PennantPark Floating Rate Capital Ltd.

and projections, and we ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from these projections. We do not undertake to update our forward-looking statements unless required by law. To obtain copies of our latest SEC filings, please visit our website at pennantpark.com, or call us at At this time, I'd like to turn the call back to our Chairman and Chief Executive Officer, Art Penn.

Thanks, Rick. We're going to spend a few minutes and comment on the current market environment for private middle market credit, provide a summary of how we fared in the quarter ended March 31st, how the portfolio is positioned for the upcoming quarters, a detailed review of the financials, and then open it up for Q&A. For the quarter ended March 31st, our GAAP and coordinate investment income was 22 cents per share. We are pleased to announce that the Board of Directors has approved an increase in the monthly dividend to 8 cents per share. The increase will be effective beginning with the June monthly dividend, which will be payable on July 1st to shareholders of record as of June 14th. This represents a 14% increase in the monthly dividend. GAAP and adjusted NAV increased 0.5%, to $7.69 per share from $7.65. As of March 31st, our portfolio grew slightly to $1.2 billion or 2% from the prior quarter. During the quarter, we continued to originate attractive investment opportunities and invested $188 million in six new and 43 existing portfolio companies at a weighted average yield of 11.7%. For the investments in new portfolio companies, the weighted average debt to EBITDA was 4.3 times, The weighted average interest coverage was 2.1 times, and the weighted average loan-to-value was 40%. We added two new investments to non-accrual status and removed one investment. Non-accruals represent 3.7% of the portfolio at cost and 3% at market value. For the quarter ended March 31st, PIC income remained low at only 2.9% of total investment income, which we believe is among the lowest in the BDC sector. As of March 31st, the portfolio's weighted average leverage ratio through our debt security was 4.4 times, and the portfolio's weighted average interest coverage was 2.2 times. These attractive credit statistics are testament to our selectivity and conservative orientation, as well as our focus on the core middle market. On average, we have seen a 50 basis point tightening of first lien spreads over the last six months. However, we continue to believe that the current vintage of core middle market directly originated loans, is excellent. In the core middle market, leverage is lower, spreads and upfront OID are higher, and covenants are tighter than in the upper middle market. Despite covenant erosion in the upper middle market and the core middle market, we are still getting meaningful covenant protections. At March 31st, the JV portfolio equaled $924 million, and during the quarter, the JV invested $113 million. including $103 million of purchases from PNNT. With its current capital base, the JV portfolio can grow to $1.1 billion. Over the last 12 months, PNNT earned a 17.5% return on invested capital in the JV. We expect that with continued growth in the JV portfolio, the JV investment will enhance PNNT's earnings momentum in future quarters. Now let me turn to the current market environment. We are well positioned as a lender focused on capital preservation in the United States. We continue to believe that our focus on core middle market opportunities provides the company with attractive investments, where we provide important strategic capital to our borrowers. We have a long-term track record of generating value by successfully financing growing middle market companies in five key sectors. These are sectors where we have substantial domain expertise, know the right questions to ask, and have an excellent track record. There are business services, consumer, government services and defense, healthcare, and software and technology. These sectors have also been recession resilient and tend to generate strong free cash flow. In the core middle market, companies with 10 to 50 million of EBITDA, those companies are below the threshold and we do not compete with the broadly syndicated loan or high yield markets, unlike our peers in the upper market. In the core middle market, Because we are an important strategic lending partner, the process and package of terms we receive is attractive. We have many weeks to do our diligence with care. We thoughtfully structure transactions with sensible credit statistics, meaningful covenants, substantial equity cushions to protect our capital, attractive spreads and upfront OID, as well as an equity co-investment. Additionally, from a monitoring perspective, we receive monthly financial statements to help us stay on top of the companies. With regard to covenants, unlike the erosion in the upper middle market, virtually all of our originated first lien loans had meaningful covenants which helped protect our capital. This is a significant reason why we believe we are well positioned in this environment. Many of our peers who focus on the upper middle market state that those bigger companies are less risky. That is a perception and may make some intuitive sense, but the reality is different. According to S&P, loans with companies Loans to companies with less than $50 million of EBITDA have a lower default rate or higher recovery rate than loans to companies with higher EBITDA. We believe that the meaningful covenant protections of core middle market loans, more careful diligence, and tighter monitoring have been an important part of this differentiated performance. As a provider of strategic capital that fuels the growth of our portfolio companies, in many cases we participate in the upside of the company by making an equity co-investment. Our returns on these equity co-investments have been excellent over time. Overall, for our platform from inception through March 31st, we've invested over $469 million in equity co-investments and have generated an IRR of 26% and a multiple on invested capital of 2.1 times. Since inception, nearly 17 years ago, PNNT has invested $8.1 billion at an average yield of 11.3% and has experienced a loss ratio on invested capital of approximately 19 basis points annually. This strong track record includes investments in primarily subordinated debt made prior to the global financial crisis, our legacy energy investments, and recently the pandemic. With regard to the outlook, new loans in our target market are attractive. Our experienced and talented team and our wide origination funnel is producing active deal flow. Our continued focus remains on capital preservation and being patient investors. We want to reiterate our goal to generate attractive risk-adjusted returns through income, coupled with long-term preservation of capital. We seek to find investment opportunities in growing middle market companies that have high free cash flow conversion. We capture that free cash flow primarily through debt instruments and pay out those contractual cash flows in the form of dividends to our shareholders. Let me now turn the call over to Rick, our CFO, to take us through the financial results. Thank you, Art.

For the quarter ended March 31st, GAAP and core net investment income was $0.22 per share. Operating expenses for the quarter were as follows. Interest and credit facility expenses were $11.9 million. Base management and incentive fees were $7.2 million. General and administrative expenses were $1.9 million. And provision for excise taxes were $0.8 million. For the quarter ended March 31st, net realized and unrealized change on our investments and debt, including provision for taxes, was a gain of $1.8 million, or $0.03 per share. As of March 31st, our gap and adjusted NAV was $7.69 per share, which is up 0.5% from $7.65 per share in the prior quarter. As of March 31st, Our debt to equity ratio was 1.4 times, and our capital structure is diversified across multiple funding sources, including both secured and unsecured debt. As of March 31st, our key portfolio statistics were as follows. Our portfolio remains highly diversified with 138 companies across 30 different industries. The weighted average yield on our debt investments was 12.5%. Pick income equaled only 2.9% of total investment income. We had two non-accruals, which represent 3.7% of the portfolio at cost and 3% at market value. The portfolio is comprised of 58% first lien secured debt, 5% second lien secured debt, 10% subordinated notes to PSLF, 4% other subordinated debt, 6% equity in PSLF, and 17% in other preferred and common equity. 97% of the debt portfolio is floating rate. Debt to EBITDA on the portfolio is 4.4 times and interest coverage is 2.2 times. Now let me turn the call back to Art.