Ares Capital Corporation Launches Inaugural \$1 Billion Commercial Paper Program
Key Highlights
- New Funding Initiative: Ares Capital Corporation (NASDAQ: ARCC) has established its first commercial paper program, enabling the company to issue up to \$1 billion in short-term, unsecured commercial paper notes.
- Cost Benefits: The company expects this program to provide cost efficiencies compared to other funding sources, which may positively impact future earnings and cash flows.
- Liquidity Backstop: Ares Capital plans to use borrowing capacity from its \$5.5 billion Revolving Credit Facility as a liquidity backstop. This enhances financial flexibility and mitigates refinancing risk associated with the notes.
- Use of Proceeds: Net proceeds from commercial paper issuance are intended for general corporate purposes, potentially supporting business growth and investment opportunities in the private middle market.
- Ranking and Terms: The commercial paper notes will rank pari passu (equal footing) with other senior unsecured debt, and will be sold under standard terms in the U.S. commercial paper market.
- Regulatory Status: The notes will not be registered under the Securities Act of 1933, and can only be offered or sold under an exemption or through definitive offering documentation.
Details for Shareholders and Potential Impact on Share Value
- Enhanced Funding Flexibility: The ability to issue up to \$1 billion in commercial paper provides Ares Capital with a powerful tool to manage liquidity and optimize its capital structure, which may support continued growth and investment activity.
- Cost Savings Potential: The anticipated cost benefits from the commercial paper market could lead to improved profitability. Lower funding costs can directly enhance earnings and potentially increase shareholder value.
- Risk Factors: While the program supports liquidity and funding flexibility, it also introduces new refinancing and interest rate risks. Investors should monitor how Ares Capital manages these risks, particularly in volatile markets.
- BDCs and Market Position: Ares Capital remains the largest publicly traded business development company (BDC) by net capitalization as of March 31, 2026. This market leadership, coupled with increased funding flexibility, may strengthen its competitive position and support ongoing investment in high-quality middle market borrowers.
- Forward-Looking Statements: Management has emphasized that all statements regarding future performance, conditions, or results are subject to risks and uncertainties. Investors should be cautious and not place undue reliance on projections.
Company Background
Ares Capital Corporation, founded in 2004, is a specialty finance company focused on providing direct loans and investments to private middle market companies in the United States. Its investment manager is a subsidiary of Ares Management Corporation (NYSE: ARES), a leading global alternative investment manager. The company aims to generate attractive levels of current income and potential capital appreciation for investors, primarily through senior secured loans, subordinated debt, and equity investments.
Investor Relations Contacts
For further information, investors can contact John Stilmar or Carl Drake at (888) 818-5298 or [email protected].
Disclaimer
This article contains forward-looking statements regarding Ares Capital Corporation’s future performance, which are subject to numerous risks and uncertainties. Actual results may differ materially from those projected. Investors are advised to review Ares Capital’s SEC filings and not to place undue reliance on statements regarding future events or performance. This article is for informational purposes only and does not constitute an offer to buy or sell securities.
