Prospect Capital Makes Senior Secured Debt and Equity Investment in Great Point Partners Portfolio Company

NEW YORK, NY--(Marketwire - August 26, 2008) - Prospect Capital Corporation (NASDAQ: PSEC) ("Prospect") announced today that it led a senior secured debt financing and co-invested alongside Great Point Partners, LLC ("Great Point") in its growth recapitalization of BNN Holdings Corp. d/b/a Biotronic NeuroNetwork ("Biotronic"), based in Ann Arbor, Michigan.

Founded in 1978, Biotronic is the largest independent national provider of intra-operative neurophysiological monitoring ("IONM") services. IONM refers to the monitoring of critical nerve functions during various types of surgeries, including orthopedic, spinal, neurocranial, vascular, and cardiothoracic. Outsourced IONM, both onsite and remotely supported, improves surgical outcomes and safety, decreases litigation risk, and reduces cost burdens for hospitals. Biotronic has more than 120 trained technicians and neurologists providing technical and professional services in more than 20,000 procedures per year to over 300 hospitals and 1,000 surgeons across the country.

Great Point is a leading healthcare investment firm based in Greenwich, Connecticut, with approximately $700 million of assets under management. Prospect's senior secured debt investment and equity co-investment supports Great Point's acquisition of Biotronic.

"I have known the senior leadership of Prospect for a decade, and our team is impressed with Prospect's professionalism and responsiveness. We look forward to having Prospect as a partner to help fuel organic and acquisitive growth at Biotronic," said Adam Dolder, Managing Director of Great Point.

"We value Great Point's domain expertise in the healthcare sector," said Gautam Shirhattikar, a Vice President with Prospect Capital Management. "With our equity co-investment, we expect to benefit from Biotronic's rapid growth as the market leader."

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 Prospect's control, and that Prospect 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 Prospect undertakes no obligation to update any such statement now or in the future.

Contact Information: Please send investment proposals to: Grier Eliasek President and Chief Operating Officer (212) 448-9577