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

 

 

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: 814-00891

PENNANTPARK FLOATING RATE CAPITAL LTD.

(Exact name of registrant as specified in its charter)

MARYLAND		27-3794690
(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	PFLT	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 49,731,815.

 

 

 

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PENNANTPARK FLOATING RATE CAPITAL LTD.

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)		38
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		40
Item 3. Quantitative and Qualitative Disclosures About Market Risk		54
Item 4. Controls and Procedures		54
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		56
Item 1A. Risk Factors		56
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		58
Item 3. Defaults Upon Senior Securities		58
Item 4. Mine Safety Disclosures		58
Item 5. Other Information		58
Item 6. Exhibits		59
SIGNATURES		60

 

2

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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 the context suggests otherwise, the terms “Company,” “we,” “our” or “us” refers to PennantPark Floating Rate Capital Ltd. and its wholly-owned consolidated subsidiaries; “Funding I” refers to PennantPark Floating Rate Funding I, LLC; “Taxable Subsidiary” refers to PFLT Investment Holdings, LLC; “PSSL” refers to PennantPark Senior Secured Loan Fund I LLC, an unconsolidated joint venture; “PTSF” refers to PennantPark-TSO Senior Loan Fund, LP, an unconsolidated limited partnership; “PennantPark Investment Advisers” or “Investment Adviser” refer to PennantPark Investment Advisers, LLC; “PennantPark Investment Administration” or “Administrator” refers to PennantPark Investment Administration, LLC; “2023 Notes” refers to our 4.3% Series A notes due 2023; “2026 Notes” refers to our 4.25% Notes due 2026; “1940 Act” refers to the Investment Company Act of 1940, as amended; “SBCAA” refers to the Small Business Credit Availability Act; “Code” refers to the Internal Revenue Code of 1986, as amended; “RIC” refers to a regulated investment company under the Code; “BDC” refers to a business development company under the 1940 Act; “Prior Credit Facility” refers to our multi-currency senior secured revolving credit facility, as amended and restated with Truist Bank (formerly SunTrust Bank) and other lenders, originally entered into on June 23, 2011 and terminated on August 12, 2021; “Credit Facility” refers to our multi-currency senior secured revolving credit facility, as amended from time to time, with Truist Bank and other lenders, or the “Lenders,” entered into on August 12, 2021; “Securitization Issuer” refers to PennantPark CLO I, Ltd.; “Securitization Issuers” refers to the Securitization Issuer and PennantPark CLO I, LLC; “Debt Securitization” refers to the $301.4 million term debt securitization completed by the Securitization Issuers; “2031 Asset-Backed Debt” refers to (i) the issuance of the Class A-1 Senior Secured Floating Rate Notes due 2031, the Class A-2 Senior Secured Fixed Rate Notes due 2031, the Class B-1 Senior Secured Floating Rate Notes due 2031, the Class B-2 Senior Secured Fixed Rate Notes due 2031, the Class C-1 Secured Deferrable Floating Rate Notes due 2031, the Class C-2 Notes Secured Deferrable Fixed Rate Notes due 2031, and the Class D Secured Deferrable Floating Notes due 2031 and (ii) the borrowing of the Class A‑1 Senior Secured Floating Rate Notes due 2031 by the Securitization Issuers in connection with the Debt Securitization; and “Depositor” refers to PennantPark CLO I Depositor, LLC. References to our portfolio, our investments, our multi-currency, senior secured revolving credit facility, as amended and restated, or the Credit Facility, and our business include investments we make through our subsidiaries.

3

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Item 1. Consolidated Financial Statements

 

PENNANTPARK FLOATING RATE CAPITAL LTD. 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— $874,191  and $882,570, respectively)		$	869,595			$	893,249
Controlled, affiliated investments (cost— $323,905  and $294,787, respectively)			294,437				271,005
Total investments (cost— $1,198,096  and $1,177,357, respectively)			1,164,032				1,164,254
Cash and cash equivalents (cost— $50,168 and $47,916, respectively)			50,155				47,880
Interest receivable			8,825				7,543
Receivable for investments sold			—				3,441
Distributions receivable			635				—
Prepaid expenses and other assets			791				748
Total assets			1,224,438				1,223,866
Liabilities
Distributions payable			4,973				4,308
Payable for investments purchased			13,289				—
Credit Facility payable, at fair value (cost— $151,654 and $169,654, respectively) (See Notes 5 and 10)			147,698				167,563
2023 Notes payable, at fair value (par—$76,219 and $97,006, respectively) (See Notes 5 and 10)			76,981				96,812
2026 Notes payable, net (par—$185,000) (See Notes 5 and 10)			182,665				182,276
2031 Asset-Backed Debt, net (par—$228,000) (See Notes 5 and 10)			226,443				226,128
Interest payable on debt			8,651				8,163
Base management fee payable (See Note 3)			2,873				3,027
Incentive fee payable (See Note 3)			4,186				3,164
Deferred tax liability			1,640				4,568
Accrued expenses			370				765
Total liabilities			669,769				696,774
Commitments and contingencies (See Note 11)
Net assets
Common stock, 49,731,815  and 45,345,638 shares issued and outstanding, respectively    Par value $0.001 per share and 100,000,000 shares authorized			50				45
Paid-in capital in excess of par value			666,924				618,028
Accumulated deficit			(112,305	)			(90,981	)
Total net assets		$	554,669			$	527,092
Total liabilities and net assets		$	1,224,438			$	1,223,866
Net asset value per share		$	11.15			$	11.62

