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Shares of PennantPark Floating Rate Capital Ltd. (NYSE:PFLT – Get Free Report) have been assigned a consensus recommendation of “Moderate Buy” from the six analysts that are presently covering the stock, MarketBeat.com reports. Three research analysts have rated the stock with a hold recommendation and three have assigned a buy recommendation to the company. The average twelve-month target price among analysts that have issued a report on the stock in the last year is $9.80.

Several research firms recently issued reports on PFLT. Zacks Research upgraded PennantPark Floating Rate Capital from a “strong sell” rating to a “hold” rating in a research report on Monday, July 20th. Truist Financial lowered their price target on PennantPark Floating Rate Capital from $10.00 to $9.00 and set a “buy” rating on the stock in a report on Tuesday, May 19th. Finally, Weiss Ratings restated a “hold (c-)” rating on shares of PennantPark Floating Rate Capital in a research note on Wednesday, August 5th.

View Our Latest Report on PFLT

PennantPark Floating Rate Capital Stock Performance Shares of PennantPark Floating Rate Capital stock opened at $7.39 on Monday. PennantPark Floating Rate Capital has a fifty-two week low of $6.83 and a fifty-two week high of $10.30. The company has a debt-to-equity ratio of 0.94, a quick ratio of 0.19 and a current ratio of 0.19. The company has a market capitalization of $733.24 million, a P/E ratio of 14.49 and a beta of 0.76. The company has a fifty day moving average of $7.26 and a 200 day moving average of $7.97. PennantPark Floating Rate Capital (NYSE:PFLT – Get Free Report) last posted its quarterly earnings results on Monday, August 10th. The company reported $0.26 EPS for the quarter, missing analysts’ consensus estimates of $0.27 by ($0.01). PennantPark Floating Rate Capital had a net margin of 18.53% and a return on equity of 10.24%. The business had revenue of $22.73 million for the quarter. On average, sell-side analysts anticipate that PennantPark Floating Rate Capital will post 1.06 earnings per share for the current fiscal year.

PennantPark Floating Rate Capital Cuts Dividend The business also recently announced a monthly dividend, which will be paid on Tuesday, September 1st. Investors of record on Friday, August 14th will be given a dividend of $0.08 per share. The ex-dividend date is Friday, August 14th. This represents a c) dividend on an annualized basis and a dividend yield of 13.0%. PennantPark Floating Rate Capital’s dividend payout ratio is currently 188.24%.

Hedge Funds Weigh In On PennantPark Floating Rate Capital Several institutional investors have recently bought and sold shares of the stock. Millennium Management LLC boosted its holdings in shares of PennantPark Floating Rate Capital by 85.0% during the 1st quarter. Millennium Management LLC now owns 1,196,752 shares of the company’s stock valued at $13,392,000 after purchasing an additional 550,011 shares during the last quarter. Jane Street Group LLC increased its holdings in shares of PennantPark Floating Rate Capital by 692.7% in the first quarter. Jane Street Group LLC now owns 319,736 shares of the company’s stock worth $3,578,000 after purchasing an additional 279,399 shares during the last quarter. Cetera Investment Advisers lifted its position in shares of PennantPark Floating Rate Capital by 2.1% in the second quarter. Cetera Investment Advisers now owns 63,704 shares of the company’s stock worth $658,000 after buying an additional 1,329 shares in the last quarter. Northwestern Mutual Wealth Management Co. purchased a new stake in shares of PennantPark Floating Rate Capital in the second quarter worth about $41,000. Finally, Quantbot Technologies LP purchased a new stake in shares of PennantPark Floating Rate Capital in the second quarter worth about $219,000. 19.77% of the stock is owned by hedge funds and other institutional investors.

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PennantPark Floating Rate Capital Ltd. is a business development company. It seeks to make secondary direct, debt, equity, and loan investments. The fund seeks to invest through floating rate loans in private or thinly traded or small market-cap, public middle market companies. It primarily invests in the United States and to a limited extent non-U.S. companies. The fund typically invests between $2 million and $20 million. The fund also invests in equity securities, such as preferred stock, common stock, warrants or options received in connection with debt investments or through direct investments.

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PennantPark Investment (NYSE:PNNT) and PennantPark Floating Rate Capital (NYSE:PFLT) both reported Q3 FY26 results on Aug. 10, run by the same manager, Art Penn. They share a middle-market credit playbook, but the portfolios and payout math diverge in ways that matter for a retiree writing checks off these yields.

Same Manager, Two Very Different Books PFLT is the larger and cleaner vehicle. Total investment income reached $66.09 million, the debt book is 99% floating rate and 89% first lien senior secured, and core NII of 26-cent per share covered the 24-cent quarterly base dividend. PNNT is smaller, broader, and softer. Revenue of $24.77 million fell 16.2% year over year, the portfolio shrank to $1,193.2M, and the mix still leans on subordinated debt and equity co-investments alongside first liens.

Metric PNNT PFLT Portfolio yield on debt 8.9% 9.8% Floating-rate exposure 87% 99% NAV per share $6.56 $10.26 Non-accruals (cost) 2.5% 1.0%
Where the Dividend Story Really Splits PFLT already took its medicine. Management cut the monthly base from 10 cents to 8 cents in mid-2026 and layered on a variable supplemental equal to 50% of NII above the base. The reset is painful, but core NII now sits above the base, and Penn told investors “our mission remains consistent to deliver a stable and well-covered dividend while preserving capital.”

PNNT tells a harder story. Core NII of 14 cents does not cover the 24-cent quarterly distribution. CFO Rick Allorto confirmed the gap is being filled by spillover income, which he expects to decline to about $0.40 per share by year-end 2026 from a peak of “a little over a dollar per share not that long ago.” The current supplemental is only communicated through the end of calendar 2026. After that, coverage must come from equity rotations and the PSLF refinancing that dropped its cost of capital from SOFR+266bps to SOFR+169bps. A distribution funded out of a draining reserve is exactly the setup we flagged in a free guide to the seven warning signs of a dividend at risk.

What I’m Watching Into 2027 With Fed funds parked at 3.75% since December, the tailwind that floated these BDCs to peak yields is gone. PFLT’s PSSL II joint venture at $390 million, targeted to exceed $1 billion over 12 to 18 months, is the accelerant. For PNNT, the real question is whether equity exits keep pace once the spillover buffer thins.

Why I Lean PFLT for Retirement Income For an investor funding retirement checks, PFLT screens as the more defensible income vehicle. The dividend has already been rebased, coverage is real at $0.26 core NII against a $0.24 base, and the book is 89% first lien with a lower non-accrual rate. Analysts agree, sitting at 3 Strong Buys, 2 Buys, 2 Holds. PNNT is the deeper-value play, trading at 0.57 times book, but the coverage math relies on a reserve that is visibly draining. A turnaround investor comfortable with the 37.7% one-year drawdown and confident in the equity rotation might still buy it. For a retiree, dividend reliability is what carries the most weight.

Contact [email protected] for any questions or corrections.

