PennantPark Floating Rate Capital 10Q 2023 Q3 Quarterly report

PennantPark Floating Rate Capital (PFLT) 10-Q2023 Q3 Quarterly report

Content analysis

0001504619Investments in Non-Control, Non-Affiliate Portfolio Companies—169.5% First Lien Secured Debt - 149.7% Sargent & Greenleaf Inc. (Revolver) Maturity 12/20/2024 Industry Electronic Equipment, Instruments, and Components Current Coupon 8.28% Basis Point Spread Above Index 1M L+5502022-09-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)r


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER: 814-00891

PENNANTPARK FLOATING RATE CAPITAL LTD.

(Exact name of registrant as specified in its charter)


MARYLAND		27-3794690
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1691 Michigan Avenue Miami Beach, Florida		33139
(Address of principal executive offices)		(Zip Code)

(786) 297-9500

(Registrant’s Telephone Number, Including Area Code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	PFLT	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, $0.001 par value per share, outstanding as of August 9, 2023 was 58,734,702.

PENNANTPARK FLOATING RATE CAPITAL LTD.

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2023

TABLE OF CONTENTS


PART I. CONSOLIDATED FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Consolidated Statements of Assets and Liabilities as of June 30, 2023 (unaudited) and September 30, 2022		4

Consolidated Statements of Operations for the three and nine months ended June 30, 2023 and 2022 (unaudited)		5

Consolidated Statements of Changes in Net Assets for the three and nine months ended June 30, 2023 and 2022 (unaudited)		6

Consolidated Statements of Cash Flows for the nine months ended June 30, 2023 and 2022 (unaudited)		7

Consolidated Schedules of Investments as of June 30, 2023 (unaudited) and September 30, 2022		8

Notes to Consolidated Financial Statements (unaudited)		19

Report of Independent Registered Public Accounting Firm (PCAOB ID 49)		38

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		40

Item 3. Quantitative and Qualitative Disclosures About Market Risk		54

Item 4. Controls and Procedures		54

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		55

Item 1A. Risk Factors		55

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		56

Item 3. Defaults Upon Senior Securities		56

Item 4. Mine Safety Disclosures		56

Item 5. Other Information		56

Item 6. Exhibits		57

SIGNATURES		58

PART I—CONSOLIDATED FINANCIAL INFORMATION

We are filing this Quarterly Report on Form 10-Q, or the Report, in compliance with Rule 13a-13 as promulgated by the Securities and Exchange Commission, or the SEC, under the Securities Exchange Act of 1934, as amended, or the Exchange Act. In this Report, except where the context suggests otherwise, the terms “Company,” “we,” “our” or “us” refers to PennantPark Floating Rate Capital Ltd. and its wholly-owned consolidated subsidiaries; “Funding I” refers to PennantPark Floating Rate Funding I, LLC; “Taxable Subsidiary” refers to PFLT Investment Holdings, LLC; “PSSL” refers to PennantPark Senior Secured Loan Fund I LLC, an unconsolidated joint venture; “PTSF” refers to PennantPark-TSO Senior Loan Fund, LP, an unconsolidated limited partnership; “PennantPark Investment Advisers” or “Investment Adviser” refer to PennantPark Investment Advisers, LLC; “PennantPark Investment Administration” or “Administrator” refers to PennantPark Investment Administration, LLC; “2023 Notes” refers to our 4.3% Series A notes due 2023; “2026 Notes” refers to our 4.25% Notes due 2026; “1940 Act” refers to the Investment Company Act of 1940, as amended; “SBCAA” refers to the Small Business Credit Availability Act; “Code” refers to the Internal Revenue Code of 1986, as amended; “RIC” refers to a regulated investment company under the Code; “BDC” refers to a business development company under the 1940 Act; “Prior Credit Facility” refers to our multi-currency senior secured revolving credit facility, as amended and restated with Truist Bank (formerly SunTrust Bank) and other lenders, originally entered into on June 23, 2011 and terminated on August 12, 2021; “Credit Facility” refers to our multi-currency senior secured revolving credit facility, as amended from time to time, with Truist Bank and other lenders, or the “Lenders,” entered into on August 12, 2021; “Securitization Issuer” refers to PennantPark CLO I, Ltd.; “Securitization Issuers” refers to the Securitization Issuer and PennantPark CLO I, LLC; “Debt Securitization” refers to the $301.4 million term debt securitization completed by the Securitization Issuers; “2031 Asset-Backed Debt” refers to (i) the issuance of the Class A-1 Senior Secured Floating Rate Notes due 2031, the Class A-2 Senior Secured Fixed Rate Notes due 2031, the Class B-1 Senior Secured Floating Rate Notes due 2031, the Class B-2 Senior Secured Fixed Rate Notes due 2031, the Class C-1 Secured Deferrable Floating Rate Notes due 2031, the Class C-2 Notes Secured Deferrable Fixed Rate Notes due 2031, and the Class D Secured Deferrable Floating Notes due 2031 and (ii) the borrowing of the Class A‑1 Senior Secured Floating Rate Notes due 2031 by the Securitization Issuers in connection with the Debt Securitization; and “Depositor” refers to PennantPark CLO I Depositor, LLC. References to our portfolio, our investments, our multi-currency, senior secured revolving credit facility, as amended and restated, or the Credit Facility, and our business include investments we make through our subsidiaries.

Item 1. Consolidated Financial Statements

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(in thousands, except share and per share data)


	June 30, 2023			September 30, 2022
	(unaudited)
Assets
Investments at fair value
Non-controlled, non-affiliated investments (amortized cost— $816,166 and $882,570, respectively)	$	814,608		$	893,249
Controlled, affiliated investments (amortized cost— $324,267 and $294,787, respectively)		290,657			271,005
Total investments (cost— $1,140,433 and $1,177,357, respectively)		1,105,265			1,164,254
Cash and cash equivalents (cost— $59,092 and $47,916, respectively)		59,092			47,880
Interest receivable		10,005			7,543
Receivable for investments sold		7,352			3,441
Distributions receivable		692			—
Prepaid expenses and other assets		817			748
Total assets		1,183,223			1,223,866
Liabilities
Distributions payable		5,499			4,308
Credit Facility payable, at fair value (cost— $64,400 and $169,654, respectively) (See Notes 5 and 10)		63,917			167,563
2023 Notes payable, at fair value (par—$76,219 and $97,006, respectively) (See Notes 5 and 10)		79,260			96,812
2026 Notes payable, net (par—$185,000) (See Notes 5 and 10)		182,860			182,276
2031 Asset-Backed Debt, net (par—$228,000) (See Notes 5 and 10)		226,601			226,128
Interest payable on debt		6,138			8,163
Base management fee payable (See Note 3)		2,840			3,027
Incentive fee payable (See Note 3)		4,625			3,164
Deferred tax liability		1,640			4,568
Accounts payable and accrued expenses		1,416			765
Total liabilities		574,796			696,774
Commitments and contingencies (See Note 11)
Net assets
Common stock, 55,537,299 and 45,345,638 shares issued and outstanding, respectively Par value $0.001 per share and 100,000,000 shares authorized		56			45
Paid-in capital in excess of par value		730,528			618,028
Accumulated deficit		(122,157	)		(90,981	)
Total net assets	$	608,427		$	527,092
Total liabilities and net assets	$	1,183,223		$	1,223,866
Net asset value per share	$	10.96		$	11.62

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)


	Three Months Ended June 30,						Nine Months Ended June 30,
	2023			2022			2023			2022
Investment income:
From non-controlled, non-affiliated investments:
Interest	$	21,988		$	16,701		$	65,440		$	49,753
Dividend		4,390			577			5,602			1,731
Other income		734			285			1,460			3,795
From non-controlled, affiliated investments:
Interest		—			—			—			112
Other income		—			—			—			—
From controlled, affiliated investments:
Interest		8,151			4,228			22,701			10,633
Dividend		2,450			3,938			8,400			10,675
Total investment income		37,713			25,729			103,603			76,699
Expenses:
Base management fee (See Note 3)		2,840			3,062			8,643			8,904
Performance-based incentive fee (See Note 3)		4,625			2,576			12,245			8,461
Interest and expenses on debt (See Note 10)		9,985			7,369			29,595			20,713
Administrative services expenses (See Note 3)		477			144			764			431
General and administrative expenses		1,134			655			2,545			1,964
Expenses before provision for taxes		19,061			13,806			53,792			40,473
Provision for taxes on net investment income		150			100			834			300
Total expenses		19,211			13,906			54,626			40,773
Net investment income		18,502			11,823			48,977			35,926
Realized and unrealized gain (loss) on investments and debt:
Net realized gain (loss) on:
Non-controlled, non-affiliated investments		(6,065	)		701			(13,520	)		10,694
Non-controlled and controlled, affiliated investments		—			—			—			(22,315	)
Provision for taxes on realized gain on investments		—			—			(300	)		—
Net realized gain (loss) on investments		(6,065	)		701			(13,820	)		(11,621	)
Net change in unrealized appreciation (depreciation) on:
Non-controlled, non-affiliated investments		3,051			(11,204	)		(12,204	)		(12,243	)
Controlled and non-controlled, affiliated investments		(4,143	)		(6,431	)		(9,825	)		8,597
Provision for taxes on unrealized appreciation (depreciation) on investments		—			—			2,929			(5,340	)
Debt (appreciation) depreciation (See Note 5 and 10)		(5,752	)		26			(4,842	)		1,273
Net change in unrealized appreciation (depreciation) on investments and debt		(6,844	)		(17,609	)		(23,942	)		(7,713	)
Net realized and unrealized gain (loss) from investments and debt		(12,909	)		(16,908	)		(37,762	)		(19,334	)
Net increase (decrease) in net assets resulting from operations	$	5,593		$	(5,085	)	$	11,215		$	16,592
Net increase (decrease) in net assets resulting from operations per common share (See Note 7)	$	0.11		$	(0.12	)	$	0.23		$	0.42
Net investment income per common share	$	0.36		$	0.29		$	1.02		$	0.90

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS

(in thousands, except share issue data)

(Unaudited)


	Three Months Ended June 30,						Nine Months Ended June 30,
	2023			2022			2023			2022
Net increase (decrease) in net assets from operations:
Net investment income	$	18,502		$	11,823		$	48,977		$	35,926
Net realized gain (loss) on investments		(6,065	)		701			(13,520	)		(11,621	)
Net change in unrealized appreciation (depreciation) on investments		(1,092	)		(17,635	)		(22,029	)		(3,646	)
Net change in provision for taxes on unrealized appreciation (depreciation) on investments		—			—			2,929			(5,340	)
Net provision for taxes on realized gain on investments		—			—			(300	)		—
Net change in unrealized depreciation on debt		(5,752	)		26			(4,842	)		1,273
Net increase (decrease) in net assets resulting from operations		5,593			(5,085	)		11,215			16,592
Distributions to stockholders:
Distribution of net investment income		(15,445	)		(11,780	)		(42,390	)		(34,141	)
Total distributions to stockholders		(15,445	)		(11,780	)		(42,390	)		(34,141	)
Capital transactions
Public offering (See Note 1)		64,060			1,820			113,215			32,336
Offering costs		(450	)		(28	)		(705	)		(485	)
Net increase in net assets resulting from capital transactions		63,610			1,792			112,510			31,851
Net increase (decrease) in net assets		53,758			(15,073	)		81,335			14,301
Net assets:
Beginning of period		554,669			519,986			527,092			490,611
End of period	$	608,427		$	504,913		$	608,427		$	504,913
Capital share activity:
Shares issued from public offering		5,805,484			136,072			10,191,661			2,464,910

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Nine months ended June 30,
	2023			2022
Cash flows from operating activities:
Net increase in net assets resulting from operations	$	11,215		$	16,593
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used in) operating activities:
Net change in unrealized appreciation (depreciation) on investments		22,029			3,645
Net change in unrealized (appreciation) depreciation on debt		4,842			(1,273	)
Net realized (gain) loss on investments		13,520			11,621
Net accretion of discount and amortization of premium		(3,741	)		(2,920	)
Purchases of investments		(231,001	)		(553,106	)
Payment-in-kind interest		(471	)		(1,203	)
Proceeds from dispositions of investments		258,075			397,184
Accretion (amortization) of deferred financing costs		1,056			385
(Increase) Decrease in:
Interest receivable		(2,462	)		(1,913	)
Distribution receivable		(692	)		—
Receivable for investments sold		(3,911	)		27,357
Prepaid expenses and other assets		(69	)		(10,127	)
Increase or (Decrease) in:
Payable for investments purchased		—			(3,746	)
Interest payable on debt		(2,025	)		(955	)
Base management fee payable		(187	)		355
Incentive fee payable		1,461			1,952
Deferred tax liability		(2,928	)		5,340
Account payable and accrued expenses		651			(768	)
Net cash provided by (used in) operating activities		65,362			(111,579	)
Cash flows from financing activities:
Proceeds from public offering		113,214			32,336
Offering costs		(705	)		(485	)
Distributions paid to stockholders		(41,200	)		(33,904	)
Repayment of 2023 notes payable (See Notes 5 and 10)		(20,787	)		(20,787	)
Proceeds from 2026 notes issuance (See Notes 5 and 10)		—			84,333
Borrowings under Credit Facility (See Notes 5 and 10)		65,000			147,254
Repayments under Credit Facility (See Notes 5 and 10)		(169,709	)		(107,000	)
Net cash provided by (used in) financing activities		(54,187	)		101,747
Net increase (decrease) in cash and cash equivalents		11,175			(9,832	)
Effect of exchange rate changes on cash		37			622
Cash and cash equivalents, beginning of period		47,880			49,826
Cash and cash equivalents, end of period	$	59,092		$	40,616
Supplemental disclosures:
Interest paid	$	30,564		$	20,610
Taxes paid	$	530		$	2,557
Non-cash exchanges and conversions	$	3,393		$	50,352

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

JUNE 30, 2023

(in thousands, except share data)

(Unaudited)


Issuer Name	Maturity	Industry	Current Coupon			Basis Point Spread Above Index (1)		Par / Shares		Cost		Fair Value (2)
Investments in Non-Controlled, Non-Affiliated Portfolio Companies—133.9% (3), (4)
First Lien Secured Debt—116.7%
A1 Garage Merger Sub, LLC	12/22/2028	Commercial Services & Supplies		11.79	%	3M L+660			1,524	$	1,502	$	1,508
A1 Garage Merger Sub, LLC - Unfunded Term Loan	12/22/2028	Commercial Services & Supplies		—			—		528		—		3
A1 Garage Merger Sub, LLC LLC (Revolver) (7), (9)	12/22/2028	Commercial Services & Supplies		—			—		748		—		(7	)
Ad.net Acquisition, LLC	05/07/2026	Media		11.50	%	3M L+600			4,900		4,855		4,863
Ad.net Acquisition, LLC (Revolver) (7)	05/07/2026	Media		11.50	%	3M L+600			871		871		865
Ad.net Acquisition, LLC (Revolver) (7), (9)	05/07/2026	Media		—			—		373		—		(3	)
Altamira Technologies, LLC	07/24/2025	IT Services		10.70	%	3M L+600			4,441		4,415		4,441
Altamira Technologies, LLC (Revolver) (7)	07/24/2025	IT Services		10.89	%	3M L+600			575		575		575
Altamira Technologies, LLC (Revolver) (7), (9)	07/24/2025	IT Services		—			—		1,581		—		—
Amsive Holding Corporation (f/k/a Vision Purchaser Corporation)	06/10/2025	Media		11.64	%	3M L+625			13,995		13,882		13,715
Anteriad, LLC (f/k/a MeritDirect, LLC)	05/23/2024	Media		10.89	%	3M L+550			13,982		13,938		13,632
Anteriad, LLC (f/k/a MeritDirect, LLC) - Incremental Term Loan	05/23/2024	Media		11.89	%	3M L+650			2,240		2,205		2,206
Anteriad, LLC (f/k/a MeritDirect, LLC) (Revolver) (7), (9)	05/23/2024	Media		—			—		2,869		—		(72	)
Any Hour Services	07/21/2027	Energy Equipment and Services		10.90	%	3M L+525			6,411		6,342		6,235
Any Hour Services (Revolver) (7), (9)	07/21/2027	Energy Equipment and Services		—			—		1,147		—		(32	)
Apex Service Partners, LLC	07/31/2025	Diversified Consumer Services		10.52	%	1M L+525			6,160		6,129		6,129
Apex Service Partners, LLC Term Loan B	07/31/2025	Diversified Consumer Services		10.75	%	1M L+550			294		294		293
Apex Service Partners, LLC Term Loan C	07/31/2025	Diversified Consumer Services		10.50	%	1M L+525			12,826		12,782		12,761
Apex Service Partners, LLC (Revolver) (7), (9)	07/31/2025	Diversified Consumer Services		—			—		1,845		—		(9	)
API Holding III Corp.	05/11/2026	Electronic Equipment, Instruments, and Components		9.75	%	1M L+425			5,760		5,744		3,936
Applied Technical Services, LLC	12/29/2026	Commercial Services & Supplies		11.13	%	3M L+575			8,133		8,030		7,971
Applied Technical Services, LLC (Unfunded Term Loan)	04/21/2023	Commercial Services & Supplies		—			—		197		—		(2	)
Applied Technical Services, LLC (Revolver) (7)	12/29/2026	Commercial Services & Supplies		12.94	%	3M L+475			1,082		1,082		1,060
Applied Technical Services, LLC (Revolver) (7), (9)	12/29/2026	Commercial Services & Supplies		—			—		191		—		(4	)
Arcfield Acquisition Corp. (Revolver) (9)	03/07/2028	Aerospace and Defense		—			—		887		—		(9	)
Beta Plus Technologies, Inc.	07/01/2029	Internet Software and Services		10.99	%	1M L+575			4,963		4,871		4,541
BioDerm, Inc. (Revolver) (9)	01/31/2028	Healthcare Equipment and Supplies		—			—		1,071		—		(16	)
Blackhawk Industrial Distribution, Inc.	09/17/2026	Distributors		11.47	%	3M L+625			632		629		616
Blackhawk Industrial Distribution, Inc. (7),(9)	09/17/2026	Distributors		—			—		2,624		—		(52	)
Blackhawk Industrial Distribution, Inc. (9)	09/17/2026	Distributors		—			—		2,744		—		(69	)
Broder Bros., Co.	12/04/2025	Textiles, Apparel and Luxury Goods		11.16	%	3M L+600			3,346		3,346		3,346
By Light Professional IT Services, LLC	05/16/2024	High Tech Industries		12.30	%	3M L+688			25,955		25,851		25,501
By Light Professional IT Services, LLC (Revolver) (7)(9)	05/16/2024	High Tech Industries		0.00	%		—		3,507		—		(61	)
Cadence Aerospace, LLC (7)	11/14/2023	Aerospace and Defense		13.91	%	3M L+850			976		975		976
			(PIK 9.50%)
Cartessa Aesthetics, LLC	06/14/2028	Distributors		11.24	%	1M L+600			13,109		12,901		13,044
Cartessa Aesthetics, LLC (Revolver) (7)	06/14/2028	Distributors		11.24	%	1M L+600			511		511		508
Cartessa Aesthetics, LLC (Revolver) (7)(9)	06/14/2028	Distributors		—					927		—		(5	)
CF512, Inc.	08/20/2026	Media		11.47	%	3M L+600			5,995		5,939		5,935
CF512, Inc. (Revolver) (7), (9)	08/20/2026	Media		—			—		955		—		(10	)
CHA Holdings, Inc.	04/10/2025	Environmental Industries		10.00	%	3M L+450			1,569		1,565		1,569
Challenger Performance Optimization, Inc. (Revolver) (7)	08/31/2023	Business Services		11.85	%	3M L+675			22		22		21
Challenger Performance Optimization, Inc. (Revolver) (7), (9)	08/31/2023	Business Services		—			—		690		—		(24	)
Compex Legal Services, Inc.	02/09/2026	Professional Services		10.78	%	3M L+525			7,976		7,954		7,976
Compex Legal Services, Inc. (Revolver) (7)	02/07/2025	Professional Services		10.79	%	3M L+525			984		984		984
Compex Legal Services, Inc. (Revolver) (7), (9)	02/07/2025	Professional Services		—			—		422		—		—
Connatix Buyer, Inc.	07/13/2027	Media		10.65	%	3M L+550			3,825		3,769		3,672
Connatix Buyer, Inc. (7), (9)	07/14/2023	Media		—			—		2,105		—		(63	)
Connatix Buyer, Inc. (7), (9)	07/13/2027	Media		—			—		1,234		—		(49	)
Crane 1 Services, Inc.	08/16/2027	Commercial Services & Supplies		10.75	%	3M L+575			884		872		876
Crane 1 Services, Inc. (Revolver) (7)	08/16/2027	Commercial Services & Supplies		10.75	%	3M L+575			179		179		178
Crane 1 Services, Inc. (Revolver) (7)	08/16/2027	Commercial Services & Supplies		—			—		157		—		(2	)
Dr. Squatch, LLC	08/31/2027	Personal Products		11.09	%	3M L+600			4,394		4,335		4,351
Dr. Squatch, LLC (Revolver) (7), (9)	08/31/2027	Personal Products		—			—		3,353		—		(34	)
DRS Holdings III, Inc.	11/03/2025	Chemicals, Plastics and Rubber		11.63	%	3M L+640			16,444		16,305		16,000
DRS Holdings III, Inc. (Revolver) (7), (9)	11/03/2025	Personal Products		—			—		1,426		—		(39	)
Duraco Specialty Tapes LLC	06/30/2024	Containers and Packaging		11.75	%	3M L+650			3,454		3,403		3,395
ECL Entertainment, LLC	05/01/2028	Hotels, Restaurants and Leisure		12.72	%	1M L+750			3,659		3,628		3,668
eCommission Financial Services, Inc. (10)	10/05/2023	Banking, Finance, Insurance & Real Estate		10.20	%	1M L+500			4,909		4,909		4,909
eCommission Financial Services, Inc. (Revolver) (7), (9), (10)	10/05/2023	Banking, Finance, Insurance & Real Estate		—			—		5,000		—		—
EDS Buyer, LLC - Unfunded Term Loan	01/10/2029	Electronic Equipment, Instruments, and Components		—			—		6,750		—		(84	)
EDS Buyer, LLC. (Revolver) (7), (9)	01/10/2029	Electronic Equipment, Instruments, and Components		—			—		2,025		—		(51	)
Efficient Collaborative Retail Marketing Company, LLC	06/15/2024	Media: Diversified and Production		14.50	%	3M L+900			7,147		7,144		5,288
ETE Intermediate II, LLC - Revolver	05/25/2029	Diversified Consumer Services		11.69	%	3M L+650			552		552		536
ETE Intermediate II, LLC (Revolver) (9)	05/25/2029	Diversified Consumer Services		—			—		1,104		—		(33	)
Exigo Intermediate II, LLC (9)	03/15/2024	Software		—			—		2,758		—		(34	)
Exigo Intermediate II, LLC (Revolver) (9)	03/15/2027	Software		—			—		689		—		(14	)

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

JUNE 30, 2023

(in thousands, except share data)

(Unaudited)


Issuer Name	Maturity	Industry	Current Coupon			Basis Point Spread Above Index (1)		Par / Shares		Cost		Fair Value (2)
Five Star Buyer, Inc.	02/23/2028	Hotels, Restaurants and Leisure		12.09	%	3M L+710			4,615	$	4,530	$	4,523
Five Star Buyer, Inc. - DDTL B Unfunded	02/23/2028	Hotels, Restaurants and Leisure		—			—		837		-		(17	)
Five Star Buyer, Inc. (Revolver) (9)	02/23/2028	Hotels, Restaurants and Leisure		—			—		741		-		(15	)
Gantech Acquisition Corp.	05/14/2026	IT Services		11.50	%	1M L+625			21,644		21,359		20,887
Gantech Acquisition Corp. (Revolver) (7)	05/14/2026	IT Services		11.50	%	1M L+625			3,733		3,733		3,603
Global Holdings InterCo LLC	03/16/2026	Diversified Financial Services		11.76	%	3M L+650			3,288		3,258		3,115
Graffiti Buyer, Inc.	08/10/2027	Trading Companies & Distributors		10.99	%	3M L+550			499		494		494
Graffiti Buyer, Inc. (7), (9)	08/10/2023	Trading Companies & Distributors		—			—		570		—		—
Graffiti Buyer, Inc. (Revolver) (7)	08/10/2027	Trading Companies & Distributors		11.30	%	3M L+575			334		334		331
Graffiti Buyer, Inc. (Revolver) (7), (9)	08/10/2027	Trading Companies & Distributors		—			—		531		—		(5	)
Hancock Roofing and Construction L.L.C.	12/31/2026	Insurance		10.74	%	3M L+550			4,172		4,108		4,089
Hancock Roofing and Construction L.L.C. (Revolver) (7)	12/31/2026	Insurance		10.70	%	3M L+550			335		335		328
Hancock Roofing and Construction L.L.C. (Revolver) (7), (9)	12/31/2026	Insurance		—			—		415		—		(8	)
Holdco Sands Intermediate, LLC	11/23/2028	Aerospace and Defense		11.21	%	3M L+600			4,925		4,844		4,876
Holdco Sands Intermediate, LLC (Revolver) (9)	11/23/2027	Aerospace and Defense		—			—		1,791		—		(18	)
HPA SPQ Merger Sub, Inc.	06/15/2029	Professional Services		11.52	%	3M L+625			3,758		3,683		3,683
HPA SPQ Merger Sub, Inc. - Unfunded Term Loan	06/15/2029	Professional Services		—			—		1,146		—		—
HPA SPQ Merger Sub, Inc (Revolver) (7), (9)	06/15/2029	Professional Services		—			—		860		—		—
HW Holdco, LLC	12/10/2024	Media		10.99	%	1M L+585			9,000		8,967		8,865
HW Holdco, LLC (Revolver) (7), (9)	12/10/2024	Media		—			—		1,452		—		(22	)
IDC Infusion Services, Inc.	12/30/2026	Healthcare Equipment and Supplies		12.13	%	3M L+700			5,680		5,579		5,680
IDC Infusion Services, Inc. (Revolver) (9)	12/30/2026	Healthcare Equipment and Supplies		—			—		4,167		—		—
IG Investments Holdings, LLC (7)	09/22/2028	Professional Services		11.17	%	3M L+600			4,439		4,364		4,373
IG Investments Holdings, LLC (Revolver) (7), (9)	09/22/2027	Professional Services		—			—		477		—		(7	)
Imagine Acquisitionco, LLC (9)	11/15/2027	Software		—			—		1,657		—		(25	)
Imagine Acquisitionco, LLC (Revolver) (9)	11/15/2027	Software		—			—		1,193		—		(30	)
Inception Fertility Ventures, LLC	12/31/2024	Healthcare Providers and Services		12.50	%	3M L+715			14,866		14,685		14,717
Infinity Home Services Holdco, Inc.	12/28/2028	Commercial Services & Supplies		11.98	%	3M L+685			1,751		1,751		1,751
Infinity Home Services Holdco, Inc. - Unfunded Term Loan	12/28/2023	Commercial Services & Supplies		—			—		1,477		—		—
Infinity Home Services Holdco, Inc. (Revolver)	12/28/2028	Commercial Services & Supplies		14.00	%	3M L+575			65		65		65
Infinity Home Services Holdco, Inc. (Revolver) (9)	12/28/2028	Commercial Services & Supplies		—			—		1,227		—		—
Infolinks Media Buyco, LLC	11/01/2026	Media		10.70	%	3M L+550			3,186		3,145		3,186
Infolinks Media Buyco, LLC (9)	11/01/2023	Media		—			—		387		—		4
Integrative Nutrition, LLC	09/29/2023	Consumer Services		12.39	%	3M L+700			15,485		15,476		14,711
Integrity Marketing Acquisition, LLC (7)	08/27/2025	Insurance		11.41	%	SOFR+550			15,705		15,608		15,548
ITI Holdings, Inc. (Revolver)	03/03/2028	IT Services		11.92	%	3M L+560			553		553		539
ITI Holdings, Inc. (Revolver) (9)	03/03/2028	IT Services		—			—		112		—		(3	)
Inventus Power, Inc.	06/30/2025	Electronic Equipment, Instruments, and Components		12.72	%	3M L+761			13,267		13,002		13,002
Inventus Power, Inc. (Revolver) (7), (9)	06/30/2025	Electronic Equipment, Instruments, and Components		—			—		1,729		—		—
K2 Pure Solutions NoCal, L.P. (Revolver) (7), (9)	12/20/2023	Chemicals, Plastics and Rubber		—			—		1,429		—		—
Kinetic Purchaser, LLC	11/10/2027	Personal Products		11.39	%	3M L+600			17,297		17,029		17,037
Kinetic Purchaser, LLC - (Revolver)	11/10/2026	Personal Products		11.39	%	3M L+600			3,091		3,091		3,045
Kinetic Purchaser, LLC - (Revolver) (9)	11/10/2026	Personal Products		—			—		343		—		(5	)
Lash OpCo, LLC	02/18/2027	Personal Products		12.13	%	1M L+700			10,431		10,279		10,274
Lash OpCo, LLC (Revolver) (7)	08/16/2026	Personal Products		12.17	%	1M L+700			1,272		1,272		1,253
Lash OpCo, LLC (Revolver) (7), (9)	08/16/2026	Personal Products		—					648		—		(10	)
LAV Gear Holdings, Inc.	10/31/2024	Capital Equipment		11.68	%	1M L+625			7,563		7,554		7,464
			(PIK 5.50%)
LAV Gear Holdings, Inc. (Revolver) (7)	10/31/2024	Capital Equipment		10.70	%	1M L+565			1,721		1,721		1,698
			(PIK 5.50%)
Ledge Lounger, Inc.	11/09/2026	Leisure Products		11.64	%	3M L+625			3,719		3,678		3,644
Ledge Lounger, Inc. (Revolver) (9)	11/09/2026	Leisure Products		—			—		789		—		(16	)
Lightspeed Buyer Inc.	02/03/2026	Healthcare Technology		10.45	%	1M L+575			22,601		22,316		22,262
Lightspeed Buyer Inc. (Revolver) (7) (9)	02/03/2026	Healthcare Technology		—			—		2,499		—		(37	)
LJ Avalon Holdings, LLC - Unfunded Term Loan	07/31/2024	Construction & Engineering		—			—		2,824		—		(14	)
LJ Avalon Holdings, LLC (Revolver) (9)	01/31/2030	Construction & Engineering		—			—		1,130		—		(23	)
Loving Tan Intermediate II, Inc.	05/31/2028	Personal Products		12.26	%	3M L+700			19,311		18,928		18,925
Loving Tan Intermediate II, Inc. (Revolver)(7)(9)	05/31/2028	Personal Products		—			—		3,384		—		(68	)
Lucky Bucks, LLC (6)	07/20/2027	Hotels, Restaurants and Leisure		0.00	%		—		4,489		4,210		1,194
Lucky Bucks, LLC - DIP	10/20/2023	Hotels, Restaurants and Leisure		15.15	%	3M L+1000			115		102		101
MAG DS Corp.	04/01/2027	Aerospace and Defense		10.84	%	1M L+550			3,684		3,566		3,453
Mars Acquisition Holdings Corp.	05/14/2026	Media		10.89	%	3M L+550			8,750		8,628		8,662
Mars Acquisition Holdings Corp. (Revolver)(7)(9)	05/14/2026	Media		—			—		2,435		—		(24	)
MBS Holdings, Inc. (Revolver)	04/16/2027	Internet Software and Services		10.93	%	3M L+575			185		185		183
MBS Holdings, Inc. (Revolver)(7)(9)	04/16/2027	Internet Software and Services		—			—		972		—		(10	)
MDI Buyer, Inc.	07/25/2028	Commodity Chemicals		10.84	%	3M L+600			2,046		2,007		2,002
MDI Buyer, inc. (Revolver) (7)	07/25/2028	Commodity Chemicals		11.00	%	3M L+600			361		361		353
MDI Buyer, inc. (Revolver) (9)	07/25/2028	Commodity Chemicals		—			—		412		—		(5	)
Meadowlark Acquirer, LLC	12/10/2027	Professional Services		10.89	%	3M L+550			1,983		1,965		1,944
Meadowlark Acquirer, LLC - Term Loan I (9)	12/10/2027	Professional Services		—			—		1,103		—		(11	)
Meadowlark Acquirer, LLC - Term Loan II (9)	12/10/2027	Professional Services		—			—		9,483		—		(95	)
Meadowlark Acquirer, LLC (Revolver) (9)	12/10/2027	Professional Services		—			—		1,693		—		(34	)
Mission Critical Electronics, Inc.	03/28/2024	Capital Equipment		10.29	%	SOFR +500			3,589		3,571		3,560
Mission Critical Electronics, Inc. (9)	03/28/2024	Capital Equipment		—			—		707		—		(3	)
Mission Critical Electronics, Inc. (Revolver) (7), (9)	03/28/2024	Capital Equipment		—			—		1,325		—		(11	)
Municipal Emergency Services, Inc.	10/01/2027	Distributors		10.86	%	3M L+550			1,184		1,145		1,142
Municipal Emergency Services, Inc. - Unfunded Term Loan A	06/16/2023	Distributors		—			—		387		—		(14	)
Municipal Emergency Services, Inc. - Unfunded Term Loan B	12/16/2024	Distributors		—			—		1,264		—		(44	)
Municipal Emergency Services, Inc. (Revolver) (7)	10/01/2027	Distributors		10.89	%	3M L+615			568		568		548
Municipal Emergency Services, Inc. (Revolver) (7), (9)	10/01/2027	Distributors		—			—		379		—		(13	)
Neptune Flood Incorporated - Revolver Unfunded	05/09/2029	Insurance		—					541		—		(8	)
NBH Group LLC (Revolver) (7), (9)	08/19/2026	Healthcare Equipment and Supplies		—			—		1,677		��		(17	)

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

JUNE 30, 2023

(in thousands, except share data)

(Unaudited)