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)

 

		Three Months Ended March 31,								Six Months Ended March 31,
		2023				2022				2023				2022
Investment income:
From non-controlled, non-affiliated investments:
Interest		$	22,717			$	16,195			$	43,452			$	33,052
Dividend			635				577				1,212				1,154
Other income			586				686				727				3,510
From non-controlled, affiliated investments:
Interest			—				—				—				112
Other income			—				—				—				—
From controlled, affiliated investments:
Interest			7,641				3,240				14,550				6,405
Dividend			2,975				3,938				5,950				6,738
Other Income			—				—				—				—
Total investment income			34,554				24,636				65,891				50,971
Expenses:
Base management fee (See Note 3)			2,873				2,945				5,804				5,841
Performance-based incentive fee (See Note 3)			4,186				2,704				7,619				5,885
Interest and expenses on debt (See Note 10)			9,752				6,705				19,610				13,344
Administrative services expenses (See Note 3)			144				144				288				287
General and administrative expenses			705				655				1,410				1,309
Expenses before provision for taxes			17,660				13,153				34,731				26,667
Provision for taxes on net investment income			150				100				684				200
Total expenses			17,810				13,253				35,415				26,867
Net investment income			16,744				11,383				30,476				24,104
Realized and unrealized gain (loss) on investments and debt:
Net realized gain (loss) on:
Non-controlled, non-affiliated investments			(7,518	)			6,920				(7,455	)			9,993
Non-controlled and controlled, affiliated investments			—				(22,380	)			—				(22,315	)
Provision for taxes on realized gain on investments			(300	)			—				(300	)			—
Net realized gain (loss) on investments			(7,818	)			(15,460	)			(7,755	)			(12,322	)
Net change in unrealized appreciation (depreciation) on:
Non-controlled, non-affiliated investments			(2,561	)			(5,425	)			(15,254	)			(1,038	)
Controlled and non-controlled, affiliated investments			(1,618	)			22,913				(5,682	)			15,029
Provision for taxes on unrealized appreciation (depreciation) on investments			3,654				(3,800	)			2,929				(5,340	)
Debt (appreciation) depreciation (See Note 5 and 10)			(1,158	)			(2,363	)			909				1,247
Net change in unrealized appreciation (depreciation) on investments and debt			(1,683	)			11,325				(17,098	)			9,897
Net realized and unrealized gain (loss) from investments and debt			(9,501	)			(4,135	)			(24,853	)			(2,425	)
Net increase (decrease) in net assets resulting from operations		$	7,243			$	7,248			$	5,623			$	21,679
Net increase (decrease) in net assets resulting from operations per common share (See Note 7)		$	0.15			$	0.18			$	0.12			$	0.55
Net investment income per common share		$	0.35			$	0.29			$	0.65			$	0.61

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(in thousands, except share issue data)

(Unaudited)

 

		Three Months Ended March 31,								Six Months Ended March 31,
		2023				2022				2023				2022
Net increase (decrease) in net assets from operations:
Net investment income		$	16,744			$	11,383			$	30,476			$	24,104
Net realized gain (loss) on investments			(7,518	)			(15,460	)			(7,455	)			(12,322	)
Net change in unrealized appreciation (depreciation) on investments			(4,179	)			17,487				(20,936	)			13,990
Net change in provision for taxes on unrealized appreciation (depreciation) on investments			3,654				(3,800	)			2,929				(5,340	)
Net provision for taxes on realized gain on investments			(300	)			—				(300	)			—
Net change in unrealized depreciation on debt			(1,158	)			(2,363	)			909				1,247
Net increase (decrease) in net assets resulting from operations			7,243				7,246				5,623				21,679
Distributions to stockholders:
Distribution of net investment income			(14,014	)			(11,255	)			(26,945	)			(22,361	)
Total distributions to stockholders			(14,014	)			(11,255	)			(26,945	)			(22,361	)
Capital transactions
Public offering (See Note 1)			48,159				26,995				49,154				30,514
Offering costs			(250	)			(405	)			(255	)			(458	)
Net increase in net assets resulting from capital transactions			47,909				26,590				48,899				30,057
Net increase (decrease) in net assets			41,138				22,581				27,577				29,375
Net assets:
Beginning of period			513,531				497,405				527,092				490,611
End of period		$	554,669			$	519,986			$	554,669			$	519,986
Capital share activity:
Shares issued from public offering			4,300,000				2,058,772				4,386,177				2,328,838

