Ares Strategic Income Fund

11/06/2026 | Press release | Distributed by Public on 11/06/2026 15:25

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

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 Strategic Income Fund (the "Fund," "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 the recent U.S. midterm elections, 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 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;
•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 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 March 9, 2026 (the "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 an externally managed, closed-end management investment company. Formed as a Delaware statutory trust on March 15, 2022, 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" or "Ares"), a publicly traded, leading global alternative investment manager, pursuant to our investment advisory and management agreement (the "investment advisory and management agreement"). Our investment adviser is responsible for sourcing potential investments, conducting due diligence on prospective investments, analyzing investment opportunities, structuring investments and monitoring our portfolio on an ongoing basis. Our investment adviser is registered as an investment adviser with the SEC. Our administrator, 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 current income and, to a lesser extent, long-term capital appreciation. We seek to invest primarily in first lien senior secured loans, second lien senior secured loans, subordinated secured and unsecured loans, subordinated loans (which in some cases include equity and/or preferred components) and other types of credit instruments which may include commercial real estate mezzanine loans, real estate mortgages, distressed investments, securitized products, notes, bills, debentures, bank loans, convertible and preferred securities, infrastructure debt and government and municipal obligations, made to or issued by U.S. middle-market companies, which we generally define as companies with annual EBITDA between $10 million and $250 million. As used herein, EBITDA represents annual net income before net interest expense, income tax expense, depreciation and amortization. We expect that a majority of our investments will be in directly originated loans. For cash management and other purposes, we also invest in broadly syndicated loans and other more liquid credit investments, including in publicly traded debt instruments and other instruments that are not directly originated. We primarily invest in illiquid and restricted investments, and while most of our investments are expected to be in private U.S. companies (we generally have to invest at least 70% of our total assets in "qualifying assets," including private U.S. companies), we may also invest from time to time in non-U.S. companies. Our portfolio may also include equity securities such as common stock, preferred stock, warrants or options, which may be obtained as part of providing a broader financing solution. Under normal circumstances, we will invest directly or indirectly at least 80% of our total assets (net assets plus borrowings for investment purposes) in debt instruments of varying maturities.
To seek to enhance our returns, we employ leverage as market conditions permit and at the discretion of our investment adviser, but in no event will leverage employed exceed the limitations set forth in the Investment Company Act. We intend to use leverage in the form of borrowings, including loans from certain financial institutions, including any potential borrowings under our Credit Facilities (as defined below) and the issuance of debt securities. We may also use leverage in the form of the issuance of preferred shares, but do not currently intend to do so. In determining whether to borrow money, we analyze the maturity, covenant package and rate structure of the proposed borrowings as well as the risks of such borrowings compared to our investment outlook. Any such leverage, if incurred, would be expected to increase the total capital available for investment by us. See Part I, "Item 1A. Risk Factors-Risks Relating to Our Business and Structure-We borrow money, which magnifies the potential for gain or loss on amounts invested and may increase the risk of investing in us" in our Annual Report. To finance investments, we may securitize certain of our secured loans or other investments, including through the formation of one or more collateralized loan obligations, while retaining all or most of the exposure to the performance of these investments. See Part I, "Item 1A. Risk Factors-Risks Relating to Our Business and Structure-We have formed and invested in and may in the future form or invest in CLOs, which subject us to certain structured financing risks" in our Annual Report. Our investments are subject to a number of risks. See Part I, "Item 1A. Risk Factors" in our Annual Report.
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 exemptive relief order from the SEC that permits us and other BDCs and registered closed-end management investment companies managed by Ares Management and its affiliates 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 trustees 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 a co-investment transaction. 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 that 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 shareholders 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 shareholders provided that we satisfy those requirements.
MACROECONOMIC ENVIRONMENT
During the third quarter of 2026, economic activity remained generally stable and labor market conditions were relatively balanced, despite continued uncertainty related to geopolitical developments and their impact on inflation, particularly with respect to energy prices. As a result of elevated inflation, the Federal Reserve raised the target range for the federal funds rate by 25 basis points and signaled the potential for additional tightening, with the aim to deliver price stability and support a timelier return to its 2% inflation target. Against this backdrop, performance across U.S. leveraged corporate credit markets was mixed, with floating-rate credit outperforming fixed-rate credit given expectations for higher market interest rates. Looking ahead, while risks remain, underlying fundamentals are supportive of continued stability and healthy overall economic activity.
PORTFOLIO AND INVESTMENT ACTIVITY
Our investment activity for the three months ended September 30, 2026 and 2025 is presented below.
For the Three Months Ended September 30,
(dollar amounts in thousands) 2026 2025
New investment commitments(1):
Total new investment commitments(2) $ 1,186,622 $ 6,071,943
Less: investment commitments exited(3) (2,119,565) (1,691,975)
Net investment commitments $ (932,943) $ 4,379,968
Principal amount of investments funded:
First lien senior secured loans $ 1,175,602 $ 4,465,975
Second lien senior secured loans 2,739 149,980
Senior subordinated loans 27,094 72,890
Collateralized loan obligations 4,098 259,549
Commercial mortgage backed securities - 35,876
Private asset-backed investments 9,064 67,086
Investments in joint ventures(5) 248,000 -
Preferred equity 17,645 116,474
Other equity 8,651 151,204
Total $ 1,492,893 $ 5,319,034
Principal amount of investments sold or repaid:
First lien senior secured loans $ 1,839,068 $ 1,621,505
Second lien senior secured loans - 8,021
Senior subordinated loans 416 -
Corporate bonds 35,000 -
Collateralized loan obligations 91,181 86,498
Commercial mortgage backed securities 34,293 531
Private asset-backed investments 23,005 6,862
Preferred equity 1,316 17,078
Other equity 4,586 5,622
Total $ 2,028,865 $ 1,746,117
Weighted average remaining term for investment commitments (in months) 79 70
Percentage of new investment commitments at floating rates 96 % 88 %
Weighted average yield(4):
Funded during the period at amortized cost 9.3 % 9.3 %
Funded during the period at fair value 9.3 % 9.3 %
Exited or repaid during the period at amortized cost 7.8 % 8.2 %
Exited or repaid during the period at fair value 7.8 % 8.3 %
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(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 and nine months ended September 30, 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 approximately $1.1 billion and $5.1 billion for the three months ended September 30, 2026 and 2025, respectively.
(3)Includes funded commitments. For the three months ended September 30, 2026 and 2025, investment commitments exited included exits of unfunded commitments of $91 million and $54.1 million, respectively.
(4)"Weighted average yield" 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 the relevant accruing investments, divided by (b) the total accruing investments at amortized cost or at fair value, as applicable.
(5)See "ADLP" below and Note 4 to our consolidated financial statements for the three and nine months ended September 30, 2026 for more information on the ADLP (as defined below).
As of September 30, 2026 and December 31, 2025, our investments consisted of the following:
As of
September 30, 2026 December 31, 2025
(in thousands) Amortized Cost(1) Fair Value Amortized Cost(1) Fair Value
First lien senior secured loans $ 16,471,161 $ 16,263,640 $ 17,143,966 $ 17,160,266
Second lien senior secured loans 392,220 349,181 430,463 429,160
Senior subordinated loans 1,300,777 1,315,808 1,003,023 1,068,842
Corporate bonds 62,600 62,294 97,600 99,063
Collateralized loan obligations 843,304 714,587 1,081,583 1,051,264
Commercial mortgage-backed securities 110,102 109,642 98,850 99,962
Private asset-backed investments 311,937 327,901 289,022 300,947
Investments in joint ventures 1,003,200 1,003,200 391,000 391,000
Preferred equity 441,409 466,777 302,430 317,476
Other equity 575,228 742,746 522,977 590,618
Total $ 21,511,938 $ 21,355,776 $ 21,360,914 $ 21,508,598
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(1)The amortized cost represents the original cost adjusted for any accretion of discounts, amortization of premiums and PIK interest or dividends.
Our 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). We are also party to subscription agreements to fund equity investments. See Note 7 to our consolidated financial statements for the three and nine months ended September 30, 2026 for more information on our unfunded commitments.
The weighted average yields at amortized cost and fair value of our portfolio as of September 30, 2026 and December 31, 2025 were as follows:
As of
September 30, 2026 December 31, 2025
Amortized Cost Fair Value Amortized Cost Fair Value
Debt and other income producing securities(1) 9.4 % 9.6 % 9.0 % 9.0 %
Total portfolio(2) 9.1 % 9.1 % 8.7 % 8.7 %
First lien senior secured loans(3) 8.8 % 8.9 % 8.5 % 8.5 %
Second lien senior secured loans(3) 11.6 % 13.0 % 10.7 % 10.8 %
Senior subordinated loans(3) 10.9 % 10.7 % 9.9 % 9.3 %
Corporate bonds(3) 8.4 % 8.4 % 7.8 % 7.7 %
Collateralized loan obligations(3) 12.2 % 14.5 % 13.5 % 13.9 %
Commercial mortgage-backed securities(3) 6.9 % 6.9 % 8.8 % 8.7 %
Private asset-backed investments(3) 10.7 % 10.6 % 9.6 % 9.5 %
Investments in joint ventures(3) 13.5 % 13.5 % 13.0 % 13.0 %
Other income producing equity securities(4) 12.2 % 11.9 % 11.7 % 11.4 %
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(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, divided by (b) the total accruing debt and other income producing securities at amortized cost or at fair value, 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, 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)"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.
