Prospect Capital Announces 55% Increase in Net Investment Income per Share and $0.12 Increase in Net Asset Value per Share for

Prospect Capital Announces 55% Increase in Net Investment Income per Share and 
$0.12 Increase in Net Asset Value per Share for Second
Fiscal Quarter Over Prior Year Second Fiscal Quarter 
NEW YORK, NY -- (Marketwire) -- 02/07/13 --  Prospect Capital
Corporation (NASDAQ: PSEC) ("Company" or "Prospect") today announced
financial results for our second fiscal quarter ended December 31,
2012.  
For the December 2012 quarter, our net investment income ("NII") was
$99.2 million or $0.51 per weighted average number of shares for the
quarter. For the December 2011 quarter, our NII was $36.5 million or
$0.33 per weighted average number of shares for the quarter. NII
increased year-over-year by 172% and 55% on a dollars and per share
basis, respectively. 
For the six months ended December 2012, our NII was $173.2 million or
$0.97 per weighted average number of shares for the period. For the
six months ended December 31, 2011, our NII was $64.4 million or
$0.59 per weighted average number of shares for the period.  
Our net asset value per share on December 31, 2012 stood at $10.81
per share, an increase of $0.12 per share from December 31, 2011. Our
debt to equity ratio stood at 47.8% (29.2% after subtraction of cash
and cash equivalents) as of December 31, 2012. We estimate that our
net investment income for the current March 2013 quarter will be
$0.27 to $0.31 per share.  
We have previously announced our upcoming cash distributions, our
55th, 56th, and 57th consecutive cash distributions to shareholders,
as follows: 


 
--  $0.110050 per share for February 2013 (record date of February 28,
    2013 and payment date of March 21, 2013);
    
    
--  $0.110075 per share for March 2013 (record date of March 29, 2013 and
    payment date of April 18, 2013); and
    
    
--  $0.110100 per share for April 2013 (record date of April 30, 2013 and
    payment date of May 23, 2013).

  
We have generated cumulative NII in excess of cumulative distributions
to shareholders in the current fiscal year to date, in the prior
fiscal year, and since Prospect's initial public offering nine years
ago. 
Our NII per weighted average share exceeded our cash distributions
per share in each of the last five quarters. Depending on future
distributions to shareholders, spillback dividend classifications,
differences between NII and investment company taxable income, and
other factors, we may retain significantly all or a portion of
realizations and reinvest them in additional income-producing
investments. 
Since our IPO nine years ago through our April 2013 distribution,
assuming our current share count for upcoming distributions, we will
have distributed more than $11.05 per share to original shareholders
and $675 million in cumulative distributions to all shareholders. 
HIGHLIGHTS  
Equity Values: 
 Net assets as of December 31, 2012: $2.327 billion  
Net asset value per share as of December 31, 2012: $10.81 
Second Fiscal Quarter Operating Results: 
 Net investment income:
$99.22 million 
 Net investment income per share: $0.51
 Dividends to
shareholders per share: $0.313325 
Fiscal Year to Date Operating Results: 
 Net investment income:
$173.24 million 
 Net investment income per share: $0.97
 Net
increase in net assets resulting from operations: $93.74 million  
Net increase in net assets per share resulting from operations:
$0.52
 Dividends to shareholders per share: $0.618125 
Second Quarter and Fiscal Year to Date Portfolio and Investment
Activity: 
 Portfolio investments in quarter: $772.13 million 
Portfolio investments during the six months ended December 31, 2012:
$1.520 billion 
 Total Portfolio investments at cost at December 31,
2012: $3.117 billion
 Total portfolio investments at fair value at
December 31, 2012: $3.039 billion
 Number of portfolio companies at
December 31, 2012: 106 
PORTFOLIO AND INVESTMENT ACTIVITY  
Our origination efforts during the December 2012 quarter prioritized
secured lending, with an emphasis on first-lien loans, although we
also seek to close selected subordinated debt and equity investments.
In addition to targeting investments senior in corporate capital
structures with our new originations, we have also increased our new
investments in third-party private equity sponsor-owned companies,
which tend to have more third-party equity capital supporting our
debt investments than in non-sponsor transactions, while still
maintaining our flexibility to pursue attractive non-sponsor
investments. With our scale team of more than 60 professionals, one
of the largest dedicated middle-market credit groups in the industry,
we believe we are well positioned to select in a disciplined manner a
small number of investments out of thousands of investment
opportunities sourced annually. 
As a result of our continuing credit risk, yield, and other portfolio
management initiatives, our portfolio's annualized current yield
stood at 14.7% across all performing interest bearing investments as
of December 31, 2012. Distributions from equity positions that we
hold are not included in this yield calculation. In many of our
portfolio companies, we hold equity positions, ranging from minority
interests to majority stakes, which we expect over time to contribute
to our investment returns. 
At December 31, 2012, our portfolio consisted of 106 long-term
investments with a fair value of $3.039 billion, a record total,
compared to 85 long-term investments with a fair value of $2.094
billion at June 30, 2012, and compared to 72 long-term investments
with a fair value of $1.463 billion at June 30, 2011.  
During the December 2012 quarter, we completed 33 new and follow-on
investments aggregating a record $772.1 million (approximately five
times our origination dollar volume in the prior year December 2011
quarter), sold two investments, and received repayment on eleven
other investments. Our repayments in the December 2012 quarter were
$349.3 million, resulting in investments net of repayments of $422.9
million. 