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

		Six months ended March 31,
		2023				2022
Cash flows from operating activities:
Net increase (decrease) in net assets resulting from operations		$	5,623			$	21,679
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash    provided by (used in) operating activities:
Net change in unrealized (depreciation) on investments			20,936				(13,990	)
Net change in unrealized (depreciation) on debt			(909	)			(1,247	)
Net realized loss on investments			7,455				12,322
Net accretion of discount and amortization of premium			(2,612	)			(2,337	)
Purchases of investments			(151,024	)			(448,352	)
Payment-in-kind interest			(193	)			(844	)
Proceeds from dispositions of investments			125,646				342,226
Accretion (amortization) of deferred financing costs			704				32
(Increase) or Decrease in:
Interest receivable			(1,282	)			129
Distribution receivable			(635	)			—
Receivable for investments sold			3,441				(4,577	)
Prepaid expenses and other assets			(43	)			(1,356	)
Increase or (Decrease) in:
Payable for investments purchased			13,289				(13,546	)
Interest payable on debt			488				1,520
Base management fee payable			(154	)			238
Performance-based incentive fee payable			1,022				2,081
Deferred tax liability			(2,928	)			5,340
Accrued other expenses			(395	)			(1,349	)
Net cash provided by (used in) operating activities			18,429				(102,031	)
Cash flows from financing activities:
Proceeds from public offering			49,154				30,514
Offering costs			(265	)			(458	)
Distributions paid to stockholders			(26,280	)			(22,238	)
Repayment of 2023 notes payable (See Notes 5 and 10)			(20,787	)			(20,787	)
Proceeds from 2026 notes issuance (See Notes 5 and 10)			—				84,333
Borrowings under Credit Facility (See Notes 5 and 10)			30,000				137,254
Repayments under Credit Facility (See Notes 5 and 10)			(48,000	)			(107,000	)
Net cash provided by (used in) financing activities			(16,178	)			101,618
Net increase (decrease) in cash and cash equivalents			2,251				(413	)
Effect of exchange rate changes on cash			24				650
Cash and cash equivalents, beginning of period			47,880				49,826
Cash and cash equivalents, end of period		$	50,155			$	50,063
Supplemental disclosures:
Interest paid		$	18,418			$	11,356
Taxes paid		$	5			$	1,733
Non-cash exchanges and conversions		$	3,393			$	22,380

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

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PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

MARCH 31, 2023

(in thousands, except share data)

(Unaudited)

