Moody’s lowers Ares Capital view to negative

Moody's Investors Service said it affirmed the Ba1 corporate family and senior unsecured ratings of Ares Capital Corp. and changed the outlook to negative.

The agency also said it placed the B2 corporate family, B2 senior secured and B3 senior unsecured ratings of American Capital, Ltd. on review for upgrade.

The outlook revision follows news that Ares Capital will acquire American Capital, excluding American Capital Mortgage Management, LLC, which will be sold in a separate transaction.

The negative outlook on Ares reflects incremental risks to the company's operating performance and capital cushion from acquiring American Capital’s higher risk portfolio of middle-market debt and equity investments, Moody’s said.

The negative view also considers execution risks relating to the approval and consummation of the transaction, along with the integration of American Capital’s operations, the agency said.

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