Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File No. 814-00663

ARES CAPITAL CORPORATION

(Exact name of Registrant as specified in its charter)



Maryland		33-1089684
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

245 Park Avenue, 44th Floor, New York, NY 10167

(Address of principal executive office) (Zip Code)

(212) 750-7300

(Registrant’s telephone number, including area code)

____________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading symbol	Name of each exchange on which registered
Common stock, $0.001 par value	ARCC	NASDAQ Global Select Market
6.875% Senior Notes due 2047	AFC	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer x		Accelerated filer o
Non-accelerated filer o		Smaller reporting company o
		Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.



Class		Outstanding at October 27, 2020
Common stock, $0.001 par value		422,622,119

ARES CAPITAL CORPORATION

INDEX



Part I.	Financial Information

Item 1.	Financial Statements

	Consolidated Balance Sheet as of September 30, 2020 (unaudited) and December 31, 2019	3

	Consolidated Statement of Operations for the three and nine months ended September 30, 2020 and 2019 (unaudited)	4

	Consolidated Schedule of Investments as of September 30, 2020 (unaudited) and December 31, 2019	5

	Consolidated Statement of Stockholders’ Equity for the three and nine months ended September 30, 2020 (unaudited) and the year ended December 31, 2019	86

	Consolidated Statement of Cash Flows for the nine months ended September 30, 2020 and 2019 (unaudited)	87

	Notes to Consolidated Financial Statements (unaudited)	88

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	125

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	153

Item 4.	Controls and Procedures	155

Part II.	Other Information

Item 1.	Legal Proceedings	156

Item 1A.	Risk Factors	156

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	157

Item 3.	Defaults Upon Senior Securities	158

Item 4.	Mine Safety Disclosures	158

Item 5.	Other Information	158

Item 6.	Exhibits	159

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(in millions, except per share data)



	As of
	September 30, 2020			December 31, 2019
	(unaudited)
ASSETS
Investments at fair value
Non-controlled/non-affiliate company investments	$	11,870		$	12,198
Non-controlled affiliate company investments	223			296
Controlled affiliate company investments	2,265			1,932
Total investments at fair value (amortized cost of $15,090 and $14,696, respectively)	14,358			14,426
Cash and cash equivalents	233			167
Restricted cash	43			9
Interest receivable	124			117
Other assets	95			78
Operating lease right-of-use asset	85			94
Receivable for open trades	12			14
Total assets	$	14,950		$	14,905
LIABILITIES
Debt	$	7,550		$	6,971
Payable to participants	43			9
Base management fees payable	53			54
Income based fees payable	83			48
Capital gains incentive fees payable	—			58
Interest and facility fees payable	48			54
Accounts payable and other liabilities	101			90
Payable for open trades	1			33
Operating lease liabilities	108			121
Total liabilities	7,987			7,438
Commitments and contingencies (Note 7)
STOCKHOLDERS’ EQUITY
Common stock, par value $0.001 per share, 600 common shares authorized; 423 and 431 common shares issued and outstanding, respectively	—			—
Capital in excess of par value	7,660			7,760
Accumulated overdistributed earnings	(697		)	(293		)
Total stockholders’ equity	6,963			7,467
Total liabilities and stockholders’ equity	$	14,950		$	14,905
NET ASSETS PER SHARE	$	16.48		$	17.32

See accompanying notes to consolidated financial statements.

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(in millions, except per share data)

(unaudited)



