NEW YORK, NY — (Marketwire) — 03/28/12 — Prospect Capital Corporation (NASDAQ: PSEC) (“Prospect”) announced today that it has completed a first closing on an expanded five-year $650 million revolving credit facility (the “Facility”) for Prospect Capital Funding LLC (“PCF”).
The new Facility, for which ten lenders have closed on $410 million to date, includes an accordion feature that allows the Facility, at Prospect’s discretion, to accept up to a total of $650 million of commitments, an objective Prospect targets reaching with additional lenders. The revolving period of the Facility extends through March 2015, followed by an additional two year amortization period, with distributions allowed to Prospect after the completion of the revolving period. Pricing for the Facility is one-month Libor plus 2.75%, with no minimum Libor floor — achieving an approximately 125 basis point reduction in pricing (based on current Libor) from the previous three-year facility pricing of Libor (with a minimum Libor floor of 1%) plus 3.25%. The new Facility has an investment grade Moody’s rating of Aa3. Improvements in the Facility include increases in advance rates under certain conditions, decreases in unused line fees, increases in maximum eligible loan sizes, and increases in baskets for longer-dated and quarterly pay loans.
“We are pleased to announce the upsizing of our credit facility on attractive terms, with broad support from our existing lenders, allowing us to secure longer-dated liabilities for the accretive benefit of our shareholders,” said John F. Barry III, Chairman and Chief Executive Officer of Prospect. “Removing the Libor floor saves us 75 basis points, and the rate reduction another 50 basis points — both enhancing our bottom line. Because PCF is in a separate entity, Prospect continues with a capital structure attractive to both Prospect shareholders and unsecured creditors because of the significant unencumbered assets Prospect retains outside of PCF.”
ABOUT PROSPECT CAPITAL CORPORATION
Prospect Capital Corporation (www.prospectstreet.com/) is a closed-end investment company that lends to and invests in private and microcap public businesses. Our investment objective is to generate both current income and long-term capital appreciation through debt and equity investments.
We have elected to be treated as a business development company under the Investment Company Act of 1940 (“1940 Act”). We are required to comply with a series of regulatory requirements under the 1940 Act as well as applicable NASDAQ, federal and state rules and regulations. We have elected to be treated as a regulated investment company under the Internal Revenue Code of 1986. Failure to comply with any of the laws and regulations that apply to us could have an adverse effect on us and our shareholders.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, whose safe harbor for forward-looking statements does not apply to business development companies. Any such statements, other than statements of historical fact, are highly likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under our control, and that we may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from these estimates and projections of the future. Such statements speak only as of the time when made, and we undertake no obligation to update any such statement now or in the future.
Source: Prospect Capital Corporation