Business development company specializing in direct investments in floating rate loans and other investments.
PennantPark Floating Rate Capital Ltd. operates as a business development company focused on making strategic investments across various sectors. Established with a mandate to invest in secondary direct, debt, equity, and loan opportunities, the firm targets private and small market-cap public middle market companies primarily within the United States. Leveraging its expertise in floating rate loans, PennantPark Floating Rate Capital Ltd. typically allocates between $2 million and $20 million per investment, ensuring a diversified portfolio that spans a spectrum of industries.
Complementing its core strategy, the company also engages in equity investments, including preferred and common stock, warrants, and options derived from its debt investments or made through direct equity placements. With a focus on senior secured loans and mezzanine debt, typically ranging from $10 million to $50 million, PennantPark Floating Rate Capital Ltd. targets companies with credit ratings between BB and CCC under the Standard & Poor's system, prioritizing investments in entities not rated by national agencies.
Underpinning its investment philosophy, PennantPark Floating Rate Capital Ltd. allocates a significant portion of its portfolio up to 30% to non-qualifying assets. These include investments in high-yield bonds, distressed debt, private equity, and securities of middle-market companies outside the United States. Despite its diverse portfolio, the company maintains stringent guidelines to ensure at least 80% of its net assets are invested in floating rate loans or assets with similar economic profiles, supported by cash equivalents in money market funds. With a typical investment horizon spanning three to ten years for floating rate loans, the firm combines strategic insight with disciplined investment practices to optimize returns for its shareholders.