	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2020			2019			2020			2019
INVESTMENT INCOME:
From non-controlled/non-affiliate company investments:
Interest income from investments (excluding payment-in-kind (“PIK”) interest income)	$	194		$	242		$	639		$	704
PIK interest income from investments	33			14			85			42
Capital structuring service fees	12			40			55			107
Dividend income	18			19			54			55
Other income	22			7			38			23
Total investment income from non-controlled/non-affiliate company investments	279			322			871			931
From non-controlled affiliate company investments:
Interest income from investments (excluding PIK interest income)	2			2			7			10
PIK interest income from investments	—			2			2			4
Capital structuring service fees	—			—			1			2
Dividend income	—			2			—			3
Total investment income from non-controlled affiliate company investments	2			6			10			19
From controlled affiliate company investments:
Interest income from investments (excluding PIK interest income)	38			35			110			109
PIK interest income from investments	13			4			22			15
Capital structuring service fees	—			1			—			15
Dividend income	19			18			55			50
Other income	1			1			3			3
Total investment income from controlled affiliate company investments	71			59			190			192
Total investment income	352			387			1,071			1,142
EXPENSES:
Interest and credit facility fees	77			76			235			212
Base management fees	53			52			161			151
Income based fees	42			49			127			146
Capital gains incentive fees	—			(8		)	(58		)	(7		)
Administrative fees	3			4			10			11
Other general and administrative	7			7			19			25
Total expenses	182			180			494			538
Waiver of income based fees	—			(10		)	—			(30		)
Total expenses, net of waiver of income based fees	182			170			494			508
NET INVESTMENT INCOME BEFORE INCOME TAXES	170			217			577			634
Income tax expense, including excise tax	4			5			12			13
NET INVESTMENT INCOME	166			212			565			621
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS, FOREIGN CURRENCY AND OTHER TRANSACTIONS:
Net realized gains (losses):
Non-controlled/non-affiliate company investments	(19		)	(88		)	15			(63		)
Non-controlled affiliate company investments	—			—			13			—
Controlled affiliate company investments	(4		)	14			(6		)	14
Foreign currency and other transactions	(2		)	11			(5		)	63
Net realized gains (losses)	(25		)	(63		)	17			14
Net unrealized gains (losses):
Non-controlled/non-affiliate company investments	160			50			(571		)	(17		)
Non-controlled affiliate company investments	4			(1		)	(31		)	8
Controlled affiliate company investments	142			(25		)	126			(30		)
Foreign currency and other transactions	(6		)	2			—			(7		)
Net unrealized gains (losses)	300			26			(476		)	(46		)
Net realized and unrealized gains (losses) on investments, foreign currency and other transactions	275			(37		)	(459		)	(32		)
NET INCREASE IN STOCKHOLDERS’ EQUITY RESULTING FROM OPERATIONS	$	441		$	175		$	106		$	589
BASIC AND DILUTED NET INCOME PER COMMON SHARE (see Note 10)	$	1.04		0.41			$	0.25		1.38
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING (see Note 10)	423			427			425			426

See accompanying notes to consolidated financial statements.

