Quarterly report pursuant to Section 13 or 15(d)

MANDATORILY REDEEMABLE PREFERRED STOCK

v3.22.2.2
MANDATORILY REDEEMABLE PREFERRED STOCK
 6 Months Ended
Sep. 30, 2022
Equity [Abstract]  
MANDATORILY REDEEMABLE PREFERRED STOCK MANDATORILY REDEEMABLE PREFERRED STOCK
In 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.
The following tables summarize dividends declared by our Board of Directors and paid by us on our Series E Term Preferred Stock during the six months ended September 30, 2021:
For the Six Months Ended September 30, 2021:
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 $ 0.1328125 
April 13, 2021 May 19, 2021 May 28, 2021 0.1328125 
April 13, 2021 June 18, 2021 June 30, 2021 0.1328125 
July 13, 2021 July 23, 2021 July 30, 2021 0.1328125 
July 13, 2021 August 23, 2021 August 31, 2021 0.0796875 
(B)
Total $ 0.6109375 

(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.
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 taxable ordinary income plus the excess of our net short-term capital gains over net long-term capital losses (“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. If we determined the tax characterization of cash distributions paid to common stockholders during the current calendar year as of September 30, 2022, 61.1% would be from ordinary income and 38.9% would be from capital gains.
We paid the following cash distributions to our common stockholders for the six months ended September 30, 2022 and 2021:
For the Six Months Ended September 30, 2022:
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 
Six Months Ended September 30, 2022 $ 0.570 
For the Six Months Ended September 30, 2021:
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 
Six Months Ended September 30, 2021 $ 0.510 
(A)Represents a supplemental distribution to common stockholders.
Aggregate cash distributions to our common stockholders declared and paid were $18.9 million and $16.9 million for the six months ended September 30, 2022 and 2021, respectively.
For the fiscal year ended March 31, 2022, Investment Company Taxable Income exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $13.9 million of the first distributions paid subsequent to fiscal year-end, as having been paid in the prior year. In addition, for the fiscal year ended March 31, 2022 net capital gains exceeded distributions declared and paid, and, in accordance with Section 855(a) of the Code, we elected to treat $15.7 million of the first distributions paid subsequent to fiscal year-end as having been paid in the prior year.
For the three and six months ended September 30, 2022, we recorded $0.4 million and $1.3 million, respectively, of net adjustments for estimated permanent book-tax differences to reflect tax character, which decreased Capital in excess of par value and increased Overdistributed net investment income and Accumulated net realized gain in excess of distributions on our accompanying Consolidated Statements of Assets and Liabilities.

For the three months ended September 30, 2021, we recorded $2.1 million of net adjustments for estimated permanent book-tax differences to reflect tax character, which decreased Capital in excess of par value and increased Overdistributed net investment income and Accumulated net realized gain in excess of distributions on our accompanying Consolidated Statements of Assets and Liabilities. For the six months ended September 30, 2021, we recorded $2.7 million of net adjustments for estimated permanent book-tax differences to reflect tax character, which decreased Capital in excess of par value and Overdistributed net investment income and increased Accumulated net realized gain in excess of distributions on our accompanying Consolidated Statements of Assets and Liabilities.
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 year ended March 31, 2022, we did not elect to retain long-term capital gains and to treat them as deemed distributions to common stockholders.