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Sep 30, 2021
Ares Capital Q3 2021 Earnings Report
Announced financial results for the third quarter ended September 30, 2021 and declared fourth quarter 2021 dividend of $0.41 per share.
Key Takeaways
Ares Capital Corporation reported a strong third quarter with robust new investing activity, strengthening credit quality and nearly $150 million in net realized gains, driving strong earnings and higher net asset value.
Declared a fourth quarter dividend of $0.41 per share payable on December 30, 2021.
Core EPS was $0.47 per share.
GAAP net income per share was $0.73.
Made $3.1 billion in new investment commitments.
Ares Capital
Ares Capital
Forward Guidance
Ares Capital authorized to enter into an equity distribution agreement and may issue and sell shares of common stock by means of “at the market” offerings having an aggregate offering price of up to $500 million.
Positive Outlook
- New investment commitments of approximately $1.5 billion were made from October 1, 2021 through October 20, 2021, of which $1.3 billion were funded.
- The weighted average yield of debt and other income producing securities funded during the period at amortized cost was 7.5%.
- The weighted average yield on total investments funded during the period at amortized cost was 6.9%.
- Recognized total net realized gains of approximately $5 million on investment commitments exited from October 1, 2021 through October 20, 2021.
- As of October 20, 2021, Ares Capital had an investment backlog and pipeline of approximately $1.9 billion and $149 million, respectively.
Challenges Ahead
- There can be no assurance that Ares Capital will issue a specific amount of shares of its common stock, if any, through these “at the market” offerings.
- Ares Capital may seek to sell all or a portion of these new investment commitments, although there can be no assurance that it will be able to do so.
- The consummation of any of the investments in this backlog and pipeline depends upon, among other things, satisfactory completion of Ares Capital due diligence investigation of the prospective portfolio company.
- Ares Capital’s acceptance of the terms and structure of such investment and the execution and delivery of satisfactory transaction documentation.
- Ares Capital cannot assure you that it will make any of these investments or that Ares Capital will sell all or any portion of these investments.