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2020

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(3)(7)	Acquisition Date	Amortized Cost		Fair Value			Percentage of Net Assets
Health Care Services
42 North Dental, LLC (fka Gentle Communications, LLC) (15)	Dental services provider	First lien senior secured revolving loan ($5.0 par due 5/2022)	7.25% (Libor + 6.25%/Q)	5/26/2017	$	5.0	$	4.7	(2)(11)
Absolute Dental Group LLC and Absolute Dental Equity, LLC (5)(15)	Dental services provider	First lien senior secured loan ($7.5 par due 9/2022)	11.00% PIK (Libor + 10.00%/Q)	9/30/2020	7.5		7.5		(2)(11)
		First lien senior secured loan ($16.0 par due 9/2022)	11.00% PIK (Libor + 10.00%/Q)	9/30/2020	16.0		16.0		(2)(11)
		Class A pref units (14,750,000 units)		9/30/2020	4.7		4.7		(2)
		Common units (7,200,000 units)		9/30/2020	—		—		(2)
					28.2		28.2
Acessa Health Inc. (fka HALT Medical, Inc.)	Medical supply provider	Common stock (569,823 shares)		6/22/2017	0.1		—
ADCS Billings Intermediate Holdings, LLC (15)	Dermatology practice	First lien senior secured revolving loan ($5.0 par due 5/2022)	6.75% (Libor + 5.75%/Q)	5/18/2016	5.0		4.8		(2)(11)
ADG, LLC and RC IV GEDC Investor LLC (15)	Dental services provider	First lien senior secured revolving loan ($13.9 par due 9/2022)	6.25% (Libor + 2.50% Cash, 2.75% PIK/M)	9/28/2016	13.9		12.1		(2)(11)
		Second lien senior secured loan ($100.5 par due 3/2024)		9/28/2016	89.0		72.4		(2)(10)
		Membership units (3,000,000 units)		9/28/2016	3.0		—		(2)
					105.9		84.5
Air Medical Group Holdings, Inc. and Air Medical Buyer Corp.	Emergency air medical services provider	First lien senior secured loan ($1.7 par due 4/2022)	4.25% (Libor + 3.25%/Q)	4/3/2020	1.6		1.7		(2)(11)(18)
		Senior subordinated loan ($182.7 par due 3/2026)	8.88% (Libor + 7.88%/Q)	3/14/2018	182.7		182.7		(2)(11)
		Warrant to purchase up to 115,733 units of common stock (expires 3/2028)		3/14/2018	0.9		2.0		(2)
					185.2		186.4
Alteon Health, LLC	Provider of physician management services	First lien senior secured loan ($2.8 par due 9/2023)	7.50% (Libor + 6.50%/Q)	5/15/2017	2.8		2.4		(2)(11)
Athenahealth, Inc., VVC Holding Corp., Virence Intermediate Holding Corp., and Virence Holdings LLC (15)	Revenue cycle management provider to the physician practices and acute care hospitals	Second lien senior secured loan ($210.3 par due 2/2027)	8.75% (Libor + 8.50%/Q)	2/11/2019	210.3		210.3		(2)
		Senior preferred stock (121,810 shares)	11.28% PIK (Libor + 11.13%/Q)	2/11/2019	145.3		145.3		(2)
		Class A interests (0.39% interest)		2/11/2019	9.0		12.1		(2)
					364.6		367.7
Bearcat Buyer, Inc. and Bearcat Parent, Inc. (15)	Provider of central institutional review boards over clinical trials	First lien senior secured loan ($30.6 par due 7/2026)	5.25% (Libor + 4.25%/Q)	7/9/2019	30.6		30.6		(2)(11)
		First lien senior secured loan ($17.0 par due 7/2026)	5.25% (Libor + 4.25%/Q)	9/10/2019	17.0		17.0		(2)(11)
		Second lien senior secured loan ($64.2 par due 7/2027)	9.25% (Libor + 8.25%/Q)	7/9/2019	64.2		64.2		(2)(11)
		Second lien senior secured loan ($5.3 par due 7/2027)	9.25% (Libor + 8.25%/Q)	7/9/2019	5.3		5.3		(2)(11)
		Second lien senior secured loan ($12.7 par due 7/2027)	9.25% (Libor + 8.25%/Q)	9/10/2019	12.7		12.7		(2)(11)
		Class B common units (4,211 units)		7/9/2019	4.2		6.8		(2)
					134.0		136.6
CCS-CMGC Holdings, Inc. (15)	Correctional facility healthcare operator	First lien senior secured revolving loan		10/1/2018	—		—		(13)

