PFLOAT: 10% Base Payout, 14.46% With Bonus, NAV Down 13.6%

What PFLOAT is, and who owns it

PFLOAT is a business development company (BDC) managed by Prospect Capital Management L.P., the adviser to Prospect Capital Corporation, the listed BDC we cover in our PSEC dividend, NAV and PIK analysis. PFLOAT is the small non-traded sibling. Its outstanding shares are Class A and Class I (the 10-K shows no Class S or Class D holders), it has no exchange listing and the 10-K says “there is no established public trading market for our common stock, and we do not expect one to develop.” Its objective is income from floating-rate loans to private U.S. middle-market companies.

The number that frames everything else is who holds the shares. The proxy statement of September 2026 lists one 5% holder, with 7,936,417 shares and 80.92% of the 9,807,965 outstanding. The holder is an individual reporting sole voting and dispositive power over shares held through a Florida family foundation. We do not name individuals here; the filing is accession 0001521945-26-000099, and the Schedule 13D/A of September 10, 2026 (accession 0002009659-26-000004) shows the same figure as 80.9%. The same foundation held 7,572,488.89 shares, 79.7%, on May 1, 2026 (accession 0001521945-26-000050), so its stake rose by 363,928 shares in four months, all through the fund’s distribution reinvestment plan.

Two readings of that table, both ours. First, a holder with a normal-size position is in a small group: the remaining 19.1% of the shares is worth about $7.3 million at NAV (our arithmetic). Second, the fund is not raising money. In the quarter after year-end it sold $50,000 of new shares; its growth in share count is reinvested distributions. The 10-K also records that the adviser subscribed $20 million of shares in fiscal 2024 and $10 million in fiscal 2025.

The distribution: 10.0% base, 14.46% with the bonus

The October 8-K says the board “declared a ‘base’ distribution for the month of October 2026, which reflects a targeted annualized ‘base’ distribution rate of 10.0% based on the net asset value per share for the fourth fiscal quarter ended June 30, 2026.” $0.03242 times 12 is $0.38904, which is 10.0% of $3.89 (our arithmetic). Each quarter-end the base is re-set on the new NAV, which is why it moved from $0.03655 (May and July 2026 declarations, on the March 31 NAV) to $0.03242 (August to October 2026).

On top of the base the board has paid a quarterly “bonus”. The September 28, 2026 8-K gives the arithmetic itself: a base of $0.03242 plus a bonus of $0.04333 for September, and “The total annualized cash distribution is $0.56232 (14.46% annualized percentage rate based on the net asset value as of June 30, 2026 of $3.89).”

Over the whole fiscal year the Class A shares received $4,620,968 in distributions, and the highlights table shows $0.50 a share, 11.1% of the opening $4.50 NAV (our arithmetic). The tax side is cleaner than the payout: for the 2025 tax year the 10-K reports $3,487,407 of distributions, all ordinary income and none return of capital; for 2024, $642,930 of $2,689,684 (23.9%, our arithmetic) was return of capital. For how this appears on the form, see our 1099-DIV timeline and the return-of-capital census.

Every one of these notices carries the same warning: “There can be no assurance that the Company will be able to pay distributions at a specific rate or at all.” It also lists the sources the fund may use: offering proceeds, borrowings, income, capital gains, dividends from portfolio companies and “expense reimbursements from Prospect Capital Management, L.P.”

Is it earned? Net investment income with and without the adviser

Reported net investment income (NII) for the year to June 30, 2026 was $5,503,564, up from $3,634,434. The reason sits two lines above it in the statement of operations. Total operating expenses were $5,722,130 before support; the adviser’s expense limitation reimbursement was $2,824,396 and a waiver of administrator costs $300,000, leaving net operating expenses of $2,597,734.

