NEW YORK, Aug. 21, 2026 (GLOBE NEWSWIRE) -- Prospect Enhanced Yield Fund (the “Fund”) proudly completed its first year of operations on August 6, 2026. The Fund returned 7.61% over the trailing 12-months since inception¹, 257bps ahead of the 5.04% average trailing 12-month total return of the Eldridge BBB–B CLO ETF (Ticker: CLOZ), Janus Henderson B–BBB CLO ETF (Ticker: JBBB), the ICE BofA BB US High Yield Index, and the Morningstar LSTA US Leveraged Loan Index over the same period.

Performance data above represents past performance. Past performance is not indicative of future performance. Current performance may be lower or higher than the performance data stated above, and investors should be aware that investment returns and principal value of an investment will fluctuate so that shares may be worth more or less at redemption than the performance data above suggests.

Class I shares (Ticker: PAYIX) paid cumulative dividends of $1.71 per share during the year and recently declared an 11.5% annualized distribution rate for the month of July.⁷

The Fund invests in non-mortgage structured credit, principally BB-rated Collateralized Loan Obligation ("CLO") tranches, alongside a smaller asset-backed security ("ABS") allocation, resulting in a portfolio of 37 investments in its first year.

The Fund sources CLO BBs in both the new issue and secondary markets; over the first year, purchases were nearly evenly split between the two deal-sourcing channels. We aim to participate in new issues when spreads compensate for the risk, and tend to shift to secondary market transactions when bonds are available at a discount to par.

Building the Portfolio

The Fund deployed $39.3 million of gross notional across 42 investments at a notional-weighted average purchase price of 99.61, with 54% ramped in the first two months since inception, eventually building a portfolio of 37 investments across 28 CLO managers. The Fund also exited five positions totaling $5.0 million of notional during the year.

Substantially all of the Fund’s portfolio trades in an established, liquid, secondary market and is valued by independent third-party pricing services, with broadly syndicated loan CLOs representing 85.9% of holdings. The Fund purchased one consumer loan ABS position during the year representing 5.5% of holdings.

Looking Ahead

We remain confident in the long-term fundamentals for the investments pursued by the Fund. CLO BB debt continues to benefit from structural features like equity subordination and over-collateralization despite the continued software and AI disruption affecting the market in 2026. Underlying credit fundamentals continue to improve; the overall market trailing 12-month default rate (including distressed exchanges) declined from 4.46% in June 2025 to 2.77% in June 2026.⁸ CLO manager tiering and disciplined underwriting remain key differentiators, and we believe the Fund is well positioned to navigate this environment.

The Fund remains optimistic in its pursuit of CLO BBs as an investment strategy and continues to canvas the market for attractive asset-backed and CLO securities.

To read more about Prospect Enhanced Yield Fund’s first year or download the PDF, please visit our website at www.ProspectEnhanced.com/news-views/.

The Prospect Enhanced Yield Fund is distributed by Ultimus Fund Distributors, LLC, Member FINRA/SIPC.

About Prospect Enhanced Yield Fund
Prospect Enhanced Yield Fund is a closed-end fund that operates as an interval fund and was created to acquire and grow an investment portfolio primarily consisting of non-mortgage related structured credit instruments, including: asset-backed securities, collateralized loan obligations and other securitized investments representing interests in cashflows from various assets, such as loans, leases, and warehouse facilities. The Fund may invest in structured credit instruments that are fixed rate or floating or variable rate, and of any credit quality, duration, or maturity. The Fund is managed by Prospect Enhanced Yield Management, LLC, which is led by a team of investment professionals from the investment and operations team of Prospect Capital Management L.P. For more information, visit www.ProspectEnhanced.com.

About Prospect Capital Management L.P.
Prospect Capital Management L.P. (“Prospect”), headquartered in New York City, is an SEC-registered investment adviser that, along with its predecessors and affiliates, has more than 30-years of investing in and managing high-yielding debt and equity investments using both private partnerships and publicly traded closed-end structures. Prospect and its affiliates employ a team of over 100 professionals who focus on credit-oriented investments yielding attractive current income. Prospect, together with its affiliates, has $6.9 billion of assets under management as of March 31, 2026. Prospect is the investment adviser to Prospect Capital Corporation (NASDAQ: PSEC). For more information, call (212) 448-0702 or visit https://www.prospectcap.com.

