2008-09-05 14:38:02 -

- MVC Capital, Inc. (NYSE: MVC), a publicly traded business development company that makes private debt and equity investments, today announced its financial results for the third quarter ended July 31, 2008.

As of July 31, 2008, the Company's net assets were approximately $417.5 million, or $17.18 per share, compared with net assets of approximately $401.7 million, or $16.53

per share, at the beginning of the quarter and $363.5 million, or $14.98 per share, at the end of the same period last year. This increase represents the 19th quarter in a row of net asset growth for the Company. During the quarter, the Valuation Committee determined to adjust the fair values of eight of the Company's portfolio companies, which operate in a variety of business sectors. Overall, the net increase in net assets resulting from operations for the third quarter of 2008 was $18.6 million, as compared to $17.2 million for the second quarter of 2008 and $13.8 million for the same period in 2007.

The Company reported a net operating loss of $1.4 million for the third quarter, as compared to net operating income of $507,487 for the second quarter of 2008 and approximately $2.0 million for the same quarter in 2007. When excluding approximately $3.9 million accrued for the incentive compensation provision (which is not payable until a realization event occurs, if ever), net operating income for the third quarter was approximately $2.6 million. This compares to approximately $4.2 million in net operating income for the second quarter of 2008 and approximately $3.6 million for the same period last year using the same methodology. During the third quarter of 2008, the Company earned approximately $5.9 million in interest and dividend income and $886,658 in fee and other income, representing a decrease in total operating income of approximately $1.3 million from the second quarter of 2008, and a decrease of approximately $225,600 from the same period in 2007. This change in total operating income is primarily reflective of decreases in LIBOR rates and net prepayments on debt investments.

During the quarter, the Company made three follow-on investments totaling $6.2 million in SGDA Europe B.V., a soil remediation business, Turf Products, LLC, a wholesale distributor of golf course and commercial turf maintenance equipment and golf course irrigation systems, and SP Industries, Inc., a designer, manufacturer and marketer of laboratory research and process equipment. These follow-on investments were made to seek additional growth within the existing portfolio. During the quarter, one of the Company's holdings, Phoenix Coal Corporation, began trading on the Toronto Stock Exchange. Consistent with the Company's valuation procedures, effective June 30, 2008, the Company has been marking this investment to its market price and has recovered its original equity investment through the sale of a portion of its shares.

Also during the quarter, the Company's board of directors declared a dividend of $0.12 per share, or a total of approximately $2.9 million, which was payable to shareholders on July 31, 2008. This dividend represents the 13th consecutive quarterly dividend paid since the Company instituted its dividend policy in 2005.

MVC-G

About MVC Capital, Inc.

MVC Capital is a Business Development Company traded on the New York Stock Exchange that provides long-term debt and equity investment capital to fund growth, acquisitions and recapitalizations of companies in a variety of industries. For MVC's investor relations, please call 914-510-9400. All media inquiries should be directed to Nathaniel Garnick at 212-687-8080.

Forward-Looking Statements

The information contained in this press release contains forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, and these factors are enumerated in the company's periodic filings with the Securities and Exchange Commission.

MVC Capital, Inc.
Investor Relations:
914-510-9400
or
Media Inquiries:
Nathaniel Garnick, 212-687-8080