NASDAQ: PSEC PROSPECT CAPITAL CORP 8-K

Prospect Capital reports Q4 FY2026 loss, NAV falls to $5.71/share, cuts monthly dividend

Filed August 21, 2026 · Period ending August 20, 2026 · ~1 min read

Key Changes

high

Q4 FY2026 net loss of $0.08/share on unrealized portfolio losses; NAV declined to $5.71/share from $6.05 prior quarter and $6.56 year-ago, reflecting valuation pressures and distributions exceeding earnings.

Exhibit 99.1 view on EDGAR →
high

Completed Valley Electric sale July 1, 2026 for ~$328M total consideration (~$281M net proceeds); investment since 2012 delivered 20.5% gross IRR and 4.8x multiple. Proceeds reduced revolver draw from $562.3M to $322.7M.

Exhibit 99.1 view on EDGAR →
high

Declared monthly common dividends of $0.035/share for Sep-Oct 2026, down from $0.038/month average in Q4 FY2026. Cumulative distributions since inception will reach $22.14/share through October 2026.

Item 7.01 — Regulation FD Disclosure verify on EDGAR →
medium

Portfolio repositioned toward first lien senior secured loans (72.5% at cost, up 840 bps from June 2024); reduced second lien exposure to 11.9% (down 454 bps) and fully exited subordinated structured notes (down 837 bps to 0%).

Exhibit 99.1 view on EDGAR →
medium

Disclosed AI and automation initiatives across operations and portfolio companies, with cross-functional team deploying tools for revenue enhancement and cost reduction, particularly in equity-held positions to capture upside.

Exhibit 99.1 view on EDGAR →

Summary

Prospect Capital reported a challenging fourth quarter of fiscal 2026, posting a net loss of $0.08 per share driven by unrealized portfolio losses that offset net investment income of $0.15 per share. Net asset value per share fell to $5.71 from $6.05 the prior quarter and $6.56 a year earlier, reflecting ongoing valuation pressures in the portfolio and distributions that have exceeded earnings.

The company reduced its monthly common dividend to $0.035 per share for September and October 2026, down from the $0.038 per month average paid in the June quarter, signaling management's response to the NAV erosion. The Valley Electric exit provided a bright spot, delivering $281 million in net proceeds and a strong 20.5% gross IRR over the 14-year hold period.

Management used the proceeds to pay down the revolver, improving the balance sheet. The company continues repositioning the portfolio toward first lien senior secured loans (now 72.5% of investments at cost) while exiting subordinated structured notes entirely. The disclosed AI and automation initiatives across portfolio companies represent a strategic effort to enhance returns in equity-held positions, though the impact on future earnings remains to be demonstrated. Investors should monitor whether the dividend cut stabilizes NAV and whether portfolio repositioning can reverse the valuation trend.

Section-by-Section Diff

Event · Item 2.02 — Results of Operations and Financial Condition

~100 words

Prospect Capital announced fiscal year 2026 financial results ended June 30, 2026 via press release.

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Added FY2026 financial results announcement high

Added in current filing · verify on EDGAR →

On August 20, 2026, the registrant issued a press release announcing its financial results for its fiscal year ended June 30, 2026.

Prospect Capital disclosed its full-year fiscal 2026 financial results through a press release. The 8-K body does not provide specific financial metrics; those details are contained in the attached Exhibit 99.1 press release.

Event · Item 7.01 — Regulation FD Disclosure

~800 words

Item 7.01 — Regulation FD Disclosure filed; see Key Changes for terms.

2 Added

Added Common stock distributions Sep-Oct 2026 medium

Added in current filing · verify on EDGAR →

Monthly Cash Common Shareholder Distribution Record Date Payment Date Amount ($ per share) September 2026 9/28/2026 10/21/2026 $0.0350 October 2026 10/28/2026 11/18/2026 $0.0350

The company declared monthly cash distributions to common shareholders of $0.0350 per share for September 2026 (record date 9/28/2026, payment date 10/21/2026) and October 2026 (record date 10/28/2026, payment date 11/18/2026). These are routine monthly distributions for the business development company.

