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September 20, 2007 at 11:06 AM EDT
Allied Capital Invests $25 Million in Leading Franchisor of Quick-Service Restaurants

Allied Capital Corporation (NYSE:ALD) announced today that it has invested $25 million to support the buyout of Bojangles Holdings, Inc. by private equity group Falfurrias Capital Partners. Allied Capitals investment took the form of subordinated debt and an equity co-investment alongside the companys management team, certain existing shareholders, and several new investors with significant restaurant experience.

Founded in 1977 and headquartered in Charlotte, North Carolina, Bojangles Holdings is the nations sixth largest chain of chicken quick-service restaurants (QSRs) with 145 owned and 241 franchised units. The company has leveraged its unique Cajun spiced menu, featuring made-from-scratch chicken and biscuits, to establish a dominant market position and strong brand recognition in the Southeastern United States.

Allied Capital has developed a core strength investing in franchisors, said Bill Walton, Chairman and CEO of Allied Capital. In the last two and a half years, we have added eight investments in franchisors to our portfolio, he added.

We are delighted with the opportunity to invest in this company, said Thomas Lauer, Managing Director of Allied Capital. Bojangles has established a loyal customer base and strong brand identity in the Carolinas and we think Falfurrias Capital is an ideal partner to lead the companys future growth.

Allied Capital has proven to be a value-added financing partner, bringing a flexible financing structure as well as a depth of franchise finance experience to this transaction, said Marc Oken, Managing Partner of Falfurrias Capital. We look forward to working with the Allied Capital team to continue to grow this business and build long-term value, he added.

About Allied Capital

Allied Capital Corporation is a leading business development company (BDC) in the U.S. that invests private debt and equity capital in middle market businesses nationwide. Founded in 1958 and operating as a public company since 1960, Allied Capital has paid consistent or increasing regular, quarterly cash dividends annually to shareholders since 1963.

Allied Capital provides long-term debt and equity capital for management and sponsor-led buyouts, and for recapitalizations, acquisitions and growth of middle market companies. Allied Capitals one-stop financing capabilities include first and second lien senior loans, unitranche debt, junior or subordinated debt and equity. Allied Capital seeks to invest in stable, less cyclical companies that produce significant free cash flow and high returns on invested capital. At June 30, 2007, the Companys private finance portfolio included investments in 143 companies in a variety of industries. These companies currently generate aggregate revenues of over $12 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 its New York Stock Exchange-listed stock. Allied Capital invests in the American entrepreneurial economy by providing long-term capital and access to managerial resources often unavailable to middle market companies. 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 Bojangles Holdings, Inc.

Founded in 1977 in Charlotte, North Carolina, Bojangles has grown to become the sixth largest operator and franchisor of chicken QSRs with 386 restaurants located in 11 states, primarily in the southeastern U.S., and in Honduras and Mexico. The business was founded on the principles of providing wholesome, high-quality made-from-scratch products with a distinctive, spicy flavor profile in a fun, festive restaurant atmosphere with fast, friendly service. For more information, please visit www.bojangles.com.

About Falfurrias Capital Partners

Falfurrias Capital Partners is a Charlotte-based private equity investment firm that acquires or invests in lower, middle-market businesses. The firm was founded in 2006 by Hugh McColl, Jr., the former Chairman and CEO of Bank of America, and Marc Oken, the former CFO of Bank of America. The firm is focused on making private equity investments in a diverse portfolio of companies operating in the southern United States. For more information, please visit www.falfurriascapital.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 Capitals filings with the Securities and Exchange Commission.

Contacts:

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