ARES CAPITAL CORP
For the period ended Jun 30, 2025. Filed Jul 29, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 29, 2025
ARCC$19.13-1.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-04-29.
0001287750-25-000020
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-29.
0001287750-25-000038
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 240 previous paragraphs and 251 current paragraphs.
154 unchanged; 78 reworded; 18 added; 4 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 42 previous and 48 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
During the second quarter of 2025, leveraged corporate credit markets posted positive returns amid heightened volatility driven by shifting trade policies and geopolitical uncertainty. Although expectations for future economic growth were revised downward, a stable macroeconomic backdrop, marked by a steady labor market and inflation levels, underpinned the relative strength of U.S. debt and equity markets.
Current report
(1)We have provided a commitment to fund up to $500 million to IHAM, of which the availability is solely at our discretion.
Current report
For the three and six months ended June 30, 2025 and 2024
Current report
The net realized gains on investments during the three months ended June 30, 2025 consisted of the following:
Current report
During the three months ended June 30, 2025, we also recognized net realized losses on foreign currency and other transactions of $39 million.
Current report
The net realized gains on investments during the six months ended June 30, 2025 consisted of the following:
Current report
During the six months ended June 30, 2025, we also recognized net realized losses on foreign currency and other transactions of $8 million.
Current report
The net realized losses on investments during the six months ended June 30, 2024 consisted of the following:
Current report
During the three months ended June 30, 2025, we also recognized net unrealized losses on foreign currency and other transactions of $10 million.
Current report
During the three months ended June 30, 2024, we also recognized net unrealized losses on foreign currency and other transactions of $10 million.
Current report
The changes in net unrealized appreciation and depreciation on investments during the six months ended June 30, 2025 consisted of the following:
Current report
During the six months ended June 30, 2025, we also recognized net unrealized losses on foreign currency and other transactions of $54 million.
Current report
The changes in net unrealized appreciation and depreciation on investments during the six months ended June 30, 2024 consisted of the following:
Current report
The Revolving Credit Facility also provides for an “accordion” feature that allows us, under certain circumstances, to increase the overall size of the Revolving Credit Facility to a maximum of approximately $7.9 billion.
Current report
In July 2025, we increased the total commitment under our Revolving Credit Facility from $5,393 million to $5,493 million. The other terms of the Revolving Credit Facility remained unchanged.
Current report
In July 2025, we and Ares Capital CP entered into an agreement to amend the Revolving Funding Facility. The amendment, among other things, (a) increased the commitments under the Revolving Funding Facility from approximately $2.2 billion to approximately $2.3 billion, (b) extended the end of the reinvestment period from October 8, 2027 to July 28, 2028, (c) extended the stated maturity date from October 8, 2029 to July 28, 2030 and (d) adjusted the interest rate charged on the Revolving Funding Facility from an applicable SOFR or a “base rate” plus an applicable spread of 2.00% per annum to an applicable SOFR or a “base rate” (as defined in the documents governing the Revolving Funding Facility) plus an applicable spread of 1.80% per annum. The other terms of the Revolving Funding Facility remained materially unchanged.
Current report
In July 2025, we and ACJB entered into an agreement to amend the SMBC Funding Facility. The amendment, among other things, (a) increased the commitments under the SMBC Funding Facility from $800 million to $1.1 billion, (b) extended the end of the reinvestment period from December 6, 2027 to July 25, 2028, (c) extended the stated maturity date from December 6, 2029 to July 25, 2030 and (d) adjusted the interest rate charged on the SMBC Funding Facility from an applicable spread of either (x) 2.00% over SOFR or (y) 1.00% over a “base rate” to an applicable spread of either (x) 1.80% over SOFR or (y) 0.80% over a “base rate” (as defined in the documents governing the SMBC Funding Facility). The SMBC Funding Facility also provides for an “accordion” feature that allows ACJB, under certain circumstances, to increase the overall size of the SMBC Funding Facility to $1.3 billion. The other terms of the SMBC Funding Facility remained materially unchanged.
Current report
In July 2025, we repaid in full the July 2025 Notes upon their maturity, which bore interest at a rate of 3.250% per annum.
Removed paragraphs (4)
Previous report
During the first quarter of 2025, leveraged corporate credit markets posted positive returns, driven by stable economic performance, labor market trends and the continued health of the debt capital markets and the U.S. banking system. The potential impact from recent trade and economic policies has resulted in increased uncertainty, which in turn has reduced expectations for future economic growth, increased expectations for rising inflation and led to greater capital markets volatility.