PennantPark Floating Rate Capital remains a hold due to persistent NAV declines and headwinds from elevated interest rates. PFLT's dividend was reduced to 12.8% yield, now covered by net investment income, but coverage remains thin and growth momentum is lacking. Net investment activity remains negative as sales and repayments outpace new investments, with a high debt-to-equity ratio of 1.56x constraining growth.

PennantPark Floating Rate Capital NYSE: PFLT reported fiscal third-quarter core net investment income of $0.26 per share for the quarter ended June 30, exceeding its base quarterly dividend of $0.24 per share.

The business development company said it will also pay a supplemental dividend of $0.0033 per share per month over the next three months, for an aggregate $0.01 per share. Chairman and Chief Executive Officer Art Penn said the supplemental payment represents 50% of net investment income exceeding the base dividend under the company’s revised dividend policy.

Net asset value fell to $10.26 per share as of June 30 from $10.47 in the preceding quarter, a decline of about 2%. Penn said the decrease was primarily driven by a write-down in a non-accrual investment.

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Portfolio Metrics and Quarterly Results Chief Financial Officer Rick Allorto said GAAP and core net investment income both totaled $0.26 per share. Investment income included $59 million of interest income, $6.2 million of dividends from joint ventures and $0.8 million of other income.

Quarterly expenses included $25 million of interest and debt expenses, $12.9 million of base management and performance-based incentive fees, and $2.3 million of general and administrative expenses. The company recorded a $18.3 million net realized and unrealized loss on investments, including tax provisions.

Allorto said the portfolio consisted of 159 companies across 51 industries at quarter-end. The weighted average yield on debt investments was 9.8%, while approximately 99% of the debt portfolio carried floating rates.

89% of the portfolio was first-lien senior secured debt. 1% was second-lien and subordinated debt. 3% was equity in the PSSL and PSSL II joint ventures. 7% was equity co-investments. Penn said the company held four non-accrual investments, representing 1% of the portfolio at cost and 0.4% at market value. Payment-in-kind income equaled 2.4% of total investment income, which Penn described as among the industry’s lowest levels.

During the quarter, PennantPark invested $212 million in new and existing investments at a weighted average yield of 9%. That total included $106 million across five new platform companies, whose median debt-to-EBITDA ratio was 2.3 times, interest coverage was 4.2 times and loan-to-value was 30%. The company also deployed $106 million into 18 existing platform companies.

Joint-Venture Expansion and Capital Position Penn said PennantPark continues to expand its PSSL II joint venture in a “measured and disciplined manner.” The venture’s portfolio totaled $390 million as of the call, and the company expects it to exceed $1 billion in assets over the next 12 to 18 months, subject to maintaining its underwriting standards.

For the quarter ended June 30, PSSL II generated a cash yield on invested capital of 12.7%, according to Penn.

At quarter-end, PennantPark’s debt-to-equity ratio stood at 1.56 times. Allorto said the company subsequently reduced borrowings under its revolving credit facility, bringing debt-to-equity to 1.5 times, within its target range of 1.4 to 1.6 times.

Responding to an analyst question about capital costs and the company’s shares, Penn said the joint ventures can generate returns in the teens, which he characterized as accretive relative to bond financing costs of roughly 7%. He said the company seeks to balance return on equity with prudent leverage at the parent-company level.

Government Services Remains a Major Focus Government services and defense represented about 18% of PennantPark’s portfolio. Penn said the company intends to maintain or potentially increase exposure over time, though he also emphasized the importance of diversification and said exposure would likely remain around its current range.

Penn cited a significant realization from an equity co-investment in defense technology company Aechelon, which was sold to Shield AI. PennantPark received approximately $45 million of proceeds from an original $3.2 million investment, representing nearly a 14-times multiple on invested capital, he said.

Since inception, Penn said the platform has invested approximately $3 billion in government services and defense, including about $1.3 billion through PFLT. Those investments were 92% first-lien senior secured and generated an overall internal rate of return of 12.2%.

Penn described the sector as historically resilient because of federal funding priorities, long-term contracts and demand tied to national-security initiatives. He said the firm focuses largely on services businesses rather than equipment providers, including companies supporting defense modernization, digital infrastructure, cyber capabilities, electronic warfare, modeling and simulation, counter-drone technologies and autonomous systems.

He acknowledged that the company considers the potential effects of tighter government spending when underwriting new investments, referencing the sequestration period during the Obama administration. Penn said PennantPark seeks to offset such risks through lower leverage and meaningful interest-coverage cushions.

Market Outlook and Credit Commentary Penn said merger-and-acquisition activity has improved over the past six to nine months, although conditions remain uneven. The company expects elevated activity through the second half of the year, which could lead to portfolio repayments, equity co-investment monetizations and opportunities to redeploy capital into income-producing assets.

In the core middle market, Penn said pricing for high-quality first-lien term loans generally ranges from SOFR plus 500 to 550 basis points, with leverage around 4.5 times EBITDA. He said such transactions retain meaningful covenant protections compared with covenant-lite structures in the upper middle market.

The company’s software exposure was approximately 4.3% of the portfolio and consisted primarily of cash-pay, covenant-protected loans to mission-critical enterprise software businesses serving regulated markets, including defense, healthcare and financial services.

On credit performance, Penn said amendment activity has been relatively light. He attributed recent portfolio pressure primarily to a small number of investments originated during the post-COVID, near-zero-interest-rate period, particularly consumer-related investments. He estimated that investments from that vintage account for roughly 10% to 15% of the current portfolio.

Allorto said the quarter’s principal valuation declines involved non-accrual investment KNS and equity position Athletico Holdings. He added that KNS was also held in a joint venture, creating a related flow-through impact.

About PennantPark Floating Rate Capital (NYSE:PFLT)PennantPark Floating Rate Capital Ltd. is a business development company. It seeks to make secondary direct, debt, equity, and loan investments. The fund seeks to invest through floating rate loans in private or thinly traded or small market-cap, public middle market companies. It primarily invests in the United States and to a limited extent non-U.S. companies. The fund typically invests between $2 million and $20 million. The fund also invests in equity securities, such as preferred stock, common stock, warrants or options received in connection with debt investments or through direct investments.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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MIAMI, Aug. 04, 2026 (GLOBE NEWSWIRE) -- PennantPark Floating Rate Capital Ltd. (the "Company") (NYSE: PFLT) declares its monthly distribution for August 2026 of $0.0833 per share, comprised of an $0.08 per share base dividend and $0.0033 per share supplemental dividend, payable on September 1, 2026 to stockholders of record as of August 14, 2026. The distribution is expected to be paid from taxable net investment income. The final specific tax characteristics of the distribution will be reported to stockholders on Form 1099 after the end of the calendar year and in the Company's periodic report filed with the Securities and Exchange Commission.

The Company, which operates as a regulated investment company (“RIC”), generates qualified interest income and short-term capital gains that may be exempt from U.S. withholding tax when distributed to non-U.S. stockholders. The U.S. tax law permits a RIC to report the portion of distributions paid that represents interest-related dividends as exempt from U.S. withholding tax when paid to non-U.S. stockholders with proper documentation.