Issuer Name		Maturity		Industry		Current  Coupon				Basis Point  Spread  Above  Index (1)				Par /  Shares				Cost				Fair Value (2)
Investments in Non-Controlled, Non-Affiliated Portfolio Companies—156.8% (3), (4)
First Lien Secured Debt—138.1%
A1 Garage Merger Sub, LLC		12/22/2028		Commercial Services & Supplies			11.49	%		3M L+650					504			$	497			$	496
A1 Garage Merger Sub, LLC - Unfunded Term Loan		12/21/2024		Commercial Services & Supplies			—				—				1,552				—				—
A1 Garage Merger Sub, LLC LLC (Revolver) (7), (9)		12/22/2028		Commercial Services & Supplies			—				—				748				—				(11	)
Ad.net Acquisition, LLC		05/07/2026		Media			11.16	%		3M L+600					4,913				4,864				4,876
Ad.net Acquisition, LLC (Revolver) (7)		05/07/2026		Media			11.16	%		3M L+600					498				498				494
Ad.net Acquisition, LLC (Revolver) (7), (9)		05/07/2026		Media			—				—				747				—				(6	)
Altamira Technologies, LLC		07/24/2025		IT Services			10.33	%		3M L+600					4,656				4,625				4,656
Altamira Technologies, LLC (Revolver) (7)		07/24/2025		IT Services			10.55	%		3M L+600					575				575				575
Altamira Technologies, LLC (Revolver) (7), (9)		07/24/2025		IT Services			—				—				1,581				—				—
American Teleconferencing Services, Ltd.(7)		06/08/2023		Telecommunications		0.00%			(6)		—				7,986				7,915				90
American Teleconferencing Services, Ltd. (Revolver) (7)		04/07/2023		Telecommunications		0.00%			(6)		—				1,656				1,642				17
Amsive Holding Corporation (f/k/a Vision Purchaser Corporation)		06/10/2025		Media			11.30	%		3M L+625					14,031				13,905				13,820
Anteriad, LLC (f/k/a MeritDirect, LLC)		05/23/2024		Media			10.55	%		3M L+550					14,177				14,121				13,752
Anteriad, LLC (f/k/a MeritDirect, LLC) - Incremental Term Loan		05/23/2024		Media			11.46	%		3M L+650					7,268				7,123				7,123
Anteriad, LLC (f/k/a MeritDirect, LLC) (Revolver) (7), (9)		05/23/2024		Media			—				—				2,869				—				(86	)
Any Hour Services		07/21/2027		Energy Equipment and Services			10.45	%		3M L+525					10,492				10,416				10,203
Any Hour Services (Revolver) (7), (9)		07/21/2027		Energy Equipment and Services			—				—				1,147				—				(31	)
Apex Service Partners, LLC		07/31/2025		Diversified Consumer Services			9.46	%		1M L+525					6,176				6,141				6,145
Apex Service Partners, LLC Term Loan B		07/31/2025		Diversified Consumer Services			10.75	%		1M L+550					295				295				293
Apex Service Partners, LLC Term Loan C		07/31/2025		Diversified Consumer Services			10.04	%		1M L+525					12,858				12,798				12,794
Apex Service Partners, LLC (Revolver) (7)		07/31/2025		Diversified Consumer Services			10.26	%		1M L+525					922				923				918
Apex Service Partners, LLC (Revolver) (7), (9)		07/31/2025		Diversified Consumer Services			—				—				922				—				(5	)
API Holding III Corp.		05/11/2026		Electronic Equipment, Instruments, and Components			9.41	%		1M L+425					5,775				5,757				4,023
Applied Technical Services, LLC		12/29/2026		Commercial Services & Supplies			10.91	%		3M L+575					8,347				8,238				8,180
Applied Technical Services, LLC (Unfunded Term Loan)		04/21/2023		Commercial Services & Supplies			—				—				1,059				—				(9	)
Applied Technical Services, LLC (Revolver) (7)		12/29/2026		Commercial Services & Supplies			12.50	%		3M L+475					923				923				904
Applied Technical Services, LLC (Revolver) (7), (9)		12/29/2026		Commercial Services & Supplies			—				—				350				—				(7	)
Arcfield Acquisition Corp. (Revolver) (9)		03/07/2028		Aerospace and Defense			—				—				887				—				(18	)
Beta Plus Technologies, Inc.		07/01/2029		Internet Software and Services			10.42	%		1M L+525					4,975				4,881				4,378
BioDerm, Inc. (Revolver) (9)		01/31/2028		Healthcare Equipment and Supplies			—				—				1,071				—				(16	)
Blackhawk Industrial Distribution, Inc.		09/17/2024		Distributors			10.04	%		3M L+500					212				211				207
Blackhawk Industrial Distribution, Inc. (7),(9)		09/17/2024		Distributors			—				—				3,045				—				(53	)
Blackhawk Industrial Distribution, Inc. (Revolver) (7)		09/17/2024		Distributors			10.04	%		3M L+500					183				183				177
