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Moody's assigns Ares fund Baa3
Moody's Investors Service said it assigned a first-time Baa3 long-term issuer rating to Ares Strategic Income Fund. The outlook is stable.
ASIF is managed by Ares Capital Management LLC, which also manages Ares Capital Corp. (ARCC), which is also rated Baa3.
“The Baa3 issuer rating reflects the company's strong capitalization and focus on senior secured lending. ASIF has a leverage target of 0.9x-1.25x debt to equity, which translates into an expected asset coverage ratio (ACR) cushion of at least 20%, based on a minimum required coverage of 150%.
“Additionally, the company's portfolio consisted almost entirely of senior secured investments as of 30 September 2023, with 95% in first-lien loans. While this may moderate over time, Moody's expects the company to remain more focused on senior lending than its sister BDC, ARCC, supporting the asset quality of the company's portfolio,” the agency said in a press release.
The outlook reflects the expectation that ASIF's portfolio will keep growing over the next 12 months as it raises more equity, Moody’s said.
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