SOURCE: Prospect Capital Corporation

Prospect Capital Corporation

June 17, 2011 07:00 ET

Prospect Capital Provides $26.5 Million in Senior Secured Financing to Support Quilvest Private Equity and Malakand Capital's Purchase of ST Products, Plus Invests Nearly $60 Million in Two Additional Transactions, Plus Reaps Significant Prince Monetization With More Than 100% IRR

NEW YORK, NY--(Marketwire - Jun 17, 2011) - Prospect Capital Corporation (NASDAQ: PSEC) ("Prospect") announced today that Prospect has made a senior secured debt investment of $26.5 million to support the acquisition of ST Products, LLC ("STP") by Quilvest Private Equity and Malakand Capital.

Headquartered in Duncansville, Pennsylvania, STP is the leading North American producer of precision redrawn, small diameter, thin wall copper, and specialty alloy tubes. STP is the technical and service leader in its industry, with leading market share in its end markets and a reputation for exceptional technical capabilities, product quality, and delivery reliability.

"ST Products has a compelling value proposition and proven business model," said Benton Cummings, a Managing Director of Prospect Capital Management. "We are excited to provide financing to support the company's next phase of growth."

Separately, Prospect provided $24 million in first lien senior secured financing for the recapitalization of a leading company in the technology accessory industry.

Prospect also provided $35 million in secured second lien financing for the recapitalization of a top company in the window covering industry.

Prospect has closed more than $500 million of new originations since December 31, 2010. Prospect has closed over $200 million in new originations in the current quarter, with the current quarter not yet complete. Prospect also has a near-term potential pipeline in excess of $300 million.

In addition, Prospect announced it has received full repayment of its loans to Prince Minerals, Inc. ("Prince"), thereby resulting in accelerated accretion income of $10.5 million related to the original purchase discount of such loans from Patriot Capital Funding, Inc. Prospect realized a 3.1 times cash on cash return and an internal rate of return in excess of 100% from the Prince investment.

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 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.