Blackhawk Industrial Distribution, Inc. (9)		09/17/2024		Distributors			—				—				2,561				—				(83	)
Broder Bros., Co.		12/04/2025		Textiles, Apparel and Luxury Goods			10.73	%		3M L+600					3,368				3,368				3,368
By Light Professional IT Services, LLC		05/16/2024		High Tech Industries			11.64	%		3M L+625					26,236				26,093				25,843
By Light Professional IT Services, LLC (Revolver)		05/16/2024		High Tech Industries			11.71	%		3M L+663					3,506				3,507				3,454
Cadence Aerospace, LLC (7)		11/14/2023		Aerospace and Defense			13.33	%		3M L+850					3,050				3,045				3,050
						(PIK 9.50%)
Cartessa Aesthetics, LLC		06/14/2028		Distributors			10.90	%		1M L+600					13,143				12,908				13,011
Cartessa Aesthetics, LLC (Revolver) (7)		06/14/2028		Distributors			10.90	%		1M L+600					511				511				505
Cartessa Aesthetics, LLC (Revolver) (7)(9)		06/14/2028		Distributors			—								927				-				(9	)
CF512, Inc.		08/20/2026		Media			11.03	%		3M L+600					8,057				7,964				7,896
CF512, Inc. (Revolver) (7), (9)		08/20/2026		Media			—				—				955				—				(19	)
CHA Holdings, Inc.		04/10/2025		Environmental Industries			9.66	%		3M L+450					1,573				1,569				1,573
Challenger Performance Optimization, Inc. (Revolver) (7), (9)		08/31/2023		Business Services			—				—				714				—				(21	)
Compex Legal Services, Inc.		02/09/2026		Professional Services			10.46	%		3M L+525					7,997				7,973				7,997
Compex Legal Services, Inc. (Revolver) (7)		02/07/2025		Professional Services			10.43	%		3M L+525					843				843				843
Compex Legal Services, Inc. (Revolver) (7), (9)		02/07/2025		Professional Services			—				—				562				—				—
Connatix Buyer, Inc.		07/13/2027		Media			10.23	%		3M L+550					3,835				3,776				3,691
Connatix Buyer, Inc. (7), (9)		07/14/2023		Media			—				—				2,105				—				(58	)
Connatix Buyer, Inc. (7), (9)		07/13/2027		Media			—				—				1,234				—				(46	)
Crane 1 Services, Inc.		08/16/2027		Commercial Services & Supplies			10.91	%		3M L+575					887				873				878
Crane 1 Services, Inc. (Revolver) (7)		08/16/2027		Commercial Services & Supplies			10.91	%		3M L+575					90				90				89
Crane 1 Services, Inc. (Revolver) (7)		08/16/2027		Commercial Services & Supplies			—				—				247				—				(2	)
Dr. Squatch, LLC		08/31/2027		Personal Products			10.91	%		3M L+600					4,406				4,342				4,340
Dr. Squatch, LLC (Revolver) (7)		08/31/2027		Personal Products			10.69	%		3M L+575					2,236				2,236				2,202
Dr. Squatch, LLC (Revolver) (7), (9)		08/31/2027		Personal Products			—				—				1,118				—				(16	)
DRS Holdings III, Inc.		11/03/2025		Chemicals, Plastics and Rubber			10.90	%		3M L+575					16,489				16,342				16,010
DRS Holdings III, Inc. (Revolver) (7), (9)		11/03/2025		Personal Products			—				—				1,426				—				(41	)
Duraco Specialty Tapes LLC		06/30/2024		Containers and Packaging			10.36	%		3M L+550					3,231				3,203				3,160
ECL Entertainment, LLC		05/01/2028		Hotels, Restaurants and Leisure			12.42	%		1M L+750					8,668				8,591				8,587
ECM Industries, LLC (Revolver)		12/23/2025		Electronic Equipment, Instruments, and Components			9.77	%		1M L+475					171				171				164
ECM Industries, LLC (Revolver) (9)		12/23/2025		Electronic Equipment, Instruments, and Components			—				—				743				—				(32	)
eCommission Financial Services, Inc. (10)		10/05/2023		Banking, Finance, Insurance & Real Estate			9.70	%		1M L+500					5,218				5,218				5,218
eCommission Financial Services, Inc. (Revolver) (7), (9), (10)		10/05/2023		Banking, Finance, Insurance & Real Estate			—				—				5,000				—				—
EDS Buyer, LLC - Unfunded Term Loan		01/10/2029		Electronic Equipment, Instruments, and Components			—				—				6,750				—				(84	)
EDS Buyer, LLC. (Revolver) (7), (9)		01/10/2029		Electronic Equipment, Instruments, and Components			—				—				2,025				—				(50	)
Efficient Collaborative Retail Marketing Company, LLC		06/15/2024		Media: Diversified and Production			12.07	%		3M L+750					7,139				7,128				6,639
Exigo Intermediate II, LLC (9)		03/15/2024		Software			—				—				2,758				—				(34	)
Exigo Intermediate II, LLC (Revolver) (9)		03/15/2027		Software			—				—				689				—				(14	)