 
--  On October 3, 2012, we made a senior secured investment of $21.5
    million to support the acquisition of CP Well Testing, LLC, a leading
    provider of flowback services to oil and gas companies operating in
    Western Oklahoma and the Texas Panhandle.
    
    
--  On October 5, 2012, Northwestern Management Services, LLC
    ("Northwestern") repaid our $15.1 million loan, and we sold our shares
    of Northwestern common stock for total proceeds of $2.2 million,
    realizing a gain of $1.9 million.
    
    
--  On October 11, 2012, we made a secured second lien investment of $12.0
    million in Deltek, Inc., an enterprise software and information
    solutions provider for professional services firms, government
    contractors, and government agencies.
    
    
--  On October 12, 2012, we made a senior secured investment of $42.0
    million to support the acquisition of Gulf Coast Machine and Supply
    Company, a preferred provider of value-added forging solutions to
    energy and industrial end markets.
    
    
--  On October 16, 2012, Blue Coat Systems, Inc. repaid our $25.0 million
    loan.
    
    
--  On October 18, 2012, we made a follow-on senior secured debt
    investment of $20.0 million in First Tower Holdings of Delaware LLC,
    to support seasonal growth in finance receivables due to increased
    holiday borrowing activity from its customer base.
    
    
--  On October 18, 2012, Hi-Tech Testing Service, Inc. and
 Wilson
    Inspection X-Ray Services, Inc. repaid our $7.2 million loan.
    
    
--  On October 19, 2012, Mood Media Corporation repaid our $15.0 million
    loan.
    
    
--  On October 24, 2012, we made an investment of $7.8 million in APH
    Property Holdings, LLC ("APH"), to acquire an industrial real estate
    property occupied by Filet-of-Chicken, a chicken processor in Georgia.
    We invested $1.8 million of equity and $6.0 million of debt in APH.
    
    
--  On October 31, 2012, Shearer's Foods, Inc. repaid our $38.0 million
    loan.
    
    
--  On November 5, 2012, we made an investment of $39.5 million to
    purchase subordinated notes in ING IM CLO 2012-IV, Ltd.
    
    
--  On November 7, 2012, we redeemed our membership interests in
    connection with the sale of Shearer's, receiving $6.0 million of net
    proceeds and realizing a gain of approximately $2.0 million on the
    redemption.
    
    
--  On November 8, 2012, Potters Holdings II, L.P. repaid our $15.0
    million loan.
    
    
--  On November 9, 2012, we made a secured second lien investment of $22.0
    million to support the recapitalization of EIG Investors Corp.
    Concurrent with the financing, we received a repayment of our previous
    $12.0 million loan.
    
    
--  On November 15, 2012, Renaissance Learning, Inc. repaid our $6.0
    million loan.
    
