Fitch affirms American Capital

Fitch Ratings said it affirmed the long-term issuer default rating of American Capital, Ltd. at B+.

The outlook is stable.

Fitch said the ratings affirmation incorporates considerable improvement in the company's financial profile over the past year, specifically the substantial overall reduction in debt and leverage, improving operating and portfolio performance trends, a reduced need to sell portfolio investments to generate liquidity, and increased capacity under financial covenants to absorb potential depreciation in portfolio investment value.

Ratings are constrained primarily by the lack of funding flexibility, given the limited ability to access the equity markets for capital, because the company's stock price is trading at a discount relative to its net asset value, and the absence of a debt facility with available borrowing capacity.

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