Fitch: Ares preferreds BBB-

Fitch Ratings said it expects to assign a BBB- rating to Ares Management, LP’s perpetual preferred issuance.

The preferred securities are expected to be subordinated to existing unsecured debt, but senior to common units, Fitch said.

The preferred units are expected to be perpetual in nature but may be redeemed five years after issuance, the agency said.

The proceeds will be used for general corporate purposes, including the company’s $275 million commitment related to Ares Capital Corp.’s acquisition of American Capital, Ltd., Fitch said.

Fitch also said it assigned a long-term issuer default rating of BBB+ to Ares Management.

This entity is the issuer of the preferred stock and is the holding company of Ares Management LLC and Ares Operating Group, which consists of Ares Holdings LP, Ares Domestic Holdings LP, Ares Offshore Holdings LP, Ares Investments LP and Ares Real Estate Holdings LP.

The outlook is stable.

The instrument is expected to be rated two notches lower than Ares’ long-term issuer default rating in accordance the agency’s criteria, Fitch said.

The preferred stock rating includes two notches for loss severity, reflecting its subordination and heightened risk of non-performance relative to other obligations, namely existing unsecured debt, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.