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

8

---

 

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

MARCH 31, 2023

(in thousands, except share data)

(Unaudited)

 

Issuer Name		Maturity		Industry		Current  Coupon				Basis Point  Spread  Above  Index (1)				Par /  Shares				Cost				Fair Value (2)
Five Star Buyer, Inc.		02/23/2028		Hotels, Restaurants and Leisure			11.92	%		3M L+710					5,173			$	5,070			$	5,069
Five Star Buyer, Inc. - DDTL A Unfunded		02/23/2028		Hotels, Restaurants and Leisure			—				—				101				-				(2	)
Five Star Buyer, Inc. - DDTL B Unfunded		02/23/2028		Hotels, Restaurants and Leisure			—				—				978				-				(20	)
Five Star Buyer, Inc. (Revolver) (9)		02/23/2028		Hotels, Restaurants and Leisure			—				—				670				-				(13	)
Gantech Acquisition Corp.		05/14/2026		IT Services			11.09	%		1M L+625					21,757				21,450				20,995
Gantech Acquisition Corp. (Revolver) (7)		05/14/2026		IT Services			11.09	%		1M L+625					1,618				1,618				1,561
Gantech Acquisition Corp. (Revolver) (7), (9)		05/14/2026		IT Services			—				—				2,116				—				(74	)
Global Holdings InterCo LLC		03/16/2026		Diversified Financial Services			11.23	%		3M L+600					3,409				3,376				3,243
Graffiti Buyer, Inc.		08/10/2027		Trading Companies & Distributors			10.57	%		3M L+550					273				270				270
Graffiti Buyer, Inc. (7), (9)		08/10/2023		Trading Companies & Distributors			—				—				798				—				—
Graffiti Buyer, Inc. (Revolver) (7)		08/10/2027		Trading Companies & Distributors			11.10	%		3M L+575					507				507				502
Graffiti Buyer, Inc. (Revolver) (7), (9)		08/10/2027		Trading Companies & Distributors			—				—				358				—				(4	)
Hancock Roofing and Construction L.L.C.		12/31/2026		Insurance			10.42	%		3M L+550					4,435				4,363				4,346
Hancock Roofing and Construction L.L.C. (Revolver) (7)		12/31/2026		Insurance			10.30	%		3M L+550					160				160				157
Hancock Roofing and Construction L.L.C. (Revolver) (7), (9)		12/31/2026		Insurance			—				—				590				—				(12	)
Holdco Sands Intermediate, LLC		11/23/2028		Aerospace and Defense			11.21	%		3M L+600					4,938				4,853				4,888
Holdco Sands Intermediate, LLC (Revolver) (9)		11/23/2027		Aerospace and Defense			—				—				1,791				—				(18	)
HW Holdco, LLC		12/10/2024		Media			10.07	%		1M L+500					9,000				8,962				8,865
HW Holdco, LLC (9)		12/10/2024		Media			—				—				1,028				—				(5	)
HW Holdco, LLC (Revolver) (7), (9)		12/10/2024		Media			—				—				1,452				—				(22	)
IDC Infusion Services, Inc.		12/30/2026		Healthcare Equipment and Supplies			11.64	%		3M L+700					5,694				5,606				5,536
IDC Infusion Services, Inc. (Revolver) (9)		12/30/2026		Healthcare Equipment and Supplies			—				—				4,167				—				(146	)
IG Investments Holdings, LLC (7)		09/22/2028		Professional Services			10.86	%		3M L+600					4,451				4,373				4,384
IG Investments Holdings, LLC (Revolver) (7), (9)		09/22/2027		Professional Services			—				—				477				—				(7	)
Imagine Acquisitionco, LLC		11/15/2027		Software			10.37	%		3M L+550					3,959				3,895				3,840
Imagine Acquisitionco, LLC (9)		11/15/2027		Software			—				—				1,657				—				(33	)
Imagine Acquisitionco, LLC (Revolver) (9)		11/15/2027		Software			—				—				1,193				—				(36	)
Inception Fertility Ventures, LLC		12/07/2023		Healthcare Providers and Services			11.94	%		3M L+715					14,879				14,766				14,581
Infinity Home Services Holdco, Inc.		12/28/2028		Commercial Services & Supplies			11.73	%		3M L+685					517				516				506
Infinity Home Services Holdco, Inc. - Unfunded Term Loan		12/28/2023		Commercial Services & Supplies			—				—				2,713				—				(54	)
Infinity Home Services Holdco, Inc. (Revolver)		12/28/2028		Commercial Services & Supplies			11.73	%		3M L+675					97				97				95
Infinity Home Services Holdco, Inc. (Revolver) (9)		12/28/2028		Commercial Services & Supplies			—				—				1,195				—				(24	)
Infolinks Media Buyco, LLC		11/01/2026		Media			10.66	%		3M L+575					2,611				2,573				2,611
Infolinks Media Buyco, LLC (9)		11/01/2023		Media			—				—				969				—				10
Integrative Nutrition, LLC		09/29/2023		Consumer Services			9.91	%		3M L+475					15,531				15,513				15,298
Integrative Nutrition, LLC (Revolver) (7), (9)		09/29/2023		Consumer Services			—				—				5,000				—				—
Integrity Marketing Acquisition, LLC (7)		08/27/2025		Insurance			11.00	%		SOFR+550					15,745				15,637				15,588
ITI Holdings, Inc. (Revolver)		03/03/2028		IT Services			12.16	%		3M L+450					419				420				412
