(Source: PRNewswire-FirstCall)
BETHESDA, Md., June 11 /PRNewswire-FirstCall/ -- American Capital Ltd. (the "Company") announced today that its Board of Directors has declared a dividend of $1.07 per share payable on August 7, 2009, to stockholders of record as of the close of business on June 22, 2009, with an ex-dividend date of June 18, 2009. At the election of each stockholder, the dividend is payable either in cash or in shares of common stock, or due to certain limitations described below, in a combination of cash and common stock.
If the aggregate amount of the cash elections exceeds 10% of the aggregate dividend amount, the cash portion will be prorated among the stockholders electing to receive cash. The remaining portion of the dividend will be paid in shares of common stock ("Stock Portion"). The number of shares of common stock comprising the Stock Portion will be determined based on the volume weighted average price of American Capital's stock on the NASDAQ Global Select Market on July 27, July 28 and July 29, 2009. The exact distribution of cash and stock to each stockholder will depend on the stockholder's election as well as elections of other stockholders. For example, if all stockholders elected to receive the dividend in cash, the actual dividend that would be paid to stockholders would consist of a 90% Stock Portion and a 10% cash distribution.
This dividend includes the Company's remaining 2008 taxable income, which is required to be distributed to stockholders in order for the Company to maintain its tax status as a regulated investment company and to eliminate its income tax liability. The IRS issued a Revenue Procedure allowing a publicly traded regulated investment company to distribute, with respect to a taxable year ending on or before December 31, 2009, its own stock as a dividend for the purpose of fulfilling its distribution requirements if, among other things, the aggregate amount of cash that may be distributed to its stockholders is at least 10% of the total dividend. The Investment Company Act of 1940 could prohibit American Capital from paying any cash dividend when its asset to debt coverage as determined under the Act is less than 200% and it has public bonds outstanding. However, the staff of the Securities and Exchange Commission has provided the Company with no-action relief to the effect that American Capital may declare and pay a cash dividend in these circumstances, provided that the cash portion does not exceed the 10% cash minimum required by the IRS Revenue Procedure.
The Company will mail a letter with additional information regarding the distribution election and an election form only to registered stockholders promptly after June 22, 2009.
