ARES CAPITAL CORP
For the period ended Sep 30, 2026. Filed Oct 27, 2026.
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.
Sep 30, 2026 · Filed Oct 27, 2026
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 2026-06-30; filed 2026-07-29.
0001628280-26-050307
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-27.
0001628280-26-067383
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 255 previous paragraphs and 278 current paragraphs.
160 unchanged; 77 reworded; 40 added; 15 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 46 previous and 47 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 (40)
Current report
•the acquisition of MidCap Financial Investment Corporation (“MFIC”);
Current report
• the likelihood that the MFIC Transaction is completed and the anticipated timing of its completion;
Current report
•the ability of our business and MFIC’s business to successfully integrate if the MFIC Transaction is completed; and
Current report
•the impact to the periods following the completion of the MFIC Transaction.
Current report
During the third quarter of 2026, economic activity remained generally stable and labor market conditions were relatively balanced, despite continued uncertainty related to geopolitical developments and their impact on inflation, particularly with respect to energy prices. As a result of elevated inflation, the Federal Reserve raised the target range for the federal funds rate by 25 basis points and signaled the potential for additional tightening, with the aim to deliver price stability and support a timelier return to its 2% inflation target. Against this backdrop, performance across U.S. leveraged corporate credit markets was mixed, with floating-rate credit outperforming fixed-rate credit given expectations for higher market interest rates. Looking ahead, while risks remain, underlying fundamentals are supportive of continued stability and healthy overall economic activity.
Current report
For the three and nine months ended September 30, 2026 and 2025
Current report
(1)There were no new investment commitments originated during the three months ended September 30, 2026 that were syndicated to third-party lenders during the same period. Excludes $565 million of new investment commitments originated during the nine months ended September 30, 2026 that were syndicated to third-party lenders during the same period. Excludes $375 million of new investment commitments originated during the three months ended September 30, 2025 that were syndicated to third-party lenders during the same period and $901 million during the nine months ended September 30, 2025. Excludes $389 million and $139 million of investments funded to IHAM for the three months ended September 30, 2026 and 2025, respectively, and $1,321 million and $294 million for the nine months ended September 30, 2026 and 2025, respectively. Excludes $570 million of new investment commitments related to a portfolio acquisition for the nine months ended September 30, 2026.
Current report
During the three months ended September 30, 2026, we also recognized net realized gains on foreign currency and other transactions of $11 million.
Current report
During the three months ended September 30, 2025, we also recognized net realized losses on foreign currency and other transactions of $13 million.
Current report
The net realized gains on investments during the nine months ended September 30, 2026 consisted of the following:
Current report
During the nine months ended September 30, 2026, we also recognized net realized gains on foreign currency and other transactions of $5 million.
Current report
The net realized gains on investments during the nine months ended September 30, 2025 consisted of the following:
Current report
During the nine months ended September 30, 2025, we also recognized net realized losses on foreign currency and other transactions of $21 million.
Current report
During the three months ended September 30, 2025, we also recognized net unrealized gains on foreign currency and other transactions of $30 million.
Current report
The changes in net unrealized appreciation and depreciation on investments during the nine months ended September 30, 2026 consisted of the following:
Current report
During the nine months ended September 30, 2026, we also recognized net unrealized gains on foreign currency and other transactions of $30 million.
Current report
The changes in net unrealized appreciation and depreciation on investments during the nine months ended September 30, 2025 consisted of the following:
Current report
During the nine months ended September 30, 2025, we also recognized net unrealized losses on foreign currency and other transactions of $24 million.
Current report
In July 2026, ADL CLO 1 completed a CLO reset transaction pursuant to which its previously existing $702 million term debt securitization was refinanced through the issuance of $709 of new term debt under the ADL CLO 1 Debt Securitization. The transaction resulted in a realized loss on extinguishment of debt of approximately $2 million related to unamortized debt issuance costs.
Current report
On October 26, 2026, we entered into a definitive agreement (the “Merger Agreement”) to acquire MFIC, a Maryland corporation, in a cash and stock transaction (the “MFIC Transaction”). Our investment adviser is also a party to the Merger Agreement for certain limited purposes, including to fund the Cash Consideration (as defined below).