Previous report
During the three months ended March 31, 2025, we also recognized net realized gains on foreign currency and other transactions of $31 million.
Previous report
During the three months ended March 31, 2025, we also recognized net unrealized losses on foreign currency and other transactions of $44 million.
Previous report
In April 2025, we amended and restated our Revolving Credit Facility. The amendment, among other things, (a) increased the total commitment under the Revolving Credit Facility from $4,513 million to $5,283 million, (b) modified certain covenant restrictions, (c) extended the expiration of the revolving period for lenders electing to extend their revolving commitments in an amount equal to approximately $3,878 million from April 12, 2028 to April 15, 2029, during which period we, subject to certain conditions, may make borrowings under the Revolving Credit Facility, (d) extended the stated maturity date for lenders electing to extend their revolving commitments in an amount equal to approximately $3,878 million from April 12, 2029 to April 15, 2030 and (e) extended the stated maturity date for approximately $945 million of the lenders electing to extend their term loan commitments from April 12, 2029 to April 15, 2030. Lenders who elected not to extend their revolving commitments in an amount equal to approximately $246 million and $50 million will remain subject to a revolving period expiration of March 31, 2026 and April 12, 2028, respectively, and a stated maturity date of March 31, 2027 and April 12, 2029, respectively. Lenders who elected not to extend their term loan commitments in an amount equal to $24 million, $70 million and $70 million will remain subject to a maturity date of March 31, 2027, April 19, 2028 and April 12, 2029, respectively. The other terms of the Revolving Credit Facility remained materially unchanged.
Reworded paragraphs (78)
Previous wording
•political and regulatory conditions that contribute to uncertainty and market volatility including the impact of the legislative, regulatory, trade and policy changes associated with the current U.S. presidential administration;
Current wording
•political and regulatory conditions that contribute to uncertainty and market volatility including the impact of the legislative, regulatory, trade, immigration and other policy changes associated with the current U.S. presidential administration;
Previous wording
Since our initial public offering (“IPO”) on October 8, 2004 through March 31, 2025, our exited investments resulted in an asset level realized gross internal rate of return to us of approximately 13% (based on original cash invested, net of syndications, of approximately $50.6 billion and total proceeds from such exited investments of approximately $64.9 billion). Internal rate of return is the discount rate that makes the net present value of all cash flows related to a particular investment equal to zero. Internal rate of return is gross of expenses related to investments as these expenses are not allocable to specific investments. Investments are considered to be exited when the original investment objective has been achieved through the receipt of cash and/or non-cash consideration upon the repayment of a debt investment or sale of an investment or through the determination that no further consideration was collectible and, thus, a loss may have been realized.
Current wording
Since our initial public offering (“IPO”) on October 8, 2004 through June 30, 2025, our exited investments resulted in an asset level realized gross internal rate of return to us of approximately 13% (based on original cash invested, net of syndications, of approximately $47.1 billion and total proceeds from such exited investments of approximately $60.3 billion). Internal rate of return is the discount rate that makes the net present value of all cash flows related to a particular investment equal to zero. Internal rate of return is gross of expenses related to investments as these expenses are not allocable to specific investments. Investments are considered to be exited when the original investment objective has been achieved through the receipt of cash and/or non-cash consideration upon the repayment of a debt investment or sale of an investment or through the determination that no further consideration was collectible and, thus, a loss may have been realized.
Previous wording
Additionally, since our IPO on October 8, 2004 through March 31, 2025, our realized gains have exceeded our realized losses by approximately $0.8 billion (excluding a one-time gain on the acquisition of Allied Capital Corporation in April 2010 (the “Allied Acquisition”) and realized gains/losses from the extinguishment of debt and other transactions). For the same time period, our average annualized net realized gain rate was approximately 0.8% (excluding a one-time gain on the Allied Acquisition and realized gains/losses from the extinguishment of debt and other transactions). Net realized gain/loss rates for a particular period are the amount of net realized gains/losses during such period divided by the average quarterly investments at amortized cost in such period.
Current wording
Additionally, since our IPO on October 8, 2004 through June 30, 2025, our realized gains have exceeded our realized losses by approximately $0.9 billion (excluding a one-time gain on the acquisition of Allied Capital Corporation in April 2010 (the “Allied Acquisition”), income tax expense on net realized gains, and realized gains/losses from the extinguishment of debt and other transactions). For the same time period, our average annualized net realized gain rate was approximately 0.8% (excluding a one-time gain on the Allied Acquisition, income tax expense on net realized gains, and realized gains/losses from the extinguishment of debt and other transactions). Net realized gain/loss rates for a particular period are the amount of net realized gains/losses during such period divided by the average quarterly investments at amortized cost in such period.