Issuer Name	Maturity	Industry	Current Coupon			Basis Point Spread Above Index (1)		Par / Shares		Cost		Fair Value (2)
One Stop Mailing, LLC	05/07/2027	Air Freight and Logistics		11.44	%	3M L+625			8,538	$	8,413	$	8,538
ORL Acquisition, Inc. (7)	09/03/2027	Consumer Finance		10.84	%	3M L+525			4,913		4,837		4,667
ORL Acquisition, Inc. (Revolver) (7), (9)	09/03/2027	Consumer Finance		—			—		861		—		(43	)
Output Services Group, Inc. (6)	06/27/2026	Business Services		0.00	%		—		4,904		4,469		1,226
Owl Acquisition, LLC	02/04/2028	Professional Services		10.80	%	3M L+575			3,893		3,793		3,815
Ox Two, LLC	05/18/2026	Construction and Building		12.75	%	1M L+725			22,736		22,495		22,282
Ox Two, LLC (Revolver) (7)	05/18/2026	Construction and Building		12.76	%	1M L+725			1,581		1,581		1,549
Ox Two, LLC (Revolver) (9)	05/18/2026	Construction and Building		—			—		1,806		—		(36	)
Pequod Merger Sub, Inc. - Unfunded Term Loan	12/02/2026	Diversified Financial Services		—			—		2,847		—		(57	)
Pequod Merger Sub, Inc (Revolver) (9)	12/02/2026	Diversified Financial Services		—			—		757		—		(15	)
PL Acquisitionco, LLC	11/09/2027	Textiles, Apparel and Luxury Goods		12.20	%	3M L+650			5,562		5,485		5,062
PL Acquisitionco, LLC - (Revolver) (9)	11/09/2027	Textiles, Apparel and Luxury Goods		—			—		2,290		—		(206	)
PlayPower, Inc.	05/08/2026	Leisure Products		10.57	%	1M L+550			3,411		3,394		3,189
Pragmatic Institute, LLC - Unfunded Term Loan	07/06/2028	Professional Services		—			—		2,290		—		(11	)
Pragmatic Institute, LLC (Revolver)	07/06/2028	Professional Services		11.01	%	3M L+575			305		305		301
Pragmatic Institute, LLC (Revolver) (9)	07/06/2028	Professional Services		—			—		1,221		—		(18	)
Quantic Electronics, LLC	11/19/2026	Electronic Equipment, Instruments, and Components		11.22	%	1M L+600			6,664		6,589		6,564
Quantic Electronics, LLC - Unfunded Term Loan	11/19/2026	Electronic Equipment, Instruments, and Components		—			—		783		—		(4	)
Quantic Electronics, LLC (Revolver) (7)	11/19/2026	Electronic Equipment, Instruments, and Components		11.30	%	1M L+600			670		670		660
Questex, LLC	09/09/2024	Media: Diversified and Production		10.51	%	3M L+500			7,069		7,036		7,033
Questex, LLC (Revolver) (7), (9)	09/09/2024	Media: Diversified and Production		—			—		1,197		—		(6	)
Rancho Health MSO, Inc. (Revolver) (7), (9)	12/18/2025	Healthcare Equipment and Supplies		—			—		525		—		—
Recteq, LLC	01/29/2026	Leisure Products		12.39	%	3M L+700			1,466		1,450		1,408
Recteq, LLC (Revolver) (7), (9)	01/29/2026	Leisure Products		—			—		1,296		—		(52	)
Research Now Group, Inc. and Dynata, LLC	12/20/2024	Business Services		10.80	%	3M L+550			17,007		16,902		11,995
Riverpoint Medical, LLC	06/20/2025	Healthcare Equipment and Supplies		10.11	%	3M L+575			7,960		7,918		7,816
Riverpoint Medical, LLC (Revolver) (7)	06/20/2025	Healthcare Equipment and Supplies		10.19	%	3M L+500			91		91		89
Riverpoint Medical, LLC (Revolver) (7), (9)	06/20/2025	Healthcare Equipment and Supplies		—			—		818		—		(15	)
Riverside Assessments, LLC	03/10/2025	Professional Services		11.14	%	3M L+625			15,238		15,095		15,010
Sales Benchmark Index LLC	01/03/2025	Professional Services		11.44	%	3M L+600			2,596		2,578		2,583
Sales Benchmark Index LLC (Revolver) (7), (9)	01/03/2025	Professional Services		—			—		1,293		—		(6	)
Sargent & Greenleaf Inc.	12/20/2024	Electronic Equipment, Instruments, and Components		12.77	%	1M L+750			3,467		3,451		3,416
Sargent & Greenleaf Inc. (Revolver)	12/20/2024	Electronic Equipment, Instruments, and Components		12.77	%	1M L+750			437		437		431
Sargent & Greenleaf Inc. (Revolver) (9)	12/20/2024	Electronic Equipment, Instruments, and Components		—			—		642		—		(10	)
Schlesinger Global, Inc.	07/14/2025	Professional Services		12.20	%	SOFR + 700			14,515		14,445		13,970
Schlesinger Global, Inc. (Revolver)	07/14/2025	Professional Services		12.20	%	1M L+700			1,494		1,494		1,438
Schlesinger Global, Inc. (Revolver) (7), (9)	07/14/2025	Professional Services		—			—		377		—		(14	)
Seaway Buyer, LLC	06/13/2029	Chemicals, Plastics and Rubber		11.09	%	3M L+575			1,925		1,899		1,877
Sigma Defense Systems, LLC	12/18/2025	IT Services		13.87	%	3M L+850			10,757		10,580		10,569
Sigma Defense Systems, LLC (Revolver) (7)	12/18/2025	IT Services		13.89	%	3M L+850			1,966		1,966		1,931
Sigma Defense Systems, LLC (Revolver) (7), (9)	12/18/2025	IT Services		—					655		—		(11	)
Signature Systems Holding Company	05/03/2024	Commercial Services & Supplies		11.89	%	1M L+650			9,870		9,842		9,870
Signature Systems Holding Company (Revolver) (9)	05/03/2024	Commercial Services & Supplies		—			—		1,747		—		—
Smile Brands Inc.	10/14/2025	Healthcare and Pharmaceuticals		9.66	%	1M L+450			2,444		2,444		2,247
Smile Brands Inc. (Revolver)	10/14/2025	Healthcare and Pharmaceuticals		10.01	%	1M L+450			1,509		1,508		1,387
Smile Brands Inc. LC (Revolver) (7), (9)	10/14/2025	Healthcare and Pharmaceuticals		—			—		108		—		(9	)
Solutionreach, Inc.	01/17/2024	Healthcare Technology		10.90	%	3M L+575			4,657		4,645		4,611
Solutionreach, Inc. (Revolver) (7), (9)	01/17/2024	Healthcare Technology		—			—		1,665		—		(17	)
Spendmend Holdings LLC	03/01/2028	Healthcare Technology		10.87	%	SOFR + 575			2,067		2,041		2,011
Spendmend Holdings LLC - Unfunded Term Loan	03/01/2024	Healthcare Technology		—			—		1,707		—		(33	)
Spendmend Holdings LLC (Revolver)	03/01/2028	Healthcare Technology		11.14	%	3M L+575			357		357		347
Spendmend Holdings LLC (Revolver) (9)	03/01/2028	Healthcare Technology		—			—		535		—		(14	)
STV Group Incorporated	12/11/2026	Construction & Engineering		10.45	%	1M L+525			4,752		4,722		4,728
System Planning and Analysis, Inc. (f/k/a Management Consulting & Research, LLC)	08/16/2027	Aerospace and Defense		11.24	%	SOFR+600			18,420		18,141		18,070
System Planning and Analysis, Inc. (Revolver) (f/k/a Management Consulting & Research, LLC)	08/16/2027	Aerospace and Defense		11.05	%	3M L+600			2,224		2,224		2,181
System Planning and Analysis, Inc. (Revolver) (9) (f/k/a Management Consulting & Research, LLC)	08/16/2027	Aerospace and Defense	—			—			2,965		—		(56	)
Teneo Holdings LLC	07/18/2025	Diversified Financial Services		10.45	%	1M L+525			5,748		5,692		5,734
The Aegis Technologies Group, LLC	10/31/2025	Aerospace and Defense		11.86	%	3M L+600			5,435		5,383		5,327
The Bluebird Group LLC	07/28/2026	Professional Services		12.64	%	3M L+700			2,379		2,339		2,360
The Bluebird Group LLC (Revolver) (7), (9)	07/28/2026	Professional Services		—		—			862		—		(7	)
The Vertex Companies, LLC (7)	08/30/2027	Construction & Engineering		10.44	%	1M L+550			2,143		2,110		2,104
The Vertex Companies, LLC (7), (9)	08/30/2027	Construction & Engineering		—			—		573		—		(5	)
The Vertex Companies, LLC (Revolver)	08/30/2027	Construction & Engineering		10.90	%	1M L+550			305		305		300
The Vertex Companies, LLC (Revolver) (7), (9)	08/30/2027	Construction & Engineering		—			—		606		—		(11	)
TPC Canada Parent, Inc. and TPC US Parent, LLC (5), (10)	11/24/2025	Food Products		10.68	%	3M L+550			4,825		4,803		4,787
TVC Enterprises, LLC	03/26/2026	Commercial Services & Supplies		10.95	%	1M L+600			24,144		23,859		23,782
TVC Enterprises, LLC (Revolver) (7), (9)	03/26/2026	Commercial Services & Supplies		—			—		661		—		(10	)
TWS Acquisition Corporation	06/16/2025	Diversified Consumer Services		11.65	%	1M L+625			5,468		5,415		5,468
TWS Acquisition Corporation (Revolver) (7), (9)	06/16/2025	Diversified Consumer Services		—			—		2,628		—		—
Tyto Athene, LLC	04/01/2028	IT Services		10.54	%	1M L+550			11,928		11,797		11,022
Tyto Athene, LLC (Revolver) (7), (9)	04/01/2026	IT Services		—			—		1,040		—		(81	)
UBEO, LLC	04/03/2024	Capital Equipment		9.95	%	3M L+490			17,733		17,700		17,290
UBEO, LLC (Revolver)	04/03/2024	Capital Equipment		12.00	%	3M L+375			235		234		229
UBEO, LLC (Revolver) (9)	04/03/2024	Capital Equipment		—			—		2,699		—		(70	)

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

JUNE 30, 2023

(in thousands, except share data)

(Unaudited)


Issuer Name	Maturity		Industry	Current Coupon				Basis Point Spread Above Index (1)		Par / Shares		Cost		Fair Value (2)
Walker Edison Furniture, LLC - Term Loan	03/31/2027		Wholesale		12.02	%		3M L+635			3,363	$	3,363	$	3,363
Walker Edison Furniture Company, LLC - Funded Junior Revolver	03/31/2027		Wholesale		11.52	%		3M L+635			1,667		1,666		1,667
Walker Edison Furniture Company, LLC - Unfunded Term Loan	03/31/2027		Wholesale		—				—		333		—		—
Wildcat Buyerco, Inc.	02/27/2026		Electronic Equipment, Instruments, and Components		11.14	%		3M L+575			7,666		7,592		7,493
Wildcat Buyerco, Inc. (Revolver) (9)	02/27/2026		Electronic Equipment, Instruments, and Components		—				—		534		—		(12	)
Zips Car Wash, LLC	03/01/2024		Automobiles		12.45	%		3M L+725			13,326		13,257		13,027
Total First Lien Secured Debt													734,151		709,802
Second Lien Secured Debt—0.0%
Mailsouth Inc. (7)	04/23/2025		Media: Advertising, Printing and Publishing		0.00	%	(6)		—		1,120		965		-
QuantiTech LLC	02/04/2027		Aerospace and Defense		15.32	%		3M L+1,000			150		148		149
Total Second Lien Secured Debt													1,113		149
Preferred Equity— 2.1% (6)
Ad.net Holdings, Inc. (7)		—	Media		—				—		6,720		672		787
Anteriad Holdings, LP (f/k/a MeritDirect Holdings, LP) (7), (8)		—	Media		—				—		2,018		2,018		2,689
Cartessa Aesthetics, LLC (Preferred) (8)		—	Distributors		—				—		1,437,500		1,438		1,889
Gauge Lash Coinvest LLC (Preferred)		—	Personal Products		—				—		108,546		586		1,319
Gauge Schlesinger Coinvest LLC (Preferred Equity)		—	Professional Services		—				—		64		64		42
Imagine Topco, LP		—	Software		8.00	%			—		1,236,027		1,236		1,218
Mars Intermediate Holdings II, Inc. (7)		—	Media		—				—		835		835		1,081
NXOF Holdings, Inc. (Tyto Athene, LLC) (7)		—	IT Services		—				—		733		733		895
ORL Holdco, Inc. (7)		—	Consumer Finance		—				—		1,327		133		67
PL Acquisitionco, LLC (Preferred Equity)		—	Textiles, Apparel and Luxury Goods		—				—		61		61		62
Signature CR Intermediate Holdco, Inc. (7)		—	Commercial Services & Supplies		12.00	%			—		1,323		1,323		2,095
TPC Holding Company, LP (5), (7), (8), (10)		—	Food Products		—				—		409		409		583
TWD Parent Holdings, LLC (The Vertex Companies, LLC) (7)		—	Construction & Engineering		—				—		37		35		42
UniTek Global Services, Inc. -		—	Telecommunications		20.00	%			—		343,861		344		161
Super Senior Preferred Equity (7)
UniTek Global Services, Inc. - Senior Preferred Equity (7)		—	Telecommunications		19.00	%			—		448,851		449		—
UniTek Global Services, Inc. (7)		—	Telecommunications		13.50	%			—		1,047,317		670		—
Total Preferred Equity													11,006		12,930
Common Equity/Warrants— 15.1% (6)
A1 Garage Equity, LLC (8)		—	Commercial Services & Supplies		—				—		647,943		648		652
Ad.net Holdings, Inc. (7)		—	Media		—				—		7,467		75		6
Affinion Group Holdings, Inc. (Warrants)	04/10/2024		Consumer Goods: Durable		—				—		8,893		245		—
AG Investco LP (7), (8)		—	Software		—				—		805,164		805		1,085
AG Investco LP (7), (8), (9)		—	Software		—				—		194,836		—		—
Altamira Intermediate Company II, Inc. (7)		—	IT Services		—				—		1,437,500		1,437		1,439
Anteriad Holdings, LP (f/k/a MeritDirect Holdings, LP) (7), (8)		—	Media		—				—		2,018		—		28
Athletico Holdings, LLC (8)		—	Healthcare Providers and Services		—				—		4,678		5,000		4,286
BioDerm Holdings, LP		—	Healthcare Equipment and Supplies		—				—		1,313		1,313		1,482
Burgess Point Holdings, LP		—	Auto Components		—				—		100		100		108
By Light Investco LP (7), (8)		—	High Tech Industries		—				—		22,789		888		11,976
Connatix Parent, LLC (7)		—	Media		—				—		38,278		421		280
Crane 1 Acquisition Parent Holdings, L.P. (7)		—	Commercial Services & Supplies		—				—		130		120		184
Delta InvestCo LP (Sigma Defense Systems, LLC) (7), (8)		—	IT Services		—				—		615,484		602		1,234
Delta InvestCo LP (Sigma Defense Systems, LLC) (7), (8),(9)		—	IT Services		—				—		389,386		—		—
eCommission Holding Corporation (7), (10)		—	Banking, Finance, Insurance & Real Estate		—				—		20		251		443
EDS Topco, LP		—	Electronic Equipment, Instruments, and Components		—				—		1,125,000		1,125		942
Exigo, LLC		—	Software		—				—		541,667		542		600
Express Wash Topco, LLC		—	Automobiles		—				—		20,000		100		27
FedHC InvestCo LP (7),(8)		—	Aerospace and Defense		—				—		21,665		727		2,545
FedHC InvestCo LP (7),(8),(9)		—	Aerospace and Defense		—				—		7,566		—		—
Five Star Parent Holdings, LLC		—	Hotels, Restaurants and Leisure		—				—		655,714		656		721
Gauge ETE Blocker, LLC		—	Diversified Consumer Services		—				—		589,363		589		589
Gauge Lash Coinvest LLC (7)		—	Personal Products		—				—		1,485,953		227		6,734
Gauge Loving Tan, LP		—	Personal Products		—				—		2,481,781		2,482		2,482
Gauge Schlesinger Coinvest LLC (7)		—	Professional Services		—				—		465		476		305
Gauge TVC Coinvest, LLC (TVC Enterprises, LLC) (7)		—	Professional Services		—				—		391,144		—		1,734
GCOM InvestCo LP (7),(8)		—	IT Services		—				—		19,184		3,342		2,605
Go Dawgs Capital III, LP		—	Building Products		—				—		324,675		325		799
(American Insulated Glass, LLC) (7), (8)
Hancock Claims Consultants Investors, LLC (7), (8)		—	Insurance		—				—		450,000		448		361
HPA SPQ Aggregator LP		—	Professional Services		—				—		750,399		750		750
HV Watterson Holdings, LLC		—	Professional Services		—				—		100,000		100		85
Icon Partners V C, L.P.		—	Internet Software and Services		—				—		1,863,863		1,864		1,794
Icon Partners V C, L.P. (7), (9)		—	Internet Software and Services		—				—		636,137		—		(24	)
IIN Group Holdings, LLC		—	Consumer Services		—				—		1,000		1,000		—
(Integrative Nutrition, LLC) (7), (8)
Imagine Topco, LP (Common)		—	Software		—				—		1,236,027		—		—
IHS Parent Holdngs, L.P.		—	Commercial Services & Supplies		—				—		1,218,045		1,218		1,467
Ironclad Holdco, LLC (Applied Technical Services, LLC) (7), (8)		—	Commercial Services & Supplies		—				—		5,811		573		713
ITC Infusion Co-invest, LP (8)		—	Healthcare Equipment and Supplies		—				—		116,032		1,160		1,219
ITC Rumba, LLC (Cano Health, LLC) (7),(8)		—	Healthcare and Pharmaceuticals		—				—		46,763		117		818

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

JUNE 30, 2023

(in thousands, except share data)

(Unaudited)


Issuer Name	Maturity		Industry	Current Coupon			Basis Point Spread Above Index (1)		Par / Shares		Cost		Fair Value (2)
Kentucky Racing Holdco, LLC (8)		—	Hotels, Restaurants and Leisure		—			—		87,345		—		883
Kinetic Purchaser, LLC		—	Personal Products		—			—		1,734,775		1,735		2,502
KL Stockton Co-Invest LP (Any Hour Services) (7),(8)		—	Energy Equipment and Services		—			—		382,353		382		1,111
Lightspeed Investment Holdco LLC (7)		—	Healthcare Technology		—			—		585,587		586		1,359
LJ Avalon, LP		—	Construction & Engineering		—			—		1,638,043		1,638		1,638
Mars Intermediate Holdings II, Inc. (7)		—	Media		—			—		835		—		275
MDI Aggregator, LP		—	Commodity Chemicals		—			—		10,761		1,077		1,199
Meadowlark Title, LLC (8)		—	Professional Services		—			—		819,231		805		—
MSpark, LLC		—	Media: Advertising, Printing and Publishing		—			—		3,988		1,287		—
Municipal Emergency Services, Inc. (7)		—	Distributors		—			—		1,973,370		2,005		1,829
NEPRT Parent Holdings, LLC (Recteq, LLC) (7), (8)		—	Leisure Products		—			—		1,494		1,448		54
North Haven Saints Equity Holdings, LP (8)		—	Healthcare Technology		—			—		223,602		224		250
NXOF Holdings, Inc. (Tyto Athene, LLC) (7)		—	IT Services		—			—		14,960		15		—
OceanSound Discovery Equity, LP (Holdco Sands Intermediate, LLC) (7), (8)		—	Aerospace and Defense		—			—		173,638		1,659		3,556
OHCP V BC COI, L.P.		—	Distributors		—			—		743,750		744		711
OHCP V BC COI, L.P. (8) (9)		—	Distributors		—			—		506,250		—		(22	)
ORL Holdco, Inc. (7)		—	Consumer Finance		—			—		1,474		15		—
PennantPark-TSO Senior Loan Fund, LP (7)		—	Financial Services		—			—		11,167,847		11,168		8,902
LEP Pequod Holdings, LP		—	Financial Services		—			—		350		865		865
Pink Lily Holdco, LLC (PL Acquisitions, LLC) (8)		—	Textiles, Apparel and Luxury Goods		—			—		1,735		1,735		54
Pragmatic Institute, LLC		—	Professional Services		—			—		610,583		611		414
Quad (U.S.) Co-Invest, L.P.			Professional Services		—			—		266,864		267		304
QuantiTech InvestCo LP (7), (8)		—	Aerospace and Defense		—			—		712		68		443
QuantiTech InvestCo LP (7), (8), (9)		—	Aerospace and Defense		—			—		955		—		—
QuantiTech InvestCo II LP (7), (8),		—	Aerospace and Defense		—			—		40		24		30
RFMG Parent, LP (Rancho Health MSO, Inc.) (7)		—	Healthcare Equipment and Supplies		—			—		1,050,000		1,050		1,050
SBI Holdings Investments LLC (Sales Benchmark Index LLC) (7), (8)		—	Professional Services		—			—		64,634		646		649
Seaway Topco, LP			Chemicals, Plastics and Rubber		—			—		296		296		277
Signature CR Intermediate Holdco, Inc. (7)		—	Commercial Services & Supplies		—			—		70		70		1,126
SP L2 Holdings, LLC (Ledge Lounger, Inc.)		—	Leisure Products		—			—		360,103		360		221
SSC Dominion Holdings, LLC		—	Capital Equipment		—			—		38		38		1,375
Class B (US Dominion, Inc.) (7)
StellPen Holdings, LLC (CF512, Inc.) (7)		—	Media		—			—		161,538		161		187
TAC LifePort Holdings, LLC (7),(8)		—	Aerospace and Defense		—			—		533,833		525		664
Tower Arch Infolinks Media, LP (Infolinks Media Buyco, LLC)(8)		—	Media		—			—		219,056		206		444
Tower Arch Infolinks Media, LP (Infolinks Media Buyco, LLC)(8) (9)		—	Media		—			—		146,550		—		—
TPC Holding Company, LP (5), (7), (8), (10)		—	Food Products		—			—		21,527		21		126
TWD Parent Holdings, LLC (The Vertex Companies, LLC) (7)		—	Construction & Engineering		—			—		749		1		—
UniTek Global Services, Inc. (7)		—	Telecommunications		—			—		213,739		—		—
UniVista Insurance (7),(8)		—	Insurance		—			—		400		374		542
Urology Partners Co., L.P.		—	Healthcare Providers and Services		—			—		694,444		694		777
Walker Edison Holdco LLC		—	Healthcare Providers and Services		—			—		36,458		3,393		2,437
WCP IvyRehab QP CF Feeder, LP(8)		—	Healthcare Providers and Services		—			—		3,715,012		3,753		4,322
WCP IvyRehab QP CF Feeder, LP (8), (9)		—	Healthcare Providers and Services		—			—		284,988		—		—
Wildcat Parent, LP (Wildcat Buyerco, Inc.) (7)		—	Electronic Equipment, Instruments, and Components		—			—		2,240		224		704
Total Common Equity/Warrants												69,896		91,727
Total Investments in Non-Controlled, Non-Affiliated Portfolio Companies												816,166		814,608
Investments in Controlled, Affiliated Portfolio Companies—47.8% (3), (4)
First Lien Secured Debt—39.5%
Marketplace Events, LLC - Super Priority First Lien Term Loan (7)	09/30/2025		Media: Diversified and Production		10.43	%	3M L+525			3,582		3,582		3,582
				(PIK 5.25%)
Marketplace Events, LLC - Super Priority First Lien (7), (9)	09/30/2025		Media: Diversified and Production		—			—		3,261		—		—
Marketplace Events, LLC	09/30/2026		Media: Diversified and Production		10.43	%	3M L+525			26,771		20,559		26,771
PennantPark Senior Secured Loan Fund I LLC (7), (9), (10)	05/06/2024		Financial Services		13.24	%	3M L+800			210,088		210,088		210,088
Total First Lien Secured Debt												234,229		240,441
Equity Interests—8.3%
New MPE Holdings, LLC (Marketplace Events, LLC) (7),(8)		—	Media: Diversified and Production		—			—		349		—		2,275
PennantPark Senior Secured Loan Fund I LLC (7), (9), (10)		—	Financial Services		—			—		90,038		90,038		47,941
Total Equity Interests												90,038		50,216
Total Investments in Controlled, Affiliated Portfolio Companies												324,267		290,657
Total Investments—181.7%												1,140,433		1,105,265
Cash and Cash Equivalents—9.7%
Money Market - BlackRock Federal FD Institutional 30												43,994		43,994
Non-Money Market Cash												15,098		15,098
Total Cash and Cash Equivalents												59,092		59,092
Total Investments and Cash Equivalents—191.4%											$	1,199,525	$	1,164,357
Liabilities in Excess of Other Assets—(91.4)%														(555,930	)
Net Assets—100.0%													$	608,427

—————

(1)

Represents floating rate instruments that accrue interest at a predetermined spread relative to an index, typically the applicable London Interbank Offered Rate, or LIBOR or “L”, Secured Overnight Financing Rate or "SOFR", or Prime rate, or “P.” The spread may change based on the type of rate used. The terms in the Schedule of Investments disclose the actual interest rate in effect as of the reporting period. LIBOR loans are typically indexed to a 30-day, 60-day, 90-day or 180-day LIBOR rate (1M L, 2M L, 3M L, or 6M L, respectively), at the borrower’s option. All securities are subject to a LIBOR or Prime rate floor where a spread is provided, unless noted. The spread provided includes payment-in-kind, or PIK, interest and other fee rates, if any.

(2)

Valued based on our accounting policy (See Note 2). The value of all securities was determined using significant unobservable inputs (See Note 5).

(3)

The provisions of the 1940 Act classify investments based on the level of control that we maintain in a particular portfolio company. As defined in the 1940 Act, a company is generally presumed to be “non-controlled” when we own 25% or less of the portfolio company’s voting securities and “controlled” when we own more than 25% of the portfolio company’s voting securities.

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(4)

The provisions of the 1940 Act classify investments further based on the level of ownership that we maintain in a particular portfolio company. As defined in the 1940 Act, a company is generally deemed as “non-affiliated” when we own less than 5% of a portfolio company’s voting securities and “affiliated” when we own 5% or more of a portfolio company’s voting securities.

(5)

Non-U.S. company or principal place of business outside the United States.

(6)

Non-income producing securities.

(7)

The securities, or a portion thereof, are not 1) pledged as collateral under the Credit Facility and held through Funding I; or, 2) securing the 2031 Asset-Backed Debt (See Note 10) and held through PennantPark CLO I, Ltd.

(8)

Investment is held through our Taxable Subsidiary (See Note 1).

(9)

Represents the purchase of a security with delayed settlement or a revolving line of credit that is currently an unfunded investment. This security does not earn a basis point spread above an index while it is unfunded.

(10)

The investment is treated as a non-qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of our total assets. As of June 30, 2023, qualifying assets represent 77% of our total assets and non-qualifying assets represent 23% of our total assets.

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

September 30, 2022

(in thousands, except share data)


Issuer Name	Maturity	Industry	Current Coupon				Basis Point Spread Above Index (1)		Par / Shares		Cost		Fair Value (2)
Investments in Non-Controlled, Non-Affiliated Portfolio Companies—169.5% (3), (4)
First Lien Secured Debt—149.7%
Ad.net Acquisition, LLC	05/06/2026	Media		9.67	%		3M L+600			4,938	$	4,882	$	4,900
Ad.net Acquisition, LLC (Revolver) (7), (9)	05/06/2026	Media		—				—		1,244		—		(9	)
Altamira Technologies, LLC	07/24/2025	IT Services		10.81	%		3M L+800			4,794		4,756		4,626
Altamira Technologies, LLC (Revolver) (7)	07/24/2025	IT Services		11.67	%		3M L+800			575		575		555
Altamira Technologies, LLC (Revolver) (7), (9)	07/24/2025	IT Services		—				—		1,581		—		(55	)
American Insulated Glass, LLC	12/21/2023	Building Products		7.79	%		3M L+550			7,601		7,559		7,601
American Teleconferencing Services, Ltd.(7)	06/08/2023	Telecommunications	0.00%			(6)		—		7,986		7,915		90
American Teleconferencing Services, Ltd. (Revolver) (7)	12/08/2022	Telecommunications	0.00%			(6)		—		1,656		1,642		17
Amsive Holding Corporation (f/k/a Vision Purchaser Corporation)	06/10/2025	Media		9.85	%		3M L+625			14,104		13,951		13,892
Anteriad, LLC (f/k/a MeritDirect, LLC)	05/23/2024	Media		9.17	%		3M L+550			14,568		14,486		14,568
Anteriad, LLC (f/k/a MeritDirect, LLC) (Revolver) (7), (9)	05/23/2024	Media		—				—		2,869		—		—
Any Hour Services	07/21/2027	Energy Equipment and Services		7.43	%		3M L+525			10,536		10,432		10,326
Any Hour Services (Revolver) (7), (9)	07/21/2027	Energy Equipment and Services		—				—		1,147		—		(23	)
Apex Service Partners, LLC	07/31/2025	Diversified Consumer Services		6.72	%		1M L+525			6,208		6,166		6,177
Apex Service Partners, LLC Term Loan B	07/31/2025	Diversified Consumer Services		9.67	%		1M L+550			296		296		295
Apex Service Partners, LLC Term Loan C	07/31/2025	Diversified Consumer Services		7.75	%		1M L+525			12,906		12,814		12,841
Apex Service Partners, LLC (Revolver) (7), (9)	07/31/2025	Diversified Consumer Services		—				—		1,845		—		(9	)
API Holding III Corp.	05/11/2026	Electronic Equipment, Instruments, and Components		7.92	%		1M L+425			5,805		5,785		5,050
Applied Technical Services, LLC	12/29/2026	Commercial Services & Supplies		9.42	%		3M L+575			7,147		7,040		6,968
Applied Technical Services, LLC (Unfunded Term Loan)	04/21/2023	Commercial Services & Supplies		—				—		2,298		—		(32	)
Applied Technical Services, LLC (Revolver) (7)	12/29/2026	Commercial Services & Supplies		10.25	%		3M L+475			255		255		248
Applied Technical Services, LLC (Revolver) (7), (9)	12/29/2026	Commercial Services & Supplies		—				—		1,018		—		(25	)
Arcfield Acquisition Corp. (Revolver) (9)	03/07/2028	Aerospace and Defense		—				—		887		—		(18	)
Beta Plus Technologies, Inc.	07/01/2029	Internet Software and Services		7.76	%		1M L+525			5,000		4,901		4,900
Blackhawk Industrial Distribution, Inc.	09/17/2024	Distributors		8.33	%		3M L+500			25		25		25
Blackhawk Industrial Distribution, Inc. (7),(9)	09/17/2024	Distributors		—				—		3,232		—		(40	)
Blackhawk Industrial Distribution, Inc. (Revolver) (7)	09/17/2024	Distributors		8.87	%		3M L+500			549		549		533
Blackhawk Industrial Distribution, Inc. (9)	09/17/2024	Distributors		—				—		2,195		—		(62	)
Broder Bros., Co.	12/02/2022	Textiles, Apparel and Luxury Goods		7.39	%		3M L+600			3,405		3,405		3,405
By Light Professional IT Services, LLC	05/16/2024	High Tech Industries		9.26	%		3M L+625			27,533		27,331		27,257
By Light Professional IT Services, LLC (Revolver)	05/16/2024	High Tech Industries		9.75	%		3M L+663			877		877		868
By Light Professional IT Services, LLC (Revolver) (9)	05/16/2024	High Tech Industries		—				—		3,189		—		(32	)
Cadence Aerospace, LLC (7)	11/14/2023	Aerospace and Defense		11.31	%		3M L+850			3,033		3,024		3,003
			(PIK 9.50%)
Cartessa Aesthetics, LLC	05/13/2028	Distributors		9.55	%		1M L+600			16,459		16,143		16,212
Cartessa Aesthetics, LLC (Revolver) (7)	05/13/2028	Distributors		9.55	%		1M L+600			511		511		503
Cartessa Aesthetics, LLC (Revolver) (7)(9)	05/13/2028	Distributors		—						927		-		(14	)
CF512, Inc.	08/20/2026	Media		9.28	%		3M L+600			8,098		7,988		7,976
CF512, Inc. (7), (9)	08/20/2026	Media		—				—		191		—		(1	)
CF512, Inc. (Revolver) (7), (9)	08/20/2026	Media		—				—		955		—		(14	)
CHA Holdings, Inc.	04/10/2025	Environmental Industries		8.17	%		3M L+450			1,581		1,577		1,581
Challenger Performance Optimization, Inc. (Revolver) (7), (9)	08/31/2023	Business Services		9.27	%		1M L+675			357		357		346
Challenger Performance Optimization, Inc. (Revolver) (7), (9)	08/31/2023	Business Services		—				—		356		—		(11	)
Compex Legal Services, Inc.	02/09/2026	Professional Services		8.83	%		3M L+525			8,038		8,010		8,038
Compex Legal Services, Inc. (Revolver) (7)	02/07/2025	Professional Services		8.92	%		3M L+525			773		773		773
Compex Legal Services, Inc. (Revolver) (7), (9)	02/07/2025	Professional Services		—				—		633		—		—
Connatix Buyer, Inc.	07/13/2027	Media		8.42	%		3M L+550			3,907		3,841		3,810
Connatix Buyer, Inc. (7), (9)	01/13/2023	Media		—				—		2,105		—		(32	)
Connatix Buyer, Inc. (7), (9)	07/13/2027	Media		—				—		1,234		—		(30	)
Crane 1 Services, Inc.	08/16/2027	Commercial Services & Supplies		9.39	%		3M L+575			891		885		882
Crane 1 Services, Inc. (Revolver) (7)	08/16/2027	Commercial Services & Supplies		8.87	%		3M L+575			224		224		222
Crane 1 Services, Inc. (Revolver) (7)	08/16/2027	Commercial Services & Supplies		—				—		112		—		(1	)
Douglas Products and Packaging Company LLC	10/19/2022	Chemicals, Plastics and Rubber		8.87	%		3M L+575			6,477		6,476		6,477
Douglas Products and Packaging Company LLC (Revolver)	10/19/2022	Chemicals, Plastics and Rubber		11.00	%		P+475			2,627		2,627		2,627
Douglas Products and Packaging Company LLC (Revolver) (9)	10/19/2022	Chemicals, Plastics and Rubber		—				—		3,425		—		—
Douglas Sewer Intermediate, LLC	10/19/2022	Chemicals, Plastics and Rubber		8.87	%		3M L+575			3,920		3,920		3,920
Dr. Squatch, LLC	08/31/2027	Personal Products		9.42	%		3M L+600			4,428		4,356		4,362
Dr. Squatch, LLC (Revolver) (7)	08/31/2027	Personal Products		8.95	%		3M L+600			1,118		1,118		1,101
Dr. Squatch, LLC (Revolver) (7), (9)	08/31/2027	Personal Products		—				—		2,236		—		(34	)
DRS Holdings III, Inc.	11/03/2025	Personal Products		8.87	%		3M L+575			17,111		16,993		16,564
DRS Holdings III, Inc. (Revolver) (7), (9)	11/03/2025	Personal Products		—				—		1,426		—		(46	)
Duraco Specialty Tapes LLC	06/30/2024	Containers and Packaging		8.62	%		3M L+550			3,247		3,208		3,169
ECL Entertainment, LLC	05/01/2028	Hotels, Restaurants and Leisure		10.62	%		1M L+750			5,203		5,158		5,125
ECM Industries, LLC (Revolver)	12/23/2025	Electronic Equipment, Instruments, and Components		8.00	%		1M L+475			514		514		490
ECM Industries, LLC (Revolver) (9)	12/23/2025	Electronic Equipment, Instruments, and Components		—				—		400		—		(19	)
eCommission Financial Services, Inc. (10)	10/05/2023	Banking, Finance, Insurance & Real Estate		7.63	%		1M L+500			5,837		5,837		5,837
eCommission Financial Services, Inc. (Revolver) (7), (10)	10/05/2023	Banking, Finance, Insurance & Real Estate		7.63	%		1M L+500			2,500		2,500		2,500
eCommission Financial Services, Inc. (Revolver) (7), (9), (10)	10/05/2023	Banking, Finance, Insurance & Real Estate		—				—		2,500		—		—
Efficient Collaborative Retail Marketing Company, LLC	06/15/2024	Media: Diversified and Production		10.42	%		3M L+675			7,150		7,123		6,936
Exigo Intermediate II, LLC (9)	03/15/2024	Software		—				—		2,758		—		(41	)
Exigo Intermediate II, LLC (Revolver)	03/15/2027	Software		8.87	%		3M L+575			138		138		135
Exigo Intermediate II, LLC (Revolver) (9)	03/15/2027	Software		—				—		552		—		(12	)
Findex Group Limited (5)(10)(11)	05/31/2024	Diversified Financial Services		7.17	%		3M L+450			AUD 10,000		7,399		6,430

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2022

(in thousands, except share data)