Current report
Under the Merger Agreement, Union Acquisition Sub Inc., our wholly owned subsidiary, will merge with and into MFIC, with MFIC as the surviving corporation (the “First Merger”). Immediately afterward, MFIC will merge with and into Union Acquisition Sub LLC, our wholly owned subsidiary, with Union Acquisition Sub LLC as the surviving company (together with the First Merger, the “Mergers”). As of October 26, 2026, the last full trading day prior to the announcement of the MFIC Transaction, the transaction had an implied value of approximately $2.6 billion, or $10.88 per share of MFIC common stock, based on $1.21 in Cash Consideration and $9.67 in implied value of the Share Consideration (as defined below) and 82,372,628 MFIC shares of common stock outstanding.
Current report
Subject to the terms of the Merger Agreement, upon the consummation of the First Merger, each share of MFIC common stock issued and outstanding immediately before the effective time of the First Merger (other than certain canceled shares) will be converted into the right to receive (i) $1.21 per share in cash, without interest, payable by Ares Capital Management, acting solely on its own behalf (the “Cash Consideration”), and (ii) a number of our shares of common stock, par value $0.001 per share, determined by the Exchange Ratio described below (the “Share Consideration”), plus cash in lieu of fractional shares, payable by us. The Exchange Ratio will be determined shortly before closing, based on our net asset value per share (the “Closing NAV”) and on the closing price of our common stock on the date that net asset value is determined (the “Closing Price”).
Current report
The Exchange Ratio will be calculated as follows:
Current report
•If the Closing Price is at or below 100% of the Closing NAV, the Exchange Ratio is $9.67 (less the per share amount of any post-signing tax dividends declared by MFIC) (the “Dividend Adjusted Price”) divided by our net asset value per share.
Current report
•If the Closing Price is above 100% but no more than 104.5% of the Closing NAV, the Dividend Adjusted Price is first multiplied by 1.00 plus 50% of the premium of the Closing Price over the Closing NAV, and the result is divided by the Closing Price.
Current report
•If the Closing Price is above 104.5% of the Closing NAV, the Dividend Adjusted Price is first multiplied by 102.25%, and the result is divided by the Closing Price.
Current report
Because the Exchange Ratio depends on our net asset value per share and stock price near closing and is adjusted by the per share amount of any tax dividends declared by MFIC, the number of shares of our common stock to be issued will not be known until shortly before the MFIC Transaction closes. The Cash Consideration and the Share Consideration are subject to adjustment for certain changes in capitalization, such as stock splits, reclassifications and stock dividends. As of October 26, 2026, 82,372,628 shares of MFIC common stock were outstanding.
Current report
Completion of the MFIC Transaction is subject to certain conditions, including, among others:
Current report
•approval of the MFIC Transaction by MFIC stockholders holding a majority of the outstanding shares of MFIC common stock;
Current report
•approval for listing on NASDAQ of the shares of our common stock to be issued;
Current report
•effectiveness of our registration statement on Form N-14 to be filed in connection with such issuance;
Current report
•the obtainment of, or deemed obtainment of, certain antitrust approvals;
Current report
•receipt of certain third-party consents relating to MFIC’s collateralized loan obligation vehicles;
Current report
•receipt by MFIC of a tax opinion; and
Current report
•other customary closing conditions.
Current report
Approval by our stockholders is not required.
Current report
While there can be no assurances as to the exact timing, or that the MFIC Transaction will be completed at all, we expect to complete the MFIC Transaction in the first half of 2027. The Merger Agreement may be terminated by either party if the First Merger has not been completed within nine months after the date of the Merger Agreement, which deadline is automatically extended by three months if, on that date, all closing conditions other than those relating to antitrust approvals have been satisfied or waived. In certain circumstances, including termination by MFIC to enter into a superior proposal or termination by us following a change in the MFIC board’s recommendation, MFIC will be required to pay us a termination fee of $31.36 million.
Current report
In connection with the MFIC Transaction, we have agreed to repay at closing the outstanding obligations under MFIC’s senior secured revolving credit agreement. MFIC has also agreed, if we request, to redeem MFIC’s outstanding notes issued under its indenture at closing.