ITI Holdings, Inc. (Revolver) (9)		03/03/2028		IT Services			—				—				245				—				(5	)
K2 Pure Solutions NoCal, L.P. (Revolver)		12/20/2023		Chemicals, Plastics and Rubber			12.81	%		3M L+800					357				357				357
K2 Pure Solutions NoCal, L.P. (Revolver) (7), (9)		12/20/2023		Chemicals, Plastics and Rubber			—				—				1,071				—				—
Kinetic Purchaser, LLC		11/10/2027		Personal Products			11.16	%		3M L+600					17,340				17,059				17,080
Kinetic Purchaser, LLC - (Revolver)		11/10/2026		Personal Products			11.16	%		3M L+600					2,748				2,748				2,707
Kinetic Purchaser, LLC - (Revolver) (9)		11/10/2026		Personal Products			—				—				687				—				(10	)
Lash OpCo, LLC		02/18/2027		Personal Products			11.84	%		1M L+700					10,457				10,294				10,248
Lash OpCo, LLC (Revolver) (7)		08/16/2026		Personal Products			11.89	%		1M L+700					1,152				1,152				1,129
Lash OpCo, LLC (Revolver) (7), (9)		08/16/2026		Personal Products			—								768				—				(15	)
LAV Gear Holdings, Inc.		10/31/2024		Capital Equipment			11.23	%		1M L+625					9,766				9,740				9,630
						(PIK 5.50%)
LAV Gear Holdings, Inc. - Unfunded Term Loan		10/31/2024		Capital Equipment			—				—				247				-				(3	)
LAV Gear Holdings, Inc. (Revolver) (7)		10/31/2024		Capital Equipment			10.55	%		1M L+565					1,721				1,721				1,697
						(PIK 5.50%)
Ledge Lounger, Inc.		11/09/2026		Leisure Products			11.30	%		3M L+625					3,728				3,680				3,654
Ledge Lounger, Inc. (Revolver) (7)		11/09/2026		Leisure Products			11.30	%		3M L+625					395				395				387
Ledge Lounger, Inc. (Revolver) (9)		11/09/2026		Leisure Products			—				—				395				—				(8	)
Lightspeed Buyer Inc.		02/03/2026		Healthcare Technology			10.34	%		1M L+575					24,233				23,978				23,627
Lightspeed Buyer Inc. (Revolver) (7) (9)		02/03/2026		Healthcare Technology			—				—				2,499				—				(62	)
LJ Avalon Holdings, LLC - Unfunded Term Loan		07/31/2024		Construction & Engineering			—				—				2,824				—				(14	)
LJ Avalon Holdings, LLC (Revolver) (9)		01/31/2030		Construction & Engineering			—				—				1,130				—				(23	)
Lucky Bucks, LLC (6)		07/20/2027		Hotels, Restaurants and Leisure			0.00	%			—				4,275				4,210				1,304
MAG DS Corp.		04/01/2027		Aerospace and Defense			10.50	%		1M L+550					3,694				3,570				3,361
Mars Acquisition Holdings Corp.		05/14/2026		Media			10.55	%		3M L+550					8,772				8,641				8,684
Mars Acquisition Holdings Corp. (Revolver)(7)(9)		05/14/2026		Media			—				—				2,435				—				(24	)
MBS Holdings, Inc. (Revolver)(7)(9)		04/16/2027		Internet Software and Services			—				—				1,157				—				(12	)
MDI Buyer, Inc. - Unfunded Term Loan		07/25/2028		Commodity Chemicals			10.61	%		3M L+600					2,052				2,011				2,007
MDI Buyer, inc. (Revolver) (7)		07/25/2028		Commodity Chemicals			10.37	%		3M L+600					237				237				232
MDI Buyer, inc. (Revolver) (9)		07/25/2028		Commodity Chemicals			—				—				536				—				(7	)
Meadowlark Acquirer, LLC		12/10/2027		Professional Services			10.41	%		3M L+550					1,988				1,969				1,968
Meadowlark Acquirer, LLC - Term Loan I (9)		12/10/2027		Professional Services			—				—				1,103				—				—
Meadowlark Acquirer, LLC - Term Loan II (9)		12/10/2027		Professional Services			—				—				9,483				—				—
Meadowlark Acquirer, LLC (Revolver) (9)		12/10/2027		Professional Services			—				—				1,693				—				(17	)
Mission Critical Electronics, Inc.		03/28/2024		Capital Equipment			9.69	%		SOFR +500					3,598				3,574				3,576
Mission Critical Electronics, Inc. (9)		03/28/2024		Capital Equipment			—				—				707				—				(2	)
Mission Critical Electronics, Inc. (Revolver) (7)		03/28/2024		Capital Equipment			12.00	%		1M L+400					353				353				351
Mission Critical Electronics, Inc. (Revolver) (7), (9)		03/28/2024		Capital Equipment			—				—				971				—				(6	)
Municipal Emergency Services, Inc. (7)		09/28/2027		Distributors			10.49	%		3M L+550					936				927				896
Municipal Emergency Services, Inc. (7), (9)		09/28/2027		Distributors			—				—				6				—				—
Municipal Emergency Services, Inc. - Unfunded Term Loan A		06/16/2023		Distributors			—				—				632				—				(18	)
Municipal Emergency Services, Inc. - Unfunded Term Loan B		12/16/2024		Distributors			—				—				1,264				—				(53	)
Municipal Emergency Services, Inc. (Revolver) (7)		09/28/2027		Distributors			11.05	%		3M L+615					568				568				544
Municipal Emergency Services, Inc. (Revolver) (7), (9)		09/28/2027		Distributors			—				—				379				—				(16	)
NBH Group LLC (Revolver) (7), (9)		08/19/2026		Healthcare Equipment and Supplies			—				—				1,677				—				—

