ACAS American Capital, Ltd.

BETHESDA, Md., Aug. 21 /PRNewswire-FirstCall/ -- American Capital Strategies Ltd. (NASDAQ:ACAS) announced today it is providing $21 million in debtor-in-possession financing to Berry-Hill Galleries Inc., a leading New York-based fine arts gallery specializing in eighteenth, nineteenth and early twentieth century American paintings. Berry-Hill is currently operating under Chapter 11 of the United States Bankruptcy Code. American Capital's loan is secured by Berry-Hill's prime Manhattan real estate and its substantial art inventory. "We are very pleased to enable this fine family business to refinance its pre-petition secured debt and to provide breathing room for the debtor and its creditors to formulate a plan of reorganization," said American Capital Managing Director Gordon O'Brien. "This transaction demonstrates the ability of our Special Situations Group to evaluate challenged businesses across a wide range of industries and to respond swiftly with flexible capital." American Capital has invested approximately $4.7 billion in the last twelve months, $3 billion year to date and $549 million quarter to date. These amounts do not include American Capital's unfunded equity commitment and debt funded to its portfolio company European Capital. Established in the first quarter of 2005, American Capital's Special Situations Group has a total portfolio value of $164 million in five companies. It represents 2% of American Capital's total assets as of June 30, 2006. For more information about American Capital's portfolio, go to http://www.acas.com/our_portfolio/our_portfolio.cfm. "Berry-Hill operates a highly regarded gallery with a prime location in the heart of New York City's Upper East Side museum and gallery district. Over four generations, the Hill family has established a deep knowledge of fine art, an impressive art portfolio and strong relationships throughout the art world," said American Capital Principal Myung Yi. "As a result of these factors, we were able to get comfortable with an atypical asset base in order to provide the debtor with a superior solution under a tight timeframe." Berry-Hill has been based in Manhattan since the 1930s and has acquired an outstanding reputation for its expertise in Early American paintings. Its collection includes works by Winslow Homer, Frederic Church, John Singer Sargent and Jackson Pollock. In addition, the gallery deals in contemporary American art and modern European paintings, as well as Old Masters. Customers also regularly turn to Berry-Hill for consignment and participation art sales. "After carefully considering all of our alternatives, we determined American Capital to be our ideal partner," said Berry-Hill Galleries co-owner James Berry Hill. "During my family's most challenging period in our long- standing business, American Capital quickly produced an attractive proposal, skillfully navigated the bankruptcy process and provided a timely solution." "Now that we have received our debtor-in-possession financing and paid off our pre-petition secured lender, we will immediately turn our full attention to working with unsecured creditors to draft a mutually-acceptable plan of reorganization," said Berry-Hill Galleries co-owner Frederick D. Hill. "We expect that having a patient and resourceful financial partner like American Capital will significantly enhance the long-term value of our family's business." ABOUT AMERICAN CAPITAL American Capital is a publicly traded buyout and mezzanine fund with capital resources of $8.9 billion. American Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts, provides capital directly to early stage and mature private and small public companies and through its asset management business is a manager of debt and equity investments in private companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations. American Capital invests up to $350 million per company. As of July 31, 2006, American Capital shareholders have enjoyed a total return of 420% since the Company's IPO -- an annualized return of 20%, assuming reinvestment of dividends. American Capital has paid a total of $1.2 billion in dividends and paid or declared $21.56 dividends per share since its August 1997 IPO at $15 per share. Companies interested in learning more about American Capital's flexible financing should contact Mark Opel, Senior Vice President, Business Development, at (800) 248-9340, or visit http://www.americancapital.com/. Performance data quoted above represents past performance of American Capital. Past performance does not guarantee future results and the investment return and principal value of an investment in American Capital will likely fluctuate. Consequently, an investor's shares, when sold, may be worth more or less than their original cost. Additionally, American Capital's current performance may be lower or higher than the performance data quoted above. This press release contains forward-looking statements. The statements regarding expected results of American Capital Strategies 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. DATASOURCE: American Capital Strategies Ltd. CONTACT: Myung Yi, Principal, Special Situations or Brian Maney, Director, Corporate Communications, of American Capital Strategies Ltd., +1-301-951-6122 Web site: http://www.americancapital.com/

Copyright