FOR IMMEDIATE RELEASE:
September 7, 2007

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

AMERICAN CAPITAL PRICES PUBLIC OFFERING OF COMMON STOCK

Bethesda, MD – September 7, 2007 – American Capital Strategies Ltd. (“American Capital” or the “Company”) (Nasdaq: ACAS) announced today it has priced its public offering of 6 million shares of its common stock at $39.40 per share (the “Initial Offering Price”).  All of the shares are being offered by Citigroup Global Markets Inc., UBS Securities LLC and Wachovia Capital Markets, LLC or certain of their respective affiliates (the “Counter-Parties” and each, a “Counter-Party”) in connection with agreements to purchase common stock from American Capital at a future date, as discussed below.  American Capital has granted the underwriters an option to purchase up to an additional 900,000 shares of common stock to cover over-allotments, which shares would be sold directly by the Company.  The offering is subject to customary closing conditions and is expected to close on Wednesday, September 12, 2007.

Citigroup Global Markets Inc., UBS Securities LLC and Wachovia Capital Markets, LLC are the joint-lead book-running managers for the offering.  A.G. Edwards & Sons, Inc., Robert W. Baird & Co. Incorporated, BB&T Capital Markets, a division of Scott and Stringfellow, Inc., William Blair & Company, L.L.C. and Stifel, Nicolaus & Company, Incorporated are co-managers for the offering.

The offering will be made under American Capital's existing shelf registration statement filed with the Securities and Exchange Commission. In connection with the offering, American Capital has entered into agreements (the "Forward Sale Agreements") with the Counter-Parties under which American Capital will agree to sell to the Counter-Parties in the aggregate 6 million shares of common stock (or a smaller number of shares) at the Initial Offering Price, subject to certain adjustments.  The timing of these sales, which must occur within the next year, will generally be determined by American Capital.  The Company will physically settle each Forward Sale Agreement by delivering shares of common stock to the Counter-Party under the relevant Forward Sale Agreement and such Counter-Party will deliver the Offering Price subject to certain adjustments to the Company upon each settlement.  In connection with hedging their respective exposures under the Forward Sale Agreements, the Counter-Parties are expected to borrow from third party lenders and sell in the aggregate 6 million (or such smaller number of shares that they are able to borrow) of the offered shares of the Company's common stock at the close of this offering at the Offering Price.

American Capital expects to use substantially all of the net proceeds from the shares of common stock being offered pursuant to the Forward Sale Agreements, which initially are valued at approximately $225 million, subject to certain adjustments, for general corporate purposes, including for the Company’s investment and lending activities and to repay indebtedness owed under existing revolving credit facilities.  Reducing borrowings under the revolving credit facilities will create availability under the facilities, which will generally be used for funding future American Capital investments and general corporate purposes.

This press release is neither an offer to sell nor a solicitation of an offer to buy shares of common stock.  The offering of these securities will be made only by means of a prospectus and a related prospectus supplement.  When available, copies of the prospectus and prospectus supplement may be obtained from Citi, Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, New York 11220 (telephone number: 718-765-6732), UBS Investment Bank, 299 Park Avenue, New York, NY 10171 or Wachovia Capital Markets, LLC, 375 Park Avenue, New York, New York 10152-4077, Attn: Equity Syndicate, equity.syndicate@wachovia.com.

ABOUT AMERICAN CAPITAL

American Capital is the only alternative asset management company that is a member of the S&P 500.  With $17 billion in assets under management¹, including its investments in externally managed funds, 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.

¹Assets Under Management is an estimate of internally and externally managed assets as of July 31, 2007 and does not include any fair value adjustments subsequent to June 30, 2007.

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.