Consistent profitability Strong capital levels Good asset liquidity relative to other business development companies Exposure to investment market volatility High-risk portfolio with increasing proportion of mezzanine investments Potential funding pressure in an extended downturn Governance challenges related to having an external portfolio manager Standard&Poor's Ratings Services' ratings on New York City–based Ares Capital Corp. (Ares Capital; NASDAQ: ARCC) are based on the firm's consistent financial performance, coupled with its strong capital levels and asset liquidity, that is strong relative to that of other business development companies (BDCs). These positive factors are partly offset by Ares Capital's exposure to volatile investment markets and potential funding pressure that could constrain operations in an extended downturn. As with other BDCs and
