Prospect Capital Corporation (PSEC) announced the pricing of $200 million in aggregate principal amount of unsecured 5.75% Convertible Senior Notes Due 2018. The Company has also granted the initial purchasers of the Notes an option to purchase up to an additional $30 million in aggregate principal amount of the Notes.

The Notes will be convertible into shares of Prospect's common stock based on an initial conversion rate of 82.3451 shares of Prospect's common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $12.14 per share of common stock, representing a 10% conversion premium over the last reported sale price of Prospect's common stock on August 8, 2012, which was $11.04 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 0.1016 cents per share, subject to anti-dilution and other adjustments.

Prospect intends to use the net proceeds from the sale of the Notes to maintain balance sheet liquidity, including repayment of debt under its credit facility and investments in high quality short-term debt instruments, or a combination thereof, and thereafter to make long-term investments in accordance with Prospect's investment objectives.