Ares Capital (ARCC) Ascends While Market Falls: Some Facts to Note

The Federal Reserve raised rates to 3.75%-4.00%, with more hikes expected. Ares Capital (ARCC) yields over 10%, facing headwinds from higher rates. ARCC's floating-rate debt portfolio may benefit from rising rates, supporting its dividend record. The stock is down 10% year-to-date, presenting a potential buying opportunity.

Ares Capital (ARCC) raised $750M via 6.250% notes maturing in 2033, paying down bank borrowings. Q2 earnings covered dividends, but net income and NAV per share declined. Short interest is high, and loan quality slightly worsened. The move extends liquidity but reflects a slower deal environment.

Ares Capital Corp (ARCC) priced a $750M public offering of 6.250% unsecured notes due 2033. The notes may be redeemed early at par plus a premium. Proceeds will repay existing debt, with potential reborrowing for general corporate purposes. The offering is expected to close on September 15, 2026.

Shell (SHEL) plans to issue 228,003,843 new shares as part of its acquisition of ARC Resources. The new shares will rank equally with existing shares and are expected to begin trading on the London Stock Exchange on 3 September 2026. The issuance will dilute existing shareholders' ownership.

Ares Management Corp. is leading a $2.2 billion loan to MedImpact Holding Inc. to finance its acquisition of Medical Card System, Inc. The second-lien loan may pay at least 8% over the baseline rate. Ares manages $671 billion in assets and recently reported $708 billion in non-accruing loans. MedImpact serves 20 million customers and processes $40 billion in pharmacy transactions annually.

Management expects industry credit conditions to continue normalizing toward longer-term averages, though it said performance differences among managers have widened. Schnabel said Ares Capital added four investments to non-accrual during the quarter, but the companies were in unrelated businesses and did not indicate a sector-specific trend.