-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 GhX+gioH/Odw/ki/gKMPdOvLQSvyFH8iQiLTFGxpEhqagdHHq6+gI9PtEP2/T1cF
 TIREMqdhKQjIgbPQP7xebg==

<SEC-DOCUMENT>0001300320-06-000073.txt : 20060623
<SEC-HEADER>0001300320-06-000073.hdr.sgml : 20060623
<ACCEPTANCE-DATETIME>20060623105315
ACCESSION NUMBER:		0001300320-06-000073
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20060623
FILED AS OF DATE:		20060623
DATE AS OF CHANGE:		20060623

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			SHULMAN JOHN D
		CENTRAL INDEX KEY:			0001208886

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	811-02708
		FILM NUMBER:		06921172

	BUSINESS ADDRESS:	
		STREET 1:		C/O ALLIED CAPITAL
		STREET 2:		1919 PENNSYLVANIA AVE NW
		CITY:			WASHINGTON
		STATE:			DC
		ZIP:			20006-3434
		BUSINESS PHONE:		2023312441

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ALLIED CAPITAL CORP
		CENTRAL INDEX KEY:			0000003906
		IRS NUMBER:				521081052
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		1919 PENNSYLVANIA AVENUE NW
		CITY:			WASHINGTON
		STATE:			DC
		ZIP:			20006
		BUSINESS PHONE:		2023311112

	MAIL ADDRESS:	
		STREET 1:		1919 PENNSYLVANIA AVENUE NW
		STREET 2:		1666 K STREET NW
		CITY:			WASHINGTON
		STATE:			DC
		ZIP:			20006

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ALLIED CAPITAL LENDING CORP
		DATE OF NAME CHANGE:	19931116

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ALLIED LENDING CORP
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>edgardoc.xml
<DESCRIPTION>PRIMARY DOCUMENT
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2006-06-23</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0000003906</issuerCik>
        <issuerName>ALLIED CAPITAL CORP</issuerName>
        <issuerTradingSymbol>ALD</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001208886</rptOwnerCik>
            <rptOwnerName>SHULMAN JOHN D</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>1919 PENNSYLVANIA AVENUE, NW</rptOwnerStreet1>
            <rptOwnerStreet2>3RD FLOOR</rptOwnerStreet2>
            <rptOwnerCity>WASHINGTON</rptOwnerCity>
            <rptOwnerState>DC</rptOwnerState>
            <rptOwnerZipCode>20006</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>Managing Director</officerTitle>
        </reportingOwnerRelationship>
    </reportingOwner>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Phantom Stock Units</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <footnoteId id="F1"/>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2006-06-23</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>10042</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>29.6962</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F2"/>
            </exerciseDate>
            <expirationDate>
                <footnoteId id="F3"/>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>10042</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>46336</value>
                    <footnoteId id="F4"/>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Phantom Stock Units acquired have a 1 for 1 conversion.</footnote>
        <footnote id="F2">The phantom stock units were awarded under the Allied Capital Corporation Deferred Compensation Plan II and are fully vested.</footnote>
        <footnote id="F3">Upon termination, phantom stock units will be distributed over a two year period or immediately upon a change in control.</footnote>
        <footnote id="F4">Securities adjusted for Non-Reportable Transactions.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>s/ John D. Shulman</signatureName>
        <signatureDate>2006-06-23</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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