Allied Capital Completes $75 Million Equity Offering.

WASHINGTON -- Allied Capital Corporation (NYSE:ALD) announced today that the company has completed the sale of 3,000,000 shares of common stock at $25.00 per share for total proceeds, before the underwriting discount and estimated offering expenses, of $75 million. Allied Capital has granted the underwriters a 30-day option to purchase up to an additional 450,000 shares at $25.00 per share to cover over-allotments, if any. The shares were issued from the company's shelf registration statement on file with the Securities and Exchange Commission.

The company intends to use the net proceeds of the offering, estimated to be $70.8 million after deducting the underwriting discount and estimated offering expenses, to reduce borrowings under its revolving line of credit. Bank of America Securities LLC and Deutsche Bank Securities Inc. acted as joint book-running managers for the offering and JMP Securities LLC was a co-manager for the offering.

A registration statement relating to these securities has been filed with and declared effective by the Securities and Exchange Commission. This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in this offering, nor shall there be any sale of these securities in any state in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. The offering may be made only by means of a prospectus and a related prospectus supplement, copies of which may be obtained from Bank of America LLC, 9 West 57th Street, 21st floor, New York, NY 10019, Deutsche Banc Securities Inc., 60 Wall Street, 4th floor, New York, NY 10005, or JMP Securities LLC, 600 Montgomery Street, Suite 1100, San Francisco, CA 94111.

About Allied Capital

Allied Capital Corporation, the nation's largest business development company with total assets of more than $3 billion, has paid regular, quarterly cash dividends to shareholders since 1963. Since its IPO in 1960, the company has been providing long-term debt and equity financing primarily to private, middle market companies. Allied Capital's mission is to generate solid total returns from a diversified private equity and commercial real estate portfolio that invests in the American entrepreneurial economy. In serving its shareholders, Allied Capital helps build American companies and create and sustain jobs. The company's private finance portfolio includes investments in over 100 companies with aggregate revenues of in excess of $11 billion, supporting more than 100,000 jobs.

Headquartered in Washington, DC, Allied Capital offers shareholders the opportunity to participate in the private equity industry through an investment in the company's New York Stock Exchange-listed stock, which is traded under the symbol ALD. For more information, please visit www.alliedcapital.com, call Allied Capital investor relations toll-free at [phone], or e-mail us at [e-mail]. For all media inquiries, please call [phone].

Forward-Looking Statements

The information contained in this press release contains forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, and these factors are enumerated in Allied Capital's periodic filings with the Securities and Exchange Commission.