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2020

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(3)(7)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
		First lien senior secured loan ($34.4 par due 10/2025)	5.76% (Libor + 5.50%/Q)	9/25/2018	34.1	32.7	(2)
					34.1	32.7
Center for Autism and Related Disorders, LLC (15)	Autism treatment and services provider specializing in applied behavior analysis therapy	First lien senior secured revolving loan ($7.5 par due 11/2023)	4.75% (Libor + 4.50%/Q)	11/21/2018	7.5	7.0	(2)(14)
Comprehensive EyeCare Partners, LLC (15)	Vision care practice management company	First lien senior secured revolving loan ($1.8 par due 2/2024)	6.00% (Libor + 4.75%/Q)	2/14/2018	1.8	1.7	(2)(11)
		First lien senior secured loan ($5.3 par due 2/2024)	6.00% (Libor + 4.75%/Q)	2/14/2018	5.3	5.1	(2)(11)
		First lien senior secured loan ($1.0 par due 2/2024)	7.00% (Base Rate + 3.75%/Q)	2/14/2018	1.0	1.0	(2)(11)
		First lien senior secured loan ($2.4 par due 2/2024)	6.00% (Libor + 4.75%/Q)	2/14/2018	2.4	2.2	(2)(11)
					10.5	10.0
Convey Health Solutions, Inc.	Healthcare workforce management software provider	First lien senior secured loan ($3.1 par due 9/2026)	6.25% (Libor + 5.25%/Q)	9/4/2019	3.1	3.1	(2)(11)
		First lien senior secured loan ($2.3 par due 9/2026)	10.00% (Libor + 9.00%/Q)	4/8/2020	2.3	2.3	(2)(11)
					5.4	5.4
CVP Holdco, Inc. and OMERS Wildcats Investment Holdings LLC (15)	Veterinary hospital operator	First lien senior secured loan ($53.3 par due 10/2025)	6.75% (Libor + 5.75%/Q)	10/31/2019	53.3	52.8	(2)(11)
		First lien senior secured loan ($21.8 par due 10/2025)	6.75% (Libor + 5.75%/Q)	10/31/2019	21.8	21.6	(2)(11)
		Common stock (32,429 shares)		10/31/2019	10.0	9.7	(2)
					85.1	84.1
D4C Dental Brands HoldCo, Inc. and Bambino Group Holdings, LLC (15)	Dental services provider	First lien senior secured revolving loan ($0.1 par due 12/2022)	8.25% (Libor + 2.50% Cash, 4.75% PIK/Q)	12/21/2016	0.1	0.1	(2)(11)(14)
		Class A preferred units (1,000,000 units)		12/21/2016	1.0	1.0	(2)
					1.1	1.1
DCA Investment Holding LLC (15)	Multi-branded dental practice management	First lien senior secured revolving loan ($5.7 par due 7/2021)	6.25% (Libor + 5.25%/Q)	7/2/2015	5.7	5.4	(2)(11)(14)
		First lien senior secured loan ($18.2 par due 7/2021)	6.25% (Libor + 5.25%/Q)	7/2/2015	18.2	17.3	(2)(11)
					23.9	22.7
Emerus Holdings, Inc.	Freestanding 24-hour emergency care micro-hospitals operator	First lien senior secured loan ($16.9 par due 2/2022)	10.00% Cash, 4.00% PIK	2/21/2019	16.9	16.9	(2)
Evolent Health LLC and Evolent Health, Inc. (15)	Medical technology company focused on value based care services and payment solutions	First lien senior secured loan ($67.1 par due 12/2024)	9.00% (Libor + 8.00%/Q)	12/30/2019	61.2	65.1	(2)(6)(11)
		Warrant to purchase up to 1,354,968 shares of common stock (expires 1/2025)		12/30/2019	5.9	13.1	(2)(6)
					67.1	78.2
GHX Ultimate Parent Corporation, Commerce Parent, Inc. and Commerce Topco, LLC	On-demand supply chain automation solutions provider to the healthcare industry	Second lien senior secured loan ($34.5 par due 6/2025)	9.00% (Libor + 8.00%/Q)	6/30/2017	34.2	34.5	(2)(11)
		Second lien senior secured loan ($55.0 par due 6/2025)	9.00% (Libor + 8.00%/Q)	1/13/2020	55.0	55.0	(2)(11)
		Series A preferred stock (110,425 shares)	11.75% PIK (Libor + 10.75%/Q)	6/30/2017	166.9	166.9	(2)(11)
		Class A units (14,013,303 units)		6/30/2017	14.0	17.6	(2)
					270.1	274.0

