PROSPECT STREET HIGH INCOME PORTFOLIO INC.
                                 60 State Street
                                   Suite 3750
                                Boston, MA 02109

                                                              February 6, 1998

                              AN IMPORTANT REMINDER

Dear Shareholder:

         You have  previously  received  proxy  material in connection  with the
upcoming Annual Meeting of Shareholders of Prospect Street High Income Portfolio
Inc.  to be held on March  11,  1998.  Your  Board of  Directors  has  carefully
considered  the proposals on the ballot for this meeting,  and believes it is in
the best interest of the Fund and our shareholders to approve all proposals.

         It is critical that Proposals 2,3 and 4 be approved now:

         Proposals 2 and 3

         -        The Fund's  existing  preferred  stock is subject to mandatory
                  retirement in 1998.
         -        The approval sought is to replace the retiring preferred stock
                  and  provide  additional  leverage  to  maintain  the  current
                  leverage ratio.
         -        In order to provide the  opportunity  to  maintain  the Fund's
                  current   earnings  and  dividend   capacity  for  the  Common
                  Stockholders  we will need to replace  the  leverage  which is
                  expiring.

         Proposal 4

         -        The  approval of Proposal 4 will allow the Board of  Directors
                  to modify the restriction on illiquid securities to enable the
                  Fund to purchase Rule 144A  securities  which now dominate the
                  high yield securities market.
         -        The  Board  of  Directors   intends  to  replace  the  current
                  fundamental  restriction  with a  non-fundamental  restriction
                  providing  that the Fund will not invest  more than 30% of its
                  total assets in securities  which are not readily  marketable.
                  Investment  in  Rule  144A  securities  is  essential  to Fund
                  operations.

                  Your  Board  of  Directors  recommends  a vote in favor of all
proposals.

         According  to our latest  records,  your proxy for this meeting has not
been  received.  Regardless of the number of shares you may own, it is important
that they be  represented  at this meeting.  Your vote is very  important and we
need your support.

         Please  sign,  date and mail  the  enclosed  proxy  card  promptly.  We
appreciate your time and support.


                                   Sincerely,



                                   Richard E. Omohundro, Jr., CFA
                                   President


                     IF YOU HAVE RECENTLY MAILED YOUR PROXY,
              PLEASE ACCEPT OUR THANKS AND DISREGARD THIS REQUEST.