Prospect Capital Corporation Shares Soar 6.29% After Debt Restructuring Offer

Prospect Capital Corporation (PSEC) shares surged by 6.29% today, marking a significant rebound despite an intraday decline of 3.14% that saw the stock price drop to a record low.

Prospect Capital Corporation recently announced a cash tender offer to purchase any and all of its outstanding 3.706% Notes due 2026. This strategic debt management initiative involves offering $990 per $1,000 principal amount of notes, plus accrued interest, representing a 1% discount. The tender offer, set to expire on April 17, 2025, is aimed at restructuring debt rather than deleveraging, funded by cash on hand and borrowings under its revolving credit facility. This move allows Prospect Capital to manage its capital structure more opportunistically, which is a common practice for Business Development Companies (BDCs).

The company's stock has been subject to volatility, trading down slightly and reaching new lows, which may be influenced by the company's strategic financial actions including the tender offer. The tender offer is part of Prospect Capital's broader strategy to optimize its financial position and ensure long-term sustainability. By restructuring its debt, the company aims to enhance its financial flexibility and better position itself to capitalize on future growth opportunities.