Bethesda, MD - August 8, 2002 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that ACAS Business Loan Trust 2002-2, a wholly owned subsidiary of American Capital, has issued $157.9 million of investment grade securities backed by $210.5 million of senior and subordinated business loans originated by American Capital. Wachovia Securities acted as the structuring and placement agent.
American Capital and subsidiaries have raised $1.288 billion in debt and equity capital since American Capital's August 1997 IPO. Combined with principal repayments, this has allowed American Capital to make $1.344 billion of investments.
The private placement is American Capital's third term securitization. The first was a December 2000 issuance of $153.9 million of asset backed securities. The second, in March of this year, was an issuance of $196.4 million of asset backed securities. None of the securitizations have experienced a charge-off or ratings downgrade and all are booked as debt on American Capital's balance sheet.
The note offering to investors consists of a $105.3 million A class and a $52.6 million B class. A $52.6 million unrated C class of notes was not offered to investors. The A and B class notes were rated by three rating agencies as follows:
| Class of Note |
Fitch |
Moody's |
S&P |
|
| A |
AAA |
Aaa |
AAA |
| B |
A+ |
A2 |
A |
|
The Class A notes were priced at LIBOR plus 50 basis points and the Class B notes were priced at LIBOR plus 160 basis points. The total borrowing cost, including interest rate swaps and fees, is 5.3%. As of the end of the second quarter 2002, the weighted average interest rate on investments outstanding was 13.5%.
"American Capital subsidiaries are the leading issuers of middle market collateralized loan obligations (CLOs). We have completed three transactions; no other issuer has completed more than one. The pool of note holders has grown from nine in our 2000 offering to a total of 26," said CFO John Erickson. "We are extremely pleased that in a bear market we have been able to issue both debt and equity, raising over $200 million at excellent pricing in the course of 30 days."
"As American Capital approaches its fifth anniversary of being a public company, we are proud to have helped establish a new method of funding middle market loans. American Capital's third on-balance sheet securitization not only increases the amount of capital available for middle market companies, but it is an important indicator of the strength of our assets and the durability of our business model," said Chairman, President and CEO Malon Wilkus. "Our continuing ability to access low cost capital in the public and institutional markets gives us considerable competitive advantage over finite-life private equity and mezzanine funds, allowing us to grow our franchise and build shareholder value."
American Capital has a declared a $.66 per share dividend to be paid on October 1, 2002 to record holders as of September 12, 2002. This dividend is an 18% increase over the third quarter 2001 regular dividend of $0.56 per share. American Capital has paid or declared $9.64 in dividends since its August 1997 IPO at $15.00 per share.
American Capital is a publicly traded buyout and mezzanine fund with capital resources exceeding $1 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 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. 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.