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2020

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(3)(7)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
HealthEdge Software, Inc. (15)	Provider of financial, administrative and clinical software platforms to the healthcare industry	First lien senior secured revolving loan		4/9/2020	—	—	(13)
		First lien senior secured loan ($3.7 par due 4/2026)	7.25% (Libor + 6.25%/M)	4/9/2020	3.7	3.6	(2)(11)
		First lien senior secured loan ($7.1 par due 4/2026)	7.25% (Libor + 6.25%/M)	4/9/2020	7.1	7.1	(2)(11)
					10.8	10.7
Hygiena Borrower LLC (15)	Adenosine triphosphate testing technology provider	Second lien senior secured loan ($2.5 par due 8/2023)	8.75% (Libor + 7.75%/Q)	8/26/2016	2.5	2.5	(2)(11)
		Second lien senior secured loan ($10.7 par due 8/2023)	8.75% (Libor + 7.75%/Q)	2/27/2017	10.7	10.7	(2)(11)
		Second lien senior secured loan ($11.1 par due 8/2023)	8.75% (Libor + 7.75%/Q)	6/29/2018	11.1	11.1	(2)(11)
		Second lien senior secured loan ($0.6 par due 8/2023)	8.75% (Libor + 7.75%/Q)	6/29/2018	0.6	0.6	(2)(11)
					24.9	24.9
JDC Healthcare Management, LLC (15)	Dental services provider	First lien senior secured revolving loan ($4.1 par due 4/2022)		4/10/2017	3.9	3.1	(2)(10)
		First lien senior secured loan ($29.6 par due 4/2023)		4/10/2017	28.3	22.5	(2)(10)
		First lien senior secured loan ($4.2 par due 4/2023)		4/10/2017	4.0	3.2	(2)(10)
					36.2	28.8
KBHS Acquisition, LLC (d/b/a Alita Care, LLC) (15)	Provider of behavioral health services	First lien senior secured revolving loan ($0.6 par due 3/2022)	6.00% (Libor + 4.00% Cash, 1.00% PIK/M)	3/17/2017	0.6	0.6	(2)(11)
Key Surgical LLC (15)	Provider of sterile processing, operating room and instrument care supplies for hospitals	First lien senior secured loan ($17.1 par due 6/2023)	6.00% (EURIBOR + 5.00%/Q)	6/1/2017	16.3	17.1	(2)(11)
		First lien senior secured loan ($5.7 par due 6/2023)	6.00% (Libor + 5.00%/Q)	8/28/2019	5.4	5.7	(2)(11)
					21.7	22.8
LivaNova USA Inc.	Medical device company focused on treating cardiovascular and neurological diseases	First lien senior secured loan ($42.5 par due 6/2025)	7.50% (Libor + 6.50%/Q)	6/10/2020	42.5	41.2	(2)(11)
MB2 Dental Solutions, LLC (15)	Dental services provider	First lien senior secured revolving loan ($2.2 par due 9/2023)	7.50% (Libor + 6.50%/Q)	9/29/2017	2.2	2.2	(2)(11)
MCH Holdings, Inc. and MC Acquisition Holdings I, LLC	Healthcare professional provider	First lien senior secured loan ($114.4 par due 7/2021)	8.50% (Libor + 7.00%/M)	7/26/2017	114.4	114.4	(2)(11)
		Class A units (1,438,643 shares)		1/17/2014	1.5	1.1	(2)
					115.9	115.5
Minerva Surgical, Inc. (15)	Medical device company focused on women's health	First lien senior secured loan ($31.0 par due 12/2022)	11.50% (Libor + 3.50% Cash, 6.00% PIK/Q)	12/30/2019	30.1	31.0	(2)(11)
MW Dental Holding Corp. (15)	Dental services provider	First lien senior secured revolving loan ($10.5 par due 4/2021)	8.25% (Libor + 6.75%/B)	4/12/2011	10.5	9.8	(2)(11)
		First lien senior secured loan ($152.9 par due 4/2021)	8.25% (Libor + 6.75%/B)	4/12/2011	152.9	142.2	(2)(11)
					163.4	152.0
Napa Management Services Corporation and ASP NAPA Holdings, LLC	Anesthesia management services provider	Second lien senior secured loan ($75.0 par due 10/2023)	12.00% PIK (Libor + 11.00%/Q)	4/19/2016	75.0	67.5	(2)(11)
		Senior preferred units (5,320 units)	8.00% PIK	6/29/2020	0.3	0.3	(2)
		Preferred units (1,842 units)	15.00% PIK	6/29/2020	0.1	0.1	(2)
		Class A units (25,277 units)		4/19/2016	2.5	0.5	(2)
					77.9	68.4