Current report
Wells Fargo Bank, National Association has also agreed, subject to customary conditions, to provide $750 million of additional secured financing that can be used to support the MFIC Transaction under the Loan and Servicing Agreement, dated as of January 22, 2010, among Ares Capital CP Funding LLC, as borrower, and us, as servicer and transferor, as amended.
Current report
The foregoing summary description of the Merger Agreement and the transactions contemplated thereby is subject to and qualified in its entirety by reference to the Merger Agreement, a copy of which has been filed as Exhibit 2.1 to our Current Report on Form 8-K, dated October 27, 2026, the terms of which are incorporated herein by reference.
Removed paragraphs (15)
Previous report
During the second quarter of 2026, U.S. leveraged corporate credit markets generated positive total returns, supported by stable economic growth and balanced labor market conditions, despite continued uncertainty related to geopolitical developments and their impact on energy prices. With inflation remaining above the Federal Reserve's long-run target, the Federal Reserve reiterated its commitment to price stability and its willingness to further tighten monetary policy if warranted by economic conditions. Looking ahead, while risks remain, underlying fundamentals are supportive of continued stability and healthy overall economic activity.
Previous report
For the three and six months ended June 30, 2026 and 2025
Previous report
(1)Excludes $86 million and $161 million of new investment commitments originated during the three months ended June 30, 2026 and 2025, respectively, and syndicated to third-party lenders during the same periods, respectively, and $565 million and $526 million during the six months ended June 30, 2026 and 2025, respectively. Excludes $554 million and $155 million of investments funded to IHAM for the three months ended June 30, 2026 and 2025, respectively, and $932 million and $155 million for the six months ended June 30, 2026 and 2025, respectively.
Previous report
The net realized gains on investments during the six months ended June 30, 2026 consisted of the following:
Previous report
During the six months ended June 30, 2026, we also recognized net realized losses on foreign currency and other transactions of $6 million.
Previous report
The net realized gains on investments during the six months ended June 30, 2025 consisted of the following:
Previous report
During the three months ended June 30, 2025, we also recognized net unrealized losses on foreign currency and other transactions of $10 million.
Previous report
The changes in net unrealized appreciation and depreciation on investments during the six months ended June 30, 2026 consisted of the following:
Previous report
During the six months ended June 30, 2026, we also recognized net unrealized gains on foreign currency and other transactions of $38 million.
Previous report
The changes in net unrealized appreciation and depreciation on investments during the six months ended June 30, 2025 consisted of the following:
Previous report
During the six months ended June 30, 2025, we also recognized net unrealized losses on foreign currency and other transactions of $54 million.
Previous report
See “Recent Developments,” as well as Note 15 to our consolidated financial statements for the three and six months ended June 30, 2026 for a subsequent event relating to the ADL CLO 1 Debt Securitization.
Previous report
See “Recent Developments,” as well as Note 15 to our consolidated financial statements for the three and six months ended June 30, 2026 for a subsequent event relating to the July 2026 Notes.
Previous report
In July 2026, ADL CLO 1 completed a refinancing of its approximately $708.7 million term debt securitization (as refinanced, the “ADL CLO 1 Debt Securitization”). The ADL CLO 1 Debt Securitization is also known as a collateralized loan obligation and is an on-balance-sheet financing incurred by us.
Previous report
The notes offered in the ADL CLO 1 Debt Securitization that mature on July 25, 2038 (collectively, the “July 2038 CLO Notes”) were issued by ADL CLO 1 pursuant to the amended and restated indenture and security agreement governing the July 2038 CLO Notes and include (i) $267.0 million of Class A-1-R Senior Floating Rate Notes, which bear interest at Term SOFR plus 1.46%; (ii) $24.5 million of Class A-2-R Senior Floating Rate Notes, which bear interest at Term SOFR plus 1.70%; (iii) $45.5 million of Class B-R Senior Floating Rate Notes, which bear interest at Term SOFR plus 1.90% and (iv) an additional $7.1 million of additional subordinated notes (in addition to the $225.6 million of existing subordinated notes issued by ADL CLO 1), which do not bear interest. We retained all of the $7.1 million of subordinated notes, which are unsecured obligations of ADL CLO 1 and will accordingly be eliminated in consolidation. In addition, in connection with the ADL CLO 1 Debt Securitization, ADL CLO 1 incurred $139.0 million of Class A-1-LR term loans that mature on July 25, 2038, which bear interest at Term SOFR plus 1.46%, under a Class A-1-LR credit agreement. The proceeds from the ADL CLO 1 Debt Securitization were used in part to redeem all outstanding April 2036 CLO Secured Notes issued by ADL CLO 1.
