Annual report pursuant to Section 13 and 15(d)

MANDATORILY REDEEMABLE PREFERRED STOCK

v3.23.1
MANDATORILY REDEEMABLE PREFERRED STOCK
 12 Months Ended
Mar. 31, 2023
Equity [Abstract]  
MANDATORILY REDEEMABLE PREFERRED STOCK MANDATORILY REDEEMABLE PREFERRED STOCKIn August 2021, we used a portion of the proceeds from the issuance of our 2028 Notes to voluntarily redeem all outstanding shares of our 6.375% Series E Cumulative Term Preferred Stock (or “Series E Term Preferred Stock” or “Series E”), which had a liquidation preference of $25.00 per share. In connection with the voluntary redemption of our Series E Term Preferred Stock, we incurred a loss on extinguishment of debt of $2.0 million, which was recorded in Realized loss on other in our accompanying Consolidated Statements of Operations and which was primarily comprised of unamortized deferred issuance costs at the time of redemption.
In March 2021, we used a portion of the proceeds from the issuance of our 2026 Notes to voluntarily redeem all outstanding shares of our 6.25% Series D Cumulative Term Preferred Stock (or “Series D Term Preferred Stock” or “Series D”), which had a liquidation preference of $25.00 per share. In connection with the voluntary redemption of our Series D Term Preferred Stock, we incurred a loss on extinguishment of debt of $0.8 million, which was recorded in Realized loss on other in our accompanying Consolidated Statements of Operations and which was primarily comprised of unamortized deferred issuance costs at the time of redemption.
The following tables summarize dividends declared by our Board of Directors and paid by us on each of our Series D Term Preferred Stock and Series E Term Preferred Stock during the years ended March 31, 2022 and 2021:
For the Year Ended March 31, 2022:
Declaration Date Record
Date
Payment
Date
Dividend per Share of
Series E Term
Preferred Stock(A)
April 13, 2021 April 23, 2021 April 30, 2021 $ 0.13281250 
April 13, 2021 May 19, 2021 May 28, 2021 0.13281250 
April 13, 2021 June 18, 2021 June 30, 2021 0.13281250 
July 13, 2021 July 23, 2021 July 30, 2021 0.13281250 
July 13, 2021 August 23, 2021 August 31, 2021 0.07968750 
(B)
Total $ 0.61093750 
For the Year Ended March 31, 2021:
Declaration Date Record Date
Payment Date
Dividend per Share of
Series D Term
 Preferred Stock(C)
Dividend per Share of
Series E Term
 Preferred Stock(A)
April 14, 2020 April 24, 2020 April 30, 2020 $ 0.13020833  $ 0.13281250 
April 14, 2020 May 19, 2020 May 29, 2020 0.13020833  0.13281250 
April 14, 2020 June 19, 2020 June 30, 2020 0.13020833  0.13281250 
July 14, 2020 July 24, 2020 July 31, 2020 0.13020833  0.13281250 
July 14, 2020 August 24, 2020 August 31, 2020 0.13020833  0.13281250 
July 14, 2020 September 23, 2020 September 30, 2020 0.13020833  0.13281250 
October 13, 2020 October 23, 2020 October 30, 2020 0.13020833  0.13281250 
October 13, 2020 November 20, 2020 November 30, 2020 0.13020833  0.13281250 
October 13, 2020 December 23, 2020 December 31, 2020 0.13020833  0.13281250 
January 12, 2021 January 22, 2021 January 29, 2021 0.13020833  0.13281250 
January 12, 2021 February 17, 2021 February 26, 2021 0.13020833  0.13281250 
January 12, 2021 March 18, 2021 March 31, 2021 0.00868056 
(D)
 0.13281250 
Total $ 1.44097219  $ 1.59375000 
(A)We voluntarily redeemed all outstanding shares of our Series E Term Preferred Stock on August 19, 2021
(B)Represents accrued and unpaid dividends up to, but excluding, the redemption date of August 19, 2021.
(C)We voluntarily redeemed all outstanding shares of our Series D Term Preferred Stock on March 3, 2021.
(D)Represents accrued and unpaid dividends up to, but excluding, the redemption date of March 3, 2021.
