Ares BDC’s Redemption Requests Ease but Exceed 5% Cap Again
Ares Strategic Income Fund, known as ASIF, will repurchase 38.2% of the shares investors asked to redeem in its third-quarter tender offer, after shareholders tendered 13.1% of outstanding shares against the fund’s 5% quarterly cap.
Shareholders tendered 50,400,325 shares by the offer’s Sept. 18 expiration, measured against shares outstanding as of July 31. The nontraded business development company offered to buy up to 19,264,139 shares and will accept tenders on a pro rata basis, with priority for odd lots, at its Aug. 31 net asset value of $26.74 per share. At that NAV, the tendered shares represent roughly $1.35 billion in redemption requests, of which about $515 million will be paid.
It is the third consecutive quarter in which ASIF has prorated redemptions. In the first quarter, shareholders tendered 11.6% of outstanding shares and the fund fulfilled 43.1% of requests. Second-quarter demand rose to 14.4%, or 56,891,917 shares, and ASIF repurchased 34.7% of requested amounts. Third-quarter requests eased from that peak but still ran more than 2.5 times the cap.
The tender priced as ASIF’s NAV turned higher. NAV per share across Class I, S, and D shares rose to $26.74 as of Aug. 31 from $26.67 at July 31, after two consecutive monthly declines from $27.00 at the end of May. Aggregate NAV was approximately $10.4 billion, up from $10.3 billion at July 31 but below the $10.8 billion reported for May 31.
“August 2026 performance was largely characterized by durable income generation and modest unrealized gains across the portfolio, driven by a broader rebound in credit markets,” the fund said.
New capital continued to slow. ASIF sold 297,543 Class I shares in September for $8 million, down from 627,661 shares and $16.7 million in August.
As of Aug. 31, the fund held approximately $21.8 billion of investments at fair value across 810 portfolio companies. First lien loans made up 77.2% of the portfolio, and 92% of debt investments were floating rate. ASIF had approximately $11.9 billion of debt outstanding, for a debt-to-equity ratio of 1.15x, or 1.12x net of about $351 million in available cash, compared with 1.16x at July 31. The fund reported approximately $4.1 billion available for additional borrowing, following the $850 million upsizing of its credit facility in May.
ASIF declared monthly gross distributions of $0.2143 per share for September through December 2026, unchanged from prior months.
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