Issuer Name	Maturity	Industry	Current Coupon			Basis Point Spread Above Index (1)		Par / Shares		Cost		Fair Value (2)
Gantech Acquisition Corp.	05/14/2026	IT Services		9.37	%	1M L+625			21,982	$	21,632	$	21,322
Gantech Acquisition Corp. (Revolver) (7)	05/14/2026	IT Services		9.37	%	1M L+625			249		249		241
Gantech Acquisition Corp. (Revolver) (7), (9)	05/14/2026	IT Services		—			—		3,484		—		(105	)
Global Holdings InterCo LLC	03/16/2026	Diversified Financial Services		8.74	%	3M L+600			3,427		3,388		3,273
Graffiti Buyer, Inc. (7), (9)	08/10/2023	Trading Companies & Distributors		—			—		1,071		—		(24	)
Graffiti Buyer, Inc. (Revolver) (7)	08/10/2027	Trading Companies & Distributors		8.92	%	3M L+575			418		418		401
Graffiti Buyer, Inc. (Revolver) (7), (9)	08/10/2027	Trading Companies & Distributors		—			—		447		—		(18	)
Hancock Roofing and Construction L.L.C.	12/31/2026	Insurance		8.67	%	3M L+500			4,441		4,378		4,374
Hancock Roofing and Construction L.L.C. (7), (9)	12/31/2022	Insurance		—			—		400		—		(6	)
Hancock Roofing and Construction L.L.C. (Revolver) (7)	12/31/2026	Insurance		7.82	%	3M L+500			270		270		266
Hancock Roofing and Construction L.L.C. (Revolver) (7), (9)	12/31/2026	Insurance		—					480		—		(7	)
Holdco Sands Intermediate, LLC	11/23/2028	Aerospace and Defense		10.17	%	3M L+600			4,963		4,872		4,863
Holdco Sands Intermediate, LLC (Revolver) (9)	11/23/2027	Aerospace and Defense		—			—		1,791		—		(36	)
HW Holdco, LLC	12/10/2024	Media		6.00	%	1M L+500			8,457		8,416		8,352
HW Holdco, LLC (9)	12/10/2024	Media		—			—		1,686		—		(4	)
HW Holdco, LLC (Revolver) (7), (9)	12/10/2024	Media		—			—		1,452		—		(18	)
IDC Infusion Services, Inc.	12/30/2026	Healthcare Equipment and Supplies		10.44	%	3M L+700			5,723		5,616		5,506
IDC Infusion Services, Inc. (Revolver) (9)	12/30/2026	Healthcare Equipment and Supplies		—			—		4,167		—		(188	)
IG Investments Holdings, LLC (7)	09/22/2028	Professional Services		9.45	%	3M L+600			4,473		4,390		4,429
IG Investments Holdings, LLC (Revolver) (7), (9)	09/22/2027	Professional Services		—			—		477		—		(5	)
Imagine Acquisitionco, LLC	11/15/2027	Software		8.42	%	3M L+550			3,979		3,909		3,879
Imagine Acquisitionco, LLC (9)	11/15/2027	Software		—			—		1,657		—		(25	)
Imagine Acquisitionco, LLC (Revolver) (9)	11/15/2027	Software		—			—		1,193		—		(30	)
Inception Fertility Ventures, LLC	12/07/2023	Healthcare Providers and Services		10.13	%	3M L+715			14,954		14,711		14,804
Infolinks Media Buyco, LLC	11/01/2026	Media		9.42	%	3M L+575			2,625		2,581		2,625
Infolinks Media Buyco, LLC (9)	11/01/2023	Media		—			—		969		—		10
Integrative Nutrition, LLC	09/29/2023	Consumer Services		8.42	%	3M L+450			15,636		15,600		15,323
Integrative Nutrition, LLC (Revolver) (7), (9)	09/29/2023	Consumer Services		—			—		5,000		—		—
Integrity Marketing Acquisition, LLC (7)	08/27/2025	Insurance		7.58	%	SOFR+550			15,825		15,697		15,667
ITI Holdings, Inc. (Revolver)	03/03/2028	IT Services		8.25	%	3M L+550			133		133		130
ITI Holdings, Inc. (Revolver) (9)	03/03/2028	IT Services		—			—		532		—		(11	)
K2 Pure Solutions NoCal, L.P. (Revolver) (7), (9)	12/20/2023	Chemicals, Plastics and Rubber		—			—		1,429		—		—
Kinetic Purchaser, LLC	11/10/2027	Personal Products		9.67	%	3M L+600			17,428		17,120		17,079
Kinetic Purchaser, LLC - (Revolver) (9)	11/10/2026	Personal Products		9.67	%	3M L+600			3,435		3,435		3,366
Lash OpCo, LLC	02/18/2027	Personal Products		11.17	%	1M L+700			10,511		10,323		10,300
Lash OpCo, LLC (Revolver) (7)	08/16/2026	Personal Products		9.38	%	1M L+700			599		599		587
Lash OpCo, LLC (Revolver) (7), (9)	08/16/2026	Personal Products		—					1,321		—		(26	)
LAV Gear Holdings, Inc.	10/31/2024	Capital Equipment		9.95	%	1M L+750			9,565		9,542		9,345
			(PIK 5.50%)
LAV Gear Holdings, Inc. (Revolver) (7)	10/31/2024	Capital Equipment		9.95	%	1M L+750			1,721		1,721		1,681
			(PIK 5.50%)
Ledge Lounger, Inc.	11/09/2026	Leisure Products		9.92	%	3M L+625			3,747		3,683		3,691
Ledge Lounger, Inc. (Revolver) (9)	11/09/2026	Leisure Products		—			—		789		—		(12	)
Lightspeed Buyer Inc.	02/03/2026	Healthcare Technology		8.87	%	1M L+575			24,357		24,065		23,566
Lightspeed Buyer Inc. (Revolver) (7)	02/03/2026	Healthcare Technology		8.87	%	1M L+575			1,083		1,083		1,048
Lightspeed Buyer Inc. (Revolver) (7) (9)	02/03/2026	Healthcare Technology		—			—		1,416		—		(46	)
Lucky Bucks, LLC	07/20/2027	Hotels, Restaurants and Leisure		8.31	%	3M L+550			4,331		4,258		3,183
MAG DS Corp.	04/01/2027	Aerospace and Defense		9.17	%	1M L+550			3,714		3,576		3,379
Mars Acquisition Holdings Corp.	05/14/2026	Media		8.62	%	3M L+550			6,052		5,958		6,022
Mars Acquisition Holdings Corp. (Revolver)(7)(9)	05/14/2026	Media		—			—		1,624		—		(8	)
MBS Holdings, Inc. (Revolver)(7)(9)	04/16/2027	Internet Software and Services		—			—		1,157		—		(12	)
MDI Buyer, Inc. - Unfunded Term Loan	07/25/2028	Commodity Chemicals		—			—		1,804		—		(18	)
MDI Buyer, inc. (Revolver) (9)	07/25/2028	Commodity Chemicals		—			—		773		—		(8	)
Meadowlark Acquirer, LLC	12/10/2027	Professional Services		9.17	%	3M L+550			1,319		1,306		1,305
Meadowlark Acquirer, LLC - Term Loan I (9)	12/10/2027	Professional Services		—			—		1,782		—		—
Meadowlark Acquirer, LLC - Term Loan II (9)	12/10/2027	Professional Services		—			—		9,483		—		—
Meadowlark Acquirer, LLC (Revolver) (9)	12/10/2027	Professional Services		—			—		1,693		—		(17	)
Mission Critical Electronics, Inc.	03/28/2024	Capital Equipment		8.03	%	SOFR +500			3,430		3,395		3,389
Mission Critical Electronics, Inc. (9)	03/28/2024	Capital Equipment		—			—		883		—		(7	)
Mission Critical Electronics, Inc. (Revolver) (7)	03/28/2024	Capital Equipment		6.67	%	1M L+500			557		557		550
Mission Critical Electronics, Inc. (Revolver) (7), (9)	03/28/2024	Capital Equipment		—			—		769		—		(9	)
Municipal Emergency Services, Inc. (7)	09/28/2027	Distributors		8.67	%	3M L+500			354		351		334
Municipal Emergency Services, Inc. (7), (9)	09/28/2027	Distributors		—			—		592		—		(29	)
Municipal Emergency Services, Inc. (Revolver) (7)	09/28/2027	Distributors		8.67	%	3M L+500			142		142		134
Municipal Emergency Services, Inc. (Revolver) (7), (9)	09/28/2027	Distributors		—			—		805		—		(47	)
NBH Group LLC (Revolver) (7), (9)	08/19/2026	Healthcare Equipment and Supplies		—			—		1,677		—		—
OIS Management Services, LLC	07/09/2026	Healthcare Equipment and Supplies		9.45	%	SOFR + 575			1,975		1,951		1,975
OIS Management Services, LLC (Revolver) (7), (9)	07/09/2026	Healthcare Equipment and Supplies		—			—		444		—		—
One Stop Mailing, LLC	05/07/2027	Air Freight and Logistics		9.37	%	3M L+625			8,759		8,612		8,496
ORL Acquisition, Inc. (7)	09/03/2027	Consumer Finance		8.92	%	3M L+525			7,195		7,069		7,195
ORL Acquisition, Inc. (Revolver) (7), (9)	09/03/2027	Consumer Finance		—			—		861		—		—
Output Services Group, Inc.	03/27/2024	Business Services		9.80	%	1M L+675			4,874		4,592		3,704
Owl Acquisition, LLC	02/04/2028	Professional Services		8.41	%	3M L+575			3,990		3,874		3,890
Ox Two, LLC	05/18/2026	Construction and Building		9.81	%	1M L+700			25,772		25,440		25,257
Ox Two, LLC (Revolver) (7)	05/18/2026	Construction and Building		9.81	%	1M L+700			2,484		2,484		2,434
Ox Two, LLC (Revolver) (9)	05/18/2026	Construction and Building		—			—		903		—		(18	)
PL Acquisitionco, LLC	11/09/2027	Textiles, Apparel and Luxury Goods		9.62	%	3M L+650			6,110		6,015		5,958
PL Acquisitionco, LLC - (Revolver) (9)	11/09/2027	Textiles, Apparel and Luxury Goods		—			—		2,290		—		(57	)
Plant Health Intermediate, Inc.	10/19/2022	Chemicals, Plastics and Rubber		8.87	%	3M L+575			637		637		637
PlayPower, Inc.	05/08/2026	Leisure Products		9.17	%	1M L+550			3,440		3,419		3,078
PRA Events, Inc.	08/07/2025	Business Services		14.17	%	1M L+1,050			3,323		2,903		3,323
			(PIK 10.50%)
Pragmatic Institute, LLC - Unfunded Term Loan	07/06/2028	Professional Services		—			—		2,290		—		—
Pragmatic Institute, LLC (Revolver)	07/06/2028	Professional Services		9.30	%	3M L+575			305		305		302
Pragmatic Institute, LLC (Revolver) (9)	07/06/2028	Professional Services		—			—		1,221		—		(12	)

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2022

(in thousands, except share data)


Issuer Name	Maturity		Industry	Current Coupon				Basis Point Spread Above Index (1)		Par / Shares		Cost		Fair Value (2)
Quantic Electronics, LLC	11/19/2026		Electronic Equipment, Instruments, and Components		9.92	%		1M L+600			4,706	$	4,632	$	4,612
Quantic Electronics, LLC (Revolver) (7)	11/19/2026		Electronic Equipment, Instruments, and Components		9.51	%		1M L+600			268		268		263
Quantic Electronics, LLC (Revolver) (7), (9)	11/19/2026		Electronic Equipment, Instruments, and Components		—				—		402		—		(8	)
Questex, LLC	09/09/2024		Media: Diversified and Production		7.45	%		3M L+500			7,200		7,146		7,056
Questex, LLC (Revolver) (7), (9)	09/09/2024		Media: Diversified and Production		—				—		1,197		—		(24	)
Rancho Health MSO, Inc. (7)	12/18/2025		Healthcare Equipment and Supplies		7.75	%		3M L+550			1,040		1,040		1,040
Rancho Health MSO, Inc. (Revolver) (7), (9)	12/18/2025		Healthcare Equipment and Supplies		—				—		525		—		—
Recteq, LLC	01/29/2026		Leisure Products		9.92	%		3M L+600			1,478		1,457		1,426
Recteq, LLC (Revolver) (7)	01/29/2026		Leisure Products		9.92	%		3M L+600			360		360		347
Recteq, LLC (Revolver) (7), (9)	01/29/2026		Leisure Products		—						936		—		(33	)
Research Now Group, Inc. and Dynata, LLC	12/20/2024		Business Services		8.84	%		3M L+550			17,142		16,985		15,406
Riverpoint Medical, LLC	06/20/2025		Healthcare Equipment and Supplies		8.65	%		3M L+575			7,980		7,924		7,781
Riverpoint Medical, LLC (Revolver) (7), (9)	06/20/2025		Healthcare Equipment and Supplies		—				—		909		—		(23	)
Riverside Assessments, LLC	03/10/2025		Professional Services		9.95	%		3M L+625			15,356		15,201		15,049
Sales Benchmark Index LLC	01/03/2025		Professional Services		9.67	%		3M L+600			7,105		7,034		7,034
Sales Benchmark Index LLC (Revolver) (7), (9)	01/03/2025		Professional Services	—					—		1,293		—		(13	)
Sargent & Greenleaf Inc.	12/20/2024		Electronic Equipment, Instruments, and Components		8.62	%		1M L+550			3,487		3,462		3,452
Sargent & Greenleaf Inc. (Revolver)	12/20/2024		Electronic Equipment, Instruments, and Components		8.28	%		1M L+550			1,048		1,048		1,037
Sargent & Greenleaf Inc. (Revolver) (9)	12/20/2024		Electronic Equipment, Instruments, and Components		—				—		9		—		—
Schlesinger Global, Inc.	07/14/2025		Professional Services		10.27	%		SOFR + 700			14,560		14,467		14,196
Schlesinger Global, Inc. (Revolver)	07/14/2025		Professional Services		10.14	%		1M L+600			1,487		1,487		1,450
Schlesinger Global, Inc. (Revolver) (7), (9)	07/14/2025		Professional Services		—				—		385		—		(10	)
Seaway Buyer, LLC	06/13/2029		Chemicals, Plastics and Rubber		9.41	%		3M L+575			6,940		6,836		6,836
Sigma Defense Systems, LLC	12/18/2025		IT Services		12.17	%		3M L+850			10,969		10,742		10,750
Sigma Defense Systems, LLC (Revolver) (7)	12/18/2025		IT Services		12.17	%		3M L+850			996		996		976
Sigma Defense Systems, LLC (Revolver) (7), (9)	12/18/2025		IT Services		—						1,625		—		(32	)
Signature Systems Holding Company	05/03/2024		Commercial Services & Supplies		10.17	%		1M L+650			10,358		10,301		10,280
Signature Systems Holding Company (Revolver) (9)	05/03/2024		Commercial Services & Supplies		—				—		1,747		—		(13	)
Smile Brands Inc.	10/14/2025		Healthcare and Pharmaceuticals		7.42	%		1M L+450			2,462		2,462		2,370
Smile Brands Inc. (Revolver) (7), (9)	10/14/2025		Healthcare and Pharmaceuticals		—				—		1,508		—		(57	)
Smile Brands Inc. LC (Revolver) (7), (9)	10/14/2025		Healthcare and Pharmaceuticals		—				—		108		—		(4	)
Solutionreach, Inc.	01/17/2024		Healthcare Technology		8.87	%		3M L+575			5,740		5,705		5,602
Solutionreach, Inc. (Revolver) (7), (9)	01/17/2024		Healthcare Technology	—					—		1,665		—		(40	)
Spear Education, LLC	02/26/2025		Professional Services		9.42	%		3M L+575			14,747		14,642		14,747
Spendmend Holdings LLC	03/01/2028		Healthcare Technology		8.63	%		SOFR + 575			3,216		3,179		3,126
Spendmend Holdings LLC (9)	03/01/2023		Healthcare Technology	—					—		1,771		—		(36	)
Spendmend Holdings LLC (Revolver)	03/01/2028		Healthcare Technology		8.63	%		3M L+575			119		119		116
Spendmend Holdings LLC (Revolver) (9)	03/01/2028		Healthcare Technology	—					—		772		—		(22	)
STV Group Incorporated	12/11/2026		Construction & Engineering		8.37	%		1M L+525			4,752		4,718		4,704
System Planning and Analysis, Inc. (f/k/a Management Consulting & Research, LLC)	08/16/2027		Aerospace and Defense		8.73	%		SOFR+600			18,560		18,237		18,263
System Planning and Analysis, Inc. (Revolver) (f/k/a Management Consulting & Research, LLC)	08/16/2027		Aerospace and Defense	—				—			5,188		—		(83	)
Teneo Holdings LLC	07/18/2025		Diversified Financial Services		8.38	%		1M L+525			5,793		5,718		5,455
The Aegis Technologies Group, LLC	10/31/2025		Aerospace and Defense		9.55	%		3M L+600			4,921		4,868		4,872
The Bluebird Group LLC	07/27/2026		Professional Services		10.67	%		3M L+700			6,265		6,162		6,328
The Bluebird Group LLC (Revolver) (7), (9)	07/27/2026		Professional Services	—				—			862		—		9
The Infosoft Group, LLC	09/16/2024		Media: Broadcasting and Subscription		8.51	%		3M L+575			15,229		15,120		15,115
The Vertex Companies, LLC (7)	08/30/2027		Construction & Engineering		8.18	%		1M L+550			2,159		2,122		2,148
The Vertex Companies, LLC (7), (9)	08/30/2027		Construction & Engineering		—				—		573		—		3
The Vertex Companies, LLC (Revolver)	08/30/2027		Construction & Engineering		8.26	%		1M L+550			182		182		181
The Vertex Companies, LLC (Revolver) (7), (9)	08/30/2027		Construction & Engineering		—				—		729		—		(4	)
TPC Canada Parent, Inc. and TPC US Parent, LLC (5), (10)	11/24/2025		Food Products		7.78	%		3M L+550			4,863		4,834		4,717
TVC Enterprises, LLC	03/26/2026		Commercial Services & Supplies		8.87	%		1M L+600			24,721		24,378		24,103
TVC Enterprises, LLC (Revolver) (7), (9)	03/26/2026		Commercial Services & Supplies		—				—		661		—		(17	)
TWS Acquisition Corporation	06/16/2025		Diversified Consumer Services		8.76	%		1M L+625			5,468		5,398		5,441
TWS Acquisition Corporation (Revolver) (7), (9)	06/16/2025		Diversified Consumer Services		—				—		2,628		—		(13	)
Tyto Athene, LLC	04/01/2028		IT Services		7.76	%		1M L+550			12,644		12,487		11,746
Tyto Athene, LLC (Revolver) (7), (9)	04/01/2026		IT Services		—				—		1,040		—		(74	)
UBEO, LLC	04/03/2024		Capital Equipment		7.60	%		3M L+450			17,926		17,860		17,657
UBEO, LLC (Revolver)	04/03/2024		Capital Equipment		9.00	%		3M L+275			587		587		578
UBEO, LLC (Revolver) (9)	04/03/2024		Capital Equipment		—				—		2,347		—		(35	)
Unique Indoor Comfort, LLC	05/24/2027		Diversified Consumer Services		8.95	%		3M L + 525			9,217		9,126		9,014
Unique Indoor Comfort, LLC Term Loan (7)	05/24/2027		Diversified Consumer Services		—				—		10,760		—		(129	)
Unique Indoor Comfort, LLC (Revolver) (7), (9)	05/24/2027		Diversified Consumer Services		—				—		2,000		—		(44	)
Walker Edison Furniture Company LLC	03/31/2027		Wholesale		12.42	%		1M L+875			12,684		12,434		8,474
Wildcat Buyerco, Inc.	02/27/2026		Electronic Equipment, Instruments, and Components		9.38	%		3M L+575			9,853		9,717		9,532
Wildcat Buyerco, Inc. (Revolver) (9)	02/27/2026		Electronic Equipment, Instruments, and Components		—				—		534		—		(34	)
Zips Car Wash, LLC	03/01/2024		Automobiles		10.30	%		3M L+725			13,428		13,284		13,092
Total First Lien Secured Debt													815,742		789,107
Second Lien Secured Debt—0%
Mailsouth Inc. (7)	04/23/2025		Media: Advertising, Printing and Publishing		0.00	%	(6)		—		1,001		965		-
				(PIK 15.00%)
QuantiTech LLC	02/04/2027		Aerospace and Defense		12.68	%		3M L+1,000			150		148		147
Total Second Lien Secured Debt													1,113		147
Preferred Equity— 1.6% (6)
Ad.net Holdings, Inc. (7),(8)		—	Media		—				—		6,720	$	672	$	747
Cartessa Aesthetics, LLC		—	Distributors		—				—		1,437,500		1,438		1,499
Imagine Topco, LP		—	Software		8.00	%			—		1,236,027		1,236		1,170

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2022

(in thousands, except share data)


Issuer Name	Maturity		Industry	Current Coupon			Basis Point Spread Above Index (1)		Par / Shares		Cost		Fair Value (2)
Mars Intermediate Holdings II, Inc. (7)		—	Media		—			—		835	$	835	$	976
Anteriad Holdings, LP (f/k/a MeritDirect Holdings, LP) (7), (8)		—	Media		—			—		2,018		2,018		2,537
NXOF Holdings, Inc. (Tyto Athene, LLC) (7)		—	IT Services		—			—		733		733		1,042
ORL Holdco, Inc. (7)		—	Consumer Finance		—			—		1,327		133		144
Signature CR Intermediate Holdco, Inc. (7)		—	Commercial Services & Supplies		12.00	%		—		1,323		1,323		1,674
TPC Holding Company, LP (5), (7), (10)		—	Food Products		—			—		409		409		116
TWD Parent Holdings, LLC (The Vertex Companies, LLC) (7)		—	Construction & Engineering		—			—		37		37		40
UniTek Global Services, Inc. -		—	Telecommunications		20.00	%		—		343,861		344		—
Super Senior Preferred Equity (7)
UniTek Global Services, Inc. - Senior Preferred Equity (7)		—	Telecommunications		19.00	%		—		448,851		449		—
UniTek Global Services, Inc. (7)		—	Telecommunications		13.50	%		—		1,047,317		670		—
Total Preferred Equity												10,297		9,945
Common Equity/Warrants— 18.1% (6)
Ad.net Holdings, Inc. (7),(8)		—	Media		—			—		7,467		75		98
Affinion Group Holdings, Inc. (Warrants)(7)	04/10/2024		Consumer Goods: Durable		—			—		8,893		245		—
AG Investco LP (7), (8)		—	Software		—			—		805,164		805		1,127
AG Investco LP (7), (8), (9)		—	Software		—			—		194,836		—		—
Altamira Intermediate Company II, Inc. (7)		—	IT Services		—			—		1,437,500		1,438		906
Anteriad Holdings, LP (f/k/a MeritDirect Holdings, LP) (7), (8)		—	Media		—			—		2,018		—		480
Athletico Holdings, LLC		—	Healthcare Providers and Services		—			—		4,678		5,000		4,758
Burgess Point Holdings, LP		—	Auto Components		—			—		100		100		101
By Light Investco LP (7), (8)		—	High Tech Industries		—			—		22,090		193		18,085
By Light Investco LP (7), (8), (9)		—	High Tech Industries		—			—		3,223		—		—
CI (Allied) Investment Holdings, LLC		—	Business Services		—			—		120,962		1,243		1,651
(PRA Events, Inc.) (7), (8)
Connatix Parent, LLC (7)		—	Media		—			—		38,278		421		459
Crane 1 Acquisition Parent Holdings, L.P. (7)		—	Commercial Services & Supplies		—			—		130		120		140
Delta InvestCo LP (Sigma Defense Systems, LLC) (7), (8)		—	IT Services		—			—		615,484		602		1,255
Delta InvestCo LP (Sigma Defense Systems, LLC) (7), (8),(9)		—	IT Services		—			—		389,386		—		—
ECM Investors, LLC (7), (8)		—	Electronic Equipment, Instruments, and Components		—			—		295,982		65		633
eCommission Holding Corporation (7), (10)		—	Banking, Finance, Insurance & Real Estate		—			—		20		251		348
Exigo, LLC		—	Software		—			—		541,667		542		478
Express Wash Topco, LLC		—	Automobiles		—			—		20,000		100		102
FedHC InvestCo LP (7),(8)		—	Aerospace and Defense		—			—		21,083		711		2,142
FedHC InvestCo LP (7),(8),(9)		—	Aerospace and Defense		—			—		9,488		—		—
Gauge InfosoftCoInvest, LLC		—	Media: Broadcasting and Subscription		—			—		500		144		2,471
(The Infosoft Group, LLC) (7)
Gauge Lash Coinvest LLC (7)		—	Personal Products		—			—		1,485,953		227		7,030
Gauge Schlesinger Coinvest LLC (7)		—	Professional Services		—			—		465		476		496
Gauge TVC Coinvest, LLC (TVC Enterprises, LLC) (7)		—	Professional Services		—			—		391,144		—		1,558
GCOM InvestCo LP (7),(8)		—	IT Services		—			—		19,184		3,342		4,626
Go Dawgs Capital III, LP		—	Building Products		—			—		324,675		325		377
(American Insulated Glass, LLC) (7), (8)
Hancock Claims Consultants Investors, LLC (7), (8)		—	Insurance		—			—		450,000		450		477
HV Watterson Holdings, LLC		—	Professional Services		—			—		100,000		100		87
Icon Partners V C, L.P.		—	Internet Software and Services		—			—		1,851,852		1,852		1,989
Icon Partners V C, L.P. (7), (9)		—	Internet Software and Services		—			—		648,148		—		—
IIN Group Holdings, LLC		—	Consumer Services		—			��		1,000		1,000		54
(Integrative Nutrition, LLC) (7), (8)
Imagine Topco, LP (Common)		—	Software		—			—		1,236,027		—		—
Ironclad Holdco, LLC (Applied Technical Services, LLC) (7), (8)		—	Commercial Services & Supplies		—			—		5,811		573		754
ITC Infusion Co-invest, LP		—	Healthcare Equipment and Supplies		—			—		81,313		813		857
ITC Rumba, LLC (Cano Health, LLC) (7),(8)		—	Healthcare and Pharmaceuticals		—			—		46,763		117		5,232
JWC-WE Holdings, L.P.		—	Wholesale		—			—		1,948		568		—
(Walker Edison Furniture Company LLC) (7), (8)
Kinetic Purchaser, LLC		—	Personal Products		—			—		1,734,775		1,735		2,458
KL Stockton Co-Invest LP (Any Hour Services) (7),(8)		—	Energy Equipment and Services		—			—		382,353		382		643
Kentucky Racing Holdco, LLC (Warrants) (7), (8)		—	Hotels, Restaurants and Leisure		—			—		87,345		—		961
Lightspeed Investment Holdco LLC (7)		—	Healthcare Technology		—			—		585,587		586		800
Mars Intermediate Holdings II, Inc. (7)		—	Media		—			—		835		—		255
MDI Aggregator, LP		—	Commodity Chemicals		—			—		668,747		670		669
Meadowlark Title, LLC		—	Professional Services		—			—		819,231		819		901
MSpark, LLC		—	Media: Advertising, Printing and Publishing		—			—		3,988		1,288		—
Municipal Emergency Services, Inc. (7)		—	Distributors		—			—		1,973,370		2,005		1,505
NEPRT Parent Holdings, LLC (Recteq, LLC) (7), (8)		—	Leisure Products		—			—		1,494		1,450		279
North Haven Saints Equity Holdings, LP		—	Healthcare Technology		—			—		223,602		224		237
NXOF Holdings, Inc. (Tyto Athene, LLC) (7)		—	IT Services		—			—		14,960		15		310
OceanSound Discovery Equity, LP (Holdco Sands Intermediate, LLC) (7), (8)		—	Aerospace and Defense		—			—		173,638		1,729		2,917
OHCP V BC COI, L.P.		—	Distributors		—			—		743,750		744		636
OHCP V BC COI, L.P. (8) (9)		—	Distributors		—			—		506,250		—		(73	)
Oral Surgery (ITC) Holdings, LLC (7),(8)		—	Healthcare Equipment and Supplies		—			—		3,872		83		231
ORL Holdco, Inc. (7)		—	Consumer Finance		—			—		1,474		15		261
PennantPark-TSO Senior Loan Fund, LP (7)		—	Financial Services		—			—		11,167,847		11,168		9,892
Pink Lily Holdco, LLC (PL Acquisitions, LLC)		—	Textiles, Apparel and Luxury Goods		—			—		1,735		1,735		914

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS—(Continued)

September 30, 2022

(in thousands, except share data)


Issuer Name	Maturity		Industry	Current Coupon			Basis Point Spread Above Index (1)		Par / Shares		Cost		Fair Value (2)
Pragmatic Institute, LLC		—	Professional Services		—			—		610,583	$	611	$	611
QuantiTech InvestCo LP (7), (8)		—	Aerospace and Defense		—			—		712		68		352
QuantiTech InvestCo LP (7), (8), (9)		—	Aerospace and Defense		—			—		955		—		—
QuantiTech InvestCo II LP (7), (8),		—	Aerospace and Defense		—			—		40		25		24
RFMG Parent, LP (Rancho Health MSO, Inc.) (7)		—	Healthcare Equipment and Supplies		—			—		1,050,000		1,050		1,091
SBI Holdings Investments LLC (Sales Benchmark Index LLC) (7), (8)		—	Professional Services		—			—		64,634		646		634
Seaway Topco, LP			Chemicals, Plastics and Rubber		—			—		296		296		296
Signature CR Intermediate Holdco, Inc. (7)		—	Commercial Services & Supplies		—			—		70		70		—
SP L2 Holdings, LLC (Ledge Lounger, Inc.)		—	Leisure Products		—			—		360,103		360		373
SSC Dominion Holdings, LLC		—	Capital Equipment		—			—		500		500		680
Class A (US Dominion, Inc.) (7)
SSC Dominion Holdings, LLC		—	Capital Equipment		—			—		500		—		1,463
Class B (US Dominion, Inc.) (7)
StellPen Holdings, LLC (CF512, Inc.) (7)		—	Media		—			—		161,538		162		160
TAC LifePort Holdings, LLC (7),(8)		—	Aerospace and Defense		—			—		488,372		488		621
Tower Arch Infolinks Media, LP (Infolinks Media Buyco, LLC)		—	Media		—			—		216,925		209		366
Tower Arch Infolinks Media, LP (Infolinks Media Buyco, LLC)(8) (9)		—	Media		—			—		148,681		—		—
TPC Holding Company, LP (5), (7), (10)		—	Food Products		—			—		21,527		22		—
TWD Parent Holdings, LLC (The Vertex Companies, LLC) (7)		—	Construction & Engineering		—			—		749		1		—
UniTek Global Services, Inc. (7)		—	Telecommunications		—			—		213,739		—		—
UniTek Global Services, Inc. (Warrants) (7)		—	Telecommunications		—			—		23,889		—		—
UniVista Insurance (7),(8)		—	Insurance		—			—		400		378		454
WCP IvyRehab QP CF Feeder, LP		—	Healthcare Providers and Services		—			—		3,762,257		3,762		3,762
WCP IvyRehab QP CF Feeder, LP (9)		—	Healthcare Providers and Services		—			—		237,743		—		—
Wildcat Parent, LP (Wildcat Buyerco, Inc.) (7), (8)		—	Electronic Equipment, Instruments, and Components		—			—		2,240		224		596
Total Common Equity/Warrants												55,418		94,050
Total Investments in Non-Controlled, Non-Affiliated Portfolio Companies												882,570		893,249
Investments in Controlled, Affiliated Portfolio Companies—51.4% (3), (4)
First Lien Secured Debt—41.8%
Marketplace Events, LLC - Super Priority First Lien Term Loan (7)	09/30/2025		Media: Diversified and Production		8.19	%	3M L+525			3,582		3,582		3,582
				(PIK 5.25%)
Marketplace Events, LLC - Super Priority First Lien (7), (9)	09/30/2025		Media: Diversified and Production		—			—		3,261		—		—
Marketplace Events, LLC	09/30/2026		Media: Diversified and Production		8.19	%	3M L+525			26,771		19,518		26,771
PennantPark Senior Secured Loan Fund I LLC (7), (9), (10)	05/06/2024		Financial Services		10.71	%	3M L+800			190,181		190,181		190,182
Total First Lien Secured Debt												213,281		220,535
Equity Interests—9.6%
New MPE Holdings, LLC (Marketplace Events, LLC) (7),(8)		—	Media: Diversified and Production		—			—		349		—		1,036
PennantPark Senior Secured Loan Fund I LLC (7), (9), (10)		—	Financial Services		—			—		81,506		81,506		49,434
Total Equity Interests												81,506		50,470
Total Investments in Controlled, Affiliated Portfolio Companies												294,787		271,005
Total Investments—220.9%												1,177,357		1,164,254
Cash and Cash Equivalents—9.1%
BlackRock Federal FD Institutional 30												38,209		38,209
BNY Mellon Cash												9,707		9,671
Total Cash and Cash Equivalents												47,916		47,880
Total Investments and Cash Equivalents—230.0%											$	1,225,273	$	1,212,134
Liabilities in Excess of Other Assets—(130.0)%														(685,042	)
Net Assets—100.0%													$	527,092

(1)

(2)

Valued based on our accounting policy (See Note 2). The value of all securities was determined using significant unobservable inputs (See Note 5).

(3)

(4)

(5)

Non-U.S. company or principal place of business outside the United States.

(6)

Non-income producing securities.

(7)

(8)

Investment is held through our Taxable Subsidiary (See Note 1).

(9)

(10)

The investment is treated as a non-qualifying asset under Section 55(a) of the 1940 Act. Under the 1940 Act, we may not acquire any non-qualifying asset unless, at the time the acquisition is made, qualifying assets represent at least 70% of our total assets. As of September 30, 2022, qualifying assets represent 81% of our total assets and non-qualifying assets represent 19% of our total assets.

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

(Unaudited)

1. ORGANIZATION

PennantPark Floating Rate Capital Ltd. was organized as a Maryland corporation in October 2010. We are a closed-end, externally managed, non-diversified investment company that has elected to be treated as a BDC under the 1940 Act.

Our investment objectives are to generate both current income and capital appreciation while seeking to preserve capital. We seek to achieve our investment objective by investing primarily in floating rate loans, and other investments made to U.S. middle-market private companies whose debt is rated below investment grade. Floating rate loans pay interest at variable rates, which are determined periodically, on the basis of a floating base lending rate such as LIBOR, with or without a floor, plus a fixed spread. Under normal market conditions, we generally expect that at least 80% of the value of our managed assets will be invested in floating rate loans and other investments bearing a variable rate of interest, which may include, from time to time, variable rate derivative instruments. We generally expect that first lien secured debt will represent at least 65% of our overall portfolio. We generally expect to invest up to 35% of our overall portfolio opportunistically in other types of investments, including second lien secured debt, subordinated debt, and, to a lesser extent, equity investments.

We have entered into an investment management agreement, or the Investment Management Agreement, with the Investment Adviser, an external adviser that manages our day-to-day operations. We have also entered into an administration agreement, or the Administration Agreement, with the Administrator, which provides the administrative services necessary for us to operate.

Funding I, our wholly-owned subsidiary and a special purpose entity, was organized in Delaware as a limited liability company in May 2011. We formed Funding I in order to establish the Credit Facility. The Investment Adviser serves as the collateral manager to Funding I and has irrevocably directed that any management fee owed with respect to such services is to be paid to us so long as the Investment Adviser remains the collateral manager. This arrangement does not increase our consolidated management fee. The Credit Facility allows Funding I to borrow up to $366 million (increased from $300 million in September 2022) at SOFR (or an alternative risk-free floating interest rate index) plus 225 basis points during the revolving period. The Credit Facility is secured by all of the assets held by Funding I. See Note 10.

We have formed and expect to continue to form certain taxable subsidiaries, including the Taxable Subsidiary, which are subject to tax as corporations. These taxable subsidiaries allow us to hold equity securities of certain portfolio companies treated as pass-through entities for U.S. federal income tax purposes while facilitating our ability to qualify as a RIC under the Code.

On April 14, 2022, listing and trading of the Company's common stock commenced on the New York Stock Exchange after the Company voluntarily withdrew the principal listing of its common stock from the Nasdaq Stock Market LLC effective at market close on April 13, 2022.

In May 2017, we and a subsidiary of Kemper Corporation (NYSE: KMPR), Trinity Universal Insurance Company, or Kemper, formed PSSL, an unconsolidated joint venture. PSSL invests primarily in middle-market and other corporate debt securities consistent with our strategy. PSSL was formed as a Delaware limited liability company. See Note 4.

In November 2017, we issued $138.6 million of our 2023 Notes. The principal on the 2023 Notes will be payable in four annual installments as follows: 15% of the original principal amount on December 15, 2020, 15% of the original principal amount on December 15, 2021, 15% of the original principal amount on December 15, 2022 and 55% on December 15, 2023. The 2023 Notes are general, unsecured obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness. The 2023 Notes are listed on the TASE. In connection with this offering, we have dual listed our common stock on the TASE.