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 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.
For liquid investments, each position is actively monitored by the liquid credit research team members responsible for coverage of a particular company or investment. The research team tracks credit and industry specific developments, as well as price movements, for shifts in relative value that may trigger a buy or sell recommendation. Ongoing monitoring and due diligence includes, but is not limited to, interaction with management, review of company and comparable financial results, company visits, participation in industry and sell-side research conferences, conversations with ratings agencies, industry experts and real-time analysis of price movements in the credit and equity markets. Notable credit developments and/or price movements are discussed real-time with portfolio management and the trading desk and may be discussed at relevant investment committee meetings.
Set forth below is the grade distribution of our portfolio companies as of September 30, 2026 and December 31, 2025:
As of
September 30, 2026 December 31, 2025
(dollar amounts in thousands) Fair Value % Number of Companies % Fair Value % Number of Companies %
Grade 4 $ 1,230,214 5.8 % 27 3.4 % $ 559,005 2.6 % 15 1.7 %
Grade 3 19,803,186 92.7 753 94.7 20,765,538 96.6 846 97.3
Grade 2 271,737 1.3 12 1.5 132,534 0.6 8 0.9
Grade 1 50,639 0.2 3 0.4 51,521 0.2 1 0.1
Total $ 21,355,776 100.0 % 795 100.0 % $ 21,508,598 100.0 % 870 100.0 %
As of September 30, 2026 and December 31, 2025, the weighted average grade of the investments in our portfolio at fair value was 3.0 and 3.0, respectively.
As of September 30, 2026, loans on non-accrual status represented 0.4% of the total investments at amortized cost (or 0.2% at fair value). As of December 31, 2025, none of the loans were on non-accrual status.
ADLP
In October 2025, we and a large North American pension fund (the "ADLP Partner") established ADLP LLC (the "ADLP"), a joint venture to make certain first lien senior secured loans, including unitranche loans, and, to a lesser extent, second lien senior secured loans and other debt and equity investments. 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 ADLP in accordance with the terms of the Co-Investment Exemptive Order. The ADLP is capitalized as transactions are completed and all portfolio decisions and generally all other decisions in respect of the ADLP, including co-investment transactions made by the ADLP in accordance with the terms of the Co-Investment Exemptive Order, must be approved by an investment committee of the ADLP consisting of representatives of ours and the ADLP Partner (with approval from a representative of each required). In connection with the establishment of the ADLP and as part of the initial funding, we and the ADLP Partner sold investment commitments to the ADLP at fair value, including approximately $703 million of investment commitments sold by us. We recognized approximately $3.5 million of net realized gains from these sales.
We and the ADLP Partner provide capital to the ADLP in the form of subordinated certificates (the "ADLP Certificates"). We and the ADLP Partner owned 80% and 20%, respectively, of the ADLP Certificates as of September 30, 2026 and December 31, 2025. We and the ADLP Partner had committed $2.0 billion and $0.5 billion, respectively, of capital in the ADLP Certificates as of September 30, 2026 and December 31, 2025. The capital committed to the ADLP will only be funded upon approval of transactions by the investment committee of the ADLP. Below is a summary of the funded subordinated certificates of the ADLP.
As of
(in thousands) September 30, 2026 December 31, 2025
Total subordinated certificates funded to the ADLP(1) $ 1,254,000 $ 489,000
Total subordinated certificates funded to the ADLP by us(1) $ 1,003,200 $ 391,000
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(1)At principal amount.
The ADLP and certain of its wholly owned subsidiaries are party to certain debt obligations. In connection with these debt obligations, we may be required to fund our subordinated certificates under certain circumstances, including upon the occurrence of an event of default by the ADLP or certain of its wholly owned subsidiaries. As of September 30, 2026 and December 31, 2025, we had unfunded ADLP Certificate commitments of approximately $1.0 billion and $1.6 billion, respectively.
The ADLP Certificates pay a fixed interest rate of 10.0% per annum and also entitle the holders thereof to receive a portion of the excess cash flow from the ADLP portfolio, after expenses, which may result in a return to the holders of the ADLP Certificates that is greater than the stated coupon.
The amortized cost and fair value of our ADLP Certificates held by us and our yield on our investment in the ADLP Certificates at amortized cost and fair value as of September 30, 2026 and December 31, 2025 were as follows:
As of
September 30, 2026 December 31, 2025
(dollar amounts in thousands) Amortized Cost Fair Value Amortized Cost Fair Value
Investment in the ADLP Certificates $ 1,003,200 $ 1,003,200 $ 391,000 $ 391,000
Yield on the investment in the ADLP Certificates 13.5 % 13.5 % 13.0 % 13.0 %
The interest income and other income earned with respect to our investment in the ADLP Certificates for the three and nine months ended September 30, 2026 were as follows:
(in thousands) For the Three Months Ended September 30, 2026 For the Nine Months Ended September 30, 2026
Interest income $ 28,730 $ 62,355
Other income $ 6,850 $ 20,615
From time to time, we may sell investments to, or purchase investments from, the ADLP. During the nine months ended September 30, 2026, we sold approximately $713 million of investments to the ADLP and recognized net realized gains of approximately $19 million. In connection with certain of the sales of the loans to the ADLP, the ADLP assumed approximately $241 million of secured borrowings associated with such sold investments. During the nine months ended September 30, 2026, we did not purchase any investments from the ADLP.
The following table is a summary of the ADLP portfolio as of September 30, 2026 and December 31, 2025.
As of
(dollar amounts in thousands) September 30, 2026 December 31, 2025
Total investment portfolio(1) $ 4,762,930 $ 1,680,961
Weighted average yield of investment portfolio(2) 7.7 % 8.1 %
Number of borrowers in the ADLP 583 313
Commitments to fund revolving and delayed draw loans(3) $ 610,327 $ 191,320
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(1)At principal amount.
(2)Computed as (a) the annual stated interest rate or yield earned on accruing investments, divided by (b) total investments at principal amount.
(3)These commitments to fund revolving and delayed draw loans have been approved by the investment committee of the ADLP and will be funded if and when conditions to funding such delayed draw loans are met.
Selected financial information of the ADLP, in conformity with U.S. generally accepted accounting principles ("GAAP"), as of September 30, 2026 and December 31, 2025 and for the three and nine months ended September 30, 2026 are presented below:
As of
(in thousands) September 30, 2026 December 31, 2025
Selected Balance Sheet Information:
Assets
Investments at fair value (amortized cost of $4,753,852 and $1,682,606, respectively)
$ 4,714,175 $ 1,681,644
Other assets 292,454 137,065
Total assets 5,006,629 1,818,709
Liabilities
Debt 3,220,304 1,314,200
Interest and facility fees payable 25,362 -
Other liabilities 509,697 19,254
Total liabilities 3,755,363 1,333,454
Members' Capital
Subordinated certificates and members' capital 1,251,266 485,255
Total liabilities and members' capital $ 5,006,629 $ 1,818,709
(in thousands) For the Three Months Ended September 30, 2026 For the Nine Months Ended September 30, 2026
Selected Statement of Operations Information:
Income
Total investment income $ 42,806 $ 185,782
Expenses
Interest expense 17,940 89,775
Other expenses 2,022 8,407
Total expenses 19,962 98,182
Net investment income 22,844 87,600
Net realized gains (losses) on investment 22,885 (27,867)
Net increase in members' capital resulting from operations $ 45,729 $ 59,733
Additional supplemental financial information for the ADLP is set forth in Exhibit 99.1 to this Form 10-Q.
KEY COMPONENTS OF OUR RESULTS OF OPERATIONS
Investments
We focus primarily on loans and securities, including syndicated loans, of U.S. private companies. Our level of investment activity (both the number of investments and the size of each investment) can and will vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to potential portfolio companies, the level of merger and acquisition activity for such companies, the general economic environment, trading prices of loans and other securities and the competitive environment for the types of investments we make.
Income
We generate income primarily in the form of interest income on debt investments, capital gains, and dividend income from our equity investments in our portfolio companies. Our senior and subordinated loan investments are expected to bear interest at a fixed or floating rate. Interest on debt securities is generally payable quarterly or semiannually. In some cases, some of our investments may provide for deferred interest payments or payment-in-kind ("PIK") interest. The principal amount of the debt securities and any accrued but unpaid PIK interest generally will become due at the maturity date. In addition, we may
generate income in the form of commitment and other fees in connection with transactions. Original issue discounts and market discounts or premiums will be capitalized, and we will accrete or amortize such amounts as interest income. We will record prepayment premiums on loans and debt securities as realized gains. Dividend income on preferred equity, if any, will be recognized on an accrual basis to the extent that we expect to collect such amounts.
