PennantPark Floating Rate Capital Ltd. Completes the Reset of a $356.5 Million Securitization, Substantially Reducing Borrowing Costs

PennantPark Floating Rate Capital (NYSE: PFLT) closed a $356.5 million refinancing of PennantPark CLO VIII, extending final maturity to April 2038 and fully funding replacement debt at closing.

Rhea-AI Summary

PennantPark Floating Rate Capital (NYSE: PFLT) closed a $356.5 million refinancing of PennantPark CLO VIII, extending final maturity to April 2038 and fully funding replacement debt at closing. Weighted average cost of capital is expected to fall by 114 basis points from SOFR+2.79% to SOFR+1.65%.

PFLT will retain the $69.45 million subordinated notes through a consolidated subsidiary; placement agent was GreensLedge and co-structuring agent was KeyBanc. PennantPark manages ~$3.7 billion in securitization assets and ~$10.0 billion of investable capital.

Positive

• Weighted average cost of capital reduced by 114 bps (SOFR+2.79% to SOFR+1.65%)
• Replacement debt 100% funded at closing, providing immediate liquidity certainty
• Maturity extended to April 2038, lengthening financing runway
• PFLT retains $69.45M subordinated notes, preserving upside from securitized assets

Negative

• Financing recorded as a consolidated secured borrowing, increasing reported leverage
• Subordinated notes are not rated (NR), maintaining credit exposure concentration

Argus Feb 25 session

+2.30% close to close Open Argus

Details

News Market Reaction – PFLT

In the Feb 25 session, PFLT gained 2.30%, reflecting a moderate positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Market Context

This announcement details a reset of a $356.5 million securitization that cuts the weighted average ...

Analysis

This announcement details a reset of a $356.5 million securitization that cuts the weighted average cost of capital from SOFR+2.79% to SOFR+1.65% and extends maturity to April 2038. PFLT retains the subordinated notes, keeping economic exposure while reducing borrowing costs. In context of recent earnings-driven NAV pressure and regular distributions, investors may watch how this lower-cost, longer-term funding supports portfolio yields, credit performance, and net asset value over time.

Key Figures

Securitization size: $356.5 million Senior tranche coupon: 3 Mo SOFR + 1.43% Prior WACC: SOFR + 2.79% +5 more

Securitization size

$356.5 million

PennantPark CLO VIII debt securitization reset

Senior tranche coupon

3 Mo SOFR + 1.43%

A-1-R Notes and Loans coupon

Prior WACC

SOFR + 2.79%

Previous weighted average cost of capital for this securitization

New WACC

SOFR + 1.65%

Expected weighted average cost after reset

Cost reduction

114 basis points

Reduction in weighted average cost of capital

Managed securitization assets

$3.7 billion

Middle-market securitization assets managed by PennantPark

Platform capital

$10.0 billion

Investable capital managed by PennantPark and affiliates

Debt maturity

April 2038

Final maturity of replacement securitization debt

Historical Context

5 past events · Latest: Feb 09

5 events

1. Feb 09

   Quarterly earnings

   24h Move

   -3.5%

   Earnings showed NAV decline and pressured results, shares fell about 3.5%.

2. Feb 03

   Monthly distribution

   24h Move

   +2.0%

   Announced $0.1025 monthly dividend, stock rose a little over 2%.

3. Jan 06

   Earnings scheduling

   24h Move

   -1.5%

   Set date for Q1 2026 results and call; shares slipped modestly.

4. Jan 05

   Monthly distribution

   24h Move

   +0.6%

   Declared $0.1025 January 2026 distribution, stock edged higher.

