NEWS

Bethesda, MD - April 30, 2002 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today its results for the quarter ended March 31, 2002. Net operating income (NOI) for the quarter increased 54% to $23.3 million compared to $15.1 million for first quarter 2001. On a diluted per share basis, NOI for the first quarter of 2002 increased 15% to $0.61 compared to $0.53 per share for the first quarter of 2001.

The net increase in shareholders' equity resulting from operations (NOI plus net realized gains and losses and net unrealized appreciation and depreciation of our assets) for the first quarter was $3.6 million compared to a net decrease of $9.9 million in the first quarter of 2001. On a diluted per share basis, the net increase in shareholders' equity resulting from operations for the first quarter of 2002 was $0.09 per share compared to a decrease of $0.35 in the first quarter of 2001.

"The investment climate could not be more attractive. The first quarter of 2002 was American Capital's strongest first quarter ever, with new investments more than double first quarter 2001," said Chairman, President and CEO Malon Wilkus. "Given current economic conditions, our portfolio is doing reasonably well. Our hands-on, secured investment approach makes it possible for our internal operating team to have a material impact on the performance of some of our companies. In the meantime, we are making new investments at excellent valuations as the demand for our capital has never been greater."

In the first quarter of 2002, American Capital completed 13 financing transactions totaling $108.9 million, an increase of 109% over the first quarter of 2001's total of $52.1 million. First quarter 2002 transactions were composed of $34.5 million of senior debt, including $4.5 million of unfunded commitments (of which $13.5 million has been repaid in the second quarter through third party senior financing), $53.1 million of subordinated debt, $6.9 million of preferred stock, $5.0 million of common stock, and $9.4 million of warrants.

During the quarter, American Capital completed a $196 million on-balance sheet securitization at a blended borrowing cost, including interest rate swaps, of approximately 6.3% at March 31, 2002. The two senior tranches of the securitization totaling $147 million were rated by Moody's, S&P & Fitch and sold to investors. The A tranche, representing 50% of the entire pool, was rated Aaa/AAA/AAA and the B tranche, representing 25%, was rated A2/A/A+.

"Closing our second term debt securitization in a difficult economic environment is a great accomplishment. This allows us to continue to leverage our equity capital with debt that is perfectly matched to the underlying assets and yields the lowest cost of debt capital available," said CFO John Erickson. "While the economy continues to impact credit quality, we did see general improvements in orders, revenues and cash flow in the first quarter over the prior quarter. We have also made substantial progress working with our underperforming portfolio companies. Many of them are seeing EBITDA trending upward, so we are optimistic that by the second half of 2002 we will see an improvement in credit statistics."

"A byproduct of today's environment is the availability of talented professionals. We have been one of the most active firms in the industry, hiring 4 principals, 9 associates and 14 CPAs, a total of 27 transaction professionals since September 2001. American Capital's capacity is growing along with our portfolio and our ability to invest in and manage middle market companies has never been stronger," said COO Ira Wagner. "We have the people, the capital and the relationships to keep growing our middle market franchise."

The weighted average interest rate on the total capital invested during the quarter was 12.2%. This partially reflects the higher proportion of senior debt that ACAS is funding to accommodate transactions that may not otherwise close. The weighted average interest rate on American Capital's total capital invested as of March 31, 2002 was 13.7%. As of March 31, 2002, eight loans totaling $72.7 million were on non-accrual. The weighted average grade of American Capital's loan portfolio remained constant at 2.9 on a scale of 1 to 4, with 4 being the highest quality.

American Capital had unrealized appreciation of $9.8 million at 7 portfolio companies. Unrealized appreciation was offset by $31.6 million of unrealized depreciation at 15 portfolio companies in the first quarter. In addition, the interest rate swaps required as part of the term securitizations had $2.1 million of appreciation, making the total net depreciation $19.7 million.

Since its August 1997 IPO, American Capital has invested over $1 billion in over 65 portfolio companies. As of March 31, 2002, American Capital shareholders have enjoyed a total return of 197% since the IPO -- an annualized return of 27%. This assumes reinvestment of $8.35 in dividends paid per share during this period. On April 25, 2002 American Capital declared a $0.63 per share dividend for the second quarter, representing a 15% increase over the prior year second quarter.

For additional information click here. Financial highlights for the quarter are as follows.

