SEC Company Response from PROSPECT CAPITAL CORP (PSEC, PSEC-PA) (CIK 0001287032) (PSEC) — Mar 11, 2009
PROSPECT CAPITAL CORP (PSEC, PSEC-PA) (CIK 0001287032)
Date: March 11, 2009 · CIK: 0001287032 · Accession: 0001341004-09-000550
AI Filing Summary & Sentiment
File numbers found in text: 333-143819, 814-00659
Letter
United States Securities and Exchange Commission Washington, D.C. 20549 Prospect Capital Corporation (the "Company") File Nos. 814-00659 & 333-143819
RE:
Dear Mr. Greene:
We are in receipt of comments provided by you over the phone during the week of March 2, 2009 and by Richard Pfordte by phone on March 10, 2009 regarding the Registration Statement on Form N-2 of the Company.
The Company has considered these comments and has authorized us to make on its behalf the responses and changes to the Company's Registration Statement discussed below. These changes will be reflected in Post-Effective Amendment No. 10 to the Company's Registration Statement. We are enclosing copies of pages changed to respond to these comments that have been marked to show the Company's responses.
The Company's responses to the comments are set forth below. For ease of reference, a summary of each comment is set forth in italics and followed by the corresponding response.
1. Please add an undertaking that the Company will not do a takedown from the shelf registration statement without a new post-effective amendment if the Company's accountants have raised a growing concern issue.
The Company has made an explicit reference to the requested effect in its undertakings.
2. Please explain the statement in the "Use of Proceeds" regarding "to manage balance sheet liquidity."
The Company has added further explanations each place this phrase occurs.
Mr. Larry L. Greene
March 10, 2009
Page
3. Please add additional details as previously requested regarding rights offerings if the Company intends to be able to do such a rights offering through a prospectus supplement.
The Company has deleted the ability to do a rights offering at a discount through a prospectus supplement. Inasmuch as the special concerns related to rights offerings at a discount do not exist if the rights offering is at or above NAV per share, the Company has not deleted the ability to complete such offerings at or above NAV through a prospectus supplement.
4. Please provide us with supplemental information regarding the credit facility commitment previously referred to in the base prospectus under "Prospectus Summary — Recent Developments."
The Company does not have a commitment for a new credit facility or a term sheet for such a facility. Rather, the Company has a commitment from Rabobank to seek to form a syndicate of lenders that would provide a facility commitment. That is, the Company only has an agreement from the potential arranger (equivalent to a placement agent in a securities offering) to use its efforts to determine whether it can find other banks interested in forming a group to provide a credit facility. As a consequence there are no terms at this date.
5. Please place the expense example prior to the notes to the expense table.
This change has been made.
6. Please provide additional detail regarding the types of offerings that may be accomplished under the Prospectus. Include such matters as agreements that are to be filed, additional disclosures, associated types of selling compensation, any differences in accounting between different types of offerings, any additional FINRA issues, any differences in the conduct of an offering below NAV per share or above NAV per share, whether any of the types of offerings described are options subject to Section 61 of the 1940 Act and whether a shelf takedown could be used to sell control of the Company.
The Company has deleted the optional cash purchase program offerings language as the Company does not intend to make offerings on such basis. The Company has also expanded disclosure in "Plan of Distribution" to address the types of issues raised by your comment to the extent applicable and not already covered in the disclosure.
The Company believes that further disclosure regarding compensation is only meaningful in the context of an actual particular offering, that there are no additional FINRA issues at this stage of the process, that the plan of distribution will not vary depending on whether the offering is at a price above or below NAV per share, that the type of offerings covered by the Prospectus do not include offerings of securities that would be options under Section 61 of the 1940 Act and that the Company does not envision selling a controlling stake to any investor through an offering under the Prospectus.
7. Please include a form of prospectus supplement in the next filing.
Mr. Larry L. Greene
March 10, 2009
Page
Amendment No. 10 will include a form of prospectus supplement.
8. Please limit the amount of NAV per share dilution from takedowns under the post-effective amendment declared effective by the SEC to no more than 15%.
The requested change has been made.
* * * *
You also raised three general accounting issues not related to the registration statement.
A. You noted that the June 30, 2008 Form 10-K filing did not have a conformed signature for the auditor's report or the report on internal controls.
The Company will refile the affected reports with appropriate conformed signatures.
B. You asked whether the annual report to shareholders was similarly affected.
The annual report also omitted conformed signatures. We do not believe, however, that any remailing to shareholders is required.
C. The Company's February 10, 2009 press release failed to note that the statutory safe harbor for forward-looking statements does not apply to business development companies.
The Company will update its press release template to correct this point.
We believe that the above responses adequately respond to the concerns raised in your comments. Should you have any additional comments or concerns, please feel free to contact me at (212) 735-2790.
Sincerely,
s/Richard
T. Prins
Show Raw Text
CORRESP
1
filename1.htm
procorrp.htm
March 10, 2009
Mr.
