Capital Raising Press Release
|American Capital Closes Managed CLO for $400 Million|
Bethesda, MD – June 25, 2007 – American Capital Strategies Ltd. (Nasdaq: ACAS) (“American Capital”) announced today the expansion of its alternative asset management business through the issuance of a $400 million collateralized loan obligation (“CLO”), ACAS CLO 2007-1 Ltd. (“ACAS CLO 2007-1”). ACAS CLO 2007-1 is invested primarily in middle market and broadly syndicated senior secured loans. The bonds issued by ACAS CLO 2007-1 to finance these assets included Aa1/AAA/AAA through Ba2/BB/BB rated tranches, and a non-rated equity tranche. American Capital Asset Management, LLC (“American Capital Asset Management”), a wholly-owned portfolio company of American Capital, manages ACAS CLO 2007-1, in exchange for an annual management fee of 67.5 basis points and an incentive fee of 20% of the return on the non-rated tranche, subject to certain hurdles.
American Capital purchased $25.9 million of the non-rated equity tranche and $8.5 million of the Ba2/BB/BB tranche of ACAS CLO 2007-1. Third party investors purchased the remaining $11.1 million of the non-rated equity tranche and the remaining $7 million of Ba2/BB/BB rated notes.
“ACAS CLO 2007-1 continues a long history by American Capital and its affiliates of issuances and investments in CLOs,” said John Hooker, American Capital Vice President, Debt Capital Markets. “Since 2000, American Capital has issued nine consolidated CLOs totaling $3.3 billion, which have provided us with low cost debt capital. American Capital has also invested $248 million over the past five years in the non-rated tranches of 20 CLOs, totaling $9.6 billion in investment funds managed by third parties. This is our first American Capital Asset Management CLO.”
“We are delighted to have contributed to American Capital’s asset management strategy by launching the first of a series of American Capital Asset Management CLOs,” said Mark Pelletier, American Capital Senior Vice President and Managing Director, CDO and CLO Group.
“Launching ACAS CLO 2007-1 is an exciting development in American Capital’s alternative asset management strategy,” said Tom McHale, American Capital Senior Vice President, Finance. “With the addition of this fund, American Capital now has approximately $4 billion of third party funds under management generating recurring management fees, and over $8 billion of assets managed on our balance sheet.”
ABOUT AMERICAN CAPITAL
American Capital is the third largest U.S. publicly traded alternative asset manager with $12 billion in assets under management (third to The Blackstone Group (NYSE: BX) and Fortress (NYSE: FIG)). 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 €5 million to €500 million per company in Europe.
These securities have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States or to U.S. persons except in accordance with the resale restrictions applicable thereto. These securities having been previously sold, this announcement appears as a matter of record only.
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.www.americancapital.com
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