Ares Capital prices $650 million notes offering at 5.1% due 2031

NEW YORK - Ares Capital Corporation (NASDAQ:ARCC), a business development company with a market capitalization of $15.74 billion, has priced an underwritten public offering of $650 million in aggregate principal amount of notes due January 15, 2031, the company announced Tuesday.

The notes carry a 5.100% interest rate and may be redeemed in whole or in part at Ares Capital’s option at any time at par plus a make-whole premium, if applicable.

The offering is expected to close on September 9, 2025, subject to customary closing conditions. Ares Capital plans to use the net proceeds to repay certain outstanding indebtedness under its debt facilities, with the possibility of reborrowing for general corporate purposes, including portfolio company investments.

BofA Securities, J.P. Morgan Securities, RBC Capital Markets, SMBC Nikko Securities America, and Wells Fargo Securities are acting as joint book-running managers for the offering, with numerous other financial institutions serving as joint lead managers and co-managers.

Ares Capital Corporation, founded in 2004, is a specialty finance company that provides direct loans and other investments to private middle market companies in the United States. Currently trading at $22.32, the company offers an attractive dividend yield of 8.57% and trades at a P/E ratio of 10.94. According to InvestingPro, ARCC maintains a "GOOD" financial health score and has demonstrated solid revenue growth of 6.85% in the last twelve months. The company has elected to be regulated as a business development company and was the largest publicly traded BDC by market capitalization as of June 30, 2025.

The company is externally managed by a subsidiary of Ares Management Corporation (NYSE:ARES).

The information about the offering was disclosed in a press release statement from the company.

In other recent news, Ares Capital has reported stable earnings for the second quarter of 2025, with a GAAP net income per share of $0.52 and core earnings per share of $0.50, consistent with the previous quarter. The company’s total portfolio at fair value increased by 3% quarter-over-quarter, reaching $27.9 billion, demonstrating resilience amid market volatility. B.Riley upgraded Ares Capital’s stock rating to Buy, raising its price target to $23.50, citing strong performance and portfolio quality. Similarly, BofA Securities also raised its price target to $23.50, maintaining a Buy rating due to Ares Capital’s steady quarter and solid liquidity. Citizens JMP increased its price target to $23.00, following what it described as solid second-quarter earnings. Keefe, Bruyette & Woods raised their price target to $23.00, highlighting Ares Capital’s sector-leading fundamentals despite missing street expectations. These developments underscore a positive outlook from various analysts on Ares Capital’s recent performance.

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