Ares Management Downgraded To 'BBB+' On Expected Increase In Leverage From Proposed Merger With Kayne Anderson Capital

Los Angeles, Calif.-based Ares Management announced plans to merge with Kayne Anderson Capital Advisors, an alternative investment firm founded in 1984 with approximately $26 billion of assets under management as of March 31, 2015. We expect the company to issue approximately $750 million of debt to fund a portion of the acquisition, raising leverage, as measured by debt to Standard&Poor's-adjusted EBITDA, to 1.5x-2.0x. We are lowering the issuer credit rating to 'BBB+' from 'A-', reflecting the heightened financial risk the expected additional leverage presents, though we recognize some diversification benefit to Ares' business profile from the acquisition. The stable outlook reflects our expectation that the combined firm will maintain its good fundraising momentum, allowing for solid growth in

...+ Los Angeles, Calif.-based Ares Management announced plans to merge with Kayne Anderson Capital Advisors, an alternative investment firm founded in 1984 with approximately $26 billion of assets under management as of March 31, 2015. + We expect the company to issue approximately $750 million of debt to fund a portion of the acquisition, raising leverage, as measured by debt to Standard & Poor's-adjusted EBITDA, to 1.5x-2.0x. + We are lowering the issuer credit rating to '###+' from 'A-', reflecting the heightened financial risk the expected additional leverage presents, though we recognize some diversification benefit to Ares' business profile from the acquisition. + The stable outlook reflects our expectation that the combined firm will maintain its good fundraising momentum, allowing for solid growth in fee-related earnings and distributable earnings. NEW YORK (Standard & Poor's) July 31, 2015--Standard & Poor's Ratings Services today said it lowered its issuer credit rating on Ares...

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