Expenses
The services of all investment professionals and staff of our investment adviser, when and to the extent engaged in providing investment advisory and management services to us and the compensation and routine overhead expenses of such personnel allocable to such services, are provided and paid for by our investment adviser. Under the investment advisory and management agreement, we bear all other allocable costs and expenses of our operations and transactions. See Note 3 to our consolidated financial statements for the three and nine months ended September 30, 2026 for more information on fees and expenses.
From time to time, our investment adviser, our administrator or their affiliates may pay third-party providers of goods or services. We will reimburse our investment adviser, our administrator or such affiliates thereof for any such amounts paid on our behalf. From time to time, our investment adviser or our administrator may defer or waive fees and/or rights to be reimbursed for expenses.
Expense Support and Conditional Reimbursement Agreement
We have entered into an expense support and conditional reimbursement agreement (the "Expense Support and Conditional Reimbursement Agreement") with our investment adviser. See Note 3 to our consolidated financial statements for the three and nine months ended September 30, 2026 for more information on the Expense Support and Conditional Reimbursement Agreement.
RESULTS OF OPERATIONS
For the three and nine months ended September 30, 2026 and 2025
Operating results for the three and nine months ended September 30, 2026 and 2025 were as follows:
For the Three Months Ended September 30, For the Nine Months Ended September 30,
(in thousands) 2026 2025 2026 2025
Total investment income $ 521,430 $ 393,881 $ 1,489,919 $ 978,024
Total expenses 263,405 206,561 731,817 500,745
Expense support - (15,363) (8,633) (45,915)
Expense support recoupment 38,940 4,516 54,576 7,400
Net expenses 302,345 195,714 777,760 462,230
Net investment income before income taxes 219,085 198,167 712,159 515,794
Income tax expense, including excise tax 63 228 136 449
Net investment income 219,022 197,939 712,023 515,345
Net realized gains 19,531 12,469 18,561 1,443
Net unrealized gains (losses) (3,123) 32,239 (297,533) 57,251
Net increase in net assets resulting from operations $ 235,430 $ 242,647 $ 433,051 $ 574,039
Net income can vary substantially from period to period due to various factors, including but not limited to the level of new investment commitments, the recognition of realized gains and losses and unrealized appreciation and depreciation.
Investment Income
For the Three Months Ended September 30, For the Nine Months Ended September 30,
(in thousands) 2026 2025 2026 2025
Interest income $ 483,528 $ 372,588 $ 1,383,122 $ 934,694
Dividend income 15,996 7,258 37,443 16,668
Other income 21,906 14,035 69,354 26,662
Total investment income $ 521,430 $ 393,881 $ 1,489,919 $ 978,024
Total investment income for the three and nine months ended September 30, 2026 increased from the comparable periods in 2025 primarily due to the increase in the average size of our investment portfolio. The average size and the weighted average yield of our portfolio at amortized cost for the three and nine months ended September 30, 2026 and 2025 were as follows:
For the Three Months Ended September 30, For the Nine Months Ended September 30,
(dollar amounts in thousands) 2026 2025 2026 2025
Average size of portfolio(1) $ 21,894,121 $ 17,733,792 $ 21,558,965 $ 14,797,968
Weighted average yield on portfolio 9.1 % 8.5 % 8.8 % 8.6 %
_______________________________________________________________________________
(1)Includes non-interest earning investments.
Operating Expenses
For the Three Months Ended September 30, For the Nine Months Ended September 30,
(in thousands) 2026 2025 2026 2025
Interest and credit facility fees $ 181,905 $ 134,006 $ 509,021 $ 320,406
Base management fee 32,522 29,789 99,308 76,934
Income based fee 37,334 27,952 106,978 70,280
Capital gains incentive fee(1) - 5,588 (19,145) 7,332
Offering expenses 679 389 1,738 1,376
Shareholder servicing and distribution fees
Class S 2,851 2,527 8,446 6,687
Class D 528 458 1,579 1,111
Administrative and other fees 1,897 2,001 6,783 5,623
Other general and administrative 5,689 3,851 17,109 10,996
Total expenses 263,405 206,561 731,817 500,745
Expense support - (15,363) (8,633) (45,915)
Expense support recoupment 38,940 4,516 54,576 7,400
Net expenses $ 302,345 $ 195,714 $ 777,760 $ 462,230
_______________________________________________________________________________
(1)Calculated in accordance with GAAP as discussed below.
Interest and credit facility fees for the three and nine months ended September 30, 2026 and 2025 were comprised of the following:
For the Three Months Ended September 30, For the Nine Months Ended September 30,
(in thousands) 2026 2025 2026 2025
Stated interest expense(1) $ 166,501 $ 123,395 $ 467,715 $ 293,687
Credit facility fees 3,892 3,844 10,255 11,534
Amortization of debt issuance costs 7,130 4,800 20,238 12,213
Accretion of discount 3,037 2,085 8,787 4,850
Net (gains) losses on interest rate swaps accounted for as hedge instruments and the related hedged items 1,345 (118) 2,026 (1,878)
Total interest and credit facility fees $ 181,905 $ 134,006 $ 509,021 $ 320,406
________________________________________
(1)Includes the impact of interest rate swaps.
Stated interest expense for the three and nine months ended September 30, 2026 increased from the comparable periods in 2025 primarily due to the increase in the average principal amount of our outstanding debt, partially offset by the decline in the weighted average stated interest rate of our outstanding debt. Average outstanding debt and weighted average stated interest rate on our outstanding debt for the three and nine months ended September 30, 2026 and 2025 were as follows:
For the Three Months Ended September 30, For the Nine Months Ended September 30,
(dollar amounts in thousands) 2026 2025 2026 2025
Average outstanding debt $ 11,968,340 $ 7,674,297 $ 11,254,057 $ 6,107,148
Weighted average stated interest rate on outstanding debt(1) 5.4 % 6.0 % 5.3 % 6.0 %
________________________________________
(1)The weighted average stated interest rate on our outstanding debt for the three and nine months ended September 30, 2026 includes the impact of interest rate swaps. See Note 6 to our consolidated financial statements for the three and nine months ended September 30, 2026 for more information on the interest rate swaps.
The base management fee for the three and nine months ended September 30, 2026 increased from the comparable periods in 2025 due to an increase in average net assets, primarily attributable to net subscriptions during 2025 from our continuous offering of Common Shares (as defined below).
The income based fee for the three and nine months ended September 30, 2026 increased from the comparable periods in 2025 primarily due to the increase in pre-incentive fee net investment income, as defined in the investment advisory and management agreement.
For the three months ended September 30, 2026, there was no capital gains incentive fee calculated in accordance with GAAP. For the nine months ended September 30, 2026, the reduction in the capital gains incentive fee calculated in accordance with GAAP was approximately $19 million. For the three and nine months ended September 30, 2025, the capital gains incentive fee calculated in accordance with GAAP was approximately $6 million and $7 million, respectively. The capital gains incentive fee accrual for the nine months ended September 30, 2026 changed from the comparable period in 2025 primarily due to net losses on investments, foreign currency and other transactions of approximately $279 million compared to net gains of approximately $59 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 September 30, 2026, there was no capital gains incentive fee accrued in accordance with GAAP or capital gains incentive fee actually payable under our investment advisory and management agreement. See Note 3 to our consolidated financial
statements for the three and nine months ended September 30, 2026 for more information on the base management fee, income based fee and capital gains incentive fee.
Offering expenses include expenses incurred in connection with our continuous offering of Common Shares. 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 each of 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 corporate officers and their respective staffs. See Note 3 to our consolidated financial statements for the three and nine months ended September 30, 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 trustees' fees.
For the three and nine months ended September 30, 2026, total other expenses was approximately $12 million and $36 million, respectively, which is comprised of offering expenses, shareholder servicing and distribution fees, administrative and other fees and other general and administrative expenses, compared to $9 million and $26 million, respectively, for the comparable periods in 2025. Other general and administrative expenses for the three and nine months ended September 30, 2026 increased from the comparable periods in 2025, primarily as a result of the continued portfolio growth.
Income Tax Expense, Including Excise Tax
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 shareholders 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 shareholders 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 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 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.
Net Realized Gains/Losses
The net realized gains (losses) from investments during the three and nine months ended September 30, 2026 and 2025 were comprised of the following:
For the Three Months Ended September 30, For the Nine Months Ended September 30,
(in thousands) 2026 2025 2026 2025
Sales, repayments or exits of investments(1) $ 2,027,933 $ 1,758,000 $ 6,137,280 $ 4,395,824
Net realized gains (losses) on investments:
Gross realized gains $ 19,276 $ 20,725 $ 88,605 $ 35,117
Gross realized losses (4,536) (1,728) (45,802) (14,362)
Total net realized gains on investments $ 14,740 $ 18,997 $ 42,803 $ 20,755
_______________________________________________________________________________
(1)Includes $346 million and $472 million of loans sold to the ADLP during the three and nine months ended September 30, 2026, respectively. There were no such sales of loans to the ADLP during the comparable periods in 2025. Net realized gains of approximately $4 million and approximately $19 million were recorded on these transactions with the ADLP during the three and nine months ended September 30, 2026, respectively. In connection with certain of the sales of loans to the ADLP, the ADLP assumed approximately $241 million of secured borrowings associated with such sold investments. See Note 4 to our consolidated financial statements for the three and nine months ended September 30, 2026 for more information on the ADLP.
