Allied Capital Corp (ALD) is taking a 35% hit to its stock today, as one of its lending clients, Ciena Capital LLC, has filed for Chapter 11 bankruptcy protection.

Ciena Capital was specializing in loans of up to $10 million for commercial real estate projects and small businesses.

Allied said it plans to pay about $320 million due under Ciena's revolving credit agreements with its lenders, and Allied will continue to guarantee a remaining balance of about $10 million.

The Bottom Line

This big hit the stock is taking is a concern for us, considering Ciena is just one of the nearly 200 companies that are in Allied Capital Corp's portfolio. We would avoid the lure of the high dividend yield and look elsewhere for now.

Allied Capital Corp (ALD) is not recommended at this time, holding a Dividend.com Rating of 2.8 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks as well as a detailed explanation of our ratings system here.

Copyright (c) 2008 BAYSTREET NEWSWIRE - All rights reserved.

In connection with the transaction, Allied Capital participated in Norwesco's new senior credit facility for $39 million.

Allied Capital began its relationship with Norwesco in 2004 as a subordinated debt lender to the company, and subsequently supported the management-led buyout of the business in 2005.

About Allied Capital

Allied Capital (NYSE: ALD) is a leading business development company (BDC) in the U.S. that invests long-term debt and equity capital in middle market businesses nationwide. Founded in 1958 and operating as a public company since 1960, Allied Capital is celebrating 50 years of investing in the U.S. entrepreneurial economy. With approximately $5 billion in total assets at June 30, 2008, Allied Capital is among the largest BDCs with a diverse portfolio of investments in 120 companies across a variety of industries. These companies generate aggregate revenues of over $13 billion and employ more than 98,000 people. In addition to our own balance sheet assets, Allied Capital manages private funds with committed capital totaling $5 billion. For more information, please visit www.alliedcapital.com, or call Allied Capital investor relations toll-free at (888) 818-5298, or e-mail us at ir@alliedcapital.com.

About Norwesco, Inc.

Founded in 1939, Norwesco is North America's leading designer and manufacturer of liquid containment solutions, serving agricultural, water, wastewater, oil and gas, and other industrial markets. The Company is the largest manufacturer of polyethylene fluid tanks used in both above-ground and below-ground applications. The Company manufactures highly specialized seamless polyethylene tanks used to store, conserve and transport fluids in a variety of applications. Norwesco operates 17 manufacturing facilities across the U.S. and Canada, and is headquartered in St. Bonifacius, MN. For more information, please visit www.norwesco.com.

About Olympus Partners

Founded in 1988, Olympus Partners manages over $3.1 billion on behalf of corporate pension plans, public retirement systems, university endowment funds and the executives of Olympus' portfolio companies. Olympus provides equity capital for middle market management buyouts and for companies needing capital for expansion. Olympus is an active long-term investor across a broad range of industries, including business services, healthcare services, consumer products, and logistics and transportation. For more information, please visit www.olympuspartners.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.

SOURCE: Allied Capital Corporation

Investor Relations Inquiries: 
Allied Capital Corporation 
Shelley Huchel, 202-721-6100 
or 
Media Inquiries: 
Sitrick and Company, Inc. 
Tom Becker, 212-573-6100

BenefitMall, Inc. is one of the nation's leading broker services companies focused on the small group employee benefits market. Allied Capital and management acquired BenefitMall in August 2006 in a management-led buyout.

About Allied Capital

Allied Capital (NYSE:ALD) is a leading business development company (BDC) in the U.S. that invests long-term debt and equity capital in middle market businesses nationwide. Founded in 1958 and operating as a public company since 1960, Allied Capital is celebrating 50 years of investing in the U.S. entrepreneurial economy. With $5 billion in total balance sheet assets at March 31, 2008, Allied Capital is among the largest BDCs with a diverse portfolio of investments in 124 companies across a variety of industries. These companies generate aggregate revenues of over $13 billion and employ more than 98,000 people. In addition to its own balance sheet assets, Allied Capital manages private funds with committed capital totaling $5 billion, and has investments in portfolio companies that manage assets totaling approximately $6 billion. 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.

About BenefitMall Holdings, Inc.

BenefitMall is the largest insurance general agency in the U.S., supporting insurance brokers in the selling of employee benefits to small businesses across the country. Headquartered in Dallas and in business for 25 years, BenefitMall offers small business brokers thousands of plans from more than 100 leading insurance carriers, either directly through the Company's sales and support offices located in 33 markets across 11 states, or via its website. BenefitMall sells more than $3.5 million in new premiums per day through a national network of more than 15,000 independent Brokers. For more information, please visit www.benefitmall.com.

