Prospect Capital Invests $52.4 Million of Debt and Equity in AIRMALL USA

SOURCE: Prospect Capital Corporation

NEW YORK, NY–(Marketwire – August 2, 2010) –  Prospect Capital Corporation (NASDAQ: PSEC) (“Prospect”) announced today that Prospect has invested $52.4 million of combined debt and equity in AIRMALL USA Inc. (“AIRMALL” or the “Company”), a leading developer and manager of airport retail operations.

Founded in 1991, AIRMALL has developed and currently manages all or substantially all of the retail operations within the Boston (Logan), Baltimore-Washington (BWI), Pittsburgh (PIT), and Cleveland (Hopkins) international airports. The Company does so pursuant to long-term, infrastructure-like contracts with the respective municipal agencies that own and operate the airports. At each of the airports, AIRMALL has been responsible for designing, constructing, leasing, and actively managing the retail space, which includes restaurants, lounges, news and gift shops, specialty retail shops, retail services (e.g., ATMs), food courts, and other common areas. Each year, nearly 50 million passengers pass through airport terminals where AIRMALL manages the retail operations. AIRMALL presently oversees nearly 300 individual retail locations. The Company is also pursuing new development and management contracts with other U.S. airports.

Of Prospect’s $52.4 million total investment, $30.0 million is structured as senior secured operating company debt, $12.5 million as holding company debt, and $9.9 million as controlling preferred equity. Prior to the change of control, AIRMALL had been operating as a subsidiary of BAA Limited of the UK under the name BAA USA. All of the managers of AIRMALL remain with the company.

“We are enthusiastic to work with Prospect to grow AIRMALL’s presence as the leading provider of airport retail development and management services,” said Mark Knight, President of AIRMALL. “We continue to work to improve the passenger experience and drive retail sales at each of the Boston, Baltimore-Washington, Pittsburgh, and Cleveland airports, and we hope to work with other airports to do the same.”

“We are excited to support the managers of AIRMALL as they continue to grow the business,” said Bart J. de Bie, a Managing Director of Prospect Capital Management. “We have been impressed with AIRMALL’s history of producing strong financial results built on underlying contracted cash flows. Our investment demonstrates Prospect’s ability to make ‘one-stop’ combined debt and equity investments as one of Prospect’s strategies to drive yield and total return for our shareholders.”

AIRMALL is a registered trademark of AIRMALL USA Inc.

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.

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