UNITE HERE's Prospect Capital Monitor has released its second report on Prospect Capital Corp. (NASDAQ: PSEC), a business development company (BDC). The report, titled Prospect Capital an Outlier in Share Issuance investigates Prospect Capital's rapid issuance of equity over the last several years and its effect on shareholder value. Prospect Capital Monitor is a website and series of reports by UNITE HERE analysts, independent of Prospect Capital Corp., which aim to be a valuable resource for investors about PSEC and Business Development Corporations (BDCs).

The report finds that Prospect Capital has increased its number of shares outstanding by 246% in the past three years ending September 30, 2013, three times more than the average of the ten largest BDCs. In the same three-year period, Prospect's rapid equity issuance did not significantly increase net asset value (NAV) per share, which grew 4.7% compared to the 20.3% average NAV growth of the ten largest BDCs. In the year ending in September 30, 2013, Prospect issued 98 million new shares, increasing its shares outstanding by 57% while its NAV per share decreased by 1.5%. Prospect's fees and expenses relative to investment yield spiked during 2012, cutting into profitability.

PSEC's most recent and largest secondary offering of 35 million shares on November 1, 2012, resulted in an 8.9% share price drop. Since its November 1, 2012 secondary offering, Prospect Capital has issued an additional 75 million shares through its ATM program and has scheduled the future issuance of the equivalent of 70 million shares at the latest conversion rate through convertible bonds. Equity issuance exerts a downward pressure on a company's share price and earnings per share by increasing the supply of outstanding shares.

The report can be viewed here:

http://www.prospectcapitalmonitor.org/wp-content/uploads/PCM-2.pdf

For more information and updates about PSEC and Business Development Companies, go to www.prospectcapitalmonitor.org.

Prospect Capital Monitor is a website and series of reports by UNITE HERE, the union for hospitality workers in North America. Our 250,000 members are beneficiaries of pension funds with over $60 billion in assets. UNITE HERE Local 7, based in Baltimore MD, is currently organizing workers whose common landlord, Airmall USA Inc., is 100% owned by Prospect Capital Corp. (NASDAQ, PSEC).

UNITE HERE
Analyst:
Nathan Horrell, 212-332-9325 ext. 4325
nhorrell@unitehere.org