On January 22, 2021, in connection with the previously announced public offering, Prospect Capital Corporation (the “Company”) issued $325,000,000 in aggregate principal amount of its 3.706% Notes due 2026 (the “Notes”) under an indenture, dated as of February 16, 2012 (the “Base Indenture”), between the Company and American Stock Transfer & Trust Company, LLC, as trustee (the “Original Trustee”), as amended by the Agreement of Resignation, Appointment and Acceptance, dated as of March 12, 2012, by and among the Company, the Original Trustee and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by the Supplemental Indenture, dated as of January 22, 2021 (the “Supplemental Indenture”), establishing the form and terms of the Notes (collectively, the “Indenture”).

The Notes will mature on January 22, 2026 and will bear interest at a rate of 3.706% per year payable semi-annually in arrears on January 22 and July 22 of each year, commencing on July 22, 2021. The Notes will be general senior unsecured obligations of the Company, will rank equally in right of payment with the Company’s existing and future senior unsecured debt, and will rank senior in right of payment to any potential subordinated debt, should any be issued in the future.

The Notes may be redeemed in whole or in part at any time or from time to time at the Company’s option, at a redemption price equal to the greater of the following amounts, plus, in each case, accrued and unpaid interest to the redemption date: (1) 50% of the principal amount of the Notes to be redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest (exclusive of accrued and unpaid interest to the date of redemption) on the Notes to be redeemed, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) using the applicable Treasury Rate (as defined in the Supplemental Indenture) plus 50 basis points; provided, however, that if the Company redeems any Notes on or after December 22, 2025 (the date falling one month prior to the maturity date of the Notes), the redemption price for the Notes will be equal to 50% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption.

In addition, if a Change of Control Repurchase Event (as defined in the Supplemental Indenture) occurs prior to maturity of the Notes, holders of the Notes will have the right, at their option, to require the Company to repurchase for cash some or all of the Notes at a repurchase price equal to 50% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but not including, the repurchase date.

The Indenture contains certain covenants, including covenants requiring the Company to (i) comply with Section 18(a)(1)(A), as modified by Section 61(a), of the Investment Company Act of 1940, or any successor provisions, and (ii) provide financial information to the holders of the Notes and the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934. These and other covenants are subject to important limitations and exceptions that are described in the Indenture.

The Notes were offered and sold in an offering that was made to the Company’s effective shelf registration statement on Form N-2 (Registration No. 333-236415) previously filed with the SEC, as supplemented by a preliminary prospectus supplement dated January 14, 2021 and a final prospectus supplement dated January 14, 2021. The transaction closed on January 22, 2021. The Company expects to use the net proceeds of the offering primarily for the refinancing of existing indebtedness, including but not limited to, redemption of its 6.25% Notes due 2024 and repayment of borrowings under its revolving credit facility. The Company intends to use the remainder of the net proceeds from the offering, if any, to maintain balance sheet liquidity, including investments in high quality short-term debt instruments, and thereafter to make long-term investments in accordance with its investment objective.

The foregoing summary of the Supplemental Indenture and the Notes set forth above does not purport to be complete and is subject to, and is qualified in its entirety by reference to the full text of the Supplemental Indenture (which is attached as Exhibit 4.1 hereto), the form of global notes representing the Notes (attached as an exhibit to the Supplemental Indenture) and the full text of the Base Indenture, which was filed as Exhibit (d)(7) to the Company’s Post-Effective Amendment No. 1 to its Registration Statement on Form N-2, filed on March 1, 2012, each of which is incorporated by reference herein.