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BlackRock Kelso Capital Corporation Declares Regular Fourth Quarter Dividend Of $0.26 Per Share, Announces September 30, 2011 Quarterly Financial Results

The weighted average yields of the debt and income producing equity securities in our portfolio at fair value were 12.7% at September 30, 2011 and 12.4% at September 30, 2010. The weighted average yields on our senior secured loans and other debt securities at fair value were 11.9% and 14.1%, respectively, at September 30, 2011, versus 10.6% and 15.0% at September 30, 2010. The weighted average yields of the debt and income producing equity securities in our portfolio at their current cost basis were 11.9% at September 30, 2011 and 10.5% at September 30, 2010. The weighted average yields on our senior secured loans and other debt securities at their current cost basis were 11.7% and 12.1%, respectively, at September 30, 2011, versus 9.4% and 11.9% at September 30, 2010. Yields exclude common equity investments, preferred equity investments with no stated dividend rate, short-term investments and cash and cash equivalents.

At September 30, 2011, we had $30.2 million in cash and cash equivalents, $232.6 million available under our senior secured, multi-currency credit facility, and $2.9 million payable for investments purchased.

Results of Operations

Results comparisons are for the three and nine months ended September 30, 2011 and 2010.

Investment Income

Investment income totaled $33.2 million and $95.5 million, respectively, for the three and nine months ended September 30, 2011, compared to $24.8 million and $80.8 million for the three and nine months ended September 30, 2010. The increase in investment income for the three and nine months ended September 30, 2011 reflects the growth of our portfolio as a result of the deployment of debt capital under our credit facility. Total investments at their current cost basis were $1,048.7 million at September 30, 2011, compared to $966.8 million at September 30, 2010.

Expenses

Total expenses for the three and nine months ended September 30, 2011 were $12.3 million and $33.9 million, respectively, versus $8.0 million and $23.3 million for the three and nine months ended September 30, 2010. Of these totals, for the three and nine months ended September 30, 2011, $4.2 million and $11.9 million, respectively, were interest and credit facility related expenses, versus $1.7 million and $4.6 million for the three and nine months ended September 30, 2010. The increase in the 2011 periods was due to the issuance of $175 million in aggregate principal amount of our senior secured notes in January. Base management fees were $5.1 million and $14.5 million, respectively, for the three and nine months ended September 30, 2011, compared to $4.0 million and $12.5 million for the three and nine months ended September 30, 2010. The increase in base management fees for the three and nine months ended September 30, 2011 reflects the overall growth of our portfolio. Professional fees for the three and nine months ended September 30, 2011 were $0.7 million and $1.3 million, respectively, versus $0.4 million and $0.8 million for the three and nine months ended September 30, 2010. The increase in professional fees is due to nonrecurring legal and other professional expenditures incurred in the current period. Expenses also consist of incentive management fees, investment advisor expenses, administrative services expense, insurance expenses, director fees and miscellaneous other expenses.

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