The specific tax characteristics of this distribution can be found on our website www.pennantpark.com.

ABOUT PENNANTPARK FLOATING RATE CAPITAL LTD.

PennantPark Floating Rate Capital Ltd. is a business development company which primarily invests in U.S. middle-market private companies in the form of floating rate senior secured loans, including first lien secured debt, second lien secured debt and subordinated debt. From time to time, the Company may also invest in equity investments. PennantPark Floating Rate Capital Ltd. is managed by PennantPark Investment Advisers, LLC.

ABOUT PENNANTPARK INVESTMENT ADVISERS, LLC

PennantPark Investment Advisers, LLC, a leading middle market credit platform, and its affiliates, manage approximately $10 billion of investable capital, including potential leverage. Since its inception in 2007, PennantPark Investment Advisers, LLC has provided investors access to middle market credit by offering private equity firms and their portfolio companies as well as other middle-market borrowers a comprehensive range of creative and flexible financing solutions. PennantPark Investment Advisers, LLC is headquartered in Miami and has offices in New York, Chicago, Houston, Los Angeles, Amsterdam, and Zurich. For more information about PennantPark and affiliates, please go to our website at www.pennantpark.com.

FORWARD-LOOKING STATEMENTS

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act and Section 21E(b)(2)(B) of the Exchange Act the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports PennantPark Floating Rate Capital Ltd. files under the Exchange Act. All statements other than statements of historical facts included in this press release are forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. PennantPark Floating Rate Capital Ltd. undertakes no duty to update any forward-looking statement made herein. You should not place undue influence on such forward-looking statements as such statements speak only as of the date on which they are made.

The information contained herein is based on current tax laws, which may change in the future. The Company cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided in this publication or from any other source mentioned. The information provided in this material does not constitute any specific legal, tax or accounting advice. Please consult with qualified professionals for this type of advice.

CONTACT:
Richard T. Allorto, Jr.
PennantPark Floating Rate Capital Ltd.
(212) 905-1000
www.pennantpark.com

MIAMI, July 06, 2026 (GLOBE NEWSWIRE) -- PennantPark Floating Rate Capital Ltd. (the "Company") (NYSE: PFLT) announced that it will report results for the third fiscal quarter ended June 30, 2026 on Monday, August 10, 2026 after the close of the financial markets.

The Company will also host a conference call at 9:00 a.m. (Eastern Time) on Tuesday, August 11, 2026 to discuss its financial results. All interested parties are welcome to participate. You can access the conference call by dialing toll-free (800) 330-6710 approximately 5-10 minutes prior to the call. International callers should dial (646) 769-9200. All callers should reference conference ID #2261035 or PennantPark Floating Rate Capital Ltd. An archived replay will also be available on a webcast link located on the Quarterly Earnings page in the Investor section of PennantPark’s website.

ABOUT PENNANTPARK FLOATING RATE CAPITAL LTD.

PennantPark Floating Rate Capital Ltd. is a business development company which primarily invests in U.S. middle-market private companies in the form of floating rate senior secured loans, including first lien secured debt, second lien secured debt and subordinated debt. From time to time, the Company may also invest in equity investments. PennantPark Floating Rate Capital Ltd. is managed by PennantPark Investment Advisers, LLC.

ABOUT PENNANTPARK INVESTMENT ADVISERS, LLC

PennantPark Investment Advisers, LLC is a leading middle market credit platform, and its affiliates, manage approximately $10 billion of investable capital, including potential leverage. Since its inception in 2007, PennantPark Investment Advisers, LLC has provided investors access to middle market credit by offering private equity firms and their portfolio companies as well as other middle-market borrowers a comprehensive range of creative and flexible financing solutions.  PennantPark Investment Advisers, LLC is headquartered in Miami and has offices in New York, Chicago, Houston, Los Angeles, Amsterdam and Zurich. For more information about PennantPark and affiliates, please go to our website at www.pennantpark.com.

FORWARD-LOOKING STATEMENTS

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this press release are forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. PennantPark Floating Rate Capital Ltd. undertakes no duty to update any forward-looking statement made herein. You should not place undue influence on such forward-looking statements as such statements speak only as of the date on which they are made.

CONTACT:

Richard T. Allorto, Jr.
PennantPark Floating Rate Capital Ltd.
(212) 905-1000
www.pennantpark.com 

MIAMI, April 02, 2026 (GLOBE NEWSWIRE) -- PennantPark Floating Rate Capital Ltd. (the "Company") (NYSE: PFLT) declares its monthly distribution for April 2026 of $0.1025 per share, payable on May 1, 2026 to stockholders of record as of April 15, 2026. The distribution is expected to be paid from taxable net investment income. The final specific tax characteristics of the distribution will be reported to stockholders on Form 1099 after the end of the calendar year and in the Company's periodic report filed with the Securities and Exchange Commission.

The Company, which operates as a regulated investment company (“RIC”), generates qualified interest income and short-term capital gains that may be exempt from U.S. withholding tax when distributed to non-U.S. stockholders. The U.S. tax law permits a RIC to report the portion of distributions paid that represents interest-related dividends as exempt from U.S. withholding tax when paid to non-U.S. stockholders with proper documentation.

The specific tax characteristics of this distribution can be found on our website www.pennantpark.com.

ABOUT PENNANTPARK FLOATING RATE CAPITAL LTD.

PennantPark Floating Rate Capital Ltd. is a business development company which primarily invests in U.S. middle-market private companies in the form of floating rate senior secured loans, including first lien secured debt, second lien secured debt and subordinated debt. From time to time, the Company may also invest in equity investments. PennantPark Floating Rate Capital Ltd. is managed by PennantPark Investment Advisers, LLC.

ABOUT PENNANTPARK INVESTMENT ADVISERS, LLC

PennantPark Investment Advisers, LLC, a leading middle market credit platform, and its affiliates, manage approximately $10 billion of investable capital, including potential leverage. Since its inception in 2007, PennantPark Investment Advisers, LLC has provided investors access to middle market credit by offering private equity firms and their portfolio companies as well as other middle-market borrowers a comprehensive range of creative and flexible financing solutions. PennantPark Investment Advisers, LLC is headquartered in Miami and has offices in New York, Chicago, Houston, Los Angeles, Amsterdam, and Zurich. For more information about PennantPark and affiliates, please go to our website at www.pennantpark.com.

FORWARD-LOOKING STATEMENTS

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act and Section 21E(b)(2)(B) of the Exchange Act the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports PennantPark Floating Rate Capital Ltd. files under the Exchange Act. All statements other than statements of historical facts included in this press release are forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. PennantPark Floating Rate Capital Ltd. undertakes no duty to update any forward-looking statement made herein. You should not place undue influence on such forward-looking statements as such statements speak only as of the date on which they are made.

The information contained herein is based on current tax laws, which may change in the future. The Company cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided in this publication or from any other source mentioned. The information provided in this material does not constitute any specific legal, tax or accounting advice. Please consult with qualified professionals for this type of advice.