    
--  On November 26, 2012, we made a secured second lien investment of
    $22.0 million in The Petroleum Place, Inc., a provider of enterprise
    resource planning software focused on the oil & gas industry.
    
    
--  On November 30, 2012, we made a secured second lien investment of $9.5
    million to support the recapitalization of R-V Industries, Inc
    ("R-V"). As part of the recapitalization, we received a dividend of
    $11.1 million for our investment in R-V's common stock.
    
    
--  On December 3, 2012, VanDeMark Chemicals, Inc. repaid our $29.7
    million loan.
    
    
--  On December 6, 2012, we made an investment of $38.3 million to
    purchase subordinated notes in Apidos CLO XI, LLC.
    
    
--  On December 7, 2012, Hudson Products Holdings, Inc. repaid our $6.3
    million loan.
    
    
--  On December 13, 2012, we completed a $33.9 million debt and equity
    recapitalization of CCPI, Inc. ("CCPI"), an international manufacturer
    of refractory materials and other consumable products for industrial
    applications. Through the recapitalization, Prospect acquired a
    controlling interest in CCPI for $28.3 million in cash and 467,928
    unregistered shares of our common stock.
    
    
--  On December 14, 2012, we provided $10.0 million of first-lien
    financing to support the recapitalization of Prince Mineral Holding
    Corp., a leading global specialty mineral processor and consolidator.
    
    
--  On December 14, 2012, we made a $3.0 million follow-on secured debt
    investment in Focus Brands, Inc.
    
    
--  On December 17, 2012, we made a $39.8 million first-lien investment in
    Coverall Health-Based Cleaning Systems, a leading franchiser of
    commercial cleaning businesses.
    
    
--  On December 17, 2012, we made a $38.2 million first-lien follow-on
    investment in Material Handling Services, LLC, d/b/a Total Fleet
    Solutions, to support the acquisition of Miner Holding Company, Inc.
    
    
--  On December 17, 2012, we made a secured debt investment of $30.0
    million to support the recapitalization of BNN Holdings Corp. After
    the financing, we received repayment of our previous $26.2 million
    loan.
    
    
--  On December 19, 2012, we provided $17.5 million of senior secured
    second-lien financing to Grocery Outlet, Inc., to support the
    recapitalization of this retailer of food, beverages, and general
    merchandise.
    
    
--  On December 19, 2012, we provided $23.2 million of senior secured
    second-lien financing to support the recapitalization of TB Corp., a
    Mexican restaurant chain.
    
    
--  On December 20, 2012, we made an additional follow-on senior secured
    debt investment of $19.5 million to support the recapitalization of
    Progrexion Holdings, Inc. ("Progrexion"). After the financing, we now
    hold $154.5 million of senior secured debt of Progrexion.
    
    
--  On December 21, 2012, ST Products, LLC repaid our $23.2 million loan.
    
    
--  On December 21, 2012, SG Acquisition, Inc. repaid our $83.2 million
    loan.
    
    
--  On December 21, 2012, we made a $10.0 million senior secured
    second-lien follow-on investment in Seaton Corp.
    
    
--  On December 21, 2012, we made a $37.5 million senior secured
    first-lien investment in Lasership, Inc., a leading provider of
    regional same day and next day distribution services for premier
    e-commerce and product supply businesses.
    
    
--  On December 21, 2012, we made a $12.0 million senior secured
    first-lien follow-on investment in FPG, LLC, a supplier of branded
    consumer and commercial products sold to the retail, foodservice, and
    hospitality sectors.
    
    
--  On December 24, 2012, we made a follow-on secured debt investment of
    $5.0 million in New Star Metals, Inc.
    
    
--  On December 24, 2012, we made a $7.0 million second-lien secured
    investment in Aderant North America, Inc., a leading provider of
    enterprise software solutions to professional services organizations.
    
    
--  On December 28, 2012, we made a $9.6 million second-lien secured
    investment in APH, to acquire Abbington Pointe, Inc., a multi-family
    property in Marietta, Georgia. We invested $3.2 million of equity and
    $6.4 million of debt in APH.
    
