SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

DONDERO JAMES D

(Last)

(First)

(Middle)

13455 NOEL ROAD, STE 800

(Street)

DALLAS

75240

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
PROSPECT STREET HIGH INCOME PORTFOLIO INC [ PHY ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

Director		10% Owner
Officer (give title below)	X	Other (specify below)
		Affiliate - Investment Advisor

3. Date of Earliest Transaction (Month/Day/Year)
04/02/2007

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock	04/02/2007		P⁽¹⁾		30,000	A	$3.2167	2,136,417.779	I	See Footnote⁽²⁾⁽³⁾
Common Stock	04/02/2007		P⁽⁴⁾		3,804	A	$3.23	2,140,221.779	I	See Footnote⁽²⁾⁽³⁾
Common Stock	04/03/2007		P⁽¹⁾		30,000	A	$3.22	2,170,221.779	I	See Footnote⁽²⁾⁽³⁾
Common Stock	04/04/2007		P⁽¹⁾		7,500	A	$3.22	2,177,721.779	I	See Footnote⁽²⁾⁽³⁾
Common Stock	04/05/2007		P⁽¹⁾		7,900	A	$3.22	2,185,621.779	I	See Footnote⁽²⁾⁽³⁾
Common Stock	04/09/2007		P⁽¹⁾		30,000	A	$3.22	2,215,621.779	I	See Footnote⁽²⁾⁽³⁾
Common Stock	04/10/2007		P⁽¹⁾		6,200	A	$3.2082	2,221,821.779	I	See Footnote⁽²⁾⁽³⁾

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)

Explanation of Responses:

1. Shares purchased by the the Highland Capital Management LP Retirement Plan and Trust (the "Retirement Plan and Trust").

2. Includes (i) 915,000 shares held by the Highland CDO Opportunity Fund, Ltd. ("CDO"), (ii) 200,816 shares held by The Canis Major Trust ("Canis Major"), (iii) 101,538 shares held by The Canis Minor Trust ("Canis Minor"), (iv) 70,982 shares held by HCMLP, (v) 84,514 shares held by PCMG Trading Partners XXIII, LP ("PCMG"), (vi) 2,275 held by the Highland Equity Focus Fund, L.P. ("HEFF"), (vii) 137,896.779 shares held by the Option Plan,(viii) 597,200 shares held by the Highland 401(k) Plan (the "401(k) Plan") and (ix) 111,600 shares held by the Retirement Plan and Trust.

3. HCMLP is the investment advisor for Prospect Street High Income Portfolio, Inc. HCMLP maintains the 401(k) Plan, the Option Plan and the Retirement Plan and Trust for the benefit of its employees. Mr. Dondero is the President of HCMLP and the trustee of Canis Major, Canis Minor, the 401(k) Plan and the Retirement Plan and Trust, as well as a participant in the 401(k) Plan and Retirement Plan and Trust. Each of CDO, HEFF and PCMG are controlled by HCMLP. Each of the Option Plan, the 401(k) Plan and Retirement Plan and Trust expressly disclaims beneficial ownership of the securities reported herein. Each of CDO, HEFF, PCMG, Canis Major, Canis Minor, HCMLP and Mr. Dondero expressly disclaims beneficial ownership of the securities reported herein, except to the extent of their pecuniary interest therein.

4. Shares purchased by the 401(k) Plan.

Remarks:

	/s/ James Dondero	04/12/2007
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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