Our ratings on Ares Capital Corp. (Ares) reflect the company's good market position, which includes its total investments of $7.8 billion across 195 portfolio companies as of March 31, 2014, as well as $2.8 billion of assets under management (AUM) that its Ivy Hill Asset Management L.P. (IHAM) portfolio company manages. The company's diversified funding profile and portfolio in terms of asset class and number of borrowers are also ratings strengths. Ares generates both interest and dividend income and fees from its investments in IHAM and the Senior Secured Loan Program (SSLP; a $1.8 billion investment at fair value as of March 31, 2014). Negative rating factors include the illiquid nature of its investments in private, middle-market companies, decline in