Previous wording
(1)New investment commitments include new agreements to fund revolving loans or delayed draw loans. See Note 7 to our consolidated financial statements for the three months ended March 31, 2025 for more information on our commitments to fund revolving loans or delayed draw loans.
Current wording
(1)New investment commitments include new agreements to fund revolving loans or delayed draw loans. See Note 7 to our consolidated financial statements for the three and six months ended June 30, 2025 for more information on our commitments to fund revolving loans or delayed draw loans.
Previous wording
(2)Includes both funded and unfunded commitments. Of these new investment commitments, we funded $2.2 billion and $2.6 billion for the three months ended March 31, 2025 and 2024, respectively.
Current wording
(2)Includes both funded and unfunded commitments. Of these new investment commitments, we funded $2.0 billion and $2.9 billion for the three months ended June 30, 2025 and 2024, respectively.
Previous wording
(3)Includes both funded and unfunded commitments. For the three months ended March 31, 2025 and 2024, investment commitments exited included exits of unfunded commitments of $536 million and $677 million, respectively.
Current wording
(3)Includes both funded and unfunded commitments. For the three months ended June 30, 2025 and 2024, investment commitments exited included exits of unfunded commitments of $171 million and $123 million, respectively.
Previous wording
(4)For the three months ended March 31, 2025 and 2024, net fundings (repayments) of first lien secured revolving loans were $80 million and $(67) million, respectively.
Current wording
(4)For the three months ended June 30, 2025 and 2024, net fundings (repayments) of first lien secured revolving loans were $(23) million and $8 million, respectively.
Previous wording
(5)See “Senior Direct Lending Program” below and Note 4 to our consolidated financial statements for the three months ended March 31, 2025 for more information on the SDLP (as defined below).
Current wording
(5)See “Senior Direct Lending Program” below and Note 4 to our consolidated financial statements for the three and six months ended June 30, 2025 for more information on the SDLP (as defined below).
Previous wording
(6)Includes our subordinated loan and equity investments in IHAM (as defined below), as applicable. See “Ivy Hill Asset Management, L.P.” below and Note 4 to our consolidated financial statements for the three months ended March 31, 2025 for more information on IHAM.
Current wording
(6)Includes our subordinated loan and equity investments in IHAM (as defined below), as applicable. See “Ivy Hill Asset Management, L.P.” below and Note 4 to our consolidated financial statements for the three and six months ended June 30, 2025 for more information on IHAM.
Previous wording
(2)First lien senior secured loans include certain loans that we classify as “unitranche” loans. The total amortized cost and fair value of the loans that we classified as “unitranche” loans were $10.0 billion and $9.8 billion, respectively, as of March 31, 2025, and $8.8 billion and $8.6 billion, respectively, as of December 31, 2024.
Current wording
(2)First lien senior secured loans include certain loans that we classify as “unitranche” loans. The total amortized cost and fair value of the loans that we classified as “unitranche” loans were $10.7 billion and $10.5 billion, respectively, as of June 30, 2025, and $8.8 billion and $8.6 billion, respectively, as of December 31, 2024.
Previous wording
(3)The proceeds from these certificates were applied to co-investments with Varagon Capital Partners (“Varagon”) and its clients to fund first lien senior secured loans to 20 and 20 different borrowers as of March 31, 2025 and December 31, 2024, respectively.
Current wording
(3)The proceeds from these certificates were applied to co-investments with Varagon Capital Partners (“Varagon”) and its clients to fund first lien senior secured loans to 19 and 20 different borrowers as of June 30, 2025 and December 31, 2024, respectively.
Previous wording
We have commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to fund which are at (or substantially at) our discretion. Our commitment to fund delayed draw loans is triggered upon the satisfaction of certain pre-negotiated terms and conditions. Generally, the most significant and uncertain term requires the borrower to satisfy a specific use of proceeds covenant. The use of proceeds covenant typically requires the borrower to use the additional loans for the specific purpose of a permitted acquisition or permitted investment, for example. In addition to the use of proceeds covenant, the borrower is generally required to satisfy additional negotiated covenants (including specified leverage levels). We are also party to subscription agreements to fund equity investments. See Note 7 to our consolidated financial statements for the three months ended March 31, 2025 for more information on our unfunded commitments, including commitments to issue letters of credit, related to certain of our portfolio companies.
