Norwesco Switches Sponsors

Allied Capital has sold its equity interest in Norwesco Inc., a maker of polyethylene storage tanks for the agricultural and industrial markets, to Olympus Partners. Allied sponsored a management buyout of Norwesco in 2005, and reports that it realized an $86 million gain on its equity investment and the repayment of $65 million in outstanding subordinated debt it had lent the company.

PRESS RELEASE

Allied Capital Corporation (NYSE:ALD) announced that on September 30, 2008 it completed the sale of its equity interest in Norwesco, Inc. (“Norwesco”), a leading manufacturer of polyethylene storage tanks for the agricultural and industrial markets, to private equity firm Olympus Partners.

As a result of the sale, Allied Capital realized a gain on its equity investment in Norwesco of approximately $86 million, subject to post-closing adjustments. Approximately $10 million of Allied Capital’s proceeds from the sale remain in escrow subject to certain holdback provisions. Allied Capital was also repaid approximately $65 million of subordinated debt outstanding to Norwesco at closing.

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.