Issuer Name		Maturity / Expiration		Industry		Current  Coupon				Basis Point  Spread Above  Index (4)				Par /  Shares				Cost				Fair Value (3)
Investments in Non-Controlled, Non-Affiliated Portfolio Companies—177.4% of Net Assets (1), (2)
First Lien Secured Debt—118.9% of Net Assets
A1 Garage Merger Sub, LLC		12/22/2028		Personal, Food and Miscellaneous Services			11.12	%		3M L+660					1,705			$	1,681			$	1,680
A1 Garage Merger Sub, LLC - Unfunded Term Loan		12/21/2024		Personal, Food and Miscellaneous Services			—				—				5,253				-				-
A1 Garage Merger Sub, LLC (Revolver) (7)		12/22/2028		Personal, Food and Miscellaneous Services			—				—				2,532				-				(38	)
Ad.net Acquisition, LLC (Revolver)		05/07/2026		Media			11.16	%		3M L+600					178				178				176
Ad.net Acquisition, LLC (Revolver) (7)		05/07/2026		Media			—				—				267				-				(2	)
Altamira Technologies, LLC (Revolver)		07/24/2025		Aerospace and Defense			10.55	%		3M L+550					50				50				50
Altamira Technologies, LLC (Revolver) (7)		07/24/2025		Aerospace and Defense			—				—				138				—				-
Anteriad, LLC (f/k/a MeritDirect, LLC)		05/23/2024		Media			11.46	%		3M L+650					1,268				1,243				1,243
Anteriad, LLC (f/k/a MeritDirect, LLC) (Revolver) (7)		05/23/2024		Media			—				—				1,612				—				(48	)
Any Hour Services		07/21/2027		Personal, Food and Miscellaneous Services			10.49	%		3M L+563					4,099				4,077				3,986
Any Hour Services (Revolver) (7)		07/21/2027		Personal, Food and Miscellaneous Services			—				—				1,147				—				(32	)
Apex Service Partners, LLC		07/31/2025		Personal, Food and Miscellaneous Services			7.60	%		1M L+550					1,331				1,331				1,324
Apex Service Partners, LLC Term Loan C		07/31/2025		Personal, Food and Miscellaneous Services			9.08	%		1M L+550					1,893				1,876				1,883
Apex Service Partners, LLC (Revolver)		07/31/2025		Personal, Food and Miscellaneous Services			10.26	%		3M L+525					466				466				464
Apex Service Partners, LLC (Revolver) (7)		07/31/2025		Personal, Food and Miscellaneous Services			—				—				466				—				(2	)
Applied Technical Services, LLC		12/29/2026		Environmental Services			10.91	%		3M L+575					2,256				2,234				2,211
Applied Technical Services, LLC (7)		04/21/2023		Environmental Services			—				—				735				—				(6	)
Applied Technical Services, LLC (Revolver)		12/29/2026		Environmental Services			12.47	%		3M P+475					825				825				809
Applied Technical Services, LLC (Revolver) (7)		12/29/2026		Environmental Services			—				—				175				—				(4	)
Arcfield Acquisition Corp. (Revolver) (7)		03/07/2028		Aerospace and Defense			—				—				2,263				—				(45	)
Berwick Industrial Park		05/02/2023		Buildings and Real Estate			11.00	%			—				4,000				4,005				3,936
Beta Plus Technologies, Inc.		07/01/2029		Business Services			9.42	%		SOFR+475					4,975				4,886				4,378
BioDerm, Inc.		01/31/2028		Healthcare, Education and Childcare			10.86	%		3M L+650					9,000				8,895				8,865
BioDerm, Inc. (Revolver) (7)		01/31/2028		Healthcare, Education and Childcare			—				—				1,071				—				(16	)
Blackhawk Industrial Distribution, Inc.		09/17/2024		Distribution			11.15	%		3M L+625					1,407				1,394				1,375
Blackhawk Industrial Distribution, Inc.(7)		09/17/2024		Distribution			—				—				3,808				—				(67	)
Blackhawk Industrial Distribution, Inc. (Revolver)		09/17/2024		Distribution			11.15	%		3M L+625					343				343				332