    
--  On December 28, 2012, we made a $5.0 million second-lien secured
    investment in TransFirst Holdings, Inc., a payments processing firm
    that provides electronic credit card authorization to merchants
    located throughout the United States.
    
    
--  On December 28, 2012, we completed a $47.9 million debt and equity
    recapitalization of Credit Central Holdings, LLC ("Credit Central") a
    branch-based provider of installment loans. Through the
    recapitalization, we acquired a controlling interest in Credit Central
    for $38.1 million in cash and 897,906 unregistered shares of our
    common stock.
    
    
--  On December 28, 2012, we made a $3.6 million follow-on subordinated
    unsecured debt investment in Ajax Rolled Ring & Machine, Inc.
    
    
--  On December 28, 2012, we made a $30.0 million first-lien senior
    secured investment to support the recapitalization of Spartan Energy
    Services, LLC, a leading provider of thru tubing and flow control
    services to oil and gas companies.
    
    
--  On December 31, 2012, we provided a $32.0 million senior secured loan
    to support the acquisition of System One Holdings, LLC, a leading
    provider of professional staffing services, by investment funds
    managed by MidOcean Partners.
    
    
--  On December 31, 2012, we funded a recapitalization of Valley Electric
    Co. of Mt. Vernon, Inc. ("Valley") with $52.1 million of combined debt
    and equity financing. Through the recapitalization, we acquired a
    controlling interest in Valley for $7.4 million in cash and 4,141,547
    unregistered shares of our common stock.
    
    
--  On December 31, 2012, we provided $70.0 million of secured second-lien
    debt financing for the acquisition of Thomson Reuters Property Tax
    Services by Ryan, LLC.

  
Since December 31, 2012 in the current March 2013 quarter, we have
completed six new investments aggregating $142.5 million. 


 
--  On January 11, 2013, we provided $27.1 million of debt financing to
    CHC Companies, Inc., a national provider of correctional medical and
    behavioral healthcare solutions.
    
    
--  On January 17, 2013, we made a $30.3 million follow-on investment in
    APH, to acquire 5100 Live Oaks Blvd, LLC, a multi-family residential
    property located in Tampa, Florida. We invested $2.7 million of equity
    and $27.6 million of debt in APH.
    
    
--  On January 24, 2013, we made an investment of $24.3 million to
    purchase subordinated notes in Cent 17 CLO Limited.
    
    
--  On January 24, 2013, we made an investment of $25.7 million to
    purchase subordinated notes in Octagon Investment Partners XV, Ltd.
    
    
--  On January 29, 2013, we provided $8.0 million of secured second lien
    financing to TGG Medical Transitory, Inc., a developer of technologies
    for extracorporeal photopheresis treatments.
    
    
--  On January 31, 2013, we funded the acquisition of the subsidiaries of
    Nationwide Acceptance Corporation, an auto finance business, with
    $25.2 million of combined debt and equity financing.
    
    
--  On February 5, 2013, we made a secured debt investment of $2.0 million
    in Healogics, Inc., a provider of outpatient wound care management
    services located in Jacksonville, Florida. On the same day we fully
    exited the deal and realized a gain of approximately $0.1 million on
    this investment.