The federal income tax characteristics of dividends paid to our preferred stockholders generally constitute ordinary income or capital gains to the extent of our current and accumulated earnings and profits and are reported after the end of the calendar year based on tax information for the full fiscal year. The tax characterization of dividends paid to our preferred stockholders during the calendar year ended December 31, 2021 was 71.3% from ordinary income and 28.7% from capital gains.
DISTRIBUTIONS TO COMMON STOCKHOLDERS
To qualify to be taxed as a RIC under Subchapter M of the Code, we must generally distribute to our stockholders, for each taxable year, at least 90% of our Investment Company Taxable Income. The amount to be paid out as distributions to our stockholders is determined by our Board of Directors and is based upon management’s estimate of Investment Company Taxable Income and net long-term capital gains, as well as amounts to be distributed in accordance with Section 855(a) of the Code. Based on that estimate, our Board of Directors declares monthly distributions, and supplemental distributions, as appropriate, to stockholders each quarter and deemed distributions of long-term capital gains annually as of the end of the fiscal year, as applicable.
The U.S. federal income tax characteristics of cash distributions paid to our common stockholders generally are reported to stockholders on IRS Form 1099 after the end of each calendar year. Estimates of tax characterization made on a quarterly basis may not be representative of the actual tax characterization of cash distributions for the full year. Estimates made on a quarterly basis are updated as of each interim reporting date. The tax characterization of cash distributions paid to our common stockholders during the calendar year ended December 31, 2022 was 61.2% from ordinary income and 38.8% from capital gains. The tax characterization of cash distributions paid to our common stockholders during the calendar year ended December 31, 2021 was 71.3% from ordinary income and 28.7% from capital gains.
We paid the following cash distributions to our common stockholders for the years ended March 31, 2023, 2022 and 2021.
For the Year Ended March 31, 2023:
Declaration Date
 Record Date Payment Date Distribution
per Common Share
April 12, 2022 April 22, 2022 April 29, 2022 $ 0.075 
April 12, 2022 May 20, 2022 May 31, 2022 0.075 
April 12, 2022 June 6, 2022 June 15, 2022 0.120 
(A)
April 12, 2022 June 22, 2022 June 30, 2022 0.075 
July 12, 2022 July 22, 2022 July 29, 2022 0.075 
July 12, 2022 August 23, 2022 August 31, 2022 0.075 
July 12, 2022 September 22, 2022 September 30, 2022 0.075 
October 11, 2022 October 21, 2022 October 31, 2022 0.080 
October 11, 2022 November 18, 2022 November 30, 2022 0.080 
October 11, 2022 December 6, 2022 December 15, 2022 0.120 
(A)
October 11, 2022 December 20, 2022 December 30, 2022 0.080 
January 10, 2023 January 20, 2023 January 31, 2023 0.080 
January 10, 2023 February 17, 2023 February 28, 2023 0.080 
January 10, 2023 March 3, 2023 March 15, 2023 0.240 
(A)
January 10, 2023 March 17, 2023 March 31, 2023 0.080 
Year ended March 31, 2023
 $ 1.410 
For the Year Ended March 31, 2022:
Declaration Date
 Record Date Payment Date Distribution
per Common Share
April 13, 2021 April 23, 2021 April 30, 2021 $ 0.070 
April 13, 2021 May 19, 2021 May 28, 2021 0.070 
April 13, 2021 June 8, 2021 June 17, 2021 0.060 
(A)
April 13, 2021 June 18, 2021 June 30, 2021 0.070 
July 13, 2021 July 23, 2021 July 30, 2021 0.070 
July 13, 2021 August 23, 2021 August 31, 2021 0.070 
July 13, 2021 September 3, 2021 September 15, 2021 0.030 
(A)
July 13, 2021 September 22, 2021 September 30, 2021 0.070 
October 12, 2021 October 22, 2021 October 29, 2021 0.075 
October 12, 2021 November 19, 2021 November 30, 2021 0.075 
October 12, 2021 December 7, 2021 December 15, 2021 0.090 
(A)
October 12, 2021 December 23, 2021 December 31, 2021 0.075 
January 11, 2022 January 21, 2022 January 31, 2022 0.075 
January 11, 2022 February 4, 2022 February 14, 2022 0.120 
(A)