Current wording
We have commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to fund which are at (or substantially at) our discretion. Our commitment to fund delayed draw loans is triggered upon the satisfaction of certain pre-negotiated terms and conditions. Generally, the most significant and uncertain term requires the borrower to satisfy a specific use of proceeds covenant. The use of proceeds covenant typically requires the borrower to use the additional loans for the specific purpose of a permitted acquisition or permitted investment, for example. In addition to the use of proceeds covenant, the borrower is generally required to satisfy additional negotiated covenants (including specified leverage levels). We are also party to subscription agreements to fund equity investments. See Note 7 to our consolidated financial statements for the three and six months ended June 30, 2025 for more information on our unfunded commitments, including commitments to issue letters of credit, related to certain of our portfolio companies.
Previous wording
As of March 31, 2025 and December 31, 2024, loans on non-accrual status represented 1.5% of the total investments at amortized cost (or 0.9% at fair value) and 1.7% at amortized cost (or 1.0% at fair value), respectively.
Current wording
As of June 30, 2025 and December 31, 2024, loans on non-accrual status represented 2.0% of the total investments at amortized cost (or 1.2% at fair value) and 1.7% at amortized cost (or 1.0% at fair value), respectively.
Previous wording
Ivy Hill Asset Management, L.P. (“IHAM”), our wholly owned portfolio company, is an asset manager and an SEC-registered investment adviser. As of March 31, 2025, IHAM had assets under management of approximately $12.9 billion. As of March 31, 2025, IHAM managed 22 vehicles (the “IHAM Vehicles”). IHAM earns fee income from managing the IHAM Vehicles and has also invested in certain of these vehicles as part of its business strategy. The amortized cost of IHAM’s total investments as of March 31, 2025 and December 31, 2024 was $2,419 million and $2,237 million, respectively. For the three months ended March 31, 2025 and 2024, IHAM had management and incentive fee income of $12 million and $14 million, respectively, and other investment-related income of $58 million and $99 million, respectively, which included net realized gains or losses on investments and other transactions.
Current wording
Ivy Hill Asset Management, L.P. (“IHAM”), our wholly owned portfolio company, is an asset manager and an SEC-registered investment adviser. As of June 30, 2025, IHAM had assets under management of approximately $13.1 billion. As of June 30, 2025, IHAM managed 21 vehicles (the “IHAM Vehicles”). IHAM earns fee income from managing the IHAM Vehicles and has also invested in certain of these vehicles as part of its business strategy. The amortized cost of IHAM’s total investments as of June 30, 2025 and December 31, 2024 was $2,652 million and $2,237 million, respectively. For the three and six months ended June 30, 2025, IHAM had management and incentive fee income of $12 million and $24 million, respectively, and other investment-related income of $52 million and $110 million, respectively, which included net realized gains or losses on investments and other transactions. For the three and six months ended June 30, 2024, IHAM had management and incentive fee income of $14 million and $28 million, respectively, and investment related income of $92 million and $191 million, respectively, which included net realized gains or losses on investments and other transactions.
Previous wording
The interest income and dividend income that we earned from IHAM for the three months ended March 31, 2025 and 2024 were as follows:
Current wording
The interest income and dividend income that we earned from IHAM for the three and six months ended June 30, 2025 and 2024 were as follows:
Previous wording
From time to time, IHAM or certain IHAM Vehicles may purchase investments from, or sell investments to, us. For any such sales or purchases by the IHAM Vehicles to or from us, the IHAM Vehicle must obtain approval from third parties unaffiliated with us or IHAM, as applicable. During the three months ended March 31, 2025 and 2024, IHAM or certain of the IHAM Vehicles purchased $794 million and $35 million, respectively, of loans from us. For the three months ended March 31, 2025, we recognized $0 million of net realized gains from these sales. For the three months ended March 31, 2024, we recognized $1 million of net realized losses from these sales. During the three months ended March 31, 2025, IHAM or certain IHAM Vehicles did not sell any investments to us. During the three months ended March 31, 2024, IHAM or certain IHAM vehicles sold $27 million of investments to us.
