Ares Capital Bolsters Lending Capacity with New $1 Billion Facility

Ares Capital Corporation has fortified its financial foundation through a strategic securitization deal, enhancing its ability to expand its direct lending operations. This move comes alongside a series of robust quarterly results, reinforcing analyst confidence in the business development company's trajectory.

On December 3, Ares Capital, via its subsidiary Ares Direct Lending CLO 7 LLC, finalized a $1.0 billion term debt securitization. The transaction is designed to improve the company's capital structure and provide greater flexibility for its core business of originating senior secured loans. Central to the deal are $570 million in Class A-1 Senior Floating Rate Notes, which carry an interest rate pegged to Term SOFR plus 1.40% and mature in January 2038. These notes are secured by a portfolio of first-lien senior secured loans that Ares contributed to the collateralized loan obligation (CLO) vehicle.

Operational Momentum and Analyst Sentiment

The company's strengthened funding position is supported by solid operational performance. For the third quarter of 2025, Ares Capital reported a sequential 10% increase in GAAP earnings, reaching $0.57 per share. The period also saw net realized gains of $247 million, while the total portfolio value grew by 3% to $28.7 billion.

This financial health is reflected in the market's assessment. Analysts largely maintain a constructive view on the equity, with a consensus rating of "Moderate Buy" based on seven "Buy" and three "Hold" recommendations. The average 12-month price target stands at $22.25.

Should investors sell immediately? Or is it worth buying Ares Capital?

Specific analyst actions include:
* Citizens Financial maintained its "Market Outperform" rating with a $23.00 price target.
* Keefe, Bruyette & Woods (KBW) reiterated an "Outperform" rating, though it adjusted its target to $22.00 from a previous $23.00.

Other key financial metrics from recent reports underscore the company's standing: a Financial Health Score of "GOOD" (2.8), a market capitalization of $15.02 billion, and a dividend yield of 9.13%.

Outlook and Market Valuation

The successful $1 billion securitization provides Ares Capital with immediate additional liquidity to pursue new lending opportunities. If the company can sustain the portfolio growth and stable GAAP earnings demonstrated in Q3 2025, the path toward the average analyst price target of $22.25 appears viable.

Currently, the shares trade at €18.05. Despite the positive operational developments, the stock remains down approximately 16.6% year-to-date, indicating a notable gap between its current market price and analyst expectations.