Reworded paragraphs (77)
Previous wording
•political and regulatory conditions that contribute to uncertainty and market volatility including the impact of any prolonged U.S. government shutdown as well as the legislative, regulatory, trade, immigration and other policies 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 upcoming U.S. midterm elections, any prolonged U.S. government shutdown as well as the legislative, regulatory, trade, immigration and other policies associated with the current U.S. presidential administration;
Previous wording
•the timing of cash flows, if any, from the operations of our portfolio companies; and
Current wording
•the timing of cash flows, if any, from the operations of our portfolio companies;
Previous wording
Since our initial public offering (“IPO”) on October 8, 2004 through June 30, 2026, 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 $58.0 billion and total proceeds from such exited investments of approximately $74.9 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 September 30, 2026, 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 $59.0 billion and total proceeds from such exited investments of approximately $76.2 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 June 30, 2026, our realized gains have exceeded our realized losses by approximately $1.1 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.
Current wording
Additionally, since our IPO on October 8, 2004 through September 30, 2026, our realized gains have exceeded our realized losses by approximately $1.0 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 and six months ended June 30, 2026 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 nine months ended September 30, 2026 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 $2.0 billion for the three months ended June 30, 2026 and 2025, respectively.
Current wording
(2)Includes both funded and unfunded commitments. Of these new investment commitments, we funded $1.6 billion and $3.0 billion for the three months ended September 30, 2026 and 2025, respectively.
Previous wording
(3)Includes both funded and unfunded commitments. For the three months ended June 30, 2026 and 2025, investment commitments exited included exits of unfunded commitments of $265 million and $171 million, respectively.
Current wording
(3)Includes both funded and unfunded commitments. For the three months ended September 30, 2026 and 2025, investment commitments exited included exits of unfunded commitments of $298 million and $281 million, respectively.
Previous wording
(4)For the three months ended June 30, 2026 and 2025, net repayments of first lien secured revolving loans were $15 million and $23 million, respectively.
Current wording
(4)For the three months ended September 30, 2026 and 2025, net repayments of first lien secured revolving loans were $188 million and $58 million, respectively.
Previous 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, 2026 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 nine months ended September 30, 2026 for more information on the SDLP (as defined below).
Previous wording
(6)Includes our subordinated loan to 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, 2026 for more information on IHAM.
Current wording
(6)Includes our subordinated loan to 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 nine months ended September 30, 2026 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 $13.1 billion and $12.8 billion, respectively, as of June 30, 2026, and $11.3 billion and $11.2 billion, respectively, as of December 31, 2025.
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 $13.6 billion and $13.3 billion, respectively, as of September 30, 2026, and $11.3 billion and $11.2 billion, respectively, as of December 31, 2025.
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 72 and 39 different borrowers as of June 30, 2026 and December 31, 2025, 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 73 and 39 different borrowers as of September 30, 2026 and December 31, 2025, 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 and six months ended June 30, 2026 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 nine months ended September 30, 2026 for more information on our unfunded commitments, including commitments to issue letters of credit, related to certain of our portfolio companies.