For the three and nine months ended September 30, 2026, we recorded net realized gains on investments of approximately $15 million and $43 million, respectively, primarily from full or partial sales or repayments of certain of our portfolio investments, compared to net realized gains on investments of $19 million and $21 million, respectively, for the comparable periods in 2025. For the three and nine months ended September 30, 2026, we also recognized net realized gains on foreign currency transactions of $5 million and net realized losses on foreign currency and other transactions of $24 million, respectively, compared to net realized losses on foreign currency transactions of $7 million and $19 million, respectively, for the comparable periods in 2025.
Net Unrealized Gains/Losses
We value our portfolio investments at least monthly 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 and nine months ended September 30, 2026 and 2025, were comprised of the following:
For the Three Months Ended September 30, For the Nine Months Ended September 30,
(in thousands) 2026 2025 2026 2025
Unrealized appreciation $ 136,404 $ 94,922 $ 199,905 $ 231,119
Unrealized depreciation (131,443) (55,420) (477,545) (83,306)
Net unrealized (appreciation) depreciation reversed related to net realized gains or losses(1) (5,436) (21,907) (83,276) (27,341)
Total net unrealized gains (losses) on investments $ (475) $ 17,595 $ (360,916) $ 120,472
_______________________________________________________________________________
(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.
The changes in net unrealized appreciation and depreciation on investments during the three months ended September 30, 2026 consisted of the following:
(in thousands)
Portfolio Company 		Net Unrealized Appreciation (Depreciation)
Other, net $ 4,961
Total $ 4,961
During the three months ended September 30, 2026, we also recognized net unrealized losses on foreign currency transactions of $3 million.
The changes in net unrealized appreciation and depreciation on investments during the three months ended September 30, 2025 consisted of the following:
(in thousands)
Portfolio Company 		Net Unrealized Appreciation (Depreciation)
FEH Group, LLC. $ 15,583
Other, net 23,919
Total $ 39,502
During the three months ended September 30, 2025, we also recognized net unrealized gains on foreign currency transactions of $15 million.
The changes in net unrealized appreciation and depreciation on investments during the nine months ended September 30, 2026 consisted of the following:
(in thousands)
Portfolio Company 		Net Unrealized Appreciation (Depreciation)
FEH Group, LLC. $ 29,813
Spruce Bidco II Inc. 15,242
South Florida Motorsports, LLC 15,104
Kaseya Inc. and Knockout Intermediate Holdings I Inc. (17,122)
BVI Medical, Inc. and BVI Group Limited (25,309)
Cornerstone OnDemand, Inc. and Sunshine Software Holdings, Inc. (54,658)
Other, net (240,710)
Total $ (277,640)
During the nine months ended September 30, 2026, we also recognized net unrealized gains on foreign currency transactions of $63 million.
The changes in net unrealized appreciation and depreciation on investments during the nine months ended September 30, 2025 consisted of the following:
(in thousands)
Portfolio Company 		Net Unrealized Appreciation (Depreciation)
Dino BidCo S.p.A. $ 39,491
Nordic Ferry Infrastructure AS 18,142
FEH Group, LLC. 16,586
Other, net 73,594
Total $ 147,813
During the nine months ended September 30, 2025, we also recognized net unrealized losses on foreign currency transactions of $63 million.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Our liquidity and capital resources are generated primarily from (i) the proceeds received from the sale of common shares of beneficial interest, including Class I shares, Class S shares and Class D shares ("Common Shares") on a continuous basis at a price per share equal to the then-current net asset value ("NAV") per share, (ii) advances from our credit facilities (the Revolving Credit Facility, the SG Funding Facility, the SB Funding Facility and the BNP Funding Facility (each as defined below, and together, the "Credit Facilities")), (iii) net proceeds from the issuances of other securities, including unsecured notes and debt securitizations and (iv) cash flows from operations.
Our primary uses of cash and cash equivalents are for (i) investments in portfolio companies and other investments, (ii) the cost of operations (including paying our investment adviser and our administrator), (iii) the cost of any borrowings or other financing arrangements and (iv) cash distributions to the holders of our Common Shares.
In accordance with the Investment Company Act, we may borrow amounts such that our asset coverage, calculated pursuant to the Investment Company Act, is at least 150% (or 200% if certain requirements under the Investment Company Act are not met) immediately after such borrowing (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 September 30, 2026, we had approximately $506 million in cash and cash equivalents and $12.3 billion in total aggregate principal amount of outstanding debt ($12.0 billion at carrying value) and our asset coverage was 179%. Subject to borrowing base and other restrictions, we had approximately $3.8 billion available for additional borrowings under the Credit Facilities as of September 30, 2026.
We have a share repurchase program, pursuant to which we intend to offer to repurchase, at the discretion of our board of trustees, up to 5% of our Common Shares outstanding in each quarter. We may from time to time seek to retire, cancel or purchase any of 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 new debt facilities, increase the size of existing facilities or issue 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.
We believe that our current cash and cash equivalents on hand, our short-term investments, our available borrowing capacity under the Credit Facilities and our anticipated cash flows from operations will be adequate to meet our cash needs for our daily operations in the near term.
Equity Capital Activities
We publicly offer our Common Shares on a continuous basis, pursuant to an offering registered with the SEC (the "Offering"). The purchase price per share for each class of Common Shares equals our NAV per share, as of the day preceding the effective date of the monthly share purchase. Ares Management Capital Markets LLC, our intermediary manager, will use its best efforts to sell Common Shares, but is not obligated to purchase or sell any specific amount of Common Shares in the Offering. We also engage in offerings of our unregistered Common Shares to non-U.S. investors pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act") and Regulation S promulgated under the Securities Act.
The following table summarizes transactions in Common Shares during the three and nine months ended September 30, 2026:
For the Three Months Ended September 30, 2026 For the Nine Months Ended September 30, 2026
(in thousands) Shares Amount Shares Amount
Class I
Subscriptions(1) 4,737 $ 126,472 32,833 $ 887,758
Share transfers between classes 264 7,042 718 19,400
Distributions reinvested 1,652 44,111 5,198 140,083
Repurchased shares, net of early repurchase deduction (17,450) (466,598) (53,273) (1,430,398)
Net decrease (10,797) $ (288,973) (14,524) $ (383,157)
Class S
Subscriptions(1) 783 $ 20,919 3,876 $ 104,844
Share transfers between classes (106) (2,828) (424) (11,499)
Distributions reinvested 329 8,779 966 26,029
Repurchased shares, net of early repurchase deduction (762) (20,371) (2,242) (60,162)
Net increase 244 $ 6,499 2,176 $ 59,212
Class D
Subscriptions(1) 674 $ 18,000 3,895 $ 105,463
Share transfers between classes (158) (4,214) (294) (7,901)
Distributions reinvested 311 8,295 950 25,604
Repurchased shares, net of early repurchase deduction (1,052) (28,129) (3,061) (82,209)
Net increase (decrease) (225) $ (6,048) 1,490 $ 40,957
Total net increase (decrease) (10,778) $ (288,522) (10,858) $ (282,988)
____________________________________
(1)See "Recent Developments" as well as Note 12 to our consolidated financial statements for the three and nine months ended September 30, 2026 for subsequent events relating to subscription activities.
Net Asset Value Per Share and Offering Price
We determine NAV for each class of shares as of the last day of each calendar month. Share issuances related to monthly subscriptions are effective the first business day of each month. The NAV per share for each class of Common Shares is determined by dividing the value of total assets attributable to the class minus liabilities attributable to the share class by the total number of each share class of Common Shares outstanding at the date as of which the determination is made. The following table summarizes each month-end NAV per share for Class I shares, Class S shares and Class D shares during the nine months ended September 30, 2026.
NAV Per Share
Class I Class S Class D
January 31, 2026 $ 27.26 $ 27.26 $ 27.26
February 28, 2026 $ 26.86 $ 26.86 $ 26.86
March 31, 2026 $ 26.85 $ 26.85 $ 26.85
April 30, 2026 $ 26.95 $ 26.95 $ 26.95
May 31, 2026 $ 27.00 $ 27.00 $ 27.00
June 30, 2026 $ 26.71 $ 26.71 $ 26.71
July 31, 2026 $ 26.67 $ 26.67 $ 26.67
August 31, 2026 $ 26.74 $ 26.74 $ 26.74
September 30, 2026 $ 26.69 $ 26.69 $ 26.69
Distributions
Our board of trustees expects to declare monthly regular distributions for each class of our Common Shares. The following tables present the monthly regular distributions that were declared and payable during the nine months ended September 30, 2026 (dollars in thousands except per share amounts).
