SecProbe.io

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							April 28, 2006

Carla Vogel, Esq.
Clifford Chance US LLP
31 West 52nd Street
New York, NY  10019-6131

	Re:	Prospect Energy Corporation
		File Nos. 333-132575 and 814-659

Dear Ms. Vogel:

	We have reviewed the registration statement on Form N-2 for
Prospect Energy Corporation ("Fund") filed with the Commission on
March 20, 2006.  We have the following comments.

Prospectus

Cover

	Please clearly distinguish the Fund, its shareholders and
Investment Adviser throughout the document.

	Please confirm that the bolded text on the first page of the
prospectus is located on the outside front cover page.  Also,
please
un-bold all but the first two sentences of the text currently
bolded.

	Please include the pricing table required by Item 1.g. of
Form
N-2

      Please disclose that an investment in the Fund presents a
heightened risk of total loss of investment and make prominent the
disclosure that the Investment Funds are subject to special risks.
See Item 1.1.j. of Form N-2.

      Please confirm that any warrants the Fund may issue meet the
requirements of Section 61(a) (3) (A) of the Investment Company
Act
of 1940.

      The registration statement pertains to a shelf offering
which
may be common stock, preferred stock, warrants or debt securities,
but does not disclose the material terms of these securities.
Please
revise the disclosure to include the material terms of the subject
securities.  Please explain to us how the Fund is eligible to make
a
shelf offering pursuant to Rule 415 under the Securities Act of
1933.

Summary

	Please summarize the risks of investing in the energy sector.

	Disclosure in the section titled "The Investment Adviser"
indicates the Fund will pay the Adviser an investment management
fee
based on gross assets "(including any amounts borrowed)."  Please
clarify that amounts borrowed to pay current liabilities, rather
than
for leverage, will not be included in the calculation of the
investment management fee.

Fees and Expenses

	Since the Fund may borrow during the current fiscal year,
please
move the current Annual Expenses information from the fee table to
footnote 7, and insert in its place the annual expenses
information
now found in footnote 7.

	Please delete from the first sentence of footnote 8 the term
"future annual expenses" and insert in its place "expenses during
current fiscal year."

	The last sentence of footnote 9 states that in the event the
total annual expense percentage was calculated as a percent of
total
assets, total annual expenses would be 5.25% of net assets.  This
does not make sense.  Please clarify.

      Please remove the footnotes from between the Fee Table and
Example and insert them immediately after the Example.

      The prospectus in narrative text discloses that the capital
gain incentive fee is calculated by taking the net proceeds from
the
sale of an asset minus the purchase price.   The examples of how
the
incentive fee is determined, however, deduct from the sales price
the
most recent fair market valuation (not the purchase price).
Please
reconcile the disclosure.

      Please disclose that the determination of fair value, and
thus
the amount of unrealized losses the Fund may incur in any year, is
to
a degree subjective, and the advisor has a conflict of interest in
making the determination.   Specifically, the amount of the
advisor`s
compensation under the incentive fee is due, in part, to the
amount
of unrealized depreciation accrued by the Fund.  Please advise the
staff whether the Board will actively monitor this conflict of
interest and the operation of the performance fee.

      Please note that the staff anticipates providing additional
comments pertaining to the Fund`s financial statements under
separate
cover.

Risk Factors

Regulations governing our operation as a business development
company
affect our ability to raise, and the way in which we raise,
additional capital

	Disclosure in this section indicates the Fund may securitize
loans, contribute them to a subsidiary, sell interests in the
subsidiary and use the cash to fund new investments.  Will the
Fund
include money obtained in this fashion when determining the degree
to
which the Fund is leveraged?

Potential conflicts of interest could impact our investment
returns

	The first paragraph states that the Fund`s executive officers
and directors and management of the Investment Adviser may have
obligations to investors in other entities, including related
entities, the fulfillment of which might not be in the best
interests
of the Fund`s stockholders.  Please disclose how the conflict of
interest will affect the Fund`s performance and how any such
conflicts will be resolved.

      The last sentence of the fourth paragraph states that, to
the
extent the Adviser can influence the portfolio companies, the
incentive fee may provide the Adviser with an incentive to induce
portfolio companies to accelerate or defer interest or other
obligations owed to the Fund from one calendar quarter to another.
Please explain to us what measures the Board will adopt to protect
shareholders against this type of overreaching by the Adviser.