Current wording
From time to time, IHAM or certain IHAM Vehicles may purchase investments from, or sell investments to, us. For any such sales or purchases by the IHAM Vehicles to or from us, the IHAM Vehicle must obtain approval from third parties unaffiliated with us or IHAM, as applicable. During the six months ended June 30, 2025 and 2024, IHAM or certain of the IHAM Vehicles purchased $1,371 million and $35 million, respectively, of loans from us. For the six months ended June 30, 2025 and 2024, we recognized $0 million of net realized gains and $1 million of net realized losses, respectively, from these sales. During the six months ended June 30, 2025, IHAM or certain IHAM Vehicles did not sell any investments to us. During the six months ended June 30, 2024, IHAM or certain IHAM vehicles sold $32 million of investments to us.
Previous wording
Pursuant to Rule 4-08(g) of Regulation S-X, selected financial information of IHAM, in conformity with U.S. generally accepted accounting principles (“GAAP”), as of March 31, 2025 and December 31, 2024 and for the three months ended March 31, 2025 and 2024 are presented below.
Current wording
Pursuant to Rule 4-08(g) of Regulation S-X, selected financial information of IHAM, in conformity with U.S. generally accepted accounting principles (“GAAP”), as of June 30, 2025 and December 31, 2024 and for the three and six months ended June 30, 2025 and 2024 are presented below.
Previous wording
When IHAM consolidates an IHAM Vehicle for GAAP purposes only, IHAM reflects the assets, liabilities, revenues and expenses of the Consolidated IHAM Vehicles on a gross basis, including the economic interests held by third-party investors in the Consolidated IHAM Vehicles as debt obligations, subordinated notes or non-controlling interests, in the consolidated IHAM financials below. All of the revenues earned by IHAM as the investment manager of the Consolidated IHAM Vehicles are eliminated in GAAP consolidation. However, because the eliminated amounts are earned from and funded by third-party investors, the GAAP consolidation of an IHAM Vehicle does not impact the net income or loss attributable to
Current wording
When IHAM consolidates an IHAM Vehicle for GAAP purposes only, IHAM reflects the assets, liabilities, revenues and expenses of the Consolidated IHAM Vehicles on a gross basis, including the economic interests held by third-party investors in the Consolidated IHAM Vehicles as debt obligations, subordinated notes or non-controlling interests, in the consolidated IHAM financials below. All of the revenues earned by IHAM as the investment manager of the Consolidated IHAM Vehicles are eliminated in GAAP consolidation. However, because the eliminated amounts are earned from and funded by third-party investors, the GAAP consolidation of an IHAM Vehicle does not impact the net income or loss attributable to IHAM. As a result, we believe an assessment of IHAM’s business and the impact to our investment in IHAM is best viewed on a stand-alone basis as reflected in the first column in the tables below.
Previous wording
(2)The determination of such fair value is determined in accordance with IHAM’s valuation process (separate and apart from our valuation process described elsewhere herein). The amortized cost of IHAM’s total investments as of March 31, 2025 and December 31, 2024 was $2,419 million and $2,237 million, respectively. The amortized cost of the total investments of IHAM on a consolidated basis as of March 31, 2025 and December 31, 2024 was $9,493 million and $8,343 million, respectively.
Current wording
(2)The determination of such fair value is determined in accordance with IHAM’s valuation process (separate and apart from our valuation process described elsewhere herein). The amortized cost of IHAM’s total investments as of June 30, 2025 and December 31, 2024 was $2,652 million and $2,237 million, respectively. The amortized cost of the total investments of IHAM on a consolidated basis as of June 30, 2025 and December 31, 2024 was $10,027 million and $8,343 million, respectively.
Previous wording
(4)As of March 31, 2025 and December 31, 2024, net unrealized losses of $61 million and $70 million, respectively, have been eliminated upon consolidation and the elimination is included in “non-controlling interests in Consolidated IHAM Vehicles” in the selected balance sheet information.
Current wording
(4)As of June 30, 2025 and December 31, 2024, net unrealized losses of $49 million and $70 million, respectively, have been eliminated upon consolidation and the elimination is included in “non-controlling interests in Consolidated IHAM Vehicles” in the selected balance sheet information.
Previous wording
(5)Non-controlling interests in Consolidated IHAM Vehicles includes net unrealized depreciation in the Consolidated IHAM Vehicles of $143 million and $171 million as of March 31, 2025 and December 31, 2024, respectively.
Current wording
(5)Non-controlling interests in Consolidated IHAM Vehicles includes net unrealized depreciation in the Consolidated IHAM Vehicles of $185 million and $171 million as of June 30, 2025 and December 31, 2024, respectively.
