ACAS American Capital, Ltd.

BETHESDA, Md., Dec. 21 /PRNewswire-FirstCall/ -- American Capital Strategies Ltd. (NASDAQ:ACAS) announced today that it has provided a $50 million acquisition line to Republic Financial Corporation ("Republic"), an investment firm with four primary business groups: Special Assets, Structured Finance, Private Equity and Aviation. American Capital's investment takes the form of a secured acquisition facility, which will be used to refinance existing debt, provide growth capital to certain Republic portfolio companies and provide the Special Assets Group with financing for future acquisitions. "We are pleased to provide financing to Republic's Special Assets Group," said Gordon O'Brien, American Capital Managing Director. "By providing the acquisition facility, we will gain exposure to the unique and proprietary deal flow that Republic's Special Assets Group generates. The group's focus is lower middle market companies in distress with $10 million or more in sales. This exposure will contribute to the diversification of the American Capital Special Situations Group's overall portfolio and both groups will benefit from the growing relationship." American Capital has invested directly and through its funds under management over $10 billion year to date and over $1.8 billion quarter to date. Not including funds under management, American Capital has invested over $7.5 billion year to date and over $1.5 billion quarter to date. American Capital has assisted in the refinance or syndication of approximately $1.7 billion of senior debt for its portfolio companies in the last 12 months and approximately $1.1 billion from July 2007 to date. For more information about American Capital's portfolio, go to http://www.americancapital.com/our_portfolio/our_portfolio.html. "Republic's Special Assets Group has extensive experience with complex distressed assets. Furthermore, we believe their demonstrated ability to take a contrarian investing approach is a competitive advantage," said American Capital Managing Director Myung Yi. "The success of the executives' active management and investment philosophy is reflected in the Company's track record of strong investment returns." "Republic's experienced management team and rigorous deal review process combine to create a steadfast investment discipline that hedges downside and generates superior risk-adjusted returns," said David McReynolds, American Capital Vice President. "The Special Assets Group is well positioned to acquire distressed debt and companies in the next wave of defaults with a veteran team of investment professionals that have been through many economic cycles over the course of their careers." Based in Aurora, CO, Republic has investment interests in a diverse pool of operating companies and assets, specializing in aviation, equipment leasing portfolios, private equity, structured finance transactions and distressed commercial debt. Since being founded in 1971, Republic has invested in assets and businesses totaling over $1 billion, achieving commercial success by developing creative solutions to difficult and complex business situations. "We look forward to the opportunity of working with the American Capital Special Situations Group," said Jim Possehl, Republic's Chairman and CEO. "The combination of both teams' knowledge and expertise in distressed assets, along with American Capital's competitive pricing, made our choice to partner with them an easy one." ABOUT THE AMERICAN CAPITAL SPECIAL SITUATIONS GROUP American Capital's Special Situations Group has the flexibility to invest from $20 million to $800 million per transaction in a variety of investments. The Special Situations Group targets distressed, turnaround and other complex investments, providing flexible capital and a wealth of turnaround experience to middle market companies. It targets buyouts across all industries involving operational turnarounds, section 363 auctions, corporate orphans, portfolio add-ons and complex management buyouts. It also provides DIP loans, exit financings, mezzanine financings for sponsored buyouts, second lien refinancings and direct lending to distressed companies. Companies interested in learning more about American Capital's Special Situations Group should contact Myung Yi, Managing Director at (301) 951-6122 or Dean Anderson, Managing Director at (312) 334-1446. ABOUT AMERICAN CAPITAL American Capital is the only alternative asset management company in 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. As of November 30, 2007, American Capital shareholders have enjoyed a total return of 511 percent since the Company's IPO, an annualized return of 19 percent, assuming reinvestment of dividends. American Capital has paid a total of $1.9 billion in dividends and paid or declared $26.16 dividends per share since going public in August 1997 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/ or http://www.europeancapital.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 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, Managing Director, Special Situations, +1-301-951-6122, or David McReynolds, Vice President, Special Situations, +1-310-806-6280, or Brian Maney, Director, Corporate Communications, +1-301-951-6122, all of American Capital Strategies Ltd. Web site: http://www.americancapital.com/ http://www.europeancapital.com/

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