5. Dec 02

   Monthly distribution

   24h Move

   +2.6%

   Announced December 2025 $0.1025 distribution, shares gained over 2%.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

clo, securitization, subordinated notes, sofr, +2 more

6 terms

clo financial

"PennantPark CLO VIII, LLC, a wholly-owned and consolidated subsidiary"

A CLO (Collateralized Loan Obligation) is a financial vehicle that pools many corporate loans and sells slices of that pool to investors, with each slice carrying a different mix of risk and return—think of it as a loan-based fund cut into safe and risky pieces. It matters to investors because CLOs can offer higher yields than traditional bonds but expose buyers to borrowers’ defaults and changes in interest rates, so understanding which slice you own is key to gauging potential reward and loss.

securitization financial

"has closed the refinancing of a four-year reinvestment period, twelve-year final maturity $356.5 million debt securitization"

Securitization is when a bank or company takes a bunch of loans or assets, like mortgages or car loans, and bundles them together into a single package. They then sell pieces of this package to investors, who receive regular payments from the borrowers. This process helps the original lender get money quickly and spreads the risk among many investors.

subordinated notes financial

"Subordinated Notes | 69,450,000 | 19.5% | N/A | NR | N/A"

Subordinated notes are loans companies issue that rank below other debts for repayment, meaning holders get paid only after higher-priority creditors if the issuer runs into trouble. Because they act like being farther back in line at a buffet, they usually offer higher interest to compensate for greater risk, so investors watch them for potential higher returns but also increased chance of loss and sensitivity to the issuer’s financial health.

sofr financial

"3 Mo SOFR + 1.43% | AAA | 100.0%"

The Secured Overnight Financing Rate (SOFR) is a market benchmark that measures the cost of borrowing cash overnight using U.S. Treasury securities as collateral. Investors watch SOFR because it acts like a speedometer for short-term interest costs—affecting loan rates, bond yields and the pricing of interest-rate contracts—so movements change borrowing expenses, cash returns and the value of interest-sensitive investments.

blue sky laws regulatory

"or any state “blue sky” laws, and may not be offered or sold"

State-level securities laws that require companies and investment products to register, disclose key information, or meet exemptions before being sold to residents; they act like local consumer protection rules for investments. They matter to investors because they reduce the risk of fraud, ensure basic disclosure about what is being offered, and can affect where and how easily an investment can be bought or sold—similar to how building codes affect whether a house can be advertised in a neighborhood.

business development company financial

"PennantPark Floating Rate Capital Ltd. is a business development company which primarily invests"

A business development company is a publicly traded investment vehicle that lends to and buys stakes in smaller or privately held companies, acting like a combination of a lender, investor, and business partner. It matters to investors because BDCs offer the potential for higher regular income through dividends and diversified exposure to growing businesses, but they can also carry greater credit and liquidity risk than typical stocks or bonds—think higher-yielding but riskier income instruments.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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MIAMI, Feb. 24, 2026 (GLOBE NEWSWIRE) -- PennantPark Floating Rate Capital Ltd. (the “Company”) (NYSE: PFLT) today announced that PennantPark CLO VIII, LLC, a wholly-owned and consolidated subsidiary of the Company, has closed the refinancing of a four-year reinvestment period, twelve-year final maturity $356.5 million debt securitization.

The debt issued in this securitization (the “Debt”) is structured in the following manner:

Class	Par Amount ($ in millions)	% of Capital Structure	Coupon	Expected Rating (S&P)	Issuance Price
A-1-R Notes	$123,000,000	34.5%	3 Mo SOFR + 1.43%	AAA	100.0%
A-1-R Loans	80,000,000	22.4%	3 Mo SOFR + 1.43%	AAA	100.0%
A-2-R Notes	14,000,000	3.9%	3 Mo SOFR + 1.60%	AAA	100.0%
B-R Loans	26,250,000	7.4%	3 Mo SOFR + 1.75%	AA	100.0%
C-R Notes	24,500,000	6.9%	3 Mo SOFR + 2.15%	A	100.0%
D-R Notes	19,250,000	5.4%	3 Mo SOFR + 3.20%	BBB-	100.0%
Subordinated Notes	69,450,000	19.5%	N/A	NR	N/A
Total	$356,450,000

“We are pleased to have completed this reset which enables us to optimize financing costs in the current market, reinforcing our commitment to deliver sustained value for our investors,” said Arthur Penn, Chief Executive Officer of the Company. “The reset is expected to result in a 114 basis point reduction in its weighted average cost of capital from SOFR+2.79% to SOFR+1.65%, and represents the lowest financing cost among all securitizations to date by entities managed by PennantPark Investment Advisers, LLC (“PennantPark”). We were able to reduce the spread on this securitization due to strong investor demand to better match the underlying growth in the Company. PennantPark currently manages approximately $3.7 billion in middle-market securitization assets, and we look forward to continued growth of our platform with the support of our current and new investors.”