Additional Information

Past performance is not indicative of future performance. The achievement of investment returns is dependent on a multitude of factors, many of which are beyond the control of Prospect Enhanced Yield Fund. Any investment is subject to market risks, including the risk of loss of all or a portion of the invested amount. Market conditions may cause the value of securities to fluctuate, sometimes significantly. Any investment is subject to a variety of other risks and there can be no assurance that any investment will meet its investment objectives, if any, or that investors will not incur losses.

Our distributions may exceed our earnings, and therefore, portions of the distributions that we make may be a return of the money that you originally invested and represent a return of capital to you for tax purposes. The Fund will ordinarily pay distributions from its net investment income, if any, on a monthly basis. Distributions are not guaranteed. Based on current estimates, July, August, and September 2026 distributions reflect a return of income, and the Fund does not expect any portion of the distributions to be a return of capital. Such a return of capital is not immediately taxable, but reduces your tax basis in our shares, which may result in higher taxes for you even if your shares are sold at a price below your original investment.

Investors should consider the investment objective and policies, risk considerations, charges and ongoing expenses of an investment carefully before investing. The prospectus and summary prospectus contains this and other information relevant to an investment in the fund. Please read the prospectus or summary prospectus carefully before you invest or send money. To obtain a prospectus, please contact your investment representative or Investor Services at 866.655.3650.

