Fitch rates Ares notes BBB-

Fitch Ratings said it assigned a BBB- senior unsecured debt rating to Ares Capital Corp.'s $200 million of 7.75% retail notes due 2040. The company has BBB long-term issuer default and secured debt ratings, and the senior unsecured debt of Allied Capital Corp. is rated BBB-.

The outlook is stable.

Proceeds will be used to repay borrowings under the company's secured revolving facility and for general corporate purposes.

The agency said the notching of the unsecured debt from Ares' BBB issuer default rating reflects the subordination of interests to secured debtholders and, therefore, reduced recovery prospects.

At the same time, Fitch believes that recovery prospects remain strong for all classes of debt given the requirement for business development companies to maintain asset coverage of their borrowings of at least 200%.

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