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2020

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(3)(7)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
NMN Holdings III Corp. and NMN Holdings LP (15)	Provider of complex rehabilitation technology solutions for patients with mobility loss	First lien senior secured revolving loan		11/13/2018	—	—	(13)
		Partnership units (30,000 units)		11/13/2018	3.0	4.9	(2)
					3.0	4.9
NueHealth Performance, LLC (15)	Developer, builder and manager of specialty surgical hospitals and ambulatory surgery centers	First lien senior secured loan ($11.1 par due 9/2023)	8.25% (Libor + 7.25%/M)	9/27/2018	11.1	11.0	(2)(11)
		First lien senior secured loan ($1.5 par due 9/2023)	8.25% (Libor + 7.25%/M)	9/27/2018	1.5	1.5	(2)(11)
					12.6	12.5
Olympia Acquisition, Inc. and Olympia TopCo, L.P. (15)	Behavioral health and special education platform provider	First lien senior secured revolving loan ($10.1 par due 9/2024)	6.50% (Libor + 5.50%/Q)	9/24/2019	10.1	9.1	(2)(11)
		First lien senior secured loan ($42.6 par due 9/2026)	6.50% (Libor + 5.50%/M)	9/24/2019	42.6	38.4	(2)(11)
		Class A common units (9,549,000 units)		9/24/2019	9.5	3.8	(2)
					62.2	51.3
OMH-HealthEdge Holdings, LLC	Provider of financial, administrative and clinical software platforms to the healthcare industry	First lien senior secured loan ($26.5 par due 10/2025)	6.50% (Libor + 5.50%/Q)	10/24/2019	26.5	26.5	(2)(11)
OSYS Holdings, LLC	Provider of technology-enabled solutions to pharmacies	Limited liability company membership interest (1.57%)		11/21/2013	1.0	0.6	(2)
Pathway Vet Alliance LLC and Jedi Group Holdings LLC (15)	Veterinary hospital operator	Second lien senior secured loan ($76.3 par due 3/2028)	8.75% (Libor + 7.75%/M)	3/31/2020	76.3	76.3	(2)(11)
		Class R common units (6,004,768 units)		3/31/2020	6.0	7.2	(2)
					82.3	83.5
Performance Health Supply, Inc.	Distributor of rehabilitation supplies and equipment	Second lien senior secured loan ($81.8 par due 8/2023)	11.50% PIK (Libor + 10.50%/Q)	9/2/2015	81.0	69.5	(2)(11)
PetVet Care Centers, LLC	Veterinary hospital operator	First lien senior secured loan ($26.1 par due 2/2025)	5.25% (Libor + 4.25%/M)	10/31/2019	25.6	26.1	(2)(11)
PhyMED Management LLC	Provider of anesthesia services	Second lien senior secured loan ($47.2 par due 5/2021)	9.75% (Libor + 0.25% Cash, 8.50% PIK/Q)	12/18/2015	47.2	43.5	(2)(11)
Premise Health Holding Corp. and OMERS Bluejay Investment Holdings LP (15)	Provider of employer-sponsored onsite health and wellness clinics and pharmacies	First lien senior secured revolving loan ($21.0 par due 7/2023)	3.52% (Libor + 3.25%/Q)	7/10/2018	21.0	20.4	(2)(14)
		First lien senior secured loan ($10.8 par due 7/2025)	3.72% (Libor + 3.50%/Q)	7/10/2018	10.7	10.4	(2)
		Second lien senior secured loan ($67.1 par due 7/2026)	7.72% (Libor + 7.50%/Q)	7/10/2018	66.6	65.8	(2)
		Class A units (9,775 units)		7/10/2018	9.8	13.2	(2)
					108.1	109.8
ProVation Medical, Inc.	Provider of documentation and coding software for gastroenterology physicians	First lien senior secured loan ($12.8 par due 3/2024)	7.15% (Libor + 7.00%/M)	3/9/2018	12.7	12.7	(2)
		First lien senior secured loan ($3.1 par due 3/2024)	8.00% (Libor + 7.00%/M)	9/15/2020	3.0	3.1	(2)(11)
					15.7	15.8
Respicardia, Inc.	Developer of implantable therapies to improve cardiovascular health	Warrant to purchase up to 99,094 shares of Series C preferred stock (expires 6/2022)		6/28/2012	—	—	(2)
RTI Surgical, Inc. and Pioneer Surgical Technology, Inc. (15)	Manufacturer of biologic, metal and synthetic implants/devices	First lien senior secured loan ($38.2 par due 7/2026)	8.25% (Libor + 6.75%/Q)	7/20/2020	38.2	37.4	(2)(11)
SCSG EA Acquisition Company, Inc. (15)	Provider of outsourced clinical services to hospitals and health systems	First lien senior secured revolving loan		9/1/2017	—	—	(13)
SiroMed Physician Services, Inc. and SiroMed Equity Holdings, LLC (15)	Outsourced anesthesia provider	First lien senior secured loan ($13.9 par due 3/2024)	5.75% (Libor + 4.75%/Q)	3/26/2018	13.9	11.8	(2)(11)

