Ares Capital : August 2020 Debt Investor Presentation

Debt Investor Presentation

August 2020

Contact:

John Stilmar, Investor Relations [e-mail] (678) 538 - 1983

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Disclaimer

IMPORTANT NOTICE:

Statements included herein may constitute "forward-looking statements," which may relate to future events or the future performance or financial condition of Ares Capital Corporation ("ARCC"), its investment adviser Ares Capital Management LLC ("ACM"), a subsidiary of Ares Management Corporation ("Ares Management"), or of Ares Management. These statements are not guarantees of future results or financial condition and involve a number of risks and uncertainties. Actual results and conditions may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in the filings of ARCC and Ares Management with the Securities and Exchange Commission ("SEC"). These factors include, but are not limited to the effects of the COVID-19 global pandemic.

The information contained in this presentation is summary information that is intended to be considered in the context of the SEC filings of ARCC and Ares Management and other public announcements that ARCC or Ares Management may make, by press release or otherwise, from time to time. Neither ARCC nor Ares Management undertakes any duty or obligation to publicly update or revise the forward-looking statements or other information contained in this presentation. These materials contain information about ARCC, ACM and Ares Management, and certain of their respective personnel and affiliates, information about their respective historical performance and general information about the market. You should not view information related to the past performance of ARCC, ACM or Ares Management or information about the market, as indicative of future results, the achievement of which cannot be assured.

Nothing in these materials should be construed as a recommendation to invest in any securities that may be issued by ARCC or Ares Management or as legal, accounting or tax advice. None of ARCC, ACM, Ares Management or any affiliate of ARCC, ACM or Ares Management makes any representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein and nothing contained herein shall be relied upon as a promise or representation whether as to the past or future performance. Certain information set forth herein includes estimates and projections and involves significant elements of subjective judgment and analysis. Further, such information, unless otherwise stated, is before giving effect to management and incentive fees and deductions for taxes. No representations are made as to the accuracy of such estimates or projections or that all assumptions relating to such estimates or projections have been considered or stated or that such estimates or projections will be realized.

These materials may contain confidential and proprietary information, and their distribution or the divulgence of any of their contents to any person, other than the person to whom they were originally delivered and such person's advisers, without the prior consent of ARCC, ACM or Ares Management, as applicable, is prohibited. You are advised that United States securities laws restrict any person who has material, non-public information about a company from purchasing or selling securities of such company (and options, warrants and rights relating thereto) and from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. You agree not to purchase or sell such securities in violation of any such laws.

These materials are not intended as an offer to sell, or the solicitation of an offer to purchase, any security, the offer and/or sale of which can only be made by definitive offering documentation. Any offer or solicitation with respect to any securities that may be issued by ARCC, Ares Management or any of their affiliates will be made only by means of definitive offering memoranda or an effective registration statement, which will be provided to prospective investors and will contain material information that is not set forth herein, including risk factors relating to any such investment.

S&P Disclaimer Notice

This may contain information obtained from third parties, including ratings from credit ratings agencies such as Standard & Poor's. Reproduction and distribution of third party content in any form is prohibited except with the prior written permission of the related third party. Third party content providers do not guarantee the accuracy, completeness, timeliness or availability of any information, including ratings, and are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, or for the results obtained from the use of such content. THIRD PARTY CONTENT PROVIDERS GIVE NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. THIRD PARTY CONTENT PROVIDERS SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, EXEMPLARY, COMPENSATORY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, COSTS, EXPENSES, LEGAL FEES, OR LOSSES (INCLUDING LOST INCOME OR PROFITS AND OPPORTUNITY COSTS OR LOSSES CAUSED BY NEGLIGENCE) IN CONNECTION WITH ANY USE OF THEIR CONTENT, INCLUDING RATINGS. Credit ratings are statements of opinions and are not statements of fact or recommendations to purchase, hold or sell securities. They do not address the suitability of securities or the suitability of securities for investment purposes, and should not be relied on as investment advice.