Class I
Declaration Date Record Date Payment Date Net Distribution Per Share Distribution Amount
November 14, 2025 January 30, 2026 February 23, 2026 $ 0.21430 $ 66,838
November 14, 2025 February 27, 2026 March 25, 2026 0.21430 68,456
November 14, 2025 March 31, 2026 April 23, 2026 0.21430 66,292
January 7, 2026 April 30, 2026 May 21, 2026 0.21430 67,356
January 7, 2026 May 29, 2026 June 24, 2026 0.21430 68,075
January 7, 2026 June 30, 2026 July 23, 2026 0.21430 64,659
May 12, 2026 July 31, 2026 August 21, 2026 0.21430 65,191
May 12, 2026 August 31, 2026 September 24, 2026 0.21430 65,628
May 12, 2026 September 30, 2026 October 23, 2026 0.21430 62,334
$ 1.92870 $ 594,829
Class S
Declaration Date Record Date Payment Date Net Distribution Per Share Distribution Amount
November 14, 2025 January 30, 2026 February 23, 2026 $ 0.19446 $ 9,406
November 14, 2025 February 27, 2026 March 25, 2026 0.19652 9,594
November 14, 2025 March 31, 2026 April 23, 2026 0.19491 9,441
January 7, 2026 April 30, 2026 May 21, 2026 0.19554 9,613
January 7, 2026 May 29, 2026 June 24, 2026 0.19484 9,645
January 7, 2026 June 30, 2026 July 23, 2026 0.19544 9,655
May 12, 2026 July 31, 2026 August 21, 2026 0.19502 9,697
May 12, 2026 August 31, 2026 September 24, 2026 0.19505 9,783
May 12, 2026 September 30, 2026 October 23, 2026 0.19562 9,703
$ 1.75740 $ 86,537
Class D
Declaration Date Record Date Payment Date Net Distribution Per Share Distribution Amount
November 14, 2025 January 30, 2026 February 23, 2026 $ 0.20847 $ 6,310
November 14, 2025 February 27, 2026 March 25, 2026 0.20907 6,573
November 14, 2025 March 31, 2026 April 23, 2026 0.20860 6,558
January 7, 2026 April 30, 2026 May 21, 2026 0.20878 6,643
January 7, 2026 May 29, 2026 June 24, 2026 0.20858 6,664
January 7, 2026 June 30, 2026 July 23, 2026 0.20875 6,498
May 12, 2026 July 31, 2026 August 21, 2026 0.20863 6,539
May 12, 2026 August 31, 2026 September 24, 2026 0.20864 6,641
May 12, 2026 September 30, 2026 October 23, 2026 0.20881 6,452
$ 1.87833 $ 58,878
The net distributions received by shareholders of Class S shares and Class D shares include the effect of the shareholder servicing and/or distribution fees applicable to such class of shares. Class I shares have no shareholder servicing and/or distribution fees.
See "Recent Developments" as well as Note 12 to our consolidated financial statements for the three and nine months ended September 30, 2026 for a subsequent event relating to regular distributions declared by our board of trustees.
Distribution Reinvestment Plan
We have adopted a distribution reinvestment plan ("distribution reinvestment plan"), pursuant to which we will not reinvest cash distributions declared by our board of trustees on behalf of our shareholders unless such shareholders elect for their shares to be automatically reinvested. As a result, if our board of trustees authorizes, and we declare, a cash distribution, then our shareholders who have opted into our distribution reinvestment plan will have their cash distributions automatically reinvested in additional shares, rather than receiving the cash distribution. Distributions on fractional shares will be credited to each participating shareholder's account. The purchase price for shares issued under our distribution reinvestment plan will be equal to the most recent available NAV per share for such shares at the time the distribution is payable.
Share Repurchase Program
We have a share repurchase program, pursuant to which we intend to offer to repurchase, at the discretion of our board of trustees, up to 5% of our Common Shares outstanding in each quarter. Our board of trustees may amend, suspend or terminate the share repurchase program if it deems such action to be in our best interest and the best interest of our common shareholders. As a result, share repurchases may not be available each quarter, or at all. We conduct any such repurchase offers in accordance with the requirements of Rule 13e-4 promulgated under the Securities Exchange Act of 1934, as amended and the Investment Company Act, with the terms of such tender offer published in a tender offer statement to be sent to all our common shareholders and filed with the SEC on Schedule TO. All shares purchased by us in connection with the share repurchase program will be retired and thereafter will be authorized and unissued shares.
In accordance with our share repurchase program, shares repurchased in our tender offers completed during the nine months ended September 30, 2026 were repurchased using a purchase price equal to the NAV per share as of the last calendar day of the applicable month designated by our board of trustees, except that we deducted 2.00% from such NAV for shares that were not outstanding for at least one year (the "Early Repurchase Deduction").
The plan adopted by us pursuant to Rule 18f-3 under the Investment Company Act so that we may issue multiple classes of Common Shares (the "Multiple Class Plan") provides that the Early Repurchase Deduction holding period ends on the one-year anniversary of the subscription closing date and the Early Repurchase Deduction will not apply to shares acquired through our distribution reinvestment plan. The Early Repurchase Deduction may be waived in the case of repurchase requests: (i) arising from the death or qualified disability of the holder; (ii) submitted by discretionary model portfolio management programs (and similar arrangements); (iii) from feeder funds (or similar vehicles) primarily created to hold our Common Shares, which are offered to non-U.S. persons, where such funds seek to avoid imposing such a deduction because of administrative or systems limitations; and (iv) in the event that a shareholder's Common Shares are repurchased because the shareholder has failed to maintain a minimum account balance. The Early Repurchase Deduction is retained by us for the benefit of remaining shareholders.
The following table presents the share repurchases completed during the nine months ended September 30, 2026 (dollar amounts in thousands except per share amounts):
Repurchase Pricing Date Total Number of Shares Repurchased (1) Percentage of Outstanding Shares Repurchased (1)(2) Repurchase Request Deadline Purchase Price Per Share Amount Repurchased (All Classes) (3) Maximum number of shares that may yet be purchased under the repurchase program (4)
February 27, 2026 19,544,669 5.00 % March 20, 2026 $ 26.86 $ 524,026 -
May 31, 2026 19,767,079 5.00 % June 18, 2026 $ 27.00 $ 533,646 -
August 31, 2026 19,264,139 5.00 % September 18, 2026 $ 26.74 $ 515,098 -
_______________________________________________________________________________
(1)During the three months ended March 31, 2026, June 30, 2026 and September 30, 2026, we fulfilled repurchase requests equal to 5.0% of outstanding shares as of January 31, 2026, April 30, 2026, and July 31, 2026, respectively, or 43.1%, 34.7% and 38.2%, respectively, of repurchase requests. Shares were accepted on a pro rata basis based on the number of validly tendered shares (subject to "odd lot" priority for holders of fewer than 100 shares as described in the Fund's tender offer materials).
(2)Percentage is based on total shares outstanding as of the close of business on the last calendar day of the month preceding the applicable repurchase pricing date.
(3)Amounts shown net of the Early Repurchase Deduction.
(4)Unfulfilled repurchase requests do not carry over automatically and must be resubmitted in the next quarterly repurchase offer, or upon the recommencement of the share repurchase program, as applicable.
Debt Capital Activities
Our debt obligations consisted of the following as of September 30, 2026 and December 31, 2025:
As of
September 30, 2026 December 31, 2025
(in thousands) 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
$ 4,138,000 (2) $ 2,104,596 $ 2,101,059 $ 3,250,000 (2) $ 2,523,737 $ 2,525,642
SG Funding Facility 2,325,000 (3) 1,470,811 1,470,811 1,825,000 (3) 612,811 612,811
SB Funding Facility 1,500,000 (4) 650,000 650,000 750,000 400,000 400,000
BNP Funding Facility 1,000,000 568,000 568,000 1,000,000 900,000 900,000
January 2037 CLO Secured Notes(5) 476,000 476,000 473,501 (6) 476,000 476,000 473,310 (6)
April 2038 CLO Secured Debt(5) 350,000 350,000 348,312 (6) 350,000 350,000 348,196 (6)
January 2039 CLO Secured Debt(5) 532,000 532,000 530,259 (6) 532,000 532,000 529,820 (6)
March 2028 Notes 1,000,000 1,000,000 984,196 (6)(7) 1,000,000 1,000,000 1,004,008 (6)(7)
September 2028 Notes 600,000 600,000 582,416 (6)(7) 600,000 600,000 597,103 (6)(7)
January 2029 Notes 600,000 600,000 573,479 (6)(7) 600,000 600,000 589,036 (6)(7)
August 2029 Notes 700,000 700,000 677,992 (6)(7) 700,000 700,000 705,261 (6)(7)
February 2030 Notes 750,000 750,000 702,715 (6)(7) 750,000 750,000 731,239 (6)(7)
September 2030 Notes 500,000 500,000 472,698 (6)(7) 500,000 500,000 496,117 (6)(7)
January 2031 Notes 500,000 500,000 459,545 (6)(7) 500,000 500,000 483,459 (6)(7)
April 2031 Notes 700,000 700,000 654,482 (6)(7) - - -
March 2032 Notes 750,000 750,000 717,245 (6)(7) 750,000 750,000 764,594 (6)(7)
Total $ 16,421,000 $ 12,251,407 $ 11,966,710 $ 13,583,000 $ 11,194,548 $ 11,160,596
________________________________________
(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 $6.2 billion and $4.6 billion as of September 30, 2026 and December 31, 2025, respectively.
