Restructuring Completed At American Capital And European Capital June 28 2010
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Restructuring Completed At American Capital And European Capital June 28 2010






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Restructuring Completed At American Capital And European Capital June 28 2010 Restructuring Completed At American Capital And European Capital June 28 2010 Presentation Transcript

  • Restructuring Completed at American Capital and European Capital June 28, 2010 © 2010 American Capital. All Rights Reserved. Nasdaq: ACAS
  • Nasdaq: ACAS Safe Harbor Statement Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 This presentation contains statements that, to the extent they are not recitations of historical fact, y constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act. Actual outcomes and results could differ materially from those forecast due to the impact of many factors beyond the control of American Capital. All forward looking statements included in this presentation are made only as of the date of this presentation and are subject to change without notice. Certain factors that could cause actual results to differ materially from those contained in the forward-looking statements are included in our periodic reports filed with the SEC. Copies are available on the SEC’s website at We disclaim any obligation to update our forward looking statements unless required by law. The following slides contain summaries of certain financial and statistical information about American Capital, Ltd. They should be read in conjunction with our periodic reports that are filed from time-to-time with the Securities and Exchange Commission including our annual report on Form 10-K for the year ended December 31, 2009, quarterly report on Form 10-Q for the quarter ended March 31, 2010 and our subsequent periodic filings. Historical results discussed in this presentation are not indicative of future results. Additional Information No information contained in this presentation constitutes an offer or invitation to acquire or dispose of any securities or investment advice in any jurisdiction. Any statements included herein regarding earnings enhancement are not a profit forecast and should not be interpreted to mean that American Capital’s future earnings will necessarily match or exceed those of any prior year. 2
  • Nasdaq: ACAS $ $2.3 B Debt Restructuring Completed g p Retaining Our Ability to Make New Investments  $1.0 B Cash Pay Down of Debt  100% of lenders wanting cash were paid cash in full fl d ti h id h i f ll  $1.3 B of New Secured Debt Maturing December 2013  $528 MM non-amortizing debt ● With make-whole provision through August 2012 p g g  $779 MM amortizing debt  2% Closing Fee Paid on the $1.3 B of New Secured Debt  1.0% fee on outstanding balance as of December 30, 2011 and December 31, 31 2012  $281 MM of New Debt is Floating Rate  LIBOR + 650 bps Interest Rate, with 2% LIBOR Floor  Rate reduced to LIBOR + 550 bps when debt outstanding is below $1.0 B p g  $1.03 B of New Debt is Fixed Rate  8.96% interest rate  Declining to 7.96% when debt outstanding is below $1.0 B 3
  • Nasdaq: ACAS Amortization Schedule Amortization to Avoid Date Minimum Amortization Higher Interest Rates (1) December 31, 2011 $0 $70,427,006 June 30, 2012 $0 $100,000,000 December 31 2012 31, $120 427 006 (2) $120,427,006 $300,000,000 $300 000 000 June 30, 2013 $500,000,000 (3) $350,000,000 (1) Annual interest rates will increase by 50 basis points for each amortization that is not met until such payments are made. (2) Reflects utilization of permitted principal amortization deferral of $200,000,000. (3) Reflects payment of scheduled amortization amount of $300,000,000 and payment of deferred amortization of $200,000,000. 4
  • Nasdaq: ACAS Flexible Amortization Requirements q Retaining Our Ability to Make New Investments  $779 MM of New Secured Amortizing Debt  No scheduled pay downs for next two and a half years until December 2012  Prepayments of principal will be applied in direct order of maturity  A Portion of Pledged Asset Disposition Proceeds, Excess Cash Flow and Capital Raising Activities to be used to Prepay Amortization  However, the first $580 MM of such amounts need not be applied ● Will be available for new investments or other general corporate purposes  Thereafter the following amounts prepay amortization Thereafter, ● 50% of asset dispositions and excess cash flow ► Reducing to 25% when amortizing debt is below $422 MM ● 100% of new debt raises ● 0% of equity raises for first two years ► 50% of equity raises thereafter  For example, if the first $1.16 B of liquidity results from pledged assets ● 100% would be available for new investments or other general corporate purposes 5
  • Nasdaq: ACAS Balance Sheet Pro forma for Debt Restructuring and Equity Raise Pre-Restructuring Restructuring Post-Restructuring $ in Millions March 31, 2010 Adjustments March 31, 2010 Assets Investments at Fair Value1 $5,698 $--- $5,698 Cash & Cash Equivalents 820 (779)2 41 Restricted Cash & Cash Equivalents 79 --- 79 Other Assets 160 24 184 Total Assets $6,757 $(755) $6,002 Liabilities Secured Debt $--- $1,308 $1,308 Unsecured Debt 2,349 (2,338) 11 Securitized Debt 1,677 --- 1,677 Total Debt 4,026 (1,030) 2,996 Other Liabilities 205 (13) 192 Total Liabilities $4,231 ($1,043) $3,188 Shareholders’ Equity Total Shareholders’ Equity $2,526 288 $2,814 Total Liabilities and Shareholders’ Equity $6,757 ($755) $6,002 Debt to Equity 1.6x 1.1x 1. Assumes no appreciation or depreciation in investment assets from March 31, 2010 2. Represents closing payment of $1.03 B paid to creditors at closing plus payment of accrued interest, closing fees and other transaction fees as well as $295 MM proceeds from an equity offering completed in April 2010 6
  • Nasdaq: ACAS Value Proposition p Potential Asset Appreciation with Economic Recovery  Potential Appreciation of ECAS  Equity investment valued at $278 MM at March 31, 2010 ● Versus $770 MM NAV at ECAS  Potential Accretion of Performing Debt Assets to Cost at ACAS and ECAS  $199 MM below cost at ACAS at March 31, 2010 31  $288 MM below cost at ECAS at March 31, 2010  Potential Appreciation of Equity Assets as the Economy Recovers  $425 million of net appreciation of portfolio since GDP turned positive in Q3 2009  Expect continued appreciation if the economy remains positive  Delivered 22% Annualized ROE Through March 31, 2010 Since GDP Turned Positive in Q3 2009 T d P iti i  $0.89 or 12% Growth in NAV per Share Over Last 3 Quarters  After dilution from $295 million equity offering in April 2010 and stock dividend in June 2009 7