PennantPark Floating Rate Capital Ltd. (PFLA)

PennantPark Floating Rate Capital Ltd. is a business development company focused on private debt. It makes secondary direct, debt, equity and loan investments, mainly through floating rate loans to middle market companies that are private, thinly traded or have a small market value. Most of its investments are in the United States, with a smaller share abroad. Typical investments range from $2 million to $20 million.

The fund may also hold preferred stock, common stock, warrants or options, either received alongside debt deals or bought directly. It mainly puts $10 million to $50 million into senior secured loans and mezzanine debt. It targets companies without ratings from national agencies; if rated, they would fall between BB and CCC on the Standard & Poor's scale.

Up to 30% of the portfolio is in non-qualifying assets. These can include public companies that are not thinly traded or have a market value of $250 million or more, middle-market companies outside the United States, high-yield bonds, distressed debt, private equity and investment companies as defined in the 1940 Act.

Normally, at least 80 percent of net assets plus investment borrowings go into floating rate loans and similar investments, including cash held in money market funds. It expects senior secured loans to make up 65 percent of the portfolio, and it holds floating rate loans for three to ten years.