Allied Capital Corp., Washington, has announced the sale of its portfolio of commercial mortgage-backed securities and collateralized debt obligation bonds and preferred shares to a Canadian pension and insurance fund manager for approximately $976 million in cash.Allied Capital said the transaction resulted in a net realized gain of approximately $216 million. The company said it has also entered into a letter of intent with the Canadian fund manager, Caisse de depot et placement du Quebec, regarding the rest of Allied's commercial real estate assets. Additional agreements could involve the sale of some or all of the assets, Allied Capital said. "Investing in commercial mortgage-backed securities has become more competitive, and the markets have recognized the ability to leverage this asset class in excess of what a BDC structure can accommodate," said Bill Walton, the company's chairman and chief executive officer. "We therefore concluded that these assets are better suited to a more leveraged capital structure and that the best opportunity for our shareholders is to sell the portfolio as a whole and realize its significant value." Allied Capital can be found online at http://www.alliedcapital.com.

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