(3)Provides for an "accordion" feature that allows ASIF Funding I (as defined below), under certain circumstances, to increase the size of the SG Funding Facility to a maximum of $2.5 billion.
(4)As of September 30, 2026, $1.1 billion of the total commitment was available under the SB Funding Facility and subject to borrowing base and other restrictions. The remaining $375 million became fully available after October 29, 2026.
(5)Excludes the subordinated notes issued by certain of our wholly owned, consolidated subsidiaries in connection with the Debt Securitizations described below, all of which were retained by us and, as such, eliminated in consolidation.
(6)Represents the aggregate principal amount outstanding, less unamortized debt issuance costs and the unaccreted discount recorded upon issuance.
(7)The carrying value of the March 2028 Notes, the September 2028 Notes, the January 2029 Notes, the August 2029 Notes, the February 2030 Notes, the September 2030 Notes, the January 2031 Notes, the April 2031 Notes and the March 2032 Notes (each as defined below) as of September 30, 2026 and December 31, 2025 include adjustments as a result of effective hedge accounting relationships, as applicable. See Note 6 to our consolidated financial statements for the three and nine months ended September 30, 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 September 30, 2026 were 5.5% and 4.7 years, respectively, and as of December 31, 2025 were 5.5% and 5.0 years, respectively. The weighted average stated interest rate of all our outstanding debt as of September 30, 2026 and 2025 includes the impact of interest rate swaps. See Note 6 to our consolidated financial statements for the three and nine months ended September 30, 2026 for more information on the interest rate swaps.
Revolving Credit Facility
We are party to a senior secured revolving credit facility agreement with JPMorgan Chase Bank, N.A and each of the other parties thereto (the "Revolving Credit Facility"), that allows us to borrow up to approximately $4.1 billion at any one time outstanding. As of September 30, 2026, the end of the revolving period and the stated maturity date were May 21, 2030 and May 21, 2031, respectively. As of September 30, 2026, the Revolving Credit Facility also provided for an "accordion" feature that allowed us, under certain circumstances, to increase the overall size of the Revolving Credit Facility to a maximum of approximately $6.2 billion. The interest rate charged on the Revolving Credit Facility is based on Secured Overnight Financing Rate ("SOFR") (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 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 September 30, 2026, the applicable spread in effect was 1.525%. Additionally, we are required to pay a commitment fee of 0.325% per annum on any unused portion of the Revolving Credit Facility. As of September 30, 2026, there was approximately $2.1 billion aggregate principal amount outstanding under the Revolving Credit Facility and we were in compliance in all material respects with the terms of the Revolving Credit Facility.
SG Funding Facility
We and our wholly owned subsidiary, ASIF Funding I, LLC ("ASIF Funding I"), are party to a revolving funding facility with Société Générale and each of the other parties thereto (the "SG Funding Facility"), that allows us to borrow up to approximately $2.3 billion at any one time outstanding. The SG Funding Facility consists of an approximately $650 million term loan tranche with a stated maturity date of August 1, 2030 and an approximately $1.7 billion revolving tranche with an end of the reinvestment period and a stated maturity date of August 1, 2028 and August 1, 2030, respectively. As of September 30, 2026, the SG Funding Facility also provides for an "accordion" feature that allows ASIF Funding I, under certain circumstances, to increase the overall size of the SG Funding Facility to a maximum of $2.5 billion. The interest rate charged on the SG Funding Facility is based on SOFR plus (i) 1.75% per annum, with respect to $500 million of commitments and (ii) 1.80% per annum, with respect to approximately $1.8 billion of commitments. In addition to the stated interest expense on the SG Funding Facility, ASIF Funding I is required to pay, among other fees, a daily commitment fee on any monthly distribution date, termination date or on the date of any payment or prepayment of a loan outstanding under the SG Funding Facility. As of
September 30, 2026, there was approximately $1.5 billion aggregate principal amount outstanding under the SG Funding Facility and we and ASIF Funding I were in compliance in all material respects with the terms of the SG Funding Facility.
SB Funding Facility
We and our wholly owned subsidiary, ASIF Funding II, LLC ("ASIF Funding II"), are party to a revolving funding facility with the Bank of Nova Scotia and each of the other parties thereto (the "SB Funding Facility"), that allows us to borrow up to $1.5 billion at any one time outstanding, of which $1,125 million was available as of September 30, 2026 and the remaining $375 million became fully available after October 29, 2026. The end of the reinvestment period and the stated maturity date were July 29, 2028 and January 29, 2035, respectively. The interest rate charged on the SB Funding Facility is based on SOFR plus an applicable margin of (i) 1.80% during the reinvestment period and (ii) 2.00% following the reinvestment period. As of September 30, 2026, the applicable spread in effect was 1.80%. In addition to the stated interest expense on the SB Funding Facility, ASIF Funding II is required to pay, among other fees, a commitment fee between 0.50%, 0.75% and 1.00% per annum depending on the aggregate amount of unused commitments under the SB Funding Facility. As of September 30, 2026, there was $650 million aggregate principal amount outstanding under the SB Funding Facility and we and ASIF Funding II were in compliance in all material respects with the terms of the SB Funding Facility.
BNP Funding Facility
We and our wholly owned subsidiary, ASIF Funding III, LLC ("ASIF Funding III"), are party to a revolving funding facility with BNP Paribus and each of the other parties thereto (the "BNP Funding Facility"), that allows us to borrow up to $1.0 billion at any one time outstanding. The end of the reinvestment period and the stated maturity date are October 21, 2028 and October 21, 2029, respectively. The interest rate charged on the BNP Funding Facility is based on SOFR plus an applicable margin of (i) 1.30% during the reinvestment period and (ii) 2.30% following the reinvestment period. As of September 30, 2026, the applicable spread in effect was 1.30%. In addition to the stated interest expense on the BNP Funding Facility, ASIF Funding III is required to pay, among other fees, a commitment fee dependent on the aggregate amount of unused commitments under the BNP Funding Facility. As of September 30, 2026, there was $568 million aggregate principal amount outstanding under the BNP Funding Facility and we and ASIF Funding III were in compliance in all material respects with the terms of the BNP Funding Facility.
Debt Securitizations
Certain of our wholly owned, consolidated subsidiaries (Ares Direct Lending CLO 3 LLC ("ADL CLO 3"), Ares Direct Lending CLO 5 LLC ("ADL CLO 5") and Ares Direct Lending CLO 8 LLC ("ADL CLO 8" and, together with ADL CLO 3 and ADL CLO 5, the "CLO Subsidiaries")) have completed on-balance sheet financings through term debt securitizations (also known as collateralized loan obligations), which are consolidated by us for financial reporting purposes and count as debt for the purposes of determining our asset coverage. These include (i) a $694 million term debt securitization completed by ADL CLO 3 (the "ADL CLO 3 Debt Securitization"), (ii) a $499 million term debt securitization completed by ADL CLO 5 (the "ADL CLO 5 Debt Securitization") and (iii) a $696 million term debt securitization completed by ADL CLO 8 (the "ADL CLO 8 Debt Securitization"). We refer to the ADL CLO 3 Debt Securitization, ADL CLO 5 Debt Securitization and ADL CLO 8 Debt Securitization collectively as the "Debt Securitizations." Our 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 3 Debt Securitization
The following table presents information on the ADL CLO 3 Debt Securitization as of September 30, 2026 (dollar amounts in millions):
Class Type Principal Amount
Outstanding 		Maturity Date Interest Rate
January 2037 Class A-1 CLO Notes(1)
Senior Secured Floating Rate $ 399 January 20, 2037
SOFR+1.58%
January 2037 Class A-2 CLO Notes(1)
Senior Secured Floating Rate 35 January 20, 2037
SOFR+1.75%
January 2037 Class B CLO Notes(1)
Senior Secured Floating Rate 42 January 20, 2037
SOFR+1.85%
Total January 2037 CLO Secured Notes 476
SOFR+1.62%
January 2037 CLO Subordinated Notes(2)
Subordinated 218 January 20, 2037 None
Total January 2037 CLO Notes $ 694
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(1)The January 2037 Class A-1 CLO Notes, the January 2037 Class A-2 CLO Notes and the January 2037 Class B CLO Notes are referred to collectively as the "January 2037 CLO Secured Notes" and are the secured obligations of ADL CLO 3 and are backed by a diversified portfolio of first lien senior secured loans contributed by us to ADL CLO 3.
