PennantPark Floating Rate Capital Ltd. priced a $200 million aggregate principal amount of 6.75% notes due March 4 2029 on February 26 2026. The offering, expected to close on March 4 2026, is being underwritten by Raymond James, Keefe, Bruyette & Woods, Stifel, Citizens JMP Securities, and Truist Securities. The notes may be redeemed in whole or in part at the company’s option at par plus a make‑whole premium, with a mandatory redemption at par three months before maturity.
The net proceeds will be used to repay obligations under the company’s revolving credit facility, invest in new or existing portfolio companies, and fund general corporate purposes. Issuing fixed‑rate debt allows PennantPark to hedge against the interest‑rate risk that currently affects roughly 99 % of its variable‑rate loan portfolio, thereby stabilizing future interest expense and supporting its middle‑market lending strategy.
In its most recent quarterly report, PennantPark reported net investment income of $26.6 million for the first quarter ended December 31 2025, down from $30.0 million a year earlier. The decline was driven by higher interest expense and one‑time credit‑facility amendment costs. As of December 31 2025, the company’s portfolio totaled $2.61 billion, composed of 89 % first‑lien secured debt and 11 % preferred or common equity.
On February 24 2026, PennantPark completed a $356.5 million debt‑securitization refinancing that lowered its weighted‑average cost of capital. CEO Arthur Penn noted that the reset “enables us to optimize financing costs in the current market, reinforcing our commitment to deliver sustained value for our investors.” The new notes continue that trend of refinancing to secure more favorable terms.
The company’s shares were trading near a 52‑week low of about $8.44 on February 26 2026, a level some analysts view as undervalued. The additional debt will increase PennantPark’s leverage, prompting investors to monitor its debt‑servicing capacity and overall capital structure.
The issuance represents a material financing event that supports PennantPark’s core middle‑market lending strategy and enhances its ability to manage interest‑rate exposure while maintaining flexibility to invest in portfolio companies.
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