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In a recent Securities and Exchange Commission (SEC) filing, Ares Capital Corporation (NASDAQ:ARCC), a $14.8 billion market cap business development company with a robust 8.82% dividend yield, disclosed amendments to its credit facility with BNP Paribas (OTC:BNPQY), including extended maturity dates and adjusted interest rates. According to InvestingPro analysis, ARCC maintains a GOOD overall financial health score of 2.8 out of 5. The changes were made to the Revolving Credit and Security Agreement originally established on June 11, 2020, and involve Ares Capital and its wholly-owned subsidiary ARCC FB Funding LLC.
According to the 8-K filing, the amendments, effective as of March 20, 2025, include an extension of the reinvestment period end date from July 26, 2027, to March 20, 2028, and a push of the stated maturity date from July 26, 2029, to March 20, 2030. The interest rate on the facility has been modified from an applicable Secured Overnight Financing Rate (SOFR) or a "base rate" plus a margin, to a lower margin during both the reinvestment period (from 2.10% to 1.90%) and the period following it (from 2.60% to 2.40%). This adjustment is particularly significant given the company’s total debt of $13.79 billion as of the latest quarter.
Ares Capital Corporation, which is a Maryland-incorporated business development company showing strong revenue growth of 14.38% in the last twelve months, has not altered the other material terms of the BNP Funding Facility. The filing indicates that the full details of the Ninth Amendment to the Revolving Credit and Security Agreement are included as an exhibit in the report. For deeper insights into ARCC’s financial metrics and growth potential, investors can access comprehensive analysis through InvestingPro’s detailed research reports.
This financial maneuvering by Ares Capital comes as the company continues to manage its debt and financing structures, maintaining an attractive P/E ratio of 9.02. The adjustments to the BNP Funding Facility are expected to impact the company’s financial obligations, as noted in the filing.
The information presented in this article is based on a press release statement.
In other recent news, Ares Capital Corporation has issued $1 billion in senior notes due in 2032, as disclosed in a Form 8-K filed with the Securities and Exchange Commission. The notes carry an interest rate of 5.800% and are set to mature on March 8, 2032, with semiannual interest payments starting in September 2025. Proceeds from this issuance are intended to repay existing debt under Ares Capital’s credit facilities, potentially allowing for reborrowing for general corporate purposes, including further investments. The notes are unsecured and rank equally with all other unsecured and unsubordinated indebtedness, subject to customary covenants.
Additionally, Raymond (NSE:RYMD) James recently downgraded Ares Capital’s stock rating from Outperform to Market Perform. Analyst Robert Dodd cited the stock’s current valuation rather than concerns over credit or portfolio performance as the reason for the downgrade. Despite the rating change, Dodd noted Ares Capital’s strong net asset value (NAV) growth of 4.9% in the current credit cycle, compared to a median decline of 7.3% in the sector. The company’s robust credit quality and sustainable dividend were also highlighted. These developments reflect the company’s ongoing strategic efforts and market positioning.
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