SOURCE: Prospect Capital Corporation

Prospect Capital Corporation

June 18, 2012 07:00 ET

Prospect Capital Announces Increase in Revolving Credit Facility Commitments, Closes More Than $500 Million in Originations for Current Quarter to Date, and Exits C&J Cladding at 36% IRR and 2.3x Cash Multiple

NEW YORK, NY--(Marketwire - Jun 18, 2012) - Prospect Capital Corporation (NASDAQ: PSEC) ("Prospect", or "we") today announced that Prospect has increased total commitments to the five-year $650 million revolving credit facility (the "Facility") for Prospect Capital Funding LLC by $10 million to $492.5 million in the aggregate.

The Facility includes an accordion feature that allows Prospect to accept up to an aggregate of $650 million of revolving commitments, a target Prospect expects to reach with additional and existing lenders. The $10 million in new commitments has come from one new lender and one existing lender, bringing the total number of lenders to 15. The Facility has an investment grade Moody's rating of Aa3.

"The facility upsizing demonstrates a broad interest in the Facility within the lender community," said Brian Oswald, Chief Financial Officer of Prospect. "We continue to identify potential new participants for the Facility and look forward to increasing the commitments to our $650 million target."

In addition, Prospect exited its C&J Cladding investment through the sale of Prospect's remaining equity position. Together with prior cash flows and including cash received by C&J Cladding Holding Company Inc., 100% owned but not yet distributed to Prospect, the pre-tax exit results in a 36% IRR and 2.3 times cash multiple on the C&J Cladding investment.

Prospect has closed more than $500 million of originations to date in the current June 2012 quarter. Prospect's advanced investment pipeline aggregates more than $400 million of potential opportunities.

Prospect Capital Corporation ( 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 statements. 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.