Allied Capital Commits $84.3 Million to Leading Currency Security Systems Company

Business Wire, March 9, 2006

WASHINGTON -- Allied Capital Corporation (NYSE:ALD) announced today that it has 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. AC Finance LLC, Allied Capital's senior loan group, will arrange placement of the senior debt post-closing.

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.

"We are pleased to be partnering for the first time with Stirling Square Capital Partners to support its buyout of 3SI" said Justin Maccarone, Managing Director of Allied Capital. "The company has built a leading market share in currency protection markets in both the U.S. and Europe by offering quality products with outstanding performance features and superior customer service. This has created loyalty and high retention among its risk-averse customer base, which includes the top banking institutions in the US, Europe and Canada, many of whom have been buying products consistently from 3SI for over 20 years."

"We are delighted to have Allied Capital as our financing partner for this transaction," said Bolaji Odunsi, Partner of Stirling Square. "Allied Capital's responsiveness, ability to commit to the full financing needs of the transaction and deep understanding of the business contributed to the successful closing of this transaction. 3SI has an experienced and dynamic management team, strong customer relationships and an extensive line of patented and proprietary products. We see great opportunities for the company in Europe and further afield."

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, Allied Capital 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 $10 billion and employ more than 85,000 people.

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 Financial Dynamics at (202) 434-0601.

About 3SI Security Systems, Inc.

3SI Security Systems is a world leader in protecting cash, using proprietary electronic smoke and ink and GPS-based technologies in banks, ATMs, safes and other applications. Currently, 86 of the top 100 banks in the U.S. and 24 of the top 50 banks in Europe use 3SI security solutions. 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 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

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 periodic filings with the Securities and Exchange Commission.