Read with care. Reported NII does cover the distributions, 119% in fiscal 2026 (our arithmetic), and that is the figure the fund’s highlights table shows: NII of $0.60 a share against $0.50 paid. But $3,124,396 of it, 56.8% (our arithmetic), is money the adviser did not charge. Strip it out and NII is about $0.26 a share (our arithmetic: $2,379,168 over 9,182,780 weighted shares) against the $0.50 paid.

Is that a problem? Only if the support stops. The Sixth Amended and Restated Expense Limitation Agreement caps operating expenses at 0.00% of average net assets through the quarter ending December 31, 2026, so the adviser pays them all; the 10-K adds that “given the 0.00% annual rate,” these amounts “will effectively not be subject to recoupment.” After December 31, 2026 the waiver may be made “at our Adviser’s option and in its sole discretion,” and the 8-Ks state that “PCM has no obligation to provide expense reimbursements to the Company in future periods.” Interest on the credit facility, $2,897,739, is outside the agreement and the fund pays it. The December 31, 2026 date is the one to watch (see the dates section below).

For comparison with the sponsor’s listed BDC, our PSEC page shows a payout that was cut twice; PFLOAT’s has instead been re-based each quarter and topped up with bonuses.

NAV: the path, and the one borrower behind it

NAV per share did not slide steadily. It dropped in the six months to December 31, 2025 and has recovered slightly since.

The five-year record in Note 11 of the 10-K runs $7.03 (June 2022), $6.10, $4.69, $4.50 and $3.89, with total returns on NAV of minus 9.60%, minus 6.67%, minus 17.39%, 3.68% and minus 2.27%. The decline in per-share NAV is therefore long-running, and the 13.6% of the latest year is the smaller part of it: it is down 44.7% from June 2022 (our arithmetic: $3.89 over $7.03).

Fiscal 2026 itself is a First Brands story. The fund held a first-lien term loan and, in October and November 2025, two debtor-in-possession (DIP) term loans to First Brands Group, which filed for Chapter 11. At June 30, 2026 all four lines were on non-accrual:

The $6,939,168 matches the 10-K’s statement that “the cost basis of our loans on non-accrual status amounted to $6,939,168.” A year earlier the two term lines were worth $5,594,631 on a cost of $5,870,481 (our arithmetic from the schedule), and at September 30, 2025 $2,151,585. The 10-K says the fall in fair value resulted in “a net change in unrealized loss of $6,442,145 for the year ended June 30, 2026,” which is about $0.70 a share on 9,182,780 weighted shares (our arithmetic), more than the whole $0.61 fall in NAV per share; net investment income above distributions and other positions offset the rest. Footnote (q) says the Chapter 11 plan was rejected in August and a bankruptcy court “converted the case to Chapter 7 Liquidation,” so recoveries may fall further. The filing does not give a recovery estimate.

Note that the 0.22% “of our total assets at fair value” on non-accrual is a fair-value measure: the loans were large at cost and are now almost nothing, which is why a small non-accrual percentage and a $6.4 million loss can both be true.

The portfolio, the CLO equity and the leverage

At June 30, 2026 the portfolio had a fair value of $73,144,555 across 26 companies, 90% first-lien loans. Fair value was 92.3% of the $79,242,395 amortized cost (our arithmetic). Healthcare and pharmaceuticals was the largest industry at 36% of fair value. The weighted average yield was 10.14% on cost against 10.70% a year earlier, and 10.44% on variable-rate debt.

The structured subordinated notes (CLO equity) were once the fund’s income engine. Their cost fell from $864,921 to $42,964 and fair value from $709,261 to $40,329, with 22 notes becoming 18. The 10-K gives the reason: income from them fell “due to 18 investments with an effective yield estimated to be 0%, as expected future cash flows are anticipated to not be sufficient to repay these investments at cost.” Realized losses on the notes were $502,949 in fiscal 2026 and $1,850,522 in fiscal 2025. The sponsor’s other CLO-equity vehicle is covered in our Priority Income Fund page.

