NEW YORK, NY — (MARKET WIRE) — 12/18/07 –Prospect Capital Corporation (NASDAQ: PSEC)(“Prospect” or “Company”) announced today that it has declared a secondfiscal quarter (for the fiscal year ending June 30, 2008) dividend of$0.395 per share.
This dividend marks the Company’s thirteenth consecutive quarterlyincrease. The dividend now represents an approximately 14.1% currentdividend yield based on the closing stock price for December 17, 2007. Theex-dividend date is Wednesday, December 26, 2007. The record date isFriday, December 28, 2007. The payment date is Monday, January 7, 2008.
In addition, the Company estimates that its net investment income for thecurrent second fiscal quarter ended December 31, 2007, will be $0.42 to$0.48 per share.
Separately, the Company announced today that it has initiated theharvesting of certain gains within the portfolio. The Company’s largest100% controlled investment, Gas Solutions Holdings, Inc. (“Gas Solutions”),has engaged RBC Capital Markets Corporation as a financial advisor toexplore strategic alternatives, including a potential sale. Gas Solutions,a midstream gathering and processing business in East Texas, is currentlygenerating an asset-level annualized run-rate earnings before interest,taxes, depreciation, and amortization (“EBITDA”) of approximately $24.8million, or approximately three times the EBITDA at the time when Prospectpurchased Gas Solutions. Prospect expects to conclude its harvestingprocess with Gas Solutions during the next few months.
Prospect may seek to monetize other investments in early 2008, includingNRG Manufacturing, Inc. (“NRG”), which, inclusive of a small add-onacquisition, has approximately tripled its pro forma trailing twelve monthEBITDA to approximately $12 million, compared to the EBITDA when Prospectpurchased NRG. In addition, Prospect on December 5, 2007 entered into abinding agreement to sell its $8 million debt investment in CentralIllinois Energy, LLC, an ethanol project, as an 86% cash-on-cashmonetization, inclusive of interest and fees received to date.
“With Gas Solutions and NRG having delivered significant growth inprofitability, we believe that now is an opportune time to explorestrategic options to harvest gains for the shareholders of Prospect,” saidJohn Barry, Chairman and Chief Executive Officer of Prospect. “In addition,we chose to exit the ethanol market at avalue-maximizing price for us due to our growing fundamental concerns aboutsupply exceeding demand in that market.”
Dividend HistoryDividend Per Share Quarter Ended$0.395December 31, 2007$0.3925September 30, 2007$0.39June 30, 2007$0.3875March 31, 2007$0.385December 31, 2006$0.38September 30, 2006$0.34June 30, 2006$0.30March 31, 2006$0.28December 31, 2005$0.20September 30, 2005$0.15June 30, 2005$0.125March 31, 2005$0.10December 31, 2004
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.