CONTACT:
Richard T. Allorto, Jr.
PennantPark Floating Rate Capital Ltd.
(212) 905-1000
www.pennantpark.com

MIAMI, April 06, 2026 (GLOBE NEWSWIRE) -- PennantPark Floating Rate Capital Ltd. (the "Company") (NYSE: PFLT) announced that it will report results for the second fiscal quarter ended March 31, 2026 on Thursday, May 7, 2026 after the close of the financial markets.

The Company will also host a conference call at 9:00 a.m. (Eastern Time) on Friday, May 8, 2026 to discuss its financial results. All interested parties are welcome to participate. You can access the conference call by dialing toll-free (800) 330-6710 approximately 5-10 minutes prior to the call. International callers should dial (646) 769-9200. All callers should reference conference ID #9559786 or PennantPark Floating Rate Capital Ltd. An archived replay will also be available on a webcast link located on the Quarterly Earnings page in the Investor section of PennantPark’s website.

ABOUT PENNANTPARK FLOATING RATE CAPITAL LTD.

PennantPark Floating Rate Capital Ltd. is a business development company which primarily invests in U.S. middle-market private companies in the form of floating rate senior secured loans, including first lien secured debt, second lien secured debt and subordinated debt. From time to time, the Company may also invest in equity investments. PennantPark Floating Rate Capital Ltd. is managed by PennantPark Investment Advisers, LLC.

ABOUT PENNANTPARK INVESTMENT ADVISERS, LLC

PennantPark Investment Advisers, LLC is a leading middle market credit platform, and its affiliates, manage approximately $10 billion of investable capital, including potential leverage. Since its inception in 2007, PennantPark Investment Advisers, LLC has provided investors access to middle market credit by offering private equity firms and their portfolio companies as well as other middle-market borrowers a comprehensive range of creative and flexible financing solutions. PennantPark Investment Advisers, LLC is headquartered in Miami and has offices in New York, Chicago, Houston, Los Angeles, Amsterdam and Zurich. For more information about PennantPark and affiliates, please go to our website at www.pennantpark.com.

FORWARD-LOOKING STATEMENTS

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this press release are forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. PennantPark Floating Rate Capital Ltd. undertakes no duty to update any forward-looking statement made herein. You should not place undue influence on such forward-looking statements as such statements speak only as of the date on which they are made.

CONTACT:

Richard T. Allorto, Jr.
PennantPark Floating Rate Capital Ltd.
(212) 905-1000
www.pennantpark.com

Investors in PennantPark Floating Rate Capital Ltd. (PFLT - Free Report) need to pay close attention to the stock based on moves in the options market lately. That is because the May 15, 2026 $40 Call had some of the highest implied volatility of all equity options today.

What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.

What do the Analysts Think?Clearly, options traders are pricing in a big move for PennantPark shares, but what is the fundamental picture for the company? Currently, PennantPark is a Zacks Rank #4 (Sell) in the Financial - Investment Management industry that ranks in the Bottom 14% of our Zacks Industry Rank. Over the last 60 days, one analyst has increased the earnings estimates for the current quarter, while none dropped the estimates. The net effect has taken our Zacks Consensus Estimate for the current quarter from 29 cents per share to 28 cents in that period.

Given the way analysts feel about PennantPark right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

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Income investors holding PennantPark Floating Rate Capital (NYSE:PFLT) face a direct question: can a business development company that has under-earned its distribution for four straight quarters keep paying $0.1025 a month? The data points in two directions, and the answer hinges largely on a single joint venture.

PFLT is a BDC that functions as a packaged income vehicle for investors seeking exposure to direct middle-market lending. The fund earns interest on a $2.54 billion portfolio of senior secured loans to companies with $10 to $50 million in EBITDA. Roughly 99% of the debt book carries floating rates, and 89% sits in first-lien positions, giving lenders the senior claim on collateral if a borrower defaults.

The Four-Quarter Coverage Gap Core net investment income came in at $0.27 in Q1 FY26 against a $0.31 quarterly distribution, missing the $0.30 consensus by 10%. That marks the fourth straight quarter of under-coverage, following $0.28 in Q4 FY25, $0.27 in Q3, and $0.28 in Q2. Total investment income grew to $70.1 million, but yield compression and share dilution squeezed the per-share math.

The weighted average yield on debt investments slid from 11.5% a year ago to 10.2% sequentially to 9.9% in the latest quarter. The Federal Reserve’s 75 basis points of cuts since September, taking the upper bound to 3.75%, flow through PFLT’s floating-rate book. Cost of debt improved to 6.2% from 7.0%, but not fast enough to close the gap.

First-Lien Armor and a $0.25 Buffer The credit story is the bull case. PIK interest accounts for just 2.5% of total interest income, among the lowest in the BDC industry, meaning borrowers pay actual cash rather than rolling interest into principal. Median portfolio leverage runs 4.5x EBITDA with 2.1x interest coverage. CEO Art Penn argues these loans carry “meaningful covenants that safeguard our capital”, in contrast to the covenant-light upper market.

Loss history reinforces that. Across $8.7 billion deployed into 545 companies over 14 years, PFLT reports an annual loss ratio of 13 basis points. Non-accruals have risen to 4 investments, or 0.5% of cost, but remain modest. Management holds a $0.25 per share spillover income buffer that can backstop the distribution if NII falls short.

The PSSL II Lifeline Closing the coverage gap depends on PennantPark Senior Secured Loan Fund II, a Hamilton Lane joint venture in which PFLT owns 75%. PSSL II reached $326 million in assets after the latest quarter and upsized its credit facility to $250 million. Penn told investors PSSL II must scale toward $1 billion for the math to work, with a timeline of 12 to 24 months: “It’s not gonna be next quarter. But we’re off to a good start.”

NAV Erosion and Total Return Book value tells the cautionary side. NAV per share fell from $11.31 at FY24 year-end to $10.49 after Q1 FY26, with net unrealized depreciation widening to $78.4 million from $11.4 million a year and a half earlier. Management attributes most markdowns to a 2021 post-COVID vintage in consumer retail and logistics names like Pink Lily and Dynata.

Shares trade near $9, up about 3% year to date and about 4% over one year. Including distributions, total return remains positive, but the price trails NAV, signaling market skepticism about coverage.

The Verdict The dividend is at risk but not broken. PFLT’s first-lien collateral, low PIK exposure, spillover buffer, and floating-rate insulation give management real time to bridge the gap through PSSL II. The risk is that yield compression continues, non-accruals climb, and the joint venture scales slower than 18 months. PFLT suits investors comfortable with BDC credit risk and a credible turnaround thesis. Investors who need certain coverage today may prefer to see NII catch the distribution before committing capital.

MIAMI, May 07, 2026 (GLOBE NEWSWIRE) -- PennantPark Floating Rate Capital Ltd. (NYSE: PFLT) announced today its financial results for the second quarter ended March 31, 2026.

