S&P rates ARES notes BBB

Standard & Poor's said it assigned ARES Capital Corp.'s $200 million 7.75% senior unsecured notes due Oct. 15, 2040 a BBB debt rating.

The outlook is stable.

S&P said ARES is expected to use the proceeds to reduce the outstanding amount of borrowings under its revolving credit facility, which was $431 million at Sept. 30.

The rating reflects ARES' improved market position and revenue diversification after its acquisition of Allied Capital, strong capital levels and good funding, the agency said.

The rating is hindered by an increase in nonaccruing loans due to weaker-quality assets it received in the Allied acquisition, declining interest coverage metrics and its higher-risk portfolio, S&P said.

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