FOR IMMEDIATE RELEASE:
July 27, 2007

Contact
Natasha Volyanskaya, Principal (415) 591-0120
Eric Heith, Vice President (415) 591-0120
Brian Maney, Director, Corporate Communications (301) 951-6122

AMERICAN CAPITAL AND UBS UNDERWRITE $710 MILLION IN COMMITTED FINANCING FOR APPLESEED’S BRANDS

Bethesda, MD – July 27, 2007 – American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that it has arranged, together with UBS Securities LLC, a $710 million committed financing package for Appleseed’s Brands, the largest multi-channel marketer of private label apparel for men and women aged 55 and over.  The investment supports Appleseed’s Brands’ recent acquisitions and the refinancing of existing debt.  American Capital is serving as Joint Lead Arranger and Administrative Agent for the facilities and has funded $480 million in a revolving credit facility, first and second lien loans and junior notes at closing.  UBS is serving as Joint Lead arranger for the facilities and has funded $230 million in a revolving credit facility and first lien loans.  Following the syndication of the first lien facilities, American Capital will hold the majority of the $200 million second lien facilities and $50 million in junior notes.  Golden Gate Capital is the equity sponsor.

“We are delighted to be leading this transaction as we continue to support the growth of Golden Gate Capital’s catalog portfolio,” said Darin Winn, American Capital Regional Managing Director.  “We have now partnered with Golden Gate seven times over 18 months in highly successful collaborations.  They have again chosen us as their partner from an intensely competitive field due to our deep understanding of the Company’s business, ability to syndicate the first lien facilities post-closing and to hold the second lien facility. ”

American Capital has invested directly and through its funds under management over $11 billion in the last twelve months, over $7 billion year to date and approximately $990 million quarter to date.  Not including funds under management, American Capital has invested over $8 billion in the last twelve months, approximately $5.4 billion year to date and approximately $800 million quarter to date.  For more information about American Capital’s portfolio, click here.

“Golden Gate Capital has established an unparalleled track record of achieving significant operational improvements across its rapidly growing and diverse multi-channel marketing portfolio,” said Natasha Volyanskaya, American Capital Principal. “Led by a world-class management team, Appleseed’s Brands has established itself as the leading multi-channel marketer of apparel for the aging baby boomer generation—the fastest-growing U.S. demographic.”

Appleseed’s Brands, the largest direct marketer of private label apparel for men and women aged 55 and over in the U.S., was formed in 2005 when Golden Gate Capital bought Johnny Appleseed’s and The TOG Shop. During 2005, the Company also purchased Draper’s and Damon’s and then acquired Norm Thompson Outfitters and Haband the following year. Appleseed’s manages eight catalogs, each targeting a distinct profile of mature women and together providing merchandise across the entire price-point spectrum. Appleseed’s uses a combination of catalogues, letter mailings and the Internet for direct marketing. The Company is headquartered in Beverly, MA.

“We selected American Capital as our financing partner once again due to their attractive and flexible financing structure, ability to hold junior debt tranches and high level of professionalism,” said Joshua Olshansky, Golden Gate Capital Principal. “American Capital has played a critical role in facilitating our growth strategy within the multi-channel marketing industry and we are pleased with their continued commitment and our growing partnership.

ABOUT AMERICAN CAPITAL

American Capital is the only alternative asset management company that is a member of the S&P 500.  With $15¹ billion in assets under management, American Capital is the largest U.S. publicly traded private equity fund and one of the largest publicly traded alternative asset managers.  American Capital, both directly and through its global asset management business, is an investor in management and employee buyouts, private equity buyouts, and early stage and mature private and public companies.  American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations.  American Capital and its affiliates invest from $5 million to $800 million per company in North America and €5 million to €500 million per company in Europe.

As of June 30, 2007, American Capital shareholders have enjoyed a total return of 578% since the Company's August 1997 IPO—an annualized return of 22% assuming reinvestment of dividends.  American Capital has paid a total of $1.7 billion in dividends and paid $24.24 dividends per share since IPO at $15 per share.

Companies interested in learning more about American Capital's flexible financing should contact Mark Opel, Senior Vice President, Business Development, at (800) 248-9340, or visit www.AmericanCapital.com or www.EuropeanCapital.com.

ABOUT GOLDEN GATE CAPITAL

Golden Gate Capital is a San Francisco-based private equity investment firm with approximately $3.4 billion of capital under management. In addition to Appleseed Brands, American Capital has invested with Golden Gate in six other portfolio companies, including Inovis International Inc., a leading provider of business-to-business (B2B) software and services; Aspect Software Inc., the leading provider of contact center software solutions for businesses worldwide; Appleseed’s Inc. and The Tog Shop, the leading direct marketers of specialty apparel; Haband Inc., one of America’s oldest direct mail-order houses; and Venus Swimwear Inc., a leading direct marketer of women’s swimwear and sportswear.

Performance data quoted above represents past performance of American Capital. Past performance does not guarantee future results and the investment return and principal value of an investment in American Capital will likely fluctuate. Consequently, an investor's shares, when sold, may be worth more or less than their original cost. Additionally, American Capital's current performance may be lower or higher than the performance data quoted above.

This press release contains forward-looking statements. The statements regarding expected results of American Capital 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.

¹Includes internally and externally managed assets at fair value as of 3/31/07, including our investments in externally managed funds, plus investments at cost through 6/30/07 and less repayments through 6/30/07.

This announcement is neither an offer to sell nor a solicitation to buy securities.
This announcement appears as a matter of record only.