NEW YORK, Jan. 31, 2011 (GLOBE NEWSWIRE) -- Kohlberg Capital Corporation (Nasdaq:KCAP) and Kohlberg Capital Funding LLC I, a special purpose, bankruptcy-remote, wholly-owned subsidiary of Kohlberg Capital Corporation (collectively the "Company"), announced that it has repaid in full the outstanding balance under its revolving credit facility with BMO Capital Markets Corp., Deutsche Bank AG and other lender parties (collectively the "Lender Parties") in advance of its scheduled forbearance date of February 28, 2011. As a result, the Company has no outstanding indebtedness and the Lender Parties have released to the Company approximately $73 million of collateral previously securing the revolving credit facility and have also paid a $2 million cash settlement to the Company. As of September 30, 2010, the Company had an outstanding balance of $137 million under its revolving credit facility with the Lender Parties. In order to pay off the revolving credit facility, the Company utilized proceeds received from the paydown, amortization or sale of portfolio loan investments totaling approximately $133 million together with available cash. The negative impact on net asset value from the sale and other activities undertaken to fully pay off the revolving credit facility, relative to our September 30, 2010 quarter-end fair value, was approximately 1.9%. As previously reported by the Company, on September 20, 2010, the Company entered into a forbearance and settlement agreement relating to their revolving credit facility with the Lender Parties in order to settle all outstanding claims asserted in connection with Company-initiated credit facility litigation. Subject to the terms and conditions of the settlement, which are more fully described in the Company's recent filings with the SEC, the Lender Parties agreed to refrain from exercising any right or remedy relating to previously alleged termination events under the credit facility through February 28, 2011 and also agreed to reset the interest rate on outstanding borrowings during the forbearance period to originally stated terms. The parties further agreed to a mutual release of claims conditioned, in the case of the Lender Parties' release, on the payment in full on or prior to February 28, 2011 of the amounts outstanding under the credit facility, and, upon such payment, the Lender Parties have agreed to remit to the Company a cash settlement payment of $2 million or to credit this amount toward the amounts outstanding under the credit facility. As the Company has satisfied these conditions prior to the end of the forbearance term, the Company has collected a $2 million cash settlement and is currently operating fully unlevered.