MCG Capital Announces Amendments to Unsecured Debt Agreements

Term Extended One Year to Increase Balance Sheet Flexibility; No Scheduled Debt Due Until the Latter Part of 2011

• Press Release
• Source: MCG Capital Corporation
• On 4:02 pm EDT, Wednesday October 28, 2009

ARLINGTON, Va.--(BUSINESS WIRE)--MCG Capital Corporation (Nasdaq:MCGC - News) (the “Company”) today announced that it has successfully executed an amendment package with the holders of the Company’s Series 2005-A and 2007-A privately-placed senior unsecured notes (the “Unsecured Notes”). Significant items announced today were:

• A one year maturity extension of the Series 2005-A Notes to October 11, 2011.
• A 100 basis point increase in the interest rate for the Series 2005-A Notes to 9.98%.
• A $5.0 million prepayment by the Company to reduce the principal outstanding on the Unsecured Notes applied on a pro-rata basis based on the principal amount outstanding under each series.
• The required sweep of net cash proceeds from any unencumbered asset monetizations to reduce the principal balance on the Unsecured Notes will increase by 5% to 45% after the required SunTrust Warehouse sweep of 7.5% of unencumbered asset monetizations has been completed.

Related Quotes

Symbol	Price	Change
MCGC	4.07	-0.12

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The 8.96% interest rate and October 2012 maturity on the Series 2007-A Notes remain unchanged. The principal balance on the Series 2005-A and Series 2007-A Notes is $34.3 million and $17.2 million, respectively, after giving effect to the $5.0 million payment.

“These amendments strengthen our balance sheet flexibility and liquidity profile, as we now have no scheduled debt due until the latter part of 2011,” said Steven F. Tunney, MCG Capital’s CEO and President. “We are pleased that we have the continued support of our private placement lenders and that we were able to reach a timely and mutually satisfactory amendment.”

About MCG Capital Corporation

MCG Capital Corporation is a solutions-focused commercial finance company providing capital and advisory services to middle-market companies throughout the United States. Our investment objective is to achieve current income and capital gains. Our capital is generally used by our portfolio companies to finance acquisitions, recapitalizations, buyouts, organic growth and working capital. For more information, please visit www.mcgcapital.com.

Forward-looking Statements:

Statements in this press release regarding management’s future expectations, beliefs, intentions, goals, strategies, plans or prospects, including statements relating to the effect of the amendments to MCG’s unsecured notes on its balance sheet flexibility and liquidity profile may constitute forward-looking statements for purposes of the safe harbor protection under applicable securities laws. Forward-looking statements can be identified by terminology such as “anticipate,” “believe,” “could,” “could increase the likelihood,” “estimate,” “expect,” “intend,” “is planned,” “may,” “should,” “will,” “will enable,” “would be expected,” “look forward,” “may provide,” “would” or similar terms, variations of such terms or the negative of those terms. Such forward-looking statements involve known and unknown risks, uncertainties and other factors including those risks, uncertainties and factors referred to in MCG Capital’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 filed with the Securities and Exchange Commission under the section “Risk Factors,” as well as other documents that may be filed by MCG Capital from time to time with the Securities and Exchange Commission. As a result of such risks, uncertainties and factors, actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. MCG Capital is providing the information in this press release as of this date and assumes no obligations to update the information included in this press release or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

MCG Capital Corporation
Marshall Murphy, 703-562-7110
MMurphy@MCGCapital.com