Fitch drops Allied

Fitch Ratings said it has taken the following rating actions on Allied Capital Corp.'s issuer default rating and outstanding debt ratings: long-term issuer default rating downgraded to B+ from BB; senior secured debt affirmed at BB; (debt rated RR1); and senior unsecured debt downgraded to B+ from BB; (debt rated RR4).

The outlook is negative.

The agency noted that the downgrade reflects the cash drain associated with the renegotiation of Allied's corporate revolver and private notes, the expectation for continued asset sales in a distressed environment in order to meet scheduled debt maturities, the subordination of public debt holders and higher funding costs.

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