Bethesda, MD - January 20, 2004 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today it has been repaid its $27 million subordinated debt investment in TransCore Holdings Inc., earning a $1.7 million realized gain and a 21% compounded annual return. TransCore's subordinated debt has been recapitalized by existing senior lenders. The repayment occurred in January and American Capital retains its warrant and preferred equity investments representing an approximately 8% ownership interest in TransCore.

"We have been delighted to participate in TransCore's growth," said American Capital Principal and Managing Director Darin Winn. "The combination of TransCore's strong management, incentivized employee-owners and the support of KRG, its majority owner, is producing a winning investment for American Capital."

TransCore is a technology-based transportation services company with leading market positions in toll collection, traffic management, asset tracking and freight management. American Capital initally invested $7.3 million in subordinated debt with warrants and preferred stock in September 1999 to support the acquisition of TransCore by management and KRG Capital Partners. In June 2000, American Capital also invested $20.2 million in subordinated debt with warrants and preferred stock to support TransCore's acquisition of Amtech, Inc. In February 2001, American Capital invested approximately $2 million in TransCore's acquisition of DAT Services.

For more information about the transactions click here.

For a chart listing American Capital's exited portfolio companies click here.

As of December 31, 2003, American Capital shareholders have enjoyed a total return of 247%since the Company's IPO - an annualized return of 22%, assuming reinvestment of dividends. American Capital has paid a total of $13.12 per share in dividends since its August 1997 IPO.

American Capital is a publicly traded buyout and mezzanine fund with capital resources in excess of $2.5 billion. American Capital is an equity partner in management and employee buyouts; invests in private equity sponsored buyouts, and provides capital directly to private and small public companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalizations.

Companies interested in learning more about American Capital's flexible financing should contact Mark Opel, Principal, at (800) 248-9340, or visit our website.

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 or national economic conditions, or changes in the conditions of the industries in which American Capital has made investments.

Contact:
John Erickson, Chief Financial Officer (301) 951-6122
Brian Maney, Director, Corporate Communications (301) 951-6122

SOURCE: American Capital Ltd.