PFLT will continue to retain the Subordinated Notes through a consolidated subsidiary. The maturity of the replacement Debt is now extended to April 2038. The replacement Debt was 100% funded at closing. In addition, PFLT continues to act as retention holder in the transaction to retain exposure to the performance of the securitized assets. GreensLedge Capital Markets LLC acted as placement agent, and KeyBanc Capital Markets acted as co-structuring agent on the refinancing transaction.

The Debt offered as part of the debt securitization have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state “blue sky” laws, and may not be offered or sold in the United States absent registration under Section 5 of the Securities Act or an applicable exemption from such registration requirements. This financing is a form of a secured borrowing incurred and consolidated by PFLT. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the Debt in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

ABOUT PENNANTPARK FLOATING RATE CAPITAL LTD.

PennantPark Floating Rate Capital Ltd. is a business development company which primarily invests in U.S. middle-market private companies in the form of floating rate senior secured loans, including first lien secured debt, second lien secured debt and subordinated debt. From time to time, the Company may also invest in equity investments. PennantPark Floating Rate Capital Ltd. is managed by PennantPark Investment Advisers, LLC.

ABOUT PENNANTPARK INVESTMENT ADVISERS, LLC

PennantPark Investment Advisers, LLC (“PennantPark”), a leading middle-market credit platform, and its affiliates, manage approximately $10.0 billion of investable capital, including potential leverage. Since its inception in 2007, PennantPark has provided investors access to middle-market credit by offering private equity firms and their portfolio companies as well as other middle-market borrowers a comprehensive range of creative and flexible financing solutions. PennantPark is headquartered in Miami, and has offices in New York, Chicago, Houston, Los Angeles, Amsterdam and Zurich. For more information about PennantPark and its affiliates, please go to our website at www.pennantpark.com.

FORWARD-LOOKING STATEMENTS

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You should understand that under Section 27A(b)(2)(B) of the Securities Act and Section 21E(b)(2)(B) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 do not apply to forward-looking statements made in periodic reports PennantPark Floating Rate Capital Ltd. files under the Exchange Act. All statements other than statements of historical facts included in this press release are forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings with the Securities and Exchange Commission. PennantPark Floating Rate Capital Ltd. undertakes no duty to update any forward-looking statement made herein. You should not place undue influence on such forward-looking statements as such statements speak only as of the date on which they are made.

CONTACT:
Richard T. Allorto, Jr.
PennantPark Floating Rate Capital Ltd.
(212) 905-1000
www.pennantpark.com

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What did PFLT announce about the $356.5 million securitization on Feb 24, 2026?

PFLT completed a $356.5 million refinancing of PennantPark CLO VIII with replacement debt fully funded at closing. According to the company, the transaction extended final maturity to April 2038 and restructured multiple rated classes and subordinated notes.

How much will PFLT's weighted average cost of capital change after the reset (PFLT)?

The reset is expected to reduce weighted average cost of capital by 114 basis points. According to the company, the cost falls from SOFR+2.79% to SOFR+1.65%, representing the lowest securitization financing cost in its managed platform.

Will PFLT keep any of the securitization tranches after the refinancing (NYSE: PFLT)?

Yes. PFLT will continue to retain the subordinated notes through a consolidated subsidiary. According to the company, the retained subordinated position totals $69.45 million, maintaining exposure to securitized asset performance.

Who arranged the refinancing of PennantPark CLO VIII for PFLT?

GreensLedge Capital Markets acted as placement agent and KeyBanc Capital Markets was co-structuring agent. According to the company, these firms supported the transaction that priced multiple SOFR-based tranches at issuance.

What are the coupon and expected ratings for the top-rated tranches in the PFLT securitization?

Top tranches priced at approximately 3 Mo SOFR +1.43% and are expected to carry AAA ratings. According to the company, both A-1-R notes and A-1-R loans were issued at par with AAA expected ratings.

How does the refinancing affect PFLT's balance sheet reporting?

The financing is treated as a secured borrowing consolidated by PFLT, which increases reported leverage. According to the company, the replacement debt is a consolidated secured borrowing and was 100% funded at closing.