In September 2019, the Securitization Issuers completed the Debt Securitization. The 2031 Asset-Backed Debt is secured by a diversified portfolio of the Securitization Issuer consisting primarily of middle market loans and participation interests in middle market loans. The 2031 Asset-Backed Debt is scheduled to mature on October 15, 2031. On the closing date of the Debt Securitization, in consideration of our transfer to the Securitization Issuer of the initial closing date loan portfolio, which included loans distributed to us by certain of our wholly-owned subsidiaries, the Securitization Issuer transferred to us 100% of the Preferred Shares of the Securitization Issuer, 100% of the Class D Secured Deferrable Floating Rate Notes issued by the Securitization Issuer, and a portion of the net cash proceeds received from the sale of the 2031 Asset-Backed Debt. See Note 10.

In April 2021, we formed PennantPark-TSO Senior Loan Fund LP ("PTSF"), an unconsolidated limited partnership, organized as a Delaware limited liability partnership. We sold $81.4 million in investments to a wholly-owned subsidiary of PTSF in exchange for cash in the amount of $69.5 million and an $11.9 million equity interest in PTSF representing 23.08% of the total outstanding Class A Units of PTSF. We recognized $0.4 million of realized gain upon the formation of PTSF. As of June 30, 2023, our capital commitment of $15.3 million is fully funded and we hold 23.08% of the total outstanding Class A Units of PTSF and a 4.99% voting interest in the general partner which manages PTSF.

We are operated by a person who has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act of 1936, as amended, or the Commodity Exchange Act, and therefore, is not subject to registration or regulation as a commodity pool operator under the Commodity Exchange Act.

2. SIGNIFICANT ACCOUNTING POLICIES

The preparation of our Consolidated Financial Statements, in conformity with U.S. generally accepted accounting principles, or GAAP, requires management to make estimates and assumptions that affect the reported amount of our assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of income and expenses during the reported periods. In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair presentation of financial statements have been included. Changes in the economic and regulatory environment, financial markets, the credit worthiness of our portfolio companies, and any other parameters used in determining these estimates and assumptions could cause actual results to differ from these estimates and assumptions. We may reclassify certain prior period amounts to conform to the current period presentation. We have eliminated all intercompany balances and transactions. References to the Financial Accounting Standards Board’s, or FASB’s, Accounting Standards Codification, as amended, or ASC, serve as a single source of accounting literature. Subsequent events are evaluated and disclosed as appropriate for events occurring through the date the Consolidated Financial Statements are issued.

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)

Our Consolidated Financial Statements are prepared in accordance with GAAP, consistent with ASC Topic 946, Financial Services – Investment Companies, and pursuant to the requirements for reporting on Form 10-K/Q and Articles 6, 10 and 12 of Regulation S-X, as appropriate. In accordance with Article 6-09 of Regulation S-X, we have provided a Consolidated Statement of Changes in Net Assets in lieu of a Consolidated Statement of Changes in Stockholders’ Equity.

Our significant accounting policies consistently applied are as follows:

(a) Investment Valuations

We expect that there may not be readily available market values for many of the investments, which are or will be in our portfolio, and we value such investments at fair value as determined in good faith by or under the direction of our board of directors using a documented valuation policy and a consistently applied valuation process, as described in this Report. With respect to investments for which there is no readily available market value, the factors that the board of directors may take into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate or revise our valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and the difference may be material. See Note 5.

Our portfolio generally consists of illiquid securities, including debt and equity investments. With respect to investments for which market quotations are not readily available, or for which market quotations are deemed not reflective of the fair value, our board of directors undertakes a multi-step valuation process each quarter, as described below:

(1)

Our quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of our Investment Adviser responsible for the portfolio investment;

(2)

Preliminary valuation conclusions are then documented and discussed with the management of the Investment Adviser;

(3)

Our board of directors also engages independent valuation firms to conduct independent appraisals of our investments for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment. The independent valuation firms review management's preliminary valuations in light of their own independent assessment and also in light of any market quotations obtained from an independent pricing service, broker, dealer or market maker;

(4)

The audit committee of our board of directors reviews the preliminary valuations of our Investment Adviser and those of the independent valuation firms on a quarterly basis, periodically assesses the valuation methodologies of the independent valuation firms, and responds to and supplements the valuation recommendations of the independent valuation firms to reflect any comments; and

(5)

Our board of directors discusses these valuations and determines the fair value of each investment in our portfolio in good faith, based on the input of our Investment Adviser, the respective independent valuation firms and the audit committee.

Our board of directors generally uses market quotations to assess the value of our investments for which market quotations are readily available. We obtain these market values from independent pricing services or at bid prices obtained from at least two brokers or dealers, if available, or otherwise from a principal market maker or a primary market dealer. The Investment Adviser assesses the source and reliability of bids from brokers or dealers. If the board of directors has a bona fide reason to believe any such market quote does not reflect the fair value of an investment, it may independently value such investments by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available.

(b) Security Transactions, Revenue Recognition, and Realized/Unrealized Gains or Losses

Security transactions are recorded on a trade-date basis. We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, using the specific identification method, without regard to unrealized appreciation or depreciation previously recognized, but considering prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in the fair values of our portfolio investments, the Credit Facility and the 2023 Notes during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

We record interest income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt investments with contractual PIK interest, which represents interest accrued and added to the loan balance that generally becomes due at maturity, we will generally not accrue PIK interest when the portfolio company valuation indicates that such PIK interest is not collectable. We do not accrue as a receivable interest on loans and debt investments if we have reason to doubt our ability to collect such interest. Loan origination fees, original issue discount, or OID, market discount or premium and deferred financing costs on liabilities, which we do not fair value, are capitalized and then accreted or amortized using the effective interest method as interest income or, in the case of deferred financing costs, as interest expense. We record prepayment penalties earned on loans and debt investments as income. Dividend income, if any, is recognized on an accrual basis on the ex-dividend date to the extent that we expect to collect such amounts. From time to time, the Company receives certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring fees and amendment fees, and are recorded as other investment income when earned. Litigation settlements are accounted for in accordance with the gain contingency provisions of ASC Subtopic 450-30, Gain Contingencies, or ASC 450-30.

Loans are placed on non-accrual status when principal or interest payments are past due 30 days or more and/or if there is reasonable doubt that principal or interest will be collected. Accrued interest is generally reversed when a loan is placed on non-accrual status. Interest payments received on non-accrual loans may be recognized as income or applied to principal depending upon management’s judgment. Non-accrual loans are restored to accrual status when past due principal and interest is paid and, in management’s judgment, are likely to remain current. As of June 30, 2023, we had three portfolio companies on non-accrual, representing 1% and zero of our overall portfolio on a cost and fair value basis, respectively. As of September 30, 2022, we had two portfolio companies on non-accrual, representing 0.9% and zero of our overall portfolio on a cost and fair value basis, respectively.

We have complied with the requirements of Subchapter M of the Code and have qualified to be treated as a RIC for federal income tax purposes. In this regard, we account for income taxes using the asset and liability method prescribed by ASC Topic 740, Income Taxes, or ASC 740. Under this method, income taxes are provided for

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)

amounts currently payable and for amounts deferred as tax assets and liabilities based on differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. Based upon our qualification and election to be treated as a RIC for U.S. federal income tax purposes, we typically do not incur material U.S. federal income taxes. However, we may choose to retain a portion of our calendar year income, which may result in the imposition of a federal excise tax, or we may incur taxes through our taxable subsidiaries, including the Taxable Subsidiary. For the three and nine months ended June 30, 2023, we recorded a provision for taxes on net investment income of $0.2 million and $0.8 million, respectively, pertaining to federal excise tax. For the three and nine months ended June 30, 2022, we recorded a provision for taxes on net investment income of $0.1 million and $0.3 million, respectively, pertaining to federal excise tax.

We recognize the effect of a tax position in our Consolidated Financial Statements in accordance with ASC 740 when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by the applicable tax authority. Tax positions not considered to satisfy the “more-likely-than-not” threshold would be recorded as a tax expense or benefit. Penalties or interest, if applicable, that may be assessed relating to income taxes would be classified as other operating expenses in the financial statements. There were no tax accruals relating to uncertain tax positions and no amounts accrued for any related interest or penalties with respect to the periods presented herein. The Company’s determinations regarding ASC 740 may be subject to review and adjustment at a later date based upon factors including, but not limited to, an ongoing analysis of tax laws, regulations and interpretations thereof. Although the Company files both federal and state income tax returns, the Company’s major tax jurisdiction is federal.

The Taxable Subsidiary (PFLT Investment Holdings, LLC, a second tier wholly-owned subsidiary of the Company), is subject to U.S. federal, state and local corporate income taxes. The income tax expense and related tax liabilities of the Taxable Subsidiary are reflected in the Company’s consolidated financial statements.

For the three and nine months ended June 30, 2023, the Company recognized a provision reduction for taxes of zero and $2.9 million, respectively, on unrealized appreciation (depreciation) on investments by the Taxable Subsidiary. For the three and nine months ended June 30, 2022 the Company recognized a provision for taxes of zero and $(5.3) million, respectively, on unrealized appreciation (depreciation) on investments by the Taxable Subsidiary. The provision for taxes on unrealized appreciation (depreciation) on investments is the result of netting (i) the expected tax liability on gains from sales of investments and (ii) the expected tax benefit from the use of losses in the current year. As of June 30, 2023 and September 30, 2022, $1.6 million and $4.6 million, respectively, was accrued as a deferred tax liability on the Consolidated Statements of Assets and Liabilities relating to unrealized gain on investments held by the Taxable Subsidiary. As of June 30, 2023 and September 30, 2022, $0.3 million and zero, respectively, was accrued as a provision for taxes on the Consolidated Statements of Operations relating to realized gain on investments held by the Taxable Subsidiary. During the three and nine months ended June 30, 2023, the Company paid $0.5 million and $0.5 million, respectively, in taxes on realized gains on the sale of investments held by the Taxable Subsidiary, resulting in a $1.2 million prepaid tax asset as of June 30, 2023 included under prepaid expenses and other assets in the Consolidated Statement of Assets and Liabilities.

We operate in a manner to maintain our election to be subject to tax as a RIC and to eliminate corporate-level U.S. federal income tax (other than the 4% excise tax) by distributing sufficient investment company taxable income and capital gain net income (if any). As a result, we will have an effective tax rate equal to 0% before the excise tax and income taxes incurred by the Taxable Subsidiary. As such, a reconciliation of the differences between our reported income tax expense and its tax expense at the federal statutory rate of 21% is not meaningful.

Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and net realized gains recognized for financial reporting purposes. Differences between tax regulations and GAAP may be permanent or temporary. Permanent differences are reclassified among capital accounts in the consolidated financial statements of assets and liabilities to reflect their tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

(d) Distributions and Capital Transactions

Distributions to common stockholders are recorded on the ex-dividend date. The amount to be paid, if any, as a distribution is determined by the board of directors each quarter and is generally based upon the earnings estimated by management. Net realized capital gains, if any, may be distributed at least annually. The tax attributes for distributions will generally include ordinary income and capital gains but may also include certain tax-qualified dividends and/or a return of capital.

Capital transactions through offerings of our common stock are recorded when issued and offering costs are charged as a reduction of capital upon issuance of our common stock.

On August 20, 2021, we entered into equity distribution agreements with each of JMP Securities LLC and Raymond James & Associates, Inc., as the sales agents, in connection with the sale of shares of our common stock, with an aggregate offering of up to $75 million under an at-the-market offering (“ATM Program”). The equity distribution agreements provide that we may offer and sell shares of our common stock from time to time through a sales agent in amounts and at times to be determined by us. On May 5, 2022, we amended the equity distribution agreements to update references from NASDAQ to NYSE and reflect that the agents are now represented by Kirkland & Ellis LLP. On March 27, 2023 we terminated the equity distribution agreements and entered into new equity distribution agreements with JMP Securities LLC, Raymond James & Associates, Inc. and Truist Securities, Inc. (together, the "Equity Distribution Agreements"), as sales agents in connection with the sale of shares of our common stock, with an aggregate offering of up to $100 million under an ATM Program. The equity distribution agreements, provide that we may offer and sell shares of our common stock from time to time through a sales agent in amounts and at times to be determined by us. Actual sales will depend on a variety of factors to be determined by us from time to time, including, market conditions and the trading price of our common stock. The Investment Adviser may, from time to time, in its sole discretion, pay some or all of the commissions payable under the equity distribution agreements or make additional supplemental payments to ensure that the sales price per share of our common stock in connection with all of the offerings made hereunder will not be less than our current NAV per share. Any such payments made by the Investment Adviser will not be subject to reimbursement by us.

During the three months ended June 30, 2023, we issued 5,805,484 shares of common stock through the ATM Program at an average price of $11.03 per share, raising $64.1 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. In connection with the share issuance, we expensed $0.5 million of deferred offering costs incurred related to establishing the ATM Program to additional paid in capital.

During the nine months ended June 30, 2023, we issued 5,891,661 shares of common stock through the ATM Program at an average price of $11.04 per share, raising $65.1 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.

(e) Foreign Currency Translation

Our books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)

Fair value of investment securities, other assets and liabilities – at the exchange rates prevailing at the end of the applicable period; and

Purchases and sales of investment securities, income and expenses – at the exchange rates prevailing on the respective dates of such transactions.

Although net assets and fair values are presented based on the applicable foreign exchange rates described above, we do not isolate that portion of the results of operations due to changes in foreign exchange rates on investments, other assets and debt from the fluctuations arising from changes in fair value of investments and liabilities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments and liabilities.

Foreign security and currency translations may involve certain considerations and risks not typically associated with investing in U.S. companies and U.S. government securities. These risks include, but are not limited to, currency fluctuations and revaluations and future adverse political, social and economic developments, which could cause investments in foreign markets to be less liquid and prices to be more volatile than those of comparable U.S. companies or U.S. government securities.

(f) Consolidation

As permitted under Regulation S-X and as explained by ASC paragraph 946-810-45-3, PennantPark Floating Rate Capital Ltd. will generally not consolidate its investment in a company other than an investment company wholly-owned subsidiary or a controlled operating company whose business consists of providing services to us. Accordingly, we have consolidated the results of our taxable subsidiaries, including the Taxable Subsidiary, Funding I and the Securitization Issuer in our Consolidated Financial Statements. We do not consolidate our non-controlling interest in PSSL or PTSF. See further description of our investment in PSSL in Note 4.

(g) Asset Transfers and Servicing

Asset transfers that do not meet ASC Topic 860, Transfers and Servicing, requirements for sale accounting treatment are reflected in the Consolidated Statements of Assets and Liabilities and the Consolidated Schedules of Investments as investments. The creditors of Funding I have received a security interest in all of its assets and such assets are not intended to be available to the creditors of PennantPark Floating Rate Capital Ltd. or any of its affiliates.

(h) Recent Accounting Pronouncements

In March 2020, the FASB issued Accounting Standards Update, or ASU, No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The guidance provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The FASB approved an (optional) two year extension to December 31, 2024, for transitioning away from LIBOR. The Company utilized the optional expedients and exceptions provided by ASU 2020-04 during the year ended September 30, 2022, the effect of which was not material to the consolidated financial statements and the notes thereto.

In March 2022, the FASB issued ASU No. 2022-02, “Financial Instruments - Credit Losses (Topic 326)”, which is intended to address issues identified during the post-implementation review of ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. The amendment, among other things, eliminates the accounting guidance for troubled debt restructurings by creditors in Subtopic 310-40, “Receivables - Troubled Debt Restructurings by Creditors”, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The new guidance is effective for interim and annual periods beginning after December 15, 2022. The Company has adopted the new accounting standard implementing appropriate controls and procedures, the effect of which was not material to the consolidated financial statements and the notes thereto.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, or ASU 2022-03, which changed the fair value measurement disclosure requirements of ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820. The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods therein. Early application is permitted. The Company is currently evaluating the impact the adoption of this new accounting standard will have on its consolidated financial statements, but the impact of the adoption is not expected to be material.

3. AGREEMENTS AND RELATED PARTY TRANSACTIONS

(a) Investment Management Agreement

The Investment Management Agreement with the Investment Adviser was reapproved by our board of directors, including a majority of our directors who are not interested persons of us or the Investment Adviser, in February 2023. Under the Investment Management Agreement, the Investment Adviser, subject to the overall supervision of our board of directors, manages the day-to-day operations of and provides investment advisory services to us. The Investment Adviser serves as the collateral manager to Funding I and has irrevocably directed that any management fee owed with respect to such services is to be paid to the Company so long as the Investment Adviser remains the collateral manager. This arrangement does not increase our consolidated management fee. For providing these services, the Investment Adviser receives a fee from us consisting of two components— a base management fee and an incentive fee.

Base Management Fee

The base management fee is calculated at an annual rate of 1.00% of our “average adjusted gross assets,” which equals our gross assets (net of U.S. Treasury Bills, temporary draws under any credit facility, cash and cash equivalents, repurchase agreements or other balance sheet transactions undertaken at the end of a fiscal quarter for purposes of preserving investment flexibility for the next quarter and unfunded commitments, if any) and is payable quarterly in arrears. The base management fee is calculated based on the average adjusted gross assets at the end of the two most recently completed calendar quarters, and appropriately adjusted for any share issuances or repurchases during the current calendar quarter. For example, if we sold shares on the 45th day of a quarter and did not use the proceeds from the sale to repay outstanding indebtedness, our gross assets for such quarter would give effect to the net proceeds of the issuance for only 45 days of the quarter during which the additional shares were outstanding. For the three and nine months ended June 30, 2023 the Investment Adviser earned a base management fee of $2.8 million and $8.6 million respectively, from us. For the three and nine months ended June 30, 2022 the Investment Adviser earned a base management fee of $3.1 million and $8.9 million respectively, from us.

Incentive Fee

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)

The incentive fee has two parts, as follows:

One part is calculated and payable quarterly in arrears based on our Pre-Incentive Fee Net Investment Income for the immediately preceding calendar quarter. For this purpose, Pre-Incentive Fee Net Investment Income means interest income, dividend income and any other income, including any other fees (other than fees for providing managerial assistance), such as amendment, commitment, origination, prepayment penalties, structuring, diligence and consulting fees or other fees received from portfolio companies, accrued during the calendar quarter, minus our operating expenses for the quarter (including the base management fee, any expenses payable under the Administration Agreement and any interest expense or amendment fees under any credit facility and distribution paid on any issued and outstanding preferred stock, but excluding the incentive fee). Pre-Incentive Fee Net Investment Income includes, in the case of investments with a deferred interest feature (such as OID, debt instruments with PIK interest and zero-coupon securities), accrued income not yet received in cash. Pre-Incentive Fee Net Investment Income does not include any realized capital gains, computed net of all realized capital losses or unrealized capital appreciation or depreciation. Pre-Incentive Fee Net Investment Income, expressed as a percentage of the value of our net assets at the end of the immediately preceding calendar quarter, is compared to the hurdle rate of 1.75% per quarter (7.00% annualized). We pay the Investment Adviser an incentive fee with respect to our Pre-Incentive Fee Net Investment Income in each calendar quarter as follows: (1) no incentive fee in any calendar quarter in which our Pre-Incentive Fee Net Investment Income does not exceed the hurdle rate of 1.75%, (2) 50% of our Pre-Incentive Fee Net Investment Income with respect to that portion of such Pre-Incentive Fee Net Investment Income, if any, that exceeds the hurdle rate but is less than 2.9167% in any calendar quarter (11.67% annualized) (we refer to this portion of our Pre-Incentive Fee Net Investment Income (which exceeds the hurdle but is less than 2.9167%) as the “catch-up,” which is meant to provide our Investment Adviser with 20% of our Pre-Incentive Fee Net Investment Income, as if a hurdle did not apply, if this net investment income exceeds 2.9167% in any calendar quarter), and (3) 20% of the amount of our Pre-Incentive Fee Net Investment Income, if any, that exceeds 2.9167% in any calendar quarter. These calculations are pro-rated for any share issuances or repurchases during the relevant quarter, if applicable. For the three and nine months ended June 30, 2023, the Investment Adviser earned $4.6 million and $12.2 million, respectively, in incentive fees on net investment income from us. For three and nine months ended June 30, 2022, the Investment Adviser earned $2.6 million and $8.5 million, respectively, in incentive fees on net investment income from us.

The second part of the incentive fee is determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Management Agreement, as of the termination date) and equals 20% of our realized capital gains, if any, on a cumulative basis from inception through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gain incentive fees. For the three and nine months ended June 30, 2023 and 2022, the Investment Adviser did not accrue an incentive fee on capital gains, as calculated under the Investment Management Agreement (as described above).

Under GAAP, we are required to accrue a capital gains incentive fee based upon net realized capital gains and net unrealized capital appreciation and depreciation on investments held at the end of each period. In calculating the capital gains incentive fee accrual, we considered the cumulative aggregate unrealized capital appreciation in the calculation, as a capital gains incentive fee would be payable if such unrealized capital appreciation were realized, even though such unrealized capital appreciation is not permitted to be considered in calculating the fee actually payable under the Investment Management Agreement. This accrual is calculated using the aggregate cumulative realized capital gains and losses and cumulative unrealized capital appreciation or depreciation. If such amount is positive at the end of a period, then we record a capital gains incentive fee equal to 20% of such amount, less the aggregate amount of actual capital gains related to incentive fees paid in all prior years. If such amount is negative, then there is no accrual for such year. There can be no assurance that such unrealized capital appreciation will be realized in the future. The incentive fee accrued for, but not payable, under GAAP on our unrealized and realized capital gains for the three and nine months ended June 30, 2023 and 2022, was zero, respectively.

(b) Administration Agreement

The Administration Agreement with the Administrator was reapproved by our board of directors, including a majority of the directors who are not interested persons of us, in February 2023. Under the Administration Agreement, the Administrator provides administrative services and office facilities to us. For providing these services, facilities and personnel, we have agreed to reimburse the Administrator for its allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including rent and our allocable portion of the costs of compensation and related expenses of our Chief Compliance Officer, Chief Financial Officer, Corporate Counsel and their respective staffs. The amount billed by the Administrator may include credits related to its administrative agreement with PSSL. The Administrator also offers, on our behalf, significant managerial assistance to portfolio companies to which we are required to offer such assistance. Reimbursement for certain of these costs is included in administrative services expenses in the Consolidated Statements of Operations. For the three and nine months ended June 30, 2023, we recorded administrative expenses of approximately $0.5 million and $0.8 million, respectively, including expenses the Administrator incurred for services described above. For the three and nine months ended June 30, 2022, we recorded adminstrative expenses of approximately $0.1 million and $0.4 million, respectively, including expenses the Administrator incurred for services described above.

On July 1, 2022, the Administration Agreement with the Administrator was amended to clarify that the Administrator may be reimbursed by the Company for certain (i) tax and general legal advice and/or services provided to the Company by in-house professionals of the Administrator related to ongoing operations of the Company; and (ii) transactional legal advice and/or services provided to the Company or portfolio companies by in-house professionals of the Administrator or its affiliates on matters related to potential or actual investments and transactions, including tax structuring and/or due diligence.

There were no transactions subject to Rule 17a-7 under the 1940 Act during each of the three and nine months ended June 30, 2023 and 2022.

For the three and nine months ended June 30, 2023, we sold $75.3 million and $121.2 million in investments to PSSL at fair value, respectively, and recognized $(0.2) million and $(0.2) million of net realized losses, respectively. For the three and nine months ended June 30, 2022, we sold $16.8 million and $197.2 million in investments to PSSL at fair value, respectively, and recognized $(0.1) million and $(0.6) million of net realized losses, respectively.

For the three and nine months ended June 30, 2023 and 2022, we sold no investments to PTSF.

4. INVESTMENTS

For the three and nine months ended June 30, 2023 purchases of investments, including PIK interest totaled $80.3 million and $231.5 million, respectively. For the same periods in the prior year, purchases of investments, including PIK interest, totaled $105.1 million and $554.3 million, respectively. For the three and nine months ended June 30, 2023 sales and repayments of investments totaled $132.4 million and $258.1 million, respectively. For the same periods in the prior year, sales and repayments of investments totaled $55.0 million and $397.2 million, respectively.

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)

Investments and cash and cash equivalents consisted of the following:


($ in thousands)	June 30, 2023				September 30, 2022
Investment Classification	Cost		Fair Value		Cost		Fair Value
First lien	$	758,292	$	740,156	$	838,842	$	819,461
First lien in PSSL		210,088		210,088		190,181		190,181
Second lien		1,113		149		1,113		147
Equity		80,903		106,931		65,715		105,031
Equity interests in PSSL		90,038		47,941		81,506		49,434
Total investments		1,140,434		1,105,265		1,177,357		1,164,254
Cash and cash equivalents		59,092		59,092		47,917		47,880
Total investments and cash and cash equivalents	$	1,199,526	$	1,164,357	$	1,225,274	$	1,212,134

The table below describes investments by industry classification and enumerates the percentage, by fair value, of the total portfolio assets (excluding cash and cash equivalents) in such industries:


Industry Classification	June 30, 2023 (1)				September 30, 2022 (1)
Media		8		%		7
Personal Products		8				7
Professional Services		7				9
IT Services		7				6
Commercial Services & Supplies		6				5
Media: Diversified and Production		5				5
Aerospace and Defense		5				4
High Tech Industries		4				5
Capital Equipment		4				4
Healthcare Technology		4				4
Diversified Consumer Services		3				4
Electronic Equipment, Instruments, and Components		3				3
Healthcare Providers and Services		3				3
Construction and Building		3				3
Insurance		3				2
Consumer Services		3				2
Distributors		2				2
Chemicals, Plastics and Rubber		2				2
Healthcare Equipment and Supplies		2				2
Business Services		2				3
Automobiles		2				1
Diversified Financial Services		1				2
Hotels, Restaurants and Leisure		1				1
Energy Equipment and Services		1				1
Financial Services		1				1
Textiles, Apparel and Luxury Goods		1				1
Leisure Products		1				1
Construction & Engineering		1				—
Air Freight and Logistics		1				1
Banking, Finance, Insurance & Real Estate		1				1
Food Products		1				1
Wholesale		1				1
Media: Broadcasting and Subscription		—				2
Building Products		—				1
All Other		3				3
Total		100	%			100	%

(1)

Excludes investments in PSSL.

PennantPark Senior Secured Loan Fund I LLC

In May 2017, we and Kemper formed PSSL, an unconsolidated joint venture. PSSL invests primarily in middle-market and other corporate debt securities consistent with our strategy. PSSL was formed as a Delaware limited liability company. As of June 30, 2023 and September 30, 2022, PSSL had total assets of $848.4 million and $796.8 million, respectively, and its investment portfolio consisted of debt investments in 105 and 95 portfolio companies, respectively. As of June 30, 2023, at fair value, the largest investment in a single portfolio company in PSSL was $17.7 million and the five largest investments totaled $83.7 million. As of September 30, 2022, at fair value, the largest investment in a single portfolio company in PSSL was $19.3 million and the five largest investments totaled $86.9 million. PSSL invests in portfolio companies in the same industries in which we may directly invest.

We and Kemper provide capital to PSSL in the form of first lien secured debt and equity interests. As of June 30, 2023 and September 30, 2022, we and Kemper owned 87.5% and 12.5%, respectively, of each of the outstanding first lien secured debt and equity interests. As of the same dates, our investment in PSSL consisted of first lien secured debt of $210.1 million (zero remaining unfunded) and $190.2 million (additional $19.9 million unfunded), respectively, and equity interests of $90.0 million (zero remaining unfunded) and $81.5 million (additional $8.5 million unfunded), respectively.

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)

presence of two members of the board of directors or investment committee, provided that at least one individual is present that was elected, designated or appointed by each member; (ii) the presence of three members of the board of directors or investment committee, provided that the individual that was elected, designated or appointed by the member with only one individual present shall be entitled to cast two votes on each matter; and (iii) the presence of four members of the board of directors or investment committee shall constitute a quorum, provided that two individuals are present that were elected, designated or appointed by each member.

In May 2022 PSSL entered into a $325.0 million (increased from $225.0 million in May 2022) senior secured revolving credit facility which bears interest at daily simple SOFR plus 260 basis points (including a spread adjustment) with Ally Bank through its wholly-owned subsidiary, PennantPark Senior Secured Loan Facility LLC II, or PSSL Subsidiary II, subject to leverage and borrowing base restrictions.

In January 2021, PSSL completed a $300.7 million debt securitization in the form of a collateralized loan obligation, or the “2032 Asset-Backed Debt”. The 2032 Asset-Backed Debt is secured by a diversified portfolio of PennantPark CLO II, Ltd., a wholly-owned and consolidated subsidiary of PSSL, consisting primarily of middle market loans and participation interests in middle market loans. The 2032 Asset-Backed Debt is scheduled to mature in January 2032. On the closing date of the transaction, in consideration of PSSL’s transfer to PennantPark CLO II, Ltd. of the initial closing date loan portfolio, which included loans distributed to PSSL by certain of its wholly owned subsidiaries and us, PennantPark CLO II, Ltd. transferred to PSSL 100% of the Preferred Shares of PennantPark CLO II, Ltd. and 100% of the Class E Notes issued by PennantPark CLO II, Ltd.

In April 2023, PSSL completed a $297.8 million debt securitization in the form of a collateralized loan obligation, or the “2035 Asset-Backed Debt”. The 2035 Asset-Backed Debt is secured by a diversified portfolio of PennantPark CLO VI, LLC, a wholly-owned and consolidated subsidiary of PSSL, consisting primarily of middle market loans and participation interests in middle market loans. The 2035 Asset-Backed Debt is scheduled to mature in April 2035. On the closing date of the transaction, in consideration of PSSL’s transfer to PennantPark CLO VI, LLC of the initial closing date loan portfolio, which included loans distributed to PSSL by certain of its wholly owned subsidiaries and us, PennantPark CLO VI, LLC transferred to PSSL 100% of the Subordinated Notes CLO VI, LLC

Below is a summary of PSSL’s portfolio at fair value:


($ in thousands)	June 30, 2023			September 30, 2022
Total investments	$	805,217		$	754,722
Weighted average cost yield on income producing investments		12.0	%		9.6	%
Number of portfolio companies in PSSL		105			95
Largest portfolio company investment	$	17,697		$	19,250
Total of five largest portfolio company investments	$	83,746		$	86,872

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)

Below is a listing of PSSL’s individual investments as of June 30, 2023 (Par and $ in thousands):


Issuer Name	Maturity	Industry	Current Coupon			Basis Point Spread Above Index (1)	Par		Cost		Fair Value (2)
First Lien Secured Debt - 1,464.6%
A1 Garage Merger Sub, LLC	12/22/2028	Commercial Services & Supplies		11.84	%	SOFR+650	$	2,940	$	2,885	$	2,910
Ad.net Acquisition, LLC	5/7/2026	Media		11.50	%	SOFR+600		8,820		8,739		8,754
Alpine Acquisition Corp II	11/30/2026	Containers and Packaging		11.07	%	SOFR+600		12,885		12,548		12,370
Altamira Technologies, LLC	7/24/2025	Business Services		10.70	%	SOFR+600		4,841		4,758		4,841
Anteriad, LLC (f/k/a MeritDirect, LLC)	5/23/2024	Media: Advertising, Printing & Publishing		10.89	%	SOFR+550		5,072		5,030		4,945
Anteriad Holdings Inc (fka MeritDirect) March 2023 Lot	5/23/2024	Media: Advertising, Printing & Publishing		11.89	%	SOFR+650		4,938		4,857		4,863
Any Hour Services	7/21/2027	Professional Services		10.77	%	SOFR+525		7,529		7,359		7,322
Apex Service Partners, LLC	7/31/2025	Diversified Consumer Services		10.52	%	SOFR+525		1,002		1,002		997
Apex Service Partners, LLC Term Loan B	7/31/2025	Diversified Consumer Services		10.75	%	SOFR+550		2,187		2,187		2,176
Apex Service Partners, LLC Term Loan C	7/31/2025	Diversified Consumer Services		10.50	%	SOFR+525		11,013		10,966		10,958
Applied Technical Services, LLC	12/29/2026	Commercial Services & Supplies		11.14	%	SOFR+575		9,409		9,301		9,221
Arcfield Acquisition Corp.	3/7/2028	Aerospace and Defense		11.07	%	SOFR+575		4,641		4,559		4,595
Beta Plus Technologies, Inc.	7/1/2029	Business Services		10.99	%	SOFR+525		4,963		4,873		4,541
BioDerm, Inc.	1/31/2028	Healthcare and Pharmaceuticals		11.67	%	SOFR+650		9,000		8,894		8,865
Blackhawk Industrial Distribution, Inc.	9/17/2024	Distributors		11.64	%	SOFR+500		15,171		14,963		14,792
Broder Bros., Co.	12/2/2022	Consumer Products		11.16	%	SOFR+600		2,364		2,364		2,364
Burgess Point Purchaser Corporation	9/26/2029	Automotive		10.45	%	SOFR+525		448		418		424
By Light Professional IT Services, LLC	5/16/2024	High Tech Industries		12.30	%	SOFR+625		13,973		13,947		13,728
Cadence Aerospace, LLC	11/14/2023	Aerospace and Defense		13.91	%	SOFR+850		3,994		3,991		3,994
			(PIK 2.00%)							-
Cartessa Aesthetics, LLC	6/14/2028	Distributors		11.24	%	SOFR+600		9,661		9,528		9,612
CF512, Inc.	8/20/2026	Media		11.50	%	SOFR+600		6,838		6,733		6,769
CHA Holdings, Inc.	4/10/2025	Construction and Engineering		10.00	%	SOFR+450		5,513		5,463		5,513
Challenger Performance Optimization, Inc.	8/31/2023	Business Services		12.01	%	SOFR+675		9,147		9,142		8,827
			(PIK 1.00%)							-
Connatix Buyer, Inc.	7/13/2027	Media		10.65	%	SOFR+550		3,825		3,769		3,672
Crane 1 Services, Inc.	8/16/2027	Commercial Services & Supplies		10.41	%	SOFR+575		2,094		2,071		2,073
Dr. Squatch, LLC	8/31/2027	Personal Products		11.09	%	SOFR+600		14,750		14,518		14,602
DRI Holding Inc.	12/21/2028	Media		10.45	%	SOFR+525		2,634		2,418		2,357
DRS Holdings III, Inc.	11/3/2025	Consumer Goods: Durable		11.63	%	SOFR+575		14,586		14,527		14,193
Duraco Specialty Tapes LLC	6/30/2024	Containers and Packaging		11.75	%	SOFR+550		10,933		10,847		10,747
ECL Entertainment, LLC	5/1/2028	Hotels, Restaurants and Leisure		12.72	%	SOFR+750		7,588		7,567		7,607
EDS Buyer, LLC	1/10/2029	Professional Services		11.49	%	SOFR+625		8,978		8,851		8,753
Electro Rent Corporation	1/17/2024	Electronic Equipment, Instruments, and Components		10.83	%	SOFR+550		2,225		2,190		2,128
Exigo Intermediate II, LLC	3/15/2027	Software		10.95	%	SOFR+575		12,708		12,524		12,453
ETE Intermediate II, LLC - Term Loan	5/29/2029	Diversified Consumer Services		11.69	%	SOFR+650		12,404		12,160		12,031
Fairbanks Morse Defense	6/17/2028	Aerospace and Defense		10.25	%	SOFR+475		10,221		10,167		9,940
Gantech Acquisition Corp.	5/14/2026	IT Services		11.50	%	SOFR+625		14,413		14,241		13,909
Global Holdings InterCo LLC	3/16/2026	Diversified Financial Services		11.76	%	SOFR+600		3,746		3,733		3,549
Graffiti Buyer, Inc.	8/10/2027	Trading Companies & Distributors		11.04	%	SOFR+575		2,351		2,317		2,327
Hancock Roofing and Construction L.L.C.	12/31/2026	Insurance		10.70	%	SOFR+550		2,250		2,214		2,205
Holdco Sands Intermediate, LLC	11/23/2028	Aerospace and Defense		11.21	%	SOFR+600		4,925		4,847		4,876
HW Holdco, LLC	12/10/2024	Media		10.93	%	SOFR+500		3,014		2,983		2,968
Icon Partners III, LP	5/11/2028	Automobiles		9.77	%	SOFR+450		2,310		2,016		1,528
IDC Infusion Services, Inc.	12/30/2026	Healthcare Equipment and Supplies		11.89	%	SOFR+650		9,875		9,685		9,875
Imagine Acquisitionco, LLC	11/15/2027	Software		10.67	%	SOFR+550		9,272		9,085		9,040
Inception Fertility Ventures, LLC	12/7/2023	Healthcare Providers and Services		12.51	%	SOFR+700		16,537		16,309		16,371
Infinity Home Services Holdco, Inc.	12/28/2028	Commercial Services & Supplies		12.09	%	SOFR+685		6,106		5,990		6,106
Integrative Nutrition, LLC	9/29/2023	Diversified Consumer Services		12.39	%	SOFR+450		11,079		11,075		10,525
Integrity Marketing Acquisition, LLC	8/27/2025	Insurance		11.41	%	SOFR+575		5,921		5,860		5,862
ITI Holdings, Inc.	3/3/2028	IT Services		10.58	%	SOFR+550		3,950		3,894		3,851
K2 Pure Solutions NoCal, L.P.	12/20/2023	Chemicals, Plastics and Rubber		13.20	%	SOFR+800		17,697		17,643		17,697
Kinetic Purchaser, LLC	11/10/2027	Personal Products		11.39	%	SOFR+600		16,704		16,372		16,453
Lash OpCo, LLC	2/18/2027	Personal Products		12.13	%	SOFR+700		14,246		14,008		14,033
LAV Gear Holdings, Inc.	10/31/2024	Capital Equipment		11.64	%	SOFR+625		15,168		15,113		14,971
Lightspeed Buyer Inc.	2/3/2026	Healthcare Providers and Services		10.50	%	SOFR+575		12,087		11,924		11,905
LJ Avalon Holdings, LLC	1/31/2030	Environmental Industries		11.51	%	SOFR+665		2,592		2,542		2,540
Loving Tan Intermediate II, Inc.	5/28/2028	Consumer Products		12.26	%	SOFR+700		7,500		7,352		7,350
Lucky Bucks, LLC (4)	7/20/2027	Hotel, Gaming and Leisure		0.00	%			4,489		4,207		1,194
Lucky Bucks. LLC - OpCo DIP Loans	10/20/2023	Hotel, Gaming and Leisure		15.15	%	SOFR+1000		115		102		101
Magenta Buyer, LLC	7/31/2028	Software		10.03	%	SOFR+500		3,014		2,845		2,259
Marketplace Events, LLC - Super Priority First Lien Term Loan	9/30/2025	Media: Diversified and Production		10.43	%	SOFR+525		647		647		647
Marketplace Events, LLC - Super Priority First Lien Unfunded Term Loan	9/30/2025	Media: Diversified and Production						589		-		-
Marketplace Events, LLC	9/30/2026	Media: Diversified and Production		10.43	%	SOFR+525		4,837		3,715		4,837
Mars Acquisition Holdings Corp.	5/14/2026	Media		10.89	%	SOFR+550		11,617		11,494		11,501
MBS Holdings, Inc.	4/16/2027	Internet Software and Services		11.00	%	SOFR+575		7,350		7,255		7,277
MDI Buyer, Inc.	7/25/2028	Chemicals, Plastics and Rubber		11.13	%	SOFR+600		6,396		6,283		6,260