    HIGHLIGHTS
Quarter ended March 31, 2026 (Unaudited)
($ in millions, except per share amounts)       Assets and Liabilities:   Investment portfolio (1)(2)$2,580.3 Net assets$1,038.7 Net asset value per share$10.47 Quarterly change in net asset value per share (0.2)%  Credit Facility$328.3 2026 Notes, net of unamortized deferred financing costs$185.0 2029 Notes, net of unamortized deferred financing costs$195.9 2036-R Asset-Backed Debt, net of unamortized deferred financing costs$286.6 2037 Asset-Backed Debt, net of unamortized deferred financing costs$387.1 2038-R Asset-Backed Debt, net of unamortized deferred financing costs$284.8 Debt to equity 1.61x Weighted average yield on debt investments at quarter-end 9.8%    Operating Results:
   Net investment income$25.7 Net investment income per share (GAAP)$0.26 Core net investment income per share (3)$0.27 Distributions declared per share$0.31     Portfolio Activity   Purchases of Investments  294.8 Sales and repayments of investments  328.0     PSSL Portfolio data:   PSSL investment portfolio$1,209.0 Purchases of investments$58.6 Sales and repayments of investments$32.2     PSSL II Portfolio data:   PSSL II investment portfolio$339.9 Purchases of investments$148.1 Sales and repayments of investments$1.3  ________________________

(1) Includes investments in PennantPark Senior Secured Loan Fund I LLC, or PSSL, an unconsolidated joint venture, totaling $297.8 million, at fair value.(2) Includes investments in PennatPark Senior Secured Loan Fund II LLC, or PSSL II, an unconsolidated joint venture, totaling $93.5 million, at fair value.(3) Core net investment income (“Core NII”) is a non-GAAP financial measure. The Company believes that Core NII provides useful information to investors and management because it reflects the Company's financial performance excluding one-time or non-recurring investment income and expenses. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. For the quarter ended March 31, 2026, Core NII excluded: i) $1.1 million of debt issuance costs and ii) $0.2 million of incentive fee expense offset.    CONFERENCE CALL AT 9:00 A.M. ET ON MAY 8, 2026

The Company will also host a conference call at 9:00 a.m. (Eastern Time) on Friday, May 8, 2026 to discuss its financial results. All interested parties are welcome to participate. You can access the conference call by dialing toll-free (800) 330-6710 approximately 5-10 minutes prior to the call. International callers should dial (646) 769-9200. All callers should reference conference ID #9559786 or PennantPark Floating Rate Capital Ltd. An archived replay will also be available on a webcast link located on the Quarterly Earnings page in the Investor section of PennantPark’s website.

PORTFOLIO AND INVESTMENT ACTIVITY

“We are pleased with the continued quality and performance of our investment portfolio in this market. The risk-reward of the core middle market remains differentiated from the upper middle market. Despite the challenging market environment, NAV was flat for the quarter and portfolio company leverage, PIK interest and non accruals are among the lowest in the industry. The substantial growth of the PSSL II JV this past quarter provides a solid base and positions PFLT for growth in NII over time as the JV ramps" said Art Penn, Chairman and CEO. "Given the lower interest rate environment and current market activity levels, in consultation with the Board, we will be adjusting our dividend policy to be better aligned with NII, starting with the July dividend."

As of March 31, 2026, our portfolio totaled $2,580.3 million, and consisted of $2,252.1 million of first lien secured debt (including $237.7 million in PSSL and $65.6 million in PSSL II), $18.8 million of subordinated debt and $309.3 million of preferred and common equity (including $60.1 million in PSSL and $27.9 million in PSSL II). Our debt portfolio consisted of approximately 99% variable-rate investments. As of March 31, 2026, we had three portfolio companies on non-accrual, representing 0.8% and 0.5% of our overall portfolio on a cost and fair value basis, respectively. As of March 31, 2026, the portfolio had net unrealized depreciation of $66.1 million. Our overall portfolio consisted of 162 companies with an average investment size of $15.9 million and had a weighted average yield on debt investments of 9.8%.

As of September 30, 2025, our portfolio totaled $2,773.3 million and consisted of $2,513.6 million of first lien secured debt (including $237.7 million in PSSL), $19.0 million of second lien and subordinated debt and $240.7 million of preferred and common equity (including $44.3 million in PSSL). Our debt portfolio consisted of approximately 99% variable-rate investments. As of September 30, 2025, we had three portfolio companies on non-accrual, representing 0.4% and 0.2% of our overall portfolio on a cost and fair value basis, respectively. As of September 30, 2025, the portfolio had net unrealized depreciation of $46.1 million. Our overall portfolio consisted of 164 companies with an average investment size of $16.9 million, and a weighted average yield on debt investments of 10.2%.

For the three months ended March 31, 2026, we invested $294.8 million in six new and 53 existing portfolio companies at a weighted average yield on debt investments of 9.3%. Sales and repayments of investments for the same period totaled $328.0 million including $56.9 million of sales to PSSL and $148.1 million of sales to PSSL II. For the six months ended March 31, 2026, we invested $595.8 million in 10 new and 74 existing portfolio companies with a weighted average yield on debt investments of 9.6%. Sales and repayments of investments for the same period totaled $769.5 million including $189.4 million of sales to PSSL and $344.6 million of sales to PSSL II.

For the three months ended March 31, 2025, we invested $293.3 million in three new and 54 existing portfolio companies at a weighted average yield on debt investments of 9.9%. Sales and repayments of investments for the same period totaled $122.4 million including $52.9 million of sales to PSSL. For the six months ended March 31, 2025, we invested $900.2 million in 14 new and 96 existing portfolio companies with a weighted average yield on debt investments of 10.2%. Sales and repayments of investments for the same period totaled $523.7 million, including $240.6 million of sales to PSSL.

PennantPark Senior Secured Loan Fund I LLC

As of March 31, 2026, PSSL’s portfolio totaled $1,209.0 million, consisted of 120 companies with an average investment size of $10.1 million and had a weighted average yield on debt investments of 9.5%. As of September 30, 2025, PSSL’s portfolio totaled $1,084.6 million, consisted of 117 companies with an average investment size of $9.3 million and had a weighted average yield on debt investments of 10.1%.

For the three months ended March 31, 2026, PSSL invested $58.6 million (including $56.9 million purchase from the Company) in three new and five existing portfolio companies with a weighted average yield on debt investments of 9.2%. PSSL’s sales and repayments of investments for the same period totaled $32.2 million. For the six months ended March 31, 2026, PSSL invested $192.4 million (including $189.4 million purchase from the Company) in seven new and 22 existing portfolio companies with a weighted average yield on debt investments of 9.3%. PSSL's sales and repayments of investments for the same period totaled $44.6 million.

For the three months ended March 31, 2025, PSSL invested $60.0 million (including $52.9 million purchase from the Company) in four new and five existing portfolio companies with a weighted average yield on debt investments of 9.8%. PSSL’s sales and repayments of investments for the same period totaled $36.8 million. For the six months ended March 31, 2025, PSSL invested $284.9 million (including $240.6 million purchased from the Company) in 21 new and 12 existing portfolio companies with a weighted average yield on debt investments of 10.2%. PSSL’s sales and repayments of investments for the same period totaled $123.4 million.