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 June 30, 2026, IHAM had assets under management of approximately $16.3 billion. As of June 30, 2026, IHAM managed 24 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, 2026 and December 31, 2025 was $3,628 million and $3,190 million, respectively. For the three and six months ended June 30, 2026, IHAM had management and incentive fee income of $15 million and $30 million, respectively, and investment-related income of $100 million and $198 million, respectively, which included net realized gains or losses on investments and other transactions. 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 investment-related income of $55 million and $113 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 September 30, 2026, IHAM had assets under management of approximately $17.7 billion. As of September 30, 2026, IHAM managed 25 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 September 30, 2026 and December 31, 2025 was $3,863 million and $3,190 million, respectively. For the three and nine months ended September 30, 2026, IHAM had management and incentive fee income of $16 million and $46 million, respectively, and investment-related income of $110 million and $308 million, respectively, which included net realized gains or losses on investments and other transactions. For the three and nine months ended September 30, 2025, IHAM had management and incentive fee income of $15 million and $39 million, respectively, and investment-related income of $86 million and $199 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 and six months ended June 30, 2026 and 2025 were as follows:
Current wording
The interest income and dividend income that we earned from IHAM for the three and nine months ended September 30, 2026 and 2025 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 six months ended June 30, 2026 and 2025, IHAM or certain of the IHAM Vehicles purchased $2,128 million and $1,371 million, respectively, of loans from us. For the six months ended June 30, 2026 and 2025, we recognized approximately $2 million and $0 million of net realized gains, respectively, from these sales. During the six months ended June 30, 2026 and 2025, neither IHAM nor any IHAM Vehicles sold any 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 nine months ended September 30, 2026 and 2025, IHAM or certain of the IHAM Vehicles purchased $3,292 million and $1,771 million, respectively, of loans from us. For the nine months ended September 30, 2026 and 2025, we recognized approximately $2 million of net realized losses and $0 million of net realized gains, respectively, from these sales. During the nine months ended September 30, 2026 and 2025, neither IHAM nor any IHAM Vehicles sold any 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 June 30, 2026 and December 31, 2025 and for the three and six months ended June 30, 2026 and 2025 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 September 30, 2026 and December 31, 2025 and for the three and nine months ended September 30, 2026 and 2025 are presented 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 June 30, 2026 and December 31, 2025 was $3,628 million and $3,190 million, respectively. The amortized cost of the total investments of IHAM on a consolidated basis as of June 30, 2026 and December 31, 2025 was $13,381 million and $11,766 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 September 30, 2026 and December 31, 2025 was $3,863 million and $3,190 million, respectively. The amortized cost of the total investments of IHAM on a consolidated basis as of September 30, 2026 and December 31, 2025 was $14,247 million and $11,766 million, respectively.
Previous wording
(4)As of June 30, 2026 and December 31, 2025, net unrealized losses of $125 million and $85 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 September 30, 2026 and December 31, 2025, net unrealized losses of $139 million and $85 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 $316 million and $167 million as of June 30, 2026 and December 31, 2025, respectively.
Current wording
(5)Non-controlling interests in Consolidated IHAM Vehicles includes net unrealized depreciation in the Consolidated IHAM Vehicles of $336 million and $167 million as of September 30, 2026 and December 31, 2025, respectively.
Previous wording
The interest income and capital structuring service fees and other income earned with respect to our investment in the SDLP Certificates for the three and six months ended June 30, 2026 and 2025 were as follows:
Current wording
The interest income and capital structuring service fees and other income earned with respect to our investment in the SDLP Certificates for the three and nine months ended September 30, 2026 and 2025 were as follows:
Previous wording
From time to time, we may sell investments to, or purchase investments from, the SDLP. During the six months ended June 30, 2026, we sold approximately $361 million of investments to the SDLP and recognized approximately $0 million of net realized losses from these sales. During the six months ended June 30, 2026, we purchased $68 million of investments from the SDLP. There were no such sales or purchases during the comparable period in 2025.
Current wording
From time to time, we may sell investments to, or purchase investments from, the SDLP. During the nine months ended September 30, 2026, we sold approximately $361 million of investments to the SDLP and recognized approximately $0 million of net realized losses from these sales. During the nine months ended September 30, 2026, we purchased $68 million of investments from the SDLP. There were no such sales or purchases during the comparable period in 2025.
Previous wording
(2)First lien senior secured loans include certain loans that the SDLP classifies as “unitranche” loans. As of June 30, 2026 and December 31, 2025, the total principal amount of loans in the SDLP portfolio that the SDLP classified as “unitranche” loans was $2,975 million and $2,844 million, respectively.
Current wording
(2)First lien senior secured loans include certain loans that the SDLP classifies as “unitranche” loans. As of September 30, 2026 and December 31, 2025, the total principal amount of loans in the SDLP portfolio that the SDLP classified as “unitranche” loans was $3,399 million and $2,844 million, respectively.