Blackhawk Industrial Distribution, Inc. (Revolver) (7)		09/17/2024		Distribution			—				—				3,203				—				(104	)
Broder Bros., Co.		12/04/2025		Consumer Products			10.73	%		3M L+600					9,967				9,967				9,967
Cartessa Aesthetics, LLC		06/14/2028		Distribution			10.90	%		1M L+600					34,229				33,618				33,887
Cartessa Aesthetics, LLC - (Revolver)		06/14/2028		Distribution			10.90	%		1M L+600					1,265				1,265				1,253
Cartessa Aesthetics, LLC - (Revolver) (7)		06/14/2028		Distribution			—				—				2,297				—				(23	)
CF512, Inc.		08/20/2026		Media			10.96	%		3M L+600					6,686				6,607				6,552
CF512, Inc.(Revolver) (7)		08/20/2026		Media			—				—				909				—				(18	)
Compex Legal Services, Inc.		02/09/2026		Business Services			10.45	%		3M L+555					849				840				849
Compex Legal Services, Inc. (Revolver)		02/07/2025		Business Services			10.45	%		3M L+555					393				393				393
Compex Legal Services, Inc. (Revolver) (7)		02/07/2025		Business Services			—				—				262				—				—
Connatix Buyer, Inc. (7)		07/14/2023		Media			—				—				3,158				—				(87	)
Connatix Buyer, Inc. (Revolver) (7)		07/13/2027		Media			—				—				1,859				—				(70	)
Confluent Health, LLC		11/30/2028		Healthcare, Education and Childcare			11.00	%		3M P+300					2,000				1,860				1,860
Crane 1 Services, Inc.		08/16/2027		Personal, Food and Miscellaneous Services			10.91	%		3M L+575					2,588				2,562				2,562
Crane 1 Services, Inc. (Revolver)		08/16/2027		Personal, Food and Miscellaneous Services			10.91	%		1M L+575					78				78				77
Crane 1 Services, Inc. (Revolver) (7)		08/16/2027		Personal, Food and Miscellaneous Services			—				—				214				—				(2	)
DermaRite Industries LLC		06/30/2023		Manufacturing / Basic Industries			12.16	%		1M L+700					8,755				8,749				3,169
Dr. Squatch, LLC		08/31/2027		Personal and Non-Durable Consumer Products			10.75	%		3M L+575					12,853				12,688				12,661
Dr. Squatch, LLC (7)		08/27/2026		Personal and Non-Durable Consumer Products			—				—				2,000				—				(10	)
Dr. Squatch, LLC (Revolver)		08/31/2027		Personal and Non-Durable Consumer Products			10.75	%		1M L+575					1,551				1,551				1,527
Dr. Squatch, LLC (Revolver) (7)		08/31/2027		Personal and Non-Durable Consumer Products			—				—				775				—				(12	)
DRS Holdings III, Inc.		11/03/2025		Consumer Products			10.59	%		3M L+575					7				7				7
DRS Holdings III, Inc. (Revolver) (7)		11/03/2025		Consumer Products			—				—				1,783				—				(52	)
ECL Entertainment, LLC		05/01/2028		Hotels, Motels, Inns and Gaming			12.42	%		1M L+750					19,059				18,930				18,881
ECM Industries, LLC (Revolver)		12/23/2025		Electronics			9.77	%		3M L+450					97				97				93
ECM Industries, LLC (Revolver) (7)		12/23/2025		Electronics			—				—				421				—				(18	)
EDS Buyer, LLC		12/22/2028		Aerospace and Defense			11.15	%		3M L+625					6,250				6,161				6,094
EDS Buyer, LLC - Unfunded Term Loan		12/22/2028		Aerospace and Defense			—				—				5,625				—				(70	)
EDS Buyer, LLC - (Revolver) (7)		12/22/2028		Aerospace and Defense			—				—				1,687				—				(42	)
Exigo Intermediate II, LLC		03/15/2027		Business Services			10.59	%		3M L+575					24,750				24,438				24,255
Exigo Intermediate II, LLC (7)		03/15/2024		Business Services			—				—				7,424				—				(93	)
Exigo Intermediate II, LLC (Revolver) (7)		03/15/2027		Business Services			—				—				1,856				—				(37	)

