PennantPark credit fund closes at $1.2bn investable capital

PennantPark Investment Advisers closed PennantPark Senior Credit Fund II above its original target with $1.2 billion of investable capital, Alternatives Watch reported Oct. 26.

The Miami-based manager said the fund and its recently completed PennantPark Credit Secondary Fund represent about $1.9 billion of aggregate capital for its core middle-market lending strategy. The secondary fund closed in early September as a $745 million continuation vehicle led by Pantheon, Alternatives Watch reported; PGIM, PennantPark and reinvesting limited partners joined in an oversubscribed transaction. PSCF II drew pension plans, insurers, asset managers and family offices across North America, Europe and Asia.

For wealth allocators comparing private credit vehicles, the $1.2 billion is not a measure of equity raised. HedgeCo News reported Oct. 27 that PennantPark defines investable capital as committed equity plus available leverage, including borrowing capacity under credit facilities. The figure covers all levered and unlevered series in the PSCF II family and related mandates. The equity base and the leverage behind the strategy are separate underwriting items.

Both funds follow the same senior debt strategy, targeting first-lien senior secured loans to sponsor-backed companies with $10 million to $50 million of earnings. Sectors include healthcare, government services, technology, consumer and business services. PennantPark says it emphasizes low borrower leverage, interest coverage and financial covenants. The continuation vehicle completed a $298.6 million debt securitization later in September, including $174 million of Class A-1 notes and loans at three-month SOFR plus 140 basis points, Alternatives Watch reported. The firm, founded in 2007, oversees about $11 billion of investable capital including available leverage.