American Capital to Prepay $107 Million of Outstanding Debt

BETHESDA, Md., Nov. 12, 2010 /PRNewswire-FirstCall/ -- American Capital Ltd. (Nasdaq: ACAS) (the "Company") announced that it has given notice today to the holders of its secured debt due in 2013 that it will voluntarily prepay $107 million of the debt on November 29, 2010.   With this prepayment, the amount outstanding under such secured debt will be less than $1.0 billion, causing the interest rate on the remaining debt to decline to the lowest level under the governing debt agreements.

The Company's fixed rate notes, representing 83% of the remaining secured debt, will bear interest at an annual rate of 7.96% and its secured loans and floating rate notes will have an annual interest rate of LIBOR plus 550 basis points, with a 2% LIBOR floor.  These rates are 1% less than the rates currently being paid.

The secured debt is due in December 2013 and was issued by the Company in June 2010 in connection with the refinancing of the Company's $2.4 billion of then-outstanding unsecured indebtedness.  The Company voluntarily prepaid $200 million of the secured debt in the third quarter of the year.  With the voluntary prepayments, there is no scheduled amortization of the remaining secured debt until June 30, 2013.

With this payment, American Capital will have reduced its total debt by $3.0 billion since its peak at the end of the second quarter of 2007.

ABOUT AMERICAN CAPITAL

American Capital is a publicly traded private equity firm and global asset manager.  American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate and structured products.  Founded in 1986, American Capital has $18 billion in capital resources under management and eight offices in the U.S., Europe and Asia.  American Capital and its affiliates will consider investment opportunities from $5 million to $100 million.  For further information, please refer to www.AmericanCapital.com.

This press release contains forward-looking statements. The statements regarding expected results of American Capital are subject to various factors and uncertainties, including the uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions or changes in the conditions of the industries in which American Capital has made investments.

SOURCE American Capital Ltd.