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

8

---

 

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited) —(Continued)

MARCH 31, 2023

(In thousands, except share data)

 

Issuer Name		Maturity / Expiration		Industry		Current  Coupon				Basis Point  Spread Above  Index (4)				Par /  Shares				Cost				Fair Value (3)
Fairbanks Morse Defense		06/17/2028		Aerospace and Defense			9.48	%		3M L+475					738			$	735			$	702
Five Star Buyer, Inc.		02/23/2028		Leisure, Amusement, Motion Pictures, Entertainment			11.90	%		3M L+700					5,173				5,070				5,069
Five Star Buyer, Inc. - Unfunded Term Loan		02/23/2028		Leisure, Amusement, Motion Pictures, Entertainment			—				—				1,079				—				(22	)
Five Star Buyer, Inc. - Unfunded Revolver		02/23/2028		Leisure, Amusement, Motion Pictures, Entertainment			—				—				670				—				(14	)
Gantech Acquisition Corp.		05/14/2026		Business Services			11.09	%		1M L+625					16,637				16,408				16,055
Gantech Acquisition Corp. (Revolver)		05/14/2026		Business Services			11.09	%		1M L+625					862				863				833
Gantech Acquisition Corp. (Revolver) (7)		05/14/2026		Business Services			—				—				1,128				—				(40	)
Graffiti Buyer, Inc.		08/10/2027		Distribution			10.66	%		3M L+550					227				225				225
Graffiti Buyer, Inc. (7)		08/10/2023		Distribution			—				—				665				—				—
Graffiti Buyer, Inc. (Revolver)		08/10/2027		Distribution			10.66	%		3M L+550					451				451				446
Graffiti Buyer, Inc. (Revolver) (7)		08/10/2027		Distribution			—				—				318				—				(3	)
Hancock Roofing and Construction L.L.C.		12/31/2026		Insurance			10.30	%		1M L+550					160				160				157
Hancock Roofing and Construction L.L.C. (Revolver) (7)		12/31/2026		Insurance			—				—				590				—				(12	)
Holdco Sands Intermediate, LLC		11/23/2028		Aerospace and Defense			10.17	%		3M L+600					1,908				1,876				1,889
Holdco Sands Intermediate, LLC (Revolver) (7)		11/23/2027		Aerospace and Defense			—				—				3,941				—				(39	)
HV Watterson Holdings, LLC		12/17/2026		Business Services			11.41	%		1M L+625					280				278				272
HV Watterson Holdings, LLC (7)		12/17/2026		Business Services			—				—				2,219				—				(43	)
HV Watterson Holdings, LLC - (Revolver)		12/17/2026		Business Services			11.41	%		3M L+625					1,050				1,050				1,022
HV Watterson Holdings, LLC - (Revolver)(7)		12/17/2026		Business Services			—				—				200				—				(5	)
HW Holdco, LLC		12/10/2024		Media			9.78	%		3M L+500					11,237				11,140				11,069
HW Holdco, LLC (7)		12/10/2024		Media			—				—				1,858				—				(9	)
HW Holdco, LLC (Revolver) (7)		12/10/2024		Media			—				—				3,387				—				(51	)
Icon Partners III, LP		05/11/2028		Auto Sector			9.32	%		3M L+450					1,985				1,606				1,395
IDC Infusion Services, Inc.		12/30/2026		Healthcare, Education and Childcare			11.90	%		3M L+700					3,667				3,568				3,593
IDC Infusion Services, Inc. (Revolver) (7)		12/30/2026		Healthcare, Education and Childcare			—				—				4,167				—				(146	)
IG Investments Holdings, LLC (Revolver) (7)		09/22/2027		Business Services			—				—				477				—				(7	)
Imagine Acquisitionco, LLC (7)		11/15/2027		Business Services			—				—				2,341				—				(47	)
Imagine Acquisitionco, LLC (Revolver) (7)		11/15/2027		Business Services			—				—				1,685				—				(51	)
Inception Fertility Ventures, LLC		12/07/2023		Healthcare, Education and Childcare			11.95	%		3M L+715					20,403				20,248				19,995
Infinity Home Services Holdco, Inc.		12/28/2028		Personal, Food and Miscellaneous Services			11.73	%		3M L+685					517				517				506
Infinity Home Services Holdco, Inc. - Unfunded Term Loan		12/28/2023		Personal, Food and Miscellaneous Services			—				—				3,230				—				(65	)
Infinity Home Services Holdco, Inc.(Revolver)		12/28/2028		Personal, Food and Miscellaneous Services			13.75	%		3M L+575					97				97				95
