PennantPark Investment Corporation Announces Financial Results for the Quarter Ended June 30, 2008

NEW YORK, NY, Aug 05 (MARKET WIRE) --
PennantPark Investment Corporation (the "Company") (NASDAQ: PNNT) today
announces financial results for its third fiscal quarter ended June 30,
2008.

HIGHLIGHTS
Quarter Ended June 30, 2008
($ in millions, except per share amounts)
Investment portfolio $ 385.7
Net assets $ 226.8
Net asset value per share $ 10.77
Increase in net asset value per share $ 0.51

Amount drawn under credit facility (excluding temporary draw) $ 164.1

Investment portfolio composition and yield:
Subordinated debt, second lien secured debt, and equity $ 252.5
First lien secured debt $ 133.2
Weighted average yield on debt 9.5%
Weighted average yield on subordinated and second lien secured
debt 11.9%
Weighted average yield on first lien secured debt 5.1%

Operating Results:
Net investment income $ 3.9
Net investment income per share $ 0.19
Distributions to stockholders per share $ 0.22

Portfolio Activity:
Purchases of long term investments $ 46.8
Sales and repayments of long term investments $ 9.2

Number of new portfolio companies invested 2
Number of existing portfolio companies invested 3
Number of portfolio companies at end of period 41

CONFERENCE CALL AT 10:00 A.M. ET ON AUGUST 6, 2008

The Company will host a conference call at 10:00 a.m. (Eastern Time) on
Wednesday, August 6, 2008 to discuss the quarterly results. All interested
parties are welcome to participate. You can access the conference call by
dialing (800) 766-6630 approximately 5-10 minutes prior to the call.
International callers should dial (416) 695-9757. All callers should
reference PennantPark Investment Corporation. An archived replay of the
call will be available through August 20, 2008 by calling (800) 408-3053.
International callers please dial (416) 695-5800. For all replays, please
reference conference ID #3266489.

PORTFOLIO AND INVESTMENT ACTIVITY

As of June 30, 2008, our portfolio totaled $385.7 million and consisted of
$130.6 million of subordinated debt, $107.0 million of second lien secured
debt, $14.9 million of equity investments and $133.2 million of senior
secured loans. This compares to our portfolio which totaled $275.1 million
and consisted of $42.3 million of subordinated debt, $54.4 million of
second lien secured debt, $3.0 million of equity investments and $175.4
million of senior secured loans as of June 30, 2007.

As of June 30, 2008, our core assets totaled $252.5 million and consisted
of investments in sixteen different companies with an average investment
size of $15.8 million per company and a weighted average yield of 11.9% on
debt investments. This compares to our core assets which totaled $99.7
million and consisted of investments in seven different companies with an
average investment size of $14.2 million per company and weighted average
yield of 12.2% on debt investments as of June 30, 2007.

On June 30, 2008, our senior secured loan portfolio totaled $133.2 million
and consisted of twenty-six different companies (including one company
also in our core portfolio) with an average investment size of $5.1
million, and a weighted average yield of 5.1%. This compares to our
senior secured loan portfolio which totaled $175.4 million and consisted
of thirty different companies with an average investment size of $5.8
million and a weighted average yield of 7.6% as of June 30, 2007.

As of June 30, 2008, our portfolio consisted of forty-one companies with
an average investment size of $9.4 million and a weighted average yield on
debt investments of 9.5%, and was invested 34% in subordinated debt, 28%
in second lien secured debt, 4% in preferred and common equity
investments and 34% in senior secured loans. This compares to our
portfolio which consisted of thirty-seven companies with an average
investment size of $7.4 million and a weighted average yield on debt
investments of 9.3%, and which was invested 15.4% in subordinated debt,
19.8% in second lien secured debt, 1.0% in equity investments and 63.8%
in senior secured loans as of June 30, 2007.

Due to a more stable market for liquid leveraged finance instruments and
the maturation and growth of some of our equity co-investments, our
portfolio had unrealized appreciation of $11.7 million for the three
months ended June 30, 2008.

For the three months ended June 30, 2008, we invested $46.8 million in two
new and three existing portfolio companies with an average yield of 14.5%
on the debt investments. Sales and repayments of primarily senior secured
loans for the three months ended June 30, 2008 totaled $9.2 million.

"The correction that is going on in the market today presents a long term
opportunity for PennantPark," said Arthur Penn, Chairman and Chief
Executive Officer. "Risk/reward is the best it has been in years and we
are uniquely positioned to take advantage of the chaos."

RESULTS OF OPERATIONS

Set forth below are the results of operations for the three months period
ended June 30, 2008 and June 30, 2007.