  
We are pleased with the overall credit quality of our portfolio, with
many of our companies generating year-over-year and sequential growth
in top-line revenues and bottom-line profits. None of our loans
originated in over five years has gone on non-accrual status. The
fair market value of our loan assets on non-accrual as a percentage
of total assets stood at approximately 1.1% on December 31, 2012,
down from 1.9% on June 30, 2012 and 3.5% on June 30, 2011.  
During calendar year 2012, we received significant dividend and
interest income from our ESHI investment. We expect our income from
ESHI in calendar year 2013 to be significantly less than such income
in calendar year 2012. We are looking to offset this decrease by
utilizing existing liquidity and prudent leverage to finance our
growth through new originations, including attractive yielding
investments in the financial services and other sectors. 
Because of the performance of several controlled positions in our
portfolio, we have selectively monetized certain such companies and
may monetize other positions if we identify attractive opportunities
for exit. As such exits materialize, we expect to reinvest such
proceeds into new income-producing opportunities. We are pleased with
the performance of our controlled portfolio companies, and are
actively exploring other new investment opportunities at attractive
multiples of cash flow. 
Our advanced investment pipeline aggregates more than $400 million of
potential opportunities. These investments are primarily secured
investments with double-digit coupons, sometimes coupled with equity
upside through additional investments, diversified across multiple
sectors. 
Our diversified approach covers multiple business segments, including
agented sponsor finance, club and syndicated finance, agented direct
lending, structured credit, real estate yield, and controlled debt
and equity investments. This diversity allows us to source a broad
range and high volume of opportunities, then select in a disciplined
bottoms-up manner the opportunities we deem to be the most attractive
on a risk-adjusted basis. 
LIQUIDITY AND FINANCIAL RESULTS  
Our modestly leveraged balance sheet is a source of significant
strength. Our debt to equity ratio stood at 47.8% (29.2% after
subtraction of cash and cash equivalents) at December 31, 2012. Our
equitized balance sheet also gives us the potential for future
earnings upside as we prudently look to utilize and grow our existing
revolving credit facility as well as potentially add additional
secured or unsecured term facilities, made more attractive by our
investment-grade ratings at corporate, revolving facility, and term
debt levels. 
On March 27, 2012, we renegotiated our credit facility and closed on
an expanded five-year revolving credit facility (the "Facility") for
Prospect Capital Funding LLC. As of December 31, 2012, our Facility
size stood at $552.5 million with commitments from 17 total lenders.
The Facility includes an accordion feature that allows aggregate
commitments to be increased to $650 million without the need for
re-approval from existing lenders or the rating agency.  
As we make additional investments, we generate additional
availability to the extent such investments are eligible to be placed
into the borrowing base. The revolving period of the Facility extends
through March 2015, with an additional two-year amortization period,
with distributions allowed after the completion of the revolving
period. Interest on borrowings under the Facility is one-month Libor
plus 275 basis points, with no minimum Libor floor. The Facility
continues to carry a high-investment-grade Moody's rating of Aa3. 
We also have significantly diversified our counterparty risk. The
current count of 17 institutional lenders in our Facility compares to
five lenders at June 30, 2010, two lenders at June 30, 2009, and one
lender at June 30, 2008. 
In addition, our repeat issuance in the 5-year to 30-year unsecured
term debt market has extended our liability duration, thereby better
matching our assets and liabilities for balance sheet risk
management. 
On December 21, 2010, we issued $150.0 million in principal amount of
6.25% senior unsecured convertible notes, convertible at $11.35 per
common share and due December 2015 ("2015 Notes").  
On February 18, 2011, we issued $172.5 million in principal amount of
5.50% senior unsecured convertible notes, convertible at $12.76 per
common share and due August 2016 ("2016 Notes"). In the March 2012
quarter, we repurchased $5.0 million of our 2016 Notes. 
On April 16, 2012, we issued $130.0 million in principal amount of
5.375% senior unsecured convertible notes, convertible at $11.65 per
common share and due October 2017 ("2017 Notes"). 
On August 14, 2012, we issued $200.0 million in principal amount of
5.75% senior unsecured convertible notes, convertible at $12.14 per
