10-Q – 2026-04-28 – arcc-20260331.htm

Cash payment of any income based fee and capital gains incentive fee otherwise earned by the Company’s investment adviser is deferred if during the most recent four full calendar quarter period ending on or prior to the date such payment is to be made the sum of (a) the aggregate distributions to the Company’s stockholders and (b) the change in net assets (defined as total assets less indebtedness and before taking into account any income based fee and capital gains incentive fee payable during the period) is less than 7.0 % of the Company’s net assets (defined as total assets less indebtedness) at the beginning of such period. These calculations will be adjusted for any share issuances or repurchases. Any income based fee and capital gains incentive fee deferred for payment are carried over for payment in subsequent calculation periods to the extent such fees are payable under the terms of the investment advisory and management agreement.
 
The services of all investment professionals and staff of the Company’s investment adviser, when and to the extent engaged in providing investment advisory and management services to the Company, and the compensation and routine
171

overhead expenses of such personnel allocable to such services, are provided and paid for by the Company’s investment adviser. Under the investment advisory and management agreement, the Company bears all other costs and expenses of its operations and transactions, including, but not limited to, those relating to: organization; calculation of the Company’s net asset value (including, but not limited to, the cost and expenses of any IVP); expenses incurred by the Company’s investment adviser payable to third parties, including agents, consultants or other advisers, in monitoring the Company’s financial and legal affairs and in monitoring the Company’s investments (including the cost of consultants hired to develop information technology systems designed to monitor the Company’s investments) and performing due diligence on the Company’s prospective portfolio companies; interest payable on indebtedness, if any, incurred to finance the Company’s investments (including, but not limited to, payments to third-party vendors for financial information services); offerings of the Company’s common stock and other securities (including, but not limited to, costs of rating agencies); investment advisory and management fees; administration fees payable under the administration agreement; fees payable to third parties, including agents, consultants or other advisers, relating to, or associated with, evaluating and making investments in portfolio companies, regardless of whether such transactions are ultimately consummated (including, but not limited to, payments to third-party vendors for financial information services); transfer agent and custodial fees; registration fees; listing fees; taxes; independent directors’ fees and expenses; costs of preparing and filing reports or other documents required by governmental bodies (including the Securities and Exchange Commission (the “SEC”)); the costs of any reports, proxy statements or other notices to stockholders, including printing costs; to the extent the Company is covered by any joint insurance policies, the Company’s allocable portion of the insurance premiums for such policies; direct costs and expenses of administration, including auditor and legal costs; and all other expenses incurred by the Company or its administrator in connection with administering the Company’s business as described in more detail under “Administration Agreement” below.

Administration Agreement
 
The Company is party to an administration agreement (the “administration agreement”) with its administrator, Ares Operations. Pursuant to the administration agreement, Ares Operations furnishes the Company with office equipment and clerical, bookkeeping and record keeping services at the Company’s office facilities. Under the administration agreement, Ares Operations also performs, or oversees the performance of, the Company’s required administrative services, which include, among other things, providing assistance in accounting, legal, compliance, operations, technology and investor relations, being responsible for the financial and other records that the Company is required to maintain and preparing all reports and other materials required to be filed with the SEC or any other regulatory authority, including reports to stockholders. In addition, Ares Operations assists the Company in determining and publishing its net asset value, assists the Company in providing managerial assistance to its portfolio companies, oversees the preparation and filing of the Company’s tax returns and the printing and dissemination of reports to its stockholders, and generally oversees the payment of its expenses and the performance of administrative and professional services rendered to the Company by others. Payments under the administration agreement are equal to an amount based upon the Company’s allocable portion of Ares Operations’ overhead and other expenses (including travel expenses) incurred by Ares Operations in performing its obligations under the administration agreement, including the Company’s allocable portion of the compensation, rent and other expenses of certain of the Company’s officers (including the Company’s chief compliance officer, chief financial officer, chief accounting officer, general counsel, secretary, treasurer and assistant treasurer) and their respective staffs. The administration agreement may be terminated by either party without penalty upon 60 days’ written notice to the other party.
 
For the three months ended March 31, 2026 and 2025, the Company incurred $ 4 and $ 4 , respectively, in administrative and other fees, including certain costs that are reimbursable to the Company’s investment adviser under the investment advisory and management agreement or the Company’s administrator under the administration agreement. As of March 31, 2026 and December 31, 2025, $ 7 and $ 6 , respectively, of the administrative and other fees were unpaid and included in “accounts payable and other liabilities” in the accompanying consolidated balance sheets.

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4. INVESTMENTS

As of March 31, 2026 and December 31, 2025, investments consisted of the following:

  As of

March 31, 2026 December 31, 2025
Amortized Cost(1) Fair Value Amortized Cost(1) Fair Value
First lien senior secured loans(2) $ 18,019   $ 17,598   $ 18,103   $ 17,858  
Second lien senior secured loans 1,600   1,428   1,558   1,487  
Subordinated certificates of the SDLP(3) 1,146   1,159   1,103   1,117  
Senior subordinated loans 1,799   1,698   1,690   1,585  
Preferred equity 2,639   2,411   2,597   2,475  
Ivy Hill Asset Management, L.P.(4) 2,462   2,661   2,231   2,434  
Other equity 1,983   2,544   1,968   2,529  
Total $ 29,648   $ 29,499   $ 29,250   $ 29,485  

________________________________________

(1) The amortized cost represents the original cost adjusted for any accretion of discounts, amortization of premiums and PIK interest or dividends.
    
(2) First lien senior secured loans include certain loans that the Company classifies as “unitranche” loans. The total amortized cost and fair value of the loans that the Company classified as “unitranche” loans were $ 11,370 and $ 11,194 respectively, as of March 31, 2026, and $ 11,349 and $ 11,239 , respectively, as of December 31, 2025.

(3) The proceeds from these certificates were applied to co-investments with Varagon Capital Partners (“Varagon”) and its clients to fund first lien senior secured loans to 45 and 39 different borrowers as of March 31, 2026 and December 31, 2025, respectively.

(4) Includes the Company’s subordinated loan to and equity investments in IHAM (as defined below), as applicable.
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The Company uses the Global Industry Classification Standard for classifying the industry groupings of its portfolio companies. The industrial and geographic compositions of the Company’s portfolio at fair value as of March 31, 2026 and December 31, 2025 were as follows:

  As of

March 31, 2026 December 31, 2025
Industry
Software and Services 21.7   % 23.8   %
Financial Services(1) 13.2   12.4  
Health Care Equipment and Services 10.7   11.3  
Commercial and Professional Services 9.5   9.4  
Consumer Services 6.0   5.6  
Insurance 5.4   5.2  
Capital Goods 5.3   4.6  
Consumer Distribution and Retail 5.3   4.8  
Investment Funds and Vehicles(2) 4.0   3.9  
Sports, Media and Entertainment 3.8   4.0  
Pharmaceuticals, Biotechnology and Life Sciences 2.7   2.7  
Materials 2.3   2.2  
Consumer Durables and Apparel 2.0   2.0  
Independent Power and Renewable Electricity Producers 1.9   2.2  
Household and Personal Products 1.4   1.4  
Other 4.8   4.5  
Total 100.0   % 100.0   %

________________________________________

(1) Includes the Company’s investment in IHAM.

(2) Includes the Company’s investment in the SDLP (as defined below), which made first lien senior secured loans to 45 and 39 different borrowers as of March 31, 2026 and December 31, 2025, respectively. The portfolio companies in the SDLP are in industries similar to the companies in the Company’s portfolio.

  As of

March 31, 2026 December 31, 2025
Geographic Region
Midwest 23.9   % 22.9   %
West(1) 20.2   20.3  
Southeast 17.8   18.8  
Northeast(2) 16.2   15.1  
Mid-Atlantic 16.0   16.3  
International 5.9   6.6  
Total 100.0   % 100.0   %

________________________________________

(1) Includes the Company’s investment in the SDLP, which represented 3.9 % and 3.8 % of the total investment portfolio at fair value as of March 31, 2026 and December 31, 2025, respectively.

(2) Includes the Company’s investment in IHAM, which represented 9.0 % and 8.3 % of the total investment portfolio at fair value as of March 31, 2026 and December 31, 2025, respectively.

As of March 31, 2026 and December 31, 2025, loans on non-accrual status represented 2.1 % of the total investments at amortized cost (or 1.2 % at fair value) and 1.8 % at amortized cost (or 1.2 % at fair value), respectively.
174

Ivy Hill Asset Management, L.P.

Ivy Hill Asset Management, L.P. (“IHAM”), a wholly owned portfolio company of the Company, is an asset manager and an SEC-registered investment adviser. As of March 31, 2026, IHAM had assets under management of approximately $ 16.3 billion. As of March 31, 2026, IHAM managed 24 vehicles (the “IHAM Vehicles”). IHAM earns fee income from managing the IHAM Vehicles and has also invested in certain of these vehicles as part of its business strategy. The amortized cost of IHAM’s total investments as of March 31, 2026 and December 31, 2025 was $ 3,419  and $ 3,190 , respectively. For the three months ended March 31, 2026 and 2025, IHAM had management and incentive fee income of $ 15 and $ 12 , respectively, and investment-related income of $ 98 and $ 58 , respectively, which included net realized gains or losses on investments and other transactions.

  The amortized cost and fair value of the Company’s investment in IHAM as of March 31, 2026 and December 31, 2025 were as follows:

As of

March 31, 2026 December 31, 2025
Amortized Cost Fair Value Amortized Cost Fair Value
Subordinated loan(1)
$ 762   $ 762   $ 531   $ 531  
Equity
1,700   1,899   1,700   1,903  
Total investment in IHAM $ 2,462   $ 2,661   $ 2,231   $ 2,434  

_______________________________________________________________________________

(1) The Company has provided a commitment to fund up to $ 1,000 and $ 750 , as of March 31, 2026 and December 31, 2025, respectively, to IHAM, with availability of funding solely at the Company’s discretion.

The interest income and dividend income that the Company earned from IHAM for the three months ended March 31, 2026 and 2025 were as follows:

For the Three Months Ended March 31,
2026 2025
Interest income
$ 17   $ —  
Dividend income
$ 78   $ 73  

From time to time, IHAM or certain IHAM Vehicles may purchase investments from, or sell investments to, the Company. For any such sales or purchases by the IHAM Vehicles to or from the Company, the IHAM Vehicle must obtain approval from third parties unaffiliated with the Company or IHAM, as applicable. During the three months ended March 31, 2026 and 2025, IHAM or certain of the IHAM Vehicles purchased $ 1,042 and $ 794 , respectively, of loans from the Company. For the three months ended March 31, 2026 and 2025, the Company recognized approximately $ 3 and $ 0 of net realized gains, respectively, from these sales. During the three months ended March 31, 2026 and 2025, neither IHAM nor any IHAM Vehicles sold any investments to the Company.

The yields at amortized cost and fair value of the Company’s investments in IHAM as of March 31, 2026 and December 31, 2025 were as follows:

  As of

March 31, 2026 December 31, 2025
  Amortized Cost Fair Value Amortized Cost Fair Value

Subordinated loan
10.3   % 10.3   % 10.3   % 10.3   %
Equity(1)
17.6   % 15.8   % 17.2   % 15.3   %

_______________________________________________________________________________

(1) Represents the yield on the Company’s equity investment in IHAM, which is computed as (a) the annualized amount of the regular dividend received by the Company related to the Company’s equity investment in IHAM during the most recent quarter end, divided by (b) the amortized cost or fair value of the Company’s equity investment in IHAM, as applicable.
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IHAM is party to an administration agreement, referred to herein as the “IHAM administration agreement,” with Ares Operations. Pursuant to the IHAM administration agreement, Ares Operations provides IHAM with, among other things, office facilities, equipment, clerical, bookkeeping and record keeping services, services relating to the marketing and sale of interests in vehicles managed by IHAM, services of, and oversight of, custodians, depositories, accountants, attorneys, underwriters and such other persons in any other capacity deemed to be necessary. Under the IHAM administration agreement, IHAM reimburses Ares Operations for all of the actual costs associated with such services, including Ares Operations’ allocable portion of the compensation, rent and other expenses of its officers, employees and respective staff in performing its obligations under the IHAM administration agreement.

Selected Financial Information

Pursuant to Rule 4-08(g) of Regulation S-X, selected financial information of IHAM, in conformity with GAAP, as of March 31, 2026 and December 31, 2025 and for the three months ended March 31, 2026 and 2025 are presented below.

In conformity with GAAP, IHAM is required to consolidate entities in which IHAM has a direct or indirect controlling financial interest based on either a variable interest model or voting interest model, which include certain of the IHAM Vehicles (the “Consolidated IHAM Vehicles”). As such, for GAAP purposes only, IHAM consolidates (a) entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity and (b) entities that it concludes are variable interest entities in which IHAM has more than insignificant economic interest and power to direct the activities that most significantly impact the entities, and for which IHAM is deemed to be the primary beneficiary.

When IHAM consolidates an IHAM Vehicle for GAAP purposes only, IHAM reflects the assets, liabilities, revenues and expenses of the Consolidated IHAM Vehicles on a gross basis, including the economic interests held by third-party investors in the Consolidated IHAM Vehicles as debt obligations, subordinated notes or non-controlling interests, in the consolidated IHAM financials below. All of the revenues earned by IHAM as the investment manager of the Consolidated IHAM Vehicles are eliminated in GAAP consolidation. However, because the eliminated amounts are earned from and funded by third-party investors, the GAAP consolidation of an IHAM Vehicle does not impact the net income or loss attributable to IHAM. As a result, the Company believes an assessment of IHAM’s business and the impact to the Company’s investment in IHAM is best viewed on a stand-alone basis as reflected in the first column in the tables below.

176

As of March 31, 2026

IHAM Consolidated IHAM Vehicles(1) Eliminations Consolidated
Selected Balance Sheet Information:
Assets

Investments at fair value(2) $ 3,327   $ 11,946   $ ( 3,228 ) $ 12,045  
Cash and cash equivalents 15   590   —   605  
Other assets 84   106   ( 73 ) 117  

Total assets $ 3,426   $ 12,642   $ ( 3,301 ) $ 12,767  

Liabilities
Debt $ 894   $ 9,022   $ —   $ 9,916  
Subordinated note from ARCC 762   —   —   762  
Subordinated notes(3) —   1,374   ( 1,035 ) 339  
Other liabilities 16   204   ( 18 ) 202  

Total liabilities 1,672   10,600   ( 1,053 ) 11,219  
Equity
Contributed capital 1,700   —   —   1,700  
Accumulated earnings 146   —   —   146  
Net unrealized gains (losses) on investments and foreign currency transactions(4) ( 92 ) —   —   ( 92 )
Non-controlling interests in Consolidated IHAM Vehicles(5)
—   2,042   ( 2,248 ) ( 206 )

Total equity 1,754   2,042   ( 2,248 ) 1,548  
Total liabilities and equity $ 3,426   $ 12,642   $ ( 3,301 ) $ 12,767  

As of December 31, 2025
IHAM Consolidated IHAM Vehicles(1) Eliminations Consolidated
Selected Balance Sheet Information:
Assets

Investments at fair value(2) $ 3,108   $ 11,504   $ ( 3,013 ) $ 11,599  
Cash and cash equivalents 10   597   —   607  

Other assets 93   146   ( 82 ) 157  

Total assets $ 3,211   $ 12,247   $ ( 3,095 ) $ 12,363  

Liabilities

Debt $ 893   $ 8,622   $ —   $ 9,515  
Subordinated note from ARCC 531   —   —   531  
Subordinated notes(3) —   1,277   ( 941 ) 336  

Other liabilities 21   311   ( 18 ) 314  

Total liabilities 1,445   10,210   ( 959 ) 10,696  
Equity
Contributed capital 1,700   —   —   1,700  
Accumulated earnings 148   —   —   148  
Net unrealized losses on investments and foreign currency transactions(4) ( 82 ) —   —   ( 82 )
Non-controlling interests in Consolidated IHAM Vehicles(5)
—   2,037   ( 2,136 ) ( 99 )

Total equity 1,766   2,037   ( 2,136 ) 1,667  
Total liabilities and equity $ 3,211   $ 12,247   $ ( 3,095 ) $ 12,363  

________________________________________
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(1) Consolidated for GAAP purposes only.

(2) The determination of such fair value is determined in accordance with IHAM’s valuation process (separate and apart from the Company’s valuation process described elsewhere herein). The amortized cost of IHAM’s total investments as of March 31, 2026 and December 31, 2025 was $ 3,419 and $ 3,190 , respectively. The amortized cost of the total investments of IHAM on a consolidated basis as of March 31, 2026 and December 31, 2025 was $ 12,339 and $ 11,766 , respectively.

(3) Subordinated notes generally represent the most junior capital in certain of the Consolidated IHAM Vehicles and effectively represent equity in such vehicles.

(4) As of March 31, 2026 and December 31, 2025, net unrealized losses of $ 102 and $ 85 , respectively, have been eliminated upon consolidation and the elimination is included in “non-controlling interests in Consolidated IHAM Vehicles” in the selected balance sheet information.

(5) Non-controlling interests in Consolidated IHAM Vehicles includes net unrealized depreciation in the Consolidated IHAM Vehicles of $ 292 and $ 167 as of March 31, 2026 and December 31, 2025, respectively.

For the Three Months Ended March 31, 2026
IHAM Consolidated IHAM Vehicles(1) Eliminations Consolidated
Selected Statement of Operations Information:
Revenues

Investment income $ 98   $ 250   $ ( 97 ) $ 251  
Management fees and other income 15   2   ( 15 ) 2  

Total revenues 113   252   ( 112 ) 253  
Expenses

Interest expense 32   126   —   158  
Distributions to subordinated notes —   44   ( 31 ) 13  
Management fees and other expenses 5   16   ( 15 ) 6  

Total expenses 37   186   ( 46 ) 177  
Net operating income 76   66   ( 66 ) 76  

Net realized gains on investments, foreign currency and other transactions —   6   —   6  

Net unrealized losses on investments, foreign currency and other transactions ( 10 ) ( 131 ) 17   ( 124 )

Total net realized and unrealized losses on investments, foreign currency and other transactions ( 10 ) ( 125 ) 17   ( 118 )
Net income (loss) 66   ( 59 ) ( 49 ) ( 42 )

Less: Net income (loss) attributable to non-controlling interests in Consolidated IHAM Vehicles —   ( 59 ) ( 49 ) ( 108 )
Net income attributable to Ivy Hill Asset Management, L.P. $ 66   $ —   $ —   $ 66  

178

For the Three Months Ended March 31, 2025
IHAM Consolidated IHAM Vehicles(1) Eliminations Consolidated
Selected Statement of Operations Information:
Revenues

Investment income $ 67   $ 217   $ ( 65 ) $ 219  
Management fees and other income 12   2   ( 11 ) 3  

Total revenues 79   219   ( 76 ) 222  
Expenses

Interest expense 9   118   —   127  
Distributions to subordinated notes —   32   ( 23 ) 9  
Management fees and other expenses 4   14   ( 11 ) 7  

Total expenses 13   164   ( 34 ) 143  
Net operating income 66   55   ( 42 ) 79  

Net realized losses on investments and foreign currency ( 9 ) ( 55 ) —   ( 64 )
Net realized loss on extinguishment of debt —   ( 1 ) —   ( 1 )
Net unrealized gains on investments, foreign currency and other transactions 25   13   ( 9 ) 29  

Total net realized and unrealized gains (losses) on investments, foreign currency and other transactions 16   ( 43 ) ( 9 ) ( 36 )
Net income 82   12   ( 51 ) 43  
Less: Net income (loss) attributable to non-controlling interests in Consolidated IHAM Vehicles —   12   ( 51 ) ( 39 )
Net income attributable to Ivy Hill Asset Management, L.P. $ 82   $ —   $ —   $ 82  

____________________________________

(1) Consolidated for GAAP purposes only.

