Prospect Capital's Dividend Safety Under Threat Due to Capital Erosion.

Prospect Capital's (PSEC) recent 25% dividend cut raises concerns about the sustainability of its 9% distribution. Despite adequate near-term net investment income coverage, persistent capital erosion from realized investment losses and quarterly NAV declines threaten the company's ability to sustain its distribution without future cuts. Retirees evaluating PSEC as a core income holding should consider the underlying risks, including NAV erosion and potential future dividend cuts.