Fitch to rate Ares Capital debt BBB

Fitch Ratings said it expects to assign a rating of BBB to Ares Capital Corp.’s unsecured institutional debt issuance.

The agency does not expect there to be a material impact on the company's leverage levels as a result of the issuance, as proceeds will be used largely to repay borrowings on secured credit facilities.

Fitch said it views the firm's ability to access the institutional bond market favorably, as it provides Ares with enhanced funding flexibility, in Fitch's opinion.

“The expected rating is equalized with the ratings assigned to Ares' existing senior unsecured debt as the new notes will rank equally in the capital structure,” Fitch said in a news release.

“The equalization of the unsecured ratings with the secured debt rating reflects Ares' relatively low leverage, its focus on senior debt investments, and Fitch's expectation that proceeds from the issuance will be used to repay a portion of secured debt outstanding, thus increasing the amount of unsecured funding in the capital structure.”

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