 

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

9

---

 

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

MARCH 31, 2023

(in thousands, except share data)

(Unaudited)

Issuer Name		Maturity		Industry		Current  Coupon				Basis Point  Spread  Above  Index (1)				Par /  Shares				Cost				Fair Value (2)
One Stop Mailing, LLC		05/07/2027		Air Freight and Logistics			11.09	%		3M L+625					8,714			$	8,580			$	8,453
ORL Acquisition, Inc. (7)		09/03/2027		Consumer Finance			10.41	%		3M L+525					7,159				7,044				7,087
ORL Acquisition, Inc. (Revolver) (7), (9)		09/03/2027		Consumer Finance			—				—				861				—				(8	)
Output Services Group, Inc. (6)		06/27/2026		Business Services			0.00	%			—				4,885				4,469				3,517
Owl Acquisition, LLC		02/04/2028		Professional Services			10.16	%		3M L+575					3,892				3,789				3,795
Ox Two, LLC		05/18/2026		Construction and Building			12.41	%		1M L+725					25,641				25,351				24,872
Ox Two, LLC (Revolver) (9)		05/18/2026		Construction and Building			—				—				3,387				—				(101	)
Pequod Merger Sub, Inc.		12/02/2026		Diversified Financial Services			11.32	%		3M L+640					11,532				11,301				11,301
Pequod Merger Sub, Inc. - Unfunded Term Loan		12/02/2026		Diversified Financial Services			—				—				2,847				—				—
Pequod Merger Sub, Inc (Revolver) (9)		12/02/2026		Diversified Financial Services			—				—				757				—				—
PL Acquisitionco, LLC		11/09/2027		Textiles, Apparel and Luxury Goods			11.34	%		3M L+650					6,079				5,992				5,806
PL Acquisitionco, LLC - (Revolver) (9)		11/09/2027		Textiles, Apparel and Luxury Goods			—				—				2,290				—				(103	)
PlayPower, Inc.		05/08/2026		Leisure Products			10.25	%		1M L+550					3,420				3,403				3,078
Pragmatic Institute, LLC - Unfunded Term Loan		07/06/2028		Professional Services			—				—				2,290				—				(11	)
Pragmatic Institute, LLC (Revolver)		07/06/2028		Professional Services			10.64	%		3M L+575					305				305				301
Pragmatic Institute, LLC (Revolver) (9)		07/06/2028		Professional Services			—				—				1,221				—				(18	)
Quantic Electronics, LLC		11/19/2026		Electronic Equipment, Instruments, and Components			11.22	%		1M L+600					6,681				6,601				6,581
Quantic Electronics, LLC - Unfunded Term Loan		11/19/2026		Electronic Equipment, Instruments, and Components			—				—				783				—				(4	)
Quantic Electronics, LLC (Revolver) (7)		11/19/2026		Electronic Equipment, Instruments, and Components			11.19	%		1M L+600					536				536				528
Quantic Electronics, LLC (Revolver) (7), (9)		11/19/2026		Electronic Equipment, Instruments, and Components			—				—				134				—				(2	)
Questex, LLC		09/09/2024		Media: Diversified and Production			9.28	%		3M L+500					7,163				7,124				7,091
Questex, LLC (Revolver) (7), (9)		09/09/2024		Media: Diversified and Production			—				—				1,197				—				(12	)
Rancho Health MSO, Inc. (7)		12/18/2025		Healthcare Equipment and Supplies			10.48	%		3M L+550					1,034				1,034				1,034
Rancho Health MSO, Inc. (Revolver) (7), (9)		12/18/2025		Healthcare Equipment and Supplies			—				—				525				—				—
Recteq, LLC		01/29/2026		Leisure Products			11.41	%		3M L+625					1,470				1,452				1,411
Recteq, LLC (Revolver) (7)		01/29/2026		Leisure Products