American Capital Issues US$167 Million in Unsecured Debt

BETHESDA (Maryland) September 9 (PROTEXT/PRNewswire) -American Capital Strategies Ltd. (Nasdaq: ACAS) announced todayit has issued US$167 million of long-term unsecured five- andseven-year notes in a private placement. The five-year notes,which totaled US$82 million, have a fixed interest rate of 5.92%.The seven-year notes, which totaled US$85 million, have a fixedinterest rate of 6.46%. Net proceeds from the sale of the noteswill be used to repay outstanding indebtedness under the AmericanCapital's revolving credit facilities and for general corporatepurposes.

The securities referred to herein have not been registeredunder the Securities Act of 1933 and may not be offered or soldin the United States absent registration or an applicableexemption from the registration requirements of such Act. Thisannouncement does not constitute an offer to sell or thesolicitation of any offer to buy any of the securities. Thisannouncement appears as a matter of record only.ABOUT AMERICAN CAPITAL

As of August 31, 2004, American Capital shareholders haveenjoyed a total return of 281% since the Company's IPO -- anannualized return of 21%, assuming reinvestment of dividends.American Capital has paid a total of US$524 million in dividendsand paid or declared US$15.24 dividends per share since itsAugust 1997 IPO at US$15 per share.

American Capital is a publicly traded buyout and mezzaninefund with capital resources over US$3.6 billion. American Capitalis an investor in and sponsor of management and employee buyouts;invests in private equity sponsored buyouts; and provides capitaldirectly to private and small public companies. American Capitalprovides senior debt, mezzanine debt and equity to fund growth,acquisitions and recapitalizations. For more information aboutAmerican Capital, go to http://www.AmericanCapital.com.

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 or national economicconditions, or changes in the conditions of the industries inwhich American Capital has made investments.Web site: http://www.americancapital.comSource: American Capital Strategies Ltd.John Erickson, CFO, +1-301-951-6122, or Tom McHale, VicePresident, Finance and Investor Relations, +1-301-951-6122, bothof American Capital Strategies Ltd. FCMN Contact:Brian.Maney@AmericanCapital.com

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