ARES CAPITAL CORPARCC

ARES CAPITAL CORP Commitments Disclosure

10-KFiled Feb 4, 20263 min read
7. COMMITMENTS AND CONTINGENCIES

Investment Commitments

The Company has various commitments to fund investments in its portfolio as described below. As of December 31, 2025 and 2024, the Company had the following commitments to fund various revolving and delayed draw senior secured and subordinated loans, including commitments to fund which are at (or substantially at) the Company’s discretion:

 As of December 31,
 20252024
Total revolving loan commitments $2,734 $2,254 
Less: funded commitments(492)(529)
Less: unavailable revolving loan commitments due to borrowing base or other covenant restrictions(11)(1)
Total net unfunded revolving loan commitments2,231 1,724 
Total unfunded delayed draw loan commitments2,989 2,193 
Less: unavailable delayed draw loan commitments due to borrowing base or other covenant restrictions(30)(22)
Total net unfunded delayed draw loan commitments2,959 2,171 
Total net unfunded revolving and delayed draw loan commitments$5,190 $3,895 
    
The Company’s commitment to fund delayed draw loans is generally triggered upon the satisfaction of certain pre-negotiated terms and conditions. Generally, the most significant and uncertain term requires the borrower to satisfy a specific use of proceeds covenant. The use of proceeds covenant typically requires the borrower to use the additional loans for the specific purpose of a permitted acquisition or permitted investment, for example. In addition to the use of proceeds covenant, the borrower is generally required to satisfy additional negotiated covenants (including specified leverage levels).

Also included within the total revolving loan commitments as of December 31, 2025 were commitments to issue up to $439 in letters of credit through a financial intermediary on behalf of certain portfolio companies. As of December 31, 2025, the Company had $66 in letters of credit issued and outstanding under these commitments on behalf of the portfolio companies. For all these letters of credit issued and outstanding, the Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. Of these letters of credit, $63 expire in 2026 and $3 expire in 2027.
 
The Company also has commitments to invest in the SDLP for the Company’s portion of the SDLP’s commitments to fund delayed draw loans to certain portfolio companies of the SDLP. See Note 4 for more information.
 
As of December 31, 2025 and 2024, the Company was party to agreements to fund equity investment commitments as follows:
 As of December 31,
 20252024
Total equity commitments$209 $191 
Less: funded equity commitments(40)(88)
Total unfunded equity commitments169 103 
Less: equity commitments substantially at discretion of the Company(43)(43)
Total net unfunded equity commitments$126 $60 
 
In the ordinary course of business, the Company may sell certain of its investments to third-party purchasers. In particular, in connection with the sale of certain controlled portfolio company equity investments (as well as certain other sales) the Company has, and may continue to do so in the future, agreed to indemnify such purchasers for future liabilities arising from the investments and the related sale transaction. Such indemnification provisions have given rise to liabilities in the past and may do so in the future.

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

Want the next ARES CAPITAL CORP commitments disclosure the moment it drops?

Set a Sentinel and we'll alert you the moment ARES CAPITAL CORP's next filing hits EDGAR. No credit card, your email never gets sold.

Track for free

Historical Timeline

Fiscal YearFiled
2025Feb 4, 2026Showing above
2024Feb 5, 2025
2023Feb 7, 2024
2022Feb 7, 2023

About Commitments Disclosures

Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.

Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.

Other Available Disclosures

Income TaxesRevenueEarnings Per ShareFair ValueLeasesSegmentsDebtNew StandardsPay vs Performance