SecProbe.io

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February 25, 2010
 Carmine Lekstutis, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, NY 10036-6522  Re: Prospect Capital Corporation (the “Fund”)
 Shelf Registration Statement on Form N-2
 File Numbers 814-00659; 333-164270
Dear Mr. Lekstutis,
 On January 8, 2010, the Fund filed a regist ration statement on Form N-2 under the
Securities Act of 1933 (“Securities Act”).  Your  cover letter to the filing requested that
the staff perform a limited review in accord ance with Securities Act Release No. 6510
(February 15, 1984). With certain exceptions, we  have limited our review of the filing.
The Fund is a business development compa ny ("BDC") regulated under the Investment
Company Act of 1940 (“1940 Act”).  The f iling was made to register an offering,
pursuant to Rule 415 under the Securities Ac t, of the Fund’s common and preferred
stocks, debt securities , and warrants.
 Our comments regarding the filing are set forth below.
General

1. Earlier this year, the Fund announced that it was seeking to ac quire Allied Capital
Corporation. Please include appropriate di sclosure in the prospectus about the
proposed transaction, including any material  risks, and the effect the merger
would have on the Fund.
 2.         We remind the Fund of its obligation to file electronic repo rts with respect to its
fidelity bond coverage under Rule 17g-1(g) under the 1940 Act.

3. Please advise the staff whether the Fina ncial Industry Regulatory Authority has
reviewed and passed upon the terms of the distribution arrangements, including
all the compensation payable to the distributors?

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Prospectus

 Outside Front Cover Page

3. The table on the facing page of the regist ration statement is in  a format different
from that required by Item 1(g) of Form  N-2. Confirm to the staff that any
prospectus supplement used to sell shares will have the pricing table required by
Item 1(g) of Form N-2.

Prospectus Summary
   T h e  O f f e r i n g   4.         The first paragraph states that the Fund will initially use the proceeds to pay down
debts.  Please disclose in the summar y the total dollar amount of debt to be
retired, and what percentage of the proceeds of the offering will be used in this manner.  Also clarify whether the sales below NAV as discussed in the prospectus
apply only to direct offerings of commo n stock by the Fund, or whether it also
applies to the other securities and tr ansactions covered by the registration
statement.
 5. In the last line of the third paragraph, pl ease update the date of the last reported
sales price.

  Fees and Expenses  6. The fee table line item for management f ee includes is inconsistent with Form N-
2.  Given the two fees, revise the fee tabl e to include two line items: one for the
asset based charge as expr essed in net assets, and a second line item for the
income and realized capital gain advisory f ees of twenty percent.  To help clarify
that those two fees are not asset-based, the twenty percent number may be indented and not aligned unde r the other figures expresse d as a percentage of net
assets.
 7. We suggest shortening the f ootnote 6 to the fee table to  include only the first and
last sentences of the footnot e. The additional disclosure should be relocated to a
more appropriate location in the prospect us. Also, please revise the last sentence
to reflect information for the three months ended December 31, 2009.
 8.         Delete footnote 7 to or explain its relevance to the staff in light of the Fund’s
outstanding borrowing and intent to issue additional debt securities.

 39. Revise footnote 8 to state that “other expenses” are based on estimated amounts
for current the fiscal year. See Inst ruction 6 to Item 3 of Form N-2.
 10. The financial statements later in the prospectus show a material investment by the
Fund in money market funds.  Please advise the staff why the fee table does not have the AFFE line item.  Please confirm th at, if the indirect costs are less than
one basis point, such indirect expenses  are nevertheless included in “other.”
   Example  10.  Please clarify the “stockholder costs” men tioned in the last sentence of the first
paragraph, including what entity pays these costs.   Are these shareholder
transaction expenses?
   Selected Condensed Fina ncial Data of Prospect

11. Please revise the disclosure to state that financial information presented in this
section for 2005 through 2009 has been audi ted. See Instruction 8 to Item 4 of
Form N-2.

Risk Factors

12. The prospectus discloses, in bold that  the most recent net asset value was
calculated on September 30, 2009, and when  calculated effective December 31,
2009 may be higher or lower.  Please update this information.