Forward-Looking Statements
This press release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the future performance of Priority Income Fund, Inc. Words such as "believes," "expects," "projects," and "future" or similar expressions are intended to identify forward-looking statements. Any such statements, other than statements of historical fact, are highly likely to be affected by unknowable future events and conditions, including elements of the future that are or are not under the control of Priority Income Fund, Inc. and that Priority Income Fund, Inc. may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from any forward-looking statements. Such statements speak only as of the time when made, and Priority Income Fund, Inc. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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¹ Total returns calculated based on Class I share price, which is equivalent to net asset value per share. Adviser has entered into an Expense Limitation Agreement pursuant to which it will reimburse the Fund, to limit Operating Expenses to an Annual Limit of 2.00% of Net Assets until June 30, 2027, subject to recoupment by the Adviser within three years. Adviser has additionally agreed to reimburse Operating Expenses up to the Annual Limit of 2.00% of Net Assets until June 30, 2027. Total Annual Expense Ratio for each class is as follows: Class I: 6.28% Gross (estimated)/0.00% Net; Class A: 6.53% Gross (estimated)/0.25% Net; and Class C: 7.28% Gross (estimated)/1.00% Net.
² Benchmark since-inception returns are calculated using the Fund’s inception date of 08/06/2025 to ensure consistency in reporting time periods. Actual fund inception date for Eldridge BBB-B CLO ETF is 01/24/2023; actual fund inception date for Janus Henderson B-BBB CLO ETF is 01/11/2022; actual inception date for ICE BofA BB US High Yield Index is 12/31/1996; and actual inception date for Morningstar LSTA US Leveraged Loan Index is 12/31/2000.
³ Eldridge BBB-B CLO ETF, as of 08/06/2026. Total annualized returns calculated using share price. There may be material differences between the Fund offering and Eldridge BBB-B CLO ETF in costs and expenses, liquidity, safety, guarantees or insurance, fluctuation of principal or return, and tax features. For example, the Fund invests at least 80% of its net assets in non-mortgage related structured credit instruments, including asset-backed securities, collateralized loan obligations and other securitized investments representing interests in cashflows from various assets, such as loans, leases, and warehouse facilities, whose debt is rated below investment grade, or in limited circumstances unrated, which have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal, may be difficult to value and illiquid. Furthermore, the Fund has an interval fund structure and conducts quarterly repurchase offers at NAV, of no less than 5% of our outstanding shares. Conversely, the Eldridge BBB-B CLO ETF invests at least 80% of its net assets (plus any borrowings made for investment purposes) in collateralized loan obligations (“CLOs”) that are rated, at the time of purchase, between BBB+ and B- or an equivalent rating by a nationally recognized statistical rating organization. Additionally, the Eldridge BBB-B CLO ETF offers intradaily liquidity on an exchange at market-determined prices.
⁴ Source: Bloomberg, Janus Henderson B-BBB CLO ETF, as of 08/06/2026. Total annualized returns calculated using share price. There may be material differences between the Fund offering and Janus Henderson B-BBB CLO ETF in costs and expenses, liquidity, safety, guarantees or insurance, fluctuation of principal or return, and tax features. For example, the Fund invests at least 80% of its net assets in non-mortgage related structured credit instruments, including asset-backed securities, collateralized loan obligations and other securitized investments representing interests in cashflows from various assets, such as loans, leases, and warehouse facilities, whose debt is rated below investment grade, or in limited circumstances unrated, which have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal, may be difficult to value and illiquid. Furthermore, the Fund has an interval fund structure and conducts quarterly repurchase offers at NAV, of no less than 5% of our outstanding shares. Conversely, the Janus Henderson B-BBB CLO ETF invests at least 80% of its net assets (plus any borrowings made for investment purposes) in CLOs of any maturity that are rated between and inclusive of BBB+ and B- (or equivalent by a nationally recognized statistical rating organization. Additionally, the Janus Henderson B-BBB CLO ETF offers intradaily liquidity on an exchange at market-determined prices.
⁵ ICE BofA BB US High Yield Index, as of 08/06/2026. There are material differences between the Fund offering and ICE BofA BB US High Yield Index. It is not possible to invest in an index. Individuals cannot invest directly in an index and unmanaged indices do not reflect fees, expenses or sales charges. There are differences between an investment in the Fund and the securities comprising the ICE BofA BB US High Yield Index (“HY Index”). For example, the Fund invests at least 80% of its net assets in non-mortgage related structured credit instruments, including asset-backed securities, collateralized loan obligations and other securitized investments representing interests in cashflows from various assets, such as loans, leases, and warehouse facilities, whose debt is rated below investment grade, or in limited circumstances unrated, which have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal, may be difficult to value and illiquid. Conversely, the HY Index is a subset of the ICE BofA US High Yield Master II Index and is comprised of market capitalization-weighted U.S. dollar-denominated high-yield or below investment grade corporate bonds and includes all securities with a given investment grade rating BB and have at least one year to maturity and have a minimum outstanding par amount of $100 million. Further, there may be different costs and expenses, liquidity, safety, guarantees or insurance, fluctuation of principal or return, and tax features for the securities comprising the HY Index and the Fund.
6 Morningstar LSTA US Leveraged Loan Index, as of 08/06/2026. There are material differences between the Fund offering and the Morningstar LSTA US Leveraged Loan Index ("Leveraged Loan Index"). It is not possible to invest in an index. Individuals cannot invest directly in an index and unmanaged indices do not reflect fees, expenses or sales charges. There are differences between an investment in the Fund and the securities comprising the Leveraged Loan Index. For example, the Fund invests at least 80% of its net assets in non-mortgage related structured credit instruments, including asset-backed securities, collateralized loan obligations and other securitized investments representing interests in cashflows from various assets, such as loans, leases, and warehouse facilities, whose debt is rated below investment grade, or in limited circumstances unrated, which have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal, may be difficult to value and illiquid. Conversely, the Leveraged Loan Index is comprised syndicated term leveraged loans that are held within top-tier institutional investor loan portfolios tracked by PitchBook LCD that have first lien seniority, at least one year to maturity, have a minimum initial spread of Base Rate + 125bps, and have an initial par value of at least $50 million. Further, there may be different costs and expenses, liquidity, safety, guarantees or insurance, fluctuation of principal or return, and tax features for the securities comprising the Leveraged Loan Index and the Fund.
⁷ The annualized distribution rate is based on the net asset value per share and is calculated by annualizing the monthly common share distributions. The annualized total cash distribution is $2.85 per share (11.48% annualized rate based on the July 31, 2026 net asset value of $24.83 per common share, or 9.18% annualized rate based on the July 31, 2026 net asset value of $24.83 per common share and excluding undistributed catch-up for tax), for distributions with record dates between July 30, 2026 and September 29, 2026. Our distributions may exceed our earnings, and therefore, portions of the distributions that we make may be a return of the money that you originally invested and represent a return of capital to you for tax purposes. The Fund will ordinarily pay distributions from its net investment income, if any, on a monthly basis. Distributions are not guaranteed. Based on current estimates, July, August, and September 2026 distributions reflect a return of income, and the Fund does not expect any portion of the distributions to be a return of capital.
⁸ Pitchbook, Morningstar LSTA Leveraged Loan Index, LTM Default Rate including Distressed Exchanges, as of 06/30/2026.