Rate hedges were significantly reduced for this quarter according to the 10k, so I'm not expecting the same level of GAAP losses in qtr 2 as in qtr 1. Not to say book value may still be impacted some, but not like in qtr 1. Core earnings which supports the dividend distribution was still strong at $1.50 so the dividend would only be reduced to protect book value, certainly not my opinion that you will see 40 cents. IMHO something substantially higher, but without taxable income numbers to know what required distribution level might be, I'm not making any guesses.
Share price should recover as it appears PSEC's qtr was business as usual. Rising interest rates will pay off down the road as well as management has stated that most interest expense is fixed while revenue vehicles are floating and will rise with interest rate increases. Spin off's are rolling out and will be neutral to both NAV and earnings per management. PPS will catch up as management continues to execute and the short noise is forced out--patience.
Problem right now is that hedges are for the long term, so in the short term with rates still low, they are losing value--most of the GAAP loss is unrealized hedge losses. When the FED increases rates later this year, the value in those hedges will return and so will book value. Important number here is core earnings to support the dividend and they blew that number away. I will be buying this temporary dip--all my opinion of course.