Senior Direct Lending Program

The Company has established a joint venture with Varagon to make certain first lien senior secured loans, including certain stretch senior and unitranche loans, primarily to U.S. middle-market companies. The joint venture is called the Senior Direct Lending Program. In July 2016, the Company and Varagon and its clients completed the initial funding of the SDLP. The Company and other BDCs, registered closed-end management investment companies and other affiliated investment entities managed by the Company’s investment adviser or its affiliates may directly co-invest with the SDLP. The SDLP is capitalized as transactions are completed and all portfolio decisions and generally all other decisions in respect of the SDLP must be approved by an investment committee of the SDLP consisting of representatives of the Company and Varagon (with approval from a representative of each required).

The Company provides capital to the SDLP in the form of subordinated certificates (the “SDLP Certificates”), and Varagon and its clients provide capital to the SDLP in the form of senior notes, intermediate funding notes and the SDLP Certificates. As of March 31, 2026 and December 31, 2025, the Company and a client of Varagon owned 87.5 % and 12.5 %, respectively, of the outstanding SDLP Certificates.

As of March 31, 2026 and December 31, 2025, the Company and Varagon and its clients had agreed to make capital available to the SDLP of $ 6,150 and $ 6,150 , respectively, in the aggregate, of which $ 1,444 and $ 1,444 , respectively, is to be made available from the Company. The Company will continue to provide capital to the SDLP in the form of the SDLP Certificates, and Varagon and its clients will provide capital to the SDLP in the form of senior notes, intermediate funding notes and the SDLP Certificates. This capital will only be committed to the SDLP upon approval of transactions by the investment committee of the SDLP as discussed above. Below is a summary of the funded capital and unfunded capital commitments of the SDLP.

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  As of
March 31, 2026 December 31, 2025
Total capital funded to the SDLP(1) $ 4,749   $ 4,606  
Total capital funded to the SDLP by the Company(1) $ 1,328   $ 1,285  
Total unfunded capital commitments to the SDLP(2) $ 233   $ 259  
Total unfunded capital commitments to the SDLP by the Company(2) $ 55   $ 60  

___________________________________________________________________________
(1) At principal amount.

(2) These commitments to fund delayed draw loans have been approved by the investment committee of the SDLP and will be funded if and when conditions to funding such delayed draw loans are met.

The SDLP Certificates pay a coupon equal to Secured Overnight Financing Rate (“SOFR”) plus 8.0 % and also entitle the holders thereof to receive a portion of the excess cash flow from the loan portfolio, after expenses, which may result in a return to the holders of the SDLP Certificates that is greater than the stated coupon. The SDLP Certificates are junior in right of payment to the senior notes and intermediate funding notes.

The amortized cost and fair value of the SDLP Certificates held by the Company and the Company’s yield on its investment in the SDLP Certificates at amortized cost and fair value as of March 31, 2026 and December 31, 2025 were as follows:

As of

March 31, 2026 December 31, 2025
Amortized Cost Fair Value Amortized Cost Fair Value
Investment in the SDLP Certificates $ 1,146   $ 1,159   $ 1,103   $ 1,117  
Yield on the investment in the SDLP Certificates 13.2   % 13.0   % 13.2   % 13.0   %

The interest income, capital structuring service fees and other income earned with respect to the Company’s investment in the SDLP Certificates for the three months ended March 31, 2026 and 2025 were as follows:

For the Three Months Ended March 31,
2026 2025
Interest income
$ 36   $ 38  
Capital structuring service fees and other income
$ 2   $ 3  

As of March 31, 2026 and December 31, 2025, the SDLP portfolio was comprised of first lien senior secured loans to primarily U.S. middle-market companies in industries similar to the companies in the Company’s portfolio. As of March 31, 2026, one of the loans in the SDLP portfolio was on non-accrual status. As of December 31, 2025, none of the loans in the SDLP portfolio were on non-accrual status. Below is a summary of the SDLP portfolio as of March 31, 2026 and December 31, 2025.

As of

March 31, 2026 December 31, 2025
Total first lien senior secured loans(1)(2) $ 4,388   $ 4,297  

Largest loan to a single borrower(1) $ 404   $ 413  
Total of five largest loans to borrowers(1) $ 1,721   $ 1,719  
Number of borrowers in the SDLP 45   39  
Commitments to fund delayed draw loans(3) $ 233   $ 259  

___________________________________________________________________________

(1) At principal amount.

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(2) First lien senior secured loans include certain loans that the SDLP classifies as “unitranche” loans. As of March 31, 2026 and December 31, 2025, the total principal amount of loans in the SDLP portfolio that the SDLP classified as “unitranche” loans was $ 2,932 and $ 2,844 , respectively.

(3) These commitments to fund delayed draw loans have been approved by the investment committee of the SDLP and will be funded if and when conditions to funding such delayed draw loans are met.

5. DEBT

In accordance with the Investment Company Act, the Company is allowed to borrow amounts such that its asset coverage, calculated pursuant to the Investment Company Act, is at least 150% after such borrowing. The Company’s asset coverage requirement applicable to senior securities was reduced from 200 % to 150 % effective June 21, 2019. As of March 31, 2026, the aggregate principal amount outstanding of the senior securities issued by the Company was $ 15,927 and the Company’s asset coverage was 188 %.

The Company’s outstanding debt as of March 31, 2026 and December 31, 2025 was as follows:

  As of  

March 31, 2026 December 31, 2025
Total Aggregate Principal Amount Committed/ Outstanding (1) Principal Amount Outstanding Carrying Value Total Aggregate Principal Amount Committed/ Outstanding (1) Principal Amount Outstanding Carrying Value
Revolving Credit Facility $ 5,312   (2) $ 2,268   $ 2,265   $ 5,493   (2) $ 2,028   $ 2,031  
Revolving Funding Facility 2,250   1,191   1,191   2,250   1,234   1,234  
SMBC Funding Facility 1,600   (3) 661   661   1,100   (3) 563   563  
BNP Funding Facility 1,265   737   737   1,265   717   717  
April 2036 CLO Notes(4) 476   476   474   (5) 476   476   473   (5)
October 2036 CLO Secured Loans(4) 544   544   541   (5) 544   544   541   (5)
January 2038 CLO Notes (4) 700 700   697   (5) 700 700   697   (5)
January 2026 Notes —   —   —   (5) 1,150   1,150   1,150   (5)
July 2026 Notes 1,000   1,000   999   (5) 1,000   1,000   999   (5)
January 2027 Notes 900   900   897   (5)(6) 900   900   900   (5)(6)
June 2027 Notes 500   500   498   (5) 500   500   498   (5)
June 2028 Notes 1,250   1,250   1,248   (5) 1,250   1,250   1,248   (5)
March 2029 Notes 1,000   1,000   992   (5)(6) 1,000   1,000   999   (5)(6)
July 2029 Notes 850   850   854   (5)(6) 850   850   861   (5)(6)
September 2030 Notes 750   750   738   (5)(6) 750   750   743   (5)(6)
January 2031 Notes 650   650   630   (5)(6) 650   650   634   (5)(6)
April 2031 Notes 750   750   730   (5)(6) —   —   —  
November 2031 Notes 700   700   693   (5) 700   700   693   (5)
March 2032 Notes 1,000   1,000   1,003   (5)(6) 1,000   1,000   1,010   (5)(6)
Total $ 21,497   $ 15,927   $ 15,848   $ 21,578   $ 16,012   $ 15,991  

________________________________________

(1) Represents the total aggregate amount committed or outstanding, as applicable, under such instrument. Borrowings under the Revolving Credit Facility, Revolving Funding Facility, SMBC Funding Facility and BNP Funding Facility (each as defined below) are subject to borrowing base and other restrictions.

181

(2) Provides for an “accordion” feature that allows the Company, under certain circumstances, to increase the size of the Revolving Credit Facility to a maximum of approximately $ 7,744 and $ 7,925 as of March 31, 2026 and December 31, 2025, respectively.

(3) Provides for an “accordion” feature that allows ACJB (as defined below), under certain circumstances, to increase the size of the SMBC Funding Facility to a maximum of $ 2,500 and $ 1,300 as of March 31, 2026 and December 31, 2025, respectively.

(4) Excludes the April 2036 CLO Subordinated Notes, the October 2036 CLO Subordinated Notes and the January 2038 CLO Subordinated Notes (each as defined below), which were retained by the Company and, as such, eliminated in consolidation.

(5) Represents the aggregate principal amount outstanding, less unamortized debt issuance costs and the net unaccreted/amortized discount or premium recorded upon issuance. In January 2026, the Company repaid in full the January 2026 Notes (as defined below) upon their maturity.

(6) The carrying value of the January 2027 Notes, the March 2029 Notes, the July 2029 Notes, the September 2030 Notes, the January 2031 Notes, the April 2031 Notes and the March 2032 Notes (each as defined below) includes adjustments as a result of effective hedge accounting relationships, as applicable. See Note 6 for more information on the interest rate swaps related to these unsecured notes issuances.

 The weighted average stated interest rate and weighted average maturity, both on aggregate principal amount outstanding, of all the Company’s outstanding debt as of March 31, 2026 were 4.9 % and 4.3 years, respectively, and as of December 31, 2025 were 4.9 % and 4.2 years, respectively. The weighted average stated interest rate of all the Company’s outstanding debt as of March 31, 2026 and December 31, 2025 includes the impact of interest rate swaps. See Note 6 for more information on the interest rate swaps.
 
Revolving Credit Facility
 
The Company is party to a senior secured revolving credit facility (as amended and restated, the “Revolving Credit Facility”) that allows the Company to borrow up to $ 5,312 at any one time outstanding. The Revolving Credit Facility consists of an approximately $ 4,168 revolving tranche and an approximately $ 1,144 term loan tranche. As of March 31, 2026, the end of the revolving periods and the stated maturity dates of the various revolving and term loan tranches of the Revolving Credit Facility were as follows:

Total Aggregate Principal Amount Committed End of Revolving Period Maturity Date
Revolving tranche $ 4,058   April 15, 2029 April 15, 2030
65 March 31, 2026(1) March 31, 2027
45 April 12, 2028 April 12, 2029

4,168  
Term loan tranche 1,035   April 15, 2030
45 April 12, 2029
40 April 19, 2028
24 March 31, 2027
1,144  
$ 5,312  

________________________________________

(1) Effective March 31, 2026, approximately $ 181 of previously available commitments expired.

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The Revolving Credit Facility also provides for an “accordion” feature that allows the Company, under certain circumstances, to increase the overall size of the Revolving Credit Facility to a maximum of approximately $ 7,744 . The Revolving Credit Facility generally requires payments of interest at the end of each SOFR interest period, but no less frequently than quarterly, on SOFR based loans, and monthly payments of interest on other loans. Subsequent to the end of the respective revolving periods and prior to the respective stated maturity dates, the Company is required to repay the relevant outstanding principal amounts under both the term loan tranche and revolving tranche on a monthly basis in an amount equal to 1/12th of the outstanding principal amount at the end of the respective revolving periods.

Under the Revolving Credit Facility, the Company is required to comply with various covenants, reporting requirements and other customary requirements for similar revolving credit facilities, including, without limitation, covenants related to: (a) limitations on the incurrence of additional indebtedness and liens, (b) limitations on certain investments, (c) limitations on certain restricted payments, (d) maintaining a certain minimum stockholders’ equity, (e) maintaining a ratio of total assets (less total liabilities not representing indebtedness) to total indebtedness of the Company and its consolidated subsidiaries (subject to certain exceptions) of not less than 1.5 :1.0, (f) limitations on pledging certain unencumbered assets, and (g) limitations on the creation or existence of agreements that prohibit liens on certain properties of the Company and certain of its subsidiaries. These covenants are subject to important limitations and exceptions that are described in the documents governing the Revolving Credit Facility. Amounts available to borrow under the Revolving Credit Facility (and the incurrence of certain other permitted debt) are also subject to compliance with a borrowing base that applies different advance rates to different types of assets (based on their value as determined pursuant to the Revolving Credit Facility) that are pledged as collateral. As of March 31, 2026, the Company was in compliance in all material respects with the terms of the Revolving Credit Facility.
 
As of March 31, 2026 and December 31, 2025, there was $ 2,268 and $ 2,028 outstanding, respectively, under the Revolving Credit Facility. The Revolving Credit Facility also provides for a sub-limit for the issuance of letters of credit for up to an aggregate amount of $ 400 . As of March 31, 2026 and December 31, 2025, the Company had $ 54 and $ 54 , respectively, in letters of credit issued through the Revolving Credit Facility. The amount available for borrowing under the Revolving Credit Facility is reduced by any letters of credit and swingline loans issued. As of March 31, 2026, there was $ 2,990 , available for borrowing (net of letters of credit and swingline loans issued) under the Revolving Credit Facility, subject to borrowing base restrictions.
 
Since April 15, 2025, subject to certain exceptions, the interest rate charged on the Revolving Credit Facility is based on SOFR plus a credit spread adjustment of 0.10 % (or an alternate rate of interest for certain loans, commitments and/or other extensions of credit denominated in certain approved foreign currencies plus a spread adjustment, if applicable) plus an applicable spread of either 1.525 %, 1.650 % or 1.775 % or an “alternate base rate” (as defined in the documents governing the Revolving Credit Facility) plus an applicable spread of either 0.525 %, 0.650 % or 0.775 %, in each case, determined monthly based on the total amount of the borrowing base relative to the sum of (i) the greater of (a) the aggregate amount of revolving credit exposure and term loans outstanding under the Revolving Credit Facility and (b) 85 % of the total commitments of the Revolving Credit Facility (or, if higher, the total revolving exposure) plus (ii) other debt, if any, secured by the same collateral as the Revolving Credit Facility. Prior to April 15, 2025, the interest rate charged on the Revolving Credit Facility was based on SOFR plus a credit spread adjustment of 0.10 % (or an alternate rate of interest for certain loans, commitments and/or other extensions of credit denominated in certain approved foreign currencies plus a spread adjustment, if applicable) plus an applicable spread of either 1.750 % or 1.875 % or an “alternate base rate” plus an applicable spread of either 0.750 % or 0.875 %, in each case, determined monthly based on the total amount of the borrowing base relative to the sum of (i) the greater of (a) the aggregate amount of revolving exposure and term loans outstanding under the Revolving Credit Facility and (b) 85 % of the total commitments of the Revolving Credit Facility (or, if higher, the total revolving credit exposure) plus (ii) other debt, if any, secured by the same collateral as the Revolving Credit Facility. The Revolving Credit Facility allows for borrowings to be made using one, three or six month SOFR. As of March 31, 2026, the one, three and six month SOFR was 3.66%, 3.68% and 3.70%, respectively. As of March 31, 2026, the applicable weighted average spread in effect was 1.53 %. Subject to certain exceptions, the Company is required to pay a commitment fee of 0.325 % per annum on any unused portion of the Revolving Credit Facility. The Company is also required to pay a letter of credit fee of either 1.775 %, 1.900 % or 2.025 % per annum on letters of credit issued, determined monthly based on the total amount of the borrowing base relative to the total commitments of the Revolving Credit Facility and other debt, if any, secured by the same collateral as the Revolving Credit Facility.

The Revolving Credit Facility is secured by certain assets in the Company’s portfolio and excludes investments held by Ares Capital CP (as defined below) under the Revolving Funding Facility, those held by ACJB (as defined below) under the SMBC Funding Facility, those held by AFB (as defined below) under the BNP Funding Facility and those held by ADL CLO 1, ADL CLO 4 and ADL CLO 7 (each as defined below) and certain other investments.

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For the three months ended March 31, 2026 and 2025, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the Revolving Credit Facility were as follows:

  For the Three Months Ended March 31,
  2026 2025
Stated interest expense $ 36   $ 17  
Credit facility fees 2   3  
Amortization of debt issuance costs 3   2  
Total interest and credit facility fees expense $ 41   $ 22  
Cash paid for interest expense $ 38   $ 21  
Average stated interest rate 5.24   % 6.18   %
Average outstanding balance $ 2,777   $ 1,118  

 
Letter of Credit Facility

The Company and Deutsche Bank AG New York Branch (the “DB Issuer”) are party to an uncommitted continuing agreement (the “Letter of Credit Facility”), which allows the DB Issuer to issue letters of credit or demand guarantees, at the request of the Company, on behalf of certain portfolio companies. The Company is required to make payments to the DB Issuer if the portfolio companies were to default on their related payment obligations. The Letter of Credit Facility is secured on a pari passu basis with the Revolving Credit Facility and pursuant to substantially the same collateral as the Revolving Credit Facility. As of March 31, 2026 and December 31, 2025, the DB Issuer had $ 312 and $ 218 , respectively, in letters of credit issued under the Letter of Credit Facility.

Revolving Funding Facility
 
The Company and the Company’s consolidated subsidiary, Ares Capital CP Funding LLC (“Ares Capital CP”), are party to a revolving funding facility (as amended, the “Revolving Funding Facility”), that allows Ares Capital CP to borrow up to $ 2,250 at any one time outstanding. The Revolving Funding Facility is secured by all of the assets held by, and the Company’s membership interest in, Ares Capital CP. The end of the reinvestment period and the stated maturity date for the Revolving Funding Facility are July 28, 2028 and July 28, 2030, respectively.

Amounts available to borrow under the Revolving Funding Facility are subject to a borrowing base that applies different advance rates to different types of assets held by Ares Capital CP. Ares Capital CP is also subject to limitations with respect to the loans securing the Revolving Funding Facility, including restrictions on sector concentrations, loan size, payment frequency and status, collateral interests and loans with fixed rates, as well as restrictions on portfolio company leverage, all of which may also affect the borrowing base and therefore amounts available to borrow. The Company and Ares Capital CP are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. These covenants are subject to important limitations and exceptions that are described in the documents governing the Revolving Funding Facility. As of March 31, 2026, the Company and Ares Capital CP were in compliance in all material respects with the terms of the Revolving Funding Facility.
 
As of March 31, 2026 and December 31, 2025, there was $ 1,191 and $ 1,234 outstanding, respectively, under the Revolving Funding Facility. Since July 28, 2025, the interest rate charged on the Revolving Funding Facility is based on SOFR or a “base rate” (as defined in the documents governing the Revolving Funding Facility) plus an applicable spread of 1.80 % per annum. Prior to July 28, 2025, the interest rate charged on the Revolving Funding Facility was based on SOFR or a “base rate” plus an applicable spread of 2.00 % per annum. Ares Capital CP is also required to pay a commitment fee of between 0.50 % and 1.25 % per annum depending on the size of the unused portion of the Revolving Funding Facility.
  