Infinity Home Services Holdco, Inc.(Revolver) (7)		12/28/2028		Personal, Food and Miscellaneous Services			—				—				678				—				(14	)
Infolinks Media Buyco, LLC (7)		11/01/2023		Media			—				—				2,372				—				24
Integrity Marketing Acquisition, LLC		08/27/2025		Insurance			11.00	%		3M L+605					9,930				9,885				9,831
ITI Holdings, Inc.		03/03/2028		Business Services			10.58	%		3M L+550					8,883				8,751				8,705
ITI Holdings, Inc. (Revolver)		03/03/2028		Business Services			10.45	%		3M L+550					942				942				923
ITI Holdings, Inc. (Revolver) (7)		03/03/2028		Business Services			—				—				548				—				(11	)
K2 Pure Solutions NoCal, L.P.		12/20/2023		Chemicals, Plastics and Rubber			11.95	%		1M L+700					10,853				10,826				10,853
K2 Pure Solutions NoCal, L.P. (Revolver)		12/20/2023		Chemicals, Plastics and Rubber			12.91	%		1M L+800					485				485				485
K2 Pure Solutions NoCal, L.P. (Revolver) (7)		12/20/2023		Chemicals, Plastics and Rubber			—				—				1,454				—				—
Kinetic Purchaser, LLC		11/10/2027		Consumer Products			11.16	%		3M L+600					24,219				23,734				23,856
Kinetic Purchaser, LLC (Revolver)		11/10/2026		Consumer Products			11.16	%		3M L+600					3,883				3,883				3,825
Kinetic Purchaser, LLC (Revolver) (7)		11/10/2026		Consumer Products			—				—				971				—				(15	)
Lash OpCo, LLC		02/18/2027		Consumer Products			11.84	%		1M L+700					2,814				2,765				2,757
Lash OpCo, LLC (Revolver)		08/16/2026		Consumer Products			11.84	%		1M L+700					1,092				1,092				1,070
Lash OpCo, LLC (Revolver) (7)		08/16/2026		Consumer Products			—				—				728				—				(15	)
LAV Gear Holdings, Inc.		10/31/2024		Leisure, Amusement, Motion Pictures, Entertainment			10.55	%		1M L+550					2,102				2,083				2,072
						(PIK 5.50%)
LAV Gear Holdings, Inc. - Unfunded Term Loan		10/31/2024		Leisure, Amusement, Motion Pictures, Entertainment			—				—				51				—				(1	)
Ledge Lounger, Inc.		11/09/2026		Consumer Products			11.15	%		3M L+625					9,131				8,992				8,949
Ledge Lounger, Inc. (Revolver)		11/09/2026		Consumer Products			11.15	%		3M L+625					966				966				947
Ledge Lounger, Inc. (Revolver) (7)		11/09/2026		Consumer Products			—				—				966				—				(19	)
Lightspeed Buyer Inc.		02/03/2026		Healthcare, Education and Childcare			10.34	%		1M L+550					2,209				2,196				2,154
Lightspeed Buyer Inc. (Revolver) (7)		02/03/2026		Healthcare, Education and Childcare			—				—				1,166				—				(29	)
Limerick Town Cener, LLC		09/27/2023		Real Estate			12.50	%			—				3,000				2,985				2,994
LJ Avalon Holdings, LLC - Unfunded Term Loan		07/31/2024		Environmental Services			—				—				1,467				—				(7	)
LJ Avalon Holdings, LLC (Revolver)(7)		01/31/2030		Environmental Services			—				—				587				—				(12	)
LSF9 Atlantis Holdings, LLC		03/31/2029		Retail			12.15	%		SOFR+725					5,850				5,641				5,684
Mars Acquisition Holdings Corp.		05/14/2026		Media			10.55	%		3M L+550					4,901				4,814				4,852
Mars Acquisition Holdings Corp. (Revolver)(7)		05/14/2026		Media			—				—				1,209				—				(12	)
MBS Holdings, Inc. (Revolver) (7)		04/16/2027		Telecommunications			—				—				694				—				(7	)
MDI Buyer, Inc.		07/25/2028		Chemicals, Plastics and Rubber			10.79	%		3M L+600					20,236				19,911				19,785
MDI Buyer, Inc. (Revolver)		07/25/2028		Chemicals, Plastics and Rubber			10.30	%		3M L+600					683				683				668
MDI Buyer, Inc. (Revolver) (7)		07/25/2028		Chemicals, Plastics and Rubber			—				—				1,544				—				(19	)
Meadowlark Acquirer, LLC		12/10/2027		Business Services			10.41	%		3M L+525					1,947				1,929				1,927
Meadowlark Acquirer, LLC Term Loan I (7)		12/10/2027		Business Services			—				—				1,038				—				—
Meadowlark Acquirer, LLC Term Loan II (7)		12/10/2027		Business Services			—				—				8,922				—				—
Meadowlark Acquirer, LLC (Revolver) (7)		12/10/2027		Business Services			—				—				1,685				—				(17	)

