(The following statement was released by the rating agency)
Oct 10 - Fitch Ratings has assigned a rating of 'BBB' to Ares CapitalCorporation's
(Ares) $230 million issuance of 4.75% unsecuredconvertible notes. The notes will mature in January 2018.
Fitch does not believe there will be a material impact on the company's leveragelevels as a result of the issuance, as proceeds will largely be used to repayborrowings on secured credit facilities.
RATING DRIVERS AND SENSITIVITIES
Ares currently has a Stable Rating Outlook, which reflects Fitch's expectationfor continued consistency in core operating performance, and the maintenance ofstrong liquidity, relatively conservative balance sheet leverage, and solid cashearnings coverage of the dividend.
Negative rating actions would be driven by an extended increase in leverageabove the targeted range, resulting from increased borrowings or materialunrealized depreciation, and/or a meaningful increase in the proportion ofequity holdings without a commensurate decline in leverage. A spike innon-accrual levels and weaker cash income dividend coverage would also be viewedunfavorably from a ratings perspective.
Fitch believes the potential for positive rating actions is relatively limitedat the present time, given significant market volatility, but positive ratingmomentum could develop from a continuation of demonstrated access to the debtand equity markets, to ensure adequate funding flexibility, and the deploymentof capital into investments with attractive risk-adjusted return prospects,which yield consistent earnings growth, stable asset quality, and strongdividend coverage.
Headquartered in New York, NY, Ares is an externally managed businessdevelopment company, organized on April 16, 2004. As of June 30, 2012 thecompany had investments in 144 portfolio companies amounting to approximately$5.5 billion.
Fitch has assigned the following rating:
Ares Capital Corporation:--$230 million Unsecured Convertible Notes 'BBB'.
Existing ratings for Ares are as follows:
Ares Capital Corporation--Long-term IDR of 'BBB';--Senior Secured Debt of 'BBB';--Senior Unsecured Debt of 'BBB'.Allied Capital Corporation--Senior Unsecured Debt of 'BBB'.The Rating Outlook is Stable.
(Caryn Trokie, New York Ratings Unit)