Gladstone Capital Corporation Preferred Stock Begins Trading on New York Stock Exchange Today Under Symbol GLADPRA

MCLEAN, Va., Nov. 8, 2011 /PRNewswire/ -- Gladstone Capital Corporation (the "Company") (NASDAQ common stock: GLAD) (the "Company") today announced that its newly-issued preferred stock began trading on the New York Stock Exchange under the symbol GLADPRA.  The Company sold 1,400,000 shares of 7.125% Series 2016 Term Preferred Stock (the "Preferred Stock") on November 4, 2011. The Preferred Stock will pay monthly dividends of $0.1484 per share, or $1.7813 annually. The dividend is cumulative. The Preferred Stock was issued at $25 per share and is mandatorily redeemable in December 2016 at $25 per share. The Company raised $35 million in gross proceeds and $33.1 million in net proceeds, after payment of underwriting discounts and commissions and estimated expenses of the offering payable by the Company.  

(Logo:  http://photos.prnewswire.com/prnh/20101005/GLADSTONECAPITAL )

Chip Stelljes, President of the Company said, "This is a fresh injection of capital into the Company and we used the net proceeds from this offering to pay down our existing short-term line of credit. By decreasing the balance on our line of credit, we should be able to draw down funds in the future to make new investments in accordance with our investment objective.  This is one of the first times that a business development company has issued preferred stock."  

The Company has also granted the underwriters a 30-day option to purchase 210,000 additional shares of Preferred Stock on the same terms and conditions to cover over-allotments, if any.  Janney Montgomery Scott LLC served as the sole bookrunner and lead manager for the offering.  BB&T Capital Markets, a Division of Scott & Stringfellow, LLC, J.J.B. Hilliard, W.L. Lyons, LLC, Wunderlich Securities, Inc., Ladenburg Thalmann & Co. Inc. and Boenning & Scattergood, Inc. served as co-managers.

Gladstone Capital Corporation is a publicly traded business development company that invests in debt securities consisting primarily of senior term loans, second term lien loans, and senior subordinated term loans in small and medium sized businesses. Including payments declared through December 2011, the Company will have paid 99 consecutive monthly cash distributions on its common stock. Before paying monthly distributions, the Company paid eight consecutive quarterly cash distributions. Information on the business activities of all the Gladstone funds can be found at www.gladstonecompanies.com.

The statements in this press release regarding the timing and the Company's ability to draw down funds from its line of credit and make new investments in accordance with its investment objective and other such statements are "forward-looking statements." These forward-looking statements inherently involve certain risks and uncertainties, although they are based on the Company's current plans that are believed to be reasonable as of the date of this press release. Factors that may cause the Company's actual results to differ from these forward-looking statements include, among others, the duration and potential future effects of the current economic downturn on its portfolio companies and on the senior loan market, and those factors listed under the caption "Risk Factors" of the final prospectus supplement, dated October 28, 2011, and the final prospectus, dated July 15, 2011 , filed by the Company with the Securities and Exchange Commission on October 31, 2011 (the "Filing"). The risk factors set forth in the Filing under the caption "Risk Factors" are specifically incorporated by reference into this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Gladstone Capital Corporation