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

9

---

 

PENNANTPARK INVESTMENT CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited) —(Continued)

MARCH 31, 2023

(In thousands, except share data)

 

Issuer Name		Maturity / Expiration		Industry		Current  Coupon				Basis Point  Spread Above  Index (4)				Par /  Shares				Cost				Fair Value (3)
Municipal Emergency Services, Inc.		09/28/2027		Distribution			11.05	%		3M L+600					1,862			$	1,845			$	1,784
Municipal Emergency Services, Inc. (7)		09/28/2027		Distribution			—				—				12				—				—
Municipal Emergency Services, Inc. - Unfunded Term Loan A		06/16/2023		Distribution			—				—				1,255				—				(34	)
Municipal Emergency Services, Inc. - Unfunded Term Loan B		12/16/2024		Distribution			—				—				2,510				—				(105	)
Municipal Emergency Services, Inc. (Revolver)		09/28/2027		Distribution			11.05	%		3M L+600					1,128				1,128				1,081
Municipal Emergency Services, Inc. (Revolver) (7)		09/28/2027		Distribution			—				—				752				—				(32	)
NBH Group LLC (Revolver) (7)		08/19/2026		Healthcare, Education and Childcare			—				—				1,163				—				—
Neptune Flood Incorporated		10/14/2026		Financial Services			10.82	%		1M L+600					3,117				3,099				3,117
One Stop Mailing, LLC		05/07/2027		Cargo Transport			11.09	%		3M L+625					6,972				6,863				6,763
ORL Acquisition, Inc.		09/03/2027		Business Services			10.41	%		3M L+525					4,431				4,362				4,387
ORL Acquisition, Inc. (Revolver) (7)		09/03/2027		Business Services			—				—				597				—				(6	)
Ox Two, LLC		05/18/2026		Building Materials			12.41	%		1M L+725					15,313				15,138				14,853
Ox Two, LLC (Revolver) (7)		05/18/2026		Building Materials			—				—				2,419				—				(73	)
Pequod Merger Sub, Inc. - Term Loan		12/02/2026		Financial Services			11.32	%		3M L+640					11,532				11,301				11,301
Pequod Merger Sub, Inc. - Unfunded Term Loan		12/02/2026		Financial Services			—				—				2,847				—				—
Pequod Merger Sub, Inc. (Revolver) (7)		12/02/2026		Financial Services			—				—				757				—				—
PL Acquisitionco, LLC (Revolver) (7)		11/09/2027		Retail			—				—				3,236				—				(146	)
Pragmatic Institute, LLC		07/06/2028		Business Services			10.64	%		3M L+575					35,163				34,685				34,636
Pragmatic Institute, LLC Term Loan (7)		07/06/2028		Business Services			—				—				7,193				—				(36	)
Pragmatic Institute, LL (Revolver)		07/06/2028		Business Services			10.64	%		3M L+575					959				959				945
Pragmatic Institute, LL (Revolver) (7)		07/06/2028		Business Services			—				—				3,836				—				(58	)
Quantic Electronics, LLC		11/19/2026		Aerospace and Defense			11.21	%		1M L+625					1,498				1,487				1,476
Quantic Electronics, LLC - Unfunded Term Loan		11/19/2026		Aerospace and Defense			—				—				584				—				(3	)
Quantic Electronics, LLC (Revolver)		11/19/2026		Aerospace and Defense			11.21	%		3M L+625					423				423				416
Quantic Electronics, LLC (Revolver) (7)		11/19/2026		Aerospace and Defense			—				—				106				—				(2	)
Questex, LLC		09/09/2024		Media			8.98	%		3M L+500					21,488				21,365				21,273
Questex, LLC (Revolver) (7)		09/09/2024		Media			—				—				3,590				—				(36	)
Radius Aerospace, Inc. (Revolver)		03/31/2025		Aerospace and Defense			10.78	%		3M L+575					371				371				364
Radius Aerospace, Inc. (Revolver) (7)		03/31/2025		Aerospace and Defense			—				—				1,856				—				(37	)
Rancho Health MSO, Inc. (7)		12/18/2025		Healthcare, Education and Childcare			10.48	%		3M L+575					289				289				289
Rancho Health MSO, Inc. - Unfunded Term Loan		12/18/2025		Healthcare, Education and Childcare			—				—				761				—				—
Rancho Health MSO, Inc. (Revolver) (7)		12/18/2025		Healthcare, Education and Childcare			—				—				525				—				—
