FOR IMMEDIATE RELEASE:
October 10, 2005

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

AMERICAN CAPITAL COMPLETES $1 BILLION SECURITIZATION

Bethesda, MD - October 10, 2005 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that ACAS Business Loan Trust 2005-1, a wholly owned, consolidated affiliate of American Capital, has issued $830 million of investment grade notes backed by $1 billion of senior and subordinated business loans originated by American Capital. The blended pricing of the offered notes, excluding fees, is LIBOR plus 36 basis points.

The private placement note offering to investors consists of the following offered notes:

In addition to the offered notes above, American Capital retained all $90 million of the Class D notes, rated "BBB" by Fitch, and all $80 million of the Class E notes, which were not rated.

ABOUT AMERICAN CAPITAL

American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $6 billion. American Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts, provides capital directly to private and small public companies and through its asset management business is a manager of debt and equity investments in private companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalizations.

As of September 30, 2005, American Capital shareholders have enjoyed a total return of 407% since the Company's IPO - an annualized return of 22%, assuming reinvestment of dividends. American Capital has paid a total of $868 million in dividends and paid $18.29 dividends per share since its August 1997 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 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, national or international 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.