American Capital Ltd. (Nasdaq: ACAS) announced today that its 2009 cash and stock dividend distribution of $1.07 per share consisted of $1.07 of ordinary income for federal income tax purposes.  American Capital also announced that the $1.07 of 2009 dividend income included $0.98 per share of non-qualified dividends and $0.09 per share of qualified dividends. The $0.09 per share of qualified dividends reflects qualified dividend income received by American Capital from portfolio companies in 2009.  Qualified dividend income is dividend income received from qualified domestic and foreign corporations.  Qualified dividend income is taxed to stockholders at the rates that apply to capital gains. Stockholders should consult their tax advisor as to how to report such income and their applicable capital gains tax rate.

Total ordinary dividends of $1.07 per share will be reported on the 2009 IRS Form 1099-DIV distributed to each American Capital stockholder regardless of whether a stockholder elected to receive cash or stock dividends. Stockholders should receive the 2009 Form 1099-DIV containing this information from their brokers, transfer agents or other institutions.

American Capital must make certain distributions of its taxable income in order to maintain its tax status as a regulated investment company.  Investors can refer to the Company's most recent report on SEC Form 10-K for more information about its tax status.  American Capital reports the estimated tax characteristics of each dividend when announced, while the actual tax characteristics of each year's dividends are reported annually to stockholders on Form 1099-DIV.

Information on dividends paid by American Capital for 2009 is provided below.

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 has $12 billion(1) in capital resources under management and eight offices in the U.S., Europe and Asia. For further information, please refer to www.AmericanCapital.com.

(1) As of September 30, 2009.

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.

SOURCE American Capital Ltd.

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http://www.americancapital.com