Show 1 minor / wording change

Added Preferred stock dividends Sep-Nov 2026 low

Added in current filing · verify on EDGAR →

Monthly Cash 7.50% Preferred Shareholder Distribution Record Date Payment Date Monthly Amount ($ per share), before pro ration for partial periods September 2026 9/21/2026 10/1/2026 $0.156250 October 2026 10/21/2026 11/2/2026 $0.156250 November 2026 11/18/2026 12/1/2026 $0.156250

The company declared monthly dividends for its 7.50% Preferred Stock at $0.156250 per share for September through November 2026. The filing also disclosed similar monthly dividends for Floating Rate Preferred Stock, 5.50% Preferred Stock, and 6.50% Preferred Stock at their respective rates, plus a quarterly dividend for 5.35% Preferred Stock. These are contractual preferred dividends based on the stated values and rates in each series' governing documents. Note: these figures were previously disclosed in the company's May 7, 2026 8-K.

Event · Exhibit 99.1

~7,900 words View exhibit on EDGAR ↗

Prospect Capital reported Q4 FY2026 results: NII $0.15/share, NAV declined to $5.71/share, and declared monthly dividends of $0.035/share for Sep-Oct 2026.

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Added Q4 FY2026 financial results high

Added in current filing · view on EDGAR →

Net Investment Income (“NII”) $77,692 ... NII per Common Share $0.15 ... Net Income (Loss) Applicable to Common Shareholders $(38,091) ... Net Income (Loss) per Common Share $(0.08) ... Net Asset Value (“NAV”) to Common Shareholders $2,928,846 ... NAV per Common Share $5.71

For the quarter ended June 30, 2026, Prospect generated net investment income of $77.7 million ($0.15 per share), down from $0.17 per share in the prior-year quarter. The company reported a net loss of $38.1 million ($0.08 per share) after unrealized losses on investments. Net asset value per share declined to $5.71 from $6.05 at March 31, 2026 and $6.56 a year earlier, reflecting portfolio valuation pressures and distributions exceeding earnings.

Added Common stock dividends declared high

Added in current filing · verify on EDGAR →

Monthly Cash Common Shareholder Distribution Record Date Payment Date Amount ($ per share) September 2026 9/28/2026 10/21/2026 $0.0350 October 2026 10/28/2026 11/18/2026 $0.0350

Prospect declared monthly common stock dividends of $0.035 per share for September and October 2026, totaling $0.07 per share over the two months. This represents a reduction from the $0.115 per share paid in the June 2026 quarter (which averaged $0.038 per month). Since inception through the October 2026 declared distribution, cumulative distributions will reach $22.14 per share, aggregating over $4.8 billion to all common shareholders.

Added AI and automation initiatives medium

Added in current filing · view on EDGAR →

Prospect, together with affiliates, and including portfolio company executives and external advisors, has a broad and deep cross-functional team that includes software and information technology engineers, portfolio company operations professionals, and other individuals focused on bringing best practice artificial intelligence (“AI”) and automation initiatives to both Prospect’s operations and that of its portfolio companies, especially those companies where Prospect holds not just senior secured debt but also equity, whereby Prospect can capture economic upside from profit enhancements (including both revenue increase projects as well as cost efficiency projects) in such businesses.

Prospect disclosed a comprehensive AI and automation initiative across its operations and portfolio companies. The company has assembled a cross-functional team to deploy AI tools for revenue enhancement and cost reduction, particularly in companies where Prospect holds equity positions to capture upside. Examples include First Tower using AI for credit scoring and fraud detection, Town & Country deploying AI design agents, and National Property REIT implementing AI-driven pricing and leasing tools. Management characterized AI as "the most transformational game changer to come along in a generation."