FOR IMMEDIATE RELEASE:
August 3, 2005

Contact
John Erickson, Chief Financial Officer (301) 951-6122
Tom McHale, Vice President, Finance and Investor Relations (301) 951-6122

AMERICAN CAPITAL ISSUES $126 MILLION IN UNSECURED DEBT

Bethesda, MD - August 3, 2005 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today it has issued $126 million of long-term unsecured five-year notes in a private placement. The notes have a fixed interest rate of 6.14%. Net proceeds from the sale of the notes will be used to repay outstanding indebtedness under American Capital's revolving credit facilities and for general corporate purposes.

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.

ABOUT AMERICAN CAPITAL

American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $5.4 billion. American Capital invests in and sponsors management and employee buyouts, invests in private equity 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.

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