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 participants in the leveraged loan market, we believe that the firm's investment portfolio entails credit risks that are high relative to our other rated financial institutions. During 2008, Ares Capital's parent, Ares Capital Management (Ares Management), increased its equity in Ares Capital, alleviating
