ARES CAPITAL CORP (ARCC) SEC Filings & Earnings Calls

Interest rate swap introduces floating rate risk; if SOFR rises, interest expense increases.

“pay floating rate interest based on three-month SOFR + 1.85250%” · word for word

Unrealized losses on investments

“Net unrealized losses on investments of $595M for six months ended June 30, 2026 vs $78M in prior year period”

NAV decline

“NET ASSET VALUE PER SHARE $19.35 vs $19.94 at Dec 31, 2025”

Net unrealized losses of $183M in Q2 2026.

“Net unrealized losses $183 million.”

Dilution risk from below-NAV issuance

“Any sale of common stock at a price below NAV would result in an immediate dilution to existing common stockholders who do not participate in such sale on at least a pro rata basis.” · word for word

Net unrealized losses of $412M in Q1-26 vs $63M in Q1-25 indicate mark-to-market volatility

“Net unrealized losses $412M in Q1-26 vs $63M in Q1-25”

GAAP net income per share declined 64% YoY due to unrealized losses

“GAAP net income per share $0.13 vs $0.36 in Q1-25”

Unrealized losses on investments

“Net unrealized losses (412) vs (63)”

Conflicts of interest with Ares Management

“There are significant potential conflicts of interest that could impact our investment returns” · word for word

Dependence on Ares Management for personnel and services

“Our executive officers do not receive any direct compensation from us. We do not currently have any employees and do not currently expect to have any employees.” · word for word

Interest Rate Decline Risk

“In periods of declining interest rates, we may earn less interest income from investments and our cost of funds will also decrease, to a lesser extent, given certain of our currently outstanding indebtedness bears interest at fixed rates, resulting in lower net investment income.” · word for word

Credit Loss Risk

“As of December 31, 2025, loans on non-accrual status represented 1.8% of the total investments at amortized cost (or 1.2% at fair value).” · word for word

Leverage Risk

“Borrowings, also known as leverage, magnify the potential for gain or loss on amounts invested and, therefore, increase the risks associated with investing in our securities.” · word for word

Competition Risk

“We operate in a highly competitive market for investment opportunities.” · word for word

Regulatory Risk

“Changes in laws or regulations governing our operations or the operations of our portfolio companies...could require changes to certain business practices of us or our portfolio companies, negatively impact the operations, cash flows or financial condition of us or our portfolio companies, impose additional costs on us or our portfolio companies or otherwise” · word for word

Yield compression on debt portfolio due to lower spreads, pressuring net investment income.

“Weighted average yield on debt at amortized cost declined from 11.1% to 10.3% YoY.”

Net realized losses increased significantly in Q4-25 ($155M) vs Q4-24 ($29M), indicating potential credit stress.

“Net realized losses Q4-25 $155M vs $29M Q4-24.”

Declining Core EPS year-over-year suggests potential margin compression from lower yields or higher expenses.

“Core EPS $0.50 in Q3-25 vs $0.58 in Q3-24”

Increased leverage as debt/equity ratio rose to 1.09x from 1.03x at year-end 2024.

“Debt/equity ratio 1.09x vs 1.03x”

Declining portfolio yield due to lower base rates

“Weighted average yield on portfolio 9.9% for Q3 2025 vs 11.3% for Q3 2024.”

Credit quality deterioration in SDLP portfolio

“One loan in SDLP portfolio on non-accrual status as of September 30, 2025.”