FAQs

Thank you for visiting the Frequently Asked Questions section of our website.

Should you have additional questions please contact us via our Information Request page or call (212) 448-0702.

  • Prospect Capital Corporation (PSEC) is a financial services company that primarily lends to and invests in middle market privately-held companies.
  • Prospect was initially founded in 1988 by former senior managers of Merrill Lynch & Co. In July 2004, Prospect Capital Corporation completed an Initial Public Offering (IPO) and its stock began to be publicly traded.
  • Our quarterly and annual reports are available on our website through the Investor Relations page, under SEC Filings. Our quarterly financial statements are prepared under Form 10-Q and our annual reports are prepared under Form 10-K. We use Form 8-K to report any material event such as change in control of the Company, purchase or sale of assets, change of certifying accountant, and other events that may occur between the filings of our quarterly or annual reports.
  • Our common stock is listed on the Nasdaq under the symbol PSEC. For more detailed stock information, please visit our Stock Information page.
  • Please see our dividend distribution schedule at our Dividends page. For information on the tax treatment of those distributions, please visit our Tax Information page.
  • From 2004 to the first quarter of 2010, we paid our dividends quarterly in arrears. Starting at the end of the second quarter of 2010, we switched to monthly payments. Dividends are paid out of the assets legally available for distribution. Our dividends, if any, will be determined by our board of directors.

    In addition, although we currently intend to distribute realized net capital gains (i.e., net long-term capital gains in excess of short-term capital losses), if any, at least annually, out of the assets legally available for such distributions, we may decide in the future to retain such capital gains for investment.
  • We have adopted a dividend reinvestment plan that provides for reinvestment of our distributions on behalf of our stockholders, unless a stockholder elects to receive cash. If and when our board of directors authorizes, and we declare, a cash dividend, then our stockholders who have not "opted out" of our dividend reinvestment plan should have their cash dividends automatically reinvested in additional shares of our common stock, rather than receiving the cash dividends. In some cases, your brokerage firm overrides the DRIP and simply gives you cash. In one or two cases, we are aware of super discount brokers not offering any DRIP program, to anyone for any stock. Contact your broker to switch from cash to the dividend reinvestment plan or vice versa.
  • For tax reporting purposes, the following types of taxable income dividends/distributions and non-taxable return of capital distributions may result and will be reported as such to US individual taxpayers on Form 1099 DIV in January of the calendar year following the year of distribution.

    Ordinary Income: This type of income arises from the receipt of interest income on debt securities held by us less expenses. Since we are a “pass-through entity” from a tax perspective, this type of income is the same as if the interest income was received directly from the borrower. This type of income is reported in Box 1a of Form 1099.

    Dividends: This type of income arises from the receipt of dividend income on stock held by us. As with interest income, it is treated as if the individual taxpayer held the stock directly. This income is considered as “qualified” for the 15% tax rate on dividends in the United States. This type of income is reported in Box 1b of Form 1099.

    Short Term Capital Gains: This type of income arises from the sale of a security held for less than one year. This income is the same as if the tax payer sold a security directly owned. This type of income is considered ordinary income and is reported in Box 1a of Form 1099.

    Long Term Capital Gains: This type of income arises from the sale of a security held for over one year. This income is the same as if the tax payer sold a security directly owned. This type of income is considered capital gain income and is reported in Box 2a of Form 1099.

    Return of Capital: Sometimes due to tax timing differences or other circumstances, we may make a distribution that is not sourced from taxable income but represents a return of your investment or capital. There is no tax liability resulting from a return of capital. This type of distribution is reported in Box 3 of Form 1099.
  • The NAV or the Net Asset Value per share represents the net assets of the company (i.e., total assets less liabilities) divided by the number of shares of common stock outstanding. This calculation is the same as dividing common stockholders’ equity by the number of shares of common stock outstanding. NAV is computed and released quarterly coincident with the Company’s issuance of its quarterly financial statements. NAV may or may not be the same as the Company’s stock price per share (which trades under the symbol “PSEC” on the NASDAQ stock exchange) depending upon whether the shares are trading at a premium to NAV or a discount to NAV.
  • Shortly after the filing of our Form 10-K, we will prepare an annual report to our shareholders. This annual report and a proxy statement will then be mailed to shareholders inviting shareholders to attend the annual meeting. We expect the meeting to be held in the 4th calendar quarter of the year. The exact date will be set by the board of directors as we approach that time frame. The board can also call special meetings of the shareholders to ask them to approve other initiatives that it believes should be heard before the next annual shareholders meeting.
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