Ares Capital Secures New Funding Ahead of Earnings Report

Ares Capital US04010L1035

Ares Capital Corporation has bolstered its financial position with a successful $750 million debt offering. The business development company (BDC), which is the largest publicly traded entity in its sector, completed the placement today. This strategic move strengthens its balance sheet just weeks before its scheduled year-end financial release.

The newly issued unsecured notes mature in 2031 and carry a coupon rate of 5.250%. Management indicated the net proceeds will be used primarily to repay existing credit facilities. However, the company retains the flexibility to re-access those lines later, ensuring continued financial capacity for new investments in private middle-market companies.

This capital raise represents a proactive refinancing strategy within a changing interest rate environment. The 5.250% coupon sits marginally above the rate on a $650 million issuance from late 2025. Ares Capital's managed portfolio volume now exceeds $28.7 billion.

Concurrently, Ares Management, the investment manager, revealed plans to double its office space in Hong Kong. This expansion of the supporting ecosystem highlights the growth of its activities across the Asia-Pacific region.

Focus Shifts to Forthcoming Earnings and Dividend

Attention now turns to the company's upcoming earnings report. Ares Capital is set to release its fourth-quarter and full-year 2025 results on February 4. Market analysts are forecasting earnings per share of $0.50 on revenue of approximately $795 million.

Dividend stability remains a core objective under CEO Kort Schnabel. The current quarterly distribution of $0.48 per share is supported by an estimated spillover income, or tax undistributed income, of $1.26 per share. This buffer is designed to protect the dividend payout during periods of market volatility.

The capital infusion secures investment power for the first quarter of 2026. Investors will be listening closely to the management's conference call on February 4 for insights into business development and the performance of its current portfolio of 587 companies.