January 11, 2022 February 18, 2022 February 28, 2022 0.075 
January 11, 2022 March 23, 2022 March 31, 2022 0.075 
Year ended March 31, 2022:
 $ 1.170 
For the Year Ended March 31, 2021:
Declaration Date
 Record Date Payment Date Distribution
per Common Share
April 14, 2020 April 24, 2020 April 30, 2020 $ 0.070 
April 14, 2020 May 19, 2020 May 29, 2020 0.070 
April 14, 2020 June 8, 2020 June 17, 2020 0.090 
(A)
April 14, 2020 June 19, 2020 June 30, 2020 0.070 
July 14, 2020 July 24, 2020 July 31, 2020 0.070 
July 14, 2020 August 24, 2020 August 31, 2020 0.070 
July 14, 2020 September 23, 2020 September 30, 2020 0.070 
October 13, 2020 October 23, 2020 October 30, 2020 0.070 
October 13, 2020 November 20, 2020 November 30, 2020 0.070 
October 13, 2020 December 23, 2020 December 31, 2020 0.070 
January 12, 2021 January 22, 2021 January 29, 2021 0.070 
January 12, 2021 February 17, 2021 February 26, 2021 0.070 
January 12, 2021 March 18, 2021 March 31, 2021 0.070 
Year ended March 31, 2021:
 $ 0.930 
(A)Represents a supplemental distribution to common stockholders.
Aggregate cash distributions to our common stockholders declared and paid for the years ended March 31, 2023, 2022 and 2021 were $47.0 million, $38.9 million, and $30.9 million, respectively.
For the fiscal years ended March 31, 2023, 2022, and 2021, Investment Company Taxable Income exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $21.4 million, $13.9 million, and $16.1 million, respectively, of the first distributions paid subsequent to fiscal year-end, as having been paid in the prior year. In addition, for the fiscal years ended March 31, 2023, 2022, and 2021, net capital gains exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $10.6 million, $15.7 million, and $8.5 million, respectively, of the first distributions paid subsequent to fiscal year-end as having been paid in the prior year.
We may distribute our net long-term capital gains, if any, in cash or elect to retain some or all of such gains, pay taxes at the U.S. federal corporate-level income tax rate on the amount retained, and designate the retained amount as a “deemed distribution.” If we elect to retain net long-term capital gains and deem them distributed, each U.S. common stockholder will be treated as if they received a distribution of their pro-rata share of the retained net long-term capital gain and the U.S. federal income tax paid. As a result, each U.S. common stockholder will (i) be required to report their pro-rata share of the retained gain on their tax return as long-term capital gain, (ii) receive a refundable tax credit for their pro-rata share of federal income tax paid by us on the retained gain, and (iii) increase the tax basis of their shares of common stock by an amount equal to the deemed distribution less the tax credit. To use the deemed distribution approach, we must provide written notice to our common stockholders prior to the expiration of 60 days after the close of the relevant taxable year. For the years ended March 31, 2023, 2022, and 2021 we did not elect to retain long-term capital gains and to treat them as deemed distributions to common stockholders.
The components of our net assets on a tax basis were as follows:
Year Ended March 31,

2023 2022
Common stock
 $ 34  $ 33 
Capital in excess of par value
 401,798  397,948 
Cumulative unrealized appreciation of investments
 31,129  43,760 
Cumulative unrealized depreciation of other
 29  — 
Undistributed ordinary income 21,380  13,862 
Undistributed capital gain
 10,552  15,731 
Other temporary differences
 (25,180) (25,504)
Net Assets
 $ 439,742  $ 445,830 
For the years ended March 31, 2023 and 2022, we recorded the following adjustments for estimated permanent book-tax differences to reflect tax character. Results of operations, total net assets, and cash flows were not affected by these adjustments.
Tax Year Ended March 31,

2023 2022
Underdistributed (overdistributed) net investment income
 $ 1,301  $ (333)
Accumulated net realized gain in excess of distributions
 $ 263  $ 3,181 
Capital in excess of par value
 $ (1,564) $ (2,848)