Prospect Capital preferred shares yield 8.07% with secure dividends despite common shares' NAV decline and dilution risks

Prospect Capital's common shares remain unattractive due to ongoing net asset value (NAV) declines, dividend cuts, and dilution from new share issuance. However, its Series A Preferred shares offer an 8.07% yield, fully covered by net investment income and trading at a 35% discount to redemption value. While the common dividend is not fully covered when accounting for preferred shares, the preferred coupon payments are secure. These yield levels reflect the higher perceived credit risk in Prospect Capital's portfolio, making preferred shares a more stable income option compared to common shares.