NEW YORK, NY–(EMWNews – August 5, 2008) – 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