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)


Issuer Name	Maturity		Industry	Current Coupon			Basis Point Spread Above Index (1)		Par / Shares		Cost		Fair Value (2)
Meadowlark Acquirer, LLC	12/10/2027		Professional Services		10.89	%	SOFR+550		$	2,378	$	2,340	$	2,330
Mission Critical Electronics, Inc.	3/28/2024		Capital Equipment		10.39	%	SOFR+500			5,794		5,787		5,748
Municipal Emergency Services, Inc.	9/28/2027		Distributors		10.89	%	SOFR+500			3,439		3,387		3,318
NBH Group LLC	8/19/2026		Healthcare, Education & Childcare		10.44	%	SOFR+525			10,738		10,590		10,631
Neptune Flood Incorporated - Term Loan	5/9/2029		Insurance		11.57	%	SOFR+650			5,235		5,158		5,157
New Milani Group LLC	6/6/2024		Consumer Goods: Non-Durable		10.70	%	SOFR+650			14,250		14,227		14,179
One Stop Mailing, LLC	5/7/2027		Air Freight and Logistics		10.24	%	SOFR+625			15,895		15,620		15,895
ORL Acquisitions, Inc.	9/3/2027		Consumer Finance		10.84	%	SOFR+525			2,228		2,207		2,117
Output Services Group, Inc. (4)	6/27/2026		Business Services		0.00	%		—		7,729		7,689		1,932
Owl Acquisition, LLC	2/4/2028		Professional Services		10.80	%	SOFR+575			3,893		3,830		3,815
Ox Two, LLC	5/18/2026		Construction and Building		12.75	%	SOFR+725			4,345		4,303		4,258
Peaquod Merger Sub, Inc.	12/2/2026		Diversified Financial Services		11.64	%	SOFR+640			11,503		11,282		11,273
PH Beauty Holdings III, Inc.	9/29/2025		Wholesale		10.48	%	SOFR+500			9,518		9,268		7,638
PL Acquisitionco, LLC	11/9/2027		Textiles, Apparel and Luxury Goods		12.20	%	SOFR+650			7,499		7,396		6,824
PlayPower, Inc.	5/8/2026		Consumer Goods: Durable		10.57	%	SOFR+550			2,565		2,500		2,399
Pragmatic Institute, LLC	7/6/2028		Education		11.01	%	SOFR+575			11,166		11,022		10,998
Quantic Electronics, LLC	11/19/2026		Aerospace and Defense		11.24	%	SOFR+600			2,811		2,775		2,768
Quantic Electronics, LLC - Unfunded Term Loan (3)	11/19/2026		Aerospace and Defense							1,104		-		(6	)
Rancho Health MSO, Inc.	12/18/2025		Healthcare Providers and Services		10.94	%	SOFR+575			1,032		1,032		1,032
Reception Purchaser, LLC	2/28/2028		Air Freight and Logistics		11.39	%	SOFR+600			4,938		4,874		4,728
Recteq, LLC	1/29/2026		Leisure Products		12.39	%	SOFR+625			4,888		4,833		4,692
Research Now Group, LLC and Dynata, LLC	12/20/2024		Diversified Consumer Services		10.80	%	SOFR+550			12,647		12,329		8,791
Sales Benchmark Index LLC	1/3/2025		Professional Services		11.44	%	SOFR+600			9,522		9,465		9,475
Sargent & Greenleaf Inc.	12/20/2024		Wholesale		12.77	%	SOFR+750			5,211		5,187		5,133
Schlesinger Global, Inc.	7/14/2025		Business Services		12.20	%	SOFR+700			11,810		11,796		11,368
				(PIK 0.50%)								-
Seaway Buyer, LLC	6/13/2029		Chemicals, Plastics and Rubber		11.09	%	SOFR+605			4,963		4,895		4,838
Sigma Defense Systems, LLC	12/18/2025		Aerospace and Defense		13.87	%	SOFR+850			14,432		14,193		14,179
Smile Brands Inc.	10/14/2025		Healthcare and Pharmaceuticals		9.65	%	SOFR+450			11,826		11,734		10,873
Solutionreach, Inc.	1/17/2024		Healthcare and Pharmaceuticals		10.90	%	SOFR+575			4,582		4,574		4,536
Spendmend Holdings LLC	3/1/2028		Healthcare Technology		10.86	%	SOFR+575			4,122		4,055		4,011
STV Group Incorporated	12/11/2026		Construction and Building		10.45	%	SOFR+525			9,075		9,021		9,030
Summit Behavioral Healthcare, LLC	11/24/2028		Healthcare and Pharmaceuticals		10.24	%	SOFR+475			1,791		1,697		1,782
System Planning and Analysis, Inc. (f/k/a Management Consulting & Research, LLC)	8/16/2027		Aerospace and Defense		11.24	%	SOFR+600			14,775		14,561		14,494
Team Services Group, LLC	11/24/2028		Healthcare and Pharmaceuticals		10.41	%	SOFR+500			347		333		336
Teneo Holdings LLC	7/18/2025		Business Services		10.45	%	SOFR+525			2,268		2,266		2,263
The Aegis Technologies Group, LLC	10/31/2025		Aerospace and Defense		11.86	%	SOFR+600			5,616		5,570		5,504
The Bluebird Group LLC	7/27/2026		Professional Services		12.64	%	SOFR+700			5,427		5,355		5,383
The Vertex Companies, LLC	8/30/2027		Construction and Engineering		10.45	%	SOFR+550			5,536		5,450		5,436
TPC Canada Parent, Inc. and TPC US Parent, LLC	11/24/2025		Consumer Goods: Non-Durable		10.76	%	SOFR+550			8,677		8,569		8,608
TVC Enterprises, LLC	3/26/2026		Diversified Consumer Services		10.95	%	SOFR+600			14,604		14,492		14,385
TWS Acquisition Corporation	6/16/2025		Diversified Consumer Services		11.65	%	SOFR+625			5,468		5,455		5,468
Tyto Athene, LLC (New Issue)	4/1/2028		IT Services		10.54	%	SOFR+550			14,670		14,562		13,555
UBEO, LLC	4/3/2024		Capital Equipment		9.95	%	SOFR+450			17,204		17,162		16,774
Urology Management Holdings, Inc.	6/15/2026		Healthcare and Pharmaceuticals		11.36	%	SOFR+665			6,910		6,783		6,768
Walker Edison Furniture Company LLC	3/31/2027		Wholesale		12.02	%	SOFR+635			3,331		3,331		3,331
Walker Edison Furniture Company LLC - Junior Revolving Credit Facility	3/31/2027		Wholesale		11.44	%	SOFR+625			1,667		1,667		1,667
Walker Edison Furniture Company LLC - DDTL - Unfunded (3)	3/31/2027		Wholesale							333		-		-
Wildcat Buyerco, Inc.	2/27/2026		Electronic Equipment, Instruments, and Components		11.14	%	SOFR+575			10,592		10,511		10,354
Zips Car Wash, LLC	3/1/2024		Automobiles		12.45	%	SOFR+725			16,830		16,714		16,452

Total First Lien Secured Debt												823,714		802,474
Equity Securities - 0.4%
New MPE Holdings, LLC		—	Media: Diversified and Production		—			—		—		—		306
Walker Edison Furniture - Common Equity		—	Wholesale							36		3,393		2,437
Total Equity Securities												3,393		2,743
Total Investments - 1,469.6%												827,107		805,217
Cash and Cash Equivalents - 69.3%
BlackRock Federal FD Institutional 30												37,943		37,943
Total Cash and Cash Equivalents												37,943		37,943
Total Investments and Cash Equivalents —1,329.0%											$	865,050	$	843,161
Liabilities in Excess of Other Assets — (1,229.0)%														(788,371	)
Members' Equity—100.0%													$	54,790

cash a

(1)

Represents floating rate instruments that accrue interest at a predetermined spread relative to an index, typically the applicable LIBOR or “L”, Secured Overnight Financing Rate or "SOFR", or Prime rate or “P”. The spread may change based on the type of rate used. The terms in the Schedule of Investments disclose the actual interest rate in effect as of the reporting period. LIBOR loans are typically indexed to a 30-day, 60-day, 90-day or 180-day LIBOR rate (1M L, 2M L, 3M L, or 6M L, respectively), at the borrower’s option. All securities arpennante subject to a LIBOR or Prime rate floor where a spread is provided, unless noted. The spread provided includes PIK interest and other fee rates, if any.

(2)

Valued based on PSSL’s accounting policy.

(3)

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)

Below is a listing of PSSL’s individual investments as of September 30, 2022 (Par and $ in thousands)


Issuer Name	Maturity	Industry	Current Coupon			Basis Point Spread Above Index (1)	Par		Cost		Fair Value (2)
First Lien Secured Debt - 1,330.4%
Ad.net Acquisition, LLC	5/6/2026	Media		9.67	%	3M L+600	$	8,888	$	8,788	$	8,821
Alpine Acquisition Corp II	11/30/2026	Containers and Packaging		8.22	%	SOFR+600		9,975		9,790		9,576
Altamira Technologies, LLC	7/24/2025	Business Services		10.81	%	3M L+800		5,225		5,113		5,042
American Insulated Glass, LLC	12/21/2023	Building Products		7.79	%	3M L+550		4,883		4,851		4,883
Anteriad, LLC (f/k/a MeritDirect, LLC)	5/23/2024	Media: Advertising, Printing & Publishing		9.67	%	3M L+550		5,284		5,208		5,284
Any Hour Services	7/21/2027	Professional Services		8.33	%	3M L+525		3,510		3,441		3,440
Apex Service Partners, LLC	7/31/2025	Diversified Consumer Services		6.72	%	1M L+525		1,010		1,010		1,005
Apex Service Partners, LLC Term Loan B	7/31/2025	Diversified Consumer Services		9.67	%	3M L+625		2,202		2,202		2,191
Apex Service Partners, LLC Term Loan C	7/31/2025	Diversified Consumer Services		7.86	%	3M L+525		11,115		11,050		11,059
Applied Technical Services, LLC	12/29/2026	Commercial Services & Supplies		8.76	%	3M L+575		8,421		8,317		8,211
Arcfield Acquisition Corp.	3/7/2028	Aerospace and Defense		8.99	%	SOFR + 575		4,677		4,588		4,583
Beta Plus Technologies, Inc.	7/1/2029	Business Services		7.76	%	SOFR + 525		5,000		4,903		4,900
Blackhawk Industrial Distribution, Inc.	9/17/2024	Distributors		8.62	%	SOFR + 500		15,293		15,102		14,956
Broder Bros., Co.	12/2/2022	Consumer Products		7.39	%	3M L+600		2,417		2,417		2,417
By Light Professional IT Services, LLC	5/16/2024	High Tech Industries		9.20	%	1M L+662		14,822		14,771		14,674
Cadence Aerospace, LLC	11/14/2023	Aerospace and Defense		11.31	%	3M L+325		12,412		12,385		12,288
			(PIK 11.31%)									-
Cartessa Aesthetics, LLC	5/13/2028	Distributors		9.55	%	SOFR + 600		6,484		6,359		6,386
CF512, Inc.	8/20/2026	Media		9.08	%	3M L+600		4,950		4,866		4,876
CHA Holdings, Inc.	4/10/2025	Construction and Engineering		8.17	%	3M L+450		5,557		5,487		5,557
Challenger Performance Optimization, Inc.	8/31/2023	Business Services		9.27	%	1M L+575		9,271		9,247		8,993
			(PIK 1.00%)									-
Connatix Buyer, Inc.	7/13/2027	Media		8.42	%	3M L+550		3,907		3,842		3,810
Crane 1 Services, Inc.	8/16/2027	Commercial Services & Supplies		9.39	%	3M L+575		2,110		2,084		2,089
Douglas Products and Packaging Company LLC	10/19/2022	Chemicals, Plastics and Rubber		8.87	%	3M L+575		8,655		8,653		8,655
Douglas Sewer Intermediate, LLC	10/19/2022	Chemicals, Plastics and Rubber		8.87	%	3M L+575		7,248		7,246		7,248
Dr. Squatch, LLC	8/31/2027	Personal Products		9.42	%	3M L+575		14,862		14,610		14,639
DRI Holding Inc.	12/21/2028	Media		8.37	%	1M L+525		1,832		1,680		1,643
DRS Holdings III, Inc.	11/3/2025	Consumer Goods: Durable		8.87	%	1M L+575		15,179		15,103		14,693
Duraco Specialty Tapes LLC	6/30/2024	Containers and Packaging		8.62	%	1M L+550		10,278		10,151		10,031
ECL Entertainment, LLC	5/1/2028	Hotels, Restaurants and Leisure		10.62	%	3M L+750		2,621		2,598		2,581
ECM Industries, LLC	12/23/2025	Electronic Equipment, Instruments, and Components		7.82	%	3M L+475		4,974		4,974		4,738
Exigo Intermediate II, LLC	3/15/2027	Software		8.87	%	1M L+575		12,935		12,759		12,644
Fairbanks Morse Defense	6/17/2028	Aerospace and Defense		8.39	%	3M L+475		10,300		10,238		9,528
Gantech Acquisition Corp.	5/14/2026	IT Services		9.37	%	1M L+625		14,638		14,427		14,199
Global Holdings InterCo LLC	3/16/2026	Diversified Financial Services		8.74	%	3M L+600		3,904		3,888		3,728
Graffiti Buyer, Inc.	8/10/2027	Trading Companies & Distributors		9.17	%	3M L+550		2,369		2,320		2,274
Hancock Roofing and Construction L.L.C.	12/31/2026	Insurance		8.67	%	1M L+500		2,392		2,347		2,356
Holdco Sands Intermediate, LLC	11/23/2028	Aerospace and Defense		10.17	%	3M L+600		4,963		4,874		4,863
HW Holdco, LLC	12/10/2024	Media		6.00	%	6M L+575		3,052		3,006		3,014
Icon Partners III, LP	5/11/2028	Automobiles		7.55	%	3M L+450		2,327		1,997		1,701
IDC Infusion Services, Inc.	12/30/2026	Healthcare Equipment and Supplies		10.20	%	SOFR+700		9,950		9,833		9,502
Imagine Acquisitionco, LLC	11/15/2027	Software		8.42	%	1M L+550		5,364		5,261		5,230
Inception Fertility Ventures, LLC	12/7/2023	Healthcare Providers and Services		8.55	%	SOFR+700		16,620		16,309		16,454
Integrative Nutrition, LLC	9/29/2023	Diversified Consumer Services		8.42	%	3M L+475		11,187		11,168		10,963
Integrity Marketing Acquisition, LLC	8/27/2025	Insurance		7.58	%	1M L+550		5,966		5,885		5,906
ITI Holdings, Inc.	3/3/2028	IT Services		8.67	%	SOFR + 550		3,980		3,917		3,900
K2 Pure Solutions NoCal, L.P.	12/20/2023	Chemicals, Plastics and Rubber		11.12	%	1M L+800		19,250		19,103		19,250
Kinetic Purchaser, LLC	11/10/2027	Personal Products		9.67	%	3M L+600		16,830		16,451		16,494
Lash OpCo, LLC	2/18/2027	Personal Products		11.17	%	3M L+700		14,355		14,074		14,068
LAV Gear Holdings, Inc.	10/31/2024	Capital Equipment		9.70	%	3M L+550		10,578		10,539		10,335
			(PIK 2.00%)									-
Lightspeed Buyer Inc.	2/3/2026	Healthcare Providers and Services		9.04	%	3M L+575		10,598		10,428		10,254
Lucky Bucks, LLC	7/20/2027	Hotel, Gaming and Leisure		8.31	%	3M L+550		4,331		4,258		3,183
Magenta Buyer, LLC	7/31/2028	Software		7.87	%	1M L+475		2,695		2,539		2,425
Marketplace Events, LLC - Super Priority First Lien Term Loan	9/30/2025	Media: Diversified and Production		8.19	%	1M L+525		647		647		647
Marketplace Events, LLC - Super Priority First Lien Unfunded Term Loan (3)	9/30/2025	Media: Diversified and Production						589		-		-
Marketplace Events, LLC	9/30/2026	Media: Diversified and Production		8.19	%	1M L+525		4,837		3,527		4,837
Mars Acquisition Holdings Corp.	5/14/2026	Media		8.62	%	1M L+550		9,900		9,782		9,851
MBS Holdings, Inc.	4/16/2027	Internet Software and Services		8.56	%	3M L+575		7,406		7,296		7,332
MDI Buyer, Inc.	7/25/2028	Chemicals, Plastics and Rubber		8.98	%	3M L+500		5,000		4,902		4,900
Meadowlark Acquirer, LLC	12/10/2027	Professional Services		9.17	%	3M L+650		2,396		2,353		2,372
Mission Critical Electronics, Inc.	3/28/2024	Capital Equipment		8.70	%	SOFR+500		5,829		5,817		5,759
Municipal Emergency Services, Inc.	9/28/2027	Distributors		8.67	%	3M L+500		3,465		3,405		3,264
NBH Group LLC	8/19/2026	Healthcare, Education & Childcare		7.80	%	1M L+550		10,820		10,641		10,820
New Milani Group LLC	6/6/2024	Consumer Goods: Non-Durable		7.75	%	3M L+500		14,363		14,319		14,111
OIS Management Services, LLC	7/9/2026	Healthcare Equipment and Supplies		8.40	%	SOFR+475		5,060		4,991		5,060
One Stop Mailing, LLC	5/7/2027	Air Freight and Logistics		9.37	%	1M L+625		14,598		14,353		14,160
Output Services Group, Inc.	3/27/2024	Business Services		9.80	%	3M L+425		7,682		7,676		5,838
Owl Acquisition, LLC	2/4/2028	Professional Services		8.41	%	3M L+575		3,990		3,918		3,890
Ox Two, LLC	5/18/2026	Construction and Building		9.81	%	3M L+600		4,925		4,866		4,827
PH Beauty Holdings III, Inc.	9/29/2025	Wholesale		8.07	%	1M L+500		9,593		9,234		7,674
PL Acquisitionco, LLC	11/9/2027	Textiles, Apparel and Luxury Goods		9.62	%	1M L+650		8,238		8,111		8,032
Plant Health Intermediate, Inc.	10/19/2022	Chemicals, Plastics and Rubber		8.87	%	3M L+575		1,562		1,561		1,562
PlayPower, Inc.	5/8/2026	Consumer Goods: Durable		9.17	%	3M L+550		2,580		2,500		2,309
Pragmatic Institute, LLC	7/6/2028	Education		9.30	%	SOFR+575		11,250		11,056		11,138
Quantic Electronics, LLC	11/19/2026	Aerospace and Defense		8.41	%	1M L+625		4,845		4,755		4,729
Quantic Electronics, LLC - Unfunded Term Loan (3)	11/19/2026	Aerospace and Defense						1,888		-		-
Reception Purchaser, LLC	2/28/2028	Air Freight and Logistics		9.13	%	SOFR+600		4,975		4,904		4,751
Recteq, LLC	1/29/2026	Leisure Products		9.92	%	3M L+600		4,925		4,856		4,753
Research Now Group, LLC and Dynata, LLC	12/20/2024	Diversified Consumer Services		8.84	%	3M L+550		12,564		12,354		11,291

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)


Issuer Name	Maturity		Industry	Current Coupon			Basis Point Spread Above Index (1)		Par / Shares		Cost		Fair Value (2)
Sales Benchmark Index LLC	1/3/2025		Professional Services		9.67	%	3M L+600		$	5,013	$	4,960	$	4,963
Sargent & Greenleaf Inc.	12/20/2024		Wholesale		8.62	%	3M L+550			5,240		5,202		5,187
Schlesinger Global, Inc.	7/14/2025		Business Services		10.27	%	SOFR+500			11,847		11,829		11,551
				(PIK 0.50%)										-
Sigma Defense Systems, LLC	12/18/2025		Aerospace and Defense		12.17	%	1M L+850			14,716		14,411		14,421
Smile Brands Inc.	10/14/2025		Healthcare and Pharmaceuticals		7.05	%	3M L+450			11,917		11,807		11,470
Solutionreach, Inc.	1/17/2024		Healthcare and Pharmaceuticals		8.87	%	1M L+575			5,647		5,625		5,511
Spendmend Holdings LLC	3/1/2028		Healthcare Technology		8.63	%	SOFR+575			2,956		2,916		2,873
STV Group Incorporated	12/11/2026		Construction and Building		8.37	%	3M L+525			9,075		9,011		8,985
System Planning and Analysis, Inc. (f/k/a Management Consulting & Research, LLC)	8/16/2027		Aerospace and Defense		8.73	%	SOFR+600			14,888		14,623		14,649
Teneo Holdings LLC	7/18/2025		Business Services		8.38	%	3M L+625			2,786		2,757		2,623
The Aegis Technologies Group, LLC	10/31/2025		Aerospace and Defense		9.55	%	3M L+500			5,659		5,600		5,603
The Bluebird Group LLC	7/27/2026		Professional Services		10.67	%	1M L+700			1,707		1,679		1,724
The Infosoft Group, LLC	9/16/2024		Media: Broadcasting and Subscription		8.47	%	3M L+525			12,957		12,952		12,859
The Vertex Companies, LLC	8/30/2027		Construction and Engineering		8.62	%	1M L+550			5,578		5,479		5,550
TPC Canada Parent, Inc. and TPC US Parent, LLC	11/24/2025		Consumer Goods: Non-Durable		8.30	%	3M L+475			8,744		8,604		8,482
TVC Enterprises, LLC	3/26/2026		Diversified Consumer Services		8.87	%	3M L+550			14,952		14,871		14,578
TWS Acquisition Corporation	6/16/2025		Diversified Consumer Services		8.76	%	3M L+625			5,468		5,450		5,441
Tyto Athene, LLC (New Issue)	4/1/2028		IT Services		7.76	%	3M L+550			15,550		15,421		14,446
UBEO, LLC	4/3/2024		Capital Equipment		8.17	%	3M L+450			17,390		17,305		17,129
Unique Indoor Comfort, LLC	5/24/2027		Home and Office Furnishings, Housewares		8.95	%	SOFR+525			4,975		4,880		4,866
Walker Edison Furniture Company LLC	3/31/2027		Wholesale		12.42	%	3M L+575			12,684		12,438		8,473
				(PIK 3.0%)										-
Wildcat Buyerco, Inc.	2/27/2026		Electronic Equipment, Instruments, and Components		9.45	%	SOFR+550			8,546		8,506		8,261
Zips Car Wash, LLC	3/1/2024		Automobiles		10.35	%	3M L+725			16,957		16,711		16,536

Total First Lien Secured Debt												767,316		751,628
Second Lien Secured Debt - 5.2%


Inventus Power, Inc.	9/29/2024		Consumer Goods: Durable		12.17	%	3M L+850			3,000		2,963		2,955
Total Second Lien Secured Debt												2,963		2,955
Equity Securities - 0.3%
New MPE Holdings, LLC		—	Media: Diversified and Production		—			—		—		—		139
Total Equity Securities												—		139
Total Investments - 1,335.9%												770,280		754,722
Cash and Cash Equivalents - 59.7%
BlackRock Federal FD Institutional 30												33,725		33,705
Total Cash and Cash Equivalents												33,725		33,705
Total Investments and Cash Equivalents —1,395.6%											$	804,005	$	788,427
Liabilities in Excess of Other Assets — (1,295.6)%														(731,931	)
Members' Equity—100.0%													$	56,496

(1)

Represents floating rate instruments that accrue interest at a predetermined spread relative to an index, typically the applicable LIBOR or “L”, Secured Overnight Financing Rate or "SOFR", or Prime rate or “P”. The spread may change based on the type of rate used. The terms in the Schedule of Investments disclose the actual interest rate in effect as of the reporting period. LIBOR loans are typically indexed to a 30-day, 60-day, 90-day or 180-day LIBOR rate (1M L, 2M L, 3M L, or 6M L, respectively), at the borrower’s option. All securities are subject to a LIBOR or Prime rate floor where a spread is provided, unless noted. The spread provided includes PIK interest and other fee rates, if any.

(2)

Valued based on PSSL’s accounting policy.

(3)

Below are the consolidated statements of assets and liabilities for PSSL ($ in thousands):



		June 30, 2023
		(Unaudited)			September 30, 2022
Assets
Investments at fair value (amortized cost—$827,107 and $770,280, respectively)	$		805,217	$		754,722
Cash and cash equivalents (cost—$37,943 and $33,725, respectively)			37,943			33,705
Interest receivable			4,556			3,025
Receivable for investment sold			—			3,637
Prepaid expenses and other assets			724			1,722
Total assets			848,440			796,811
Liabilities
Credit facility payable			41,300			259,500
2032 Asset-backed debt, net (par—$246,000)			243,821			243,365
2035 Asset-backed debt, net (par—$246,000)			243,370			—
Notes payable to members			240,100			217,350
Payable for investments purchased			8,950			10,414
Interest payable on notes to members			6,363			4,719
Interest payable on Credit facility and asset backed debt			9,000			3,817
Accrued expenses			746			1,150
Total liabilities			793,650			740,315
Commitments and contingencies(1)
Members' equity			54,790			56,496
Total liabilities and members' equity	$		848,440	$		796,811

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)

(1)

As of June 30, 2023 and September 30, 2022, PSSL had unfunded commitments to fund investments of $2.0 million and $2.5 million, respectively.

Below are the consolidated statements of operations for PSSL ($ in thousands):



	Three months ended June 30,						Nine months ended June 30,
	2023			2022			2023			2022
Investment income:
Interest	$	23,373		$	13,535		$	64,282		$	36,467
Other income		373			65			930			1,084
Total investment income		23,746			13,600			65,212			37,551
Expenses:
Interest and expense on credit facility and asset-backed debt		12,094			4,667			30,413			11,514
Interest expense on notes to members		7,986			4,510			22,159			11,704
Administration fees		529			300			1,553			900
General and administrative expenses		193			289			773			867
Total expenses		20,802			9,766			54,898			24,985
Net investment income		2,944			3,834			10,314			12,566
Realized and unrealized gain (loss) on investments and credit facility foreign currency translation:
Net realized gain (loss) on:
Investments		93			(24	)		(5,852	)		(14,956	)
Credit facility foreign currency translation		—			—			(10	)		—
Net change in unrealized appreciation (depreciation) on:
Investments		(4,442	)		(5,232	)		(6,308	)		6,325
Net change in unrealized appreciation (depreciation) on investments and credit facility foreign currency translation		(4,442	)		(5,232	)		(6,308	)		6,325
Net realized and unrealized gain (loss) from investments and credit facility foreign currency translation		(4,349	)		(5,256	)		(12,170	)		(8,631	)
Net increase (decrease) in members' equity resulting from operations	$	(1,405	)	$	(1,422	)	$	(1,856	)	$	3,935

(*) No management or incentive fees are payable by PSSL. If any fees were to be charged, they would be separately disclosed in the Statement of Operations.

5. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value, as defined under ASC 820, is the price that we would receive upon selling an investment or pay to transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment or liability. ASC 820 emphasizes that valuation techniques maximize the use of observable market inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing an asset or liability based on market data obtained from sources independent of us. Unobservable inputs reflect the assumptions market participants would use in pricing an asset or liability based on the best information available to us on the reporting period date.

ASC 820 classifies the inputs used to measure these fair values into the following hierarchies:


Level 1:	Inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities, accessible by us at the measurement date.
Level 2:	Inputs that are quoted prices for similar assets or liabilities in active markets, or that are quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term, if applicable, of the financial instrument.
Level 3:	Inputs that are unobservable for an asset or liability because they are based on our own assumptions about how market participants would price the asset or liability.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Generally, most of our investments, our 2031 Asset-Backed Debt and our Credit Facility are classified as Level 3. Our 2026 Notes are classified as Level 2 as they are financial instruments with readily observable market inputs. Our 2023 Notes are classified as Level 1, as they were valued using the closing price from the primary exchange. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and those differences may be material.

The inputs into the determination of fair value may require significant management judgment or estimation. Even if observable market data is available, such information may be the result of consensus pricing information, disorderly transactions or broker quotes which include a disclaimer that the broker would not be held to such a price in an actual transaction. The non-binding nature of consensus pricing and/or quotes accompanied by disclaimer would result in classification as Level 3 information, assuming no additional corroborating evidence were available. Corroborating evidence that would result in classifying these non-binding broker/dealer bids as a Level 2 asset includes observable orderly market-based transactions for the same or similar assets or other relevant observable market-based inputs that may be used in pricing an asset.

Our investments are generally structured as floating rate loans, mainly first lien secured debt, but also may include second lien secured debt, subordinated debt and equity investments. The transaction price, excluding transaction costs, is typically the best estimate of fair value at inception. Ongoing reviews by our Investment Adviser and independent valuation firms are based on an assessment of each underlying investment, incorporating valuations that consider the evaluation of financing and sale transactions with third parties, expected cash flows and market-based information including comparable transactions, performance multiples and yields, among other factors. These non-public investments valued using unobservable inputs are included in Level 3 of the fair value hierarchy.

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)

A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in our ability to observe valuation inputs may result in a reclassification for certain financial assets or liabilities.

In addition to using the above inputs to value cash equivalents, investments, our 2023 Notes, our 2026 Notes, our 2031 Asset-Backed Debt and our Credit Facility, we employ the valuation policy approved by our board of directors that is consistent with ASC 820. Consistent with our valuation policy, we evaluate the source of inputs, including any markets in which our investments are trading, in determining fair value. See Note 2.

As outlined in the table below, some of our Level 3 investments using a market approach valuation technique are valued using the average of the bids from brokers or dealers. The bids include a disclaimer, may not have corroborating evidence, may be the result of a disorderly transaction and may be the result of consensus pricing. The Investment Adviser assesses the source and reliability of bids from brokers or dealers. If the board of directors has a bona fide reason to believe any such bids do not reflect the fair value of an investment, it may independently value such investment by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available. In accordance with ASC 820, we do not categorize any investments for which fair value is measured using the net asset value per share as a practical expedient within the fair value hierarchy.

The remainder of our investment portfolio and our long-term Credit Facility are valued using a market comparable or an enterprise market value technique. With respect to investments for which there is no readily available market value, the factors that the board of directors may take into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments, its earnings and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly traded securities, discounted for lack of marketability and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the pricing indicated by the external event, excluding transaction costs, is used to corroborate the valuation. When using earnings multiples to value a portfolio company, the multiple used requires the use of judgment and estimates in determining how a market participant would price such an asset. These non-public investments using unobservable inputs are included in Level 3 of the fair value hierarchy. Generally, the sensitivity of unobservable inputs or combination of inputs such as industry comparable companies, market outlook, consistency, discount rates and reliability of earnings and prospects for growth, or lack thereof, affects the multiple used in pricing an investment. As a result, any change in any one of those factors may have a significant impact on the valuation of an investment. Generally, an increase in a market yield will result in a decrease in the valuation of a debt investment, while a decrease in a market yield will have the opposite effect. Generally, an increase in an earnings before interest, taxes, depreciation and amortization, or EBITDA, multiple will result in an increase in the valuation of an investment, while a decrease in an EBITDA multiple will have the opposite effect.

Our Level 3 valuation techniques, unobservable inputs and ranges were categorized as follows for ASC 820 purposes ($ in thousands):


Asset Category	Fair value at June 30, 2023		Valuation Technique	Unobservable Input	Range of Input (Weighted Average) (1)
First lien	$	52,268	Market Comparable	Broker/Dealer bids or quotes	N/A
First lien		897,976	Market Comparable	Market yield	8.8% - 18.5% (11.6%)
Second lien		149	Market Comparable	Market yield	14.2%
Equity		97,211	Enterprise Market Value	EBITDA multiple	.3x - 18.8x (11.9x)
Equity		818	Enterprise Market Value	DLOM(2)	21.7%
Total Level 3 investments	$	1,048,422
Debt Category
Long-Term Credit Facility	$	63,917	Market Comparable	Market Yield	2.5%

____________________________________________

(1)

The weighted averages disclosed in the table above were weighted by their relative fair value.

(2)

DLOM is defined as discount for lack of marketability.


Asset Category	Fair value at September 30, 2022		Valuation Technique	Unobservable Input	Range of Input (Weighted Average) (1)
First lien	$	70,363	Market Comparable	Broker/Dealer bids or quotes	N/A
First lien		930,806	Market Comparable	Market Yield	8.2% - 21% (10.9%)
First lien		8,473	Enterprise Market Value	EBITDA multiple	14.0x
Second lien		147	Market Comparable	Market Yield	14.7%
Equity		89,906	Enterprise Market Value	EBITDA multiple	3.3x - 21.4x (12.5x)
Equity		5,232	Enterprise Market Value	DLOM(2)	11.8%
Total Level 3 investments	$	1,104,927
Debt Category
Long-Term Credit Facility	$	167,563	Market Comparable	Market Yield	2.5%

(1)

The weighted averages disclosed in the table above were weighted by their relative fair value.

