Why Invest in Prospect?

Why Invest in Prospect?

Prospect Capital Corporation is among the oldest and largest BDCs. Throughout our 12+ years as a public company, we have provided consistent returns to our shareholders through our disciplined approach to investing in the U.S. middle market.

Attractive Dividend Yield

PSEC is a yield-oriented investor and has paid a continuous, regular dividend to its investors since inception. We have declared 109 consecutive dividends, totaling over $2.3 billion, since our 2004 IPO.1

Focus on Senior and Secured Lending

PSEC is focused on providing senior and secured term loans to U.S. middle market businesses. Of our total investments, 88% are in the form of interest bearing loans, the vast majority of which are secured by a first or second lien loan. For calendar year 2016, 93.9% of our total investment income was interest income on loans.

Proven Organization Strategies

Our team has developed a broad and deep network of U.S. middle market relationships over many years of investing, including extensive relationships with private equity firms, other capital providers, business owners and managers, and intermediaries.

Broad Investment Portfolio

Since its 2004 IPO, PSEC has invested over $13 billion in over 300 businesses, with 125 portfolio companies today. Our current investments span 36 separate industries, with no single industry representing more than 9.6% of our total portfolio. We underwrite our investments as floating-rate loans, which stand to benefit from the anticipated hikes in interest rates.

Large and Experienced Team

We cover the U.S. middle market with a team of over 100 professionals with experience investing across a range of industries and through multiple economic and investing cycles, with offices in New York and Connecticut. Our investment professionals are supported by a dedicated team of attorneys, accountants, and other specialists.

Conservative, Strong Capitalization

With over $6.2 billion of assets, PSEC is among the largest of the BDCs. We benefit from a conservative 0.76x Net Leverage Ratio and a low 31.2% five-year average expense ratio.2 Our investment professionals own over 6.7% of outstanding PSEC shares as of 2/28/2017, so we are very much aligned with our shareholders.

All information derived from PSEC filings and management, and is as of 3/31/17 unless otherwise noted.

Past performance does not guarantee future results and current performance may be lower or higher than the performance contained herein. An investment in PSEC’s return and principal value will fluctuate such that an investor’s shares, when sold, may be worth more or less than their original cost.

Investors are advised to carefully consider the investment objective, risks, charges and expenses of PSEC before investing. A supplemental prospectus dated 5/12/17 and prospectus dated 11/3/16 have been filed with the Securities and Exchange Commission. The supplemental prospectus and prospectus contain information about PSEC and should be read carefully before investing. A more detailed discussion of risks and uncertainties is contained in the prospectus supplement and prospectus.

This information page does not constitute an offer to sell or a solicitation of an offer to buy nor will there be any sale of the shares referred to in this information page in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state or jurisdiction.

The information contained herein may contain forward-looking statements. Any such statements are likely to be affected by unknowable future events and conditions, most of which are not under PSEC’s control and that PSEC may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance, and actual developments and results may vary materially. Such statements speak only as of the time when made, and PSEC undertakes no obligation to update any such statement now or in the future.

Certain information discussed in this presentation (including information relating to portfolio companies) was derived from third party sources and has not been independently verified and, accordingly, Prospect Capital Corporation makes no representation or warranty in respect of this information.

1Dividends may not continue at the current level if at all.
2Note: Expense ratio defined as non-financing operating expenses (including all management fees and expenses) divided by gross investment income. Source: PSEC analysis of Capital IQ data as of 3/20/17 for the 37 BDCs for which there is quarterly data for the five years ended 12/31/16.