Reception Purchaser, LLC		02/28/2028		Transportation			10.83	%		SOFR+600					5,940				5,861				5,665
Recteq, LLC (Revolver)		01/29/2026		Consumer Products			11.41	%		3M L+625					188				188				180
Recteq, LLC (Revolver) (7)		01/29/2026		Consumer Products			—				—				939				—				(38	)
Research Now Group, Inc. and Dynata, LLC		12/20/2024		Business Services			10.31	%		3M L+550					125				125				95
Riverpoint Medical, LLC (Revolver) (7)		06/20/2025		Healthcare, Education and Childcare			—				—				364				—				(5	)
Riverside Assessments, LLC		03/10/2025		Education			10.67	%		3M L+575					12,773				12,612				12,581
Sales Benchmark Index LLC (Revolver) (7)		01/03/2025		Business Services			—				—				732				—				(4	)
Sargent & Greenleaf Inc. (Revolver)		12/20/2024		Electronics			12.26	%		3M L+450					453				453				445
Sargent & Greenleaf Inc. (Revolver) (7)		12/20/2024		Electronics			—				—				154				-				(3	)
Schlesinger Global, Inc.		07/14/2025		Business Services			11.41	%		3M L+650					4,667				4,622				4,562
Schlesinger Global, Inc. (Revolver)		07/14/2025		Business Services			11.41	%		3M L+650					30				30				30
						(PIK 0.5%)
Schlesinger Global, Inc. (Revolver)(7)		07/14/2025		Business Services			—				—				8				—				—
Seaway Buyer, LLC		06/13/2029		Chemicals, Plastics and Rubber			10.95	%		1M L+605					4,776				4,711				4,657
Seaway Buyer, LLC (Revolver)(7)		06/13/2029		Chemicals, Plastics and Rubber			—				—				3,126				—				(78	)
Shiftkey, LLC		06/21/2027		Business Services			10.91	%		1M L+575					17,865				17,710				17,472
Sigma Defense Systems, LLC		12/18/2025		Telecommunications			13.66	%		1M L+850					31,273				30,655				30,725
Sigma Defense Systems, LLC (Revolver)		12/18/2025		Telecommunications			13.66	%		1M L+850					2,232				2,232				2,193
Sigma Defense Systems, LLC (Revolver) (7)		12/18/2025		Telecommunications			—				—				744				—				(13	)
Signature Systems Holding Company (Revolver) (7)		05/03/2024		Chemicals, Plastics and Rubber			—				—				2,016				—				—
Solutionreach, Inc. (Revolver) (7)		01/17/2024		Communications			—				—				1,665				—				(80	)
Spendmend Holdings LLC		03/01/2028		Business Services			10.61	%		1M L+565					9,656				9,542				9,386
Spendmend Holdings LLC (7)		03/01/2028		Business Services			—				—				2,784				—				(57	)
Spendmend Holdings LLC - Funded Revolver		03/01/2028		Business Services			10.61	%		3M L+565					561				561				545
Spendmend Holdings LLC - Unfunded Revolver (7)		03/01/2028		Business Services			—				—				841				—				(24	)
System Planning and Analysis, Inc. - (Revolver) (f/k/a Management Consulting & Research, LLC)		08/16/2027		Aerospace and Defense			11.10	%		3M L+590					836				836				823
System Planning and Analysis, Inc. - (Revolver) (7)  (f/k/a Management Consulting & Research, LLC)		08/16/2027		Aerospace and Defense			—				—				2,089				—				(31	)
The Aegis Technologies Group, LLC		10/31/2025		Aerospace and Defense			11.55	%		3M L+650					1,126				1,098				1,104
The Bluebird Group LLC		07/27/2026		Business Services			12.15	%		3M L+725					4,835				4,757				4,767
The Bluebird Group LLC (Revolver) (7)		07/27/2026		Business Services			—				—				734				—				(11	)
The Vertex Companies, LLC		08/30/2027		Business Services			9.96	%		3M L+550					1,745				1,729				1,709
The Vertex Companies, LLC (7)		08/30/2027		Business Services			—				—				466				—				(5	)
The Vertex Companies, LLC (Revolver)		08/30/2027		Business Services			10.01	%		3M L+550					192				192				188
The Vertex Companies, LLC (Revolver) (7)		08/30/2027		Business Services			—				—				548				—				(12	)
TVC Enterprises, LLC		03/26/2026		Transportation			10.59	%		1M L+575					12,597				12,365				12,408
TVC Enterprises, LLC (Revolver) (7)		03/26/2026		Transportation			—				—				1,370				—				(21	)