NEW YORK, NY — (MARKET WIRE) — 02/22/08 — Prospect Capital Corporation(NASDAQ: PSEC) (“Prospect”) announced today that Ken-Tex Energy Corp.(“Ken-Tex”), has repaid Prospect’s $10.8 million loan to Ken-Tex. Prospecthas also sold its net profit interest (“NPI”) and overriding royaltyinterest (“ORRI”) back to Ken-Tex as part of the refinancing. With aprepayment premium, NPI, and ORRI aggregating approximately $3.3 million,Prospect has realized an approximately 69% cash on cash internal rate ofreturn (“IRR”) on the Ken-Tex investment, representing a 1.43 times cash oncash multiple.
Ken-Tex represents the sixth successful realization to date in Prospect’sportfolio. These six realizations have averaged an approximately 61% IRRand 1.5 times cash on cash multiple. These returns do not include equityinterests still held by Prospect in four of the six portfolio companiesthat have yet to be monetized.
“Ken-Tex has been a terrific investment for Prospect and our shareholders,and we look forward to future successful monetizations from our portfolioto build additional shareholder value,” said Grier Eliasek, President andChief Operating Officer of Prospect.
“We commend the Ken-Tex management team for achieving significant growth,and we welcome other experienced teams with capital needs to establish adialogue with us,” said David Belzer, Managing Director of Prospect CapitalManagement.
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.