Fitch may cut Ares Capital

Fitch Ratings said it assigned Ares Capital Corp. long-term issuer default rating and senior secured debt of BBB, with ratings placed on Rating Watch negative.

Ratings reflect Ares's low leverage, demonstrated access to the capital markets, increased cushion on its asset coverage ratio, consistent operating performance in a very difficult market environment, moderate portfolio investment concentrations, experienced management and the company's access to deal flow and investment resources from asset manager Ares Capital Management, LLC and its affiliate Ares Management, LLC, according to the agency.

Constraints reflect the company's secured funding profile, capital markets impact on leverage, dependence on the capital markets to fund portfolio growth and limited ability to retain capital due to dividend requirements, the agency said.

The watch reflects the risks associated with Ares' recently announced acquisition of Allied Capital Corp., according to the agency.

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