Previous wording
The interest income from our investment in the SDLP Certificates and capital structuring service fees and other income earned for the three months ended March 31, 2025 and 2024 were as follows:
Current wording
The interest income from our investment in the SDLP Certificates and capital structuring service fees and other income earned for the three and six months ended June 30, 2025 and 2024 were as follows:
Previous wording
As of March 31, 2025 and December 31, 2024, the SDLP portfolio was comprised entirely of first lien senior secured loans primarily to U.S. middle-market companies and were in industries similar to the companies in our portfolio. As of March 31, 2025, one of the loans was on non-accrual status. As of December 31, 2024, two of the loans were on non-accrual status. Below is a summary of the SDLP’s portfolio as of March 31, 2025 and December 31, 2024:
Current wording
As of June 30, 2025 and December 31, 2024, the SDLP portfolio was comprised entirely of first lien senior secured loans primarily to U.S. middle-market companies and were in industries similar to the companies in our portfolio. As of June 30, 2025, one of the loans in the SDLP portfolio was on non-accrual status. As of December 31, 2024, two of the loans in the SDLP portfolio were on non-accrual status. Below is a summary of the SDLP’s portfolio as of June 30, 2025 and December 31, 2024:
Previous wording
(2)First lien senior secured loans include certain loans that the SDLP classifies as “unitranche” loans. As of March 31, 2025 and December 31, 2024, the total principal amount of loans in the SDLP portfolio that the SDLP classified as “unitranche” loans was $3,732 million and $3,937 million, respectively.
Current wording
(2)First lien senior secured loans include certain loans that the SDLP classifies as “unitranche” loans. As of June 30, 2025 and December 31, 2024, the total principal amount of loans in the SDLP portfolio that the SDLP classified as “unitranche” loans was $3,452 million and $3,937 million, respectively.
Previous wording
Selected financial information of the SDLP, in conformity with GAAP, as of March 31, 2025 and December 31, 2024 and for the three months ended March 31, 2025 and 2024 are presented below:
Current wording
Selected financial information of the SDLP, in conformity with GAAP, as of June 30, 2025 and December 31, 2024 and for the three and six months ended June 30, 2025 and 2024 are presented below:
Previous wording
Operating results for the three months ended March 31, 2025 and 2024 were as follows:
Current wording
Operating results for the three and six months ended June 30, 2025 and 2024 were as follows:
Previous wording
Interest income from investments for the three months ended March 31, 2025 increased from the comparable period in 2024 primarily due to the increase in the average size of our portfolio. The average size and weighted average yield of our portfolio at amortized cost for the three months ended March 31, 2025 and 2024 were as follows:
Current wording
Interest income from investments for the three months ended June 30, 2025 decreased from the comparable period in 2024 primarily as a result of declining base rates, resulting in a decrease in the weighted average yield of our portfolio, and partially offset by an increase in the average size of our portfolio. Interest income from investments for the six months ended June 30, 2025 increased from the comparable period in 2024 primarily due to the increase in the average size of our portfolio. The average size and weighted average yield of our portfolio at amortized cost for the three and six months ended June 30, 2025 and 2024 were as follows:
Previous wording
Capital structuring service fees for the three months ended March 31, 2025 increased from the comparable period in 2024 primarily due to an increase in new investment commitments. The new investment commitments and weighted average capital structuring service fee percentages for the three months ended March 31, 2025 and 2024 were as follows:
Current wording
Capital structuring service fees for the three and six months ended June 30, 2025 decreased from the comparable periods in 2024 primarily due to a decrease in new investment commitments. The new investment commitments and weighted average capital structuring service fee percentages for the three and six months ended June 30, 2025 and 2024 were as follows:
Previous wording
(1)Excludes $366 million and $1,552 million of new investment commitments sold to third party lenders during the three months ended March 31, 2025 and 2024, respectively. There were no investment commitments to IHAM during the three months ended March 31, 2025. Excludes $240 million of investment commitments to IHAM for the three months ended March 31, 2024.
Current wording
(1)Excludes $161 million and $34 million of new investment commitments sold to third party lenders during the three months ended June 30, 2025 and 2024, respectively, and $526 million and $1,586 million during the six months ended June 30, 2025 and 2024, respectively. Excludes $155 million and $155 million of investment commitments to IHAM for the three and six months ended June 30, 2025, respectively, and $23 million and $263 million, respectively for the comparable periods in 2024.
