February 22, 2006 

Allied Capital Invests $28.5 Million in DVS Intelestream, LLC.

WASHINGTON, DC, Feb 22, 2006 (BUSINESS WIRE) -- Allied Capital Corporation (NYSE:ALD) announced today that it has invested $28.5 million in the minority recapitalization of DVS Intelestream LLC, a media supply chain management company which provides software and services to major television and movie studios. Management of DVS maintained its majority ownership of the company post-closing.

DVS Intelestream provides a broad array of media supply chain management software and technical services to over 1,200 clients in the entertainment industry. Its services include mastering, editing, conversion, restoration and distribution of audio and video content. Its customers include major motion picture studios as well as independent TV production companies, television studios, music labels and advertising agencies. DVS enjoys preferred vendor status with many of its customers and has key, long-standing relationships with customers such as Walt Disney Pictures, Sony Pictures, Universal Studios and Warner Music Group. DVS has earned a reputation with these customers for innovation, high quality and quick-turnaround service.

"We are delighted to be partnering with the management team of DVS in this transaction," said Jeri Harman, Managing Director of Allied Capital. "The team, led by Donald Stine and Richard Appell, has built a successful business in a highly competitive industry, by providing quality, consistent service to their customers on a 24/7 delivery schedule. With the continued proliferation of media outlets, media alternatives (like DVD, HDTV and Internet Video), as well as media content providers, DVS is well positioned to continue growing its market share."

"We are pleased to have Allied Capital as our financial partner going forward," said Richard Appell, President of DVS. "Allied Capital's responsiveness, structural flexibility, and long-term investment horizon make them the ideal partner for our company as we position ourselves for future growth through expanded service offerings, increased penetration of existing and new customers, and complementary acquisitions. We look forward to building on DVS's market position with Allied Capital's financial and strategic support."

About Allied Capital

Allied Capital Corporation, a leading business development company with total assets of more than $3 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 $10 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 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 DVS Intelestream, LLC.

Headquartered in Burbank, California, DVS Intelestream was founded in 2000 by Donald Stine and Richard Appell, industry veterans who together had previously built two successful businesses in the technical post-production industry. DVS has grown organically and through acquisitions to become a provider of a complete portfolio of media supply chain management software and services, targeting the consistent, stable markets of feature film promotional materials, television programming, movie trailers, music videos, commercials and other broadcast media. The company's commitment to meeting the rush delivery schedules of customers with 24/7 demands has created a loyal and long-term customer base of over 1,200 clients. DVS operates four production facilities in Los Angeles and one in New York, and employs approximately 150 people. For more information, please visit www.dvs.tv.

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.

SOURCE: Allied Capital Corporation

Allied Capital Corporation
Dale Lynch, 202-973-6344
or
Media Contact:
Financial Dynamics
Stan Collender, 202-434-0601