(2)We retained all of the January 2037 CLO Subordinated Notes, as such, the January 2037 CLO Subordinated Notes are eliminated in consolidation. The January 2037 CLO Secured Notes and the January 2037 CLO Subordinated Notes are referred to collectively as the "January 2037 CLO Notes."
The indenture governing the ADL CLO 3 Debt Securitization contains customary covenants and events of default as well as certain conditions pursuant to which additional loans can be acquired by ADL CLO 3. Through January 20, 2029, all principal collections received on the underlying collateral may be used by ADL CLO 3 to purchase new collateral, including additional collateral from us.
ADL CLO 5 Debt Securitization
The following table presents information on the ADL CLO 5 Debt Securitization as of September 30, 2026 (dollar amounts in millions):
Class Type Principal Amount
Outstanding 		Maturity Date Interest Rate
April 2038 Class A-1 CLO Notes(1) Senior Secured Floating Rate $ 210 April 20, 2038
SOFR+1.38%
April 2038 Class A-1A CLO Loans(1) Senior Secured Floating Rate 75 April 20, 2038
SOFR+1.38%
April 2038 Class A-2 CLO Notes(1) Senior Secured Floating Rate 15 April 20, 2038
SOFR+1.60%
April 2038 Class B CLO Notes(1) Senior Secured Floating Rate 50 April 20, 2038
SOFR+1.70%
Total April 2038 CLO Secured Debt 350
SOFR+1.44%
April 2038 CLO Subordinated Notes(2) Subordinated 149 April 20, 2038 None
Total April 2038 CLO Debt $ 499
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(1)The April 2038 Class A-1 CLO Notes, the April 2038 Class A-1A CLO Loans, the April 2038 Class A-2 CLO Notes and the April 2038 Class B CLO Notes are referred to collectively as the "April 2038 CLO Secured Debt" and are the secured obligations of ADL CLO 5 and are backed by a diversified portfolio of first lien senior secured loans contributed by us to ADL CLO 5.
(2)We retained all of the April 2038 CLO Subordinated Notes, as such, the April 2038 CLO Subordinated Notes are eliminated in consolidation. The April 2038 CLO Secured Debt and the April 2038 CLO Subordinated Notes are referred to collectively as the "April 2038 CLO Debt."
The documents governing the ADL CLO 5 Debt Securitization contain customary covenants and events of default as well as certain conditions pursuant to which additional loans can be acquired by ADL CLO 5. Through April 20, 2030, all principal collections received on the underlying collateral may be used by ADL CLO 5 to purchase new collateral, including additional collateral from us.
ADL CLO 8 Debt Securitization
The following table presents information on the ADL CLO 8 Debt Securitization as of September 30, 2026 (dollar amounts in millions):
Class Type Principal Amount
Outstanding 		Maturity Date Interest Rate
January 2039 Class A-1 CLO Notes(1) Senior Secured Floating Rate $ 356 January 20, 2039
SOFR+1.40%
January 2039 Class A-1A CLO Loans(1) Senior Secured Floating Rate 50 January 20, 2039
SOFR+1.40%
January 2039 Class A-2 CLO Notes(1) Senior Secured Floating Rate 28 January 20, 2039
SOFR+1.60%
January 2039 Class B CLO Notes(1) Senior Secured Floating Rate 42 January 20, 2039
SOFR+1.75%
January 2039 Class C CLO Notes(1) Senior Secured Floating Rate 56 January 20, 2039
SOFR+2.00%
Total January 2039 CLO Secured Debt 532
SOFR+1.50%
January 2039 CLO Subordinated Notes(2) Subordinated 164 January 20, 2039 None
Total January 2039 CLO Debt $ 696
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(1)The January 2039 Class A-1 CLO Notes, the January 2039 Class A-1A CLO Loans, the January 2039 Class A-2 CLO Notes, the January 2039 Class B CLO Notes and the January 2039 Class C CLO Notes are referred to collectively as the "January 2039 CLO Secured Debt" and are the secured obligations of ADL CLO 8 and are backed by a diversified portfolio of first lien senior secured loans contributed by us to ADL CLO 8.
(2)We retained all of the January 2039 CLO Subordinated Notes, as such, the January 2039 CLO Subordinated Notes are eliminated in consolidation. The January 2039 CLO Secured Debt and the January 2039 CLO Subordinated Notes are referred to collectively as the "January 2039 CLO Debt."
The documents governing the ADL CLO 8 Debt Securitization contain customary covenants and events of default as well as certain conditions pursuant to which additional loans can be acquired by ADL CLO 8. Through January 20, 2031, all principal collections received on the underlying collateral may be used by ADL CLO 8 to purchase new collateral, including additional collateral from us.
Unsecured Notes
We issued certain unsecured notes (we refer to each series of unsecured notes using the defined term set forth under the "Unsecured Notes" column of the table below and collectively refer 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 our 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 accrued and unpaid interest. Certain key terms related to the features of the Unsecured Notes as of September 30, 2026 are listed below.
(dollar amounts in millions)
Unsecured Notes 		Aggregate Principal Amount Issued Effective Stated Interest Rate(1) Original Issuance Date Maturity Date
March 2028 Notes $ 1,000 5.465 % November 21, 2024 March 15, 2028
September 2028 Notes $ 600 5.489 % June 9, 2025 September 9, 2028
January 2029 Notes $ 600 5.439 % September 15, 2025 January 15, 2029
August 2029 Notes $ 700 6.025 % June 5, 2024 August 15, 2029
February 2030 Notes $ 750 6.119 % October 2, 2024 February 15, 2030
September 2030 Notes $ 500 5.791 % June 9, 2025 September 9, 2030
January 2031 Notes $ 500 5.763 % September 15, 2025 January 15, 2031
April 2031 Notes $ 700 5.692 % January 29, 2026 April 15, 2031
March 2032 Notes $ 750 5.489 % January 21, 2025 March 21, 2032
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(1)The effective stated interest rates include the impact of interest rate swaps.
In connection with the issuances of the Unsecured Notes, we entered into registration rights agreements (each, a "Registration Rights Agreement") for the benefit of the initial purchasers of the Unsecured Notes. Pursuant to these Registration Rights Agreements, we are obligated to file one or more registration statements with the SEC with respect to an offer to exchange each series of Unsecured Notes for a new issue of debt securities registered under the Securities Act with terms substantially identical to such series of Unsecured Notes (except for provisions relating to transfer restrictions and payment of additional interest) and to use our commercially reasonable efforts to consummate such exchange offer on the earliest practicable date after the registration statement has become or been declared effective but in no event later than 365 days after the initial issuance of such series of Unsecured Notes. If we fail to satisfy our registration obligations under each Registration Rights Agreement, we will be required to pay additional interest to the holders of the applicable Unsecured Notes.
Pursuant to the terms of the Registration Rights Agreements, we filed registration statements with the SEC and completed exchange offers to exchange the unregistered notes of each series of Unsecured Notes for newly issued registered notes with substantially identical terms to such series of Unsecured Notes. The following exchange offers were completed during 2026:
Unsecured Notes Original Issuance Date Exchange Offer Commenced Exchange Offer Expired (1)
September 2028 Notes June 9, 2025 April 28, 2026 May 28, 2026
January 2029 Notes September 15, 2025 April 28, 2026 May 28, 2026
September 2030 Notes June 9, 2025 April 28, 2026 May 28, 2026
January 2031 Notes September 15, 2025 April 28, 2026 May 28, 2026
April 2031 Notes January 29, 2026 April 28, 2026 May 28, 2026
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(1)The related exchange was completed promptly following the expiration of the applicable exchange offer.
In connection with the Unsecured Notes issued by us, we have entered into interest rate swaps to more closely align the interest rates of such liabilities with our investment portfolio, which consists primarily of floating rate loans. We designated these interest rate swaps and the associated unsecured notes as qualifying fair value hedge accounting relationships. Under the interest rate swaps, we receive a fixed interest rate and pay a floating interest rate based on SOFR plus an applicable spread, as presented in the table below. Certain information related to our interest rate swaps as of September 30, 2026 is presented below.
(dollar amounts in millions)
Description 		Hedged Item Fund Receives Fund Pays Payment Frequency Maturity Date Notional Amount
Interest rate swap March 2028 Notes 5.700 %
SOFR +1.6485%
Monthly March 15, 2028 $ 1,000
Interest rate swap September 2028 Notes 5.450 %
SOFR +1.7465%
Monthly September 9, 2028 $ 600
Interest rate swap January 2029 Notes 4.850 %
SOFR +1.6220%
Monthly January 15, 2029 $ 600
Interest rate swap August 2029 Notes 6.350 %
SOFR +2.2080%
Monthly August 15, 2029 $ 700
Interest rate swap February 2030 Notes 5.600 %
SOFR +2.3020%
Monthly February 15, 2030 $ 750
Interest rate swap September 2030 Notes 5.800 %
SOFR +2.0490%
Monthly September 9, 2030 $ 500
Interest rate swap(1) January 2031 Notes 5.150 %
SOFR +1.9460%
Monthly January 15, 2031 $ 500
Interest rate swap April 2031 Notes 5.550 %
SOFR +1.8750%
Monthly April 15, 2031 $ 700
Interest rate swap March 2032 Notes 6.200 %
SOFR +1.8290%
Monthly March 21, 2032 $ 750
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(1)In connection with the issuance of the January 2031 Notes, we entered into a forward-starting interest rate swap with an effective date of July 15, 2026.
