SecProbe.io

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     October 1, 2014  Richard Prins Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, NY 10036  Re:  Prospect Capital Corporation
Registration Statement on Form N-2  File No. 333-198505
Dear Mr. Prins:
Prospect Capital Corporation (the “Fund”) f iled a draft shelf registration statement on
September 2, 2014 (the “Registration Statemen t”), under which the Fund may offer up to
$5,000,000,000 of shares of its common stock, prefe rred stock, warrants, subscription rights,
debt securities or units (collectively, the “Securi ties”).  The Securities may be offered at prices
and on terms to be disclosed in one or more supplements to this Prospectus.  Terms that are
capitalized but not defined herein shall have  the same meaning assigned to them in the
Registration Statement.

Whenever a comment is made in one location,  you should consider it applicable to all
similar disclosure appearing elsewhere in the registration statement (including all future prospectus supplements).  We have the following comments:

General

1. Please advise us if you have submitted or exp ect to submit an exemptive application or
no-action request in connection wi th your Registration Statement.

2. Please confirm that the Fund does not intend to issue preferred stock within a year from
the effective date of the Registration Statement.

3. Please state in your response letter whethe r FINRA will or has reviewed the proposed
underwriting terms and arrangements of the transaction involved in the Registration
Statement.

4. Please undertake that the Fund will file a post- effective amendment under Section 8(c) of
the Securities Act of 1933 in respect of any rights offering or any debt offering that

differs from its currently outstan ding Senior Notes (other than with respect to price, term
and size of the offering).

5. New offerings of debt securitie s that are consistent with the current Senior Notes should
not be characterized as “senior,” as there ar e no securities in the Fund’s capital structure
that are subordinate to the Senior Notes. Please revise the defined terms “Senior Notes”, “Senior Convertible Notes” and “Senior Un secured Notes” accordingly by removing the
term “senior” from the definitions.  Further, please include additional disclosures regarding the prior ity in interest of the Fund’s debt securities w ithin the Fund’s capital
structure, including with re spect to other indebtedness incurred by the Fund and its
subsidiaries.

6. Please confirm that all of the Fund’s who lly-owned and substantially wholly-owned
subsidiaries have been consolidated  on the Fund’s financial statements.

7. Please confirm that all portfolio company fees ( e.g. commitment, closing, origination,
structuring or diligence fees, monitoring fees, fees for providing managerial assistance,
consulting fees, etc.) are paid to the Fund only.

Prospectus Summary

Page 3

8. It is disclosed that the Fund may invest in  below investment grade securities (often
referred to as “junk”).  Please revise the descri ption of the Fund’s strategy in all relevant
sections of the Registration Statement to  include a clarification that the Fund’s
investments will include below investment grade securities (please also include a parenthetical to define such securities as “junk”).
Fees and Expenses

Page 22

9. Please update the fee table to reflect estimated  interest expenses in connection with the
offering of any debt securities within a year from the effective date of the Registration
Statement, and explain the assumptions upon wh ich such estimate is based in a footnote
to the table.  Please confirm that total interest expense amounts stated in the table reflect interest expenses associated with the F und’s credit facilities, including additional
borrowings under such facilities expected to be incurred within a year from the effective
date of the Registration Statement (please includ e a footnote that states the interest rate
applicable to such facilities).  In add ition, Note 4 to the Financial Statements, Revolving
Credit Facility, the disclosure states that the lender s charge a fee on th e unused portion of
the 2012 Facility equal to either 50 basis points, if at least ha lf of the credit facility is
drawn, or 100 basis points otherwise.  These f ees need to be disclosed in the Fees and
Expenses table in the Prospectus.

10. In footnote 6 to the fee table, please provide  additional detail regard ing the calculation of
the incentive fee, instead of cross-referencing to other sections of the Prospectus.  Please
include an explanation that the hurdle rate is fixed, and as interest rates rise, it will be
easier to surpass the hurdle rate and for the Adviser to receive an incentive fee based on
income.