The fund refinanced in August 2025, replacing the SMBC revolver with the Bank OZK facility and booking a $495,849 loss on extinguishment. Our non-traded BDC list ranks it among the lowest NAVs of 67 funds and shows its liabilities at 1.65 times net assets.

The tender offers: four for four at 100%

With no secondary market, the tender is the exit. The fund offers to buy, each quarter, only the shares it can pay for with the cash it retained in the prior quarter by issuing shares through its distribution reinvestment plan, capped at 10% of weighted average shares a year, 2.5% a quarter. The price is the NAV at the month-end after the offer closes.

Four offers took in 232,834 shares and $906,129 (our arithmetic), about 0.6% of the shares a quarter. The April 2026 amendment says 57,531 shares were tendered and then that the fund bought “all 51,531 Shares”; $220,342 divided by $3.83 is 57,531, as the 10-K states, so the 51,531 looks like a typo.

The current offer was filed on September 18, 2026. Its estimated maximum cost at $3.88 is $869,512, about 224,101 shares (our arithmetic), 2.3% of the 9,808,091 outstanding. The last result, 58,090 shares, was 25.9% of that (our arithmetic). It expires at 4:00 p.m. Eastern on October 30, 2026, is priced at the NAV of October 31, 2026, requires a $5,000 balance after a partial tender and, if oversubscribed, is bought pro rata. The offer states its purpose: “to provide stockholders with liquidity, because there is otherwise no public market for the Shares.”

What the numbers do and do not show. Requests have been far below capacity, so nobody has had to be prorated. But the 19.1% of shares outside the largest holder is only about 1.87 million shares: if all 58,090 shares tendered in July came from that group, 3.1% of it left in one quarter (our arithmetic), and the filings do not say who tendered. Compare funds where requests exceed the cap in our tender offer census.

Dates that matter

• October 30, 2026, 4:00 p.m. Eastern: the tender offer expires.
• October 31, 2026: NAV date that sets the tender price.
• November 6, 2026: payment date of the October base distribution of $0.03242.
• Early to mid November 2026: the quarter ended September 30, 2026 (Form 10-Q) should show the first NAV after the Chapter 7 conversion.
• December 31, 2026: the last day of the mandatory expense waiver.

What a reader can do with this

• If you hold PFLOAT: compare the 10.0% base and the 14.46% with bonus with $2.38 million of income before adviser support against $4.62 million paid (our arithmetic). Your NAV statement, not the distribution rate, tells you what your shares are worth.
• Before the December 31, 2026 date: read the 10-Q and the next 8-K on the expense limitation agreement. If the waiver is extended, the 8-K will say so.
• If you are thinking of tendering: the deadline is October 30, 2026; the price will not be known until the NAV of October 31 is published. A tender is a taxable sale for most holders; our Form 8949 guide shows where it is reported.
• If you are choosing a fund: the questions this page answers (who pays the expenses, how much of the payout is support, who owns the shares) can be asked of any non-traded BDC with its filings.

FAQ

Figures are from the Form 10-K for the year ended June 30, 2026 (accession 0001521945-26-000095, filed September 28, 2026) and the Form 10-K for 2025 (0001521945-25-000069); Forms 10-Q 0001521945-25-000094, 0001521945-26-000013 and 0001521945-26-000054; Forms 8-K 0001521945-26-000071, -000080, -000086, -000101 and -000106; the Schedule TO-I of September 18, 2026 with its Offer to Purchase (0001521945-26-000088) and the TO-I/A results 0001521945-25-000097, 0001521945-26-000019, -000067 and -000084; the proxy statement 0001521945-26-000099; and Schedule 13D/A filings 0001521945-26-000050 and 0002009659-26-000004. The fund’s Form 10-Q for the quarter ended September 30, 2026 was not yet filed on October 28, 2026. Totals, ratios and per-share figures labelled “our arithmetic” are ours. This is analysis of public documents, not investment, legal or tax advice.