NEW YORK, NY — (MARKET WIRE) — 10/10/07 — Prospect Capital Corporation (NASDAQ: PSEC)(“Prospect”) announced today that it has made a second lien debt investmentof approximately $9.75 million in Resco Products, Inc. (“Resco”), a leadingdesigner and manufacturer of refractory materials based in Pittsburgh,Pennsylvania.
Refractories, a $15 billion global market, are consumable materials used asprotective linings for high temperature furnaces, containers carryingmolten metals, and a range of other harsh environment industrialsituations. Process applications include power generation, refineries,petrochemical plants, steel mills, paper mills, cement plants, non-ferrousmetal plants, incineration facilities, and other sectors. Due towear-and-tear from harsh operating environments, refractory materials needto be frequently replaced, creating recurring revenues for refractorycompanies. Resco has been owned since September 2005 by Hancock ParkAssociates, a private equity firm based in Los Angeles. Resco has completedseveral acquisitions under its private equity fund ownership. WilliamBrown, President and CEO of Resco and Chairman of The RefractoriesInstitute, has led Resco since 1998 and has more than 40 years ofexperience in the refractory industry.
Resco completed a dividend recapitalization in June 2007, led by PNC Bank(“PNC”). Prospect recently purchased its second lien debt investment inResco from PNC as part of PNC’s post-closing syndication process.
“The Resco transaction reflects our increased focus on the private equitysponsor financing business, both on a primary as well as a secondary basis,where we identify attractive risk-adjusted return situations for ourcapital,” said Gautam Shirhattikar, an investment professional withProspect Capital Management.
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