12.  Please update the effective date referenced in this subheading.

If we sell common stock at a discount to our net asset value per share, stockholders who do not pa rticipate in such sale will
experience immediate dilution in an  amount that may be material.
    The Energy Industry is Subject to Many Risks  16. If applicable, please revi se this section of the prospectus to address the
Commission’s recent release providing inte rpretive guidance on disclosure related
to business or legal developmen ts regarding climate change.
   Senior Securities  17.        The disclosure under this section states that information denoted with a “--“
reflects “information which the SEC expressl y does not require to be disclosed for
certain types of senior s ecurities.” Please inform the staff to what this is
referencing.  Please provide us with the omitted information.

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Price Range of  Common Stock
 14. Please update all dates in footnotes 3 and 4   Plan of Distribution  18.       The section discloses that th e Fund may engage in transferable and non-
transferable offerings, and appears to set forth contradictory statements in the first and fifth paragraphs regarding the issu ance of rights to subscribe to common
stock at and below net asset value.  Please reconcile this disclosure.

With respect to tran sferable rights offerings, such offerings should be consistent
with an understanding that they are to be  designed for exceptional and not routine
circumstances. In this connection, I nvestment Company Act Release No. 9932
(September 15, 1977) indicates that tran sferable rights offerings are truly
exceptional, that the exception permitting them is to be construed narrowly, and that directors must make a determination that there is a reas onable likelihood that
existing shareholders will exercise a very  substantial majority of the rights.
Explain to the staff the manner in which th e Fund’s offerings are to be structured
consistent with these required determinations.

Disclosure in the second paragraph stat es that, “[i]n addition, pursuant to the
terms of certain applicable registration ri ghts agreements entered into by us or that
we may enter into in the future, certain of our stockholders may resell shares of
our common stock under this prospectus  and as described in any related
prospectus supplement.” Briefly summar ize the type of information to be
disclosed regarding such sales as required by Regulation S-K, Item 507.

19.       The following paragraph was deleted from the current filing: “Any of our
common stock sold pursuant to a prospectus supplement will be listed on The NASDAQ Global Select Market, or anothe r exchange on which our common
stock is traded.” Indicate to the staff whether the deletion reflects a change in
actual policy.

Closing

 We note that portions of the filing ar e 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 suppl ied to the staff in
EDGAR correspondence, or on exhibits ad ded in any pre-effective amendment.

 Where a comment is made in one location, it is applicable to a ll similar disclosure
appearing elsewhere in the registration statement.

 5Response to this letter shoul d be in the form of a pr e-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 indica te that fact in a s upplemental letter and
briefly state the basis for your opinion.
 Please advise us if you have submitted or  expect to submit a no-action letter in
connection with your registration statement.
 You should review and comply with all applicable requirements of the federal
securities laws in connection with the pr eparation and distribution of preliminary
prospectus.
 We urge all persons who are responsibl e for the accuracy and adequacy of the
disclosure in these filings reviewed by the sta ff 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 th e accuracy and adequacy of the disclosures
they have made.
 Notwithstanding our comments, in the ev ent the Fund requests acceleration of the
effective date of the pending registration statem ent, it should furnish a letter, at the time
of such request, acknowledging that:
• The Fund is responsible for the adequacy and accuracy of the disclosure in the
filing;

• Should the Commission or the staff, ac ting 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 de legated authority,
in declaring the filing effective, doe s 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 the action as a de fense to 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 Di vision of Enforcement has access to all
information you provide to the staff of th e Division of Investment Management in
connection with our review of your filing or  in response to our comments on your filing.

 6We will consider a written request for acceleration of the effective date of the
registration statement as a confirmation of th e fact that those reque sting acceleration are
aware of their respec tive responsibilities.

We will act on the request and, pursuant to  delegated authorit y, grant acceleration
of the effective date.

Should you have any questions regarding this  letter, please contact David Woliner
at 202-551-6861 or me at 202-551-6976.
       S i n c e r e l y ,

         L a r r y  G r e e n e          S e n i o r  A t t o r n e y