American Capital Completes Public Offering of Common Stock

BETHESDA (Maryland, USA) September 24 (PROTEXT/PRNewswire) -American Capital Strategies Ltd. ("American Capital" or the"Company") (Nasdaq: ACAS) announced today it has closed on itspreviously announced common stock offering. As a result,11,500,000 shares of common stock were sold at US$31.60 per share(the "Offering Price"). Of those shares, 2,500,000 were offereddirectly by the Company and 9,000,000 were sold in connectionwith agreements to purchase common stock from American Capitalfor delivery at future dates (the "Forward Sale Agreements"), asdiscussed below.

Wachovia Capital Markets, LLC, Citigroup Global Markets Inc.,J.P. Morgan Securities Inc., UBS Securities LLC, A.G. Edwards &Sons, Inc. and Legg Mason Wood Walker, Incorporated were theunderwriters for the offering. The joint book-running managersfor the offering were Wachovia Capital Markets, LLC and CitigroupGlobal Markets Inc. J.P. Morgan Securities Inc. served as thesole structuring agent for the Forward Sale Agreements.

The offering was made under American Capital's existing shelfregistration statement filed with the Securities and ExchangeCommission. In connection with the offering, American Capitalentered into the Forward Sale Agreements with an affiliate ofJ.P. Morgan Securities Inc., Citigroup Global Markets Inc. and anaffiliate of Wachovia Capital Markets, LLC (the "ForwardPurchasers"), under which the Forward Purchasers (or theiraffiliates) agreed to borrow and sell to retail and institutionalinvestors 9,000,000 shares of the Company's common stock at theOffering Price. Under the Forward Sale Agreements, the ForwardPurchasers will be required to buy and the Company will berequired to sell a total of 9,000,000 shares of common stock, atsuch times as the Company elects, over the next twelve months.The Company will physically settle all transactions under theForward Sale Agreements by delivering shares of common stock andthe Forward Purchasers will deliver the Offering Price less theunderwriting discount, subject to certain adjustments, upon eachsettlement.

American Capital expects to use substantially all of the netproceeds from the direct sale of 2,500,000 shares of its commonstock of approximately US$73,000,000, to reduce the borrowingsunder the Company's existing revolving credit facilities and tofund investments. American Capital expects to use substantiallyall of the net proceeds from the sale of its common stockpursuant to the Forward Sale Agreements, which initially arevalued at approximately US$272,000,000, primarily to reduce theborrowings under the Company's existing revolving creditfacilities and to fund investments. These repayments will createavailability under the facilities, which will generally be usedfor funding future American Capital investments and generalcorporate purposes.

This press release is neither an offer to sell nor asolicitation of an offer to buy shares of common stock. Theoffering of these securities will be made only by means of aprospectus and a related prospectus supplement. Copies of theprospectus and prospectus supplement may be obtained fromWachovia Capital Markets, LLC at 7 Saint Paul Street, 1st Floor,Baltimore, MD 21202, or Citigroup Global Markets Inc., 140 58thStreet, 8th Floor, Brooklyn, New York 11220 (telephone number: +1-718-765-6732).

American Capital is a publicly traded buyout and mezzaninefundwith capital resources exceeding US$4.2 billion. AmericanCapital is an investor in and sponsor of management and employeebuyouts, invests in private equity sponsored buyouts and providescapital directly to private and small public companies. AmericanCapital provides senior debt, mezzanine debt and equity to fundgrowth, acquisitions and recapitalizations.

This press release contains forward-looking statements. Thestatements regarding expected results of American CapitalStrategies are subject to various factors and uncertainties,including the uncertainties associated with the timing oftransaction closings, changes in interest rates, availability oftransactions, changes in regional, national and internationaleconomic conditions, and changes in the conditions of theindustries in which American Capital has made investments.Web site: http://www.americancapital.comSource: American Capital Strategies Ltd.Tom McHale, Vice President, Finance and Investor Relations ofAmerican Capital Strategies Ltd., +1-301-951-6122

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