11. It appears that the example contains some in advertent typographical errors. Please fix the
table.
12. There is a paragraph below the expense exam ple that states “The income incentive fee
under our Investment Advisory Agreement with  Prospect Capital Management is unlikely
to be material assuming a 5% annual return and is not includ ed in the example.”  Please
consider revising the sentence to state that the income in centive fee is based on a 7%
annualized hurdle rate and ther efore there is no income incentive fee in cluded in the
expense example as the example is based on a 5% hypothetical return.

13. Please check the placement of footnote 4 and determine whether it should be placed on
the line “Total stockholder transaction expens es (as a percentage of offering price).”

Risk Factors

Page 13

14. The Registration Statement discloses that the Fund may invest in original discount
instruments, but there is no similar disclosu re in the sections describing the Fund’s
strategy. Please revise the strategy sections to  the extent such types of investments are
contemplated by the Fund’s principal investme nt strategy.  In addition, please discuss
risks presented by investments in PIK securities. Please disclose that:
 a. the higher interest rates on PIK securities reflects the payment deferral and
increased credit risk associated with such  instruments and that such investments
generally represent a significantly hi gher credit risk than coupon loans.

b. even if accounting conditions were met, the borrower could still default when the
Fund’s actual collection is supposed to occu r at the maturity of the obligation.

c. PIK securities may have unreliable valuations because their continuing accruals
require continuing judgments about the co llectability of the deferred payments
and the value of any associated collateral.

d. PIK interest has the effect of generati ng investment income  and increasing the
incentive fees payable at a compounding rate.  In addition, the deferral of PIK
interest also reduces the loan-t o-value ratio at a compounding rate.

e. PIK securities create the risk that incen tive fees will be paid to the Adviser based
on non-cash accruals that ultimately may not  be realized, but the Adviser will be
under no obligation to reimburse the Fund for these fees.
 Page 31

15. With respect to the exemptive order received fr om the staff that gives the Fund the ability
to co-invest with affiliates, please add a de scription of the conditions under which such
co-investments are permitted.

Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations

Page 54

16. In the sub-section discussing First Tower, there are several references to the Fund
providing First Tower with additional capi tal to “support seasonal demand.”  Please
provide more details about the economic f actors affecting “seasonal demand” and the
need for additional funding.

Business

Page 105

17. Under the sub-section titled “Administration Ag reement”, it is disclosed that the Fund
reimbursed to the Administrator ap proximately $14,373, $8,737, $6,848 for the years
ended June 30, 2014, 2013 and 2012, respectivel y.  Per the Fund’s latest Form 10-K,
these amounts are $14.4 million, $8.7 million and $6.8 million.  Please revise.

18. Please disclose the methodology used to allocate costs and expenses under the
administration agreement and that the Fund’s board exercises oversi ght with respect to
the allocation of such expenses.

Brokerage Allocation and Other Practices

Page 155

19. Please disclose that any research or other be nefits received by the Adviser from a broker-
dealer, for transactions where the Fund will be “paying-up”, will qualify for the safe
harbor provisions under S ection 28(e) of the Securi ties Exchange Act of 1934.

Financial Statements
 F-3

20. Page 71 of the Prospectus states that cash a nd cash equivalents incl udes short term liquid
investments.  All investments need to be in  the Schedule of Investments.  Ensure that

beginning with the next 10-Q all investment s will be identified in the Schedule of
Investments.
21. The Statement of Assets and Liabilities shoul d separately disclose the amounts payable
for officers and directors, controlled companies and any other affiliates.  Ensure that this
information is presented in accordance with S-X going forward.  ASC 946-405-45-2.

22. The Statement of Changes discloses Ne t Investment Income for 2014 of $357,223 and
Distributions from Net Investment In come of $403,188.  Please discuss in the
correspondence filing whether the distributions  paid disclosed in the Statement of
Changes is on a tax basis or a GAAP basis.  In addition, should there be a separate line
for “Distributions in Excess of Net Investment Income?”