About BenefitPort Southwest

BenefitPort Southwest is a full service general agency that assists brokers in meeting the needs of their group, senior or individual clients. Originally known as Associated Group Brokerage, BenefitPort Southwest was founded in 1985 in Fort Worth, Texas. BenefitPort Southwest supports broker sales of group and individual products across Texas and Oklahoma, and their Senior Benefits division distributes products throughout the Southwest.

Forward-Looking Statements

The information contained in this press release includes 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 filings with the Securities and Exchange Commission. This press release should be read in conjunction with the company's recent SEC filings.

SOURCE: Allied Capital Corporation

Investor Relations Inquiries:
Allied Capital Corporation
Shelley Huchel, 202-721-6100
or
Media Inquiries:
Qorvis Communications
Stan Collender, 202-448-3131

York Insurance Services Group is a specialized third-party claims administrator ("TPA") that processes, adjusts and settles claims to insured members on behalf of insurance carriers. York focuses on profitable, higher service-oriented niche segments where insurance carriers tend to outsource a greater portion of the claims processing.

"Allied Capital and GE Commercial Finance are pleased to continue our relationship with York, which began in April 2006 with Odyssey's original buyout of the company, and has included several acquisition financings as well as this new transaction through the Unitranche Fund," said John Fruehwirth, Managing Director of Allied Capital. "This deal demonstrates the unitranche product's value in providing flexible financing to support both acquisition and recapitalization transactions for our customers," added Diane Burton, Managing Director of GE Global Sponsor Finance.

Doug Rotatori, Managing Principal of Odyssey Investment Partners commented, "This unitranche financing provided numerous benefits to our company, including a simplified balance sheet, a competitive cost of capital, and certainty of closing with two trusted lenders."

About Unitranche Fund LLC

Unitranche Fund LLC (the "Fund") was formed in December 2007 by Allied Capital and GE Commercial Finance. The Fund can invest up to $270 million for a single borrower, while Allied Capital and GE Commercial Finance will jointly underwrite amounts above that, up to $500 million in total debt financing. The Fund targets investments in a wide range of industry sectors, including business services, healthcare, media, energy, aerospace and transportation. A unitranche loan blends senior and junior debt pricing and terms into a single first lien debt facility, and provides a simple, attractive alternative to traditional 1st lien/2nd lien structures. Borrowers benefit from simplified documentation through a single credit agreement, greater certainty of execution, and reduced decision-making complexity throughout the life of the loan.

About Allied Capital

Allied Capital (NYSE:ALD) is a leading business development company (BDC) in the U.S. that invests long-term debt and equity capital in middle market businesses nationwide. Founded in 1958 and operating as a public company since 1960, Allied Capital is celebrating 50 years of investing in the U.S. entrepreneurial economy. With $5 billion in total balance sheet assets at March 31, 2008, Allied Capital is among the largest BDCs with a diverse portfolio of investments in 124 companies across a variety of industries. These companies generate aggregate revenues of over $13 billion and employ more than 98,000 people. In addition to its own balance sheet assets, Allied Capital manages private funds with committed capital totaling $5 billion, and has investments in portfolio companies that manage assets totaling approximately $6 billion. 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.

About GE Commercial Finance, Global Sponsor Finance

With over $14 billion in assets, and offices in Boston, Chicago, Dallas, London, Los Angeles, New York, and San Francisco, GE Commercial Finance, Global Sponsor Finance represents a "one-stop" source for the comprehensive range of GE's lending and other structured financial services offered to the private equity sponsor market. For more information, please visit www.gegsf.com.

About GE Commercial Finance

GE Commercial Finance, which offers businesses around the globe an array of financial products and services, has assets of approximately $300 billion and is headquartered in Norwalk, Connecticut. GE (NYSE:GE) is Imagination at Work - a diversified technology, media and financial services company focused on solving some of the world's toughest problems. With products and services ranging from aircraft engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and industrial products, GE serves customers in more than 100 countries and employs more than 300,000 people worldwide. For more information, visit the company's website at www.ge.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.

SOURCE: Allied Capital

Investor Relations Inquiries:
Allied Capital Corporation
Shelley Huchel, 202-721-6100
or
Media Inquiries:
Qorvis Communications
Stan Collender, 202-448-3131