common share and due March 2018 ("2018 Notes"). 
On December 21, 2012, we issued $200.0 million in principal amount of
5.875% senior unsecured convertible notes, convertible at $12.54 per
common share and due January 2019 ("2019 Notes", and together with
the 2015 Notes, 2016 Notes, 2017 Notes, and 2018 Notes, the
"Convertible Notes"). In the past we have repurchased Convertible
Notes when we deemed such purchases to be attractive for us. 
On February 16, 2012, we entered into a Selling Agent Agreement for
our issuance and sale from time to time of senior unsecured Prospect
Capital InterNotes(R) (the "InterNotes"). Since initiating the
program, we have issued $183.0 million of InterNotes. These notes
were issued with interest rates ranging from 4.00% to 7.00% with a
weighted average rate of 5.94%. These notes mature between June 15,
2019 and February 15, 2043.  
On May 1, 2012, we issued $100.0 million in principal amount of 6.95%
senior unsecured notes due November 2022 (the "2022 Baby Bond Notes",
and together with our Convertible Notes and our InterNotes, the
"Unsecured Notes"). The 2022 Baby Bond Notes trade on the New York
Stock Exchange with ticker PRY and further demonstrate our
diversified access to longer-dated funding. 
The Unsecured Notes are general unsecured obligations of Prospect,
with no financial covenants, no technical cross default provisions,
and no payment cross default provisions with respect to our revolving
credit facility. The Unsecured Notes have no restrictions related to
the type and security of assets in which Prospect might invest. The
issuance of these notes has allowed us to grow our investment program
in calendar year 2012 and prudently commit to loans with maturities
longer than our existing revolving credit facility maturity. These
Unsecured Notes have an investment-grade S&P rating of BBB. As of
December 31, 2012, Prospect held more than $2.89 billion of
unencumbered assets on its balance sheet, benefiting holders of
Unsecured Notes and Prospect shareholders. 
Since June 30, 2012, we have completed five equity issuances at
prices above net asset value per share.  
On June 1, 2012, we entered into an equity distribution agreement,
relating to at-the-market offerings from time to time, of up to 9.5
million shares of our common stock (the "ATM Program"). During the
period from July 2, 2012 to July 12, 2012, we sold approximately 2.25
million shares of our common stock at an average price of $11.59 per
share, and raised $26.0 million of gross proceeds.  
On July 16, 2012, and subsequently through exercise of the
underwriter option, we issued 24,150,000 shares of our common stock
at $11.15 per share, raising $269.3 million of gross proceeds. 
On September 10, 2012, we entered into an equity distribution
agreement, relating to at-the-market offerings from time to time, of
up to 9.75 million shares of our common stock. During the period from
September 13, 2012 to September 28, 2012, we sold approximately 6.8
million shares of our common stock at an average price of $11.86 per
share, and raised $80.2 million of gross proceeds, under the program.
During the period from October 1, 2012 to October 9, 2012, we sold
approximately 1.25 million shares of our common stock at an average
price of $11.53 per share, and raised $14.4 million of gross
proceeds. 
On November 7, 2012, we issued 35,000,000 shares of our common stock
to the public at an initial price of $11.10 per share to the public
(or $10.96 per share net proceeds after commissions and expenses),
raising $383.6 million of net proceeds. 
On December 21, 2012, we entered into an equity distribution
agreement, relating to at-the-market offerings from time to time, of
up to 17.5 million shares of our common stock. During the period from
January 7, 2013 to February 5, 2013, we sold approximately 10.2
million shares of our common stock at an average price of $11.25 per
share, and raised $115.3 million of gross proceeds, under the
program.  
We currently have no borrowings under our Facility. Assuming
sufficient assets are pledged to the Facility and that we are in
compliance with all Facility terms, and taking into account our cash
balances on hand, we have over $740 million of new investment
capacity. Any principal repayments or other monetizations of our
assets would further increase our new investment capacity. Any
issuance of equity, increase in our Facility size, or issuance of
other debt, including additional term debt, would also further
increase our investment capacity.  
CONFERENCE CALL 
 The Company will host a conference call on Friday,
February 8, 2013 at 11:00 a.m. Eastern Time. The conference call
dial-in number will be 888-317-6016. A recording of the conference
call will be available for approximately 30 days. To hear a replay,
call 877-344-7529 and use passcode 10024741. 


