Tuesday, April 2, 2013

Prospect Capital: Buy This 12% Yielder With Record Orginations


After the trading week closed on Thursday, March 28, Prospect Capital Corporation (PSEC) made a surprising announcement that the company had originated a record $800 million during the March quarter. The surprise comes after the company claimed in early February that the originations for Q1 were a mediocre $141 million almost halfway into the quarter. The market didn't actually expect much following the year-end push to exit businesses to beat the tax deadline.

Prospect Capital is a leading provider of flexible private debt and equity capital to sponsor-owned and non-sponsor-owned middle market companies in the United States and Canada. It trades as a closed-end investment company that has elected to be treated as a business development company (BDC) under the Investment Company Act of 1940.

The origination pace, while bullish, does bring into play a previous concern about another equity raise, as a surge in deals were the only reason equity would be needed. Clearly, this equity raise issue should be considered given that the last offering caused the stock to plunge back in early November.

Read the full article at Seeking Alpha.


Disclosure: No positions mentioned. Please review the disclaimer page for more details. 



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