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American Capital Ltd.’s stock plunges on analyst downgrade

Thursday, June 3, 2010, 12:13pm EDT
http://www.bizjournals.com/washington/stories/2010/05/31/daily32.html?surround=lfn

Shares of Bethesda-based private equity company American Capital Ltd. were down 13 percent in mid-day trading Thursday after Stifel Nicolaus analysts downgraded the company on concerns that bankruptcy was more likely.

American Capital (NASDAQ: ACAS) has been trying since November to restructure some $2.4 billion in debt and avoid Chapter 11 bankruptcy.

It announced Wednesday it was extending the deadline for its debt restructuring agreement to June 8 and reported preliminary results of its debt holder votes, which some analysts felt was well below what the company would need to reach an agreement to restructure its debt, Reuters reported.

“We believe the probability of bankruptcy has risen significantly,” Stifel analyst Greg Mason wrote in a note to clients, according to Reuters.