Previous wording
Selected financial information of the SDLP, in conformity with GAAP, as of June 30, 2026 and December 31, 2025 and for the three and six months ended June 30, 2026 and 2025 is presented below:
Current wording
Selected financial information of the SDLP, in conformity with GAAP, as of September 30, 2026 and December 31, 2025 and for the three and nine months ended September 30, 2026 and 2025 is presented below:
Previous wording
Operating results for the three and six months ended June 30, 2026 and 2025 were as follows:
Current wording
Operating results for the three and nine months ended September 30, 2026 and 2025 were as follows:
Previous wording
Interest income from investments for the three and six months ended June 30, 2026 increased from the comparable periods in 2025 primarily due to the increase in the average size of our portfolio, which was partially offset by lower yields. The average size and weighted average yield of our portfolio at amortized cost for the three and six months ended June 30, 2026 and 2025 were as follows:
Current wording
Interest income from investments for the three months ended September 30, 2026 decreased from the comparable period in 2025 primarily due to lower base rates, resulting in a decrease in the weighted average yield of our portfolio. Interest income from investments for the nine months ended September 30, 2026 increased from the comparable period in 2025 due to an 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 nine months ended September 30, 2026 and 2025 were as follows:
Previous wording
Capital structuring service fees for the three months ended June 30, 2026 increased from the comparable period in 2025 primarily due to an increase in the weighted average capital structuring fee percentage. This increase was partially offset by 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, 2026 and 2025 were as follows:
Current wording
Capital structuring service fees for the three and nine months ended September 30, 2026 decreased from the comparable periods in 2025 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 nine months ended September 30, 2026 and 2025 were as follows:
Previous wording
Dividend income for the three and six months ended June 30, 2026 and 2025 were as follows:
Current wording
Dividend income for the three and nine months ended September 30, 2026 and 2025 were as follows:
Previous wording
(1)Dividend income received from IHAM for the six months ended June 30, 2026 includes a non-recurring special dividend of $3 million.
Current wording
(1)Dividend income received from IHAM for the nine months ended September 30, 2026 includes a non-recurring special dividend of $3 million.
Previous wording
Recurring dividend income for the three and six months ended June 30, 2026 decreased from the comparable periods in 2025 primarily due to a decrease in yielding preferred equity investments.
Current wording
Recurring dividend income for the nine months ended September 30, 2026 decreased from the comparable period in 2025 primarily due to a decrease in yielding preferred equity investments.
Previous wording
Interest and credit facility fees for the three and six months ended June 30, 2026 and 2025 were comprised of the following:
Current wording
Interest and credit facility fees for the three and nine months ended September 30, 2026 and 2025 were comprised of the following:
Previous wording
(1)Includes the impact of the interest rate swaps.
Current wording
(1)Includes the impact of interest rate swaps.
Previous wording
Stated interest expense for the three and six months ended June 30, 2026 increased from the comparable periods in 2025 primarily due to the increase in the average principal amount of our outstanding debt. Average outstanding debt and weighted average stated interest rate on our outstanding debt for the three and six months ended June 30, 2026 and 2025 were as follows:
Current wording
Stated interest expense for the three and nine months ended September 30, 2026 increased from the comparable periods in 2025 primarily due to the increase in the average principal amount of our outstanding debt. Average outstanding debt and weighted average stated interest rate on our outstanding debt for the three and nine months ended September 30, 2026 and 2025 were as follows:
Previous wording
(1)The weighted average stated interest rate on our outstanding debt includes the impact of interest rate swaps. See Note 6 to our consolidated financial statements for the three and six months ended June 30, 2026 for more information on the interest rate swaps.
Current wording
(1)The weighted average stated interest rate on our outstanding debt includes the impact of interest rate swaps. See Note 6 to our consolidated financial statements for the three and nine months ended September 30, 2026 for more information on the interest rate swaps.
Previous wording
The base management fee for the three and six months ended June 30, 2026 increased from the comparable periods in 2025 primarily due to the increase in the average size of our portfolio.
Current wording
The base management fee for the three and nine months ended September 30, 2026 increased from the comparable periods in 2025 primarily due to the increase in the average size of our portfolio.
Previous wording
The income based fee for the three and six months ended June 30, 2026 decreased from the comparable periods in 2025 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, 2026 being lower than in the comparable periods in 2025.