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2020

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(3)(7)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
		Common units (684,854 units)		3/26/2018	4.8	0.2	(2)
					18.7	12.0
SM Wellness Holdings, Inc. and SM Holdco, Inc. (15)	Breast cancer screening provider	First lien senior secured revolving loan ($5.5 par due 8/2024)	6.47% (Libor + 6.25%/Q)	8/1/2018	5.5	5.3	(2)
		First lien senior secured loan ($7.0 par due 8/2024)	6.47% (Libor + 6.25%/Q)	8/1/2018	7.0	6.7	(2)
		Series A preferred stock (44,975 shares)	10.55% PIK (Libor + 10.25%/Q)	8/1/2018	58.6	58.6	(2)
		Series A units (7,475 units)		8/1/2018	7.5	—	(2)
		Series B units (747,500 units)		8/1/2018	—	3.8	(2)
					78.6	74.4
Synergy HomeCare Franchising, LLC and NP/Synergy Holdings, LLC (15)	Franchisor of private-pay home care for the elderly	First lien senior secured loan ($15.7 par due 4/2024)	6.75% (Libor + 5.75%/Q)	4/2/2018	15.7	15.7	(2)(11)
		Common units (550 units)		4/2/2018	0.6	0.8
					16.3	16.5
Teligent, Inc.	Pharmaceutical company that develops, manufactures and markets injectable pharmaceutical products	Second lien senior secured loan ($57.2 par due 6/2024)		12/13/2018	52.3	44.6	(2)(10)
		Second lien senior secured loan ($32.7 par due 6/2024)		12/13/2018	30.4	25.5	(2)(10)
		Warrant to purchase up to 490,492 shares of common stock (expires 4/2025)		4/6/2020	—	—	(2)
		Warrant to purchase up to 122,548 shares of common stock (expires 7/2025)		7/20/2020	—	—	(2)
					82.7	70.1
Touchstone Acquisition, Inc. and Touchstone Holding, L.P.	Manufacturer of consumable products in the dental, medical, cosmetic and consumer/industrial end-markets	First lien senior secured loan ($25.3 par due 11/2025)	4.90% (Libor + 4.75%/M)	11/15/2018	25.3	24.8	(2)
		First lien senior secured loan ($11.2 par due 11/2025)	4.90% (Libor + 4.75%/M)	11/15/2018	11.2	11.0	(2)
		Class A preferred units (2,149 units)	8.00% PIK	11/15/2018	2.5	2.5	(2)
					39.0	38.3
U.S. Anesthesia Partners, Inc.	Anesthesiology service provider	Second lien senior secured loan ($71.8 par due 6/2025)	8.25% (Libor + 7.25%/Q)	6/16/2017	71.2	68.9	(2)(11)

United Digestive MSO Parent, LLC (15)	Gastroenterology physician group	First lien senior secured revolving loan ($5.6 par due 12/2023)	5.00% (Libor + 4.00%/Q)	12/14/2018	5.6	5.6	(2)(11)
		First lien senior secured loan ($1.1 par due 12/2024)	5.00% (Libor + 4.00%/Q)	12/14/2018	1.1	1.1	(2)(11)
		First lien senior secured loan ($2.4 par due 12/2024)	5.00% (Libor + 4.00%/Q)	12/14/2018	2.4	2.4	(2)(11)
					9.1	9.1
Urgent Cares of America Holdings I, LLC and FastMed Holdings I, LLC	Operator of urgent care clinics	Preferred units (7,696,613 units)		6/11/2015	7.7	—
		Series A common units (2,000,000 units)		6/11/2015	2.0	—
		Series C common units (5,288,427 units)		6/11/2015	—	—
					9.7	—
Urology Management Associates, LLC and JWC/UMA Holdings, L.P.	Urology private practice	First lien senior secured loan ($9.7 par due 8/2024)	6.00% (Libor + 5.00%/M)	8/31/2018	9.6	9.7	(2)(11)
		Limited partnership interests (3.64% interest)		8/31/2018	4.8	5.2	(2)

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of September 30, 2020

(dollar amounts in millions)

(unaudited)