(2)

DLOM is defined as discount for lack of marketability.

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)

Our investments, cash and cash equivalents, Credit Facility or Prior Credit Facility, as applicable, 2023 Notes, 2026 Notes and 2031 Asset-Backed Debt were categorized as follows in the fair value hierarchy for ASC 820 purposes ($ in thousands):


	Fair Value at June 30, 2023
Description	Fair Value		Level 1		Level 2		Level 3		Measured at Net Asset Value (1)
First lien	$	950,244	$	—	$	—	$	950,244	$	—
Second lien		149		—		—		149		—
Equity		154,872		—		—		98,029		56,843
Total investments		1,105,265		—		—		1,048,422		56,843
Cash and cash equivalents		43,994		43,994		—		—		—
Total investments and cash and cash equivalents	$	1,149,259	$	43,994	$	—	$	1,048,422	$	56,843
Credit Facility payable	$	63,917	$	—	$	—	$	63,917	$	—
2023 Notes payable		79,260		79,260		—		—		—
2026 Notes payable (2)		182,860		—		182,860		—		—
2031 Asset-Backed Debt(2)		226,601		—		—		226,601		—
Total debt	$	552,638	$	79,260	$	182,860	$	290,518	$	—

(1)

In accordance with ASC Subtopic 820-10, Fair Value Measurements and Disclosures, or ASC 820-10, our equity investment in PSSL and PTSF are measured using the net asset value per share (or its equivalent) as a practical expedient for fair value, and thus have not been classified in the fair value hierarchy.

(2)

We elected not to apply the fair value option allowed by ASC 825-10 to the 2026 Notes and the 2031 Asset-Backed Debt and thus the balance reported in the Consolidated Statement of Assets and Liabilities represents the carrying value, which approximates the fair value.


	Fair Value at September 30, 2022
Description	Fair Value		Level 1		Level 2		Level 3		Measured at Net Asset Value (1)
First lien	$	1,009,642	$	—	$	—	$	1,009,642	$	—
Second lien		147		—		—		147		—
Equity		154,465		—		—		95,138		59,327
Total investments		1,164,254		—		—		1,104,927		59,327
Cash and cash equivalents		47,880		47,880		—		—		—
Total investments and cash and cash equivalents	$	1,212,134	$	47,880	$	—	$	1,104,927	$	59,327
Credit Facility payable	$	167,563	$	—	$	—	$	167,563	$	—
2023 Notes payable		96,812		96,812		—		—		—
2026 Notes payable (2)		182,276		—		182,276		—		—
2031 Asset-Backed Debt(2)		226,128		—		—		226,128		—
Total debt	$	672,779	$	96,812	$	182,276	$	393,691	$	—

(1)

In accordance with ASC Subtopic 820-10, Fair Value Measurements and Disclosures, or ASC 820-10, our equity investment in PSSL and PTSF is measured using the net asset value per share (or its equivalent) as a practical expedient for fair value, and thus has not been classified in the fair value hierarchy.

(2)

The tables below show a reconciliation of the beginning and ending balances for fair valued investments measured using significant unobservable inputs (Level 3)

($ in thousands):


	Nine Months Ended June 30,2023
Description	First Lien			Second lien, subordinated debt and equity investments			Totals
Beginning Balance	$	1,009,642		$	95,285		$	1,104,927
Net realized gain (loss)		(16,268	)		2,203			(14,065	)
Net change in unrealized depreciation		1,245			(12,296	)		(11,051	)
Purchases, PIK interest, net discount accretion and non-cash exchanges		208,709			17,977			226,686
Sales, repayments and non-cash exchanges		(253,084	)		(4,991	)		(258,075	)
Transfers in and/or out of Level 3		—			—			—
Ending Balance	$	950,244		$	98,178		$	1,048,422
Net change in unrealized depreciation reported within the net change in unrealized depreciation on investments in our Consolidated Statements of Operations attributable to our Level 3 assets still held at the reporting date.	$	(13,491	)	$	(9,234	)	$	(22,725	)

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)


	Nine Months Ended June 30,2022
Description	First Lien			Second lien, subordinated debt and equity investments			Totals
Beginning Balance	$	934,418		$	86,771		$	1,021,189
Net realized losses		1,124			(13,106	)		(11,982	)
Net change in unrealized depreciation		(7,553	)		12,411			4,858
Purchases, PIK interest, net discount accretion and non-cash exchanges		539,028			25,045			564,073
Sales, repayments and non-cash exchanges		(404,635	)		(16,368	)		(421,003	)
Transfers in and/or out of Level 3		—			—			—
Ending Balance	$	1,062,382		$	94,753		$	1,157,135
Net change in unrealized depreciation reported within the net change in unrealized depreciation on investments in our Consolidated Statements of Operations attributable to our Level 3 assets still held at the reporting date.	$	(5,627	)	$	12,170		$	6,543

The table below shows a reconciliation of the beginning and ending balances for liabilities recognized at fair value and measured using significant unobservable inputs (Level 3)($ in thousands):


	Nine months ended June 30,
Long-Term Credit Facility	2023			2022
Beginning Balance (cost – $169,654 and $219,400, respectively)	$	167,563		$	218,852
Net change in unrealized (depreciation) appreciation included in earnings		1,607			(5,663	)
Borrowings		65,000			147,254
Repayments		(169,709	)		(107,000	)
Net realized (gain) loss		(544	)		—
Transfers in and/or out of Level 3		—			—
Ending Balance (cost – $64,400 and $259,277, respectively)	$	63,917		$	253,443

As of June 30, 2023, we did not have any outstanding non-U.S. dollar borrowings on our Credit Facility.

As of September 30, 2022 we had outstanding non-U.S. dollar borrowings on our Credit Facility. Net change in fair value from currency translation on outstanding borrowings is listed below ($ in thousands):


Foreign Currency	Amount Borrowed		Borrowing Cost		Current Value		Reset Date	Change in Fair Value
Australian Dollar	$	10,000	$	7,254	$	6,430	10/1/22	$	(824	)

Generally, the carrying value of our consolidated financial liabilities approximates fair value. We have adopted the principles under ASC Subtopic 825-10, Financial Instruments, or ASC 825-10, which provides companies with an option to report selected financial assets and liabilities at fair value, and made an irrevocable election to apply ASC 825-10 to the Credit Facility and the 2023 Notes. We elected to use the fair value option for the Credit Facility and the 2023 Notes to align the measurement attributes of both our assets and liabilities while mitigating volatility in earnings from using different measurement attributes. Due to that election and in accordance with GAAP, we did not incur any expenses relating to amendment costs on the Credit Facility during both the three and nine months ended June 30, 2023 and 2022. ASC 825-10 establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities and to more easily understand the effect on earnings of a company’s choice to use fair value. ASC 825-10 also requires entities to display the fair value of the selected assets and liabilities on the face of the Consolidated Statements of Assets and Liabilities and changes in fair value of the Credit Facility and the 2023 Notes are reported in our Consolidated Statements of Operations. We elected not to apply ASC 825-10 to any other financial assets or liabilities, including our 2026 Notes and the 2031 Asset-Backed Debt.

For the three and nine months ended June 30, 2023, the Credit Facility and the 2023 Notes had a net change in unrealized appreciation (depreciation) of $(5.8) million and $(4.8) million, respectively. For the three and nine months ended June 30, 2022, the Credit Facility and the 2023 Notes had a net change in unrealized appreciation (depreciation) of less than $(0.1) million and $(1.3) million, respectively. As of June 30, 2023 and September 30, 2022, the net unrealized appreciation (depreciation) on the Credit Facility and the 2023 Notes totaled $2.6 million and $(1.5) million, respectively. We use a nationally recognized independent valuation service to measure the fair value of the Credit Facility in a manner consistent with the valuation process that our board of directors uses to value our investments. Our 2023 Notes trade on the TASE and we use the closing price on the exchange to determine the fair value.

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)

6. TRANSACTIONS WITH AFFILIATED COMPANIES

An affiliated portfolio company is a company in which we have ownership of 5% or more of its voting securities. A portfolio company is generally presumed to be a non-controlled affiliate when we own at least 5% but less than 25% of its voting securities and a controlled affiliate generally when we own more than 25% of its voting securities. Transactions related to our funded investments with both controlled and non-controlled affiliates for the nine months ended June 30, 2023 were as follows ($ in thousands):


Name of Investment	Fair Value at September 30, 2022	Gross Additions	Sale of/ Distribution from Affiliates	Net Change in Unrealized Appreciation (Depreciation)	Fair Value at June 30, 2023	Interest Income	Dividend/ Other Income	Net Realized Gains (Losses)
Controlled Affiliates
Marketplace Events, LLC	$31,389	$1,041	$—	$198	$32,628	$3,312	$—	$—
PennantPark Senior Secured
Loan Fund I LLC *	239,614	28,438	—	(10,023)	258,029	19,389	8,400	—
Total Controlled Affiliates	$271,003	$29,479	$—	$(9,825)	$290,657	$22,701	$8,400	$—

* We and Kemper are the members of PSSL, a joint venture formed as a Delaware limited liability company that is not consolidated by us for financial reporting purposes. The members of PSSL make investments in PSSL in the form of first lien secured debt and equity interests, and all portfolio and other material decisions regarding PSSL must be submitted to PSSL’s board of directors or investment committee, both of which are comprised of two members appointed by each of us and Kemper. Because management of PSSL is shared equally between us and Kemper, we do not believe we control PSSL for purposes of the 1940 Act or otherwise.

7. CHANGE IN NET ASSETS FROM OPERATIONS PER COMMON SHARE

The following information sets forth the computation of basic and diluted per share net increase (decrease) in net assets resulting from operations

($ in thousands, except per share data):


	Three Months Ended June 30,					Nine Months Ended June 30,
	2023		2022			2023		2022
Numerator for net increase in net assets resulting from operations	$	5,593	$	(5,085	)	$	11,215	$	16,592
Denominator for basic and diluted weighted average shares		50,799,353		41,334,234			48,220,835		39,940,832
Basic and diluted net increase in net assets per share resulting from operations	$	0.11	$	(0.12	)	$	0.23	$	0.42

8. CASH AND CASH EQUIVALENTS

Cash equivalents represent cash in money market funds pending investment in longer-term portfolio holdings. Our portfolio may consist of temporary investments in U.S. Treasury Bills (of varying maturities), repurchase agreements, money market funds or repurchase agreement-like treasury securities. These temporary investments with original maturities of 90 days or less are deemed cash equivalents and are included in the Consolidated Schedule of Investments. At the end of each fiscal quarter, we may take proactive steps to preserve investment flexibility for the next quarter by investing in cash equivalents, which is dependent upon the composition of our total assets at quarter-end. We may accomplish this in several ways, including purchasing U.S. Treasury Bills and closing out positions on a net cash basis after quarter-end, temporarily drawing down on the Credit Facility, or utilizing repurchase agreements or other balance sheet transactions as are deemed appropriate for this purpose. These amounts are excluded from average adjusted gross assets for purposes of computing the Investment Adviser’s management fee. U.S. Treasury Bills with maturities greater than 60 days from the time of purchase are valued consistent with our valuation policy. As of June 30, 2023 and September 30, 2022, cash and cash equivalents in the amounts of $59.1 million of which $44.0 million consisted of money market funds and $47.9 million of money market funds at fair value, respectively.

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)

9. FINANCIAL HIGHLIGHTS

Below are the financial highlights ($ in thousands, except per share data):


	Nine Months Ended June 30,
	2023			2022
Per Share Data:
Net asset value, beginning of period	$	11.62		$	12.62
Net investment income (1)		1.02			0.90
Net change in realized and unrealized (loss) gain (1)		(0.79	)		(0.48	)
Net increase in net assets resulting from operations (1)		0.23			0.42
Distributions to stockholders (1), (2)		(0.87	)		(0.86	)
Accretive (Dilutive) effect of common stock issuance		(0.02	)		0.03
Net asset value, end of period	$	10.96		$	12.21
Per share market value, end of period	$	10.65		$	11.48
Total return *(3)		20.17	%	(4.08%)
Shares outstanding at end of period		55,537,299			41,345,638
Ratios** / Supplemental Data:
Ratio of operating expenses to average net assets** (4)		6.04	%		5.33	%
Ratio of debt related expenses to average net assets (5)		7.20	%		5.50	%
Ratio of total expenses to average net assets** (5)		13.24	%		10.83	%
Ratio of net investment income to average net assets** (5)		11.73	%		9.54	%
Net assets at end of period	$	608,427		$	504,913
Weighted average debt outstanding	$	649,677		$	762,376
Weighted average debt per share (1)	$	13.47		$	19.09
Asset coverage per unit (6)	$	2,097		$	1,656
Portfolio turnover rate*		17.67	%		33.07	%

* Not annualized for periods less than one year.

** Re-occuring investment income and expenses included in these ratios are annualized for periods less than one year

(1)

Based on the weighted average shares outstanding for the respective periods.

(2)

The tax status of distributions is calculated in accordance with income tax regulations, which may differ from amounts determined under GAAP, and reported on Form 1099-DIV each calendar year.

(3)

Based on the change in market price per share during the periods and assumes distributions, if any, are reinvested.

(4)

Excludes debt-related costs.

(5)

Includes interest and expenses on debt (annualized) as well as Credit Facility amendment and debt issuance costs, if any, (not annualized).

(6)

The asset coverage ratio for a class of senior securities representing indebtedness is calculated on our consolidated total assets, less all liabilities and indebtedness not represented by senior securities, divided by the senior securities representing indebtedness at par (changed from fair value). This asset coverage ratio is multiplied by $1,000 to determine the asset coverage per unit.

10. DEBT

The annualized weighted average cost of debt for the nine months ended June 30, 2023 and 2022, inclusive of the fee on the undrawn commitment on the Credit Facility or the Prior Credit Facility, as applicable, amendment costs and debt issuance costs, was 6.1% and 3.7%, respectively. As of June 30, 2023, in accordance with the 1940 Act, with certain limited exceptions, we are only allowed to borrow amounts such that we are in compliance with a 150% asset coverage ratio requirement after such borrowing.

On April 5, 2018, our board of directors approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the Consolidated Appropriations Act of 2018 (which includes the Small Business Credit Availability Act, or SBCAA). As a result, the asset coverage requirement applicable to us for senior securities was reduced from 200% (i.e., $1 of debt outstanding for each $1 of equity) to 150% (i.e., $2 of debt outstanding for each $1 of equity), effective as of April 5, 2019, subject to compliance with certain disclosure requirements. As of June 30, 2023 and September 30, 2022, our asset coverage ratio, as computed in accordance with the 1940 Act, was 210% and 178%, respectively.

Credit Facility

Funding I’s multi-currency Credit Facility with affiliates of Truist Bank (formerly SunTrust Bank), or the Lenders, was $366.0 million as of June 30, 2023, subject to satisfaction of certain conditions and the regulatory restrictions that the 1940 Act imposes on us as a BDC, has an interest rate spread above SOFR (or an alternative risk-free floating interest rate index) of 236 basis points, a maturity date of August 2026 and a revolving period that ends in August 2024. As of June 30, 2023 and September 30, 2022, Funding I had $64.4 million and $169.7 million of outstanding borrowings under the Credit Facility, respectively. The Credit Facility had a weighted average interest rate of 7.5% and 4.9%, exclusive of the fee on undrawn commitments as of June 30, 2023 and September 30, 2022, respectively. As of June 30, 2023 and September 30, 2022, we had $301.6 million and $196.3 million of unused borrowing capacity under the Credit Facility, respectively, subject to leverage and borrowing base restrictions.

During the revolving period, the Credit Facility bears interest at SOFR (or an alternative risk-free floating interest rate index) plus 236 basis points and, after the revolving period, the rate will reset to Base Rate (or an alternative risk-free floating interest rate index) plus 250 basis points for the remaining two years, maturing in August 2026. The Credit Facility is secured by all of the assets of Funding I. Both we and Funding I have made customary representations and warranties and are required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities.

The Credit Facility contains covenants, including, but not limited to, restrictions of loan size, industry requirements, average life of loans, geographic and individual portfolio concentrations, minimum portfolio yield and loan payment frequency. Additionally, the Credit Facility requires the maintenance of a minimum equity investment in Funding I and income ratio as well as restrictions on certain payments and issuance of debt. The Credit Facility compliance reporting is prepared on a basis of accounting other than GAAP. As of June 30, 2023, we were in compliance with the covenants relating to the Credit Facility.

We own 100% of the equity interest in Funding I and treat the indebtedness of Funding I as our leverage. Our Investment Adviser serves as collateral manager to Funding I under the Credit Facility.

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)

interest and, if applicable, principal to the Lenders, (2) administrative expenses and (3) claims of other unsecured creditors of Funding I. The Investment Adviser has irrevocably directed that any management fee owed with respect to such services is to be paid to the Company so long as the Investment Adviser remains the collateral manager.

2023 Notes

In November 2017, we issued $138.6 million of our 2023 Notes of which $76.2 million and $97.0 million were outstanding as of June 30, 2023 and September 30, 2022, respectively. The 2023 Notes were issued pursuant to a deed of trust between the Company and Mishmeret Trust Company, Ltd., as trustee, in November 2017

The 2023 Notes pay interest at a rate of 4.3% per year. As a result of the downgrade of the 2023 Notes from “ilA+” to “ilA-” in March 2020, the interest rate of the 2023 Notes was increased to 4.3% from 3.8%. Interest on the 2023 Notes is payable semi-annually in arrears on June 15 and December 15 of each year, commencing June 15, 2018. The principal on the 2023 Notes will be payable in four annual installments as follows: 15% of the original principal amount on December 15, 2020, 15% of the original principal amount on December 15, 2021, 15% of the original principal amount on December 15, 2022 and 55% of the original principal amount on December 15, 2023.

The 2023 Notes are general, unsecured obligations, rank equal in right of payment with all of PennantPark Floating Rate Capital Ltd.'s existing and future senior unsecured indebtedness and are generally redeemable at our option. The deed of trust governing the 2023 Notes includes certain customary covenants, including minimum equity requirements, and events of default. Please refer to the deed of trust filed as Exhibit (d)(8) to our post-effective amendment filed on December 13, 2017 for more information. The 2023 Notes are rated ilA- by S&P Global Ratings Maalot Ltd. and are listed on the TASE. In connection with this offering, we have dual listed our common stock on the TASE.

The 2023 Notes have not been and will not be registered under the Securities Act and may not be offered or sold in the United States absent registration under the Securities Act or in transactions exempt from, or not subject to, such registration requirements.

2026 Notes

In March 2021 and in October 2021, we issued $100.0 million and $85.0 million, respectively, in aggregate principal amount of $185.0 million of our 2026 Notes at a public offering price per note of 99.4% and 101.5%, respectively. Interest on the 2026 Notes is paid semi-annually on April 1 and October 1 of each year, at a rate of 4.25% per year, commencing October 1, 2021. The 2026 Notes mature on April 1, 2026 and may be redeemed in whole or in part at our option subject to a make-whole premium if redeemed more than three months prior to maturity. The 2026 Notes are our general, unsecured obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness. The 2026 Notes are effectively subordinated to all of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally subordinated to all of our existing and future indebtedness and other obligations of any of our subsidiaries, financing vehicles, or similar facilities. We do not intend to list the 2026 Notes on any securities exchange or automated dealer quotation system.

2031 Asset-Backed Debt

In September 2019, the Company completed the $301.4 million term debt securitization. Term debt securitizations, also known as CLOs, are a form of secured financing incurred by the Company, which is consolidated by the Company and subject to the Company’s asset coverage requirements. The 2031 Asset-Backed Debt was issued by the Securitization Issuer. The 2031 Asset-Backed Debt is secured by the middle market loans, participation interests in middle market loans and other assets of the Securitization Issuer. The Debt Securitization was executed through (A) a private placement of: (i) $78.5 million Class A-1 Senior Secured Floating Rate Loans maturing 2031, which bear interest at the three-month LIBOR plus 1.8%, (ii) $15.0 million Class A-2 Senior Secured Fixed Rate Notes due 2031, which bear interest at 3.7%, (iii) $14.0 million Class B-1 Senior Secured Floating Rate Notes due 2031, which bear interest at the three-month LIBOR plus 2.9%, (iv) $16.0 million Class B-2 Senior Secured Fixed Rate Notes due 2031, which bear interest at 4.3%, (v) $19.0 million Class C‑1 Secured Deferrable Floating Rate Notes due 2031, which bear interest at the three-month LIBOR plus 4.0%, (vi) $8.0 million Class C-2 Secured Deferrable Fixed Rate Notes due 2031, which bear interest at 5.4%, and (vii) $18.0 million Class D Secured Deferrable Floating Rate Loans due 2031, which bear interest at the three-month LIBOR plus 4.8% and (B) the borrowing of $77.5 million Class A‑1 Senior Secured Floating Rate Notes due 2031, which bear interest at the three-month LIBOR plus 1.8%, under a credit agreement by and among the Securitization Issuers, as borrowers, various financial institutions, as lenders, and U.S. Bank National Association, as collateral agent and as loan agent. The annualized interest on the 2031 Asset-Backed Debt will be paid, to the extent of funds available. The reinvestment period of the Debt Securitization ends on October 15, 2023 and the 2031 Asset-Backed Debt is scheduled to mature on October 15, 2031.

On the closing date of the Debt Securitization, in consideration of our transfer to the Securitization Issuer of the initial closing date loan portfolio, which included loans distributed to us by certain of our wholly-owned subsidiaries, the Securitization Issuer transferred to us 100% of the Preferred Shares of the Securitization Issuer, 100% of the Class D Secured Deferrable Floating Rate Notes issued by the Securitization Issuer, and a portion of the net cash proceeds received from the sale of the 2031 Asset-Backed Debt. The Preferred Shares of the Securitization Issuer do not bear interest and had a stated value of approximately $55.4 million at the closing of the Debt Securitization.

The 2031 Asset-Backed Debt is included in the Consolidated Statement of Assets and Liabilities as debt of the Company and the Class D Secured Deferrable Floating Rate Notes and the Preferred Shares of the Securitization Issuer were eliminated in consolidation. As of both June 30, 2023 and September 30, 2022, the Company had $228.0 million of 2031 Asset-Backed Debt outstanding with a weighted average interest rate of 6.8% and 4.6%, respectively. As of June 30, 2023 and September 30, 2022, the unamortized fees on the 2031 Asset-Backed Debt were $1.4 million and $1.9 million, respectively.

Our Investment Adviser serves as collateral manager to the Securitization Issuer pursuant to the Collateral Management Agreement. For so long as our Investment Adviser serves as collateral manager, it will elect to irrevocably waive any collateral management fee to which it may be entitled under the Collateral Management Agreement.

11. COMMITMENTS AND CONTINGENCIES

From time to time, we may be a party to legal proceedings, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations. Unfunded debt and equity investments, if any, are disclosed in the Consolidated Schedules of Investments. As of June 30, 2023 and September 30, 2022, we had $150.3 million and $150.6 million, respectively, in commitments to fund investments. Additionally, as described in Note 4, the Company had unfunded commitments of zero and $28.4 million to PSSL as of June 30, 2023 and September 30, 2022, respectively, that may be contributed primarily for the purpose of funding new investments approved by the PSSL board of directors or investment committee.

12. SUBSEQUENT EVENTS

PENNANTPARK FLOATING RATE CAPITAL LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

June 30, 2023

(Unaudited)

Subsequent to June 30, 2023, we issued 3,197,403 shares of common stock through the ATM Program that were sold prior to the quarter end at an average price of $11.01 per share, raising $35.2 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.

On July 31, 2023, the Credit Facility's commitment was increased by $20 million due to the inclusion of a new lender to the facility. The additional commitment increases the Credit Facility's total commitment amount to $386 million.

Report of Independent Registered Public Accounting Firma

To the Stockholders and Board of Directors of PennantPark Floating Rate Capital Ltd. and its Subsidiaries

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated statement of assets and liabilities of PennantPark Floating Rate Capital Ltd. and its Subsidiaries (collectively referred to as the Company), including the consolidated schedule of investments, as of June 30, 2023, the related consolidated statements of operations and changes in net assets for the three-month and nine-month periods ended June 30, 2023 and 2022 and cash flows for the nine-month periods ended June, 2023 and 2022, and the related notes to
the consolidated financial statements (collectively, the interim financial statements). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statement of assets and liabilities of the Company, including the consolidated schedule of investments, as of September 30, 2022, and the related consolidated statements of operations, changes in net assets, and cash flows for the year then ended (not presented herein); and in our report dated November 17, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated statement of assets and liabilities, including the consolidated schedule of investments, as of September 30, 2022, is fairly stated, in all material respects, in relation to the consolidated statement of assets and liabilities, including the consolidated schedule of investments, from which it has been derived.

Basis for Review Results

These interim financial statements are the responsibility of the Company’s management. We conducted our reviews in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

/s/ RSM US LLP

New York, New York

August 9, 2023

Awareness Letter of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of PennantPark Floating Rate Capital Ltd. and its Subsidiaries

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited interim financial information of PennantPark Floating Rate Capital Ltd. for the periods ended June 30, 2023 and 2022, as indicated in our report dated August 9, 2023; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, is incorporated by reference in Registration Statement No.333-268813 on Form N-2.

We are also aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

/s/ RSM US LLP

New York, New York

August 9, 2023

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This Report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains statements that constitute forward-looking statements, which relate to us and our consolidated subsidiaries regarding future events or our future performance or future financial condition. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about our Company, our industry, our beliefs and our assumptions. The forward-looking statements contained in this Report involve risks and uncertainties, including statements as to:

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our future operating results;

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our business prospects and the prospects of our prospective portfolio companies, including as a result of the pandemic caused by COVID-19 or any future worsening there of;

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changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets that could result in changes to the value of our assets, including changes from the impact of the COVID-19 pandemic or any future worsening there of;

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the dependence of our future success on the general economy and its impact on the industries in which we invest;

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the impact of a protracted decline in the liquidity of credit markets on our business;

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the impact of investments that we expect to make;

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the impact of fluctuations in interest rates and foreign exchange rates on our business and our portfolio companies;

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our contractual arrangements and relationships with third parties;

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the valuation of our investments in portfolio companies, particularly those having no liquid trading market;

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the ability of our prospective portfolio companies to achieve their objectives;

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our expected financings and investments and ability to fund capital commitments to PSSL;

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the adequacy of our cash resources and working capital;

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the timing of cash flows, if any, from the operations of our prospective portfolio companies;

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the impact of price and volume fluctuations in the stock market;

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increasing levels of inflation, and its impact on us and our portfolio companies;

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the ability of our Investment Adviser to locate suitable investments for us and to monitor and administer our investments;

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the impact of future legislation and regulation on our business and our portfolio companies; and

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the impact of the ongoing invasion of Ukraine by Russia, United Kingdom’s withdrawal from the European Union (commonly known as “Brexit”) and other world economic and political issues.

We use words such as “anticipates,” “believes,” “expects,” “intends,” “seeks,” “plans,” “estimates” and similar expressions to identify forward-looking statements. You should not place undue influence on the forward-looking statements as our actual results could differ materially from those projected in the forward-looking statements for any reason, including the factors in “Risk Factors” and elsewhere in this Report.

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and, as a result, the forward-looking statements based on those assumptions also could be inaccurate. Important assumptions include our ability to originate new loans and investments, certain margins and levels of profitability and the availability of additional capital. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this Report should not be regarded as a representation by us that our plans and objectives will be achieved.

We have based the forward-looking statements included in this Report on information available to us on the date of this Report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements in this Report, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we in the future may file with the SEC, including reports on Form 10-Q/K and current reports on Form 8-K.

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 we file under the Exchange Act.

The following analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and the related notes thereto contained elsewhere in this Report.

Overview

PennantPark Floating Rate Capital Ltd. is a BDC whose objectives are to generate both current income and capital appreciation while seeking to preserve capital by investing primarily in floating rate loans and other investments made to U.S. middle-market companies.

We believe that floating rate loans to U.S. middle-market companies offer attractive risk-reward to investors due to a limited amount of capital available for such companies. We use the term “middle-market” to refer to companies with annual revenues between $50 million and $1 billion. Our investments are typically rated below

investment grade. Securities rated below investment grade are often referred to as “leveraged loans,” “high yield” securities or “junk bonds” and are often higher risk compared to debt instruments that are rated above investment grade and have speculative characteristics. However, when compared to junk bonds and other non-investment grade debt, senior secured floating rate loans typically have more robust capital-preserving qualities, such as historically lower default rates than junk bonds, represent the senior source of capital in a borrower’s capital structure and often have certain of the borrower’s assets pledged as collateral. Our debt investments may generally range in maturity from three to ten years and are made to U.S. and, to a limited extent, non-U.S. corporations, partnerships and other business entities which operate in various industries and geographical regions.

Under normal market conditions, we generally expect that at least 80% of the value of our managed assets will be invested in floating rate loans and other investments bearing a variable-rate of interest. We generally expect that first lien secured debt will represent at least 65% of our overall portfolio. We also generally expect to invest up to 35% of our overall portfolio opportunistically in other types of investments, including second lien secured debt and subordinated debt and, to a lesser extent, equity investments. We seek to create a diversified portfolio by generally targeting an investment size between $5 million and $30 million, on average, although we expect that this investment size will vary proportionately with the size of our capital base.

Our investment activity depends on many factors, including the amount of debt and equity capital available to middle-market companies, the level of merger and acquisition activity for such companies, the general economic environment and the competitive environment for the types of investments we make. We have used, and expect to continue to use, our debt capital, proceeds from the rotation of our portfolio and proceeds from public and private offerings of securities to finance our investment objectives.

Organization and Structure of PennantPark Floating Rate Capital Ltd.

PennantPark Floating Rate Capital Ltd., a Maryland corporation organized in October 2010, is a closed-end, externally managed, non-diversified investment company that has elected to be treated as a BDC under the 1940 Act. In addition, for federal income tax purposes we elected to be treated, and intend to qualify annually, as a RIC under the Code.

Our investment activities are managed by the Investment Adviser. Under our Investment Management Agreement, we have agreed to pay our Investment Adviser an annual base management fee based on our average adjusted gross assets as well as an incentive fee based on our investment performance. We have also entered into an Administration Agreement with the Administrator. Under our Administration Agreement, we have agreed to reimburse the Administrator for our allocable portion of overhead and other expenses incurred by the Administrator in performing its obligations under our Administration Agreement, including rent and our allocable portion of the costs of compensation and related expenses of our Chief Compliance Officer, Chief Financial Officer, Corporate Counsel and their respective staffs. Our board of directors, a majority of whom are independent of us, provides overall supervision of our activities, and the Investment Adviser supervises our day-to-day activities.

Revenues

We generate revenue in the form of interest income on the debt securities we hold and capital gains and dividends, if any, on investment securities that we may acquire in portfolio companies. Our debt investments, whether in the form of first lien secured debt, second lien secured debt or subordinated debt, typically have a term of three to ten years and bear interest at a floating or fixed rate. Interest on debt securities is generally payable quarterly or semiannually. In some cases, our investments provide for deferred interest payments or PIK interest. The principal amount of the debt securities and any accrued but unpaid interest generally becomes due at the maturity date. In addition, we may generate revenue in the form of amendment, commitment, origination, structuring or diligence fees, fees for providing significant managerial assistance and possibly consulting fees. Loan origination fees, OID and market discount or premium are capitalized and accreted or amortized using the effective interest method as interest income or, in the case of deferred financing costs, as interest expense. Dividend income, if any, is recognized on an accrual basis on the ex-dividend date to the extent that we expect to collect such amounts. From time to time, the Company receives certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring fees and amendment fees, and are recorded as other investment income when earned. Litigation settlements are accounted for in accordance with the gain contingency provisions of ASC Subtopic 450-30, Gain Contingencies, or ASC 450-30.

Expenses

Our primary operating expenses include the payment of a management fee and the payment of an incentive fee to our Investment Adviser, if any, our allocable portion of overhead under our Administration Agreement and other operating costs as detailed below. Our management fee compensates our Investment Adviser for its work in identifying, evaluating, negotiating, consummating and monitoring our investments. Additionally, we pay interest expense on the outstanding debt and unused commitment fees on undrawn amounts under our various debt facilities. We bear all other direct or indirect costs and expenses of our operations and transactions, including:

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the cost of calculating our NAV, including the cost of any third-party valuation services;

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the cost of effecting sales and repurchases of shares of our common stock and other securities;

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fees payable to third parties relating to, or associated with, making investments, including fees and expenses associated with performing due diligence and reviews of prospective investments or complementary businesses;

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expenses incurred by the Investment Adviser in performing due diligence and reviews of investments;

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transfer agent and custodial fees;

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fees and expenses associated with marketing efforts;

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federal and state registration fees and any exchange listing fees;

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federal, state, local and foreign taxes;

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independent directors’ fees and expenses;

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brokerage commissions;

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fidelity bond, directors and officers, errors and omissions liability insurance and other insurance premiums;

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direct costs such as printing, mailing, long distance telephone and staff;

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fees and expenses associated with independent audits and outside legal costs;

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costs associated with our reporting and compliance obligations under the 1940 Act and applicable federal and state securities laws; and

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all other expenses incurred by either the Administrator or us in connection with administering our business, including payments under our Administration Agreement that will be based upon our allocable portion of overhead, and other expenses incurred by the Administrator in performing its obligations under our Administration Agreement, including rent and our allocable portion of the costs of compensation and related expenses of our Chief Compliance Officer, Chief Financial Officer, Corporate Counsel and their respective staffs.

Generally, during periods of asset growth, we expect our general and administrative expenses to be relatively stable or to decline as a percentage of total assets and increase during periods of asset declines. Incentive fees, interest expense and costs relating to future offerings of securities would be additive to the expenses described above.

PORTFOLIO AND INVESTMENT ACTIVITY

PennantPark Floating Rate Capital Ltd.

As of June 30, 2023, our portfolio totaled $1,105.3 million, and consisted of $950.2 million of first lien secured debt (including $210.1 million in PSSL), $0.1 million of second lien secured debt and $154.9 million of preferred and common equity (including $47.9 million in PSSL). Our debt portfolio consisted of 100% variable-rate investments. As of June 30, 2023, we had three portfolio companies on non-accrual, representing 1% and zero percent of our overall portfolio on a cost and fair value basis, respectively. As of June 30, 2023, the portfolio had net unrealized depreciation of $35.2 million. Our overall portfolio consisted of 130 companies with an average investment size of $8.5 million and had a weighted average yield on debt investments of 12.4%, and was invested 86% in first lien secured debt (including 19% in PSSL), less than 1% in second lien secured debt and 14% in preferred and common equity (including 4% in PSSL). As of June 30, 2023, 99% of the investments held by PSSL were first lien secured debt.

As of September 30, 2022, our portfolio totaled $1,164.3 million and consisted of $1,009.6 million of first lien secured debt (including $190.2 million in PSSL), $0.1 million of second lien secured debt and $154.5 million of preferred and common equity (including $49.4 million in PSSL). Our debt portfolio consisted of 100% variable-rate investments. As of September 30, 2022, we had two portfolio companies on non-accrual, representing 0.9% and zero percent of our overall portfolio on a cost and fair value basis, respectively. As of September 30, 2022, the portfolio had net unrealized depreciation of $13.1 million. Our overall portfolio consisted of 125 companies with an average investment size of $9.3 million, had a weighted average yield on debt investments of 10.0%, and was invested 87% in first lien secured debt (including 16% in PSSL), less than 1% in second lien secured debt and 13% in preferred and common equity (including 4% in PSSL). As of September 30, 2022, 99% of the investments held by PSSL were first lien secured debt.

