(Company letterhead)
                                                                February 5, 1999

                             IMPORTANT REMINDER !!!

Dear Valued Stockholder:

         The  Annual  Stockholders   Meeting  of  PROSPECT  STREET  HIGH  INCOME
PORTFOLIO  INC.  is  approaching  and our  records  show that your vote for this
meeting has not been received. Regardless of the number of shares you own, it is
important  they be  represented  at the meeting.  Your vote matters to us and we
need your support.

         In addition to the election of Directors  and the  ratification  of our
independent auditors, your Board of Directors is seeking stockholder approval to
increase the advisory fee paid to the Fund's  Manager.  We are  requesting  this
because the costs  associated  with the research and analysis done by the Fund's
Manager  continue to rise.  Research and analysis is crucial for making accurate
investment  decisions in the high yield market.  Identifying  opportunities in a
highly  competitive  and  growing  market  place  is at the  top  of our  Fund's
priorities.  According to information  derived from Lipper Analytical  Services,
Inc.  as of October  1998,  the  advisory  fee  resulting  from the  adoption of
Proposal No. 2 will still  constitute a lower  percentage  of net assets  (i.e.,
 .69%) than the industry  standard for similar  leveraged,  high yield closed-end
funds (.726).  Based upon this and the other information  already provided,  the
members  of the  Board of  Directors  who are not  affiliated  with the  Manager
believe  that  the  requested  fee  increase  is  reasonable  and is in the best
interest of the Fund.

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

         Since the time remaining is short, we urge you to sign, date and return
your vote as soon as possible. Your broker may not vote your shares without your
specific  instructions  on  proposal  #2.  Please  save your Fund the expense of
additional  solicitation  costs  by  voting  as soon as  possible.  You may take
advantage of the toll free number located in the upper  left-hand  corner of the
enclosed  voting form to vote your shares.  We appreciate  your time and effort.
Thank you for voting.

                  Sincerely,



                  /s/Richard E. Omohundro, Jr.
                  President



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