PennantPark Senior Secured Loan Fund II LLC

As of March 31, 2026, PSSL II’s portfolio totaled $339.9 million and consisted of 54 companies with an average investment size of $6.3 million and at a weighted average yield on debt investments of 8.9%.

For the three months ended March 31, 2026, PSSL II invested $148.1 million (including $148.1 million purchased from the Company) in 12 new and 15 existing portfolio companies at a weighted average yield on debt investments of 8.8%. Sales and repayments of investments for the three months ended March 31, 2026 totaled $1.3 million. For the six months ended March 31, 2026, PSSL II invested $344.6 million (including $344.6 million purchased from the Company) in 54 new and zero existing portfolio companies at a weighted average yield on debt investments of 9.1%. Sales and repayments for the same period totaled $4.2 million.

RESULTS OF OPERATIONS

Set forth below are the results of operations for the three and six months ended March 31, 2026 and 2025.

Investment Income

For the three and six months ended March 31, 2026 investment income was $66.0 million and $136.0 million, respectively, which was attributable to $58.6 million and $122.9 million from first lien secured debt and $7.3 million and $13.2 million from other investments, respectively. For the three and six months ended March 31, 2025, investment income was $61.9 million and $128.9 million, respectively, which was attributable to $56.2 million and $117.2 million from first lien secured debt and $5.7 million and $11.7 million from other investments, respectively. The increase in investment income for the three and six months ended March 31, 2026, was primarily due to the increase in the size of our debt portfolio.

Expenses

For the three and six months ended March 31, 2026, expenses totaled $40.2 million and $83.7 million, respectively and were comprised of: $24.1 million and $51.3 million of debt related interest and expenses, $6.4 million and $13.2 million of base management fees, $6.4 million and $13.1 million of performance-based incentive fees, $2.1 million and $4.2 million of general and administrative expenses, less than $0.1 million and $0.3 million of taxes and $1.1 million and $1.6 million in Credit Facility amendment and debt issuance costs. For the three and six months ended March 31, 2025, expenses totaled $36.9 million and $74.0 million, respectively and were comprised of: $22.5 million and $44.9 million of debt related interest and expenses, $5.6 million and $10.9 million of base management fees, $6.3 million and $13.8 million of performance-based incentive fees, $1.9 million and $3.6 million of general and administrative expenses, $0.2 million and $0.5 million of taxes and $0.4 million and $0.4 million in Credit Facility amendment costs. The increase in expenses for the three and six months ended March 31, 2026, was primarily due to the increase in interest expense from increased borrowings as a result of the increase in our investment portfolio.

Net Investment Income

For the three and six months ended March 31, 2026 net investment income totaled $25.8 million or $0.26 per share, and $52.4 million or $0.53 per share, respectively. For the three and six months ended March 31, 2025 net investment income totaled $25.0 million or $0.28 per share, and $55.0 million or $0.64 per share, respectively. The decrease in net investment income for the six months ended March 31, 2026, was primarily due to an increase in interest expense and one time credit facility amendment and debt issuance costs.

Net Realized Gains or Losses

For the three and six months ended March 31, 2026 net realized gains (losses) totaled $(8.9) million and $(7.5) million, respectively. For the three and six months ended March 31, 2025 net realized gains (losses) totaled $(3.5) million and $23.1 million, respectively. The change in net realized gains (losses) was primarily due to changes in the market conditions of our investments and the values at which they were realized.

Unrealized Appreciation or Depreciation on Investments and Debt

For the three and six months ended March 31, 2026, we reported net change in unrealized appreciation (depreciation) on investments of $12.2 million and $(20.1) million, respectively. For the three and six months ended March 31, 2025 we reported net change in unrealized appreciation (depreciation) on investments of $(20.8) million and $(49.7) million, respectively. As of March 31, 2026 and September 30, 2025, our net unrealized appreciation (depreciation) on investments totaled $(66.1) million and $(46.1) million, respectively. The net change in unrealized appreciation (depreciation) on our investments was primarily due to the operating performance of the portfolio companies within our portfolio, changes in the capital market conditions of our investments, and realization of investments.

For the three and six months ended March 31, 2026, our Credit Facility had a net change in unrealized appreciation (depreciation) of less than $0.1 million and less than $0.1 million, respectively. For the three and six months ended March 31, 2025, our Credit Facility had a net change in unrealized appreciation (depreciation) of less than $0.1 million and $0.1 million, respectively. As of March 31, 2026 and September 30, 2025, the net unrealized appreciation (depreciation) on the Credit Facility totaled approximately zero and zero, respectively. The net change in net unrealized (appreciation) or depreciation was primarily due to changes in the capital markets.

Net Change in Net Assets Resulting from Operations

For the three and six months ended March 31, 2026, net increase (decrease) in net assets resulting from operations totaled $28.7 million or $0.29 per share and $25.2 million, or $0.25 per share, respectively. For the three and six months ended March 31, 2025, net increase (decrease) in net assets resulting from operations totaled $1.2 million or $0.01 per share and $29.6 million or $0.34 per share, respectively. The net increase or (decrease) from operations for the three and six months ended March 31, 2026, was primarily due to operating performance of our portfolio and changes in capital market conditions of our investments along with change in size and cost yield of our debt portfolio and costs of financing.

LIQUIDITY AND CAPITAL RESOURCES

Our liquidity and capital resources are derived primarily from cash flows from operations, including income earned, proceeds from investment sales and repayments, and proceeds of securities offerings and debt financings. Our primary use of funds from operations includes investments in portfolio companies and payments of fees and other operating expenses we incur. We have used, and expect to continue to use, our debt capital, proceeds from our portfolio and proceeds from public and private offerings of securities to finance our investment objectives and operations.

In February 2026, the Company closed the refinancing of the 2036 Asset-Backed Debt with a four-year reinvestment period and 12-year final maturity $356.5 million debt securitization (the "2038-R Asset-Backed Debt"). The Company retained the $69.5 million of the securitization's subordinated notes. The replacement debt had weighted average interest rate of 5.3% as of March 31, 2026 and matures in April 2038.

In March 2026, we issued $200.0 million in aggregate principal amount of 6.75% unsecured 2029 Notes. The effective interest rate on the 2029 Notes is 7.00% and they mature in March 2029.

For the six months ended March 31, 2026 and 2025, the annualized weighted average cost of debt, inclusive of the fee on the undrawn commitment on the Credit Facility, amendment costs and debt issuance costs, was 6.1% and 6.8%, respectively. As of March 31, 2026 and September 30, 2025 we had $439.7 million and $34.1 million of unused borrowing capacity under the Credit Facility, respectively, subject to leverage and borrowing base restrictions.

As of March 31, 2026 and September 30, 2025, we had cash and cash equivalents of $121.9 million and $122.7 million, respectively, available for investing and general corporate purposes. We believe our liquidity and capital resources are sufficient to take advantage of market opportunities.

