NEW YORK, NY — (MARKET WIRE) — 07/26/06 — Prospect Energy Corporation (NASDAQ: PSEC)(“Prospect”) announced today that Prospect has closed a $50 millionrevolving credit facility (the “Facility”) with HSH Nordbank asadministrative agent and sole lead arranger, replacing Prospect’s priorsmaller $30 million facility.
This Facility is being used to refinance Prospect’s prior $30 millioncredit facility and, together with Prospect’s equity capital, to makeadditional long-term investments. Interest on borrowings under the Facilityis charged, at Prospect’s option, at either (i) LIBOR plus the applicablespread, ranging from 200 to 250 basis points (the refinanced facility beingat 250 basis points over LIBOR), or (ii) the greater of the lender primerate or the federal funds effective rate plus 50 to 100 basis points. Theapplicable spread decreases as the equity base of Prospect increases.
“We are very pleased to put this larger revolving credit capability inplace,” said John Barry, Chairman and Chief Executive Officer of Prospect.”This facility provides flexible ‘just in time’ bank credit as a valuablecomponent of Prospect’s capital structure going forward, enabling us toleverage the returns on our portfolio in a cost-effective way for thebenefit of our shareholders. This revolver, which we expect to see growover time, provides us enhanced access on favorable terms to significantrevolving bank credit, at lower costs as we grow our equity base. With therobust investment pipeline we currently have, we believe that we may befully utilizing this larger facility in the near future.”
ABOUT PROSPECT ENERGY CORPORATION
Prospect Energy Corporation (www.prospectenergy.com) is a closed-endinvestment company that lends to and invests in energy-related businesses.Prospect Energy’s investment objective is to generate both current incomeand long-term capital appreciation through debt and equity investments.
Prospect Energy has elected to be treated as a business development companyunder the Investment Company Act of 1940 (“1940 Act”). We are required tocomply with a series of regulatory requirements under the 1940 Act as wellas applicable NASDAQ, federal and state rules and regulations. We haveelected to be treated as a regulated investment company under the InternalRevenue Code of 1986. Failure to comply with any of the laws andregulations that apply to Prospect Energy could have an adverse effect onProspect Energy 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 highly likely tobe affected 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.
ABOUT HSH NORDBANK
HSH Nordbank AG is one of the leading banks in Germany with total assets of$235 billion and offices in the world’s leading capital markets, includingNew York and London. HSH Nordbank continues to maintain a strong commitmentto the energy and project finance sector globally. The New York Branch hasa team of energy structured finance professionals focusing on oil and gas,power generation, including renewable energy projects, and infrastructure.Among the other segments served, in which HSH Nordbank has a leadingposition, are transportation, real estate and ship financing. For moreinformation please visit www.hsh-nordbank.com.
Please send investment proposals to:Prospect Energy CorporationJohn BarryChairman and Chief Executive Officerjbarry@prospectstreet.comGrier EliasekPresident and Chief Operating Officergrier@prospectstreet.com(212) 448-0702