 
                                                                            
                PROSPECT CAPITAL CORPORATION AND SUBSIDIARY                 
              CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES             
                     December 31, 2012 and June 30, 2012                    
               (in thousands, except share and per share data)              
                                                                            
                                                                            
                                                December 31,     June 30,   
                                                    2012           2012     
                                               -------------  ------------- 
Assets                                          (Unaudited)     (Audited)   
Investments at fair value:                                                  
  Control investments (amortized cost of                                    
   $666,360 and $518,015, respectively)        $     649,380  $     564,489 
  Affiliate investments (amortized cost of                                  
   $48,659 and $44,229, respectively)                 48,266         46,116 
  Non-control/Non-affiliate investments                                     
   (amortized cost of $2,402,038 and                                        
   $1,537,069, respectively)                       2,341,162      1,483,616 
                                               -------------  ------------- 
    Total investments at fair value (amortized                              
     cost of $3,117,057 and $2,099,313,                                     
     respectively)                                 3,038,808      2,094,221 
                                                                            
  Investments in money market funds                  430,945        118,369 
                                               -------------  ------------- 
Total investments                                  3,469,753      2,212,590 
                                               -------------  ------------- 
Cash                                                   2,219          2,825 
Receivables for:                                                            
  Interest, net                                       16,531         14,219 
  Dividends                                               11              1 
  Other                                                2,409            783 
Prepaid expenses                                         227            421 
Deferred financing costs                              38,571         24,415 
                                               -------------  ------------- 
    Total Assets                                   3,529,721      2,255,254 
                                               -------------  ------------- 
                                                                            
Liabilities                                                                 
Credit facility payable                                   --         96,000 
Senior convertible notes                             847,500        447,500 
Senior unsecured notes                               100,000        100,000 
Prospect Capital InterNotes(R)                         164,993         20,638 
Due to broker                                         38,291         44,533 
Dividends payable                                     23,669         14,180 
Due to Prospect Administration                           373            658 
Due to Prospect Capital Management                     2,019          7,913 
Accrued expenses                                      16,544          9,648 
Other liabilities                                      9,697          2,210 
                                               -------------  ------------- 
    Total Liabilities                              1,203,086        743,280 
                                               -------------  ------------- 
Net Assets                                     $   2,326,635  $   1,511,974 
                                               =============  ============= 
                                                                            
Components of Net Assets                                                    
Common stock, par value $0.001 per share                                    
 (500,000,000 common shares authorized;                                     
 215,173,410 and 139,633,870 issued and                                     
 outstanding, respectively)                    $         215  $         140 
Paid-in capital in excess of par                   2,379,742      1,544,801 
Undistributed net investment income                   82,817         23,667 
Accumulated realized losses on investments           (57,890)       (51,542)
Unrealized depreciation on investments               (78,249)        (5,092)
                                               -------------  ------------- 
Net Assets                                     $   2,326,635  $   1,511,974 
                                               =============  ============= 
                                                                            
Net Asset Value Per Share                      $       10.81  $       10.83 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                PROSPECT CAPITAL CORPORATION AND SUBSIDIARY                 
                    CONSOLIDATED STATEMENTS OF OPERATIONS                   
        For the Three Months and Six Ended December 31, 2012 and 2011       
              (in thousands, except share and per share data)               
                                 (Unaudited)                                
                                                                            
                                                                            
                               For The Three Months    For The Six Months   
                                      Ended                   Ended         
                                   December 31,           December 31,      
                             ----------------------- ---------------------- 
                                2012         2011       2012        2011    
                             ----------  ----------- ----------  ---------- 
                                                                            
Investment Income                                                           
Interest Income:                                                            
  Control investments        $   33,239  $     6,415 $   51,158  $   12,580 
  Affiliate investments           1,694        2,399      3,345       4,801 
  Non-control/Non-affiliate                                                 
   investments other than                                                   
   CLO securities                58,513       36,714    103,540      70,034 
  CLO fund securities            23,420          608     37,133       1,108 
                             ----------  ----------- ----------  ---------- 
    Total interest income       116,866       46,136    195,176      88,523 
                             ----------  ----------- ----------  ---------- 
                                                                            
Dividend income:                                                            
  Control investments            31,717       17,645     64,967      24,345 
  Non-control/Non-affiliate                                                 
   investments                      230        1,384      3,185       1,733 
  Money market funds                  8            -         11           1 
                             ----------  ----------- ----------  ---------- 
    Total dividend income        31,955       19,029     68,163      26,079 
                             ----------  ----------- ----------  ---------- 
                                                                            
