Contact Information: Please send investment proposals to: Grier Eliasek President and Chief Operating Officer grier@prospectstreet.com (212) 448-9577
Prospect Capital Provides Financing for Private Equity Sponsors in Recapitalization of Regional Management Corp.
| Source: Prospect Capital Corporation
NEW YORK, NY--(Marketwire - July 13, 2007) - Prospect Capital Corporation
(NASDAQ : PSEC ) ("Prospect") announced today that on June 29, 2007, Prospect
committed to provide, and subsequently funded, debt financing of $25.0
million to Regional Management Corp. ("RMC"), located in Greenville, South
Carolina.
RMC is one of the leading consumer finance installment loan companies in
the United States. The company offers a variety of credit products to
individuals with limited access to traditional sources of consumer credit.
RMC, which has been growing rapidly in the Southeast across multiple
economic cycles, operates approximately 90 branch offices in South
Carolina, Texas, North Carolina and Tennessee. Typical loan sizes are less
than $5,000 per customer. Palladium Equity Partners ("Palladium"), a
private equity firm based in New York, and Parallel Investment Partners
("Parallel"), a private equity firm based in Dallas, co-sponsored the
recapitalization of RMC in March 2007 in partnership with management.
Prospect's debt capital is being utilized by RMC to recapitalize a bridge
loan by Palladium and Parallel and to provide capital for add-on
acquisitions.
"Prospect's team has impressed us with their responsiveness to our capital
needs, and we would recommend them to other private equity sponsors," said
Erik Scott, a principal with Palladium.
"This investment reflects our previously articulated strategies both to
increase our business with private equity sponsors and to broaden the
diversification of our portfolio," said Montgomery Cook, a managing
director with Prospect Capital Management, LLC. "Because of RMC's strict
underwriting procedures, focus on areas other than the mortgage market, and
impressive performance over multiple economic cycles, we believe RMC does
not face the same credit issues as seen recently in the sub-prime mortgage
market."
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.