Prospect Fund Declares Monthly Payouts

The distributions reflect a strategic blend of earnings and potential return of capital amid market uncertainty.

May 29, 2025

Prospect Floating Rate and Alternative Income Fund Sets Monthly Distributions Through June

Prospect Floating Rate and Alternative Income Fund, Inc. is locking in monthly cash distributions for May and June 2025, aiming for a 5.0% annualized yield based on its net asset value as of March 31. The move continues the fund’s approach of providing consistent income to shareholders while adjusting to the current market environment.

Shareholders holding Class A or Class I shares on May 30 will see payments on June 6. The second distribution will go to shareholders of record on June 27, with payments following on July 7. Both share classes receive identical payouts:

• $0.02145 per share in May


• $0.01716 per share in June

Tax treatment for these distributions will be finalized at year-end. In the meantime, Prospect plans to share quarterly estimates of how much of the payout reflects taxable ordinary income. That helps keep shareholders in the loop, even as the final numbers for each tax year are still in progress. The official breakdown will arrive via Form 1099-DIV once the fiscal year closes.

Funding and Flexibility

To maintain this distribution rate, the fund has flexibility in how it sources the cash. It may draw from several avenues, including:

• Net investment income


• Capital gains or proceeds from asset sales


• Offering proceeds or dividends from holdings


• Expense reimbursements from Prospect Capital Management

These reimbursements, however, are not guaranteed in future periods. If distributions exceed current earnings or investment income, part of the payment may be classified as a return of capital.

Looking Ahead

The Board of Directors reserves the right to adjust the amount or timing of future distributions based on available capital and compliance requirements. There’s no preset formula—each decision is made based on what the fund can sustain under current conditions.

Bottom line: this distribution schedule gives shareholders clarity heading into the summer, while offering the flexibility Prospect needs to navigate a changing market. With monthly payments set and quarterly tax estimates on the way, investors have the information they need to track performance and plan ahead.