Use of Proceeds

	Please state the amount of time in which the proceeds of this
offering will be invested in portfolio companies consistently
throughout the registration statement.  Please explain why the
Fund
will require two or three years to invest the proceeds of this
offering.  See Guide 1 to Form N-2.

Results of Operations

	Please clarify the meaning of the word "closed" as used in
the
sentence discussing long-term portfolio investments.

Forward-Looking Statements

      This section attempts to limit liability for forward-looking
statements.  Please delete this section.  Statements relating to
investment companies (including business development companies)
and
statements made in connection with initial public offerings are
excluded from the safe harbor for forward-looking statements.  See
Section 21E(b)(2)(B) & (D) of the Securities Exchange Act of 1934.

Control Persons and Principal Stockholders

	Why is William Vastardis classified in this section as an
"Executive Director" of Prospect Energy Corp, rather than an
Interested Director?

Managerial Assistance to Portfolio Companies

      This paragraph states that the Fund or another person or
entity
will provide managerial assistance on behalf of the Fund to
portfolio
companies that request assistance.  Please disclose the identities
of
all potential providers of managerial assistance to portfolio
companies.  Please supplementally inform us whether the Fund or
portfolio companies will pay the Investment Adviser or any other
entity for managerial
assistance provided to portfolio companies.  Disclose who at the
Fund
is qualified to render the assistance.  Also advise us
supplementally
of the legal basis for receiving such compensation, including
citation to legislative history.

Management Fee

      How will average value of gross assets be "appropriately
adjusted" for share issuances or repurchases?  What does this
mean?

      Please disclose whether the Adviser is required to reimburse
the Fund for fees that were based on income accrued on deferred
interest obligations where the obligor subsequently defaults.

Dividend Reinvestment Plan

      The third paragraph states that the dividend reinvestment
plan
will use primarily newly issued shares to implement the plan and
that
these shares will be issued at the market price per share.
Section
23(b) of the Investment Company Act provides that closed-end funds
may not issue shares below net asset value.  Please explain to us
how
the Fund will issue shares to stockholders if the market price is
below the Fund`s net asset value.  See Section 23(b) of the
Investment Company Act.

Control Share Acquisitions

      The first sentence of the fourth paragraph states that, if
the
voting rights are not approved or the acquiring person does not
deliver an acquiring person statement, then the corporation may
repurchase for fair value any or all of the control shares, except
those for which voting rights have been previously approved.
Please
explain how this provision is consistent with Section 23(c) of the
Investment Company Act.

Undertakings

      Please undertake to file, in advance of any offering of the
subject securities, a post-effective amendment to the registration
statement disclosing the material terms of the securities.  Please
advise the staff how the Fund will file the legal opinions and
other
exhibits required for each take-down of the shelf registration.

General

	We note that portions of the filing are incomplete. We may
have
additional comments on such portions when you complete them in a
pre-
effective amendment, on disclosures made in response to this
letter,
on information supplied supplementally, or on exhibits added in
any
pre-effective amendments.  Please note that comments we give in
one
section apply to other sections in the filing that contain the
same
or similar disclosure.
      Please advise us if you have submitted or expect to submit
an
exemptive application or no-action request in connection with your
registration statement.
      Response to this letter should be in the form of a pre-
effective amendment filed pursuant to Rule 472 under the
Securities
Act. Where no change will be made in the filing in response to a
comment, please indicate this fact in a supplemental letter and
briefly state the basis for your position.
      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the Fund and its management are in
possession of all facts relating to the Fund`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
	Notwithstanding our comments, in the event the Fund requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the Fund from its full responsibility for the adequacy and
accuracy of the disclosure in the filing; and
* the Fund may not assert this action as defense in any proceeding
initiated by the Commission or any person under the federal
securities laws of the United States.

*    *    *    *    *    *

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Investment Management in connection with our review of
your filing or in response to our comments on your filing.
	Any questions you may have regarding the filing or this
letter
may be directed to me at 202.551.6965.

							Sincerely,

							Vincent J. Di Stefano
							Senior Counsel
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