Bank of America Disclaimer Notice

This may contain information sourced from Bank of America, used with permission. BANK OF AMERICA IS LICENSING THE ICE BOFA INDICES AND RELATED DATA "AS IS," MAKES NO WARRANTIES REGARDING SAME, DOES NOT GUARANTEE THE SUITABILITY, QUALITY, ACCURACY, TIMELINESS, AND/OR COMPLETENESS OF THE ICE BOFA INDICES OR ANY DATA INCLUDED IN, RELATED TO, OR DERIVED THEREFROM, ASSUMES NO LIABILITY IN CONNECTION WITH THEIR USE, AND DOES NOT SPONSOR, ENDORSE, OR RECOMMEND ARES MANAGEMENT, OR ANY OF ITS PRODUCTS OR SERVICES.

REF: DLUS-00780

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ARCC is a Leader in Middle Market Lending

ARCC is one of the largest direct lenders with the scale and capabilities necessary to successfully invest across a variety of market environments, including a downcycle

Scale, Team &

Capabilities

• Externally managed by Ares Management
• Large U.S. direct lender with $13.8 billion portfolio(1)
• Highly experienced and tenured team with 24 years average investing experience(2)
• Sizeable portfolio management team with extensive restructuring capabilities that seek to enhance investment performance
• Disciplined underwriting process supports highly selective approach
• Incumbency creates differentiated investment opportunities

Attractive Portfolio &

Robust Investment Track

Record

• Diversified, high quality, senior-oriented portfolio
• Less cyclically positioned investment portfolio focused on upper middle market
• Invested approximately $60 billion(3) with realized asset level gross IRR of 14%(4) since IPO
• 1.1% average annual net realized gains in excess of losses since IPO(5)
• 83% of portfolio companies are controlled by PE sponsors that we believe have significant resources to support these businesses(6)

	• Deep sources of liquidity and committed capital with $4.2 billion of available liquidity*
Strong Balance Sheet &	•	Fortified balance sheet with significant unsecured, long dated financing and low leverage
Liquidity	•	Leverage long-term capital to target attractive risk-adjusted returns
	• Well-laddered debt maturities with no maturities until 2022
Potential for Long Term	• Track record of generating strong returns to shareholders
•	Compelling historical investment and credit performance during periods of volatility
Shareholder Value
•	50% higher returns than the S&P 500 since IPO in 2004(7)

As of June 30, 2020, unless otherwise stated. Past performance is not indicative of future results. Please see notes at the end of this presentation for additional important information.
*Proforma for issuance of $750 million aggregate principal amount of 3.875% notes and associated repayments of outstanding revolving credit facilities with net
proceeds in July 2020.
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Our Approach to Today's Environment

How we invest and manage our portfolio in the current environment

Key Differentiators in the	•	Significant Scale and Dry Powder	•	Flexible Capital	•	Large and Experienced Restructuring Team
COVID-19 Environment	•	Defensive Investment Posture	•	Use Lead Position to Drive Outcomes •	Information Advantages Across Global Platform

Remain Selective and

Prudent

Supporting Our Existing

Borrowers

Identify Opportunities to

Reprice / Reduce Risk

Collaborate Across the

Ares Platform

• We fundamentally believe that credit selection, sector avoidance and maintaining lead positions are paramount to help mitigate risk and construct investment portfolios that can withstand market shocks
• Leverage experience and approach through prior cycles to drive long-term outperformance
• Remain patient, constructive and prudent
• Incumbency allows for greater visibility into a company's earnings profile and transparency as we re-underwrite risks
• Re-underwriteinvestments to assess risk of further deterioration
• Address liquidity needs/ confirm capitalization
• Monitor revolver and DDTL drawings
• Identify areas to strengthen documentation and adjust pricing where possible
• Ask financial sponsors to support their investments with additional equity capital for liquidity if needed
• If prudent, provide additional capital to protect investment
• Be flexible -- different situations require different solutions
• Engage across the entire Ares platform to enhance our view on relative value across capital structures
• Share intellectual capital across strategies to inform market views and generate deep business insights
• Utilize cross platform resources for industry knowledge and operational expertise
• Overcommunicate and remain collaborative

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