Company(1)	Business Description	Investment	Interest(3)(7)	Acquisition Date	Amortized Cost	Fair Value		Percentage of Net Assets
					14.4	14.9
WSHP FC Acquisition LLC (15)	Provider of biospecimen products for pharma research	First lien senior secured revolving loan ($1.4 par due 3/2024)	7.25% (Libor + 6.25%/Q)	3/30/2018	1.4	1.4	(2)(11)
		First lien senior secured loan ($28.0 par due 3/2024)	7.25% (Libor + 6.25%/Q)	3/30/2018	28.0	28.0	(2)(11)
		First lien senior secured loan ($5.9 par due 3/2024)	7.25% (Libor + 6.25%/Q)	3/30/2018	5.9	5.9	(2)(11)
		First lien senior secured loan ($4.6 par due 3/2024)	7.25% (Libor + 6.25%/Q)	2/11/2019	4.6	4.6	(2)(11)
		First lien senior secured loan ($8.6 par due 3/2024)	7.25% (Libor + 6.25%/Q)	8/30/2019	8.6	8.6	(2)(11)
		First lien senior secured loan ($11.0 par due 3/2024)	7.25% (Libor + 6.25%/Q)	10/31/2019	11.0	11.0	(2)(11)
					59.5	59.5
					2,781.3	2,690.6		38.64	%
Software & Services
AffiniPay Midco, LLC and AffiniPay Intermediate Holdings, LLC (15)	Payment processing solution provider	First lien senior secured loan ($64.8 par due 3/2026)	6.75% (Libor + 5.50%/Q)	2/28/2020	64.8	64.8	(2)(11)
		Senior subordinated loan ($23.4 par due 2/2028)	12.75% PIK	2/28/2020	23.4	23.4	(2)
					88.2	88.2
Anaqua Parent Holdings, Inc. & Astorg VII Co-Invest Anaqua (15)	Provider of intellectual property management lifecycle software	First lien senior secured loan ($4.9 par due 4/2026)	5.50% (Euribor + 5.50%/Q)	4/10/2019	4.7	4.9	(2)
		Limited partnership units (4,400,000 units)		6/13/2019	5.0	8.3	(2)(6)
					9.7	13.2
APG Intermediate Holdings Corporation and APG Holdings, LLC (4)(15)	Aircraft performance software provider	First lien senior secured loan ($12.9 par due 1/2025)	6.75% (Libor + 5.25%/Q)	1/3/2020	12.9	12.9	(2)(11)
		First lien senior secured loan ($0.8 par due 1/2025)	6.75% (Libor + 5.25%/Q)	1/3/2020	0.8	0.8	(2)(11)
		Class A membership units (9,750,000 units)		1/3/2020	9.8	9.9	(2)
					23.5	23.6
Apptio, Inc. (15)	Provider of cloud-based technology business management solutions	First lien senior secured loan ($62.2 par due 1/2025)	8.25% (Libor + 7.25%/Q)	1/10/2019	62.2	61.6	(2)(11)
Blue Campaigns Intermediate Holding Corp. and Elevate Parent, Inc. (dba EveryAction) (15)	Provider of fundraising and organizing efforts and digital services to non-profits and political campaigns	First lien senior secured revolving loan		8/20/2018	—	—	(13)
		First lien senior secured loan ($40.6 par due 8/2023)	8.50% (Libor + 6.75%/Q)	8/20/2018	40.6	40.6	(2)(11)
		Series A preferred stock (150,000 shares)		9/26/2018	1.5	2.0
					42.1	42.6
CallMiner, Inc.	Provider of cloud-based conversational analytics solutions	Warrant to purchase up to 2,350,636 shares of Series 1 preferred stock (expires 7/2024)		7/23/2014	—	—	(2)
Cority Software Inc., IQS, Inc. and Project Falcon Parent, Inc. (15)	Provider of environmental, health and safety software to track compliance data	First lien senior secured loan ($6.4 par due 7/2026)	6.25% (Libor + 5.25%/Q)	7/2/2019	6.4	6.4	(2)(6)(11)
		First lien senior secured loan ($4.5 par due 7/2026)	6.25% (Libor + 5.25%/Q)	10/15/2019	4.5	4.5	(2)(6)(11)
		First lien senior secured loan ($1.1 par due 7/2026)	8.25% (Libor + 7.25%/Q)	9/3/2020	1.1