S&P rates Ares Capital convertibles BBB-

S&P said it assigned a BBB- rating on Ares Capital Corp.'s senior unsecured convertible notes due 2024.

The issuance is expected to be between $350 million and $400 million.

The proceeds will be used to pay down existing debt.

For that reason, the agency said it expects the transaction to be leverage neutral.

The stable outlook reflects a view that Ares will gradually increase its leverage over the next 12- to 24-months to 1x to 1.3x, S&P said.

The company's current leverage is below historical levels, but the company received board approval to increase its leverage beyond 1x beginning in June 2019, the agency noted.

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