NEW YORK and CHICAGO — Continuing a string of investment firms pushing
money into subprime auto lenders, special finance paper purchaser Nationwide
Acceptance Corp. recently received an injection from Prospect Capital Corp.

Officials said the combined debt and equity financing
totaled $25.2 million.

Founded in 1954, Nationwide operates in 22 states and purchases
loans originated by the more than 800 active dealers. In the past year,
Nationwide financed the purchase of more than 7,000 vehicle contracts and hold an
aggregate loan portfolio in excess of $100 million.

Led by chief executive officer Martin Less, senior
management of Nationwide invested alongside Prospect and owns, directly and
through various incentive plans, approximately 6.2 percent of the fully diluted
economic interests in Nationwide. Prospect is the controlling shareholder of Nationwide.

Wells Fargo provided a $75.0 million revolving credit
facility.

Prospect expects Nationwide to pay out substantially all of
its income in the form of dividends on a go-forward basis, providing for an
attractive current yield to Prospect and to Nationwide's management owners.

Prospect structured the acquisition of Nationwide using
tax-advantaged limited liability companies.

Officials highlighted Nationwide has enjoyed multi-decade
success due to several key factors, including a broad-based dealer origination
network, a rigorous and consistent new loan underwriting process and an
intense commitment to monitoring and collecting existing loans.

Because of these strengths, Nationwide has generated
consistent profitability and has grown its asset base during the past several
years, according to Ted Fowler, a managing director of Prospect Capital
Management

"We are pleased to be partnering with the Nationwide
management team and look forward to supporting continued profitable growth, including
acquisitions, for the business," Fowler said.

Milestone Advisors (now part of Houlihan Lokey) served as
exclusive financial advisor to Nationwide on the transaction.

"Prospect has worked extensively to understand the auto
finance industry and Nationwide's long-term track record," Less said.

"Leveraging our broad footprint and the capital backing that
Prospect provides, we anticipate continuing to deliver profitable growth by
expanding our business in current states as well as new expansion states," he
went on to say.

Earlier this month, subprime lender Pelican Auto Finance received
an initial equity investment from funds affiliated with private equity firm
Flexpoint Ford. SubPrime Auto Finance News published more details here.

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