Allied Capital posts loss for 1Q on bad debt investments

Allied Capital Corp. posted a loss for the first quarter on Wednesday as the fund's investments in certain kinds of debt soured.

Allied Capital lost $40.7 million, or 25 cents per share, in the first quarter. In the first quarter last year, Allied Capital earned $133.1 million, or 87 cents per share.

Allied Capital lends to and invests in medium-sized businesses looking for cash to grow or overhaul their businesses.

The company attributed the loss to $113.4 million in investment losses, mainly from lower values of collateralized loans and other types of debt. Allied Capital said these losses can swing from quarter to quarter and do not necessarily depict a trend.

The company booked investment income of $69.5 million, or 43 cents per share, a 76 percent increase from the first quarter last year. Analysts polled by Thomson Financial forecast investment income of 30 cents per share.

Allied Capital invested $275.1 million during the quarter, including investments in the buyout of Augusta Sportswear Group and the recapitalization of United Road Towing Inc.

The value of Allied Capital's portfolio at the end of the first quarter was $4.6 billion, down from $4.78 billion at the beginning of the year.