PennantPark Floating Rate Capital Is Paying Out 171% of Earnings and That's a Problem
PennantPark's high 13.2% dividend appears unsustainable given a 171% payout ratio, falling net income, mounting unrealized losses, and rapidly increasing leverage.
Middle-market lending exposure via BDCs and swaps offers a 12% yield while concentrating credit risk, leverage, and income volatility in a few large BDCs.