Moody's upgrades Ares Capital

Moody's Investors Service said it upgraded Ares Capital Corp.'s corporate family and senior unsecured ratings to Baa3 from Ba1.

The outlook is positive.

This follows news that the company entered into an amended credit agreement with its bank syndicate that revises its asset coverage covenant to align with its recently lowered regulatory minimum asset-coverage requirement, Moody's said.

The agency said it will subsequently withdraw the Baa3 corporate family rating as this rating is an anchor rating for non-investment grade issuers.

This concludes a review of Ares Capital's ratings that began in June, Moody's said.

The upgrades are due to Ares Capital's strong earnings and low earnings volatility, record of successfully resolving underperforming loans and solid prospects for consistent operating performance, the agency said.

The current lending environment is competitive, a function of strong capital inflows from private equity providers, banks and other finance companies, but Moody's said it expects that Ares Capital will continue to prioritize credit underwriting diligence amidst pressure on yields.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.