ACAS American Capital, Ltd.

BETHESDA, Md., Nov. 15 /PRNewswire-FirstCall/ -- American Capital Strategies Ltd. ("American Capital" or the "Company") (NASDAQ:ACAS) announced today it plans to make a public offering of approximately 4 million shares of its common stock, subject to market conditions, all of which are being offered by Morgan Stanley & Co. Incorporated, Bear, Stearns & Co. Inc. and UBS Investment Bank or certain of their respective affiliates (the "Counter- Parties" and each, a "Counter-Party") in connection with agreements to purchase common stock from American Capital at a future date. The Company has granted the underwriters an option to purchase up to an additional 600,000 shares to cover over-allotments. Morgan Stanley & Co. Incorporated, Bear, Stearns & Co. Inc. and UBS Investment Bank are joint book-running managers for the offering. RBC Capital Markets Corporation, Ferris, Baker Watts, Incorporated and Morgan Keegan & Company, Inc. are the co-managers for the offering. The offering will be made under American Capital's existing shelf registration statement filed with the Securities and Exchange Commission. In connection with the offering, American Capital will enter into agreements (the "Forward Sale Agreements") with the Counter-Parties under which American Capital will agree to sell to the Counter-Parties in the aggregate 4 million shares of common stock (or a smaller number of shares) at the offering price per share (the "Offering Price"), subject to certain adjustments. The timing of these sales, which must occur within the next year, will generally be determined by American Capital. The Company will physically settle each Forward Sale Agreement by delivering shares of common stock to the Counter- Party under the relevant Forward Sale Agreement and such Counter-Party will deliver the Offering Price subject to certain adjustments to the Company upon each settlement. In connection with hedging their respective exposures under the Forward Sale Agreements, the Counter-Parties are expected to borrow from third party lenders and sell in the aggregate 4 million (or such smaller number of shares that they are able to borrow) of the offered shares of the Company's common stock at the close of this offering at the Offering Price. American Capital expects to use substantially all of the net proceeds from the sale of its shares pursuant to over-allotments, and the subsequent sale of shares under the Forward Sale Agreements, if any, to reduce the borrowings under American Capital's existing revolving credit facilities and to fund investments. Reducing borrowings under the revolving credit facilities will create availability under these facilities, which will generally be used for funding future American Capital investments and general corporate purposes. This press release is neither an offer to sell nor a solicitation of an offer to buy shares of common stock. The offering of these securities will be made only by means of a prospectus and a related prospectus supplement. When available, copies of the prospectus and prospectus supplement may be obtained from Morgan Stanley & Co. Incorporated, 180 Varick Street 2/F, New York, NY 10014 (telephone number 1-866-718-1649 and email ), Bear, Stearns & Co. Inc., 383 Madison Avenue, New York, New York 10179 (telephone number 1-866-803-9204) or UBS Investment Bank, Prospectus Department, 299 Park Avenue, New York, NY 10171 (telephone number 212-821-3000). ABOUT AMERICAN CAPITAL American Capital is the only alternative asset management company that is a member of the S&P 500. With $19 billion in capital resources under management, American Capital is the largest U.S. publicly traded private equity fund and one of the largest publicly traded alternative asset managers. American Capital, both directly and through its global asset management business, is an investor in management and employee buyouts, private equity buyouts, and early stage and mature private and public companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations. American Capital and its affiliates invest from $5 million to $800 million per company in North America and euro 5 million to euro 500 million per company in Europe. 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. DATASOURCE: American Capital Strategies Ltd. CONTACT: John Erickson, Chief Financial Officer, Tom McHale, Senior Vice President, Finance, or Justin Cressall, Vice President, Equity Capital Markets, all of American Capital Strategies Ltd., +1-301-951-6122 Web site: http://www.americancapital.com/

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