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For the three months ended March 31, 2026 and 2025, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the Revolving Funding Facility were as follows:

  For the Three Months Ended March 31,
  2026 2025
Stated interest expense $ 15   $ 16  
Credit facility fees 1   2  
Amortization of debt issuance costs 1   1  
Total interest and credit facility fees expense $ 17   $ 19  
Cash paid for interest expense $ 17   $ 17  
Average stated interest rate 5.40   % 6.33   %
Average outstanding balance $ 1,092   $ 987  

SMBC Funding Facility
 
The Company and the Company’s consolidated subsidiary, Ares Capital JB Funding LLC (“ACJB”), are party to a revolving funding facility (as amended, the “SMBC Funding Facility”), with ACJB, as the borrower, and Sumitomo Mitsui Banking Corporation, as the administrative agent and collateral agent, that allows ACJB to borrow up to $ 1,600 at any one time outstanding. The SMBC Funding Facility also provides for an “accordion” feature that allows ACJB, under certain circumstances, to increase the overall size of the SMBC Funding Facility to $ 2,500 . The SMBC Funding Facility is secured by all of the assets held by ACJB. The end of the reinvestment period and the stated maturity date for the SMBC Funding Facility are July 25, 2028 and July 25, 2030, respectively. The reinvestment period and the stated maturity date are both subject to two one-year extensions by mutual agreement.
 
Amounts available to borrow under the SMBC Funding Facility are subject to a borrowing base that applies an advance rate to assets held by ACJB. ACJB is also subject to limitations with respect to the loans securing the SMBC Funding Facility, including restrictions on sector concentrations, loan size, payment frequency and status, collateral interests and loans with fixed rates, as well as restrictions on portfolio company leverage, all of which may also affect the borrowing base and therefore amounts available to borrow. The Company and ACJB are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. These covenants are subject to important limitations and exceptions that are described in the documents governing the SMBC Funding Facility. As of March 31, 2026, the Company and ACJB were in compliance in all material respects with the terms of the SMBC Funding Facility.
 
As of March 31, 2026 and December 31, 2025, there was $ 661 and $ 563 outstanding, respectively, under the SMBC Funding Facility. Since February 25, 2026, the interest rate charged on the SMBC Funding Facility is based on an applicable spread of either (i) 1.75 % over SOFR or (ii) 0.75 % over a “base rate” (as defined in the documents governing the SMBC Funding Facility). From July 25, 2025 to February 24, 2026, the interest rate charged on the SMBC Funding Facility was based on an applicable spread of either (i) 1.80 % over SOFR or (ii) 0.80 % over a “base rate”. Prior to July 25, 2025, the interest rate charged on the SMBC Funding Facility was based on an applicable spread of either (i) 2.00 % over one month SOFR or (ii) 1.00 % over a “base rate”, in each case, determined monthly based on the amount of the average borrowings outstanding under the SMBC Funding Facility. ACJB is required to pay a commitment fee of between 0.50 % and 1.00 % per annum depending on the size of the unused portion of the SMBC Funding Facility.

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For the three months ended March 31, 2026 and 2025, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the SMBC Funding Facility were as follows:

  For the Three Months Ended March 31,
  2026 2025
Stated interest expense $ 8   $ 7  
Credit facility fees 1   —  
Amortization of debt issuance costs —   1  
Total interest and credit facility fees expense $ 9   $ 8  
Cash paid for interest expense $ 8   $ 7  
Average stated interest rate 5.46   % 6.32   %
Average outstanding balance $ 561   $ 414  

    
BNP Funding Facility
 
The Company and the Company’s consolidated subsidiary, ARCC FB Funding LLC (“AFB”), are party to a revolving funding facility (as amended, the “BNP Funding Facility”) with AFB, as the borrower, and BNP Paribas, as the administrative agent and lender, that allows AFB to borrow up to $ 1,265 at any one time outstanding. The BNP Funding Facility is secured by all of the assets held by AFB. The end of the reinvestment period and the stated maturity date for the BNP Funding Facility are March 20, 2028 and March 20, 2030, respectively.
 
Amounts available to borrow under the BNP Funding Facility are subject to a borrowing base that applies an advance rate to assets held by AFB. AFB is also subject to limitations with respect to the loans securing the BNP Funding Facility, including restrictions on sector concentrations, loan size, payment frequency and status, collateral interests and loans with fixed rates, as well as restrictions on portfolio company leverage, all of which may also affect the borrowing base and therefore amounts available to borrow. The Company and AFB are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. These covenants are subject to important limitations and exceptions that are described in the documents governing the BNP Funding Facility. As of March 31, 2026, the Company and AFB were in compliance in all material respects with the terms of the BNP Funding Facility.
 
As of March 31, 2026 and December 31, 2025, there was $ 737 and $ 717 , respectively, outstanding under the BNP Funding Facility. Since March 20, 2025, the interest rate charged on the BNP Funding Facility is based on an applicable SOFR or a “base rate” (as defined in the documents governing the BNP Funding Facility) plus a margin of (i) 1.90 % during the reinvestment period and (ii) 2.40 % following the reinvestment period. Prior to March 20, 2025, the interest rate charged on the BNP Funding Facility was based on an applicable SOFR or a “base rate” plus a margin of (i) 2.10 % during the reinvestment period and (ii) 2.60 % following the reinvestment period.

For the three months ended March 31, 2026 and 2025, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the BNP Funding Facility were as follows:

For the Three Months Ended March 31,
  2026 2025

Stated interest expense $ 9   $ 11  
Credit facility fees 1   —  
Amortization of debt issuance costs 1   1  
Total interest and credit facility fees expense $ 11   $ 12  
Cash paid for interest expense $ 11   $ 12  
Average stated interest rate 5.58   % 6.41   %
Average outstanding balance $ 668   $ 712  

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Debt Securitizations

Certain of the Company’s wholly owned, consolidated subsidiaries (Ares Direct Lending CLO I LLC (“ADL CLO 1”), Ares Direct Lending CLO 4 LLC (“ADL CLO 4”) and Ares Direct Lending CLO 7 LLC (“ADL CLO 7” and, together with ADL CLO 1 and ADL CLO 4, the “CLO Subsidiaries”)) have completed on-balance sheet financings through term debt securitizations (also known as collateralized loan obligations), which are consolidated by the Company for financial reporting purposes and count as debt for the purposes of determining the Company’s asset coverage. These include (i) a $ 702 term debt securitization completed in May 2024 (the “ADL CLO 1 Debt Securitization”), (ii) a $ 804 term debt securitization completed in November 2024 (the “ADL CLO 4 Debt Securitization”) and (iii) a $ 1,003 term debt securitization completed in December 2025 (the “ADL CLO 7 Debt Securitization”). The Company refers to the ADL CLO 1 Debt Securitization, ADL CLO 4 Debt Securitization and ADL CLO 7 Debt Securitization collectively as the “Debt Securitizations.” The Company’s investment adviser serves as asset manager to the CLO Subsidiaries under asset management agreements with each CLO Subsidiary and has agreed to waive any management fees from the CLO Subsidiaries for such services.

ADL CLO 1 Debt Securitization

The following table presents information on the ADL CLO 1 Debt Securitization as of March 31, 2026:

Class Type Principal Outstanding Maturity Date Interest Rate
April 2036 Class A CLO Notes Senior Secured Floating Rate $ 406   April 25, 2036 SOFR+ 1.80 %

April 2036 Class B CLO Notes(1)
Senior Secured Floating Rate 70   April 25, 2036 SOFR+ 2.20 %

Total April 2036 CLO Secured Notes 476  
April 2036 CLO Subordinated Notes(2)
Subordinated 226   April 25, 2036 None
Total April 2036 CLO Notes $ 702  

________________________________________

(1) The April 2036 Class A CLO Notes and the April 2036 Class B CLO Notes are referred to collectively as the April 2036 CLO Secured Notes and are the secured obligations of ADL CLO 1 and are backed by a diversified portfolio of first lien senior secured loans contributed by the Company to ADL CLO 1.

(2) The Company retained all of the April 2036 CLO Subordinated Notes, as such, the April 2036 CLO Subordinated Notes are eliminated in consolidation.

The indenture governing the April 2036 CLO Secured Notes contains customary covenants and events of default as well as certain conditions pursuant to which additional loans can be acquired by ADL CLO 1. Through April 25, 2028, all principal collections received on the underlying collateral may be used by ADL CLO 1 to purchase new collateral, including additional collateral from the Company .

ADL CLO 4 Debt Securitization

The following table presents information on the ADL CLO 4 Debt Securitization as of March 31, 2026:

Class Type Principal Outstanding Maturity Date Interest Rate
October 2036 Class A CLO Loans
Senior Secured Floating Rate $ 464   October 24, 2036 SOFR+ 1.54 %

October 2036 Class B CLO Loans(1)
Senior Secured Floating Rate 80   October 24, 2036 SOFR+ 1.83 %

Total October 2036 CLO Secured Loans 544  
October 2036 CLO Subordinated Notes(2)
Subordinated 260   October 24, 2036 None
Total October 2036 CLO Notes $ 804  

________________________________________

(1) The October 2036 Class A CLO Loans and the October 2036 Class B CLO Loans are referred to collectively as the October 2036 CLO Secured Loans and are the secured obligations of ADL CLO 4 and are backed by a diversified portfolio of first lien senior secured loans contributed by the Company to ADL CLO 4.

187

(2) The Company retained all of the October 2036 CLO Subordinated Notes, as such, the October 2036 CLO Subordinated Notes are eliminated in consolidation.

The documents governing the October 2036 CLO Secured Loans contain customary covenants and events of default as well as certain conditions pursuant to which additional loans can be acquired by ADL CLO 4. Through October 24, 2028, all principal collections received on the underlying collateral may be used by ADL CLO 4 to purchase new collateral, including additional collateral from the Company .

ADL CLO 7 Debt Securitization

The following table presents information on the ADL CLO 7 Debt Securitization as of March 31, 2026:

Class Type Principal Outstanding Maturity Date Interest Rate
January 2038 Class A-1 CLO Notes Senior Secured Floating Rate $ 570   January 20, 2038 SOFR+ 1.40 %

January 2038 Class A-2 CLO Notes Senior Secured Floating Rate 50   January 20, 2038 SOFR+ 1.65 %

January 2038 Class B CLO Notes(1)
Senior Secured Floating Rate 80   January 20, 2038 SOFR+ 1.85 %

Total January 2038 CLO Secured Notes 700  
January 2038 CLO Subordinated Notes(2)
Subordinated 303   January 20, 2038 None
Total January 2038 CLO Notes $ 1,003  

________________________________________

(1) The January 2038 Class A-1 CLO Notes, the January 2038 Class A-2 CLO Notes and the January 2038 Class B CLO Notes are referred to collectively as the January 2038 CLO Secured Notes and are the secured obligations of ADL CLO 7 and are backed by a diversified portfolio of first lien senior secured loans contributed by the Company to ADL CLO 7.

(2) The Company retained all of the January 2038 CLO Subordinated Notes, as such, the January 2038 CLO Subordinated Notes are eliminated in consolidation.

The indenture governing the January 2038 CLO Secured Notes contains customary covenants and events of default as well as certain conditions pursuant to which additional loans can be acquired by ADL CLO 7. Through January 20, 2038, all principal collections received on the underlying collateral may be used by ADL CLO 7 to purchase new collateral, including additional collateral from the Company.

The interest rate charged on the April 2036 CLO Secured Notes, the October 2036 CLO Secured Loans and the January 2038 CLO Secured Notes is based on SOFR plus a blended weighted average spread of 1.86 %, 1.58 % and 1.47 %, respectively. For the three months ended March 31, 2026 and 2025, the components of interest expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the April 2036 CLO Secured Notes, the October 2036 CLO Secured Loans and the January 2038 CLO Secured Notes were as follows.

  For the Three Months Ended March 31,
  2026 2025
Stated interest expense $ 23   $ 16  

Total interest expense $ 23   $ 16  
Cash paid for interest expense $ 15   $ 8  
Average stated interest rate 5.34   % 6.18   %
Average outstanding balance $ 1,720   $ 1,020  

Unsecured Notes
 
The Company has issued certain unsecured notes (the Company refers to each series of unsecured notes using the defined term set forth under the “Unsecured Notes” column of the table below and collectively refers to all such series as the “Unsecured Notes”), that pay interest semi-annually and all principal amounts are due upon maturity. Each of the Unsecured Notes may be redeemed in whole or in part at any time at the Company’s option at a redemption price equal to par plus a “make whole” premium, if applicable, as determined pursuant to the indentures governing each of the Unsecured Notes, plus any
188

accrued and unpaid interest. Certain key terms related to the features of the Unsecured Notes as of March 31, 2026 are listed below.

Unsecured Notes Aggregate Principal Amount Issued Effective Stated Interest Rate Original Issuance Date Maturity Date

July 2026 Notes $ 1,000   2.150 % January 13, 2021 July 15, 2026
January 2027 Notes(1) $ 900   6.254 % August 3, 2023 January 15, 2027
June 2027 Notes $ 500   2.875 % January 13, 2022 June 15, 2027
June 2028 Notes $ 1,250   2.875 % June 10, 2021 June 15, 2028
March 2029 Notes(1) $ 1,000   5.690 % January 23, 2024 March 1, 2029
July 2029 Notes(1) $ 850   5.316 % May 13, 2024 July 15, 2029
September 2030 Notes(1) $ 750   5.438 % June 3, 2025 September 1, 2030
January 2031 Notes $ 650   5.100 % September 9, 2025 January 15, 2031
April 2031 Notes(1) $ 750   5.398 % January 12, 2026 April 12, 2031
November 2031 Notes $ 700   3.200 % November 4, 2021 November 15, 2031
March 2032 Notes(1) $ 1,000   5.369 % January 8, 2025 March 8, 2032

________________________________________

(1) The effective stated interest rates for the January 2027 Notes, the March 2029 Notes, the July 2029 Notes, the September 2030 Notes, the April 2031 Notes and the March 2032 Notes include the impact of interest rate swaps.

In January 2026, the Company repaid in full the $ 1,150 in aggregate principal amount outstanding of unsecured notes (the “January 2026 Notes”) upon their maturity. The January 2026 Notes bore interest at a rate of 3.875 % per annum.

In connection with certain of the unsecured notes issued by the Company, the Company has entered into interest rate swaps to more closely align the interest rates of such liabilities with the Company’s investment portfolio, which consists primarily of floating rate loans. Under the interest rate swaps, the Company receives a fixed interest rate and pays a floating interest rate of one-month SOFR plus an applicable spread. The Company designated these interest rate swaps and the associated unsecured notes as qualifying fair value hedge accounting relationships. See Note 6 for more information on the interest rate swaps.

For the three months ended March 31, 2026 and 2025, the components of interest expense and cash paid for interest expense for the Unsecured Notes, as well as any other unsecured notes outstanding during the periods presented, were as follows:

  For the Three Months Ended March 31,
  2026 2025
Stated interest expense(1) $ 105   $ 107  
Amortization of debt issuance costs 3   4  
Net amortization of original issue discount/premium 2   ( 1 )
Net gain on interest rate swaps accounted for as hedge instruments and the related hedged items —   ( 1 )
Total interest expense $ 110   $ 109  
Cash paid for interest expense(1) $ 130   $ 111  

________________________________________

(1) Includes the impact of the interest rate swaps.
 
The Unsecured Notes contain certain covenants, including covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a) of the Investment Company Act, or any successor provisions, and to provide financial information to the holders of such notes under certain circumstances. These covenants are subject to important limitations and exceptions set forth in the indentures governing such notes. As of March 31, 2026, the Company was in compliance in all material respects with the terms of the respective indentures governing each of the Unsecured Notes.
 
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The Unsecured Notes are the Company’s senior unsecured obligations and rank senior in right of payment to any future indebtedness that is expressly subordinated in right of payment to the Unsecured Notes; equal in right of payment to the Company’s existing and future unsecured indebtedness that is not expressly subordinated; effectively junior in right of payment to any of its secured indebtedness (including existing unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.

6. DERIVATIVE INSTRUMENTS

The Company enters into derivative instruments from time to time to help mitigate its foreign currency and interest rate risk exposures.

Foreign Currency Forward Contracts

Certain information related to the Company’s foreign currency forward derivative instruments as of March 31, 2026 and December 31, 2025 is presented below.

  As of March 31, 2026
Derivative Instrument Notional
Amount Gross Amount of Recognized Assets Gross Amount of Recognized Liabilities Balance Sheet
Location of Net Amounts
Foreign currency forward contract ¥ 4,066 $ 49   $ ( 47 ) Other assets
Foreign currency forward contract  CAD 324 234   ( 233 ) Other assets
Foreign currency forward contract € 317 324   ( 321 ) Other assets
Foreign currency forward contract £ 194 233   ( 231 ) Other assets
Foreign currency forward contract £ 159 204   ( 204 ) Other assets
Foreign currency forward contract  CAD 159 142   ( 142 ) Accounts payable and other liabilities
Foreign currency forward contract € 138 162   ( 160 ) Other assets
Foreign currency forward contract  NZD 69 40   ( 39 ) Other assets
Foreign currency forward contract  NOK 64 6   ( 6 )  Accounts payable and other liabilities
Foreign currency forward contract  AUD 14 13   ( 13 )  Accounts payable and other liabilities
Total $ 1,407   $ ( 1,396 )

  As of December 31, 2025
Derivative Instrument Notional
Amount Gross Amount of Recognized Assets Gross Amount of Recognized Liabilities Balance Sheet
Location of Net Amounts
Foreign currency forward contract ¥ 8,131 $ 58   $ ( 56 ) Other assets
Foreign currency forward contract CAD 402 290   ( 295 ) Accounts payable and other liabilities
Foreign currency forward contract £ 304 367   ( 369 ) Accounts payable and other liabilities
Foreign currency forward contract £ 238 312   ( 315 ) Accounts payable and other liabilities
Foreign currency forward contract € 180 210   ( 212 ) Accounts payable and other liabilities
Foreign currency forward contract € 155 181   ( 182 ) Accounts payable and other liabilities
Foreign currency forward contract CAD 148 107   ( 109 ) Accounts payable and other liabilities
Foreign currency forward contract NZD 64 37   ( 37 ) Other assets
Foreign currency forward contract NOK 64 6   ( 6 ) Other assets
Foreign currency forward contract AUD 22 15   ( 15 ) Accounts payable and other liabilities
Total $ 1,583   $ ( 1,596 )

As of March 31, 2026 and December 31, 2025, the counterparties to each of the Company’s foreign currency forward contracts were Canadian Imperial Bank of Commerce or Royal Bank of Canada.

