Terms

Series

5.35% Series A Fixed Rate Cumulative Perpetual Preferred Stock

Liquidation Preference

$25.00

Coupon Rate

5.35%

Rate Type

Fixed

Annual Dividend

$1.34

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

Yes

Callable

Yes

First Call Date

July 19, 2026

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Existing And Future Secured And Unsecured Indebtedness, Revolving Credit Facility, 3.364% Notes Due 2026, 3.437% Notes Due 2028, 5.50% Series A Notes Due 2030, Prospect Capital Internotes, Any Future Additional Indebtedness; Pari Passu With: All Other Outstanding Series Of Prospect Capital Corporation Preferred Stock; Senior To: Common Stock, All Other Junior Securities

Regulatory (Basel III) Call

Yes

Tax Classification

Ordinary

Prospectus Summary

Prospect Capital Corporation is offering its 5.35% Series A Fixed Rate Cumulative Perpetual Preferred Stock, with a $25 liquidation preference per share and a fixed annual dividend of $1.3375 per share ($0.334375 quarterly), payable on February 1, May 1, August 1, and November 1. The issuer may redeem shares at any time on or after July 19, 2026 at $25 per share plus accrued unpaid dividends. As a cumulative preferred, unpaid dividends accumulate and must be paid before any common stock dividends, providing holders with a claim on earnings prioritized over common shareholders but subordinate to all debt. The Series A Preferred Stock ranks senior to common stock and junior to all existing and future debt obligations, including the company's revolving credit facility, outstanding notes due 2026–2030, and Prospect Capital InterNotes. The Series A is pari passu with all other preferred stock series. As a BDC (business development company) holding company, Prospect Capital's ability to declare dividends is subject to asset coverage requirements under the Investment Company Act of 1940 (currently 150%). Regulatory redemption rights allow the company to call shares at any time, pro rata with other preferred series, if necessary to maintain asset coverage or RIC status, exposing holders to early redemption risk unrelated to interest rate changes. The effective yield at par is 5.35% annually, paid quarterly. Dividends are declared when and if authorized by the Board and depend on availability of legally distributable funds. Record dates fall 7–20 days before each dividend payment date. Dividend stopper provisions block common stock dividends and redemptions unless all cumulative preferred dividends (including Series A) are paid in full and asset coverage remains at least 150%. As a BDC preferred dividend, holders should consult a tax advisor regarding potential disqualification from the preferential 15%/20% qualified dividend income rate and corporate dividends-received deduction treatment that may otherwise apply to preferred stock.

Summarized from the SEC prospectus filing.

Distribution History

Conversion Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

Common stock dividends are blocked unless all cumulative preferred dividends (including Series A) for all outstanding preferred series have been declared and paid in full, and the issuer remains in compliance with 1940 Act asset coverage requirements (150%). Additionally, no common stock redemptions or liquidation payments may be made unless the same dividend and asset coverage conditions are satisfied.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 50 (Average)