Monday, March 2, 2009, 9:41am EST
American Capital posts $1.7B loss

The fourth quarter 2008 loss for American Capital Ltd. is only on paper, but it is still eye-popping: almost $1.7 billion. The Bethesda-based investment firm reported Monday that depreciation of its investments, based on current market valuations, accounted for the bulk of its $8.13 per share loss in the fourth quarter, compared to a $1.27 per share loss, or $243 million in the year ago period.

American Capital said that just one penny of its $8.13 per share fourth quarter loss was a realized loss from the disposal of assets. The realized loss accounted for $3 million of the total loss of $1.684 billion.

American Capital also announced that as a result of continuing asset value declines, it is in breach of certain financial covenants on $2.3 billion of unsecured credit. The company has been in discussions with lenders about modifying its agreements but has not yet been able to do so.