Previous wording
Dividend income for the three months ended March 31, 2025 and 2024 were as follows:
Current wording
Dividend income for the three and six months ended June 30, 2025 and 2024 were as follows:
Previous wording
Dividend income received from IHAM for the three months ended March 31, 2025 increased from the comparable period in 2024 primarily due to the increased earnings from the IHAM Vehicles. Recurring dividend income for the three months ended March 31, 2025 increased from the comparable period in 2024 primarily due to an increase in yielding preferred equity investments.
Current wording
Dividend income received from IHAM for the three and six months ended June 30, 2025 increased from the comparable periods in 2024 primarily due to the increased earnings from the IHAM Vehicles. Recurring dividend income for the three and six months ended June 30, 2025 increased from the comparable periods in 2024 primarily due to an increase in yielding preferred equity investments.
Previous wording
Interest and credit facility fees for the three months ended March 31, 2025 and 2024, were comprised of the following:
Current wording
Interest and credit facility fees for the three and six months ended June 30, 2025 and 2024, were comprised of the following:
Previous wording
(1)Includes the impact of the interest rate swaps for the three months ended March 31, 2025 and 2024.
Current wording
(1)Includes the impact of the interest rate swaps for the three and six months ended June 30, 2025 and 2024.
Previous wording
Stated interest expense for the three months ended March 31, 2025 increased from the comparable period in 2024 primarily due to the increase in the average principal amount of outstanding debt. Average outstanding debt and weighted average stated interest rate on our outstanding debt for the three months ended March 31, 2025 and 2024 were as follows:
Current wording
Stated interest expense for the three and six months ended June 30, 2025 increased from the comparable periods in 2024 primarily due to the increase in the average principal amount of outstanding debt. Average outstanding debt and weighted average stated interest rate on our outstanding debt for the three and six months ended June 30, 2025 and 2024 were as follows:
Previous wording
(1)The weighted average stated interest rate on our outstanding debt for the three months ended March 31, 2025 and 2024 includes the impact of interest rate swaps. See Note 6 to our consolidated financial statements for the three months ended March 31, 2025 for more information on the interest rate swaps.
Current wording
(1)The weighted average stated interest rate on our outstanding debt for the three and six months ended June 30, 2025 and 2024 includes the impact of interest rate swaps. See Note 6 to our consolidated financial statements for the three and six months ended June 30, 2025 for more information on the interest rate swaps.
Previous wording
The base management fee for the three months ended March 31, 2025 increased from the comparable period in 2024 primarily due to the increase in the average size of our portfolio.
Current wording
The base management fee for the three and six months ended June 30, 2025 increased from the comparable periods in 2024 primarily due to the increase in the average size of our portfolio.
Previous wording
The income based fee for the three months ended March 31, 2025 decreased from the comparable period in 2024 primarily due to the pre-incentive fee net investment income, as defined in the investment advisory and management agreement, for the three months ended March 31, 2025 being lower than in the comparable period in 2024.
Current wording
The income based fee for the three and six months ended June 30, 2025 decreased from the comparable periods in 2024 primarily due to the pre-incentive fee net investment income, as defined in the investment advisory and management agreement, for the three and six months ended June 30, 2025 being lower than in the comparable periods in 2024.
Previous wording
For the three months ended March 31, 2025, the reduction in the capital gains incentive fee calculated in accordance with GAAP was $25 million. For the three months ended March 31, 2024, the capital gains incentive fee calculated in accordance with GAAP was $25 million. The capital gains incentive fee accrual for the three months ended March 31, 2025 changed from the comparable period in 2024 primarily due to net losses on investments, foreign currency, other transactions and the extinguishment of debt of $124 million compared to net gains of $124 million for the comparable period in 2024. The capital gains incentive fee accrued under GAAP includes an accrual related to unrealized capital appreciation, whereas the capital gains incentive fee actually payable under our investment advisory and management agreement does not. There can be no assurance that such unrealized capital appreciation will be realized in the future. The accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. As of March 31, 2025, there was $80 million of capital gains incentive fee accrued in accordance with GAAP. As of March 31, 2025, there was no capital gains incentive fee actually payable under our investment advisory and management agreement. See Note 3 to our consolidated financial statements for the three months ended March 31, 2025 for more information on the base management fee, income based fee and capital gains incentive fee.
