Fitch affirms Allied Capital

Fitch Ratings said it affirmed and removed from Rating Watch negative Allied Capital Corp.'s BBB long-term issuer default and senior unsecured debt ratings. The agency also assigned a BBB secured debt rating for Allied to reflect the collateral provided to private debt holders.

The outlook is negative.

The agency said the removal of the Rating Watch reflects Allied's ability to obtain covenant amendments from its private noteholders. Revised covenants include a reduction in the minimum tangible net worth requirement to the greater of $1.5 billion or 85% of consolidated debt. As of Sept. 30, Allied's tangible net worth amounted to $2.4 billion and 85% of consolidated debt equaled $1.9 billion.

The negative outlook reflects the impact of the uncertain market environment on profitability, valuation and asset quality and the potential impact dividend restrictions and encumbering assets could have on Allied's funding flexibility going forward, Fitch said.

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