Prospect Capital Announces Increase in Revolving Credit Facility Commitments to $400 Million

NEW YORK, NY--(Marketwire - Sep 1, 2011) - Prospect Capital Corporation (NASDAQ: PSEC) ("Prospect" or "Company") today announced that Prospect has increased total commitments to its three-year revolving credit facility (the "Facility") by $25 million to $400 million in the aggregate, filling the commitments allowed under the accordion feature in the Facility. The Facility, which has eleven lenders, has a reaffirmed investment-grade Moody's rating of A2.

We are currently in discussions with our Facility agent regarding an extension of the Facility to a five-year term, comprised of three years for the revolving period followed by two years for the amortization period, with distributions allowed. We anticipate, but cannot guarantee, an increase of the Facility size to at least $500 million with new and existing lenders, a reduction in our spread on borrowings, an increase in our advance rate, and an improvement in covenants.

"We are delighted to receive strong support from our lenders for the Facility upsizing and look forward to working with them on the extension," said Brian Oswald, Chief Financial Officer of Prospect. "The Facility is our most efficient financing solution, and its expansion and extension allow us to capitalize on an attractive set of opportunities we are identifying in the current marketplace."

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. Our investment objective is to generate both current income and long-term capital appreciation through debt and equity investments.

We have 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 rules 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 us could have an adverse effect on us and our shareholders.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, whose safe harbor for forward-looking statements does not apply to business development companies. Any such statements, other than statements of historical fact, are highly likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under our control, and that we 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 we undertake no obligation to update any such statement now or in the future.