Current wording
The income based fee for the three and nine months ended September 30, 2026 decreased from the comparable periods in 2025 primarily due to the pre-incentive fee net investment income, as defined in the investment advisory and management agreement, for the three and nine months ended September 30, 2026 being lower than in the comparable periods in 2025.
Previous wording
For the three months ended June 30, 2026, the reduction in the capital gains incentive fee accrued in accordance with GAAP was $21 million. 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, 2026 and 2025, the reduction in the capital gains incentive fee accrued in accordance with GAAP was $82 million and $21 million, respectively. The capital gains incentive fee accrual for the six months ended June 30, 2026 changed from the comparable period in 2025 primarily due to net losses on investments, foreign currency and other transactions of $494 million compared to net losses of $105 million for the comparable period in 2025. 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, 2026, there was no capital gains incentive fee accrued in accordance with GAAP or 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, 2026 for more information on the base management fee, income based fee and capital gains incentive fee.
Current wording
For the three months ended September 30, 2026, there was no capital gains incentive fee accrued in accordance with GAAP. For the three months ended September 30, 2025, the capital gains incentive fee calculated in accordance with GAAP was $13 million. For the nine months ended September 30, 2026 and 2025, the reduction in the capital gains incentive fee accrued in accordance with GAAP was $82 million and $8 million, respectively. The capital gains incentive fee accrual for the nine months ended September 30, 2026 changed from the comparable period in 2025 primarily due to net losses on investments, foreign currency, other transactions and the extinguishment of debt of $503 million compared to net losses of $39 million for the comparable period in 2025. 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 September 30, 2026, there was no capital gains incentive fee accrued in accordance with GAAP or 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 nine months ended September 30, 2026 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. Pursuant to these terms, payment of the $84 million income based fee earned by our investment adviser for the second quarter of 2026 has been deferred. See Note 3 to our consolidated financial statements for the three and six months ended June 30, 2026 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. Pursuant to these terms, payment of the $84 million income based fee earned by our investment adviser for the second quarter of 2026 had been previously deferred. As of September 30, 2026, such deferral of income based fee was payable under the terms of the investment advisory and management agreement. See Note 3 to our consolidated financial statements for the three and nine months ended September 30, 2026 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 and six months ended June 30, 2026 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 nine months ended September 30, 2026 for more information on the administrative and other fees.
Previous wording
Depending on the level of taxable income earned in a tax year, we may choose to carry forward such taxable income in excess of current year dividend distributions from such current year taxable income into the next tax year and pay a 4% excise tax on such income, as required. To the extent that we determine that our estimated current year taxable income will be in excess of estimated dividend distributions for the current year from such income, we accrue excise tax, if any, on estimated excess taxable income as such taxable income is earned. For the three and six months ended June 30, 2026, we recorded a net expense of $7 million and approximately $14 million, respectively, for U.S. federal excise taxes. For the three and six months ended June 30, 2025, we recorded a net expense of $7 million and $14 million, respectively, for U.S. federal excise taxes.
Current wording
Depending on the level of taxable income earned in a tax year, we may choose to carry forward such taxable income in excess of current year dividend distributions from such current year taxable income into the next tax year and pay a 4% excise tax on such income, as required. To the extent that we determine that our estimated current year taxable income will be in excess of estimated dividend distributions for the current year from such income, we accrue excise tax, if any, on estimated excess taxable income as such taxable income is earned. For the three and nine months ended September 30, 2026, we recorded a net expense of $6 million and approximately $20 million, respectively, for U.S. federal excise taxes. For the three and nine months ended September 30, 2025, we recorded a net expense of $11 million and $25 million, respectively, for U.S. federal excise taxes.
Showing the first 40 of 77 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
•the outcome and impact of any litigation relating to the MFIC Transaction (as defined below);
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
During the three months ended June 30, 2025, we also recognized net realized losses on foreign currency and other transactions of $39 million.
Previous report — wording carried elsewhere
During the six months ended June 30, 2025, we also recognized net realized losses on foreign currency and other transactions of $8 million.
Previous report — wording carried elsewhere
In July 2026, we repaid in full the July 2026 Notes upon their maturity, which bore interest at a rate of 2.150% per annum.