NEW YORK, NY — (MARKET WIRE) — 08/08/07 — Prospect Capital Corporation (NASDAQ: PSEC)(“Prospect”) announced today that Prospect has increased its net investmentincome guidance for the fourth fiscal quarter ended June 30, 2007.
Previously, Prospect had indicated net investment income guidance for theJune quarter of $0.33 to $0.40 per share, with a midpoint of $0.365 pershare. Because of recent deal closings, that guidance is being increased toa range of $0.40 to $0.45 per share, with a midpoint of $0.425 per share,representing a 16% increase in guidance for the prior quarter.
The midpoint of the new guidance range represents an 11.2% annualized bookyield based on the March 31, 2007, net asset value of $15.18 per share, andan 11.7% annualized yield based on Prospect’s August 7, 2007, closing shareprice of $14.58 per share.
Prospect expects to complete its 2007 fiscal year audit and to releasefinal financial numbers in September in accordance with its normalregulatory deadlines.
Prospect has invested approximately $140 million in eight new portfoliocompanies in calendar year 2007 — approximately $120 million in the past65 days — bringing the total invested portfolio to approximately $355million across 25 companies. Currently, Prospect has drawn approximately$60 million under its credit facility.
In addition, Prospect’s investment pipeline currently includesapproximately $185 million across 13 transactions under engagement letteror in advanced stages.
“We are pleased with our prior quarter preliminary financials,” said JohnF. Barry, Chairman and Chief Executive Officer of Prospect. “We have agrowing and increasingly diversified portfolio of 25 companies, and we haveequity kickers in addition to secured debt instruments in almost all ofthese companies. We view recent stresses in the overall credit markets aspositive for us, as we are both expecting and seeing leverage multiplesdecline, covenants tighten, and spreads widen, all benefiting lenders likeProspect. Prospect’s business historically has been driven more by directcorporate lending and buyouts as opposed tothird-party private equity sponsor financings, which previously we haddeemed to be exuberantly priced. Recent dynamics are causing thereward-to-risk ratio for such third-party sponsor financings to beconsiderably more attractive for lenders like Prospect, in our opinion, andwe expect to increase our business in that channel while still pursuing ourdirect corporate lending and buyout model, with energy and industrialtransactions still a significant area of our focus. As we have statedbefore, we have no exposure to the commercial or residential real estatemarket in our portfolio. Overall, we are pleased with the portfolio andlook forward to continuing our path of dividend growth for Prospect’sshareholders.”
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’s investment objective is to generate both currentincome and capital appreciation through debt and equity investments.
Prospect has elected to be treated as a business development company underthe Investment Company Act of 1940 (“1940 Act”). We are required to complywith a series of regulatory requirements under the 1940 Act as well asapplicable NASDAQ, federal and state laws and regulations. We have electedto be treated as a regulated investment company under the Internal RevenueCode of 1986. Failure to comply with any of the laws and regulations thatapply to Prospect could have a material adverse effect on Prospect and itsshareholders.
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 Prospect’s control, andthat Prospect may or may not have considered; accordingly, such statementscannot be guarantees or assurances of any aspect of future performance.Actual developments and results are highly likely to vary materially fromthese estimates and projections of the future. Such statements speak onlyas of the time when made, and Prospect undertakes no obligation to updateany such statement now or in the future. Before investing, an investorshould read Prospect’s prospectus carefully, which is part of aregistration statement that has been filed with the Securities and ExchangeCommission (“SEC”) but which is not yet effective. The prospectus containsimportant information about Prospect and its investment objectives, risks,charges and expenses. A copy of the prospectus may be obtained by callingProspect at the phone number below. The information in this press releaseand the prospectus are not complete and may be changed. Prospect may notsell its shares until the registration statement filed with the SEC iseffective, and Prospect may or may not sell any new shares once suchstatement is effective. This press release and prospectus do not constitutean offer to sell or a solicitation to buy, nor shall there be any sale ofsuch securities in any state or jurisdiction in which such offer orsolicitation or sale would be unlawful prior to registration orqualification under the laws of such state or jurisdiction.
Please send investment proposals to:Grier EliasekPresident and Chief Operating Officergrier@prospectstreet.com(212) 448-0702