For the three months ended June 30, 2023, we invested $80.0 million in four new and 40 existing portfolio companies at a weighted average yield on debt investments of 12.5%. For the three months ended June 30, 2023, sales and repayments of investments totaled $132.4 million, including $75.3 million of sales to PSSL. For the nine months ended June 30, 2023, we invested $231.0 million in 13 new and 63 existing portfolio companies at a weighted average yield on debt investments of 12.1%. For the nine months ended June 30, 2023 sales and repayments of investments totaled $258.1 million, including $121.2 million of sales to PSSL.

For the three months ended June 30, 2022, we invested $104.8 million in six new and 39 existing portfolio companies at a weighted average yield on debt investments of 8.1%. For the three months ended June 30, 2022 sales and repayments of investments totaled $55.0 million, including $16.8 million of sales to PSSL. For the nine months ended June 30, 2022, we invested $553.1 million in 29 new and 53 existing portfolio companies at a weighted average yield on debt investments of 7.7%. Sales and repayments of investments for the nine months ended June 30, 2022 totaled $397.2 million, including $225.2 million of sales to PSSL.

PennantPark Senior Secured Loan Fund I LLC

As of June 30, 2023, PSSL’s portfolio totaled $805.2 million and consisted of 105 companies with an average investment size of $7.7 million and at a weighted average yield on debt investments of 12.0%. As of September 30, 2022, PSSL’s portfolio totaled $754.7 million, consisted of 95 companies with an average investment size of $8.0 million and at a weighted average yield on debt investments of 9.6%.

For the three months ended June 30, 2023, PSSL invested $77.8 million (including $75.3 million purchased from the Company) in six new and 15 existing portfolio companies at a weighted average yield on debt investments of 12.1%. Sales and repayments of investments for the three months ended June 30, 2023 totaled $40.8 million. For the nine months ended June 30, 2023, PSSL invested $138.3 million (including $121.2 million purchased from the Company) in 17 new and 22 existing portfolio companies at a weighted average yield on debt investments of 11.8%. For the nine months ended June 30, 2023 sales and repayments of investments totaled $78.8 million.

For the three months ended June 30, 2022, PSSL invested $31.5 million (including $16.8 million purchased from the Company) in four new and seven existing portfolio companies at a weighted average yield on debt investments of 8.8%. For the three months ended June 30, 2022 sales and repayments of investments totaled $13.5 million. For the nine months ended June 30, 2022, PSSL invested $228.6 million (including $225.2 million purchased from the Company) in 25 new and 12 existing portfolio companies at a weighted average yield on debt investments of 7.9%. For the nine months ended June 30, 2022, sales and repayments of investments totaled $69.2 million.

At-the-Market Offering

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of our Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of our assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of income and expenses during the reported periods. In the

opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for the fair presentation of financial statements have been included. Actual results could differ from these estimates due to changes in the economic and regulatory environment, financial markets and any other parameters used in determining such estimates and assumptions. We may reclassify certain prior period amounts to conform to the current period presentation. We have eliminated all intercompany balances and transactions. References to ASC serve as a single source of accounting literature. Subsequent events are evaluated and disclosed as appropriate for events occurring through the date the Consolidated Financial Statements are issued. In addition to the discussion below, we describe our critical accounting policies in the notes to our Consolidated Financial Statements. We discuss our critical accounting estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on Form 10-K. There have been no significant changes in our critical accounting estimates during the three months from those disclosed in our 2022 Annual Report on Form 10-K.

Investment Valuations

We expect that there may not be readily available market values for many of our investments which are or will be in our portfolio, and we value such investments at fair value as determined in good faith by or under the direction of our board of directors using a documented valuation policy and a consistently applied valuation process, as described in this Report. With respect to investments for which there is no readily available market value, the factors that the board of directors may take into account in pricing our investments at fair value include, as relevant, the nature and realizable value of any collateral, the portfolio company’s ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, comparison to publicly traded securities and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, we consider the pricing indicated by the external event to corroborate or revise our valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the price used in an actual transaction may be different than our valuation and the difference may be material.

(1)

(2)

Preliminary valuation conclusions are then documented and discussed with the management of our Investment Adviser;

(3)

Our board of directors also engages independent valuation firms to conduct independent appraisals of our investments for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment. The independent valuation firms review management’s preliminary valuations in light of their own independent assessment and also in light of any market quotations obtained from an independent pricing service, broker, dealer or market maker;

(4)

(5)

Our board of directors generally uses market quotations to assess the value of our investments for which market quotations are readily available. We obtain these market values from independent pricing services or at the bid prices obtained from at least two brokers or dealers, if available, or otherwise from a principal market maker or a primary market dealer. The Investment Adviser assesses the source and reliability of bids from brokers or dealers. If the board of directors has a bona fide reason to believe any such market quote does not reflect the fair value of an investment, it may independently value such investments by using the valuation procedure that it uses with respect to assets for which market quotations are not readily available.

ASC 820 classifies the inputs used to measure these fair values into the following hierarchies:

Level 1: Inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities, accessible by us at the measurement date.

Level 2: Inputs that are quoted prices for similar assets or liabilities in active markets, or that are quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term, if applicable, of the financial instrument.

Level 3: Inputs that are unobservable for an asset or liability because they are based on our own assumptions about how market participants would price the asset or liability.

On December 3, 2020, the SEC adopted Rule 2a-5 under the 1940 Act, which establishes an updated regulatory framework for determining fair value in good faith for purposes of the 1940 Act. The new rule clarifies how fund boards of directors can satisfy their valuation obligations and requires, among other things, the boards of directors to periodically assess material valuation risks and take steps to manage those risks. The rule also permits boards of directors, subject to board oversight and certain other conditions, to designate the fund’s investment adviser to perform fair value determinations. The new rule went into effect on March 8, 2021 and had a compliance date of September 8, 2022. We came into compliance with Rule 2a-5 under the 1940 Act before the compliance date. While our board of directors has not elected to designate the

Investment Adviser as the valuation designee at this time, we have adopted certain revisions to our valuation policies and procedures in order comply with the applicable requirements of Rule 2a-5 under the 1940 Act.

Generally, the carrying value of our consolidated financial liabilities approximates fair value. We have adopted the principles ASC Subtopic 825-10, Financial Instruments, or ASC 825-10, which provides companies with an option to report selected financial assets and liabilities at fair value, and made an irrevocable election to apply ASC 825-10 to the Credit Facility and the 2023 Notes. We elected to use the fair value option for the Credit Facility and the 2023 Notes to align the measurement attributes of both our assets and liabilities while mitigating volatility in earnings from using different measurement attributes. Due to that election and in accordance with GAAP, we did not incur any expenses relating to amendment costs on the Credit Facility and debt issuance costs on the 2023 Notes during the three and nine months ended June 30, 2023 and 2022, respectively. ASC 825-10 establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities and to more easily understand the effect on earnings of a company’s choice to use fair value. ASC 825-10 also requires entities to display the fair value of the selected assets and liabilities on the face of the Consolidated Statements of Assets and Liabilities and changes in fair value of the Credit Facility and the 2023 Notes are reported in our Consolidated Statements of Operations. We elected not to apply ASC 825-10 to any other financial assets or liabilities, including the 2026 Notes and the 2031 Asset-Backed Debt.

For the three and nine months ended June 30, 2023, the Credit Facility and the 2023 Notes had a net change in unrealized appreciation (depreciation) of $(5.8) million and $(4.8) million, respectively. For the three and nine months ended June 30, 2022, the Credit Facility and the 2023 Notes had a net change in unrealized appreciation (depreciation) of $(0.1) million and $(1.3) million, respectively. As of June 30, 2023 and September 30, 2022, the net unrealized appreciation (depreciation) on the Credit Facility as applicable, and the 2023 Notes totaled $2.6 million and $(1.5) million, respectively. We use a nationally recognized independent valuation service to measure the fair value of the Credit Facility in a manner consistent with the valuation process that our board of directors uses to value our investments. Our 2023 Notes trade on the TASE and we use the closing price on the exchange to determine the fair value.

Revenue Recognition

We record interest income on an accrual basis to the extent that we expect to collect such amounts. For loans and debt investments with contractual PIK interest, which represents interest accrued and added to the loan balance that generally becomes due at maturity, we will generally not accrue PIK interest when the portfolio company valuation indicates that such PIK interest is not collectable. We do not accrue as a receivable interest on loans and debt investments if we have reason to doubt our ability to collect such interest. Loan origination fees, OID, market discount or premium and deferred financing costs on liabilities, which we do not fair value, are capitalized and then accreted or amortized using the effective interest method as interest income or, in the case of deferred financing costs, as interest expense. We record prepayment penalties on loans and debt investments as income. Dividend income, if any, is recognized on an accrual basis on the ex-dividend date to the extent that we expect to collect such amounts. From time to time, the Company receives certain fees from portfolio companies, which are non-recurring in nature. Such fees include loan prepayment penalties, structuring fees and amendment fees, and are recorded as other investment income when earned.

Net Realized Gains or Losses and Net Change in Unrealized Appreciation or Depreciation

We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, using the specific identification method, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized upfront fees and prepayment penalties. Net change in unrealized appreciation or depreciation reflects the change in the fair values of our portfolio investments, our Credit Facility, the 2023 Notes during the reporting period, including any reversal of previously recorded unrealized appreciation or depreciation, when gains or losses are realized.

Foreign Currency Translation

Our books and records are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis:

Fair value of investment securities, other assets and liabilities – at the exchange rates prevailing at the end of the applicable period; and

Purchases and sales of investment securities, income and expenses – at the exchange rates prevailing on the respective dates of such transactions.

Payment -in-kind, or PIK Interest

We have investments in our portfolio which contain a PIK interest provision. PIK interest is added to the principal balance of the investment and is recorded as income. In order for us to maintain our ability to be subject to tax as a RIC, substantially all of this income must be paid out to stockholders in the form of dividends for federal income tax purposes, even though we may not have collected any cash with respect to interest on PIK securities.

Federal Income Taxes

We have elected to be treated and intend to qualify annually to maintain our election to be treated, as a RIC under Subchapter M of the Code. To maintain our RIC tax election, we must, among other requirements, meet certain annual source-of-income and quarterly asset diversification requirements. We also must annually distribute dividends for federal income tax purposes to our stockholders out of the assets legally available for distribution of an amount generally at least equal to 90% of the sum of our net ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, or investment company taxable income, determined without regard to any deduction for dividends paid.

Although not required for us to maintain our RIC tax status, in order to preclude the imposition of a 4% nondeductible federal excise tax imposed on RICs, we must distribute dividends for U.S. federal income tax purposes to our stockholders in respect of each calendar year of an amount at least equal to the sum of (1) 98% of our net ordinary income (subject to certain deferrals and elections) for the calendar year, (2) 98.2% of our capital gain net income (i.e., the excess, if any, of our capital gains over capital losses), adjusted for certain ordinary losses, generally for the one-year period ending on October 31 of the calendar year plus (3) any net ordinary income or capital gain net income for the preceding years that was not distributed during such years on which we did not incur any corporate income tax, or the Excise Tax Avoidance Requirement. In addition, although we may distribute realized net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least

annually, out of the assets legally available for such distributions in the manner described above, we have retained and may continue to retain such net capital gains or investment company taxable income, subject to maintaining our ability to be taxed as a RIC, in order to provide us with additional liquidity.

Because federal income tax regulations differ from GAAP, distributions in accordance with tax regulations may differ from net investment income and net realized gain recognized for financial reporting purposes. Differences between tax regulations and GAAP may be permanent or temporary. Permanent differences are reclassified among capital accounts in the Consolidated Financial Statements to reflect their appropriate tax character. Temporary differences arise when certain items of income, expense, gain or loss are recognized at some time in the future.

For the three and nine months ended June 30, 2023, we recorded a provision for taxes on net investment income of $0.2 million and $0.8 million, respectively, pertaining to federal excise tax. For the three and nine months ended June 30, 2022, we recorded a provision for taxes on net investment income of $0.1 million and $0.3 million, respectively, pertaining to federal excise tax.

We have formed and expect to continue to form certain taxable subsidiaries, including the Taxable Subsidiary, which are taxed as corporations. These taxable subsidiaries allow us to hold equity securities of certain portfolio companies treated as pass-through entities for U.S. federal income tax purposes while facilitating our ability to qualify as a RIC under the Code.

RESULTS OF OPERATIONS

Set forth below are the results of operations for the three and nine months ended June 30, 2023 and 2022.

Investment Income

For the three and nine months ended June 30, 2023, investment income was $37.7 million and $103.6 million, respectively, which was attributable to $30.4 million and $88.6 million from first lien secured debt and $7.3 million and $15.0 million from other investments, respectively. For the three and nine months ended June 30, 2022, investment income was $25.7 million and $76.7 million, respectively, which was attributable to $21.1 million and $64.0 million from first lien secured debt and $4.6 million and $12.7 million from other investments, respectively. The increase in investment income compared to the same periods in the prior year was primarily due to the increase in the cost yield of our debt portfolio and a dividend related to our equity investment in Dominion Voting Systems.

Expenses

For the three and nine months ended June 30, 2023, expenses totaled $19.2 million and $54.6 million, respectively and were comprised of: $10.0 million and $29.6 million of debt related interest and expenses, $2.8 million and $8.6 million of base management fees, $4.6 million and $12.2 million of performance-based incentive fees, $1.6 million and $3.3 million of general and administrative expenses and $0.2 million and $0.8 million of taxes. For the three and nine months ended June 30, 2022, expenses totaled $13.9 million and $40.8 million, respectively, and were comprised of: $7.4 and $20.7 million of debt related interest and expenses, $3.1 million and $8.9 million of base management fees, $2.6 million and $8.5 million of performance-based incentive fees, $0.8 million and $2.4 million of administrative expenses and $0.1 million and $0.3 million of taxes. The increase in expenses compared to the same periods in the prior year was primarily due to the increase in financing costs of our debt liabilities and an increase in performance-based incentive fees as a result of higher pre-incentive fee net investment income.

Net Investment Income

For the three and nine months ended June 30, 2023, net investment income totaled $18.5 million and $49.0 million or $0.36 and $1.02 per share, respectively. For the three and nine months ended June 30, 2022, net investment income totaled $11.8 million and $35.9 million, or $0.29 and $0.90 per share, respectively. The increase in net investment income was primarily due to an increase in investment income partially offset by an increase in expenses compared to the same period in the prior year.

Net Realized Gains or Losses

For the three and nine months ended June 30, 2023, net realized gains (losses) totaled $(6.1) million and $(13.8) million, respectively. For the three and nine months ended June 30, 2022, net realized gains (losses) totaled $0.7 million and $(11.6) million, respectively. The change in net realized gains (losses) compared to the same periods in the prior year 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, the Credit Facility and the 2023 Notes

For the three and nine months ended June 30, 2023, we reported net change in unrealized appreciation (depreciation) on investments of $(1.1) million and $(22.0) million, respectively. For the three and nine months ended June 30, 2022, we reported net change in unrealized appreciation (depreciation) on investments of $(17.7) million and $(3.7) million, respectively. As of June 30, 2023 and September 30, 2022, our net unrealized appreciation (depreciation) on investments totaled $(35.2) million and $(13.1) million, respectively. The net change in unrealized appreciation (depreciation) on our investments compared to the same period in the prior year was primarily due to the operating performance of the portfolio companies within our portfolio and changes in the capital market conditions of our investments.

For the three and nine months ended June 30, 2023, our Credit Facility and the 2023 Notes had a net change in unrealized appreciation (depreciation) of $(5.8) million and $(4.8) million, respectively. For the three and nine months ended June 30, 2022, the Credit Facility and the 2023 Notes had a net change in unrealized appreciation (depreciation) of less than $(0.1) million and $(1.3) million, respectively. As of June 30, 2023 and September 30, 2022, the net unrealized appreciation (depreciation) on the Credit Facility and the 2023 Notes totaled $2.6 million and $(1.5) million, respectively. The net change in net unrealized appreciation or depreciation compared to the same periods in the prior year was primarily due to changes in the capital markets.

Net Increase (Decrease) in Net Assets Resulting from Operations

For the three and nine months ended June 30, 2023, net increase (decrease) in net assets resulting from operations totaled $5.6 million and $11.2 million, or $0.11 and $0.23 per share, respectively. For the three and nine months ended June 30, 2022, net increase (decrease) in net assets resulting from operations totaled $(5.1) million and $16.6 million, or $(0.12) and $0.42 per share, respectively. The net increase or decrease from operations compared to the same periods in the prior year was primarily due to operating performance of our portfolio and changes in capital market conditions of our investments along with change in 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. As of June 30, 2023, in accordance with the 1940 Act, with certain limited exceptions, we are only allowed to borrow amounts such that we are in compliance with a 150% asset coverage ratio requirement after such borrowing.

On April 5, 2018, our board of directors approved the application of the modified asset coverage requirements set forth in Section 61(a)(2) of the 1940 Act, as amended by the Consolidated Appropriations Act of 2018 (which includes the SBCAA). As a result, the asset coverage requirement applicable to us for senior securities was reduced from 200% (i.e., $1 of debt outstanding for each $1 of equity) to 150% (i.e., $2 of debt outstanding for each $1 of equity), effective as of April 5, 2019, subject to compliance with certain disclosure requirements. As of June 30, 2023 and September 30, 2022, our asset coverage ratio, as computed in accordance with the 1940 Act, was 210% and 178%, respectively.

For the nine months ended June 30, 2023 and 2022, 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 3.7%, respectively. As of June 30, 2023 and September 30, 2022, we had $301.6 million and $196.3 million of unused borrowing capacity under the Credit Facility, as applicable, respectively, subject to leverage and borrowing base restrictions.

Funding I’s multi-currency Credit Facility with the Lenders was $366.0 million as of June 30, 2023 subject to satisfaction of certain conditions and regulatory restrictions that the 1940 Act imposes on us as a BDC, has an interest rate spread above SOFR (or an alternative risk-free floating interest rate index) of 236 basis points, a maturity date of August 2026 and a revolving period that ends in August 2024. As of June 30, 2023 and September 30, 2022, PennantPark Floating Rate Funding I, LLC, our wholly-owned subsidiary, borrowed $64.4 million and $169.7 million under the Credit Facility, respectively, and the weighted average interest rate, exclusive of the fee on undrawn commitments, was of 7.5% and 4.9%, respectively.

During the revolving period, the Credit Facility bears interest at SOFR (or an alternative risk-free floating interest rate index) plus 236 basis points and, after the revolving period, the rate will reset to Base Rate (or an alternative risk-free floating interest rate index) plus 250 basis points for the remaining two years, maturing in August 2026. The Credit Facility is secured by all of the assets of Funding I. Both PennantPark Floating Rate Capital Ltd. and Funding I have made customary representations and warranties and are required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities.

The Credit Facility contains covenants, including but not limited to, restrictions of loan size, currency types and amounts, industry requirements, average life of loans, geographic and individual portfolio concentrations, minimum portfolio yield and loan payment frequency. Additionally, the Credit Facility requires the maintenance of a minimum equity investment in Funding I and income ratio as well as restrictions on certain payments and issuance of debt. The Credit Facility compliance reporting is prepared on a basis of accounting other than GAAP. As of June 30, 2023, we were in compliance with the covenants relating to our Credit Facility.

We own 100% of the equity interest in Funding I and treat the indebtedness of Funding I as our leverage. Our Investment Adviser serves as collateral manager to Funding I under the Credit Facility.

Our interest in Funding I (other than the management fee) is subordinate in priority of payment to every other obligation of Funding I and is subject to certain payment restrictions set forth in the Credit Facility. We may receive cash distributions on our equity interests in Funding I only after it has made (1) all required cash interest and, if applicable, principal payments to the Lenders, (2) required administrative expenses and (3) claims of other unsecured creditors of Funding I. We cannot assure you that there will be sufficient funds available to make any distributions to us or that such distributions will meet our expectations from Funding I. The Investment Adviser has irrevocably directed that the management fee owed with respect to such services is to be paid to the Company so long as the Investment Adviser remains the collateral manager.

In November 2017, we issued $138.6 million of our 2023 Notes. The 2023 Notes were issued pursuant to a deed of trust between the Company and Mishmeret Trust Company, Ltd., as trustee, of which $76.2 million and $97.0 million was outstanding as of June 30, 2023 and September 30, 2022, respectively.

The 2023 Notes pay interest at a rate of 4.3% per year. Interest on the 2023 Notes is payable semi-annually in arrears on June 15 and December 15 of each year, commencing June 15, 2018. The principal on the 2023 Notes will be payable in four annual installments as follows: 15% of the original principal amount on December 15, 2020, 15% of the original principal amount on December 15, 2021, 15% of the original principal amount on December 15, 2022 and 55% of the original principal amount on December 15, 2023.

The 2023 Notes are general, unsecured obligations, rank equal in right of payment with all of our existing and future senior unsecured indebtedness and are generally redeemable at our option. The deed of trust governing the 2023 Notes includes certain customary covenants, including minimum equity requirements, and events of default. Please refer to the deed of trust filed as Exhibit (d)(8) to our post-effective amendment filed on December 13, 2017 for more information. The 2023 Notes are rated ilA- by S&P Global Ratings Maalot Ltd. and are listed on the TASE. In connection with this offering, we have dual listed our common stock on the TASE.

In March 2021 and in October 2021, we issued $100.0 million and $85.0 million, respectively, in aggregate principal amount of our 2026 Notes at a public offering price per note of 99.4% and 101.5%, respectively. Interest on the 2026 Notes is paid semi-annually on April 1 and October 1 of each year, at a rate of 4.25% per year, commencing October 1, 2021. The 2026 Notes mature on April 1, 2026 and may be redeemed in whole or in part at our option subject to a make-whole premium if redeemed more than three months prior to maturity. The 2026 Notes are our general, unsecured obligations and rank equal in right of payment with all of our existing and future senior unsecured indebtedness. The 2026 Notes are effectively subordinated to all of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and structurally subordinated to all existing and future indebtedness and other obligations of any of our subsidiaries, financing vehicles, or similar facilities. We do not intend to list the 2026 Notes on any securities exchange or automated dealer quotation system.

In September 2019, the Securitization Issuers completed the Debt Securitization. The 2031 Asset-Backed Debt is secured by the middle market loans, participation interests in middle market loans and other assets of the Securitization Issuer. The Debt Securitization was executed through (A) a private placement of: (i) $78.5 million Class A-1 Senior Secured Floating Rate Notes maturing 2031, which bear interest at the three-month LIBOR plus 1.8%, (ii) $15.0 million Class A-2 Senior Secured Fixed Rate Notes due 2031, which bear interest at 3.7%, (iii) $14.0 million Class B-1 Senior Secured Floating Rate Notes due 2031, which bear interest at the three-month LIBOR plus 2.9%, (iv) $16.0 million Class B-2 Senior Secured Fixed Rate Notes due 2031, which bear interest at 4.3%, (v) $19.0 million Class C‑1 Secured Deferrable Floating Rate Notes due 2031, which bear interest at the three-month LIBOR plus 4.0%, (vi) $8.0 million Class C-2 Secured Deferrable Fixed Rate Notes due 2031, which bear interest at 5.4%, and (vii) $18.0 million Class D Secured Deferrable Floating Rate Notes due 2031, which bear interest at the three-month LIBOR plus 4.8% and (B) the borrowing of $77.5 million Class A‑1 Senior Secured Floating Rate Loans due 2031, which bear interest at the three-month LIBOR plus 1.8%, under a credit agreement by and among the Securitization Issuers, as borrowers, various financial institutions, as lenders, and U.S. Bank National Association, as collateral agent and as loan agent. The 2031 Asset-Backed Debt is scheduled to mature on October 15, 2031. As of both June 30, 2023 and September 30, 2022, the Company had $228.0 million of 2031 Asset-Backed Debt outstanding with a weighted average interest rate of 6.8% and 4.6%, respectively.

On the closing date of the Debt Securitization, in consideration of our transfer to the Securitization Issuer of the initial closing date loan portfolio, which included loans distributed to us by our wholly-owned subsidiary, the Securitization Issuer transferred to us 100% of the Preferred Shares of the Securitization Issuer, 100% of the Class D Secured Deferrable Floating Rate Notes issued by the Securitization Issuer, and a portion of the net cash proceeds received from the sale of the 2031 Asset-Backed Debt. The Preferred Shares of the Securitization Issuer do not bear interest and had a stated value of $55.4 million at the closing of the Debt Securitization.

The 2031 Asset-Backed Debt constitutes secured obligations of the Securitization Issuers, and the indenture governing the 2031 Asset-Backed Debt includes customary covenants and events of default. The 2031 Asset-Backed Debt has not been, and will not be, registered under the Securities Act or any state securities or “blue sky” laws and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from registration.

Our Investment Adviser serves as collateral manager to the Securitization Issuer pursuant to a collateral management agreement between our Investment Adviser and the Securitization Issuer, or the Collateral Management Agreement. For so long as our Investment Adviser serves as collateral manager, it will elect to irrevocably waive any collateral management fee to which it may be entitled under the Collateral Management Agreement.

We may raise equity or debt capital through both registered offerings off our shelf registration statement and private offerings of securities, securitizing a portion of our investments among other considerations or mergers and acquisitions. Furthermore, the Credit Facility availability depends on various covenants and restrictions as discussed in the preceding paragraphs. The primary use of existing funds and any funds raised in the future is expected to be for repayment of indebtedness, investments in portfolio companies, cash distributions to our stockholders or for other general corporate purposes.

We have entered into certain contracts under which we have material future commitments. Under our Investment Management Agreement, which was most recently reapproved by our board of directors, including a majority of our directors who are not interested persons of us or the Investment Adviser, in February 2023, PennantPark Investment Advisers serves as our investment adviser. Payments under our Investment Management Agreement in each reporting period are equal to (1) a management fee

equal to a percentage of the value of our average adjusted gross assets and (2) an incentive fee based on our performance.

Under our Administration Agreement, which was most recently reapproved by our board of directors, including a majority of our directors who are not interested persons of us, in February 2023, the Administrator furnishes us with office facilities and administrative services necessary to conduct our day-to-day operations. The Administration Agreement was amended on July 1, 2022. If requested to provide significant managerial assistance to our portfolio companies, we or the Administrator will be paid an additional amount based on the services provided. Payment under our Administration Agreement is based upon our allocable portion of the Administrator’s overhead in performing its obligations under our Administration Agreement, including rent and our allocable portion of the costs of our Chief Compliance Officer, Chief Financial Officer, Corporate Counsel and their respective staffs.

If any of our contractual obligations discussed above are terminated, our costs under new agreements that we enter into may increase. In addition, we will likely incur significant time and expense in locating alternative parties to provide the services we expect to receive under our Investment Management Agreement and our Administration Agreement. Any new investment management agreement would also be subject to approval by our stockholders.

As of June 30, 2023 and September 30, 2022, we had cash and cash equivalents of $59.1 million and $47.9 million, respectively, available for investing and general corporate purposes. We believe our liquidity and capital resources are sufficient to take advantage of market opportunities.

For the nine months ended June 30, 2023, our operating activities provided cash of $65.4 million and our financing activities used cash of $54.2 million. Our operating activities provided cash primarily realized from our investment activities and our financing activities used cash primarily due to repayments under our Credit Facility and principal repayment of our 2023 Notes, partially offset by proceeds from our equity offering.

For the nine months ended June 30, 2022, our operating activities used cash of $111.6 million and our financing activities provided cash of $101.7 million. Our operating activities used cash primarily for our investment activities and our financing activities provided cash primarily due to the issuance of $85 million of our 2026 Add-on Notes borrowings under our Credit Facility.

PennantPark Senior Secured Loan Fund I LLC

We and Kemper each appointed two members to PSSL’s four-person board of directors and investment committee. All material decisions with respect to PSSL, including those involving its investment portfolio, require unanimous approval of a quorum of the board of directors or investment committee. Quorum is defined as (i) the presence of two members of the board of directors or investment committee, provided that at least one individual is present that was elected, designated or appointed by each member; (ii) the presence of three members of the board of directors or investment committee, provided that the individual that was elected, designated or appointed by the member with only one individual present shall be entitled to cast two votes on each matter; and (iii) the presence of four members of the board of directors or investment committee shall constitute a quorum, provided that two individuals are present that were elected, designated or appointed by each member.

Below is a summary of PSSL’s portfolio at fair value:


($ in thousands)	June 30, 2023			September 30, 2022
Total investments	$	805,217		$	754,722
Weighted average cost yield on income producing investments		12.0	%		9.6	%
Number of portfolio companies in PSSL		105			95
Largest portfolio company investment	$	17,697		$	19,250
Total of five largest portfolio company investments	$	83,746		$	86,872

Below is a listing of PSSL’s individual investments as of June 30, 2023 (Par and $ in thousands):


Issuer Name	Maturity	Industry	Current Coupon			Basis Point Spread Above Index (1)	Par		Cost		Fair Value (2)
First Lien Secured Debt - 1,464.6%
A1 Garage Merger Sub, LLC	12/22/2028	Commercial Services & Supplies		11.84	%	SOFR+650	$	2,940	$	2,885	$	2,910
Ad.net Acquisition, LLC	5/7/2026	Media		11.50	%	SOFR+600		8,820		8,739		8,754
Alpine Acquisition Corp II	11/30/2026	Containers and Packaging		11.07	%	SOFR+600		12,885		12,548		12,370
Altamira Technologies, LLC	7/24/2025	Business Services		10.70	%	SOFR+600		4,841		4,758		4,841
Anteriad, LLC (f/k/a MeritDirect, LLC)	5/23/2024	Media: Advertising, Printing & Publishing		10.89	%	SOFR+550		5,072		5,030		4,945
Anteriad Holdings Inc (fka MeritDirect) March 2023 Lot	5/23/2024	Media: Advertising, Printing & Publishing		11.89	%	SOFR+650		4,938		4,857		4,863
Any Hour Services	7/21/2027	Professional Services		10.77	%	SOFR+525		7,529		7,359		7,322
Apex Service Partners, LLC	7/31/2025	Diversified Consumer Services		10.52	%	SOFR+525		1,002		1,002		997
Apex Service Partners, LLC Term Loan B	7/31/2025	Diversified Consumer Services		10.75	%	SOFR+550		2,187		2,187		2,176
Apex Service Partners, LLC Term Loan C	7/31/2025	Diversified Consumer Services		10.50	%	SOFR+525		11,013		10,966		10,958
Applied Technical Services, LLC	12/29/2026	Commercial Services & Supplies		11.14	%	SOFR+575		9,409		9,301		9,221
Arcfield Acquisition Corp.	3/7/2028	Aerospace and Defense		11.07	%	SOFR+575		4,641		4,559		4,595
Beta Plus Technologies, Inc.	7/1/2029	Business Services		10.99	%	SOFR+525		4,963		4,873		4,541
BioDerm, Inc.	1/31/2028	Healthcare and Pharmaceuticals		11.67	%	SOFR+650		9,000		8,894		8,865
Blackhawk Industrial Distribution, Inc.	9/17/2024	Distributors		11.64	%	SOFR+500		15,171		14,963		14,792
Broder Bros., Co.	12/2/2022	Consumer Products		11.16	%	SOFR+600		2,364		2,364		2,364
Burgess Point Purchaser Corporation	9/26/2029	Automotive		10.45	%	SOFR+525		448		418		424
By Light Professional IT Services, LLC	5/16/2024	High Tech Industries		12.30	%	SOFR+625		13,973		13,947		13,728
Cadence Aerospace, LLC	11/14/2023	Aerospace and Defense		13.91	%	SOFR+850		3,994		3,991		3,994
			(PIK 2.00%)							-
Cartessa Aesthetics, LLC	6/14/2028	Distributors		11.24	%	SOFR+600		9,661		9,528		9,612
CF512, Inc.	8/20/2026	Media		11.50	%	SOFR+600		6,838		6,733		6,769
CHA Holdings, Inc.	4/10/2025	Construction and Engineering		10.00	%	SOFR+450		5,513		5,463		5,513
Challenger Performance Optimization, Inc.	8/31/2023	Business Services		12.01	%	SOFR+675		9,147		9,142		8,827
			(PIK 1.00%)							-
Connatix Buyer, Inc.	7/13/2027	Media		10.65	%	SOFR+550		3,825		3,769		3,672
Crane 1 Services, Inc.	8/16/2027	Commercial Services & Supplies		10.41	%	SOFR+575		2,094		2,071		2,073
Dr. Squatch, LLC	8/31/2027	Personal Products		11.09	%	SOFR+600		14,750		14,518		14,602
DRI Holding Inc.	12/21/2028	Media		10.45	%	SOFR+525		2,634		2,418		2,357
DRS Holdings III, Inc.	11/3/2025	Consumer Goods: Durable		11.63	%	SOFR+575		14,586		14,527		14,193
Duraco Specialty Tapes LLC	6/30/2024	Containers and Packaging		11.75	%	SOFR+550		10,933		10,847		10,747
ECL Entertainment, LLC	5/1/2028	Hotels, Restaurants and Leisure		12.72	%	SOFR+750		7,588		7,567		7,607
EDS Buyer, LLC	1/10/2029	Professional Services		11.49	%	SOFR+625		8,978		8,851		8,753
Electro Rent Corporation	1/17/2024	Electronic Equipment, Instruments, and Components		10.83	%	SOFR+550		2,225		2,190		2,128
Exigo Intermediate II, LLC	3/15/2027	Software		10.95	%	SOFR+575		12,708		12,524		12,453
ETE Intermediate II, LLC - Term Loan	5/29/2029	Diversified Consumer Services		11.69	%	SOFR+650		12,404		12,160		12,031
Fairbanks Morse Defense	6/17/2028	Aerospace and Defense		10.25	%	SOFR+475		10,221		10,167		9,940
Gantech Acquisition Corp.	5/14/2026	IT Services		11.50	%	SOFR+625		14,413		14,241		13,909
Global Holdings InterCo LLC	3/16/2026	Diversified Financial Services		11.76	%	SOFR+600		3,746		3,733		3,549
Graffiti Buyer, Inc.	8/10/2027	Trading Companies & Distributors		11.04	%	SOFR+575		2,351		2,317		2,327
Hancock Roofing and Construction L.L.C.	12/31/2026	Insurance		10.70	%	SOFR+550		2,250		2,214		2,205
Holdco Sands Intermediate, LLC	11/23/2028	Aerospace and Defense		11.21	%	SOFR+600		4,925		4,847		4,876
HW Holdco, LLC	12/10/2024	Media		10.93	%	SOFR+500		3,014		2,983		2,968
Icon Partners III, LP	5/11/2028	Automobiles		9.77	%	SOFR+450		2,310		2,016		1,528
IDC Infusion Services, Inc.	12/30/2026	Healthcare Equipment and Supplies		11.89	%	SOFR+650		9,875		9,685		9,875
Imagine Acquisitionco, LLC	11/15/2027	Software		10.67	%	SOFR+550		9,272		9,085		9,040
Inception Fertility Ventures, LLC	12/7/2023	Healthcare Providers and Services		12.51	%	SOFR+700		16,537		16,309		16,371
Infinity Home Services Holdco, Inc.	12/28/2028	Commercial Services & Supplies		12.09	%	SOFR+685		6,106		5,990		6,106
Integrative Nutrition, LLC	9/29/2023	Diversified Consumer Services		12.39	%	SOFR+450		11,079		11,075		10,525
Integrity Marketing Acquisition, LLC	8/27/2025	Insurance		11.41	%	SOFR+575		5,921		5,860		5,862
ITI Holdings, Inc.	3/3/2028	IT Services		10.58	%	SOFR+550		3,950		3,894		3,851
K2 Pure Solutions NoCal, L.P.	12/20/2023	Chemicals, Plastics and Rubber		13.20	%	SOFR+800		17,697		17,643		17,697
Kinetic Purchaser, LLC	11/10/2027	Personal Products		11.39	%	SOFR+600		16,704		16,372		16,453
Lash OpCo, LLC	2/18/2027	Personal Products		12.13	%	SOFR+700		14,246		14,008		14,033
LAV Gear Holdings, Inc.	10/31/2024	Capital Equipment		11.64	%	SOFR+625		15,168		15,113		14,971
Lightspeed Buyer Inc.	2/3/2026	Healthcare Providers and Services		10.50	%	SOFR+575		12,087		11,924		11,905
LJ Avalon Holdings, LLC	1/31/2030	Environmental Industries		11.51	%	SOFR+665		2,592		2,542		2,540
Loving Tan Intermediate II, Inc.	5/28/2028	Consumer Products		12.26	%	SOFR+700		7,500		7,352		7,350
Lucky Bucks, LLC (4)	7/20/2027	Hotel, Gaming and Leisure		0.00	%			4,489		4,207		1,194
Lucky Bucks. LLC - OpCo DIP Loans	10/20/2023	Hotel, Gaming and Leisure		15.15	%	SOFR+1000		115		102		101
Magenta Buyer, LLC	7/31/2028	Software		10.03	%	SOFR+500		3,014		2,845		2,259
Marketplace Events, LLC - Super Priority First Lien Term Loan	9/30/2025	Media: Diversified and Production		10.43	%	SOFR+525		647		647		647
Marketplace Events, LLC - Super Priority First Lien Unfunded Term Loan	9/30/2025	Media: Diversified and Production						589		-		-
Marketplace Events, LLC	9/30/2026	Media: Diversified and Production		10.43	%	SOFR+525		4,837		3,715		4,837
Mars Acquisition Holdings Corp.	5/14/2026	Media		10.89	%	SOFR+550		11,617		11,494		11,501
MBS Holdings, Inc.	4/16/2027	Internet Software and Services		11.00	%	SOFR+575		7,350		7,255		7,277
MDI Buyer, Inc.	7/25/2028	Chemicals, Plastics and Rubber		11.13	%	SOFR+600		6,396		6,283		6,260