Larry L. Greene
United
States Securities and Exchange Commission
100
F Street, N.E., Mail Stop 4720
Washington,
D.C. 20549
RE:
Prospect
Capital Corporation (the "Company")
File Nos. 814-00659
& 333-143819
Dear
Mr. Greene:
We
are in receipt of comments provided by you over the phone during the week of
March 2, 2009 and by Richard Pfordte by phone on March 10, 2009 regarding the
Registration Statement on Form N-2 of the Company.
The
Company has considered these comments and has authorized us to make on its
behalf the responses and changes to the Company's Registration Statement
discussed below. These changes will be reflected in Post-Effective
Amendment No. 10 to the Company's Registration Statement. We are
enclosing copies of pages changed to respond to these comments that have been
marked to show the Company's responses.
The
Company's responses to the comments are set forth below. For ease of
reference, a summary of each comment is set forth in italics and followed by the
corresponding response.
1. Please add an
undertaking that the Company will not do a takedown from the shelf registration
statement without a new post-effective amendment if the Company's accountants
have raised a growing concern issue.
The
Company has made an explicit reference to the requested effect in its
undertakings.
2. Please explain the
statement in the "Use of Proceeds" regarding "to manage balance sheet
liquidity."
The
Company has added further explanations each place this phrase
occurs.
Mr.
Larry L. Greene
March
10, 2009
Page
2
3. Please add
additional details as previously requested regarding rights offerings if the
Company intends to be able to do such a rights offering through a prospectus
supplement.
The
Company has deleted the ability to do a rights offering at a discount through a
prospectus supplement. Inasmuch as the special concerns related to
rights offerings at a discount do not exist if the rights offering is at or
above NAV per share, the Company has not deleted the ability to complete such
offerings at or above NAV through a prospectus supplement.
4. Please provide us
with supplemental information regarding the credit facility commitment
previously referred to in the base prospectus under "Prospectus Summary — Recent
Developments."
The
Company does not have a commitment for a new credit facility or a term sheet for
such a facility. Rather, the Company has a commitment from Rabobank
to seek to form a syndicate of lenders that would provide a facility
commitment. That is, the Company only has an agreement from the
potential arranger (equivalent to a placement agent in a securities offering) to
use its efforts to determine whether it can find other banks interested in
forming a group to provide a credit facility. As a consequence there
are no terms at this date.
5. Please place the
expense example prior to the notes to the expense table.
This
change has been made.
6. Please provide
additional detail regarding the types of offerings that may be accomplished
under the Prospectus. Include such matters as agreements that are to
be filed, additional disclosures, associated types of selling compensation, any
differences in accounting between different types of offerings, any additional
FINRA issues, any differences in the conduct of an offering below NAV per share
or above NAV per share, whether any of the types of offerings described are
options subject to Section 61 of the 1940 Act and whether a shelf takedown could
be used to sell control of the Company.
The
Company has deleted the optional cash purchase program offerings language as the
Company does not intend to make offerings on such basis. The Company
has also expanded disclosure in "Plan of Distribution" to address the types of
issues raised by your comment to the extent applicable and not already covered
in the disclosure.
The
Company believes that further disclosure regarding compensation is only
meaningful in the context of an actual particular offering, that there are no
additional FINRA issues at this stage of the process, that the plan of
distribution will not vary depending on whether the offering is at a price above
or below NAV per share, that the type of offerings covered by the Prospectus do
not include offerings of securities that would be options under Section 61 of
the 1940 Act and that the Company does not envision selling a controlling stake
to any investor through an offering under the Prospectus.
7. Please include a
form of prospectus supplement in the next filing.
Mr.
Larry L. Greene
March
10, 2009
Page
3
Amendment
No. 10 will include a form of prospectus supplement.
8. Please limit the
amount of NAV per share dilution from takedowns under the post-effective
amendment declared effective by the SEC to no more than 15%.
The
requested change has been made.
* * * *
You
also raised three general accounting issues not related to the registration
statement.
A. You noted that the June 30, 2008 Form
10-K filing did not have a conformed
signature for the auditor's report or the report on internal
controls.
The
Company will refile the affected reports with appropriate conformed
signatures.
B. You asked whether the annual report to shareholders was
similarly affected.
The
annual report also omitted conformed signatures. We do not believe,
however, that any remailing to shareholders is required.
C. The Company's February 10, 2009 press
release failed to note that the statutory safe harbor for forward-looking
statements does not apply to business development companies.
The
Company will update its press release template to correct this
point.
We
believe that the above responses adequately respond to the concerns raised in
your comments. Should you have any additional comments or concerns,
please feel free to contact me at (212) 735-2790.
Sincerely,
s/Richard
T. Prins
cc: Grier
Eliasek
Brian
Oswald
Joseph Ferraro
Prospect
Capital Corporation
Filed
Pursuant to Rule 497(e)
Registration
No. 333-143819
PROSPECTUS
SUPPLEMENT
(To
Prospectus dated March ___, 2009)
_________
Shares
Common
Stock
$_____
per share
Prospect
Capital Corporation is a financial services company that lends to and invests in
middle market, privately-held companies. We are organized as an
externally-managed, non-diversified closed-end management investment company
that has elected to be treated as a business development company under the
Investment Company Act of 1940. Prospect Capital Management LLC manages our
investments, and Prospect Administration LLC provides the administrative
services necessary for us to operate.
