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Weak M&A activity limits Ares Capital's deal flow, with declining investment commitments and credit risks rising.

Market News
15 Sep 2026
Seeking Alpha
View Source
Neutral
Weak M&A activity limits Ares Capital's deal flow, with declining investment commitments and credit risks rising.

Ares Capital is experiencing weak merger and acquisition (M&A) activity, which is constraining its deal flow. Although there was a slight increase in transaction reviews in June, net investment commitments declined in the second quarter, and the backlog and pipeline have been trending lower for three consecutive quarters. Additionally, rising indicators of credit risk such as non-accruals, interest receivables, and portfolio-company leverage suggest the need for closer credit monitoring. Despite these challenges, Ares Capital trades near its book value and maintains a slight premium over other business development companies due to its scale and borrower relationships. Technical analysis indicates potential short-term upside, but resistance levels may limit gains.

Ares Capital trades at USD 19.83 on Pluang as of Sep 16, 2026 03:01 WIB, showing a modest 0.46% gain in one day. The stock's market cap stands at $14.22 billion, with a dividend yield of 9.7%. Despite challenges in deal flow, the price remains close to its 52-week high of $21.56, reflecting steady investor interest.

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