Investment Income

Investment income for the three months ended June 30, 2008 and June 30,
2007, was $9.7 million and $5.4 million, respectively. Investment income
for the three months ended June 30, 2008 was primarily attributed to $3.7
million of interest income from senior secured loan investments; $3.7
million from our second lien secured debt investments; and $1.7 million
from our subordinated debt investments. The remaining investment income
was primarily attributed to interest income from short-term investments
and to accretion of discount and amortization of premium. This compares to
investment income which was primarily attributed to senior secured loan
investments as of June 30, 2007.

Expenses

Net expenses for the three months ended June 30, 2008 and June 30, 2007,
totaled $5.7 million and $2.2 million, respectively. Of these totals, $1.7
million and approximately $862,000 were attributable to credit facility
related expenses, and $1.2 million and approximately $569,000 to general
and administrative expenses, respectively. Net base management fee for the
same periods totaled $1.8 million and approximately $786,000, and
performance-based incentive fee totaled $1.0 million and zero,
respectively.

Net Investment Income

Net investment income totaled $3.9 million and $3.2 million or $0.19 and
$0.15 per share for the three months ended June 30, 2008 and June 30,
2007, respectively.

Net Realized Loss

Sales and repayments of long-term investments totaled $9.2 million and
$84.6 million, respectively, for the three months ended June 30, 2008 and
June 30, 2007, and net realized losses totaled approximately $402,000 and
$35,000, respectively, for the same periods.

Net Unrealized Depreciation on Investments and Cash Equivalents

The Company's investments and cash equivalents had a net
increase/(decrease) in unrealized appreciation of $11.7 million and ($5.1)
million, respectively, for the three months ended June 30, 2008 and June
30, 2007. On June 30, 2008 and June 30, 2007, net unrealized depreciation
on investments totaled $66.1 million and $5.1 million, respectively.

Net Increase/(Decrease) in Net Assets From Operations

Net increase/(decrease) in net assets resulting from operations totaled
$15.2 million and ($1.9) million, or $0.72 and ($0.09) per share,
respectively, for the three months ended June 30, 2008 and June 30, 2007.

LIQUIDITY AND CAPITAL RESOURCES

The Company's liquidity and capital resources are generated primarily
through its senior secured, multi-currency, $300 million, five-year
revolving credit facility maturing in June 2012 as well as from cash flows
from operations, investment sales and prepayments, and income earned from
investments and cash equivalents. On June 30, 2008, the Company had $204.1
million in borrowings outstanding; including $40.0 million of temporary
draws invested in cash equivalents. Our operating activities resulted in a
net use of cash of $45.2 million and $144.7 million, respectively, for the
three months ended June 30, 2008 and June 30, 2007, and our financing
activities resulted in a net inflow of cash of $5.0 million and $141.7
million, respectively, for the same periods, primarily from net borrowings
under our credit facilities.

DIVIDENDS

Dividends paid to stockholders totaled $4.6 million and $2.9 million, or
$0.22 and $0.14 per share, respectively, for the three months ended June
30, 2008 and June 30, 2007. Tax characteristics of all dividends will be
reported to stockholders on form 1099-DIV after the end of the
calendar
year.

PENNANTPARK INVESTMENT CORPORATION
STATEMENTS OF ASSETS AND LIABILITIES

June 30,
2008 September 30,
(Unaudited) 2007
------------- -------------
Assets
Investments at fair value
Non-controlled, non-affiliated investments,
at fair value (cost--$435,256,061 and
$298,789,297, respectively) $ 369,991,408 $ 274,679,030
Non-controlled, affiliated investments, at
fair value (cost--$16,534,481 and
$16,092,573, respectively) 15,715,395 16,337,578
------------- -------------
Investments at fair value 385,706,803 291,016,608
Cash equivalents (cost--$41,030,236 and
$258,016,351, respectively) 41,030,236 257,959,635
Interest receivable 4,024,013 4,517,850
Prepaid expenses and other assets 1,524,999 1,513,583
------------- -------------
Total assets 432,286,051 555,007,676
------------- -------------

Liabilities
Payable for cash equivalents purchased - 252,759,931
Payable for investments purchased - 16,583,921
Unfunded investments - 3,989,948
Credit facility payable 204,100,000 10,000,000
Interest payable 134,946 170,989
Accrued other expenses 1,224,266 1,109,793
------------- -------------
Total liabilities 205,459,212 284,614,582
------------- -------------

Net Assets
Common stock, par value $0.001 per share,
100,000,000 shares authorized and 21,068,772
shares issued and outstanding 21,069 21,069
Paid-in capital in excess of par 294,586,604 294,586,604
Distributions in excess of net investment
income (980,265) (196,769)
Accumulated net realized loss (716,830) (95,832)
Net unrealized depreciation on investments and
cash equivalents (66,083,739) (23,921,978)
------------- -------------