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Net realized and unrealized gains and losses on derivative instruments not designated as a qualifying hedge accounting relationship recognized by the Company for the three months ended March 31, 2026 and 2025 is in the following location in the consolidated statements of operations:

For the Three Months Ended March 31,
Derivative Instrument Statement Location 2026 2025

Foreign currency forward contract Net realized gains (losses) from foreign currency and other transactions $ ( 5 ) $ 31  
Foreign currency forward contract Net unrealized gains (losses) from foreign currency and other transactions $ 25   $ ( 44 )

Interest Rate Swaps

In connection with certain of the unsecured notes issued by the Company, the Company has entered into interest rate swaps to more closely align the interest rates of such liabilities with the Company’s investment portfolio, which consists primarily of floating rate loans. Under the interest rate swaps, the Company receives a fixed interest rate and pays a floating interest rate of one-month SOFR plus an applicable spread, as disclosed below. The Company designated these interest rate swaps and the associated unsecured notes as qualifying fair value hedge accounting relationships. As of March 31, 2026 and 2025, the counterparties to each of the Company’s interest rate swaps were Wells Fargo Bank, N.A or SMBC Capital Markets, Inc. Certain information related to the Company’s interest rate swaps as of March 31, 2026 is presented below.

Description Hedged Item Company Receives Company Pays Maturity Date Notional Amount
Interest rate swap January 2027 Notes 7.000   % SOFR + 2.5810 %
January 15, 2027 $ 900  
Interest rate swap March 2029 Notes 5.875   % SOFR + 2.0230 %
March 1, 2029 $ 1,000  
Interest rate swap July 2029 Notes 5.950   % SOFR + 1.6430 %
July 15, 2029 $ 850  
Interest rate swap September 2030 Notes 5.500   % SOFR + 1.7705 %
September 1, 2030 $ 750  
Interest rate swap(1) January 2031 Notes 5.100   % SOFR + 1.7270 %
January 15, 2031 $ 650  
Interest rate swap April 2031 Notes 5.250   % SOFR + 1.7217 %
April 15, 2031 $ 750  
Interest rate swap(1) March 2032 Notes 5.800   % SOFR + 1.6995 %
March 8, 2032 $ 1,000  

________________________________________

(1) In connection with the issuances of the January 2031 Notes and the March 2032 Notes, the Company entered into forward-starting interest rate swaps with effective dates of July 15, 2026 and January 8, 2026, respectively.

See Note 5 for more information on the January 2027 Notes, the March 2029 Notes, the July 2029 Notes, the September 2030 Notes, the January 2031 Notes, the April 2031 Notes and the March 2032 Notes.

191

As a result of the Company’s designation of the interest rate swaps as hedging instruments in qualifying fair value hedge accounting relationships, the Company is required to fair value the hedging instruments and the related hedged items, with the changes in the fair value of each being recorded in interest expense. The net gain related to the fair value hedges was approximately $ 0 and $ 1 for the three months ended March 31, 2026 and 2025, respectively, which is included in “interest and credit facility fees” in the Company’s consolidated statements of operations. The balance sheet impact of fair valuing the interest rate swaps as of March 31, 2026 and December 31, 2025 is presented below:

  As of March 31, 2026
Derivative Instrument Notional Amount Maturity Date Gross Amount of Recognized Assets Gross Amount of Recognized Liabilities Balance Sheet Location of Amounts
Interest rate swap(1) $ 900   January 15, 2027 $ 4   $ —   Other assets
Interest rate swap(2) $ 1,000   March 1, 2029 6   —   Other assets
Interest rate swap(3) $ 850 July 15, 2029 17   —   Other assets
Interest rate swap(4) $ 750   September 1, 2030 2   —   Other assets
Interest rate swap(5) $ 650   January 15, 2031 —   ( 8 ) Accounts payable and other liabilities
Interest rate swap(6) $ 750   April 15, 2031 —   ( 5 ) Accounts payable and other liabilities
Interest rate swap(7) $ 1,000   March 8, 2032 20   —   Other assets
Total $ 49   $ ( 13 )

________________________________________

(1) The asset related to the fair value of the interest rate swaps was offset by a $ 4 increase to the carrying value of the January 2027 Notes.

(2) The asset related to the fair value of the interest rate swap was offset by a $ 6 increase to the carrying value of the March 2029 Notes.

(3) The asset related to the fair value of the interest rate swap was offset by a $ 17 increase to the carrying value of the July 2029 Notes.

(4) The asset related to the fair value of the interest rate swap was offset by a $ 2 increase to the carrying value of the September 2030 Notes.

(5) The liability related to the fair value of the interest rate swap was offset by a $ 8 decrease to the carrying value of the January 2031 Notes.

(6) The liability related to the fair value of the interest rate swap was offset by a $ 5 decrease to the carrying value of the April 2031 Notes.

(7) The asset related to the fair value of the interest rate swap was offset by a $ 20 increase to the carrying value of the March 2032 Notes.

192

  As of December 31, 2025
Derivative Instrument Notional Amount Maturity Date Gross Amount of Recognized Assets Gross Amount of Recognized Liabilities Balance Sheet Location of Amounts
Interest rate swap(1) $ 900   January 15, 2027 $ 8   $ —   Other assets
Interest rate swap(2) $ 1,000   March 1, 2029 13   —   Other assets
Interest rate swap(3) $ 850 July 15, 2029 25   —   Other assets
Interest rate swap(4) $ 750   September 1, 2030 7   —   Other assets
Interest rate swap(5) $ 650   January 15, 2031 —   ( 4 ) Accounts payable and other liabilities
Interest rate swap(6) $ 1,000   March 8, 2032 28   —   Other assets
Total $ 81   $ ( 4 )

________________________________________

(1) The asset related to the fair value of the interest rate swaps was offset by a $ 8 increase to the carrying value of the January 2027 Notes.

(2) The asset related to the fair value of the interest rate swap was offset by a $ 13 increase to the carrying value of the March 2029 Notes.

(3) The asset related to the fair value of the interest rate swap was offset by a $ 25 increase to the carrying value of the July 2029 Notes.

(4) The asset related to the fair value of the interest rate swap was offset by a $ 7 increase to the carrying value of the September 2030 Notes.

(5) The liability related to the fair value of the interest rate swap was offset by a $ 4 decrease to the carrying value of the January 2031 Notes.

(6) The asset related to the fair value of the interest rate swap was offset by a $ 28 increase to the carrying value of the March 2032 Notes.

7. COMMITMENTS AND CONTINGENCIES

Investment Commitments

The Company has various commitments to fund investments in its portfolio as described below. As of March 31, 2026 and December 31, 2025, the Company had the following commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to fund which are at (or substantially at) the Company’s discretion:

  As of
  March 31, 2026 December 31, 2025
Total revolving loan commitments $ 2,941   $ 2,734  
Less: funded commitments ( 689 ) ( 492 )
Less: unavailable revolving loan commitments due to borrowing base or other covenant restrictions ( 13 ) ( 11 )

Total net unfunded revolving loan commitments 2,239   2,231  

Total unfunded delayed draw loan commitments 2,791   2,989  
Less: unavailable delayed draw loan commitments due to borrowing base or other covenant restrictions ( 35 ) ( 30 )

Total net unfunded delayed draw loan commitments 2,756   2,959  
Total net unfunded revolving and delayed draw loan commitments $ 4,995   $ 5,190  

    
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The Company’s commitment to fund delayed draw loans is generally triggered upon the satisfaction of certain pre-negotiated terms and conditions. Generally, the most significant and uncertain term requires the borrower to satisfy a specific use of proceeds covenant. The use of proceeds covenant typically requires the borrower to use the additional loans for the specific purpose of a permitted acquisition or permitted investment, for example. In addition to the use of proceeds covenant, the borrower is generally required to satisfy additional negotiated covenants (including specified leverage levels).

Also included within the total revolving loan commitments as of March 31, 2026 were commitments to issue up to $ 402 in letters of credit through a financial intermediary on behalf of certain portfolio companies. As of March 31, 2026, the Company had $ 69 in letters of credit issued and outstanding under these commitments on behalf of the portfolio companies. For all these letters of credit issued and outstanding, the Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. Of these letters of credit, $ 59 expire in 2026 and $ 10 expire in 2027.
 
The Company also has commitments to invest in the SDLP for the Company’s portion of the SDLP’s commitments to fund delayed draw loans to certain portfolio companies of the SDLP. See Note 4 for more information.
 
As of March 31, 2026 and December 31, 2025, the Company was party to agreements to fund equity investment commitments as follows:

  As of
  March 31, 2026 December 31, 2025
Total equity commitments $ 199   $ 209  
Less: funded equity commitments ( 48 ) ( 40 )
Total unfunded equity commitments 151   169  
Less: equity commitments substantially at discretion of the Company ( 43 ) ( 43 )
Total net unfunded equity commitments $ 108   $ 126  

 
In the ordinary course of business, the Company may sell certain of its investments to third-party purchasers. In particular, in connection with the sale of certain controlled portfolio company equity investments (as well as certain other sales) the Company has, and may continue to do so in the future, agreed to indemnify such purchasers for future liabilities arising from the investments and the related sale transaction. Such indemnification provisions have given rise to liabilities in the past and may do so in the future.

In addition, in the ordinary course of business, the Company may guarantee certain obligations in connection with its portfolio companies (in particular, certain controlled portfolio companies). Under these guarantee arrangements, payments may be required to be made to third parties if such guarantees are called upon or if the portfolio companies were to default on their related obligations, as applicable.

8. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows ASC 825-10, R ecognition and Measurement of Financial Assets and Financial Liabilities (“ASC 825-10”), which provides companies the option to report selected financial assets and liabilities at fair value. ASC 825-10 also establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities and a better understanding of the effect of the company’s choice to use fair value on its earnings. ASC 825-10 also requires entities to display the fair value of the selected assets and liabilities on the face of the balance sheet. The Company has not elected the ASC 825-10 option to report selected financial assets and liabilities at fair value. With the exception of the line items entitled “other assets” and “debt,” which are reported at amortized cost, the carrying value of all other assets and liabilities approximate fair value.
 
The Company also follows ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”), which expands the application of fair value accounting. ASC 820-10 defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure of fair value measurements. ASC 820-10 determines fair value to be the price that would be received for an investment in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Company to assume that the portfolio investment is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market, which may be a hypothetical market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. In accordance with ASC 820-10, the Company has considered its principal market as the market in which the Company exits its portfolio investments with the greatest volume and level of activity. ASC
194

820-10 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. In accordance with ASC 820-10, these inputs are summarized in the three broad levels listed below:

• Level 1—Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

• Level 2—Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

• Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
 
In addition to using the above inputs in investment valuations, the Valuation Designee continues to employ its net asset valuation policy and procedures that have been reviewed by the Company’s board of directors in connection with their designation of the Company’s investment adviser as the valuation designee and are consistent with the provisions of Rule 2a-5 under the Investment Company Act and ASC 820-10 (see Note 2 for more information). Consistent with its valuation policy and procedures, the Valuation Designee evaluates the source of inputs, including any markets in which the Company’s investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value. Because there is not a readily available market value for most of the investments in the Company’s portfolio, the fair value of the investments must typically be determined using unobservable inputs.
 
The Company’s portfolio investments (other than as described below in the following paragraph) are typically valued using two different valuation techniques. The first valuation technique is an analysis of the enterprise value (“EV”) of the portfolio company. EV means the entire value of the portfolio company to a market participant, including the sum of the values of debt and equity securities used to capitalize the enterprise at a point in time. The primary method for determining EV uses a multiple analysis whereby appropriate multiples are applied to the portfolio company’s EBITDA (generally defined as net income before net interest expense, income tax expense, depreciation and amortization). EBITDA multiples are typically determined based upon review of market comparable transactions and publicly traded comparable companies, if any. The Valuation Designee may also employ other valuation multiples to determine EV, such as revenues or, in the case of certain portfolio companies in the power generation industry, kilowatt capacity. The second method for determining EV uses a discounted cash flow analysis whereby future expected cash flows of the portfolio company are discounted to determine a present value using estimated discount rates (typically a weighted average cost of capital based on costs of debt and equity consistent with current market conditions). The EV analysis is performed to determine the value of equity investments, the value of debt investments in portfolio companies where the Company has control or could gain control through an option or warrant security, and to determine if there is credit impairment for debt investments. If debt investments are credit impaired, an EV analysis may be used to value such debt investments; however, in addition to the methods outlined above, other methods such as a liquidation or wind-down analysis may be utilized to estimate EV. The second valuation technique is a yield analysis, which is typically performed for non-credit impaired debt investments in portfolio companies where the Company does not own a controlling equity position. To determine fair value using a yield analysis, a current price is imputed for the investment based upon an assessment of the expected market yield for a similarly structured investment with a similar level of risk. In the yield analysis, the Valuation Designee considers the current contractual interest rate, the maturity and other terms of the investment relative to risk of the company and the specific investment. A key determinant of risk, among other things, is the leverage through the investment relative to the EV of the portfolio company. As debt investments held by the Company are substantially illiquid with no active transaction market, the Valuation Designee depends on primary market data, including newly funded transactions, as well as secondary market data with respect to high yield debt instruments and syndicated loans, as inputs in determining the appropriate market yield, as applicable.
 
For other portfolio investments such as investments in the SDLP Certificates and IHAM, discounted cash flow analysis is the primary technique utilized to determine fair value. Expected future cash flows associated with the investment are discounted to determine a present value using a discount rate that reflects estimated market return requirements.

195

The following table presents fair value measurements of investments, unfunded revolving and delayed draw loan commitments and derivatives as of March 31, 2026:

  Fair Value Measurements Using
Total Level 1 Level 2 Level 3
Investments not measured at net asset value $ 29,482   $ 35   $ 609   $ 28,838  
Investments measured at net asset value(1) 17  
 Total investments $ 29,499  
Unfunded revolving and delayed draw loan commitments(2) $ ( 33 ) $ —   $ —   $ ( 33 )
Derivatives:
Foreign currency forward contracts $ 11   $ —   $ 11   $ —  
Interest rate swaps $ 36   $ —   $ 36   $ —  

________________________________________

(1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets.

(2) The fair value of unfunded revolving and delayed draw loan commitments is included in “accounts payable and other liabilities” in the accompanying consolidated balance sheets.

The following table presents fair value measurements of investments, unfunded revolving and delayed draw loan commitments and derivatives as of December 31, 2025:

  Fair Value Measurements Using
Total Level 1 Level 2 Level 3
Investments not measured at net asset value $ 29,468   $ 20   $ 756   $ 28,692  
Investments measured at net asset value(1) 17  
 Total investments $ 29,485  
Unfunded revolving and delayed draw loan commitments(2) $ ( 32 ) $ —   $ —   $ ( 32 )
Derivatives:
Foreign currency forward contracts $ ( 13 ) $ —   $ ( 13 ) $ —  
Interest rate swaps $ 77   $ —   $ 77   $ —  

________________________________________

(1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheets.

(2) The fair value of unfunded revolving and delayed draw loan commitments is included in “accounts payable and other liabilities” in the accompanying consolidated balance sheets.

196

The following tables summarize the significant unobservable inputs the Valuation Designee used to value the majority of the Company’s investments categorized within Level 3 as of March 31, 2026 and December 31, 2025. The tables are not intended to be all-inclusive, but instead to capture the significant unobservable inputs relevant to the Valuation Designee’s determination of fair values.

  As of March 31, 2026
Unobservable Input
Asset Category Fair Value Primary Valuation Techniques Input Estimated Range Weighted Average(1)

First lien senior secured loans $ 17,406   Yield analysis Market yield 5.5 % - 27.7 %
9.7   %
Second lien senior secured loans 1,032   Yield analysis Market yield 9.4 % - 31.0 %
16.3   %
Subordinated certificates of the SDLP 1,159   Discounted cash flow analysis Discount rate 9.3 % - 12.6 %
11.3   %
Senior subordinated loans 1,690   Yield analysis Market yield 7.1 % - 25.8 %
12.5   %
Preferred equity 2,415   Yield analysis Market yield 4.7 % - 32.7 %
15.0   %
EV market multiple analysis EBITDA multiple 3.3 x - 24.0 x
12.4 x
Ivy Hill Asset Management, L.P.(2) 2,661   Discounted cash flow analysis Discount rate 9.3 % - 17.0 %
10.7   %

Other equity 2,475   EV market multiple analysis EBITDA multiple 3.3 x - 30.0 x
13.3 x
Total investments $ 28,838  

________________________________________

(1) Unobservable inputs were weighted by the relative fair value of the investments.

(2) Includes the Company’s subordinated loan to and equity investments in IHAM, as applicable.

  As of December 31, 2025
Unobservable Input
Asset Category Fair Value Primary Valuation Techniques Input Estimated Range Weighted Average(1)

First lien senior secured loans $ 17,584   Yield analysis Market yield 5.5 % - 23.6 %
9.5   %
Second lien senior secured loans 1,063   Yield analysis Market yield 8.2 % - 25.3 %
13.7   %
Subordinated certificates of the SDLP 1,117   Discounted cash flow analysis Discount rate 9.4 % - 12.7 %
11.3   %
Senior subordinated loans 1,537   Yield analysis Market yield 7.0 % - 24.7 %
12.8   %
Preferred equity 2,475   Yield analysis Market yield 7.0 % - 23.1 %
13.4   %
EV market multiple analysis EBITDA multiple 3.5 x - 26.0 x
13.8 x
Ivy Hill Asset Management, L.P.(2) 2,434   Discounted cash flow analysis Discount rate 9.3 % - 16.5 %
10.1   %
Other equity 2,482   EV market multiple analysis EBITDA multiple 4.5 x - 33.0 x
14.2 x
Total investments $ 28,692  

________________________________________

(1) Unobservable inputs were weighted by the relative fair value of the investments.

(2) Includes the Company’s subordinated loan to and equity investments in IHAM, as applicable.

Changes in market yields, discount rates or EBITDA multiples, each in isolation, may change the fair value of certain of the Company’s investments. Generally, an increase in market yields or discount rates or a decrease in EBITDA multiples may result in a decrease in the fair value of certain of the Company’s investments.
 
Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Company’s investments may fluctuate from period to period. Additionally, the fair value of the
197

Company’s investments may differ significantly from the values that would have been used had a ready market existed for such investments and may differ materially from the values that the Company may ultimately realize. Further, such investments are generally subject to legal and other restrictions on resale or otherwise are less liquid than publicly traded securities. If the Company was required to liquidate a portfolio investment in a forced or liquidation sale, it could realize significantly less than the value at which the Company has recorded it.

In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the unrealized gains or losses reflected in the valuations currently assigned.

The following table presents changes in investments that use Level 3 inputs as of and for the three months ended March 31, 2026:

  As of and For the Three Months Ended March 31, 2026
Balance as of December 31, 2025 $ 28,692  
Net realized gains 93  
Net unrealized losses ( 339 )
Purchases 3,407  
Sales ( 1,640 )
Repayments ( 1,458 )
PIK interest and dividends 109  
Net accretion of discount on investments 3  
Transfers into Level 3 — 
Transfers out of Level 3 ( 29 )

Balance as of March 31, 2026 $ 28,838  

Investments that were transferred into and out of Level 3 during the three months ended March 31, 2026 were generally as a result of changes in the observability of significant inputs or available market data for certain portfolio companies.

As of March 31, 2026, the net unrealized depreciation on the investments that use Level 3 inputs was $ 102 .

For the three months ended March 31, 2026, the total amount of gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to the Company’s Level 3 assets still held as of March 31, 2026, and reported within the net unrealized gains (losses) on investments, foreign currency and other transactions in the Company’s consolidated statements of operations was $( 319 ).

