Ares Capital Corp Completes ADL CLO 1 Debt Refinancing (July 2026)

What Happened

• Ares Capital Corporation (ARCC) reported that its wholly owned, consolidated subsidiary Ares Direct Lending CLO 1 LLC (ADL CLO 1) completed a refinancing (the “ADL CLO 1 Reset Transaction”) on July 17, 2026 of its approximately $708.7 million term debt securitization (a collateralized loan obligation that is on ARCC’s balance sheet). The transaction included issuance of secured CLO notes and new term loans and extended maturities to July 25, 2038.

Key Details

• ADL CLO 1 issued the following July 2038 CLO notes: $267.0M Class A-1-R (Term SOFR + 1.46%), $24.5M Class A-2-R (Term SOFR + 1.70%), $45.5M Class B-R (Term SOFR + 1.90%), plus an additional $7.1M of Subordinated Notes due 2038.
• ADL CLO 1 also incurred $139.0M of Class A-1-LR term loans (Term SOFR + 1.46%) under a credit agreement; these loans may be converted into Class A-1-R notes under certain conditions.
• ARCC retained all subordinated notes (together with $225.6M existing subordinated notes), which are unsecured obligations of ADL CLO 1 and are eliminated on consolidation.
• Net proceeds were used to redeem ADL CLO 1’s prior Class A ($406.0M) and Class B ($70.0M) notes, fund required account deposits, and pay transaction fees and expenses. Collateral backing the new secured obligations is a portfolio of first‑lien senior secured loans contributed by ARCC (per a May 24, 2024 contribution agreement).
• The Asset Manager (Ares Capital Management LLC) agreed to waive management fees; collateral administration continues to be handled by U.S. Bank. The new notes are not registered under the Securities Act.

Why It Matters

• For investors, this is an on‑balance‑sheet refinancing by ARCC’s consolidated CLO that (1) replaces prior notes, (2) extends funded maturities to 2038, and (3) maintains ARCC’s economic interest via retained subordinated notes. The transaction preserves ADL CLO 1’s ability (through July 25, 2031) to reinvest principal collections into new collateral — including purchases from ARCC under an existing master purchase agreement — which can affect future cash flow and portfolio composition. The filing also discloses key interest spreads, amounts issued, and that the subordinated position is retained by ARCC (eliminated on consolidation), all material facts for assessing ARCC’s financing structure and consolidated balance sheet.