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Ares Capital marks down software loans amid AI-era risks, maintaining a cautious Hold rating.

Market News
27 Oct 2026, 09:47 WIB
Seeking Alpha
View Source
Bearish
Ares Capital marks down software loans amid AI-era risks, maintaining a cautious Hold rating.

Ares Capital has reduced the value of its loans to Cornerstone OnDemand to 64% of cost due to concerns over high leverage and competition in the AI-driven software sector. While most of Ares Capital's loan portfolio remains stable, this markdown highlights potential risks in software loans. Key indicators to watch include nonaccrual rates exceeding 3%, dividend cuts below $0.48, or core earnings dropping under $0.45 per share for two consecutive quarters. Investors are advised to hold a small position until after the October 27 earnings report to assess dividend sustainability and loan portfolio health.

Ares Capital Corporation (ARCC) shares trade at USD 18.51 on Pluang as of Oct 27, 2026 14:01 WIB, showing a slight 0.54% decline in one day. The stock carries a dividend yield of 10.3%, reflecting its income potential despite recent loan markdowns. Market participants on Pluang hold ARCC for an average of 129 days, indicating moderate-term investor interest.

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