During the three and six months ended March 31, 2026, we did not issue any shares of our common stock under the ATM Programs. During the three and six months ended March 31, 2025, we issued 11,562,000 shares and 18,838,000 shares of our common stock under the ATM Programs, respectively, at an average price of $11.34 per share and $11.35 per share raising $131.0 million and
$213.2 million of net proceeds after commissions to the Sales Agents and inclusive of proceeds from the Investment Adviser to ensure that all shares were sold at or above NAV, respectively.

For the six months ended March 31, 2026, our operating activities provided cash of $172.9 million and our financing activities used cash of $173.7 million. Our operating activities provided cash primarily due to our investment activities and our financing activities used cash primarily due to repayments of our Credit Facility offset by proceeds received from the sales of $28.5 million of 2037 Class D Notes, $21.0 million of 2036-R Asset-Backed Debt D-R Notes to third parties and the issuance of $200.0 million of our 2029 Notes.

For the six months ended March 31, 2025, our operating activities used cash of $350.8 million and our financing activities provided cash of $350.1 million. Our operating activities used cash primarily due to our investment activities and our financing activities provided cash primarily due to borrowings under our Credit Facility, proceeds from the 2037 Asset-Backed debt and proceeds from the public offerings under our 2024 ATM Program.

DISTRIBUTIONS

During the three and six months ended March 31, 2026 we declared distributions of $0.3075 per share and $0.615 per share for total distributions of $30.5 million and $61.0 million. During the three and six months ended March 31, 2025, we declared distributions of $0.3075 per share and $0.615 per share for total distributions of $27.7 million and $52.9 million. We monitor available net investment income to determine if a return of capital for tax purposes may occur for the fiscal year. To the extent our taxable earnings fall below the total amount of our distributions for any given fiscal year, stockholders will be notified of the portion of those distributions deemed to be a tax return of capital. Tax characteristics of all distributions will be reported to stockholders subject to information reporting on Form 1099-DIV after the end of each calendar year and in our periodic reports filed with the SEC.

ADJUSTED DISTRIBUTION POLICY

Given the lower interest rate environment and current market activity levels, in consultation with the Board, we will be adjusting our dividend policy to be better aligned with NII, starting with the July monthly distribution. The monthly base dividend will be adjusted to $0.08 per share. In addition to the base dividend, we plan to pay a monthly supplemental dividend. The supplemental dividend will be variable and, in general, calculated as 50% of prior quarter's NII in excess of the base dividend, if any, rounded to the nearest penny. Such amount will be paid each quarter ratably over a three-month period to be paid at the same time as the base dividend. The exact amount of each supplemental dividend will be included in our monthly distribution announcements. The supplemental dividend for July, August, and September will be $0.0033 per share each month. 

RECENT DEVELOPMENTS

The 2026 Notes were repaid in full on April 1, 2026.

AVAILABLE INFORMATION

The Company makes available on its website its Quarterly Report on Form 10-Q filed with the SEC, and stockholders may find such report on its website at www.pennantpark.com.

 PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
(in thousands, except per share data)  March 31, 2026  September 30, 2025 Assets(unaudited)    Investments at fair value   Non-controlled, non-affiliated investments (amortized cost— $2,151,925 and $2,458,018, respectively)$2,189,011  $2,491,360 Controlled, affiliated investments (amortized cost— $494,500 and $361,375, respectively) 391,270   281,968 Total investments (amortized cost— $2,646,425 and $2,819,393, respectively) 2,580,281   2,773,328 Cash equivalents (cost— $31,427 and $40,729, respectively) 31,427   40,729 Cash (cost— $90,446 and $81,955, respectively) 90,444   81,959 Interest receivable 12,611   13,832 Distributions receivable 900   — Receivable for investments sold 30,052   1,369 Due from affiliate 136   321 Prepaid expenses and other assets 2,085   2,143 Total assets 2,747,936   2,913,681 Liabilities   Credit Facility payable, at fair value (cost— $328,355 and $683,855, respectively) 328,333   683,837 2026 Notes payable, net (par—$185,000) (unamortized deferred financing costs of $2 and $391, respectively) 184,998   184,609 2029 Notes payable, net (par—$200,000 and $0) (unamortized deferred financing costs of $4,132 and $0, respectively) 195,868   — 2036 Asset-Backed Debt, net (par—$0 and $287,000) (unamortized deferred financing costs of $0 and $2,373, respectively) —   284,627 2036-R Asset-Backed Debt, net (par— $287,000 and $266,000) (unamortized deferred financing costs of $415 and $634, respectively) 286,585   265,366 2037 Asset-Backed Debt, net (par— $389,500 and $361,000) (unamortized deferred financing costs of $2,355 and $2,669, respectively) 387,145   358,331 2038-R Asset-Backed Debt, net (par—$287,000 and $0) (unamortized deferred financing costs of $2,230 and $0, respectively) 284,770   — Payable for investments purchased —   14,852 Interest payable on debt 15,407   19,172 Distributions payable 10,170   10,170 Base management fee payable 6,427   6,549 Incentive fee payable 6,437   6,883 Accounts payable and accrued expenses 1,581   2,166 Deferred tax liability 1,558   1,864 Due to affiliates —   739 Total liabilities 1,709,279   1,839,165 Net assets   Common stock, 99,217,896 and 99,217,896 shares issued and outstanding, respectively Par value $0.001 per share and 200,000,000 shares authorized 99   99 Paid-in capital in excess of par value 1,219,502   1,219,502 Accumulated deficit (180,944)  (145,085)Total net assets$1,038,657  $1,074,516 Total liabilities and net assets$2,747,936  $2,913,681 Net asset value per share$10.47  $10.83   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,Investment income: 2026   2025   2026   2025 From non-controlled, non-affiliated investments:       Interest$50,735  $49,215  $107,265  $96,678 Dividend 33   369   41   946 Other income 386   634   1,148   2,114 From controlled, affiliated investments:Interest 8,652   7,345   16,497   20,153 Dividend 6,150   4,375   11,094   8,750 Other income —   —   —   306 Total investment income 65,956   61,938   136,045   128,947 Expenses:Interest and expenses on debt 24,139   22,529   51,293   44,890 Performance-based incentive fee 6,437   6,258   13,097   13,750 Base management fee 6,427   5,604   13,241   10,868 General and administrative expenses 1,200   1,200   2,400   2,400 Administrative services expenses 900   650   1,800   1,150 Expenses before amendment costs, debt issuance costs and provision for taxes 39,103   36,241   81,831   73,058 Provision for taxes on net investment income 25   225   250   450 Credit Facility amendment and debt issuance costs 1,080   442   1,578   442 Total expenses 40,208   36,908   83,659   73,950 Net investment income 25,748   25,030   52,386   54,997 Realized and unrealized gain (loss) on investments and debt:       Net realized gain (loss) on:       Non-controlled, non-affiliated investments (7,535)  (795)  (6,079)  386 Non-controlled and controlled, affiliated investments —   (2,682)  —   22,811 Provision for taxes on realized gain (loss) on investments —   (21)  —   (94)Debt extinguishment (1,380)  —   (1,380)  — Net realized gain (loss) on investments (8,915)  (3,498)  (7,459)  23,103 Net change in unrealized appreciation (depreciation) on:Non-controlled, non-affiliated investments 25,010   (9,630)  3,744   (6,688)Controlled and non-controlled, affiliated investments (12,802)  (11,146)  (23,823)  (43,050)Provision for taxes on unrealized appreciation (depreciation) on investments (329)  468   307   1,100 Debt appreciation (depreciation) 26   1   4   91 Net change in unrealized appreciation (depreciation) on investments and debt 11,905   (20,307)  (19,768)  (48,547)Net realized and unrealized gain (loss) from investments and debt 2,990   (23,805)  (27,227)  (25,444)Net increase (decrease) in net assets resulting from operations$28,738  $1,225  $25,159  $29,553 Net increase (decrease) in net assets resulting from operations per common share$0.29  $0.01  $0.25  $0.34 Net investment income per common share$0.26  $0.28  $0.53  $0.64                  ABOUT PENNANTPARK FLOATING RATE CAPITAL LTD.