Other income:                                                               
  Control investments             5,095          612      5,097         618 
  Affiliate investments             605           13        613          74 
  Non-control/Non-affiliate                                                 
   investments                   11,514        1,473     20,622       7,311 
                             ----------  ----------- ----------  ---------- 
    Total other income           17,214        2,098     26,332       8,003 
                             ----------  ----------- ----------  ---------- 
  Total Investment Income       166,035       67,263    289,671     122,605 
                             ----------  ----------- ----------  ---------- 
                                                                            
Operating Expenses                                                          
Investment advisory fees:                                                   
  Base management fee            16,306        8,825     29,534      17,036 
  Income incentive fee           24,804        9,127     43,311      16,096 
                             ----------  ----------- ----------  ---------- 
    Total investment                                                        
     advisory fees               41,110       17,952     72,845      33,132 
                                                                            
Interest and credit facility                                                
 expenses                        16,414        9,759     29,925      18,719 
Legal fees                          635          510      1,257         942 
Valuation services                  371          306        747         608 
Audit, compliance and tax                                                   
 related fees                       378          525        810         865 
Allocation of overhead from                                                 
 Prospect Administration          2,139        1,117      4,323       2,233 
Insurance expense                    78           20        171          99 
Directors' fees                      75           63        150         127 
Excise tax                        4,500            -      4,500           - 
Other general and                                                           
 administrative expenses          1,119          503      1,700       1,495 
                             ----------  ----------- ----------  ---------- 
  Total Operating Expenses       66,819       30,755    116,428      58,220 
                             ----------  ----------- ----------  ---------- 
                                                                            
  Net Investment Income          99,216       36,508    173,243      64,385 
                             ----------  ----------- ----------  ---------- 
                                                                            
Net realized (loss) gain on                                                 
 investments                     (8,123)      13,498     (6,348)     (1,109)
Net change in unrealized                                                    
 (depreciation) appreciation                                                
 on investments                 (44,604)      14,486    (73,157)     41,116 
                             ----------  ----------- ----------  ---------- 
                                                                            
  Net Increase in Net Assets                                                
   Resulting from Operations $   46,489  $    64,492 $   93,738  $  104,392 
                             ----------  ----------- ----------  ---------- 
                                                                            
Net increase in net assets                                                  
 resulting from operations                                                  
 per share:                  $     0.24  $      0.59 $     0.52  $     0.96 
                             ----------  ----------- ----------  ---------- 
Dividends declared per share $     0.31  $      0.31 $     0.61  $     0.61 
                             ----------  ----------- ----------  ---------- 
                                                                            
                                                                            
                                                                            
                PROSPECT CAPITAL CORPORATION AND SUBSIDIARY                 
                   ROLLFORWARD OF NET ASSET VALUE PER SHARE                 
           For the Three and Six Months December 31, 2012 and 2011          
                            (in actual dollars)                             
                                 (Unaudited)                                
                                                                            
                                                                            
                              For The Three Months     For The Six Months   
                                      Ended                   Ended         
                             ----------------------  ---------------------- 
                              December    December    December    December  
                              31, 2012    31, 2011    31, 2012    31, 2011  
                             ----------  ----------  ----------  ---------- 
Per Share Data:                                                             
Net asset value at beginning                                                
 of period                   $    10.88  $    10.41  $    10.83  $    10.36 
Net investment income              0.51        0.33        0.97        0.59 
Net realized (loss) gain          (0.04)       0.12       (0.04)      (0.01)
Net unrealized                                                              
 (depreciation) appreciation      (0.23)       0.14       (0.41)       0.38 
Net increase (decrease) in                                                  
 net assets as a result of                                                  
 public offerings                  0.01           -        0.10       (0.01)
Dividends declared                (0.32)      (0.31)      (0.64)      (0.62)
                             ----------  ----------  ----------  ---------- 
Net asset value at end of                                                   
 period                      $    10.81  $    10.69  $    10.81  $    10.69 
                             ==========  ==========  ==========  ========== 

 
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
any forward-looking 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.   
For further information, contact: 
Grier Eliasek
President and Chief Operating Officer 
grier@prospectstreet.com 
(212) 448-9577 
 
 
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