See Note 6 to our consolidated financial statements for the three and nine months ended September 30, 2026 for more information on our interest rate swaps.
As of September 30, 2026, we were in compliance in all material respects with the indenture and supplemental indentures governing the Unsecured Notes.
The Unsecured Notes are our 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 our existing and future unsecured indebtedness that is not expressly subordinated; effectively junior in right of payment to any of our secured indebtedness (including existing unsecured indebtedness that we later secure) 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 our subsidiaries, financing vehicles or similar facilities.
RECENT DEVELOPMENTS
Effective October 1, 2026, we issued and sold 1,304,528 Common Shares (consisting of 1,021,707 Class I shares, 215,848 Class S shares and 66,973 Class D shares at an offering price of $26.69 per share for each class of shares), and we received approximately $35 million as payment for such shares.
We received approximately $97 million of net proceeds relating to the issuance of Class I shares, Class S shares and Class D shares for subscriptions effective November 1, 2026. The purchase price per Class I share, Class S share and Class D share will equal our NAV per Class I share, Class S share and Class D share, respectively, as of the last calendar day of October 2026 (the "October NAV"), which is generally expected to be available within 20 business days after November 1, 2026. At that time, the number of Class I shares, Class S shares and Class D shares issued to each investor based on the October NAV and such investor's subscription amount will be determined and Class I shares, Class S shares and Class D shares, as applicable, will be credited to the investor's account as of the effective date of the share purchase, November 1, 2026.
As previously disclosed, we announced the declaration of regular monthly gross distributions for October, November and December 2026, in each case for each class of our Common Shares. On November 6, 2026, we announced the declaration of regular monthly gross distributions for January, February and March 2027, in each case for each class of its Common Shares. The following table presents the regular monthly gross distributions per share that were declared and payable:
Gross Distribution Per Share
Record Date Payment Date(1) Class I Class S Class D
October 30, 2026 November 20, 2026 $ 0.21430 $ 0.21430 $ 0.21430
November 30, 2026 December 24, 2026 $ 0.21430 $ 0.21430 $ 0.21430
December 31, 2026 January 25, 2027 $ 0.21430 $ 0.21430 $ 0.21430
January 29, 2027 February 23, 2027 $ 0.21430 $ 0.21430 $ 0.21430
February 26, 2027 March 25, 2027 $ 0.21430 $ 0.21430 $ 0.21430
March 31, 2027 April 23, 2027 $ 0.21430 $ 0.21430 $ 0.21430
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(1)The distributions for each class of our Common Shares will be paid on or about the payment dates above.
These distributions will be paid in cash or reinvested in our Common Shares for shareholders participating in our distribution reinvestment plan. The net distributions received by shareholders of each of the Class S shares and Class D shares will be equal to the gross distribution in the table above, less specific shareholder servicing and/or distribution fees applicable to such class of our Common Shares as of their respective record dates. Class I shares have no shareholder servicing and/or distribution fees.
CRITICAL ACCOUNTING ESTIMATES
The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. Changes in the economic environment, financial markets and any other parameters used in determining such estimates could cause actual results to differ. Our critical accounting estimates, including those relating to the valuation of our investment portfolio, are described below. The critical accounting estimates should be read in conjunction with our risk factors as disclosed in Part I, "Item 1A. Risk Factors" in our Annual Report. See Note 2 to our consolidated financial statements for the three and nine months ended September 30, 2026 for more information on our critical accounting policies.
Investments
Investment transactions are recorded on the trade date. Realized gains or losses are measured by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment using the specific identification method without regard to unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries. Unrealized gains or losses primarily reflect the change in investment values, including the reversal of previously recorded unrealized gains or losses when gains or losses are realized.
Pursuant to Rule 2a-5 under the Investment Company Act, our board of trustees has designated our investment adviser as our valuation designee (the "Valuation Designee") to perform the fair value determinations for investments held by us without readily available market quotations, subject to the oversight of our board of trustees. All investments are recorded at their fair value.
Investments for which market quotations are readily available are typically valued at such market quotations. In order to validate market quotations, the Valuation Designee looks at a number of factors to determine if the quotations are representative of fair value, including the source and nature of the quotations. Debt and equity securities that are not publicly traded or whose market prices are not readily available are valued monthly at fair value as determined in good faith by the Valuation Designee, subject to the oversight of our board of trustees, based on, among other things, the input of our independent third-party valuation providers ("IVPs") that have been engaged to support the valuation of such portfolio investments at least monthly, beginning as of the third quarter after origination (with certain de minimis exceptions) and under a valuation policy and a consistently applied valuation process. In addition, our independent registered public accounting firm obtains an understanding of, and performs select procedures relating to, our valuation process within the context of performing our financial statement audit.
Investments in our portfolio that do not have a readily available market are valued at fair value as determined in good faith by the Valuation Designee, as described herein. As part of the valuation process for investments that do not have readily available market prices, the Valuation Designee may take into account the following types of factors, if relevant, in determining the fair value of our investments: the enterprise value of a portfolio company (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 nature and realizable value of any collateral, the portfolio company's ability to make payments and its earnings and discounted cash flow, the markets in which the portfolio company does business, a comparison of the portfolio company's securities to any similar publicly traded securities, changes in the interest rate environment and the credit markets, which may affect the price at which similar investments would trade in their principal markets and other relevant factors. When an external event such as a purchase transaction, public offering or subsequent sale occurs, the Valuation Designee considers the pricing indicated by the external event to corroborate the valuation.
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 our investments may fluctuate from period to period. Additionally, the fair value of our 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 we 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 we were required to liquidate a portfolio investment in a forced or liquidation sale, we could realize significantly less than the value at which we have 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 Valuation Designee, subject to the oversight of our board of trustees, undertakes a multi-step valuation process each quarter, as described below:
•Our quarterly valuation process begins with a preliminary valuation being prepared by the investment professionals responsible for the portfolio investment in conjunction with our portfolio management and valuation team.
•Preliminary valuations are reviewed and discussed by the valuation committee of the Valuation Designee.
•When a portfolio investment is reviewed by an IVP:
◦Relevant information related to the portfolio investment is made available by the Valuation Designee to the IVP, who does not independently verify such information.
◦The IVP reviews and analyzes the information provided by the Valuation Designee, along with relevant market and economic data, and independently determines a range of values for the portfolio investment.
◦The IVP provides its analysis to the Valuation Designee to support the IVP's valuation methodology and calculations.
•The valuation committee of the Valuation Designee determines the fair value of each investment in our portfolio without a readily available market quotation in good faith based on, among other things, the input of the IVPs, where applicable.
•When a portfolio investment is reviewed by an IVP, a positive assurance opinion or independent valuation report is issued by the IVP that confirms the fair value determined by the Valuation Designee for the portfolio investment is within the range of values independently calculated by such IVP.
When the Valuation Designee determines our NAV as of the last day of a month that is not also the last day of a calendar quarter, the Valuation Designee updates the value of securities with reliable market quotations to the most recent market quotation. For securities without reliable market quotations, the Valuation Designee will generally value such assets at the most recent quarterly valuation unless the Valuation Designee determines that a significant observable change has occurred since the most recent quarter end with respect to the investment (which determination may be as a result of a material event at a portfolio company, material change in market spreads, secondary market transaction in the securities of an investment or otherwise). If the Valuation Designee determines such a change has occurred with respect to one or more investments, the Valuation Designee will determine whether to update the value for each relevant investment.
Fair Value of Financial Instruments
We follow ASC 825-10, Recognition 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 to more easily understand the effect of the company's choice to use fair value on its earnings. ASC 825-10 also requires companies to display the fair value of the selected assets and liabilities on the face of the balance sheet. We have 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.
We also follow 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 us 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, we have considered its principal market as the market in which we exit our portfolio investments with the greatest volume and level of activity. ASC 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 we have 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 our board of trustees in connection with their designation of our
investment adviser as our valuation designee and are consistent with the provisions of Rule 2a-5 under the Investment Company Act and ASC 820-10. Consistent with its valuation policy and procedures, the Valuation Designee evaluates the source of inputs, including any markets in which our investments are trading (or any markets in which securities with similar attributes are trading), in determining fair value. Because there may not be a readily available market value for some of the investments in our portfolio, the fair value of a portion of our investments may be determined using unobservable inputs.
Our portfolio investments classified as Level 3 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 we have 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 we do 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 the 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 us 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.
See Notes 2 and 8 to our consolidated financial statements for the three and nine months ended September 30, 2026 for more information on our valuation process.
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