Bethesda, MD - March 15, 2002 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that a subsidiary has issued investment grade securities backed by $196.4 million of senior and subordinated business loans originated by American Capital. The $196.4 million of senior and subordinated business loans were contributed to ACAS Business Loan Trust 2002-1, a wholly owned, limited purpose indirect subsidiary of American Capital. Wachovia Securities acted as the structuring and placement agent. American Capital has raised over $1 billion in debt and equity capital since its August 1997 IPO.
The private placement is American Capital's second term securitization. The first, which has experienced zero charge-offs, was a December 2000 issuance of $153.9 million of investment grade securities.
The note offering to investors consists of a $98.2 million A class and a $49.1 million B class. 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+ |
A2 |
A |
|
The Class A notes were priced at LIBOR plus 50 basis points and the Class B notes were priced at LIBOR plus 150 basis points.
"We were the first issuer of term debt securities in our asset class and we are now the first repeat issuer. Our pool of bondholders has grown from 9 to 19," said CFO John Erickson. "This transaction is a strong testament to the overall quality of our portfolio despite the current condition of the economy. We had numerous institutions assess the quality of the assets that secure the debt issuance. This transaction also provides us with debt that is perfectly matched to the assets that secured the debt with respect to both interest rate and duration."
"Even though there has been a widening of spreads in the credit markets, we achieved similar all in pricing on this transaction compared with our first term debt issuance over a year ago," said Chairman, President and CEO Malon Wilkus. "We increased the AAA rated bonds from 45% of the transaction in our first term securitization to 50% of this financing. Issuing debt today allows us to lock in the current wide spreads between our cost of debt and the yield on our assets. We are very pleased to have funded a substantial portion of our balance sheet with such low cost capital, making American Capital extremely competitive and positioned to take advantage of tremendous opportunities in the middle market."
Jim Sigman, Wachovia Securities managing director commented, "We were very pleased with the response to the transaction. Investor interest was very strong, which reflects the growing demand for ABS product structured around middle market commercial loans."
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 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. American Capital has paid and declared $8.35 per share in dividends since its IPO in August of 1997.
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.
