Allied Capital to Sell Its Majority Equity Interest in Mercury Air Centers, Inc. to Macquarie Infrastructure Company.

WASHINGTON -- Allied Capital Corporation (NYSE:ALD) announced today that a definitive agreement has been signed to sell its majority equity interest in Mercury Air Centers, Inc. ("Mercury") to Macquarie Infrastructure Company LLC (NYSE:MIC).

Based on the definitive agreement, Mercury will sell for an enterprise value of approximately $427 million, subject to pre- and post-closing adjustments. Allied Capital expects to realize a gain on the equity being sold of approximately $240 million, subject to pre- and post-closing adjustments. Approximately $10 million of Allied Capital's proceeds from the sale of its equity will be subject to certain holdback provisions. In addition, Allied Capital expects to be repaid approximately $50 million of subordinated debt outstanding to Mercury at closing. The transaction is expected to close in the third quarter of 2007, subject to certain closing conditions including regulatory approvals.

"Allied Capital first invested in Mercury in 2004. Since then, we added value by recruiting a new management team, led by CEO Kenn Ricci, and successfully completing several acquisitions and building a strong operating platform," said Dan Russell, Managing Director of Allied Capital. "Our efforts have yielded an outstanding investment outcome," added Russell.

Harris Williams & Co. served as financial advisor to Mercury on the transaction.

About Allied Capital

Allied Capital Corporation is a leading business development company (BDC) in the U.S. that invests private debt and equity capital in middle market businesses nationwide. Founded in 1958 and operating as a public company since 1960, Allied Capital has paid consistent or increasing regular, quarterly cash dividends annually to shareholders since 1963.

Allied Capital provides long-term debt and equity capital for management and sponsor-led buyouts, and for recapitalizations, acquisitions and growth of middle market companies. Allied Capital's one-stop financing capabilities include first and second lien senior loans, unitranche debt, junior or subordinated debt and equity. Allied Capital seeks to invest in stable, less cyclical companies that produce significant free cash flow and high returns on invested capital. At December 31, 2006, the Company's private finance portfolio included investments in 145 companies in a variety of industries. These companies currently generate aggregate revenues of over $13 billion and employ more than 90,000 people.

Headquartered in Washington, DC, Allied Capital offers shareholders the opportunity to participate in the private equity industry through an investment in its New York Stock Exchange-listed stock. Allied Capital invests in the American entrepreneurial economy by providing long-term capital and access to managerial resources often unavailable to middle market companies. For more information, please visit www.alliedcapital.com, call Allied Capital investor relations toll-free at [phone], or e-mail us at [e-mail].

About Mercury Air Centers, Inc.

Mercury Air Centers, Inc., based in Richmond Heights, OH, is the fourth largest owner and operator of fixed base operations (FBOs) in the U.S., providing general aviation services to private, commercial and military aircraft at 24 FBO locations at 22 airports nationwide. These services include fuel sales, into-plane services, ground support services, aircraft hangar and tie-down facilities. The company operates under the brand names Mercury Air Centers, Corporate Wings, First Air and IX Jet Centers. For more information, please visit www.fuelondemand.com.

About Macquarie Infrastructure Company

Macquarie Infrastructure Company was formed in 2004 and listed its shares on the New York Stock Exchange on December 15th of that year. The Company is managed by a wholly-owned subsidiary of Macquarie Bank Limited. MIC owns, operates and invests in a diversified group of infrastructure businesses, which provide basic, everyday services, to customers in the United States. Its businesses consist of an airport services business, an airport parking business, a district energy business, a gas production and distribution business, and a fifty percent indirect interest in a bulk liquid storage terminal business. For more information, please visit www.macquarie.com

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 some of these factors are enumerated in Allied Capital's filings with the Securities and Exchange Commission.