PFLOAT – A Prospect Capital Fund

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Prospect Floating Rate and Alternative Income Fund

Middle-Market Credit Solution for Income-Focused Investors

MARKET OPPORTUNITY
OUR TRACK RECORD
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Portfolio Companies

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Weighted Average Coupon ¹

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Diverse Industries

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Underlying Secured Investments

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Floating Rate and Alternative Investments²

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Distribution Rate³

Fund Overview

Prospect Floating Rate and Alternative Income Fund, Inc. (the “Fund” or “PFLOAT”), is a non-traded business development company (“BDC”) that invests primarily in the debt of privately-owned U.S. middle-market companies. The Fund seeks to provide income largely from investing in senior and secured floating rate credits, while building a portfolio of investments across a broad range of economic sectors.

Market Opportunity

There is significant current market opportunity in the U.S. senior and secured loan market.

Growth of Private Credit

Private credit is increasing as a segment of the total addressable sub-investment grade credit market. Private credit consisted 8% of the $0.9 trillion market in 2005 versus 42% of the $5.0 trillion market in 2025.⁴

Uncertain Economic Environment

During the Great Financial Crisis, the total return of middle market direct lending outperformed other selected credit investments. Between 2005-2008, rising rates through market bottom increased 29.0% within private credit versus syndicated loans decreasing (18.8%), high yield decreasing (13.5%), and investment grade corporate bonds increasing 5.4%.⁶

Demand for Financing

Private credit industry research suggests the asset class will grow from $2.3 trillion in 2027 to $5.0 trillion in 2029, suggesting an opportunity for alternative sources to meet the continued demand for financing.⁵

Demand for Credit

The large amount of uninvested capital held by private equity buyout funds, estimated at $2 trillion, continues to drive deal activity and demand for credit.⁷

Track Record

The Fund’s track record in the senior and secured loan market employs a proven and repeatable investment process.

Current Income Generation

The Fund seeks attractive risk-adjusted investments with favorable terms, and the 10.0% distribution rate is over 6.3% higher than 5-year treasuries.⁸

Inflation and Rising Interest Rate Hedge

95% of the Fund’s investments are floating rate, providing a natural hedge against inflation and rising interest rates.

Varied Portfolio

The Fund is invested in 44 distinct companies with low exposure to cyclical industries.

Senior Secured Loans

First-lien senior secured loans are the most senior positions in a company’s capital structure, providing the Fund with potentially the strongest downside management compared to any other investment in the company. 

Investment Strategies

Middle-Market Lending

Providing customized, flexible financing solutions to middle-market companies across the U.S., supporting growth, acquisitions, and longevity.

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Lower Middle-Market

One-stop financing solutions to U.S.-based lower middle-market companies across a broad range of industries.

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Key Funds

Shareholder Resources

Tender Offer

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Forms

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Tax Documents

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Disclosure

Investors should consider the investment objectives, risks, and charges and expenses of the Fund(s) before investing. The prospectus contains this and other information about the Fund(s) and should be read carefully before investing. The prospectus may be obtained at https://www.pfloat.com/. The Prospect Floating Rate and Alternative Income Fund is distributed by Ultimus Fund Distributors, LLC, Member FINRA/SIPC. Prospect Capital is not affiliated with Ultimus Fund Distributors, LLC.

1 Weighted average loan coupon assumes the 1-month or 3-month SOFR rate elected by the respective borrower. Excludes Structured Subordinated Notes and Equity and is weighted by principal balance.

2 Based on cost basis, the portfolio is 95% floating rate debt.

3 Declared distribution rate is based on the most recent quarter end net asset value per share and is calculated by annualizing the monthly “base” common share distributions and the quarterly “bonus” common share distribution from March 2026 through April 2026. Historical declared distributions: 8.5% per annum declared for November 2024 to April 2025, 5.0% per annum declared for May 2025 to June 2025, and 10.0% per annum declared for July 2025 to February 2026. Distributions are not guaranteed any may be modified as our discretion. Any future distributions may exceed our earnings, and therefore portions of the distribution may be a return of money originally invested and represent a return of capital for tax purposes.

4 Source: Morningstar, as of February 6, 2026. For illustrative purposes only. Represents private equity dry powder in North America only. Dry powder is a term for uncalled capital commitments.

5 Source: Per Morningstar as of February 6, 2026 and Morgan Stanley as of October 3, 2025. Total addressable US subinvestment grade credit market defined as the aggregate of the US high yield bonds, US leveraged loans and North American private credit markets. Leveraged loans refer to broadly syndicated loans. Private Credit includes BDCs.

6 Preqin, as of December 2022.

7 Per Finalis, as of November 20, 2025. For illustrative purposes only. Represents private equity dry powder in North America only. Dry powder is a term for uncalled capital commitments.

8 Source: Assumes 5-year treasury rate of 3.7% (Bloomberg as of December 31, 2025).

An investment in the Fund is speculative and involves a high degree of risk, including the risk of a substantial loss of investment, as well as substantial fees and costs, all of which can impact an investor’s return. An investor should carefully consider the fees and expenses and other information found in the prospectus, including the “Risk Factors” section, before making an investment decision. These risks include:

  • Our use of borrowed funds to make investments will expose us to risks typically associated with leverage.
  • Rising interest rates may adversely affect the value of our portfolio investments, which could have an adverse effect on our business, financial condition and results of operations.
  • The phase-out and cessation of LIBOR and the use of SOFR as a replacement rate may adversely affect the value of the LIBOR-indexed, floating-rate debt securities in our portfolio.
  • We may suffer credit losses.
  • Economic recessions or downturns could impair a company in which we invest and harm our operating results.
  • Inflation can adversely impact our cost of capital and the value of our portfolio investments.
  • Our financial results may be affected adversely if one or more of our significant equity or junior debt investments in a Collateralized Loan Obligation (“CLO”) vehicle defaults on our payment obligations or fails to perform as we expect.
  • Our CLO investments will be exposed to leveraged credit risks.
  • There is potential for interruption and deferral of cash flow from CLO investments.
  • The payment of underlying portfolio manager fees and other charges on CLO investments could adversely impact our return on our CLO investments.
  • We have limited control of the administration and amendment of any CLO in which we invest.
  • We will have no influence on management of underlying investments managed by non-affiliated third-party CLO collateral managers.
  • Our portfolio companies may be highly leveraged.
 
An investor should not expect to be able to sell its shares of our common stock regardless of how we perform and should consider that it may not have access to the money it invests in us for an indefinite period of time. An investment in shares of our common stock is not suitable for an investor if the investor needs access to the money it invests.