Prospect Floating Rate and Alternative Income Fund Declares Monthly Distribution

January Distribution Declared

On January 23, 2026, Prospect Floating Rate and Alternative Income Fund locked in another monthly distribution—this time reflecting a 10% annualized rate based on its net asset value as of the fiscal quarter ending September 30, 2025. The fund’s Board approved the payout, which will go to shareholders of record as of January 30 and will be paid on February 6.

Both Class A and Class I common shares are receiving $0.03970 per share. That distribution aligns with the company’s stated income strategy and continues a pattern of consistent cash flow for investors.

Tax Reporting and Shareholder Communication

As with all distributions, the final tax treatment will depend on the fund’s full-year taxable income and will be reported to investors via Form 1099-DIV. Interim updates on the estimated taxable portion will be shared quarterly, giving shareholders better visibility into how their payouts are classified.

How Distributions Are Funded

Prospect Floating Rate and Alternative Income Fund draws on multiple sources to fund its distributions, including:

• Net investment income


• Proceeds from asset sales


• Dividends from portfolio holdings


• Potential expense reimbursements from its advisor, Prospect Capital Management

However, that flexibility comes with a caveat: future reimbursements from the advisor aren’t guaranteed, and the Board retains full discretion over whether future distributions are declared at all.

The fund also notes that when distributions exceed earnings, a portion may represent a return of capital for tax purposes. That doesn’t change how it’s reported to shareholders, but it does affect how it’s ultimately taxed.

By staying disciplined with its payout structure and transparent with its disclosures, Prospect Floating Rate and Alternative Income Fund is helping shareholders stay informed and aligned with its income strategy—month after month.