23. In the Schedule of Investments on a going forw ard basis disclose th e estimated yield on
the CLO equity positions.  Include a footnote to the Schedule of Investments stating that
the equity investments are entitled to recurr ing distributions which are generally equal to
the remaining cash flow of the payments ma de by the underlying f und’s securities less
contractual payments to debt holders and f und expenses.  The estimat ed yield is based on
current projections which are periodically re viewed and adjusted, and the estimated yield
may not ultimately be realized.  As of  June 30, 2014 the portfolio has 18.4% in CLO
equity. The Company should add additional di sclosures to the accompanying footnotes to
the Financial Statements discussing the risks associated with investing in the residual
equity of CLO investments.

24. Enhance the disclosures in the fair value hier archy disclosures included in Note 3 to the
Financial Statements , Portfolio Investments .  A Fund should determine the appropriate
classes to disclose by consider ing the nature, characteristics of risks of the securities as
well as the fair value hierarchy within which the fair value measurem ents are categorized.
There are asset categories in the Schedule of Investments that ar e not identified in the fair
value hierarchy disclosure, e .g. second lien term loan.  Determine whether the disclosures
need to be enhanced to a dd additional classes or sub ca tegories to the asset classes
already disclosed.  In additional the Company can consider presentational similar to the Schedule of Investments in identifying the cate gories of “Control Investments,” “Affiliate
Investments,” and “Non-Control/Non-Affiliate Investments.”

25. Currently the disclosures included in Note 3 to the Financial Statements, Portfolio
Investments , state significant increases or decreases in the varying fair value assumptions
would result in a decrease or increase, resp ectively, in the fair value measurement.
Enhance the disclosures to state that the assumptions do not need to be considered ‘significant” in order for there to be a change  in the fair value measurement.  For example
a small incremental change in an EBITDA mul tiple can result in a significant change in
fair vale measurement of an investment.

26. In Note 3, Portfolio Investments , required disclosures under  Regulation S-X 4-08 (g)
have been included for the unconsolidated signi ficant subsidiary First Tower Holdings of
Delaware LLC as it generated more than 10% of Prospect’s income.  The information is required to be included in the audited financ ial statements and may not be marked as
“unaudited.”  Based on the information that has been disclosed in the financial statements
of Prospect for First Tower Holdings of Delaware LLC the staff has calculated a
percentage that would trigger the requi rements of Regulation S-X 3-09 and would
therefore require audited financial statements  of First Tower Holdi ngs of Delaware LLC
to be included with the financial statements of Prospect Capital.

27. The Dividend section of the Company’s website  discloses a current dividend yield of
13.04%.  If any portion of the distributions repr esents a return of capital the reference on
the website to a current dividend yield should be changed to state “distribution rate.”

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 We may have additional comments on disclosures made in response to this letter, on information supplied supplementally, or on exhi bits added in any pre-effective amendments.
  Response to this letter should be in the form  of a pre-effective amendment filed pursuant
to Rule 472 under the Securities Act.  The pre-effective amendm ent filing should be
accompanied by a supplemental letter that includ es your responses to each of these comments.
Where no change will be made in the filing in re sponse to a comment, please indicate this fact in
your supplemental letter and briefly state the basis for your position.

 You should review and comply with all appli cable requirements of the federal securities
laws in connection with the prep aration and distribution of a prel iminary prospectus. 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 ma nagement are in possession of all facts relating
to the fund’s disclosure, they are responsible fo r the 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 statement, it should furnish a letter, at the time of such
request, acknowledging that
 should the Commission or the st aff, acting pursuant to dele gated authority, declare the
filing effective, it does not foreclose the Co mmission 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 reliev e 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 a dvised that the Division of Enforcement has access to all
information you provide to the staff of the Divi sion of Investment Management in connection
with our review of your filing or in response to our comments on your filing.
We will consider a written request for acceleration of the effective date of the registration
statement as a confirmation of the fact that those requesting acceleration are aware of their
respective responsibilities.  We will act on the request and, pursua nt to delegated authority, grant
acceleration of the e ffective date.

*     *     *     *     *     *
  Should you have any questions regarding this  letter, please contac t me at (202) 551-
6908 or Sheila Stout at (202) 551-6987.
Sincerely,
         Asen Parachkevov
Attorney Adviser  Sheila Stout Staff Accountant