Current wording
For the three months ended June 30, 2025, the capital gains incentive fee calculated in accordance with GAAP was $4 million. For the six months ended June 30, 2025, the reduction in the capital gains incentive fee calculated in accordance with GAAP was $21 million. For the three months ended June 30, 2024, the reduction in the capital gains incentive fee calculated in accordance with GAAP was $13 million. For the six months ended June 30, 2024, the capital gains incentive fee calculated in accordance with GAAP was $12 million. The capital gains incentive fee accrual for the six months ended June 30, 2025 changed from the comparable period in 2024 primarily due to net losses on investments, foreign currency, other transactions and the extinguishment of debt of $105 million compared to net gains of $59 million for the comparable period in 2024. The capital gains incentive fee accrued under GAAP includes an accrual related to unrealized capital appreciation, whereas the capital gains incentive fee actually payable under our investment advisory and management agreement does not. There can be no assurance that such unrealized capital appreciation will be realized in the future. The accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. As of June 30, 2025, there was $84 million of capital gains incentive fee accrued in accordance with GAAP. As of June 30, 2025, there was no capital gains incentive fee actually payable under our investment advisory and management agreement. See Note 3 to our consolidated financial statements for the three and six months ended June 30, 2025 for more information on the base management fee, income based fee and capital gains incentive fee.
Previous wording
Cash payment of any income based fee and capital gains incentive fee otherwise earned by our investment adviser is deferred if during the most recent four full calendar quarter period ending on or prior to the date such payment is to be made the sum of (a) the aggregate distributions to our stockholders and (b) the change in net assets (defined as total assets less indebtedness and before taking into account any income based fee and capital gains incentive fee payable during the period) is less than 7.0% of our net assets (defined as total assets less indebtedness) at the beginning of such period. These calculations will be adjusted for any share issuances or repurchases. Any income based fee and capital gains incentive fee deferred for payment are carried over for payment in subsequent calculation periods to the extent such fees are payable under the terms of the investment advisory and management agreement. See Note 3 to our consolidated financial statements for the three months ended March 31, 2025 for more information on the related deferral terms.
Current wording
Cash payment of any income based fee and capital gains incentive fee otherwise earned by our investment adviser is deferred if during the most recent four full calendar quarter period ending on or prior to the date such payment is to be made the sum of (a) the aggregate distributions to our stockholders and (b) the change in net assets (defined as total assets less indebtedness and before taking into account any income based fee and capital gains incentive fee payable during the period) is less than 7.0% of our net assets (defined as total assets less indebtedness) at the beginning of such period. These calculations will be adjusted for any share issuances or repurchases. Any income based fee and capital gains incentive fee deferred for payment are carried over for payment in subsequent calculation periods to the extent such fees are payable under the terms of the investment advisory and management agreement. See Note 3 to our consolidated financial statements for the three and six months ended June 30, 2025 for more information on the related deferral terms.
Previous wording
Administrative and other fees represent fees paid to Ares Operations and our investment adviser for our allocable portion of overhead and other expenses incurred by Ares Operations and our investment adviser in performing their obligations under the administration agreement and the investment advisory and management agreement, respectively, including our allocable portion of the compensation, rent and other expenses of certain of our officers and their respective staffs. See Note 3 to our consolidated financial statements for the three months ended March 31, 2025, for more information on the administrative and other fees.
Current wording
Administrative and other fees represent fees paid to Ares Operations and our investment adviser for our allocable portion of overhead and other expenses incurred by Ares Operations and our investment adviser in performing their obligations under the administration agreement and the investment advisory and management agreement, respectively, including our allocable portion of the compensation, rent and other expenses of certain of our officers and their respective staffs. See Note 3 to our consolidated financial statements for the three and six months ended June 30, 2025, for more information on the administrative and other fees.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Subordinated Notes, as such, the April 2036 CLO Subordinated Notes are eliminated in consolidation. The following table presents information on the April 2036 CLO Notes as of June 30, 2025 (dollar amounts in millions):
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
IHAM. As a result, we believe an assessment of IHAM’s business and the impact to our investment in IHAM is best viewed on a stand-alone basis as reflected in the first column in the tables below.
Previous report — wording carried elsewhere
For the three months ended March 31, 2025 and 2024
Previous report — wording carried elsewhere
The net realized losses on investments during the three months ended March 31, 2024 consisted of the following:
Previous report — wording carried elsewhere
SOFR or a “base rate” (as defined in the documents governing the Revolving Funding Facility) plus an applicable spread of 2.00% per annum. Ares Capital CP is also required to pay a commitment fee of between 0.50% and 1.25% per annum depending on the size of the unused portion of the Revolving Funding Facility. As of March 31, 2025, there was $1.0 billion outstanding under the Revolving Funding Facility and we and Ares Capital CP were in compliance in all material respects with the terms of the Revolving Funding Facility.