HispanicBusiness

Since March 31, 2013 in the current June 2013 quarter, we have completed a follow-on investment and four new investments aggregating $163.8 million.

•On April 1, 2013, we refinanced our existing $38.5 million senior secured loans to Ajax Rolled Ring & Machine, Inc. •On April 19, 2013, we made an investment of $43.7 million to purchase subordinated notes in Mountain View CLO 2013-I Ltd. •On April 22, 2013, we provided $34.4 million of senior secured financing to support the carve-out acquisition of Pegasus Financial Services. •On April 25, 2013, we made an investment of $26.0 million to purchase subordinated notes in Brookside Mill CLO Ltd. •On April 30, 2013, we made a $21.2 million follow-on investment in APH, to acquire Lofton Place Apartments and Vista at Palma Sola, two residential properties located in Florida. We invested $3.2 million of equity and $18.0 million of debt in APH.

None of our loans originated in nearly six years has gone on non-accrual status. The fair market value of our loan assets on non-accrual as a percentage of total assets stood at approximately 1.3% on March 31, 2013, down from 1.9% on June 30, 2012. We are pleased with the overall credit quality of our portfolio, with many of our companies generating year-over-year and sequential growth in top-line revenues and bottom-line profits.

During calendar year 2012, we received significant dividends and interest income from our ESHI investment. Our income from ESHI in calendar year 2013 is significantly less than such income in calendar year 2012. We are targeting to offset this decrease by utilizing existing liquidity and prudent leverage to finance our growth through new originations, including attractive yielding investments in the financial services and other sectors.

Because of the good performance of several controlled positions in our portfolio, we have selectively monetized certain such companies and may monetize other positions if we identify attractive opportunities for exit. As such exits materialize, we expect to reinvest such proceeds into new income-producing opportunities. We are pleased with the performance of our controlled portfolio companies, and are actively exploring other new investment opportunities at attractive multiples of cash flow.

Our advanced investment pipeline aggregates more than $500 million of potential opportunities diversified across multiple sectors. These opportunities are primarily secured investments with double-digit coupons, sometimes coupled with equity upside through additional investments.

LIQUIDITY AND FINANCIAL RESULTS

Our modestly leveraged balance sheet, with its vast majority of unencumbered assets, access to multiple funding sources, matched-book funding, and weighting toward unsecured fixed-rate debt, is a source of significant strength. Our debt to equity ratio stood at a modest 43.7% after subtraction of cash and equivalents at March 31, 2013. Our equitized balance sheet also gives us the potential for future earnings upside as we prudently utilize and grow our existing revolving credit facility as well as potentially add additional secured or unsecured term facilities made more attractive by our investment-grade ratings at corporate, revolving facility, and term debt levels.

On March 27, 2012, we renegotiated our credit facility and closed on an expanded five-year revolving credit facility (the "Facility") for Prospect Capital Funding LLC. As of March 31, 2013, our Facility size stood at $552.5 million with commitments from 17 total lenders. The Facility includes an accordion feature which allows aggregate commitments to be increased to $650 million without the need for re-approval from existing lenders or the rating agency.