Contact Information: Please send investment proposals to: Grier Eliasek President and Chief Operating Officer grier@prospectstreet.com (212) 448-9577
Prospect Capital Corporation Closes $200 Million Revolving Credit Facility and Announces 21% IRR Portfolio Company Realization
| Source: Prospect Capital Corporation
NEW YORK, NY--(Marketwire - June 7, 2007) - Prospect Capital Corporation (NASDAQ : PSEC )
("Prospect") announced today that Prospect has closed a $200 million
three-year revolving credit facility (the "Facility") with Rabobank
Nederland as administrative agent and sole lead arranger.
This Facility is being used to refinance Prospect's $50 million credit
facility and, together with Prospect's equity capital, to make additional
long-term investments. Interest on borrowings under the Facility is charged
at LIBOR plus 125 basis points.
"Increasing our access to credit by 300% is a significant milestone for our
company," said John Barry, Chairman and Chief Executive Officer of
Prospect. "In addition, we have significantly lowered the cost of our
credit while extending the term from one year to three years, enhancing our
access to capital and overall financial flexibility. With the robust
investment pipeline we currently have, we believe we will be drawing on
this expanded line in the not-too-distant future."
Separately, Prospect announced today that Charlevoix Energy LLC and
affiliates (collectively, "Charlevoix") have repaid the unamortized portion
of Charlevoix's term loan with Prospect. With the $352 thousand prepayment
premium from the loan, Prospect has realized a 21% internal rate of return
on the Charlevoix investment, representing 1.2 times cash on cash. Prospect
continues to hold a net profit interest in Charlevoix. "We greatly value
our relationship with the owners and managers of Charlevoix," said Grier
Eliasek, President and Chief Operating Officer of Prospect, "and we are
looking for more transactions we can work on together."
ABOUT PROSPECT CAPITAL CORPORATION
Prospect Capital Corporation (www.prospectstreet.com) is a closed-end
investment company that lends to and invests in private and microcap public
businesses. Prospect Capital's investment objective is to generate both
current income and capital appreciation through debt and equity
investments.
Prospect Capital has elected to be treated as a business development
company under the Investment Company Act of 1940 ("1940 Act"). We are
required to comply with a series of regulatory requirements under the 1940
Act as well as applicable NASDAQ, federal and state laws and regulations.
We have elected to be treated as a regulated investment company under the
Internal Revenue Code of 1986. Failure to comply with any of the laws and
regulations that apply to Prospect Capital could have a material adverse
effect on Prospect Capital and its shareholders.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Any such
statements, other than statements of historical fact, are likely to be
affected by other unknowable future events and conditions, including
elements of the future that are or are not under the Company's control, and
that the Company may or may not have considered; accordingly, such
statements cannot be guarantees or assurances of any aspect of future
performance. Actual developments and results are highly likely to vary
materially from these estimates and projections of the future. Such
statements speak only as of the time when made, and the Company undertakes
no obligation to update any such statement now or in the future.
ABOUT RABOBANK
Rabobank Group is a financial services leader providing retail and
institutional banking and finance solutions in key markets around the
world. From its century-old roots as a finance cooperative founded by Dutch
farmers, Rabobank has grown into one of the 25 largest banks worldwide with
approximately US$650 billion in assets and operations in over 35 countries.
Rabobank is the only private bank in the world with the highest possible
credit rating from both Standard & Poor's (AAA) and Moody's Investor
Service (Aaa), and is ranked as the world's third safest bank by Global
Finance magazine. For more information, visit www.rabobankamerica.com.