PennantPark Floating Rate Capital Ltd. is a business development company which primarily invests in U.S. middle-market companies in the form of floating rate senior secured loans, including first lien secured debt, second lien secured debt and subordinated debt. From time to time, the Company may also invest in equity investments. PennantPark Floating Rate Capital Ltd. is managed by PennantPark Investment Advisers, LLC.

ABOUT PENNANTPARK INVESTMENT ADVISERS, LLC

PennantPark Investment Advisers, LLC, a leading middle-market credit platform, and its affiliates, manage approximately $10 billion of investable capital, including potential leverage. Since its inception in 2007, PennantPark Investment Advisers, LLC has provided investors access to middle-market credit by offering private equity firms and their portfolio companies as well as other middle-market borrowers a comprehensive range of creative and flexible financing solutions. PennantPark Investment Advisers, LLC is headquartered in Miami and has offices in New York, Chicago, Houston, Los Angeles, Amsterdam, and Zurich. For more information about PennantPark and affiliates, please go to our website at www.pennantpark.com.

FORWARD-LOOKING STATEMENTS AND OTHER

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports we file under the Exchange Act. All statements other than statements of historical facts included in this press release are forward-looking statements and are not guarantees of future performance or results, and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. PennantPark Floating Rate Capital Ltd. undertakes no duty to update any forward-looking statement made herein. You should not place undue influence on such forward-looking statements as such statements speak only as of the date on which they are made.

We may use words such as “anticipates,” “believes,” “expects,” “intends,” “seeks,” “plans,” “estimates” and similar expressions to identify forward-looking statements. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations.

The information contained herein is based on current tax laws, which may change in the future. The Company cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided in this publication or from any other source mentioned. The information provided in this material does not constitute any specific legal, tax or accounting advice. Please consult with qualified professionals for this type of advice.

CONTACT: Richard T. Allorto, Jr.
PennantPark Floating Rate Capital Ltd.
(212) 905-1000
www.pennantpark.com

PennantPark Floating Rate Capital (PFLT) Q2 2026 Earnings Call Transcript

PennantPark Floating Rate Capital remains a hold as NAV declines and flat earnings persist, despite a 13.8% dividend yield. PFLT will reduce its monthly payout to $0.08 per share in July, aligning distributions with net investment income and improving future dividend coverage. Negative net investment activity and rising debt-to-equity (1.61x) highlight limited near-term growth catalysts and ongoing portfolio challenges.

In the article I list all monthly-paying BDCs. This list is then reduced to a handful of BDCs. These remaining BDCs, in my view, are the one with the strongest prospect to generate durable income without permanent NAV decay.

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For income investors hunting yield in a choppy rate environment, business development companies (BDCs) trading under $30 deserve a fresh look. These middle-market lenders pass through interest income as eye-watering distributions, and several names in the group now sit well off their highs after a year of yield compression and dividend resets. That combination, depressed share prices alongside double-digit yields, is exactly where opportunistic income buyers like to hunt.

With that in mind, here is one ultra-high-yield BDC trading under $30 that looks compelling right now, anchored by a 100% floating-rate portfolio and a fresh joint venture set to recharge earnings.

PennantPark Floating Rate Capital (NYSE: PFLT) PennantPark Floating Rate Capital (NYSE:PFLT) is a business development company that provides floating-rate loans to middle-market enterprises, with capital preservation as a stated priority.

Shares closed the most recent session at $8.33, a level that puts the stock comfortably in retail-accessible territory and well below its 52-week high of $9.72. For a retail investor, that low absolute price means a $1,000 allocation buys a meaningful share count, amplifying the dollar value of every monthly distribution.

The fundamentals tell a value story. PFLT trades at a price-to-book ratio of 0.784 against a book value of $10.49 per share, meaning buyers are paying roughly 78 cents for every dollar of net asset value. The trailing P/E sits at 13, dropping to 11 on a forward basis. Wall Street is constructive: the analyst target price of $10.08 implies meaningful upside, and the rating mix of three Strong Buys, two Buys, and two Holds leans positive with no sell ratings.

The bull case rests on three pillars. First, the dividend. The current monthly base of $0.1025 annualizes to $1.23 per share for a yield around 15%, and even after a planned reset to $0.08 monthly plus a $0.0033 supplemental starting July 2026, the payout still clears double digits at current prices. Second, the portfolio. CEO Art Penn noted that “NAV was flat for the quarter and portfolio company leverage, PIK interest and non accruals are among the lowest in the industry”, with PIK interest at 1.8% and non-accruals at 0.8% of portfolio at cost. Third, the growth engine: the PSSL II joint venture with Hamilton Lane scaled to $339.9 million in the latest quarter and is designed to drive net investment income higher as it ramps toward a $500 million target portfolio. With 100% of the debt portfolio in floating-rate instruments, sustained higher rates or sticky inflation feed directly into net investment income.

The key risk cuts against the income narrative directly. The looming dividend reset reflects yield compression, with the weighted average yield on debt sliding from 10.2% to 9.8%, and Q2 NII of $0.26 missed the $0.28 estimate. Net unrealized depreciation of $66.1 million on the portfolio is a reminder that mark-to-market risk is real. Still, the discount to NAV, the floating-rate posture, and the JV ramp argue that the reset is already in the price.

For income-focused investors comfortable with BDC volatility, PFLT screens as a deep-value setup, trading at a steep NAV discount with a double-digit yield that appears covered by net investment income.

The Bottom Line A sub-$10 share price alone is never a reason to buy, and a high yield is never a guarantee of safety. BDC distributions track net investment income, which moves with credit spreads, base rates, and non-accruals. Investors should pair this thesis with their own work on portfolio quality, leverage, and rate sensitivity before sizing any position.

PennantPark Floating Rate Capital has issued its first listed fixed-income security, the 7.375% Notes due 2031, currently priced at par. PFLT's asset coverage ratio stands at 162% but could fall to 158% if all PFLA proceeds are invested in new assets, still above the regulatory 150% requirement. Recent dividend cuts and a decrease in the asset coverage ratio suggest caution for creditors, as coverage has tightened; NAV per share has also shown gradual depletion.