NEW YORK, NY — (MARKET WIRE) — 05/02/08 — Prospect Capital Corporation (NASDAQ: PSEC)(“Prospect”) announced today that Prospect has now fully exited itsinvestment in Arctic Acquisition Corp., dba Cougar Pressure Control(“Cougar”).
Prospect initially invested $9.25 million in Cougar in July 2005 in theform of a senior secured loan, and that loan was subsequently increased by$6.0 million. Prospect received a minority equity interest in Cougar asadditional consideration for making the secured loan. In August 2007,Cougar repaid in full the Prospect loan, and Prospect retained its equityinterest in Cougar.
Cougar has now acquired Prospect’s equity interest in Cougar for $3.4million. With this further monetization, Prospect exits its Cougarinvestment entirely with a 31% cash on cash internal rate of return on itscombined debt and equity investment, representing an approximately 1.5times cash on cash multiple.
ABOUT PROSPECT CAPITAL CORPORATION
Prospect Capital Corporation (www.prospectstreet.com/) is a closed-endinvestment company that lends to and invests in private and microcap publicbusinesses. Prospect Capital’s investment objective is to generate bothcurrent income and capital appreciation through debt and equityinvestments.
Prospect Capital has elected to be treated as a business developmentcompany under the Investment Company Act of 1940 (“1940 Act”). We arerequired to comply with a series of regulatory requirements under the 1940Act as well as applicable NASDAQ, federal and state laws and regulations.We have elected to be treated as a regulated investment company under theInternal Revenue Code of 1986. Failure to comply with any of the laws andregulations that apply to Prospect Capital could have a material adverseeffect on Prospect Capital and its shareholders.
This press release contains forward-looking statements within the meaningof the Private Securities Litigation Reform Act of 1995. Any suchstatements, other than statements of historical fact, are likely to beaffected by other unknowable future events and conditions, includingelements of the future that are or are not under the Company’s control, andthat the Company may or may not have considered; accordingly, suchstatements cannot be guarantees or assurances of any aspect of futureperformance. Actual developments and results are highly likely to varymaterially from these estimates and projections of the future. Suchstatements speak only as of the time when made, and the Company undertakesno obligation to update any such statement now or in the future.
Please send investment proposals to:Grier EliasekPresident and Chief Operating Officergrier@prospectstreet.com(212) 448-9577