PennantPark Floating Rate Capital Ltd. (NASDAQ:PFLT) Q1 2019 Earnings Conference Call Transcript

Feb 08, 2019 • 10:00 am ET

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PennantPark Floating Rate Capital Ltd. (NASDAQ:PFLT) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the PennantPark Floating Rate Capital's First Fiscal Quarter 2019 Earnings Conference Call. Today's conference is being recorded. (Operator Instructions) It is now my pleasure to turn the conference over to Mr. Art Penn, Chairman and Chief Executive Officer of PennantPark Floating Rate Capital.

Mr. Penn, you may now begin your conference.

Executive
Art Penn

Thank you, and good morning, everyone. I'd like to welcome you to PennantPark Floating Rate Capital's First Fiscal Quarter 2019 Earnings Conference Call. I'm joined today by Aviv Efrat, our Chief Financial Officer. Aviv, please start off by disclosing some general conference call information and include a discussion about forward-looking statements.

Executive
Aviv Efrat

Thank you, Art. I'd like to remind everyone that today's call is being recorded. Please note that this call is a property of PennantPark Floating Rate Capital and that any unauthorized broadcast of this call in any form is strictly prohibited. Audio replay of the call will be available by using the telephone numbers and PIN provided in our earnings press release as well as on our website.

I'd also like to call your attention to the customary safe harbor disclosure in our press release regarding forward-looking information. Today's conference call may also include forward-looking statements and projections, and we ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from these projections. We do not undertake to update our forward-looking statements unless required by law. To obtain copies of our latest SEC filings, please visit our website at www.pennantpark.com or call us at (212) 905-1000.

At this time, I'd like to turn the call back to our Chairman and Chief Executive Officer, Art Penn.

Executive
Art Penn

Thanks, Aviv. I'm going to spend a few minutes discussing financial highlights, followed by a discussion of the portfolio, investment activity, the financials and then open it up for Q&A.

For the quarter ended December 31st, we invested $180 million in primarily first lien senior secured assets and an average yield of 8.6%. PennantPark Senior Secured Loan Fund or PSSL continued to grow. As of December 31st, PSSL owned a $493 million diversified pool of 43 names with an average yield of 8.2%. Over the last several years we have substantially grown our platform by adding senior and mid-level investment professionals in regional offices as well as in New York. The additional people and offices combined with additional equity and debt capital we've raised, has significantly enhanced our deal flow. This puts us in a position to be both active and selective. The growth is evidence of this enhanced platform.

Net investment income was $0.28 per share. Core net investment income, excluding accrued non-payable incentive fee and one-time credit facility amendment cost, was $0.30 per share. Due to the activity level we are seeing and the growth of PSSL, we are pleased that our current run rate net investment income covers our dividend. Our earnings stream should have a nice tailwind based on a gradual increase