NEW YORK, NY — (MARKETWIRE) — 07/13/07 — Prospect Capital Corporation(NASDAQ: PSEC) (“Prospect”) announced today that on June 29, 2007, Prospectcommitted to provide, and subsequently funded, debt financing of $25.0million to Regional Management Corp. (“RMC”), located in Greenville, SouthCarolina.
RMC is one of the leading consumer finance installment loan companies inthe United States. The company offers a variety of credit products toindividuals with limited access to traditional sources of consumer credit.RMC, which has been growing rapidly in the Southeast across multipleeconomic cycles, operates approximately 90 branch offices in SouthCarolina, Texas, North Carolina and Tennessee. Typical loan sizes are lessthan $5,000 per customer. Palladium Equity Partners (“Palladium”), aprivate equity firm based in New York, and Parallel Investment Partners(“Parallel”), a private equity firm based in Dallas, co-sponsored therecapitalization of RMC in March 2007 in partnership with management.
Prospect’s debt capital is being utilized by RMC to recapitalize a bridgeloan by Palladium and Parallel and to provide capital for add-onacquisitions.
“Prospect’s team has impressed us with their responsiveness to our capitalneeds, and we would recommend them to other private equity sponsors,” saidErik Scott, a principal with Palladium.
“This investment reflects our previously articulated strategies both toincrease our business with private equity sponsors and to broaden thediversification of our portfolio,” said Montgomery Cook, a managingdirector with Prospect Capital Management, LLC. “Because of RMC’s strictunderwriting procedures, focus on areas other than the mortgage market, andimpressive performance over multiple economic cycles, we believe RMC doesnot face the same credit issues as seen recently in the sub-prime mortgagemarket.”
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