198

The following table presents changes in investments that use Level 3 inputs as of and for the three months ended March 31, 2025:

  As of and For the Three Months Ended March 31, 2025
Balance as of December 31, 2024 $ 26,091  
Net realized losses ( 103 )
Net unrealized gains 26  
Purchases 2,679  
Sales ( 799 )
Repayments ( 1,456 )
PIK interest and dividends 105  
Net accretion of discount on investments 2  
Transfers into Level 3 —  
Transfers out of Level 3 ( 160 )
Balance as of March 31, 2025 $ 26,385  

Investments that were transferred into and out of Level 3 during the three months ended March 31, 2025 were generally as a result of changes in the observability of significant inputs or available market data for certain portfolio companies.

As of March 31, 2025, the net unrealized appreciation on the investments that use Level 3 inputs was $ 403 .

For the three months ended March 31, 2025, the total amount of gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to the Company’s Level 3 assets still held as of March 31, 2025, and reported within the net unrealized gains (losses) on investments, foreign currency and other transactions in the Company’s consolidated statements of operations was $( 78 ).

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The following are the carrying and fair values of the Company’s debt obligations as of March 31, 2026 and December 31, 2025. Fair value is estimated by discounting remaining payments using applicable current market rates, which take into account changes in the Company’s marketplace credit ratings, or market quotes, if available.

  As of
  March 31, 2026 December 31, 2025
Carrying Value(1) Fair Value(6) Carrying Value(1) Fair Value(6)
Revolving Credit Facility $ 2,265   $ 2,265   $ 2,031   $ 2,031  
Revolving Funding Facility 1,191   1,191   1,234   1,234  
SMBC Funding Facility 661   661   563   563  
BNP Funding Facility 737   737   717   717  
April 2036 CLO Notes (principal amount outstanding of $ 476 )(2)
474   (3) 474   473   (3) 473  
October 2036 CLO Secured Loans (principal amount outstanding of $ 544 )(2)
541   (3) 541   541   (3) 541  
January 2038 CLO Notes (principal amount outstanding of $ 700 )(2)
697   (3) 697   697   (3) 697  
January 2026 Notes (principal amount outstanding of $ 0 and $ 1,150 , respectively)
—   —   1,150   (3) 1,149  
July 2026 Notes (principal amount outstanding of $ 1,000 )
999   (3) 993   999   (3) 989  
January 2027 Notes (principal amount outstanding of $ 900 )
897   (3)(4) 913   900   (3)(4) 923  
June 2027 Notes (principal amount outstanding of $ 500 )
498   (3) 487   498   (3) 490  
June 2028 Notes (principal amount outstanding of $ 1,250 )
1,248   (3) 1,182   1,248   (3) 1,196  
March 2029 Notes (principal amount outstanding of $ 1,000 )
992   (3)(4) 1,008   999   (3)(4) 1,027  
July 2029 Notes (principal amount outstanding of $ 850 )
854   (3)(4) 855   861   (3)(4) 874  
September 2030 Notes (principal amount outstanding of $ 750 )
738   (3)(4) 737   743   (3)(4) 756  
January 2031 Notes (principal amount outstanding of $ 650 )
630   (3)(4) 625   634   (3)(4) 642  
April 2031 Notes (principal amount outstanding of $ 750 and $ 0 , respectively)
730   (3)(4) 726   —   —  
November 2031 Notes (principal amount outstanding of $ 700 )
693   (3) 607   693   (3) 622  
March 2032 Notes (principal amount outstanding of $ 1,000 )
1,003   (3)(4) 986   1,010   (3)(4) 1,011  
Total $ 15,848   (5) $ 15,685   $ 15,991   (5) $ 15,935  

________________________________________

(1) The Revolving Credit Facility, the Revolving Funding Facility, the SMBC Funding Facility and the BNP Funding Facility carrying values are the same as the principal amounts outstanding.

(2) Excludes the April 2036 CLO Subordinated Notes, the October 2036 CLO Subordinated Notes and the January 2028 CLO Subordinated Notes which were retained by the Company and, as such, eliminated in consolidation. See Note 5 for more information on the Debt Securitizations.

(3) Represents the aggregate principal amount outstanding, less unamortized debt issuance costs and the net unaccreted/amortized discount or premium recorded upon issuance.

(4) The carrying value of the January 2027 Notes, the March 2029 Notes, the July 2029 Notes, the September 2030 Notes, the January 2031 Notes, the April 2031 Notes and the March 2032 Notes includes adjustments as a result of effective hedge accounting relationships, as applicable. See Notes 5 and 6 for more information.

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(5) Total principal amount of outstanding debt totaled $ 15,927 and $ 16,012 as of March 31, 2026 and December 31, 2025, respectively.

(6) The fair value of these debt obligations would be categorized as Level 2 under ASC 820-10.

9. STOCKHOLDERS’ EQUITY

The Company may from time to time issue and sell shares of its common stock through public or “at the market” offerings. During the three months ended March 31, 2026, the Company did not issue or sell any shares of its common stock.

During the three months ended March 31, 2025, the Company issued and sold the following shares of common stock:

Issuances of Common Stock Number of Shares Issued Gross Proceeds Underwriting Fees/Offering Expenses Net Proceeds Average Offering Price Per Share(1)

“At the market” offerings 17.2 $ 388.6   $ 4.4   $ 384.2   $ 22.55  

________________________________________

(1)    Represents the gross offering price per share before deducting underwriting discounts and commissions and offering expenses.

“At the Market” Offerings

The Company is party to equity distribution agreements with several banks (the “Equity Distribution Agreements”). The Equity Distribution Agreements provide that the Company may from time to time issue and sell, by means of “at the market” offerings, up to $ 1,500 of its common stock. Subject to the terms and conditions of the Equity Distribution Agreements, sales of common stock, if any, may be made in transactions that are deemed to be “at the market” offerings as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. Under the Equity Distribution Agreements, common stock with an aggregate offering amount of $ 563 remained available for issuance as of March 31, 2026.

Dividend Reinvestment Plan

See Note 11 for information regarding shares of common stock issued or purchased in accordance with the Company’s dividend reinvestment plan.

Stock Repurchase Program

The Company is authorized under its stock repurchase program to purchase up to $ 1,000 in the aggregate of its outstanding common stock in the open market at certain thresholds below its net asset value per share, in accordance with the guidelines specified in Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The timing, manner, price and amount of any share repurchases will be determined by the Company, in its sole discretion, based upon an evaluation of economic and market conditions, stock price, applicable legal and regulatory requirements and other factors. The stock repurchase program does not require the Company to repurchase any specific number of shares of common stock or any shares of common stock at all. Consequently, the Company cannot assure stockholders that any specific number of shares of common stock, if any, will be repurchased under the stock repurchase program. As of March 31, 2026, the expiration date of the stock repurchase program was February 15, 2027. The program may be suspended, extended, modified or discontinued at any time. As of March 31, 2026, there was $ 1,000 available for repurchases under the stock repurchase program.

During the three months ended March 31, 2026 and 2025, the Company did not repurchase any shares of the Company’s common stock under the stock repurchase program.

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10. EARNINGS PER SHARE

The following information sets forth the computations of basic and diluted net increase in stockholders’ equity resulting from operations per share for the three months ended March 31, 2026 and 2025:

  For the Three Months Ended March 31,
  2026 2025

Net increase in stockholders’ equity resulting from operations $ 92   $ 241  

Basic and diluted weighted average shares of common stock outstanding 718   676  

Basic and diluted net increase in stockholders’ equity resulting from operations per share $ 0.13   $ 0.36  

11. DIVIDENDS AND DISTRIBUTIONS

The following table summarizes the Company’s dividends declared and payable during the three months ended March 31, 2026 and 2025:

Date declared Record date Payment date Per share
amount Total amount

February 4, 2026 March 13, 2026 March 31, 2026 $ 0.48   $ 345  

Total dividends declared and payable for the three months ended March 31, 2026
$ 0.48   $ 345  

February 5, 2025 March 14, 2025 March 31, 2025 $ 0.48   $ 328  
Total dividends declared and payable for the three months ended March 31, 2025
$ 0.48   $ 328  

The Company has a dividend reinvestment plan, whereby the Company may buy shares of its common stock in the open market or issue new shares in order to satisfy dividend reinvestment requests. When the Company issues new shares in connection with the dividend reinvestment plan, the issue price is equal to the closing price of its common stock on the dividend payment date. Dividend reinvestment plan activity for the three months ended March 31, 2026 and 2025, was as follows:

For the Three Months Ended March 31,
2026 2025
Shares issued —   0.9  
Average issue price per share $ —   $ 22.16  
Shares purchased by plan agent to satisfy dividends declared and payable during the period for stockholders 1.2   —  
Average purchase price per share $ 18.02   $ —  

12. RELATED PARTY TRANSACTIONS

In accordance with the investment advisory and management agreement, the Company bears all costs and expenses of the operation of the Company and reimburses its investment adviser or its affiliates for certain of such costs and expenses paid for by the investment adviser or its affiliates on behalf of the Company. For the three months ended March 31, 2026 and 2025, the Company’s investment adviser or its affiliates incurred and the Company reimbursed such expenses totaling $ 1 and $ 2 , respectively.

The Company has entered into agreements with Ares Management LLC and IHAM, pursuant to which Ares Management LLC and IHAM are entitled to use the Company’s proprietary portfolio management software. For the three months ended March 31, 2026 and 2025, amounts payable to the Company under these agreements totaled $ 0 and $ 0 , respectively.

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Ares Management Capital Markets LLC (“AMCM”), an affiliate of Ares Management, served as a co-manager and an underwriter in connection with the Company’s offerings of certain of the Unsecured Notes issued during the three months ended March 31, 2026 and 2025. Under the purchase agreements the Company entered into in connection with such issuances, AMCM received an aggregate of $ 0.2 and $ 0.3 of underwriting and advisory fees for the three months ended March 31, 2026 and 2025, respectively. The underwriting and advisory fees AMCM received were on terms equivalent to those of other underwriters.

See Notes 3, 4 and 5 for descriptions of other related party transactions.

13. FINANCIAL HIGHLIGHTS

The following is a schedule of financial highlights as of and for the three months ended March 31, 2026 and 2025:

  As of and For the Three Months Ended March 31,
Per Share Data: 2026 2025
Net asset value at beginning of period(1) $ 19.94   $ 19.89  
Issuances of common stock —   0.05  

Net investment income for period(2) 0.55   0.54  
Net realized and unrealized losses for period(2) ( 0.42 ) ( 0.18 )
Net increase in stockholders' equity resulting from operations 0.13   0.41  
Total distributions to stockholders ( 0.48 ) ( 0.48 )
Net asset value at end of period(1) $ 19.59   $ 19.82  
Per share market value at end of period $ 18.02   $ 22.16  
Total return based on market value(3) ( 8.53 ) % 3.52   %
Total return based on net asset value(4) 0.65   % 2.06   %
Shares outstanding at end of period 718   690  
Ratio/Supplemental Data:  
Net assets at end of period $ 14,065   $ 13,672  
Ratio of operating expenses to average net assets(5)(6) 10.27   % 10.81   %
Ratio of net investment income to average net assets(5)(7) 11.36   % 10.96   %
Portfolio turnover rate(5) 42   % 39   %

_________________________________________________________________________________

(1) The net assets used equals the total stockholders’ equity on the consolidated balance sheets.

(2) Weighted average basic per share data.

(3) For the three months ended March 31, 2026, the total return based on market value equaled the decrease of the ending market value at March 31, 2026 of $ 18.02 per share from the ending market value at December 31, 2025 of $ 20.23 per share plus the declared and payable dividends of $ 0.48 per share for the three months ended March 31, 2026, divided by the market value at December 31, 2025. For the three months ended March 31, 2025, the total return based on market value equaled the increase of the ending market value at March 31, 2025 of $ 22.16 per share from the ending market value at December 31, 2024 of $ 21.89 per share plus the declared and payable dividends of $ 0.48 per share for the three months ended March 31, 2025, divided by the market value at December 31, 2024. The Company’s performance changes over time and currently may be different than that shown. Past performance is no guarantee of future results.

(4) For the three months ended March 31, 2026, the total return based on net asset value equaled the change in net asset value during the period plus the declared and payable dividends of $ 0.48 per share for the three months ended March 31, 2026, divided by the beginning net asset value for the period. For the three months ended March 31, 2025, the total return based on net asset value equaled the change in net asset value during the period plus the declared and payable dividends of $ 0.48 per share for the three months ended March 31, 2025, divided by the beginning net asset value for the period. The Company’s performance changes over time and currently may be different than that shown. Past performance is no guarantee of future results.
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(5) The ratios reflect an annualized amount.

(6) For the three months ended March 31, 2026 and 2025, the ratio of operating expenses to average net assets consisted of the following:

  As of and For the Three Months Ended March 31,
2026 2025
Base management fee 3.18   % 3.07   %
Income based fee and capital gains incentive fee 0.66   1.81  
Interest and credit facility fees 6.08   5.59  
Other operating expenses 0.35   0.34  
Total operating expenses 10.27   % 10.81   %

(7) The ratio of net investment income to average net assets excludes income taxes related to realized gains and losses.

14. SEGMENT REPORTING

The Company operates through a single operating and reporting segment with an investment objective to generate both current income and capital appreciation through debt and equity investments. The chief operating decision maker (“CODM”) is comprised of the Company’s chief executive officer, president, chief financial officer and chief operating officer and the CODM assesses the performance and makes operating decisions of the Company on a consolidated basis primarily based on the Company’s net increase in stockholders’ equity resulting from operations (“net income”). In addition to numerous other factors and metrics, the CODM utilizes net income as a key metric in determining the amount of dividends to be distributed to the Company’s stockholders. As the Company’s operations comprise of a single reporting segment, the segment assets are reflected on the accompanying consolidated balance sheets as “total assets” and the significant segment expenses are listed on the accompanying consolidated statements of operations.

15. SUBSEQUENT EVENTS

The Company’s management has evaluated subsequent events through the date of issuance of the consolidated financial statements included herein. There have been no subsequent events that occurred during such period that would require disclosure in this Form 10-Q or would be required to be recognized in the consolidated financial statements as of and for the three months ended March 31, 2026.

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

The information contained in this section should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report. In addition, some of the statements in this Quarterly Report (including in the following discussion) constitute forward-looking statements, which relate to future events or the future performance or financial condition of Ares Capital Corporation (the “Company,” “Ares Capital,” “we,” “us,” or “our”). The forward-looking statements contained in this report involve a number of risks and uncertainties, including statements concerning:

• our, or our portfolio companies’, future business, operations, operating results or prospects;

• the return or impact of current and future investments;

• the impact of a protracted decline in the liquidity of credit markets on our business;

• changes in the general economy, including those caused by tariffs and trade disputes with other countries, changes in inflation and risk of recession;

• fluctuations in global interest rates;

• the impact of changes in laws or regulations (including the interpretation thereof), including tax laws, governing our operations or the operations of our portfolio companies or the operations of our competitors;

• the valuation of our investments in portfolio companies, particularly those having no liquid trading market;

• our ability to recover unrealized losses;

• market conditions and our ability to access different debt markets and additional debt and equity capital and our ability to manage our capital resources effectively;

• our contractual arrangements and relationships with third parties;

• political and regulatory conditions that contribute to uncertainty and market volatility including the impact of any prolonged U.S. government shutdown as well as the legislative, regulatory, trade, immigration and other policies associated with the current U.S. presidential administration;

• the impact of supply chain constraints on our portfolio companies and the global economy;

• uncertainty surrounding global financial stability;

• ongoing conflicts in the Middle East and South America and the Russia-Ukraine war, including the potential for volatility in energy prices and other commodities and their impact on the industries in which we invest;

• the disruption of global shipping activities;

• the financial condition of our current and prospective portfolio companies and their ability to achieve their objectives;

• the impact of information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity attacks;

• the impact of the development and use of artificial intelligence and potential impact to certain of our portfolio companies;

• the impact of global health crises on our or our portfolio companies’ business and the U.S. and global economy;

• our ability to anticipate and identify evolving market expectations with respect to environmental, social and governance matters, including the environmental impacts of our portfolio companies’ supply chain and operations;

• our ability to successfully complete and integrate any acquisitions;
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• the outcome and impact of any litigation or regulatory proceeding;

• the adequacy of our cash resources and working capital;

• the timing, form and amount of any dividend distributions;

• the timing of cash flows, if any, from the operations of our portfolio companies; and

• the ability of our investment adviser to locate suitable investments for us and to monitor and administer our investments.

We use words such as “anticipates,” “believes,” “expects,” “intends,” “projects,” “seeks,” “estimates,” “will,” “should,” “could,” “would,” “likely,” “may” and similar expressions to identify forward-looking statements, although not all forward-looking statements include these words. You should not place undue reliance on these forward-looking statements, and our actual results and condition could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Item 1A. Risk Factors” and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on February 4, 2026 (“Annual Report”) and in this Quarterly Report.

We have based the forward-looking statements included in this Quarterly Report on information available to us as of the filing date of this Quarterly Report, and we assume no obligation to update any such forward-looking statements. Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we have filed or in the future may file with the SEC, including annual reports on Form 10-K, registration statements on Form N-2, quarterly reports on Form 10-Q and current reports on Form 8-K.

OVERVIEW

We are a specialty finance company that is a closed-end, non-diversified management investment company incorporated in Maryland. We have elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (together with the rules and regulations promulgated thereunder, the “Investment Company Act”).
 
We are externally managed by Ares Capital Management LLC (“Ares Capital Management” or our “investment adviser”), a subsidiary of Ares Management Corporation (“Ares Management”), a publicly traded, leading global alternative investment manager, pursuant to our investment advisory and management agreement. Ares Operations LLC (“Ares Operations” or our “administrator”), a subsidiary of Ares Management, provides certain administrative and other services necessary for us to operate.
 
Our investment objective is to generate both current income and capital appreciation through debt and equity investments. We invest primarily in first lien senior secured loans (including “unitranche” loans, which are loans that combine both senior and subordinated loans, generally in a first lien position) and second lien senior secured loans. In addition to senior secured loans, we also invest in subordinated loans (sometimes referred to as mezzanine debt) and preferred equity.
 
To a lesser extent, we also make common equity investments, which have generally been non-control equity investments of less than $20 million (usually in conjunction with a concurrent debt investment). However, we may increase the size or change the nature of these investments.
 
Since our initial public offering (“IPO”) on October 8, 2004 through March 31, 2026, our exited investments resulted in an asset level realized gross internal rate of return to us of approximately 13% (based on original cash invested, net of syndications, of approximately $56.9 billion and total proceeds from such exited investments of approximately $73.4 billion). Internal rate of return is the discount rate that makes the net present value of all cash flows related to a particular investment equal to zero. Internal rate of return is gross of expenses related to investments as these expenses are not allocable to specific investments. Investments are considered to be exited when the original investment objective has been achieved through the receipt of cash and/or non-cash consideration upon the repayment of a debt investment or sale of an investment or through the determination that no further consideration was collectible and, thus, a loss may have been realized.

