Prospect Capital Announces Pricing of $130M of 5.375% 5.5-Year Unsecured Convertible Senior Notes Due October 2017

Prospect Capital Corporation

announced today the pricing of $130 million in aggregate principal amount of 5.5-year unsecured 5.375% Convertible Senior Notes Due 2017. The Company has also granted the initial purchasers of the Notes an option to purchase up to an additional $20 million in aggregate principal amount of Notes. The Notes will be convertible into shares of Prospect's common stock based on an initial conversion rate of 85.8442 shares of Prospect's common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $11.65 per share of common stock, representing a 10% conversion premium over the last reported sale price of Prospect's common stock on April 10, 2012, which was $10.59 per share. The conversion price for the Notes will not be reduced for monthly cash dividends paid to common shares at or below the rate of 10.15 cents per share, subject to anti-dilution and other adjustments. Interest on the Notes will be payable semiannually in arrears on April 15 and October 15 of each year, beginning October 15, 2012. The Notes will mature on October 15, 2017, unless previously converted in accordance with their terms. The Notes will be general unsecured obligations of Prospect, will rank equally in right of payment with Prospect's existing and future senior unsecured debt, and will rank senior in right of payment to any potential subordinated debt, should any be issued in the future.