Total net assets $ 226,826,839 $ 270,393,094
------------- -------------
Total liabilities and net assets $ 432,286,051 $ 555,007,676
------------- -------------
Net asset value per share $ 10.77 $ 12.83
============= =============

PENNANTPARK INVESTMENT CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)

Period from
January 11,
2007
Three months Three months Nine months (inception)
ended ended ended months through
June 30, 2008 June 30, 2007 June 30, 2008 June 30, 2007
------------ ------------ ------------ ------------
Investment income:
From non-controlled,
non-affiliated
investments:
Interest $ 9,080,471 $ 5,425,279 $ 27,016,694 $ 6,198,262
Dividends 132,154 - 132,154 -
Other 111,924 - 167,806 -
From non-controlled,
affiliated
investments:
Interest 337,832 - 1,063,257 -
------------ ------------ ------------ ------------
Total investment
income 9,662,381 5,425,279 28,379,911 6,198,262
------------ ------------ ------------ ------------

Expenses:
Base management fee 1,829,909 1,048,503 5,195,750 1,048,503
Performance-based
incentive fee 985,287 - 2,433,394 -
Interest and other
credit facility
expenses 1,656,140 862,433 4,422,543 1,603,408
Administrative
services expenses 591,726 192,584 1,804,047 192,584
Other general and
administrative
expenses 658,178 276,166 1,823,014 559,394
------------ ------------ ------------ ------------
Expenses before
base management
fee waiver 5,721,240 2,379,686 15,678,748 3,403,889
------------ ------------ ------------ ------------

Base management fee
waiver - (262,126) (420,731) (262,126)
Income tax expense - 100,000 - 100,000
------------ ------------ ------------ ------------
Net expenses 5,721,240 2,217,560 15,258,017 3,241,763
------------ ------------ ------------ ------------
Net investment
income 3,941,141 3,207,719 13,121,894 2,956,499
------------ ------------ ------------ ------------

Realized and unrealized
gain (loss) on
investments and
cash equivalents:
Net realized loss
on investments and
cash equivalent (401,624) (34,726) (620,998) (15,351)
Net change in
unrealized
appreciation
(depreciation) on:
Non-controlled,
non-affiliated
investments and
cash equivalents 10,700,808 (5,117,039) (41,097,670) (5,118,740)
Non-controlled,
affiliated
investments 964,139 - (1,064,091) -
------------ ------------ ------------ ------------
Net change in
unrealized
appreciation
(depreciation) 11,664,947 (5,117,039) (42,161,761) (5,118,740)
------------ ------------ ------------ ------------
Net realized and
unrealized gain
(loss) from
investments and
cash equivalents 11,263,323 (5,151,765) (42,782,759) (5,134,091)
------------ ------------ ------------ ------------
Net increase
(decrease) in net
assets resulting
from operations $ 15,204,464 $ (1,944,046) $(29,660,865) $ (2,177,592)
============ ============ ============ ============
Gain (loss) per
common share $ 0.72 $ (0.09) $ (1.40) $ (0.10)
============ ============ ============ ============

ABOUT PENNANTPARK INVESTMENT CORPORATION

PennantPark Investment Corporation is a business development company which
principally invests in U.S. middle-market private companies in the form of
mezzanine debt, senior secured loans and equity investments. From time to
time, we may also invest in public companies whose securities are thinly
traded. PennantPark Investment Corporation is managed by PennantPark
Investment Advisers, LLC.

FORWARD-LOOKING STATEMENTS

This press release may contain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. All
statements other than statements of historical facts included in this
press release are forward-looking statements and are not guarantees of
future performance or results and involve a number of risks and
uncertainties. Actual results may differ materially from those in the
forward-looking statements as a result of a number of factors, including
those described from time to time in filings with the Securities and
Exchange Commission. The Company undertakes no duty to update any
forward-looking statement made herein. All forward-looking statements
speak only as of the date of this press release.

We may use words such as "anticipates," "believes," "expects," "intends,"
"will," "should," "may" and similar expressions to identify
forward-looking statements. Such statements are based on currently
available operating, financial and competitive information and are
subject to various risks and uncertainties that could cause actual
results to differ materially from our historical experience and our
present expectations. Undue reliance should not be placed on such
forward-looking statements as such statements speak only as of the date
on which they are made. We do not undertake to update our forward-looking
statements unless required by law.

Contact:
Aviv Efrat
PennantPark Investment Corporation
(212) 905-1000
Or visit us on the web at: www.pennantpark.com

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