American Capital Announces Foreclosure of Executive's Stock Option Loans - 5 March 2009

American Capital Announces Foreclosure of Executive's Stock Option Loans
Thursday March 5, 6:00 pm ET

BETHESDA, Md., March 5 /PRNewswire-FirstCall/ -- American Capital Ltd. (or "the Company") (Nasdaq: ACAS - News)
announced today that on March 2, it foreclosed on the collateral
securing three loans, which had been extended by the Company in 2001 to
Malon Wilkus, its Chairman and Chief Executive Officer. The foreclosed
collateral consisted of 1,060,656 shares of the Company's common stock.
Under the terms of the loan agreements, the foreclosures occurred
automatically and extinguished the loans.

Mr. Wilkus' $5,021,109 in loans were evidenced by
Purchase Notes and Stock Option Exercise Agreements dated March 2,
2001, March 7, 2001, and December 12, 2001, copies of which had been
previously filed as exhibits to certain of the Company's filings with
the Securities and Exchange Commission. The loans had been extended as
part of a program then available to all American Capital employees to
fund the exercise of stock options under the Company's employee stock
option plans. The Company discontinued the employee stock option loan
program after the enactment of the Sarbanes-Oxley Act in June 2002;
although, in accordance with the Act, existing loans remained in place.

Mr.
Wilkus had originally pledged as collateral for the loans the 208,200
shares of common stock purchased with the proceeds of the loans and had
recently pledged the additional 852,456 shares of the Company's common
stock that were also foreclosed. Pursuant to the loan agreements, the
collateral value of the original shares was the greater of the common
stock's net asset value per share (NAV) and its fair market value,
based on the average of the closing prices for a share on 20-day
trailing average as reported on the NASDAQ National Market System (the
"Fair Market Value"). When the Compensation and Corporate Governance
Committee of the Company's Board of Directors accepted the additional
collateral, it valued those shares at their Fair Market Value.

As
a result of the recent decline in the NAV and Fair Market Value, Mr.
Wilkus' loans became under collateralized on March 1, which triggered
an automatic event of default and involuntary foreclosure by the
Company on the collateral in full satisfaction of his loans. At March
1, the NAV was $15.41 per share and the Fair Market Value was $2.13 per
share. The Company's NAV per share will increase as a result of the
foreclosure. In June 2008, Mr. Wilkus had repaid in cash his only other
employee stock option loan from the Company, which was in the amount of
$1,868,518.

"I have always prided myself on never selling a share
of American Capital stock," said Mr. Wilkus. "Over the years, I
purchased additional shares of stock on the market and through the
dividend reinvestment plan, some of it with the proceeds of borrowings.
In fact, from mid-2007 to mid-2008, I purchased almost 120,000 shares
on the market. Like many others, I never imagined that our stock could
trade at such a discount to its intrinsic value.

"As the stock
price declined in recent months, I used much of my personal resources
to repay outstanding loans to the Company and others, rather than
selling the stock in which I so strongly believe," continued Mr.
Wilkus. "This included pledging over 850,000 additional shares, which
were previously unencumbered, in order to provide additional collateral
for my stock loans from American Capital. Unfortunately, with the
latest decline in our NAV and stock price, I did not have the resources
to protect the loans any further and the foreclosure occurred. I remain
a substantial shareholder with over 630,000 vested and unvested shares
in the Company's Incentive Bonus Plan, most of which I am generally
unable to sell for eight years. I am completely focused on getting the
share price once again to reflect the Company's intrinsic value, which
will benefit all of our stockholders, including myself."

During
2002, the Company accelerated the maturity of $23 million in loans made
to 27 other employees under the Company's employee stock option loan
program, and foreclosed upon 981,000 shares of common stock as a result
of a significant decrease in the value of the Company's stock price.
Those shares are included in treasury stock and are not included in
outstanding shares of common stock. The Company has no further employee
stock option loans outstanding.

ABOUT AMERICAN CAPITAL

American
Capital is a publicly traded private equity firm and global asset
manager. American Capital, both directly and through its asset
management business, originates, underwrites and manages investments in
middle market private equity, leveraged finance, real estate and
structured products. Founded in 1986, American Capital currently has
$14 billion in capital resources under management and ten offices in
the U.S., Europe and Asia. For further information, please refer to www.AmericanCapital.com.

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.

    Contact:
    Investors - (301) 951-5917
    Media - (301) 968-9400

Source:
American Capital, Ltd.