We
are offering _____________ shares of our common stock directly to
institutional investors. We have not retained any underwriter or placement
agent, and we will not pay any commission or underwriting discount in connection
with this offering. See “Plan of Distribution” beginning on page S-__ of
this Prospectus Supplement for more information regarding this offering. These
shares are being offered at a discount from our most recently determined net
asset value per share pursuant to authority granted by our stockholders at the
annual meeting of shareholders held on February 12, 2009. Sales of
common stock at prices below net asset value per share dilute the interests of
existing stockholders, have the effect of reducing our net asset value per share
and may reduce our market price per share. See “Risk Factors”
beginning on page S - ____ and “Sales of Common Stock Below Net Asset Value” on
page S–__ of this prospectus supplement and on page 76 of the accompanying
prospectus.
Our
common stock is traded on the NASDAQ Global Select Market under the symbol
“PSEC.” The last reported closing price for our common stock on __________, 2009
was $______ per share, and our most recently determined net asset value per
share was $______.
This
prospectus supplement and the accompanying prospectus contain important
information you should know before investing in our securities. Please read it
before you invest and keep it for future reference. We file annual, quarterly
and current reports, proxy statements and other information about us with the
Securities and Exchange Commission, or the SEC. This information is available
free of charge by contacting us at 10 East 40th Street, 44th Floor,
New York, NY 10016 or by telephone at (212) 448-0702. The SEC maintains a
website at www.sec.gov where such information is available without charge upon
written or oral request. Our Internet website address is www.prospectstreet.com.
Information contained on our website is not incorporated by reference into this
prospectus supplement or the accompanying prospectus and you should not consider
information contained on our website to be part of this prospectus.
Investing
in our common stock involves risks. See “Risk Factors” beginning on page S–
__ of this prospectus supplement and on page 9 of the accompanying
prospectus.
Neither
the SEC nor any state securities commission, nor any other regulatory body, has
approved or disapproved of these securities or determined if this prospectus
supplement or the accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Per
Share
Total
Public
offering price
$
$
Proceeds
to Prospect Capital Corporation, before expenses(1)
$
$
(1)
Before
deducting estimated offering expenses payable by us of approximately
$______.
Prospectus
Supplement dated ________, 2009
ii
You
should rely only on the information contained in this prospectus supplement and
the accompanying prospectus. We have not authorized any other person to provide
you with information that is different from that contained in this prospectus
supplement or the accompanying prospectus. If anyone provides you with different
or inconsistent information, you should not rely on it. We are not making an
offer of these securities in any jurisdiction where the offer is not permitted.
You should assume that the information appearing in this prospectus supplement
and the accompanying prospectus is accurate only as of their respective dates.
Our business, financial condition and results of operations may have changed
since those dates. This prospectus supplement supersedes the accompanying
prospectus to the extent it contains information that is different from or in
addition to the information in that prospectus.
TABLE OF CONTENTS
PROSPECTUS
SUPPLEMENT
Prospectus
Summary
S-1
Risk
Factors
S-6
Use
of Proceeds
S-7
Capitalization
S-8
Distributions
and Price Range of Common Stock
S-9
Sales
of Common Stock Below Net Asset Value
S-11
Plan
of Distribution
S-14
Legal
Matters
S-14
Independent
Registered Public Accounting Firm
S-14
Available
Information
S-14
PROSPECTUS
About
this Prospectus
ii
Prospectus
Summary
1
Selected
Condensed Financial Data
7
Risk
Factors
9
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
26
Report
of Management on Internal Control Over Financial Reporting
47
Use
of Proceeds
48
Forward-Looking
Statements
49
Distributions
51
Price
Range of Common Stock
53
Business
54
Management
60
Certain
Relationships and Transactions
78
Control
Persons and Principal Stockholders
79
Portfolio
Companies
80
Determination
of Net Asset Value
83
Sales
of Common Stock Below Net Asset Value
84
Dividend
Reinvestment Plan
88
Material
U.S. Federal Income Tax Considerations
90
Description
of our Capital Stock
97
Description
of Our Preferred Stock
104
Description
of Our Warrants
105
Description
of Our Debt Securities
107
Regulation
109
Custodian,
Transfer and Dividend Paying Agent and Registrar
116
Brokerage
Allocation and Other Practices
117
iii
Plan
of Distribution
118
Legal
Matters
120
Independent
Registered Public Accounting Firm
120
Available
Information
120
Index
to Financial Statements
F-1
Part
C -- Other Information
C-1
iv
The Offering
Common
stock offered by us
_________ shares.
Common
stock outstanding
prior
to this offering
_________ shares.
Common