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Additionally, since our IPO on October 8, 2004 through March 31, 2026, our realized gains have exceeded our realized losses by approximately $1.1 billion (excluding a one-time gain on the acquisition of Allied Capital Corporation in April 2010 (the “Allied Acquisition”), income tax expense on net realized gains, and realized gains/losses from the extinguishment of debt and other transactions). For the same time period, our average annualized net realized gain rate was approximately 0.8% (excluding a one-time gain on the Allied Acquisition, income tax expense on net realized gains, and realized gains/losses from the extinguishment of debt and other transactions). Net realized gain/loss rates for a particular period are the amount of net realized gains/losses during such period divided by the average quarterly investments at amortized cost in such period.
 
Information included herein regarding internal rates of return, realized gains and losses and annualized net realized gain rates are historical results relating to our past performance and are not necessarily indicative of future results, the achievement of which cannot be assured.

As a BDC, we are required to comply with certain regulatory requirements. For instance, we generally have to invest at least 70% of our total assets in “qualifying assets,” including securities and indebtedness of private U.S. companies and certain public U.S. companies, cash, cash equivalents, U.S. government securities and high-quality debt investments that mature in one year or less. We also may invest up to 30% of our portfolio in non-qualifying assets, as permitted by the Investment Company Act. Specifically, as part of this 30% basket, we may invest in entities that are not considered “eligible portfolio companies” (as defined in the Investment Company Act), including companies located outside of the United States, entities that are operating pursuant to certain exceptions under the Investment Company Act, and publicly traded entities whose public equity market capitalization exceeds the levels provided for under the Investment Company Act. In addition, we, our investment adviser and certain of our affiliates have received an order from the SEC that permits us and other BDCs and registered closed-end management investment companies managed by Ares Management to co-invest in portfolio companies with each other and with other affiliated investment entities (the “Co-Investment Exemptive Order”). As required by the Co-Investment Exemptive Order, we have adopted, and our board of directors has approved, policies and procedures reasonably designed to ensure compliance with the terms of the Co-Investment Exemptive Order. Co-investments made under the Co-Investment Exemptive Order are subject to compliance with certain conditions and other requirements, which could limit our ability to participate in co-investment transactions. As a result of investments permitted by the Co-Investment Exemptive Order, there could be significant overlap in our investment portfolio and the investment portfolio of affiliated Ares Management entities that can rely on the Co-Investment Exemptive Order and have an investment objective similar to ours. We may also otherwise co-invest with funds managed by Ares Management or any of its downstream affiliates, subject to compliance with existing regulatory guidance, applicable regulations and our investment adviser’s allocation policy.
 
We have elected to be treated as a regulated investment company (“RIC”) under the Internal Revenue Code of 1986, as amended (the “Code”), and operate in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, we must, among other requirements, meet certain source-of-income and asset diversification requirements and timely distribute to our stockholders generally at least 90% of our investment company taxable income, as defined by the Code, for each year. Pursuant to this election, we generally will not have to pay U.S. federal corporate-level taxes on any income that we distribute to our stockholders provided that we satisfy those requirements.

MACROECONOMIC ENVIRONMENT

During the first quarter of 2026, U.S. leveraged corporate credit markets demonstrated resilience relative to broad equity indices, supported by moderating expectations for U.S. gross domestic product growth, stable long-run inflation and low unemployment. These tailwinds were partially offset by increased uncertainty related to geopolitical developments, with markets now expecting the Federal Reserve to maintain policy rates at current levels this year amid rising near-term inflation expectations. Looking ahead, while risks have risen, underlying fundamentals remain supportive of continued stability and healthy overall economic activity.
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PORTFOLIO AND INVESTMENT ACTIVITY

Our investment activity for the three months ended March 31, 2026 and 2025 is presented below.

  For the Three Months Ended March 31,
(dollar amounts in millions) 2026 2025
New investment commitments(1):    
New portfolio companies $ 1,344  $ 1,510 
Existing portfolio companies 1,902  1,943 
Total new investment commitments(2) $ 3,246  $ 3,453 
Less:  
Investment commitments exited(3) (3,176) (2,857)
Net investment commitments $ 70  $ 596 
Principal amount of investments funded:  
First lien senior secured loans(4) $ 2,450  $ 2,616 
Second lien senior secured loans 106  9 
Subordinated certificates of the SDLP(5) 47  24 
Senior subordinated loans 284  52 
Preferred equity 48  31 
Ivy Hill Asset Management, L.P.(6) 378  — 
Other equity 52  73 
Total $ 3,365  $ 2,805 
Principal amount of investments sold or repaid:  
First lien senior secured loans(4) $ 2,573  $ 1,933 
Second lien senior secured loans 66  390 
Subordinated certificates of the SDLP(5) 5  58 
Senior subordinated loans 201  38 

Preferred equity 60  73 
Ivy Hill Asset Management, L.P.(6) 146  — 
Other equity 37  70 
Total $ 3,088  $ 2,562 
Number of new investment commitments(7) 61  70 
Average new investment commitment amount $ 53  $ 49 
Weighted average term for new investment commitments (in months) 64  70 
Percentage of new investment commitments at floating rates 91  % 90  %
Percentage of new investment commitments at fixed rates 7  % 6  %
Weighted average yield of debt and other income producing securities(8):  
Funded during the period at amortized cost 9.2  % 9.9  %
Funded during the period at fair value(9) 9.3  % 10.0  %
Exited or repaid during the period at amortized cost 9.2  % 10.0  %
Exited or repaid during the period at fair value(9) 9.3  % 10.1  %

_______________________________________________________________________________

(1) New investment commitments include new agreements to fund revolving loans or delayed draw loans. See Note 7 to our consolidated financial statements for the three months ended March 31, 2026 for more information on our commitments to fund revolving loans or delayed draw loans.

(2) Includes both funded and unfunded commitments. Of these new investment commitments, we funded $2.5 billion and $2.2 billion for the three months ended March 31, 2026 and 2025, respectively.

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(3) Includes both funded and unfunded commitments. For the three months ended March 31, 2026 and 2025, investment commitments exited included exits of unfunded commitments of $430 million and $536 million, respectively.

(4) For the three months ended March 31, 2026 and 2025, net fundings of first lien secured revolving loans were $189 million and $80 million, respectively.

(5) See “Senior Direct Lending Program” below and Note 4 to our consolidated financial statements for the three months ended March 31, 2026 for more information on the SDLP (as defined below). 

(6) Includes our subordinated loan to and equity investments in IHAM (as defined below), as applicable. See “Ivy Hill Asset Management, L.P.” below and Note 4 to our consolidated financial statements for the three months ended March 31, 2026 for more information on IHAM.

(7) Number of new investment commitments represents each commitment to a particular portfolio company or a commitment to multiple companies as part of an individual transaction (e.g., the purchase of a portfolio of investments).

(8) “Weighted average yield of debt and other income producing securities” is computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount or premium earned on accruing debt and other income producing securities (including the annualized amount of the regular dividend received by us related to our equity investment in IHAM during the most recent quarter end, as applicable), divided by (b) the total accruing debt and other income producing securities at amortized cost or at fair value (including the amortized cost or fair value of our equity investment in IHAM as applicable), as applicable.

(9) Represents fair value for investments in the portfolio as of the most recent prior quarter end, if applicable.

As of March 31, 2026 and December 31, 2025, our investments consisted of the following:

  As of
  March 31, 2026 December 31, 2025
(in millions) Amortized Cost(1) Fair Value Amortized Cost(1) Fair Value
First lien senior secured loans(2) $ 18,019  $ 17,598  $ 18,103  $ 17,858 
Second lien senior secured loans 1,600  1,428  1,558  1,487 
Subordinated certificates of the SDLP(3) 1,146  1,159  1,103  1,117 
Senior subordinated loans 1,799  1,698  1,690  1,585 

Preferred equity 2,639  2,411  2,597  2,475 
Ivy Hill Asset Management, L.P.(4) 2,462  2,661  2,231  2,434 
Other equity 1,983  2,544  1,968  2,529 
Total $ 29,648  $ 29,499  $ 29,250  $ 29,485 

_______________________________________________________________________________

(1) The amortized cost represents the original cost adjusted for any accretion of discounts, amortization of premiums and payment-in-kind (“PIK”) interest or dividends.

(2) First lien senior secured loans include certain loans that we classify as “unitranche” loans. The total amortized cost and fair value of the loans that we classified as “unitranche” loans were $11.4 billion and $11.2 billion, respectively, as of March 31, 2026, and $11.3 billion and $11.2 billion, respectively, as of December 31, 2025.

(3) The proceeds from these certificates were applied to co-investments with Varagon Capital Partners (“Varagon”) and its clients to fund first lien senior secured loans to 45 and 39 different borrowers as of March 31, 2026 and December 31, 2025, respectively.

(4) Includes our subordinated loan to and equity investments in IHAM, as applicable.

We have commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to fund which are at (or substantially at) our discretion. Our commitment to fund delayed draw loans is triggered
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upon the satisfaction of certain pre-negotiated terms and conditions. Generally, the most significant and uncertain term requires the borrower to satisfy a specific use of proceeds covenant. The use of proceeds covenant typically requires the borrower to use the additional loans for the specific purpose of a permitted acquisition or permitted investment, for example. In addition to the use of proceeds covenant, the borrower is generally required to satisfy additional negotiated covenants (including specified leverage levels). We are also party to subscription agreements to fund equity investments. See Note 7 to our consolidated financial statements for the three months ended March 31, 2026 for more information on our unfunded commitments, including commitments to issue letters of credit, related to certain of our portfolio companies.

The weighted average yields at amortized cost and fair value of the following portions of our portfolio as of March 31, 2026 and December 31, 2025 were as follows:

  As of
  March 31, 2026 December 31, 2025
  Amortized Cost Fair Value Amortized Cost Fair Value
Debt and other income producing securities(1) 10.3  % 10.4  % 10.3  % 10.3  %
Total portfolio(2) 9.3  % 9.3  % 9.4  % 9.3  %
First lien senior secured loans(3) 8.9  % 9.1  % 9.1  % 9.2  %
Second lien senior secured loans(3) 10.0  % 11.2  % 10.2  % 10.7  %
Subordinated certificates of the SDLP(3)(6) 13.2  % 13.0  % 13.2  % 13.0  %
Senior subordinated loans(3) 10.4  % 10.8  % 10.5  % 11.0  %

Ivy Hill Asset Management L.P.(4) 17.6  % 15.8  % 17.2  % 15.3  %
Other income producing equity securities(5) 11.0  % 11.7  % 11.0  % 11.3  %

_______________________________________________________________________________

(1) “Weighted average yields on debt and other income producing securities” are computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount or premium earned on accruing debt and other income producing securities (including the annualized amount of the regular dividend received by us related to our equity investment in IHAM during the most recent quarter end), divided by (b) the total accruing debt and other income producing securities at amortized cost or at fair value (including the amortized cost or fair value of our equity investment in IHAM as applicable), as applicable.

(2) “Weighted average yields on total portfolio” are computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount or premium earned on accruing debt and other income producing securities (including the annualized amount of the regular dividend received by us related to our equity investment in IHAM during the most recent quarter end), divided by (b) total investments at amortized cost or at fair value, as applicable.

(3) “Weighted average yields” of investments are computed as (a) the annual stated interest rate or yield earned plus the net annual amortization of original issue discount and market discount or premium earned on the relevant accruing investments, divided by (b) the total relevant investments at amortized cost or at fair value, as applicable.

(4) Represents the yield on our equity investment in IHAM, which is computed as (a) the annualized amount of the regular dividend received by us related to our equity investment in IHAM during the most recent quarter end, divided by (b) the amortized cost or fair value of our equity investment in IHAM, as applicable.

(5) “Weighted average yield on other income producing equity securities” is computed as (a) the yield earned on the relevant income producing equity securities, divided by (b) the total relevant income producing equity securities at amortized cost or fair value, as applicable.

(6) The proceeds from these certificates were applied to co-investments with Varagon and its clients to fund first lien senior secured loans.
 
Ares Capital Management employs an investment rating system to categorize our investments. In addition to various risk management and monitoring tools, our investment adviser grades the credit risk of all investments on a scale of 1 to 4 no less frequently than quarterly. This system is intended primarily to reflect the underlying risk of a portfolio investment relative to our initial cost basis in respect of such portfolio investment (i.e., at the time of origination or acquisition), although it may
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also take into account under certain circumstances the performance of the portfolio company’s business, the collateral coverage of the investment and other relevant factors. The grade of a portfolio investment may be reduced or increased over time. The following is a description of each investment grade:

Investment grade Description
4 Involves the least amount of risk to our initial cost basis. The trends and risk factors for this investment since origination or acquisition are generally favorable, which may include the performance of the portfolio company or a potential exit.
3 Involves a level of risk to our initial cost basis that is similar to the risk to our initial cost basis at the time of origination or acquisition. This portfolio company is generally performing as expected and the risk factors to our ability to ultimately recoup the cost of our investment are neutral to favorable. All investments or acquired investments in new portfolio companies are initially assessed a grade of 3.
2 Indicates that the risk to our ability to recoup the initial cost basis of such investment has increased materially since origination or acquisition, including as a result of factors such as declining performance and non-compliance with debt covenants; however, payments are generally not more than 120 days past due. For investments graded 2, our investment adviser enhances its level of scrutiny over the monitoring of such portfolio company.
1 Indicates that the risk to our ability to recoup the initial cost basis of such investment has substantially increased since origination or acquisition, and the portfolio company likely has materially declining performance. For debt investments with an investment grade of 1, most or all of the debt covenants are out of compliance and payments are substantially delinquent. For investments graded 1, it is anticipated that we will not recoup our initial cost basis and may realize a substantial loss of our initial cost basis upon exit. For investments graded 1, our investment adviser enhances its level of scrutiny over the monitoring of such portfolio company.

    
Set forth below is the grade distribution of our portfolio companies as of March 31, 2026 and December 31, 2025:

  As of
  March 31, 2026 December 31, 2025
(dollar amounts in millions) Fair Value % Number of
Companies % Fair Value % Number of
Companies %
Grade 4 $ 5,295  17.9  % 66  10.9  % $ 5,040  17.1  % 65  10.8  %
Grade 3 22,849  77.5  480  79.1  23,322  79.1  486  80.6 
Grade 2 919  3.1  31  5.1  675  2.3  27  4.5 
Grade 1 436  1.5  30  4.9  448  1.5  25  4.1 
Total $ 29,499  100.0  % 607  100.0  % $ 29,485  100.0  % 603 100.0  %

As of March 31, 2026 and December 31, 2025, the weighted average grade of the investments in our portfolio at fair value was 3.1 and 3.1, respectively.

As of March 31, 2026 and December 31, 2025, loans on non-accrual status represented 2.1% of the total investments at amortized cost (or 1.2% at fair value) and 1.8% at amortized cost (or 1.2% at fair value), respectively.

Ivy Hill Asset Management, L.P.

Ivy Hill Asset Management, L.P. (“IHAM”), our wholly owned portfolio company, is an asset manager and an SEC-registered investment adviser. As of March 31, 2026, IHAM had assets under management of approximately $16.3 billion. As of March 31, 2026, IHAM managed 24 vehicles (the “IHAM Vehicles”). IHAM earns fee income from managing the IHAM Vehicles and has also invested in certain of these vehicles as part of its business strategy. The amortized cost of IHAM’s total investments as of March 31, 2026 and December 31, 2025 was $3,419 million and $3,190 million, respectively. For the three months ended March 31, 2026 and 2025, IHAM had management and incentive fee income of $15 million and $12 million, respectively, and other investment-related income of $98 million and $58 million, respectively, which included net realized gains or losses on investments and other transactions.
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 The amortized cost and fair value of our investments in IHAM as of March 31, 2026 and December 31, 2025 were as follows:

As of
March 31, 2026 December 31, 2025
(in millions) Amortized Cost Fair Value Amortized Cost Fair Value
Subordinated loan(1)
$ 762  $ 762  $ 531  $ 531 
Equity
1,700  1,899  1,700  1,903 
Total investment in IHAM $ 2,462  $ 2,661  $ 2,231  $ 2,434 

_______________________________________________________________________________

(1) We have provided a commitment to fund up to $1.0 billion and $750 million, as of March 31, 2026 and December 31, 2025, respectively, to IHAM, with availability of funding solely at our discretion.

The interest income and dividend income that we earned from IHAM for the three months ended March 31, 2026 were as follows:

For the Three Months Ended March 31,
(in millions) 2026 2025
Interest income
$ 17  $ — 
Dividend income
$ 78  $ 73 

From time to time, IHAM or certain IHAM Vehicles may purchase investments from, or sell investments to, us. For any such sales or purchases by the IHAM Vehicles to or from us, the IHAM Vehicle must obtain approval from third parties unaffiliated with us or IHAM, as applicable. During the three months ended March 31, 2026 and 2025, IHAM or certain of the IHAM Vehicles purchased $1,042 million and $794 million, respectively, of loans from us. For the three months ended March 31, 2026 and 2025, we recognized approximately $3 million and $0 million of net realized gains, respectively, from these sales. During the three months ended March 31, 2026 and 2025, neither IHAM nor any IHAM Vehicles sold any investments to us.

The yields at amortized cost and fair value of our investments in IHAM as of March 31, 2026 and December 31, 2025 were as follows:

  As of
  March 31, 2026 December 31, 2025
  Amortized Cost Fair Value Amortized Cost Fair Value
Subordinated loan
10.3  % 10.3  % 10.3  % 10.3  %
Equity(1)
17.6  % 15.8  % 17.2  % 15.3  %

_______________________________________________________________________________

(1) Represents the yield on our equity investment in IHAM, which is computed as (a) the annualized amount of the regular dividend received by us related to our equity investment in IHAM during the most recent quarter end, divided by (b) the amortized cost or fair value of our equity investment in IHAM, as applicable.

Selected Financial Information

Pursuant to Rule 4-08(g) of Regulation S-X, selected financial information of IHAM, in conformity with U.S. generally accepted accounting principles (“GAAP”), as of March 31, 2026 and December 31, 2025 and for the three months ended March 31, 2026 and 2025 are presented below.

In conformity with GAAP, IHAM is required to consolidate entities in which IHAM has a direct or indirect controlling financial interest based on either a variable interest model or voting interest model, which include certain of the IHAM Vehicles (the “Consolidated IHAM Vehicles”). As such, for GAAP purposes only, IHAM consolidates (a) entities in which it holds a majority voting interest or has majority ownership and control over the operational, financial and investing decisions of that entity and (b) entities that it concludes are variable interest entities in which IHAM has more than insignificant economic
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interest and power to direct the activities that most significantly impact the entities, and for which IHAM is deemed to be the primary beneficiary.

When IHAM consolidates an IHAM Vehicle for GAAP purposes only, IHAM reflects the assets, liabilities, revenues and expenses of the Consolidated IHAM Vehicles on a gross basis, including the economic interests held by third-party investors in the Consolidated IHAM Vehicles as debt obligations, subordinated notes or non-controlling interests, in the consolidated IHAM financials below. All of the revenues earned by IHAM as the investment manager of the Consolidated IHAM Vehicles are eliminated in GAAP consolidation. However, because the eliminated amounts are earned from and funded by third-party investors, the GAAP consolidation of an IHAM Vehicle does not impact the net income or loss attributable to IHAM. As a result, we believe an assessment of IHAM’s business and the impact to our investment in IHAM is best viewed on a stand-alone basis as reflected in the first column in the tables below.

