Moody's cuts Ares outlook to negative

Moody's Investors Service said it changed the outlook of Ares Capital Corp. to negative from stable, adding that Ares' issuer rating is Baa3.

The agency said that the outlook change follows the company's third quarter 2008 loss of $41 million and the risk for additional losses due to unrealized mark-to-market losses on the company's investment portfolio.

According to Moody's, these write-downs could be significant and although Ares is better positioned than its rated Business Development Co. peers, further losses, combined with the requirement for the company to distribute 90% of its taxable income, would put negative pressure on the company's capital levels.

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