Bethesda, MD -- American Capital Strategies, Ltd. (Nasdaq:ACAS) announced today that a subsidiary has issued investment grade securities backed by $153.9 million of senior and subordinated business loans originated by American Capital. The $153.9 million of senior and subordinated business loans were contributed to ACAS Business Loan Trust 2000-1, a wholly owned, limited purpose indirect subsidiary of American Capital. First Union Securities Inc., a subsidiary of First Union Corp. (NYSE: FTU), is structuring agent and placement agent. With this securitization, the Company has raised over $250 million in debt and equity capital this year and has approximately $800 million in capital resources.
The private placement is American Capital's first term securitization. The note offering to investors consists of a $69.2 million A class of notes and a $46.2 million B class of notes. A $38.5 million C class of notes is not being offered to investors. The Company is treating the transaction as a financing on its balance sheet. The A and B class notes were rated by the rating agencies as follows:
Class of
Note Fitch Moody's S&P
---- ----- ------- ---
A AAA Aaa AAA
B A+ A1 A
The Class A notes were priced at LIBOR plus 45 basis points and the Class B notes were priced at LIBOR plus 150 basis points.
"This securitization is an important step in the maturation of our balance sheet. We are now able to layer in term debt to continue to prudently leverage our business. Access to this diversified funding source also broadens our sources of capital," said American Capital CFO John Erickson. "We securitized all of our grade 3 and 4 loans except for loans that were most recently originated and loans that are expected to prepay in the near term."
"We believe that the rating agencies' underwriting and scrutiny of our assets is another indication of our ability to originate and manage high quality assets," said American Capital Chairman and CEO Malon Wilkus. "Our equity holders now have another source of information about American Capital's credit quality as the rating agencies continue to scrutinize the asset pool."
American Capital is a publicly traded buyout and mezzanine fund. American Capital is an equity partner in management and employee buyouts; invests in debt and equity of companies led by private equity firms, and provides capital directly to private and small public companies. American Capital funds growth, acquisitions and recapitalizations.
Companies interested in learning more about American Capital's flexible financing and ability to provide senior debt, subordinated debt and equity should contact Mark Opel, Principal, at (800) 248-9340, or visit our website.This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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.
The securities referred to herein have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act. This announcement does not constitute an offer to sell or the solicitation of any offer to buy any of the securities. This announcement appears as a matter of record only.