As of March 31, 2026

(in millions) IHAM Consolidated IHAM Vehicles(1) Eliminations Consolidated
Selected Balance Sheet Information:
Assets
Investments at fair value(2) $ 3,327  $ 11,946  $ (3,228) $ 12,045 
Cash and cash equivalents 15  590  —  605 
Other assets 84  106  (73) 117 

Total assets $ 3,426  $ 12,642  $ (3,301) $ 12,767 

Liabilities
Debt $ 894  $ 9,022  $ —  $ 9,916 
Subordinated note from ARCC 762  —  —  762 
Subordinated notes(3) —  1,374  (1,035) 339 
Other liabilities 16  204  (18) 202 

Total liabilities 1,672  10,600  (1,053) 11,219 
Equity
Contributed capital 1,700  —  —  1,700 
Accumulated earnings 146  —  —  146 
Net unrealized gains (losses) on investments and foreign currency transactions(4) (92) —  —  (92)
Non-controlling interests in Consolidated IHAM Vehicles(5)
—  2,042  (2,248) (206)

Total equity 1,754  2,042  (2,248) 1,548 
Total liabilities and equity $ 3,426  $ 12,642  $ (3,301) $ 12,767 

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As of December 31, 2025
(in millions) IHAM Consolidated IHAM Vehicles(1) Eliminations Consolidated
Selected Balance Sheet Information:
Assets

Investments at fair value(2) $ 3,108  $ 11,504  $ (3,013) $ 11,599 
Cash and cash equivalents 10  597  —  607 

Other assets 93  146  (82) 157 

Total assets $ 3,211  $ 12,247  $ (3,095) $ 12,363 

Liabilities

Debt $ 893  $ 8,622  $ —  $ 9,515 
Subordinated note from ARCC 531  —  —  531 
Subordinated notes(3) —  1,277  (941) 336 

Other liabilities 21  311  (18) 314 

Total liabilities 1,445  10,210  (959) 10,696 
Equity
Contributed capital 1,700  —  —  1,700 
Accumulated earnings 148  —  —  148 
Net unrealized losses on investments and foreign currency transactions(4) (82) —  —  (82)
Non-controlling interests in Consolidated IHAM Vehicles(5)
—  2,037  (2,136) (99)

Total equity 1,766  2,037  (2,136) 1,667 
Total liabilities and equity $ 3,211  $ 12,247  $ (3,095) $ 12,363 

____________________________________

(1) Consolidated for GAAP purposes only.

(2) The determination of such fair value is determined in accordance with IHAM’s valuation process (separate and apart from our valuation process described elsewhere herein). The amortized cost of IHAM’s total investments as of March 31, 2026 and December 31, 2025 was $3,419 million and $3,190 million, respectively. The amortized cost of the total investments of IHAM on a consolidated basis as of March 31, 2026 and December 31, 2025 was $12,339 million and $11,766 million, respectively.

(3) Subordinated notes generally represent the most junior capital in certain of the Consolidated IHAM Vehicles and effectively represent equity in such vehicles.

(4) As of March 31, 2026 and December 31, 2025, net unrealized losses of $102 million and $85 million, respectively, have been eliminated upon consolidation and the elimination is included in “non-controlling interests in Consolidated IHAM Vehicles” in the selected balance sheet information.

(5) Non-controlling interests in Consolidated IHAM Vehicles includes net unrealized depreciation in the Consolidated IHAM Vehicles of $292 million and $167 million as of March 31, 2026 and December 31, 2025, respectively.

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For the Three Months Ended March 31, 2026
(in millions) IHAM Consolidated IHAM Vehicles(1) Eliminations Consolidated
Selected Statement of Operations Information:
Revenues

Investment income $ 98  $ 250  $ (97) $ 251 
Management fees and other income 15  2  (15) 2 

Total revenues 113  252  (112) 253 
Expenses

Interest expense 32  126  —  158 
Distributions to subordinated notes —  44  (31) 13 
Management fees and other expenses 5  16  (15) 6 

Total expenses 37  186  (46) 177 
Net operating income 76  66  (66) 76 

Net realized gains on investments, foreign currency and other transactions —  6  —  6 

Net unrealized losses on investments, foreign currency and other transactions (10) (131) 17  (124)

Total net realized and unrealized losses on investments, foreign currency and other transactions (10) (125) 17  (118)
Net income (loss) 66  (59) (49) (42)

Less: Net income (loss) attributable to non-controlling interests in Consolidated IHAM Vehicles —  (59) (49) (108)
Net income attributable to Ivy Hill Asset Management, L.P. $ 66  $ —  $ —  $ 66 

For the Three Months Ended March 31, 2025
(in millions) IHAM Consolidated IHAM Vehicles(1) Eliminations Consolidated
Selected Statement of Operations Information:
Revenues

Investment income $ 67  $ 217  $ (65) $ 219 
Management fees and other income 12  2  (11) 3 

Total revenues 79  219  (76) 222 
Expenses

Interest expense 9  118  —  127 
Distributions to subordinated notes —  32  (23) 9 
Management fees and other expenses 4  14  (11) 7 

Total expenses 13  164  (34) 143 
Net operating income 66  55  (42) 79 

Net realized losses on investments and foreign currency (9) (55) —  (64)
Net realized gain on extinguishment of debt —  (1) —  (1)
Net unrealized gains on investments, foreign currency and other transactions 25  13  (9) 29 

Total net realized and unrealized gains (losses) on investments, foreign currency and other transactions 16  (43) (9) (36)
Net income 82  12  (51) 43 
Less: Net income (loss) attributable to non-controlling interests in Consolidated IHAM Vehicles —  12  (51) (39)
Net income attributable to Ivy Hill Asset Management, L.P. $ 82  $ —  $ —  $ 82 

____________________________________
(1) Consolidated for GAAP purposes only.
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Senior Direct Lending Program

We have established a joint venture with Varagon to make certain first lien senior secured loans, including certain stretch senior and unitranche loans, primarily to U.S. middle-market companies. The joint venture is called the Senior Direct Lending Program, LLC (d/b/a the “Senior Direct Lending Program” or the “SDLP”). In July 2016, we and Varagon and its clients completed the initial funding of the SDLP. We, and other BDCs, registered closed-end management investment companies and other affiliated investment entities managed by our investment adviser or its affiliates, may directly co-invest with the SDLP in accordance with the terms of the Co-Investment Exemptive Order. The SDLP is capitalized as transactions are completed and all portfolio decisions and generally all other decisions in respect of the SDLP, including co-investment transactions made by the SDLP in accordance with the terms of the Co-Investment Order, must be approved by an investment committee of the SDLP consisting of representatives of ours and Varagon (with approval from a representative of each required).

We provide capital to the SDLP in the form of subordinated certificates (the “SDLP Certificates”), and Varagon and its clients provide capital to the SDLP in the form of senior notes, intermediate funding notes and the SDLP Certificates. As of March 31, 2026, we and a client of Varagon owned 87.5% and 12.5%, respectively, of the outstanding SDLP Certificates.

As of March 31, 2026 and December 31, 2025, we and Varagon and its clients had agreed to make capital available to the SDLP of $6.2 billion and $6.2 billion, respectively, in the aggregate, of which $1.4 billion and $1.4 billion, respectively, is to be made available from us. This capital will only be committed to the SDLP upon approval of transactions by the investment committee of the SDLP. Below is a summary of the funded capital and unfunded capital commitments of the SDLP.

  As of
(in millions) March 31, 2026 December 31, 2025
Total capital funded to the SDLP(1) $ 4,749  $ 4,606 
Total capital funded to the SDLP by the Company(1) $ 1,328  $ 1,285 
Total unfunded capital commitments to the SDLP(2) $ 233  $ 259 
Total unfunded capital commitments to the SDLP by the Company(2) $ 55  $ 60 

___________________________________________________________________________
(1) At principal amount.

(2) These commitments to fund delayed draw loans have been approved by the investment committee of the SDLP and will be funded if and when conditions to funding such delayed draw loans are met.

The SDLP Certificates pay a coupon equal to Secured Overnight Financing Rate (“SOFR”) plus 8.0% and also entitle the holders thereof to receive a portion of the excess cash flow from the loan portfolio, after expenses, which may result in a return to the holders of the SDLP Certificates that is greater than the stated coupon. The SDLP Certificates are junior in right of payment to the senior notes and intermediate funding notes.

The amortized cost and fair value of our SDLP Certificates and our yield on our investment in the SDLP Certificates at amortized cost and fair value as of March 31, 2026 and December 31, 2025 were as follows:

As of
March 31, 2026 December 31, 2025
(dollar amounts in millions) Amortized Cost Fair Value Amortized Cost Fair Value
Investment in the SDLP Certificates $ 1,146  $ 1,159  $ 1,103  $ 1,117 
Yield on the investment in the SDLP Certificates 13.2  % 13.0  % 13.2  % 13.0  %

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The interest income and capital structuring service fees and other income earned with respect to our investment in the SDLP Certificates for the three months ended March 31, 2026 and 2025 were as follows:

For the Three Months Ended March 31,
(in millions) 2026 2025
Interest income
$ 36  $ 38 
Capital structuring service fees and other income
$ 2  $ 3 

As of March 31, 2026 and December 31, 2025, the SDLP portfolio was comprised of first lien senior secured loans to primarily U.S. middle-market companies in industries similar to the companies in our portfolio. As of March 31, 2026, one of the loans in the SDLP portfolio was on non-accrual status. As of December 31, 2025, none of the loans in the SDLP portfolio were on non-accrual status. Below is a summary of the SDLP portfolio as of March 31, 2026 and December 31, 2025:

  As of
(dollar amounts in millions) March 31, 2026 December 31, 2025
Total first lien senior secured loans(1)(2) $ 4,388  $ 4,297 
Weighted average yield on first lien senior secured loans(3) 8.2  % 8.5  %
Largest loan to a single borrower(1) $ 404  $ 413 
Total of five largest loans to borrowers(1) $ 1,721  $ 1,719 
Number of borrowers in the SDLP 45  39 
Commitments to fund delayed draw loans(4) $ 233  $ 259 

_______________________________________________________________________________

(1) At principal amount.

(2) First lien senior secured loans include certain loans that the SDLP classifies as “unitranche” loans. As of March 31, 2026 and December 31, 2025, the total principal amount of loans in the SDLP portfolio that the SDLP classified as “unitranche” loans was $2,932 million and $2,844 million, respectively.

(3)   Computed as (a) the annual stated interest rate on accruing first lien senior secured loans, divided by (b) total first lien senior secured loans at principal amount.

(4) These commitments to fund delayed draw loans have been approved by the investment committee of the SDLP and will be funded if and when conditions to funding such delayed draw loans are met.

Selected financial information of the SDLP, in conformity with GAAP, as of March 31, 2026 and December 31, 2025 and for the three months ended March 31, 2026 and 2025 is presented below:

As of
(in millions) March 31, 2026 December 31, 2025
Selected Balance Sheet Information:
Investments at fair value (amortized cost of $4,392 and $4,305, respectively) $ 4,233  $ 4,159 
Other assets 189  128 
Total assets $ 4,422  $ 4,287 

Senior notes $ 3,125  $ 3,024 
Intermediate funding notes 106  113 
Other liabilities 105  98 
Total liabilities 3,336  3,235 
Subordinated certificates and members’ capital 1,086  1,052 
Total liabilities and members’ capital $ 4,422  $ 4,287 

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For the Three Months Ended March 31,
(in millions) 2026 2025
Selected Statement of Operations Information:
Total investment income $ 92  $ 107 
Interest expense 47  60 
Other expenses 3  4 
Total expenses 50  64 
Net investment income 42  43 
Net realized and unrealized losses on investments (13) (28)
Net increase in members’ capital resulting from operations $ 29  $ 15 

Additional supplemental financial information for the SDLP is set forth in Exhibit 99.2 to this Form 10-Q.

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RESULTS OF OPERATIONS

For the three months ended March 31, 2026 and 2025

Operating results for the three months ended March 31, 2026 and 2025 were as follows:

  For the Three Months Ended March 31,
(in millions) 2026 2025
Total investment income $ 763  $ 732 
Total expenses 359  360 
Net investment income before income taxes 404  372 
Income tax expense, including excise taxes 6  7 
Net investment income 398  365 
Net realized gains (losses) 106  (61)
Net unrealized losses (412) (63)

Net increase in stockholders’ equity resulting from operations $ 92  $ 241 

Net income can vary substantially from period to period due to various factors, including acquisitions, the level of new investment commitments, the level of base interest rates and the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, comparisons of net increase in stockholders’ equity resulting from operations may not be meaningful.

Investment Income

  For the Three Months Ended March 31,
(in millions) 2026 2025
Interest income from investments $ 550  $ 526 
Capital structuring service fees 39  46 
Dividend income 156  143 
Other income 18  17 
Total investment income $ 763  $ 732 

Interest income from investments for the three months ended March 31, 2026 increased from the comparable period in 2025 primarily due to the increase in the average size of our portfolio, which was partially offset by lower yields. The average size and weighted average yield of our portfolio at amortized cost for the three months ended March 31, 2026 and 2025 were as follows:

  For the Three Months Ended March 31,
(dollar amounts in millions) 2026 2025
Average size of portfolio(1) $ 29,450  $ 26,576 
Weighted average yield on portfolio 9.6  % 10.2  %

_______________________________________________________________________________

(1)    Includes non-interest earning investments.

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Capital structuring service fees for the three months ended March 31, 2026 decreased from the comparable period in 2025 primarily due to a decrease in new investment commitments. The new investment commitments and weighted average capital structuring service fee percentages for the three months ended March 31, 2026 and 2025 were as follows:

  For the Three Months Ended March 31,
(dollar amounts in millions) 2026 2025
New investment commitments(1) $ 2,390  $ 3,087 
Weighted average capital structuring service fee percentage(1) 1.6  % 1.5  %

_______________________________________________________________________________

(1) Excludes $478 million and $366 million of new investment commitments sold to third-party lenders during the three months ended March 31, 2026 and 2025, respectively. Excludes $378 million of investment commitments to IHAM for the three months ended March 31, 2026. There were no investment commitments to IHAM during the three months ended March 31, 2025.

Dividend income for the three months ended March 31, 2026 and 2025 were as follows:

  For the Three Months Ended March 31,
(in millions) 2026 2025
Dividend income received from IHAM(1) $ 78  $ 73 
Recurring dividend income 67  69 
Non-recurring dividend income 11  1 
Total dividend income $ 156  $ 143 

_______________________________________________________________________________
                        
(1) Dividend income received from IHAM for the three months ended March 31, 2026 includes a non-recurring special dividend of $3 million.

Recurring dividend income for the three months ended March 31, 2026 decreased from the comparable period in 2025 primarily due to a decrease in yielding preferred equity investments.
    
Operating Expenses

  For the Three Months Ended March 31,
(in millions) 2026 2025
Interest and credit facility fees $ 213  $ 186 
Base management fee 111  102 
Income based fee 84  85 
Capital gains incentive fee(1) (61) (25)
Administrative and other fees 4  4 
Other general and administrative 8  8 
Total expenses $ 359  $ 360 

_______________________________________________________________________________
                        
(1) Accrued in accordance with GAAP as discussed below. As of March 31, 2026 and 2025, there was no capital gains incentive fee actually payable under our investment advisory and management agreement.

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Interest and credit facility fees for the three months ended March 31, 2026 and 2025 were comprised of the following:

  For the Three Months Ended March 31,
(in millions) 2026 2025
Stated interest expense(1) $ 196  $ 173 
Credit facility fees 7  6 
Amortization of debt issuance costs 8  9 
Net amortization of discount/premium on notes payable 2  (1)
Net gain on interest rate swaps accounted for as hedge instruments and the related hedged items —  (1)
Total interest and credit facility fees $ 213  $ 186 

________________________________________

(1) Includes the impact of the interest rate swaps.

Stated interest expense for the three months ended March 31, 2026 increased from the comparable period in 2025 primarily due to the increase in the average principal amount of our outstanding debt. Average outstanding debt and weighted average stated interest rate on our outstanding debt for the three months ended March 31, 2026 and 2025 were as follows:

  For the Three Months Ended March 31,
(dollar amounts in millions) 2026 2025
Average outstanding debt $ 16,247  $ 14,174 
Weighted average stated interest rate on outstanding debt(1) 4.8  % 4.9  %
________________________________________

(1) The weighted average stated interest rate on our outstanding debt includes the impact of interest rate swaps. See Note 6 to our consolidated financial statements for the three months ended March 31, 2026 for more information on the interest rate swaps.

The base management fee for the three months ended March 31, 2026 increased from the comparable period in 2025 primarily due to the increase in the average size of our portfolio.

The income based fee for the three months ended March 31, 2026 decreased from the comparable period in 2025 primarily due to the pre-incentive fee net investment income, as defined in the investment advisory and management agreement, for the three months ended March 31, 2026 being lower than in the comparable period in 2025.

For the three months ended March 31, 2026 and 2025, the reduction in the capital gains incentive fee accrued in accordance with GAAP was $61 million and $25 million, respectively. The capital gains incentive fee accrual for the three months ended March 31, 2026 changed from the comparable period in 2025 primarily due to net losses on investments, foreign currency and other transactions of $306 million compared to net losses of $124 million for the comparable period in 2025. The capital gains incentive fee accrued under GAAP includes an accrual related to unrealized capital appreciation, whereas the capital gains incentive fee actually payable under our investment advisory and management agreement does not. There can be no assurance that such unrealized capital appreciation will be realized in the future. The accrual for any capital gains incentive fee under GAAP in a given period may result in an additional expense if such cumulative amount is greater than in the prior period or a reduction of previously recorded expense if such cumulative amount is less than in the prior period. If such cumulative amount is negative, then there is no accrual. As of March 31, 2026, there was $20 million of capital gains incentive fee accrued in accordance with GAAP. As of March 31, 2026, there was no capital gains incentive fee actually payable under our investment advisory and management agreement. See Note 3 to our consolidated financial statements for the three months ended March 31, 2026 for more information on the base management fee, income based fee and capital gains incentive fee.
 
Cash payment of any income based fee and capital gains incentive fee otherwise earned by our investment adviser is deferred if during the most recent four full calendar quarter period ending on or prior to the date such payment is to be made the sum of (a) the aggregate distributions to our stockholders and (b) the change in net assets (defined as total assets less indebtedness and before taking into account any income based fee and capital gains incentive fee payable during the period) is less than 7.0% of our net assets (defined as total assets less indebtedness) at the beginning of such period. These calculations
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will be adjusted for any share issuances or repurchases. Any income based fee and capital gains incentive fee deferred for payment are carried over for payment in subsequent calculation periods to the extent such fees are payable under the terms of the investment advisory and management agreement. See Note 3 to our consolidated financial statements for the three months ended March 31, 2026 for more information on the related deferral terms.

