Prospect Capital Invests $32.5 Million in Senior Secured Debt for Recapitalization of Manufacturer and Marketer of Branded Health and Fitness Equipment

NEW YORK, NY--(Marketwire - October 12, 2010) -  Prospect Capital Corporation (NASDAQ: PSEC) ("Prospect") announced today that Prospect has made a senior secured debt investment of $32.5 million in a leading manufacturer and marketer of branded health and fitness equipment ("Company"). The Company designs, sources, manufactures, and distributes branded fitness equipment for consumers, retailers, and gym owners. Prospect's debt investment is secured by a first lien on substantially all of the Company's present and future assets.

"Spending on health and fitness not only has sustained itself through these tough economic times, but also is expected to increase considerably over the next decade in conjunction with demographic trends," said Sachin Sarnobat, a Vice President with Prospect Capital Management. "We are excited to support an innovative company led by a world-class management team that has shown the ability to grow profitability and gain market share over the last several years."

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.