3906--2/29/2008--ALLIED_CAPITAL

related topics

{tax, income, asset}

{loan, real, estate}

{stock, price, share}

{stock, price, operating}

{debt, indebtedness, cash}

{capital, credit, financial}

{competitive, industry, competition}

{personnel, key, retain}

{investment, property, distribution}

{interest, director, officer}

{cost, regulation, environmental}

{condition, economic, financial}

{acquisition, growth, future}

Substantially all of our portfolio investments, which are generally illiquid, are recorded at fair value as determined in good faith by our Board of Directors and, as a result, there is uncertainty regarding the value of our portfolio investments. Economic recessions or downturns could impair our portfolio companies and harm our operating results. Our borrowers may default on their payments, which may have a negative effect on our financial performance. Our private finance investments may not produce current returns or capital gains. Our financial results could be negatively affected if a significant portfolio investment fails to perform as expected. We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us. We may not borrow money unless we maintain asset coverage for indebtedness of at least 200%, which may affect returns to shareholders. Changes in interest rates may affect our cost of capital and net investment income. We will continue to need additional capital to grow because we must distribute our income. Loss of regulated investment company tax treatment would substantially reduce net assets and income available for debt service and dividends. There is a risk that our common stockholders may not receive dividends or distributions. We operate in a competitive market for investment opportunities. There are potential conflicts of interest between us and the funds managed by us. Our business depends on our key personnel. Changes in the law or regulations that govern us could have a material impact on us or our operations. Failure to invest a sufficient portion of our assets in qualifying assets could preclude us from investing in accordance with our current business strategy. Results may fluctuate and may not be indicative of future performance. Our common stock price may be volatile. The trading market or market value of our publicly issued debt securities may be volatile. Our credit ratings may not reflect all risks of an investment in the debt securities.

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3906--2/29/2008--ALLIED_CAPITAL_CORP