Pennantpark Floating Rate Capital (PFLT) investor relations material

Executive summary

• Net investment income for the quarter was $26.6 million ($0.27 per share), down from $30.0 million ($0.37 per share) in the prior year quarter, mainly due to higher interest expense and one-time credit facility amendment costs.

• Portfolio at December 31, 2025 totaled $2.61 billion, with 89% in first lien secured debt, less than 1% in second lien/subordinated debt, and 11% in preferred/common equity, including investments in PSSL and PSSL II.

• Four portfolio companies were on non-accrual status, representing 0.5% of cost and 0.1% of fair value of the portfolio.

• PSSL II joint venture launched during the quarter, investing $197–200 million and growing to a $193.2–$326 million portfolio, with a $250 million credit facility expandable to $350 million.

• Net asset value per share decreased to $10.49 from $10.83 sequentially, down 3.1% from the prior quarter.

Financial highlights

• GAAP and core net investment income were both $0.27 per share for the quarter.

• Total investment income for the quarter was $70.1 million, up from $67.0 million year-over-year.

• Total expenses increased to $43.5 million from $37.0 million, mainly due to higher interest expense and one-time credit facility amendment costs.

• Net realized and unrealized losses on investments totaled $30–32.3 million, resulting in a net decrease in net assets from operations of $(3.6) million ($(0.04) per share).

• Distributions declared were $0.3075 per share, totaling $30.5 million for the quarter.

Outlook and guidance

• Management expects to continue focusing on floating rate loans to U.S. middle-market companies, maintaining a portfolio with at least 80% in floating rate assets and at least 65% in first lien secured debt.

• The company intends to maintain monthly distributions, subject to available net investment income and compliance with asset coverage requirements.

• PSSL II joint venture is expected to support future NII growth and dividend coverage as it scales toward a $1 billion asset target, with timing dependent on M&A activity.

• Increased M&A activity in the private middle market is expanding the investment pipeline and expected to drive portfolio repayments and equity rotation.

• Management is confident in maintaining a stable dividend and sees upside potential from equity co-investments as M&A accelerates.