Prospect Street(R) Income Shares Inc. Announces Declaration of Regular Distribution

  
    
  
  
    
      Prospect Street® Income Shares Inc. (the “Fund”) 
      (NYSE: CNN), a diversified, closed-end management investment company, 
      today announced that its Board of Directors has declared a regular 
      distribution on its common stock of $0.1125 per share, payable on 
      July 8, 2008 to holders of record on June 30, 2008.
    
    
      The following are annualized historical distribution rate calculations 
      based on the total declared distribution for the quarter, the Fund’s 
      net asset value (“NAV”) 
      at quarter-end and the Fund’s quarter-end 
      closing price (“Market Price”).
    
    
      
        
          Annualized Period-End Distribution Rates
        
        
           
        
        
          Amount
        
        
           
        
        
          NAV
        
        
           
        
        
          Market Price
        
      
      
        
          Quarter-End
        
        
           
        
        
          Payment Date
        
        
        
        
        
        
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          March 31, 2008
        
        
        
        
          April 15, 2008
        
        
        
        
          $
        
        
          0.1125
        
        
        
        
          8.18
        
        
          %
        
        
        
        
          9.41
        
        
          %
        
      
      
        
          December 31, 2007
        
        
        
        
          January 15, 2008
        
        
        
        
          $
        
        
          0.1125
        
        
        
        
          7.68
        
        
          %
        
        
        
        
          8.91
        
        
          %
        
      
      
        
          September 28, 2007
        
        
        
        
          October 15, 2007
        
        
        
        
          $
        
        
          0.1125
        
        
        
        
          7.27
        
        
          %
        
        
        
        
          8.23
        
        
          %
        
      
      
        
          June 29, 2007
        
        
        
        
          July 13, 2007
        
        
        
        
          $
        
        
          0.1125
        
        
        
        
          6.80
        
        
          %
        
        
        
        
          7.33
        
        
          %
        
      
      
        
          March 30, 2007
        
        
        
        
          April 13, 2007
        
        
        
        
          $
        
        
          0.1125
        
        
        
        
          6.73
        
        
          %
        
        
        
        
          7.20
        
        
          %
        
      
    
    
      Distribution rates are calculated by annualizing the distribution 
      declared during the period and then dividing the resulting annualized 
      distribution by the quarter-end NAV (in the case of NAV) or the 
      quarter-end closing price (in the case of Market Price). The 
      distribution rate is based on an estimation of investment income and may 
      or may not include a return of capital. The distribution rate is based 
      solely on actual distributions, which are made at the discretion of the 
      Board of Directors.
    
    
      This press release is not for tax reporting purposes but is being 
      provided to announce the amount of the Fund’s 
      distributions that have been declared by the Board of Directors. In 
      early 2009, after definitive information is available, the Fund will 
      send stockholders a Form 1099-DIV specifying how the distributions paid 
      by the Fund during the calendar year should be characterized for 
      purposes of reporting the distributions on a stockholder’s 
      tax return (e.g., ordinary income, short-term capital gain, long-term 
      capital gain or return of capital).
    
    
      About Prospect Street® Income Shares Inc.
    
    
      Prospect Street® Income Shares Inc. is a 
      diversified, closed-end management investment company. The Fund’s 
      investment objective is to provide high current income, with capital 
      appreciation as a secondary objective. The Fund seeks to primarily 
      invest in debt securities rated in the four highest categories (Baa/BBB 
      or higher) by an established rating agency or nonrated debt securities 
      deemed by the Fund’s investment adviser to be 
      of comparable quality. Highland Capital Management, L.P. (“Highland”) 
      has served as Fund’s investment adviser since 
      2001. Fund’s shares are listed on the NYSE 
      under the symbol “CNN”. 
      An investment in the Fund is not appropriate for all investors. No 
      assurance can be given that the Fund will achieve its investment 
      objectives.
    
    
      Shares of closed-end investment companies frequently trade at a discount 
      to net asset value. The price of the Fund’s 
      shares is determined by a number of factors, several of which are beyond 
      the control of the Fund. Therefore, the Fund cannot predict whether its 
      shares will trade at, below or above net asset value.
    
    
      Highland Capital Management, L.P., the Fund’s 
      investment adviser, is a leading alternative investment management firm 
      specializing in credit and structured products. Headquartered in Dallas, 
      Texas, Highland manages assets on behalf of investors around the world 
      with offices in New York and London.
    
    
      Past performance does not guarantee future results.