CNN Prospect Street Income Shs I

Prospect Street� Income Shares Inc. (the �Fund�) (NYSE: CNN), a diversified, closed-end management investment company, today announced that its Board of Directors has declared a regular distribution on its common stock of $0.1125 per share, payable on July 8, 2008 to holders of record on June 30, 2008. The following are annualized historical distribution rate calculations based on the total declared distribution for the quarter, the Fund�s net asset value (�NAV�) at quarter-end and the Fund�s quarter-end closing price (�Market Price�). Annualized Period-End Distribution Rates � Amount � NAV � Market Price Quarter-End � Payment Date � March 31, 2008 April 15, 2008 $ 0.1125 8.18 % 9.41 % December 31, 2007 January 15, 2008 $ 0.1125 7.68 % 8.91 % September 28, 2007 October 15, 2007 $ 0.1125 7.27 % 8.23 % June 29, 2007 July 13, 2007 $ 0.1125 6.80 % 7.33 % March 30, 2007 April 13, 2007 $ 0.1125 6.73 % 7.20 % Distribution rates are calculated by annualizing the distribution declared during the period and then dividing the resulting annualized distribution by the quarter-end NAV (in the case of NAV) or the quarter-end closing price (in the case of Market Price). The distribution rate is based on an estimation of investment income and may or may not include a return of capital. The distribution rate is based solely on actual distributions, which are made at the discretion of the Board of Directors. This press release is not for tax reporting purposes but is being provided to announce the amount of the Fund�s distributions that have been declared by the Board of Directors. In early 2009, after definitive information is available, the Fund will send stockholders a Form 1099-DIV specifying how the distributions paid by the Fund during the calendar year should be characterized for purposes of reporting the distributions on a stockholder�s tax return (e.g., ordinary income, short-term capital gain, long-term capital gain or return of capital). About Prospect Street� Income Shares Inc. Prospect Street� Income Shares Inc. is a diversified, closed-end management investment company. The Fund�s investment objective is to provide high current income, with capital appreciation as a secondary objective. The Fund seeks to primarily invest in debt securities rated in the four highest categories (Baa/BBB or higher) by an established rating agency or nonrated debt securities deemed by the Fund�s investment adviser to be of comparable quality. Highland Capital Management, L.P. (�Highland�) has served as Fund�s investment adviser since 2001. Fund�s shares are listed on the NYSE under the symbol �CNN�. An investment in the Fund is not appropriate for all investors. No assurance can be given that the Fund will achieve its investment objectives. Shares of closed-end investment companies frequently trade at a discount to net asset value. The price of the Fund�s shares is determined by a number of factors, several of which are beyond the control of the Fund. Therefore, the Fund cannot predict whether its shares will trade at, below or above net asset value. Highland Capital Management, L.P., the Fund�s investment adviser, is a leading alternative investment management firm specializing in credit and structured products. Headquartered in Dallas, Texas, Highland manages assets on behalf of investors around the world with offices in New York and London. Past performance does not guarantee future results.