Administrative and other fees represent fees paid to Ares Operations and our investment adviser for our allocable portion of overhead and other expenses incurred by Ares Operations and our investment adviser in performing their obligations under the administration agreement and the investment advisory and management agreement, respectively, including our allocable portion of the compensation, rent and other expenses of certain of our officers and their respective staffs. See Note 3 to our consolidated financial statements for the three months ended March 31, 2026, for more information on the administrative and other fees.

Other general and administrative expenses include, among other costs, professional fees, insurance, fees and expenses related to evaluating and making investments in portfolio companies and independent directors’ fees.

Income Tax Expense, Including Excise Taxes

We have elected to be treated as a RIC under the Code and operate in a manner so as to qualify for the tax treatment applicable to RICs. To qualify as a RIC, we must, among other requirements, meet certain source-of-income and asset diversification requirements and timely distribute to our stockholders at least 90% of our investment company taxable income, as defined by the Code, for each year. We have made and intend to continue to make the requisite distributions to our stockholders which will generally relieve us from U.S. federal corporate-level income taxes.
 
Depending on the level of taxable income earned in a tax year, we may choose to carry forward such taxable income in excess of current year dividend distributions from such current year taxable income into the next tax year and pay a 4% excise tax on such income, as required. To the extent that we determine that our estimated current year taxable income will be in excess of estimated dividend distributions for the current year from such income, we accrue excise tax, if any, on estimated excess taxable income as such taxable income is earned. For the three months ended March 31, 2026 and 2025, we recorded a net expense of approximately $7 million and $7 million, respectively, for U.S. federal excise taxes.

Certain of our consolidated subsidiaries are subject to U.S. federal and state income taxes. For the three months ended March 31, 2026 and 2025, we recorded a net tax expense (benefit) of approximately $(1) million and $0 million, respectively, for such subsidiaries. The income tax expense for our taxable consolidated subsidiaries will vary depending on the level of realized gains from the exits of investments held by such taxable subsidiaries during the respective periods.

Net Realized Gains/Losses

The net realized gains (losses) from the sales, repayments or exits of investments during the three months ended March 31, 2026 and 2025 were comprised of the following:

For the Three Months Ended March 31,
(in millions) 2026 2025
Sales, repayments or exits of investments(1) $ 3,179  $ 2,390 
Net realized gains (losses) on investments:
Gross realized gains $ 121  $ 46 
Gross realized losses (7) (138)
Total net realized gains (losses) on investments $ 114  $ (92)

_______________________________________________________________________________

(1) Includes $1,042 million and $794 million of loans sold to IHAM or certain IHAM Vehicles during the three months ended March 31, 2026 and 2025, respectively. Net realized gains of approximately $3 million and approximately $0 million were recorded on these transactions with IHAM during the three months ended March 31, 2026 and 2025, respectively. See Note 4 to our consolidated financial statements for the three months ended March 31, 2026 for more information on IHAM and the IHAM Vehicles.

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The net realized gains on investments during the three months ended March 31, 2026 consisted of the following:

(in millions)
Portfolio Company Net Realized Gains (Losses)
Storm Investment S.a.r.l. $ 42 
 GHX Ultimate Parent Corporation, Commerce Parent, Inc. and Commerce Topco, LLC 17 
 Raptor Technologies, LLC, Sycamore Bidco LTD and Rocket Parent, LLC 16 
Other, net 39 
Total $ 114 

During the three months ended March 31, 2026, we also recognized net realized losses on foreign currency and other transactions of $8 million.

The net realized losses on investments during the three months ended March 31, 2025 consisted of the following:

(in millions)
Portfolio Company Net Realized Gains (Losses)

Aimbridge Acquisition Co., Inc. (19)
H-Food Holdings, LLC (20)
SVP-Singer Holdings Inc. (23)
Vobev, LLC and Vobev Holdings, LLC (63)
Other, net 33 
Total $ (92)

During the three months ended March 31, 2025, we also recognized net realized gains on foreign currency and other transactions of $31 million.

Net Unrealized Gains/Losses

We value our portfolio investments at least quarterly and the changes in value are recorded as unrealized gains or losses in our consolidated statements of operations. Net unrealized gains and losses on investments, including the net change in deferred tax liabilities, for the three months ended March 31, 2026 and 2025, were comprised of the following:

  For the Three Months Ended March 31,
(in millions) 2026 2025
Unrealized appreciation $ 229  $ 252 
Unrealized depreciation (586) (354)
Net unrealized (appreciation) depreciation reversed related to net realized gains or losses(1) (85) 83 
Total net unrealized losses on investments $ (442) $ (19)

_______________________________________________________________________________

(1) The net unrealized (appreciation) depreciation reversed related to net realized gains or losses represents the unrealized appreciation or depreciation recorded on the related asset at the end of the prior periods.

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The changes in net unrealized appreciation and depreciation on investments during the three months ended March 31, 2026 consisted of the following:

(in millions)
Portfolio Company Net Unrealized Appreciation (Depreciation)
Global Medical Response, Inc. and GMR Buyer Corp. $ 45 
FEH Group, LLC. 31 
Mavis Tire Express Services Topco Corp., Metis HoldCo, Inc., and Metis TopCo, LP 15 
South Florida Motorsports, LLC 15 
ADG, LLC, GEDC Equity, LLC and RC IV GEDC Investor LLC (15)
Pluralsight, LLC (17)
CoreLogic, Inc. and T-VIII Celestial Co-Invest LP (18)
Digicert, Inc., Dcert Buyer, Inc., DCert Preferred Holdings, Inc. and Destiny Digital Holdings, L.P. (32)
Symplr Software Inc. and Symplr Software Intermediate Holdings, Inc. (58)
Cornerstone OnDemand, Inc. (63)
Other, net (260)
Total $ (357)

During the three months ended March 31, 2026, we also recognized net unrealized gains on foreign currency and other transactions of $30 million.

The changes in net unrealized appreciation and depreciation on investments during the three months ended March 31, 2025 consisted of the following:

(in millions)
Portfolio Company Net Unrealized Appreciation (Depreciation)
Potomac Intermediate Holdings II LLC $ 73 
Redwood Services, LLC 22 

Symplr Software Inc. and Symplr Software Intermediate Holdings, Inc. (15)
Neptune Bidco US Inc. (18)
VPROP Operating, LLC and V SandCo, LLC (21)
Implus Footcare, LLC (22)
Senior Direct Lending Program, LLC (43)
Other, net (78)
Total $ (102)

During the three months ended March 31, 2025, we also recognized net unrealized losses on foreign currency and other transactions of $44 million.

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FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Our liquidity and capital resources are generated primarily from the net proceeds of public offerings of equity and debt securities, advances from our credit facilities (the Revolving Credit Facility, the Revolving Funding Facility, the SMBC Funding Facility and the BNP Funding Facility (each as defined below, and together, the “Credit Facilities”)), net proceeds from the issuance of other securities, including unsecured notes and debt securitizations, as well as cash flows from operations.

In accordance with the Investment Company Act, we are allowed to borrow amounts such that our asset coverage, calculated pursuant to the Investment Company Act, is at least 150% after such borrowings (i.e., we are able to borrow up to two dollars for every dollar we have in assets less all liabilities and indebtedness not represented by senior securities issued by us). As of March 31, 2026, we had $505 million in cash and cash equivalents and $15.9 billion in total aggregate principal amount of outstanding debt ($15.8 billion at carrying value) and our asset coverage was 188%. Subject to borrowing base and other restrictions, we had approximately $5.5 billion available for additional borrowings under the Credit Facilities as of March 31, 2026.
 
We may from time to time seek to retire or repurchase our common stock through cash purchases, as well as retire, cancel or purchase our outstanding debt through cash purchases and/or exchanges, in open market purchases, privately negotiated transactions or otherwise. The amounts involved may be material. In addition, we may from time to time enter into additional credit facilities, increase the size of existing facilities or issue additional debt securities, including secured debt, unsecured debt and/or debt securities convertible into common stock. Any such purchases or exchanges of common stock or outstanding debt, or incurrence or issuance of additional debt would be subject to prevailing market conditions, our liquidity requirements, contractual and regulatory restrictions and other factors.

Equity Capital Activities

As of March 31, 2026, our total equity market capitalization was $12.9 billion.
    
We may from time to time issue and sell shares of our common stock through public or “at the market” offerings. During the three months ended March 31, 2026, we did not issue or sell any shares of our common stock.

“At the Market” Offerings

We are a party to equity distribution agreements with several banks (the “Equity Distribution Agreements”). The Equity Distribution Agreements provide that we may from time to time issue and sell, by means of “at the market” offerings, up to $1.5 billion of our common stock. Subject to the terms and conditions of the Equity Distribution Agreements, sales of common stock, if any, may be made in transactions that are deemed to be “at the market” offerings as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”). Under the currently effective Equity Distribution Agreements, common stock with an aggregate offering amount of $563 million remained available for issuance as of March 31, 2026.

Dividend Reinvestment Plan

See Note 11 to our consolidated financial statements for the three months ended March 31, 2026 for information regarding shares of common stock issued or purchased in accordance with our dividend reinvestment plan.

Stock Repurchase Program

We are authorized under our stock repurchase program to purchase up to $1.0 billion in the aggregate of our outstanding common stock in the open market at certain thresholds below our net asset value per share, in accordance with the guidelines specified in Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The timing, manner, price and amount of any share repurchases will be determined by us, in our sole discretion, based upon an evaluation of economic and market conditions, stock price, applicable legal and regulatory requirements and other factors. The stock repurchase program does not require us to repurchase any specific number of shares of common stock or any shares of common stock at all. Consequently, we cannot assure stockholders that any specific number of shares of common stock, if any, will be repurchased under the stock repurchase program. As of March 31, 2026, the expiration date of the stock repurchase program was February 15, 2027. The program may be suspended, extended, modified or discontinued at any time. As of March 31, 2026, there was $1.0 billion available for additional repurchases under the program.
 
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During the three months ended March 31, 2026, we did not repurchase any shares of our common stock in the open market under the stock repurchase program.

Price Range of Common Stock

The following table sets forth, for the first quarter of the year ending December 31, 2026 and each fiscal quarter for the fiscal years ended December 31, 2025 and 2024, the net asset value per share of our common stock, the range of high and low closing sales prices of our common stock, the closing sales price as a premium (discount) to net asset value and the dividends or distributions declared by us. On April 23, 2026, the last reported closing sales price of our common stock on the NASDAQ Global Select Market was $$18.62 per share, which represented a discount of approximately 4.95% to the net asset value per share reported by us as of March 31, 2026.

Net
Asset
Price Range
High
Sales Price
Premium
(Discount)
to Net Asset
Low
Sales Price
Premium
(Discount)
to Net Asset
Cash
Dividend
Per

Value(1)
High
Low
Value(2)
Value(2)
Share(3)

Year ending December 31, 2026
First Quarter
$ 19.59  $ 20.99  $ 17.45  7.15  % (10.92) % $ 0.48 
Year ended December 31, 2025
First Quarter
$ 19.82  $ 23.81  $ 21.28  20.13  % 7.37  % $ 0.48 
Second Quarter
$ 19.90  $ 22.43  $ 18.91  12.71  % (4.97) % $ 0.48 
Third Quarter
$ 20.01  $ 23.25  $ 20.41  16.19  % 2.00  % $ 0.48 
Fourth Quarter
$ 19.94  $ 21.03  $ 18.90  5.47  % (5.22) % $ 0.48 
Year ended December 31, 2024
First Quarter
$ 19.53  $ 20.82  $ 19.94  6.61  % 2.10  % $ 0.48 
Second Quarter
$ 19.61  $ 21.58  $ 20.24  10.05  % 3.21  % $ 0.48 
Third Quarter
$ 19.77  $ 21.28  $ 19.80  7.64  % 0.15  % $ 0.48 
Fourth Quarter
$ 19.89  $ 22.27  $ 20.74  11.97  % 4.27  % $ 0.48 

_______________________________________________________________________________

(1) Net asset value per share is determined as of the last day in the relevant quarter and therefore may not reflect the net asset value per share on the date of the high and low closing sales prices. The net asset values shown are based on outstanding shares at the end of the relevant quarter.

(2) Calculated as the respective high or low closing sales price less net asset value, divided by net asset value (in each case, as of the applicable quarter).

(3) Represents the dividend or distribution declared in the relevant quarter.

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Debt Capital Activities

Our debt obligations consisted of the following as of March 31, 2026 and December 31, 2025:

  As of  
  March 31, 2026 December 31, 2025  
(in millions) Total
Aggregate
Principal
Amount
Available/
Outstanding(1)   Principal Amount Outstanding Carrying
Value   Total
Aggregate
Principal
Amount
Available/
Outstanding(1)   Principal Amount Outstanding Carrying
Value  
Revolving Credit Facility $ 5,312  (2) $ 2,268  $ 2,265  $ 5,493  (2) $ 2,028  $ 2,031 
Revolving Funding Facility 2,250  1,191  1,191  2,250  1,234  1,234 
SMBC Funding Facility 1,600  (3) 661  661  1,100  (3) 563  563 
BNP Funding Facility 1,265  737  737  1,265  717  717 
April 2036 CLO Notes(4) 476  476  474  (5) 476  476  473  (5)
October 2036 CLO Secured Loans(4) 544  544  541  (5) 544  544  541  (5)
January 2038 CLO Notes (4) 700  700  697  (5) 700  700  697  (5)
January 2026 Notes —  —  —  (5) 1,150  1,150  1,150  (5)
July 2026 Notes 1,000  1,000  999  (5) 1,000  1,000  999  (5)
January 2027 Notes 900  900  897  (5)(6) 900  900  900  (5)(6)
June 2027 Notes 500  500  498  (5) 500  500  498  (5)
June 2028 Notes 1,250  1,250  1,248  (5) 1,250  1,250  1,248  (5)
March 2029 Notes 1,000  1,000  992  (5)(6) 1,000  1,000  999  (5)(6)
July 2029 Notes 850  850  854  (5)(6) 850  850  861  (5)(6)
September 2030 Notes 750  750  738  (5)(6) 750  750  743  (5)(6)
January 2031 Notes 650  650  630  (5)(6) 650  650  634  (5)(6)
April 2031 Notes 750  750  730  (5)(6) —  —  — 
November 2031 Notes 700  700  693  (5) 700  700  693  (5)
March 2032 Notes 1,000  1,000  1,003  (5)(6) 1,000  1,000  1,010  (5)(6)
Total $ 21,497  $ 15,927  $ 15,848  $ 21,578  $ 16,012  $ 15,991 

________________________________________

(1) Represents the total aggregate amount committed or outstanding, as applicable, under such instrument. Borrowings under the Credit Facilities are subject to borrowing base and other restrictions.

(2) Provides for an “accordion” feature that allows us, under certain circumstances, to increase the size of the Revolving Credit Facility to a maximum of approximately $7.7 billion and $7.9 billion as of March 31, 2026 and December 31, 2025, respectively.

(3) Provides for an “accordion” feature that allows ACJB (as defined below), under certain circumstances, to increase the size of the SMBC Funding Facility to a maximum of $2.5 billion and $1.3 billion as of March 31, 2026 and December 31, 2025, respectively.

(4) Excludes the April 2036 CLO Subordinated Notes, the October 2036 CLO Subordinated Notes and the January 2038 CLO Subordinated Notes (each as defined below), which were retained by us and, as such, eliminated in consolidation.

(5) Represents the aggregate principal amount outstanding, less unamortized debt issuance costs and the net unaccreted/amortized discount or premium recorded upon issuance. In January 2026, we repaid in full the January 2026 Notes (as defined below) upon their maturity.
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(6) The carrying value of the January 2027 Notes, the March 2029 Notes, the July 2029 Notes, the September 2030 Notes, the January 2031 Notes, the April 2031 Notes and the March 2032 Notes (each as defined below) includes adjustments as a result of effective hedge accounting relationships, as applicable. See Note 6 to our consolidated financial statements for the three months ended March 31, 2026 for more information on the interest rate swaps related to these unsecured notes issuances.

 The weighted average stated interest rate and weighted average maturity, both on aggregate principal amount outstanding, of all our outstanding debt as of March 31, 2026 were 4.9% and 4.3 years, respectively, and as of December 31, 2025 were 4.9% and 4.2 years, respectively. The weighted average stated interest rate of all our outstanding debt as of March 31, 2026 and December 31, 2025 includes the impact of interest rate swaps. See Note 6 to our consolidated financial statements for the three months ended March 31, 2026 for more information on the interest rate swaps.
 
The ratio of total principal amount of outstanding debt to stockholders’ equity as of March 31, 2026 was 1.13:1.00 compared to 1.12:1.00 as of December 31, 2025.
 
Revolving Credit Facility
 
We are party to a senior secured revolving credit facility (as amended and restated, the “Revolving Credit Facility”), that allows us to borrow up to approximately $5.3 billion at any one time outstanding. The Revolving Credit Facility consists of an approximately $4.2 billion revolving tranche and an approximately $1.1 billion term loan tranche. As of March 31, 2026, the end of the revolving periods and the stated maturity dates of the various revolving and term loan tranches of the Revolving Credit Facility were as follows:

(in millions) Total Aggregate Principal Amount Committed End of Revolving Period Maturity Date
Revolving tranche $ 4,058  April 15, 2029 April 15, 2030
65 March 31, 2026(1) March 31, 2027
45 April 12, 2028 April 12, 2029
4,168 
Term loan tranche 1,035  April 15, 2030
45 April 12, 2029
40 April 19, 2028
24 March 31, 2027
1,144 
$ 5,312 

________________________________________

(1) Effective March 31, 2026, approximately $181 million of previously available commitments expired.

The Revolving Credit Facility also provides for an “accordion” feature that allows us, under certain circumstances, to increase the overall size of the Revolving Credit Facility to a maximum of approximately $7.7 billion.

Subject to certain exceptions, the interest rate charged on the Revolving Credit Facility is based on SOFR plus a credit spread adjustment of 0.10% (or an alternate rate of interest for certain loans, commitments and/or other extensions of credit denominated in certain approved foreign currencies plus a spread adjustment, if applicable) plus an applicable spread of either 1.525%, 1.650%, 1.775% or an “alternate base rate” (as defined in the documents governing the Revolving Credit Facility) plus an applicable spread of either 0.525%, 0.650% or 0.775%, in each case, determined monthly based on the total amount of the borrowing base relative to the sum of (i) the greater of (a) the aggregate amount of revolving credit exposure and term loans outstanding under the Revolving Credit Facility and (b) 85% of the total commitments of the Revolving Credit Facility (or, if higher, the total revolving credit exposure) plus (ii) other debt, if any, secured by the same collateral as the Revolving Credit Facility. As of March 31, 2026, the applicable weighted average spread in effect was 1.53%. Subject to certain exceptions, we are required to pay a commitment fee of 0.325% per annum on any unused portion of the Revolving Credit Facility. We are also required to pay letter of credit fees of 1.775%, 1.900% or 2.025% per annum on letters of credit issued, determined monthly based on the total amount of the borrowing base relative to the total commitments of the Revolving Credit Facility and other debt, if any, secured by the same collateral as the Revolving Credit Facility. As of March 31, 2026, there was $2.3 billion
228