Issuer Name	Maturity		Industry	Current Coupon			Basis Point Spread Above Index (1)		Par / Shares		Cost		Fair Value (2)
Meadowlark Acquirer, LLC	12/10/2027		Professional Services		10.89	%	SOFR+550		$	2,378	$	2,340	$	2,330
Mission Critical Electronics, Inc.	3/28/2024		Capital Equipment		10.39	%	SOFR+500			5,794		5,787		5,748
Municipal Emergency Services, Inc.	9/28/2027		Distributors		10.89	%	SOFR+500			3,439		3,387		3,318
NBH Group LLC	8/19/2026		Healthcare, Education & Childcare		10.44	%	SOFR+525			10,738		10,590		10,631
Neptune Flood Incorporated - Term Loan	5/9/2029		Insurance		11.57	%	SOFR+650			5,235		5,158		5,157
New Milani Group LLC	6/6/2024		Consumer Goods: Non-Durable		10.70	%	SOFR+650			14,250		14,227		14,179
One Stop Mailing, LLC	5/7/2027		Air Freight and Logistics		10.24	%	SOFR+625			15,895		15,620		15,895
ORL Acquisitions, Inc.	9/3/2027		Consumer Finance		10.84	%	SOFR+525			2,228		2,207		2,117
Output Services Group, Inc. (4)	6/27/2026		Business Services		0.00	%		—		7,729		7,689		1,932
Owl Acquisition, LLC	2/4/2028		Professional Services		10.80	%	SOFR+575			3,893		3,830		3,815
Ox Two, LLC	5/18/2026		Construction and Building		12.75	%	SOFR+725			4,345		4,303		4,258
Peaquod Merger Sub, Inc.	12/2/2026		Diversified Financial Services		11.64	%	SOFR+640			11,503		11,282		11,273
PH Beauty Holdings III, Inc.	9/29/2025		Wholesale		10.48	%	SOFR+500			9,518		9,268		7,638
PL Acquisitionco, LLC	11/9/2027		Textiles, Apparel and Luxury Goods		12.20	%	SOFR+650			7,499		7,396		6,824
PlayPower, Inc.	5/8/2026		Consumer Goods: Durable		10.57	%	SOFR+550			2,565		2,500		2,399
Pragmatic Institute, LLC	7/6/2028		Education		11.01	%	SOFR+575			11,166		11,022		10,998
Quantic Electronics, LLC	11/19/2026		Aerospace and Defense		11.24	%	SOFR+600			2,811		2,775		2,768
Quantic Electronics, LLC - Unfunded Term Loan (3)	11/19/2026		Aerospace and Defense							1,104		-		(6	)
Rancho Health MSO, Inc.	12/18/2025		Healthcare Providers and Services		10.94	%	SOFR+575			1,032		1,032		1,032
Reception Purchaser, LLC	2/28/2028		Air Freight and Logistics		11.39	%	SOFR+600			4,938		4,874		4,728
Recteq, LLC	1/29/2026		Leisure Products		12.39	%	SOFR+625			4,888		4,833		4,692
Research Now Group, LLC and Dynata, LLC	12/20/2024		Diversified Consumer Services		10.80	%	SOFR+550			12,647		12,329		8,791
Sales Benchmark Index LLC	1/3/2025		Professional Services		11.44	%	SOFR+600			9,522		9,465		9,475
Sargent & Greenleaf Inc.	12/20/2024		Wholesale		12.77	%	SOFR+750			5,211		5,187		5,133
Schlesinger Global, Inc.	7/14/2025		Business Services		12.20	%	SOFR+700			11,810		11,796		11,368
				(PIK 0.50%)								-
Seaway Buyer, LLC	6/13/2029		Chemicals, Plastics and Rubber		11.09	%	SOFR+605			4,963		4,895		4,838
Sigma Defense Systems, LLC	12/18/2025		Aerospace and Defense		13.87	%	SOFR+850			14,432		14,193		14,179
Smile Brands Inc.	10/14/2025		Healthcare and Pharmaceuticals		9.65	%	SOFR+450			11,826		11,734		10,873
Solutionreach, Inc.	1/17/2024		Healthcare and Pharmaceuticals		10.90	%	SOFR+575			4,582		4,574		4,536
Spendmend Holdings LLC	3/1/2028		Healthcare Technology		10.86	%	SOFR+575			4,122		4,055		4,011
STV Group Incorporated	12/11/2026		Construction and Building		10.45	%	SOFR+525			9,075		9,021		9,030
Summit Behavioral Healthcare, LLC	11/24/2028		Healthcare and Pharmaceuticals		10.24	%	SOFR+475			1,791		1,697		1,782
System Planning and Analysis, Inc. (f/k/a Management Consulting & Research, LLC)	8/16/2027		Aerospace and Defense		11.24	%	SOFR+600			14,775		14,561		14,494
Team Services Group, LLC	11/24/2028		Healthcare and Pharmaceuticals		10.41	%	SOFR+500			347		333		336
Teneo Holdings LLC	7/18/2025		Business Services		10.45	%	SOFR+525			2,268		2,266		2,263
The Aegis Technologies Group, LLC	10/31/2025		Aerospace and Defense		11.86	%	SOFR+600			5,616		5,570		5,504
The Bluebird Group LLC	7/27/2026		Professional Services		12.64	%	SOFR+700			5,427		5,355		5,383
The Vertex Companies, LLC	8/30/2027		Construction and Engineering		10.45	%	SOFR+550			5,536		5,450		5,436
TPC Canada Parent, Inc. and TPC US Parent, LLC	11/24/2025		Consumer Goods: Non-Durable		10.76	%	SOFR+550			8,677		8,569		8,608
TVC Enterprises, LLC	3/26/2026		Diversified Consumer Services		10.95	%	SOFR+600			14,604		14,492		14,385
TWS Acquisition Corporation	6/16/2025		Diversified Consumer Services		11.65	%	SOFR+625			5,468		5,455		5,468
Tyto Athene, LLC (New Issue)	4/1/2028		IT Services		10.54	%	SOFR+550			14,670		14,562		13,555
UBEO, LLC	4/3/2024		Capital Equipment		9.95	%	SOFR+450			17,204		17,162		16,774
Urology Management Holdings, Inc.	6/15/2026		Healthcare and Pharmaceuticals		11.36	%	SOFR+665			6,910		6,783		6,768
Walker Edison Furniture Company LLC	3/31/2027		Wholesale		12.02	%	SOFR+635			3,331		3,331		3,331
Walker Edison Furniture Company LLC - Junior Revolving Credit Facility	3/31/2027		Wholesale		11.44	%	SOFR+625			1,667		1,667		1,667
Walker Edison Furniture Company LLC - DDTL - Unfunded (3)	3/31/2027		Wholesale							333		-		-
Wildcat Buyerco, Inc.	2/27/2026		Electronic Equipment, Instruments, and Components		11.14	%	SOFR+575			10,592		10,511		10,354
Zips Car Wash, LLC	3/1/2024		Automobiles		12.45	%	SOFR+725			16,830		16,714		16,452

Total First Lien Secured Debt												823,714		802,474
Equity Securities - 0.4%
New MPE Holdings, LLC		—	Media: Diversified and Production		—			—		—		—		306
Walker Edison Furniture - Common Equity		—	Wholesale							36		3,393		2,437
Total Equity Securities												3,393		2,743
Total Investments - 1,469.6%												827,107		805,217
Cash and Cash Equivalents - 69.3%
BlackRock Federal FD Institutional 30												37,943		37,943
Total Cash and Cash Equivalents												37,943		37,943
Total Investments and Cash Equivalents —1,329.0%											$	865,050	$	843,161
Liabilities in Excess of Other Assets — (1,229.0)%														(788,371	)
Members' Equity—100.0%													$	54,790

(1)

Represents floating rate instruments that accrue interest at a predetermined spread relative to an index, typically the applicable LIBOR or “L” or Prime rate or “P”. The spread may change based on the type of rate used. The terms in the Schedule of Investments disclose the actual interest rate in effect as of the reporting period. LIBOR loans are typically indexed to a 30-day, 60-day, 90-day or 180-day LIBOR rate (1M L, 2M L, 3M L, or 6M L, respectively), at the borrower’s option. All securities are subject to a LIBOR or Prime rate floor where a spread is provided, unless noted. The spread provided includes PIK interest and other fee rates, if any.

(2)

Valued based on PSSL’s accounting policy.

(3)

Below is a listing of PSSL’s individual investments as of September 30, 2022 ($ in thousands):


Issuer Name	Maturity	Industry	Current Coupon			Basis Point Spread Above Index (1)	Par		Cost		Fair Value (2)
First Lien Secured Debt - 1,330.4%
Ad.net Acquisition, LLC	5/6/2026	Media		9.67	%	3M L+600	$	8,888	$	8,788	$	8,821
Alpine Acquisition Corp II	11/30/2026	Containers and Packaging		8.22	%	SOFR+600		9,975		9,790		9,576
Altamira Technologies, LLC	7/24/2025	Business Services		10.81	%	3M L+800		5,225		5,113		5,042
American Insulated Glass, LLC	12/21/2023	Building Products		7.79	%	3M L+550		4,883		4,851		4,883
Anteriad, LLC (f/k/a MeritDirect, LLC)	5/23/2024	Media: Advertising, Printing & Publishing		9.67	%	3M L+550		5,284		5,208		5,284
Any Hour Services	7/21/2027	Professional Services		8.33	%	3M L+525		3,510		3,441		3,440
Apex Service Partners, LLC	7/31/2025	Diversified Consumer Services		6.72	%	1M L+525		1,010		1,010		1,005
Apex Service Partners, LLC Term Loan B	7/31/2025	Diversified Consumer Services		9.67	%	3M L+625		2,202		2,202		2,191
Apex Service Partners, LLC Term Loan C	7/31/2025	Diversified Consumer Services		7.86	%	3M L+525		11,115		11,050		11,059
Applied Technical Services, LLC	12/29/2026	Commercial Services & Supplies		8.76	%	3M L+575		8,421		8,317		8,211
Arcfield Acquisition Corp.	3/7/2028	Aerospace and Defense		8.99	%	SOFR + 575		4,677		4,588		4,583
Beta Plus Technologies, Inc.	7/1/2029	Business Services		7.76	%	SOFR + 525		5,000		4,903		4,900
Blackhawk Industrial Distribution, Inc.	9/17/2024	Distributors		8.62	%	SOFR + 500		15,293		15,102		14,956
Broder Bros., Co.	12/2/2022	Consumer Products		7.39	%	3M L+600		2,417		2,417		2,417
By Light Professional IT Services, LLC	5/16/2024	High Tech Industries		9.20	%	1M L+662		14,822		14,771		14,674
Cadence Aerospace, LLC	11/14/2023	Aerospace and Defense		11.31	%	3M L+325		12,412		12,385		12,288
			(PIK 11.31%)									-
Cartessa Aesthetics, LLC	5/13/2028	Distributors		9.55	%	SOFR + 600		6,484		6,359		6,386
CF512, Inc.	8/20/2026	Media		9.08	%	3M L+600		4,950		4,866		4,876
CHA Holdings, Inc.	4/10/2025	Construction and Engineering		8.17	%	3M L+450		5,557		5,487		5,557
Challenger Performance Optimization, Inc.	8/31/2023	Business Services		9.27	%	1M L+575		9,271		9,247		8,993
			(PIK 1.00%)									-
Connatix Buyer, Inc.	7/13/2027	Media		8.42	%	3M L+550		3,907		3,842		3,810
Crane 1 Services, Inc.	8/16/2027	Commercial Services & Supplies		9.39	%	3M L+575		2,110		2,084		2,089
Douglas Products and Packaging Company LLC	10/19/2022	Chemicals, Plastics and Rubber		8.87	%	3M L+575		8,655		8,653		8,655
Douglas Sewer Intermediate, LLC	10/19/2022	Chemicals, Plastics and Rubber		8.87	%	3M L+575		7,248		7,246		7,248
Dr. Squatch, LLC	8/31/2027	Personal Products		9.42	%	3M L+575		14,862		14,610		14,639
DRI Holding Inc.	12/21/2028	Media		8.37	%	1M L+525		1,832		1,680		1,643
DRS Holdings III, Inc.	11/3/2025	Consumer Goods: Durable		8.87	%	1M L+575		15,179		15,103		14,693
Duraco Specialty Tapes LLC	6/30/2024	Containers and Packaging		8.62	%	1M L+550		10,278		10,151		10,031
ECL Entertainment, LLC	5/1/2028	Hotels, Restaurants and Leisure		10.62	%	3M L+750		2,621		2,598		2,581
ECM Industries, LLC	12/23/2025	Electronic Equipment, Instruments, and Components		7.82	%	3M L+475		4,974		4,974		4,738
Exigo Intermediate II, LLC	3/15/2027	Software		8.87	%	1M L+575		12,935		12,759		12,644
Fairbanks Morse Defense	6/17/2028	Aerospace and Defense		8.39	%	3M L+475		10,300		10,238		9,528
Gantech Acquisition Corp.	5/14/2026	IT Services		9.37	%	1M L+625		14,638		14,427		14,199
Global Holdings InterCo LLC	3/16/2026	Diversified Financial Services		8.74	%	3M L+600		3,904		3,888		3,728
Graffiti Buyer, Inc.	8/10/2027	Trading Companies & Distributors		9.17	%	3M L+550		2,369		2,320		2,274
Hancock Roofing and Construction L.L.C.	12/31/2026	Insurance		8.67	%	1M L+500		2,392		2,347		2,356
Holdco Sands Intermediate, LLC	11/23/2028	Aerospace and Defense		10.17	%	3M L+600		4,963		4,874		4,863
HW Holdco, LLC	12/10/2024	Media		6.00	%	6M L+575		3,052		3,006		3,014
Icon Partners III, LP	5/11/2028	Automobiles		7.55	%	3M L+450		2,327		1,997		1,701
IDC Infusion Services, Inc.	12/30/2026	Healthcare Equipment and Supplies		10.20	%	SOFR+700		9,950		9,833		9,502
Imagine Acquisitionco, LLC	11/15/2027	Software		8.42	%	1M L+550		5,364		5,261		5,230
Inception Fertility Ventures, LLC	12/7/2023	Healthcare Providers and Services		8.55	%	SOFR+700		16,620		16,309		16,454
Integrative Nutrition, LLC	9/29/2023	Diversified Consumer Services		8.42	%	3M L+475		11,187		11,168		10,963
Integrity Marketing Acquisition, LLC	8/27/2025	Insurance		7.58	%	1M L+550		5,966		5,885		5,906
ITI Holdings, Inc.	3/3/2028	IT Services		8.67	%	SOFR + 550		3,980		3,917		3,900
K2 Pure Solutions NoCal, L.P.	12/20/2023	Chemicals, Plastics and Rubber		11.12	%	1M L+800		19,250		19,103		19,250
Kinetic Purchaser, LLC	11/10/2027	Personal Products		9.67	%	3M L+600		16,830		16,451		16,494
Lash OpCo, LLC	2/18/2027	Personal Products		11.17	%	3M L+700		14,355		14,074		14,068
LAV Gear Holdings, Inc.	10/31/2024	Capital Equipment		9.70	%	3M L+550		10,578		10,539		10,335
			(PIK 2.00%)									-
Lightspeed Buyer Inc.	2/3/2026	Healthcare Providers and Services		9.04	%	3M L+575		10,598		10,428		10,254
Lucky Bucks, LLC	7/20/2027	Hotel, Gaming and Leisure		8.31	%	3M L+550		4,331		4,258		3,183
Magenta Buyer, LLC	7/31/2028	Software		7.87	%	1M L+475		2,695		2,539		2,425
Marketplace Events, LLC - Super Priority First Lien Term Loan	9/30/2025	Media: Diversified and Production		8.19	%	1M L+525		647		647		647
Marketplace Events, LLC - Super Priority First Lien Unfunded Term Loan (3)	9/30/2025	Media: Diversified and Production						589		-		-
Marketplace Events, LLC	9/30/2026	Media: Diversified and Production		8.19	%	1M L+525		4,837		3,527		4,837
Mars Acquisition Holdings Corp.	5/14/2026	Media		8.62	%	1M L+550		9,900		9,782		9,851
MBS Holdings, Inc.	4/16/2027	Internet Software and Services		8.56	%	3M L+575		7,406		7,296		7,332
MDI Buyer, Inc.	7/25/2028	Chemicals, Plastics and Rubber		8.98	%	3M L+500		5,000		4,902		4,900
Meadowlark Acquirer, LLC	12/10/2027	Professional Services		9.17	%	3M L+650		2,396		2,353		2,372
Mission Critical Electronics, Inc.	3/28/2024	Capital Equipment		8.70	%	SOFR+500		5,829		5,817		5,759
Municipal Emergency Services, Inc.	9/28/2027	Distributors		8.67	%	3M L+500		3,465		3,405		3,264
NBH Group LLC	8/19/2026	Healthcare, Education & Childcare		7.80	%	1M L+550		10,820		10,641		10,820
New Milani Group LLC	6/6/2024	Consumer Goods: Non-Durable		7.75	%	3M L+500		14,363		14,319		14,111
OIS Management Services, LLC	7/9/2026	Healthcare Equipment and Supplies		8.40	%	SOFR+475		5,060		4,991		5,060
One Stop Mailing, LLC	5/7/2027	Air Freight and Logistics		9.37	%	1M L+625		14,598		14,353		14,160
Output Services Group, Inc.	3/27/2024	Business Services		9.80	%	3M L+425		7,682		7,676		5,838
Owl Acquisition, LLC	2/4/2028	Professional Services		8.41	%	3M L+575		3,990		3,918		3,890
Ox Two, LLC	5/18/2026	Construction and Building		9.81	%	3M L+600		4,925		4,866		4,827
PH Beauty Holdings III, Inc.	9/29/2025	Wholesale		8.07	%	1M L+500		9,593		9,234		7,674
PL Acquisitionco, LLC	11/9/2027	Textiles, Apparel and Luxury Goods		9.62	%	1M L+650		8,238		8,111		8,032
Plant Health Intermediate, Inc.	10/19/2022	Chemicals, Plastics and Rubber		8.87	%	3M L+575		1,562		1,561		1,562
PlayPower, Inc.	5/8/2026	Consumer Goods: Durable		9.17	%	3M L+550		2,580		2,500		2,309
Pragmatic Institute, LLC	7/6/2028	Education		9.30	%	SOFR+575		11,250		11,056		11,138
Quantic Electronics, LLC	11/19/2026	Aerospace and Defense		8.41	%	1M L+625		4,845		4,755		4,729
Quantic Electronics, LLC - Unfunded Term Loan (3)	11/19/2026	Aerospace and Defense						1,888		-		-
Reception Purchaser, LLC	2/28/2028	Air Freight and Logistics		9.13	%	SOFR+600		4,975		4,904		4,751
Recteq, LLC	1/29/2026	Leisure Products		9.92	%	3M L+600		4,925		4,856		4,753
Research Now Group, LLC and Dynata, LLC	12/20/2024	Diversified Consumer Services		8.84	%	3M L+550		12,564		12,354		11,291


Issuer Name	Maturity		Industry	Current Coupon			Basis Point Spread Above Index (1)		Par / Shares		Cost		Fair Value (2)
Sales Benchmark Index LLC	1/3/2025		Professional Services		9.67	%	3M L+600		$	5,013	$	4,960	$	4,963
Sargent & Greenleaf Inc.	12/20/2024		Wholesale		8.62	%	3M L+550			5,240		5,202		5,187
Schlesinger Global, Inc.	7/14/2025		Business Services		10.27	%	SOFR+500			11,847		11,829		11,551
				(PIK 0.50%)										-
Sigma Defense Systems, LLC	12/18/2025		Aerospace and Defense		12.17	%	1M L+850			14,716		14,411		14,421
Smile Brands Inc.	10/14/2025		Healthcare and Pharmaceuticals		7.05	%	3M L+450			11,917		11,807		11,470
Solutionreach, Inc.	1/17/2024		Healthcare and Pharmaceuticals		8.87	%	1M L+575			5,647		5,625		5,511
Spendmend Holdings LLC	3/1/2028		Healthcare Technology		8.63	%	SOFR+575			2,956		2,916		2,873
STV Group Incorporated	12/11/2026		Construction and Building		8.37	%	3M L+525			9,075		9,011		8,985
System Planning and Analysis, Inc. (f/k/a Management Consulting & Research, LLC)	8/16/2027		Aerospace and Defense		8.73	%	SOFR+600			14,888		14,623		14,649
Teneo Holdings LLC	7/18/2025		Business Services		8.38	%	3M L+625			2,786		2,757		2,623
The Aegis Technologies Group, LLC	10/31/2025		Aerospace and Defense		9.55	%	3M L+500			5,659		5,600		5,603
The Bluebird Group LLC	7/27/2026		Professional Services		10.67	%	1M L+700			1,707		1,679		1,724
The Infosoft Group, LLC	9/16/2024		Media: Broadcasting and Subscription		8.47	%	3M L+525			12,957		12,952		12,859
The Vertex Companies, LLC	8/30/2027		Construction and Engineering		8.62	%	1M L+550			5,578		5,479		5,550
TPC Canada Parent, Inc. and TPC US Parent, LLC	11/24/2025		Consumer Goods: Non-Durable		8.30	%	3M L+475			8,744		8,604		8,482
TVC Enterprises, LLC	3/26/2026		Diversified Consumer Services		8.87	%	3M L+550			14,952		14,871		14,578
TWS Acquisition Corporation	6/16/2025		Diversified Consumer Services		8.76	%	3M L+625			5,468		5,450		5,441
Tyto Athene, LLC (New Issue)	4/1/2028		IT Services		7.76	%	3M L+550			15,550		15,421		14,446
UBEO, LLC	4/3/2024		Capital Equipment		8.17	%	3M L+450			17,390		17,305		17,129
Unique Indoor Comfort, LLC	5/24/2027		Home and Office Furnishings, Housewares		8.95	%	SOFR+525			4,975		4,880		4,866
Walker Edison Furniture Company LLC	3/31/2027		Wholesale		12.42	%	3M L+575			12,684		12,438		8,473
				(PIK 3.0%)										-
Wildcat Buyerco, Inc.	2/27/2026		Electronic Equipment, Instruments, and Components		9.45	%	SOFR+550			8,546		8,506		8,261
Zips Car Wash, LLC	3/1/2024		Automobiles		10.35	%	3M L+725			16,957		16,711		16,536

Total First Lien Secured Debt												767,316		751,628
Second Lien Secured Debt - 5.2%


Inventus Power, Inc.	9/29/2024		Consumer Goods: Durable		12.17	%	3M L+850			3,000		2,963		2,955
Total Second Lien Secured Debt												2,963		2,955
Equity Securities - 0.3%
New MPE Holdings, LLC		—	Media: Diversified and Production		—			—		—		—		139
Total Equity Securities												—		139
Total Investments - 1,335.9%												770,280		754,722
Cash and Cash Equivalents - 59.7%
BlackRock Federal FD Institutional 30												33,725		33,705
Total Cash and Cash Equivalents												33,725		33,705
Total Investments and Cash Equivalents —1,395.6%											$	804,005	$	788,427
Liabilities in Excess of Other Assets — (1,295.6)%														(731,931	)
Members' Equity—100.0%													$	56,496

(1)

(2)

Valued based on PSSL’s accounting policy.

(3)

Below are the consolidated statements of assets and liabilities for PSSL ($ in thousands):



		June 30, 2023
		(Unaudited)			September 30, 2022
Assets
Investments at fair value (amortized cost—$827,107 and $770,280, respectively)	$		805,217	$		754,722
Cash and cash equivalents (cost—$37,943 and $33,725, respectively)			37,943			33,705
Interest receivable			4,556			3,025
Receivable for investment sold			—			3,637
Prepaid expenses and other assets			724			1,722
Total assets			848,440			796,811
Liabilities
Credit facility payable			41,300			259,500
2032 Asset-backed debt, net (par—$246,000)			243,821			243,365
2035 Asset-backed debt, net (par—$246,000)			243,370			—
Notes payable to members			240,100			217,350
Payable for investments purchased			8,950			10,414
Interest payable on notes to members			6,363			4,719
Interest payable on Credit facility and asset backed debt			9,000			3,817
Accrued expenses			746			1,150
Total liabilities			793,650			740,315
Commitments and contingencies(1)
Members' equity			54,790			56,496
Total liabilities and members' equity	$		848,440	$		796,811

(1) As of June 30, 2023 and September 30, 2022, PSSL had unfunded commitments to fund investments of $2.0 million and $2.5 million, respectively.

Below are the consolidated statements of operations for PSSL ($ in thousands):



	Three months ended June 30,						Nine months ended June 30,
	2023			2022			2023			2022
Investment income:
Interest	$	23,373		$	13,535		$	64,282		$	36,467
Other income		373			65			930			1,084
Total investment income		23,746			13,600			65,212			37,551
Expenses:
Interest and expense on credit facility and asset-backed debt		12,094			4,667			30,413			11,514
Interest expense on notes to members		7,986			4,510			22,159			11,704
Administration fees		529			300			1,553			900
General and administrative expenses		193			289			773			867
Total expenses		20,802			9,766			54,898			24,985
Net investment income		2,944			3,834			10,314			12,566
Realized and unrealized gain (loss) on investments and credit facility foreign currency translation:
Net realized gain (loss) on:
Investments		93			(24	)		(5,852	)		(14,956	)
Credit facility foreign currency translation		—			—			(10	)		—
Net change in unrealized appreciation (depreciation) on:
Investments		(4,442	)		(5,232	)		(6,308	)		6,325
Net change in unrealized appreciation (depreciation) on investments and credit facility foreign currency translation		(4,442	)		(5,232	)		(6,308	)		6,325
Net realized and unrealized gain (loss) from investments and credit facility foreign currency translation		(4,349	)		(5,256	)		(12,170	)		(8,631	)
Net increase (decrease) in members' equity resulting from operations	$	(1,405	)	$	(1,422	)	$	(1,856	)	$	3,935

(1)

Currently, no management or incentive fees are payable by PSSL. If any fees were to be charged, they would be separately disclosed in the Statements of Operations.

Off-Balance Sheet Arrangements

We currently engage in no off-balance sheet arrangements other than our funding requirements for the unfunded investments described above.

Distributions

In order to be treated as a RIC for federal income tax purposes and to not be subject to corporate-level tax on undistributed income or gains, we are required, under Subchapter M of the Code, to annually distribute dividends for U.S. federal income tax purposes to our stockholders out of the assets legally available for distribution of an amount generally at least equal to 90% of our investment company taxable income, determined without regard to any deduction for dividends paid.

Although not required for us to maintain our RIC tax status, in order to preclude the imposition of a 4% nondeductible federal excise tax imposed on RICs, we must distribute dividends for federal income tax purposes to our stockholders in respect of each calendar year an amount at least equal to the Excise Tax Avoidance Requirement. In addition, although we may distribute realized net capital gains (i.e., net long-term capital gains in excess of net short-term capital losses), if any, at least annually, out of the assets legally available for such distributions in the manner described above, we have retained and may continue to retain such net capital gains or investment company taxable income, subject to maintaining our ability to be taxed as a RIC, in order to provide us with additional liquidity.

During the three and nine months ended June 30, 2023, we declared distributions of $0.3025 and $0.8775 per share for total distributions of $15.4 million and $42.4 million, respectively. For the three and nine months ended June 30, 2022, we declared distributions of $0.285 and $0.855 per share for total distributions of $11.8 million and $34.1 million, respectively. 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.

We intend to continue to make monthly distributions to our stockholders. Our monthly distributions, if any, are determined by our board of directors quarterly.

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. In addition, we may be limited in our ability to make distributions due to the asset coverage ratio for borrowings applicable to us as a BDC under the 1940 Act and due to provisions in future credit facilities. If we do not distribute at least a certain percentage of our income annually, we could suffer adverse tax consequences, including possible loss of our ability to be subject to tax as a RIC. We cannot assure stockholders that they will receive any distributions at a particular level.

Recent Accounting Pronouncements

new guidance is effective for interim and annual periods beginning after December 15, 2022. The Company has adopted the new accounting standard implementing appropriate controls and procedures, the effect of which was not material to the consolidated financial statements and the notes thereto.

RECENT DEVELOPMENTS

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are subject to financial market risks, including changes in interest rates. As of June 30, 2023, our debt portfolio consisted of 100.0% variable-rate investments. The variable-rate loans are usually based on a SOFR (or an alternative risk-free floating interest rate index) rate and typically have durations of three months, after which they reset to current market interest rates. Variable-rate investments subject to a floor generally reset by reference to the current market index after one to nine months only if the index exceeds the floor. In regards to variable-rate instruments with a floor, we do not benefit from increases in interest rates until such rates exceed the floor and thereafter benefit from market rates above any such floor. In contrast, our cost of funds, to the extent it is not fixed, will fluctuate with changes in interest rates since it has no floor.

Assuming that the most recent Consolidated Statements of Assets and Liabilities was to remain constant, and no actions were taken to alter the existing interest rate sensitivity, the following table shows the annualized impact of hypothetical base rate changes in interest rates:


Change in Interest Rates	Change in Interest Income, Net of Interest Expense (in thousands)			Change in Interest Income, Net of Interest Expense Per Share
Down 1%	$	(7,182	)	$	(0.13	)
Up 1%		7,182			0.13
Up 2%		14,364			0.26
Up 3%		21,545			0.39
Up 4%		28,741			0.52

Although management believes that this measure is indicative of our sensitivity to interest rate changes, it does not adjust for potential changes in the credit market, credit quality, size and composition of the assets on the Consolidated Statements of Assets and Liabilities and other business developments that could affect net increase in net assets resulting from operations or net investment income. Accordingly, no assurances can be given that actual results would not differ materially from those shown above.

Because we borrow money to make investments, our net investment income is dependent upon the difference between the rate at which we borrow funds and the rate at which we invest these funds, as well as our level of leverage. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income or net assets.

We may hedge against interest rate and foreign currency fluctuations by using standard hedging instruments such as futures, options and forward contracts or our Credit Facility subject to the requirements of the 1940 Act and applicable commodities laws. While hedging activities may insulate us against adverse changes in interest rates and foreign currencies, they may also limit our ability to participate in benefits of lower interest rates or higher exchange rates with respect to our portfolio of investments with fixed interest rates or investments denominated in foreign currencies. During the periods covered by this Report, we did not engage in interest rate hedging activities or foreign currency derivatives hedging activities.

Item 4. Controls and Procedures

As of the period covered by this Report, we, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). As disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022, a material weakness was previously identified in connection with our internal control over financial reporting relating to procedures ensuring the timely transmission of portfolio company financial information to our independent valuation service providers. We have taken steps to remediate this material weakness, which steps have included (i) enhancing existing controls to ensure the timely transmission of all relevant portfolio company financial information to our independent service providers and (ii) enhancing policies and procedures to demonstrate a commitment to improving our overall control environment.

Taking the above efforts into consideration, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures for the quarter ended June 30, 2023 were effective and provided reasonable assurance that information required to be disclosed in our periodic filings with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.

Other than disclosed in this Item 4, there have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

None of us, our Investment Adviser or our Administrator, is currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us, or against our Investment Adviser or Administrator. From time to time, we, our Investment Adviser or Administrator, may be a party to certain legal proceedings, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of these and any future legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.

Item 1A. Risk Factors

In addition to the other information set forth in this Report, you should consider carefully the factors discussed below, as well as in Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022 filed on November 17, 2022, which could materially affect our business, financial condition and/or operating results. The risks described below, as well as in our Annual Report on Form 10-K are not the only risks facing PennantPark Floating Rate Capital Ltd. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

We and our portfolio companies may maintain cash balances at financial institutions that exceed federally insured limits and may otherwise be materially affected by adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties.

Our cash is held in accounts at U.S. banking institutions that we believe are of high quality. Cash held by us and by our portfolio companies in non-interest-bearing and interest-bearing operating accounts may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. If such banking institutions were to fail, we or our portfolio companies could lose all or a portion of those amounts held in excess of such insurance limitations. In addition, actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems, which could adversely affect our and our portfolio companies’ business, financial condition, results of operations, or prospects.

Although we assess our and our portfolio companies’ banking relationships as we believe necessary or appropriate, our and our portfolio companies’ access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our respective current and projected future business operations could be significantly impaired by factors that affect us or our portfolio companies, the financial institutions with which we or our portfolio companies have arrangements directly, or the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry. These factors could involve financial institutions or financial services industry companies with which we or our portfolio companies have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally.

In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us or our portfolio companies to acquire financing on acceptable terms or at all.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

10b5-1 Disclosure

None of the officers or directors of the Company have adopted or terminated any Rule 10b5-1 trading arrangements applicable to them (if any) or the Company.

Item 6. Exhibits

Unless specifically indicated otherwise, the following exhibits are incorporated by reference to exhibits previously filed with the SEC:


3.1	Articles of Amendment and Restatement of the Registrant (Incorporated by reference to Exhibit 99(A) to the Registrant's Pre-Effective Amendment No. 3 to the Registration Statement on Form N-2 (File No. 333-170243), filed on March 29, 2011).

3.2	Second Amended and Restated Bylaws of the Registrant (Incorporated by reference to Exhibit 3.2 to the Registrant's Quarterly Report on Form 10-Q (File No. 814-00891), filed on May 11, 2020).

4.1	Form of Share Certificate (Incorporated by reference to Exhibit 99(D) to the Registrant's Pre-Effective Amendment No. 5 to the Registration Statement on Form N-2 (File No. 333-170243), filed on April 5, 2011).

31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.

31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.

32.1*	Certification of Chief Executive Officer pursuant to section 906 of The Sarbanes-Oxley Act of 2002.

32.2*	Certification of Chief Financial Officer pursuant to section 906 of The Sarbanes-Oxley Act of 2002.

99.1	Privacy Policy of the Registrant (Incorporated by reference to Exhibit 99.1 to the Registrant’s Annual Report on Form 10-K (File No. 814-00891), filed on November 17, 2011).

101.INS*	Inline XBRL Instance Document

101.SCH*	Inline XBRL Taxonomy Extension Schema

101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.



	PENNANTPARK FLOATING RATE CAPITAL LTD.

Date: August 9, 2023	By:	/s/ Arthur H. Penn
		Arthur H. Penn
		Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)

Date: August 9, 2023	By:	/s/ Richard T. Allorto, Jr.
		Richard T. Allorto, Jr.
		Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	H.S. junior Avg

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company