AC Finance Closes on the Syndication of $63.7 Million in Senior Loans for 3SI Security Systems, Inc

Business Wire, July 27, 2006

WASHINGTON -- Allied Capital Corporation (NYSE:ALD) announced today that its senior loan financing group, AC Finance, has completed the structuring and syndication of $63.7 million in senior loans for 3SI Security Systems, Inc. AC Finance served as Sole Lead Arranger, Sole Bookrunner and Syndication Agent for the transaction. In February 2006, Allied Capital committed $84.3 million of financing to support the buyout of 3SI Security Systems, Inc. by private equity firm Stirling Square Capital Partners. Allied Capital's investment took the form of senior and subordinated debt. Upon completion of the senior loan syndication, Allied Capital's commitment to 3SI Security Systems will total approximately $26.3 million of subordinated notes.

About 3SI Security Systems, Inc.

3SI Security Systems is the world's leading manufacturer of electronic security systems for cash protection. The company's innovative products and solutions offer protection against bank robberies, cash in transit raids and ATM thefts. Currently, 86 of the top 100 banks in the United States and 24 of the top 50 banks in Europe use 3SI security solutions. The company's main products incorporate state-of-the-art smoke and ink technology, GPS-based tracking systems and DNA tagging systems. Its U.S. headquarters are located in Exton, PA and the European headquarters are located in Zaventem, Belgium. The company has R&D and production facilities in Byron, Georgia, US and Zaventem, Belgium. Globally, the business employs a team of 165 people providing innovative solutions, professional service and customer satisfaction. For more information, visit the company's web site at www.3sisecurity.com.

About Allied Capital

Allied Capital Corporation, a leading business development company with total assets of more than $4 billion, has paid regular, quarterly cash dividends to shareholders since 1963. Allied Capital invests in the American entrepreneurial economy by providing capital to companies seeking a long- term financial partner and access to managerial resources often unavailable to smaller companies. Since its IPO in 1960, the Company has provided long-term debt and equity financing to thousands of middle market companies. In serving its shareholders, Allied Capital helps build middle market businesses and support American jobs. The Company's private finance portfolio includes investments in over 100 companies that generate aggregate revenues of more than $12 billion and employ more than 90,000 people.

Allied Capital provides flexible, competitive debt and equity capital for management and sponsor-led buyouts, recapitalizations, acquisitions and growth of middle market companies. Allied Capital's seamless, one-stop financing options include first and second lien senior loans, unitranche facilities, mezzanine debt and equity.

AC Finance, Allied Capital's senior loan financing group, originates, structures and syndicates senior loans for middle market borrowers.

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 (888) 818-5298, or e-mail us at ir@alliedcapital.com. All media inquiries should be directed to Stan Collender of Qorvis Communications at (202) 448-3131.

About Stirling Square Capital Partners

Stirling Square Capital Partners is a pan-European mid-market private equity firm with $250 million of committed capital from Citigroup. Stirling Square Capital Partners provides private equity investment to European companies with enterprise values in the EUR 50 million - EUR 500 million range, operating across a broad range of sectors and industries. Target companies are sector leaders with international aspirations, defensible competitive advantages and talented management teams capable of executing a clearly defined value creation strategy. For more information, please visit www.stirlingsquare.com.