AMERICAN CAPITAL STRATEGIES, LTD. Consolidated Balance Sheets (In thousands except per share data) March 31, 2002 December 31, 2001 Assets Cash and cash equivalents $2,041 $18,890 Investments at fair value (cost of $1,000,945 and $882,731, respectively) 951,604 858,266 Interest receivable 13,401 12,957 Other 16,673 14,071 Total assets $983,719 $904,184 Liabilities and Shareholders' Equity Revolving credit facility $107,890 $147,646 Notes payable 244,676 103,495 Accrued dividends payable -- 3,420 Other 8,063 9,358 Total liabilities $360,629 $263,919 Shareholders' equity Undesignated preferred stock, $0.01 par value, 5,000 shares authorized, 0 issued and outstanding $-- $-- Common stock, $.01 par value, 70,000 shares authorized, and 38,315 and 38,017 issued and outstanding, respectively 383 380 Capital in excess of par value 706,558 699,291 Notes receivable from sale of common stock (32,205) (27,143) Distributions in excess of net realized earnings (3,538) (3,823) Net unrealized depreciation of investments (48,108) (28,440) Total shareholders' equity 623,090 640,265 Total liabilities and shareholders' equity $983,719 $904,184

AMERICAN CAPITAL STRATEGIES, LTD. Consolidated Statements of Operations (In thousands except per share data) Three Months Ended March 31, 2002 Three Months Ended March 31, 2001 Operating income: Interest and dividend income $28,268 $20,766 Fees 4,373 1,927 Total operating income 32,641 22,693 Operating expenses: Interest 2,236 3,524 Salaries and benefits 4,325 2,369 General and administrative 2,829 1,748 Total operating expenses $9,390 $7,641 Net operating income 23,251 15,052 Net realized gain on investments 57 24 Decrease in net unrealized appreciation of investments (19,691) (24,978) Net increase (decrease) in shareholders' equity resulting from operations $3,617 $(9,902) Net operating income per common share: Basic $0.62 $0.54 Diluted $0.61 $>0.53 Earnings (loss) per common share: Basic $0.10 $(0.36) Diluted $0.09 $(0.35) Weighted average shares of common stock outstanding: Basic $37,477 $27,856 Diluted $38,374 $28,278 Dividends declared per common share $0.59 $0.53

Portfolio Statistics On a Weighted Average Basis* ($ in millions): Aggregate 2001 Static Pool 2000 Static Pool 1999 Static Pool Pre-1999 Static Pool Original Investments at Cost $1,125 $390 $275 $177 $171 Total Exits and Prepayments $115 $-- $37 $17 $61 Realized Gain on Investments $14 $-- $2 $4 $8 Current Cost of Original Investments $988 $378 $240 $150 $115 Fair Value of Investments $945 $383 $210 $149 $99 Non-Accruing Loans $73 $-- $35 $16 $22 Interest Coverage 2.2 2.2 1.9 2.5 2.0 Debt Service Coverage 1.5 1.6 1.3 1.6 1.7 Debt to EBITDA 5.9 5.0 6.7 5.2 10.2 Investment Grade 2.9 3.0 2.7 3.2 2.7 Average Age of Companies** 43 years 44 years 42 years 52 years 39 years Total Sales** $5,918 $2,624 $711 $1,493 $938 Average Sales** $118 $166 $95 $92 $102 Total EBITDA** $601 $267 $80 $154 $67 Average EBITDA** $14 $17 $14 $11 $9 Ownership Percentage** 41% 36% 43% 40% 39% % with Senior Lien*** 22% 28% 23% 7% 18% % with Senior or Junior Lien*** 84% 71% 90% 93% 84%

*These amounts do not include investments in which American Capital owns only equity.
**Includes American Capital's equity investment in Electrolux and o2wireless Solutions.
***As a percentage of American Capital's total debt investments.

American Capital invites prospective shareholders, shareholders and analysts to attend the American Capital Shareholder Call on Wednesday, May 1 at 11:00 am ET. The dial in number is 800-230-1085. International callers should dial 612-288-0337. Please advise the operator you are dialing in for the American Capital Shareholder Call.

A shareholder slide presentation will be made available here at the night of April 30th, a portion of which will be used during the Shareholder Call on May 1st. We hope that you will take the time to review the slides in advance of the Shareholder Call.

During the Shareholder Call, we invite you to turn to our shareholder website and click on the May 1st Shareholder Call Slide Show button to see the streaming slide presentation during the conference call at which slides will be presented and discussed by management.

The entire quarterly slide presentation will remain on the website and may be downloaded and printed. Supplementary information and a downloadable spreadsheet with summary financial data used to produce the slide presentation will be made available later in the week.

For the convenience of our shareholders, there will be a recording available from 6:00 pm May 1st to 11:00 pm May 12th. If you are interested in hearing the recording of the presentation, please dial 800-475-6701 and enter code 635539. International callers may dial 320-365-3844 and enter the same code, 635539. We will also have the streaming Shareholder slide presentation together with the audio of the conference call available on our website starting May 2nd.

For further information or questions, please do not hesitate to call our Shareholder Relations department at (301) 951-6122.

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 provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalizations. The Company has paid and declared $8.98 per share in dividends since going public in 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.