Ares Strategic Income Fund Expands Credit Line to $4.1B as Redemption Pressure Continues

Ares Strategic Income Fund, or ASIF, expanded its senior secured revolving credit facility by $850 million to $4.1 billion last week, lowered its cost of funds, and extended the facility’s maturity to 2031 – then opened its second-quarter tender offer today as the nontraded business development company entered what is on track to be a second consecutive quarter of oversubscribed redemption requests.

The amended facility, led by JPMorgan Chase Bank as administrative agent, also eliminated the secured overnight financing rate credit spread adjustment, reducing the borrowing cost by 10 basis points per year. The facility includes 24 lenders and now carries an uncommitted accordion feature that could expand the total commitment to approximately $6.15 billion under certain circumstances, the company said.

Ares Capital Corporation (Nasdaq: ARCC), a publicly traded BDC managed by the same Ares Management subsidiary, announced a parallel facility renewal last week. ARCC increased its revolving credit commitment by approximately $170 million to approximately $5.5 billion, made the same SOFR adjustment, and extended its final maturity to May 2031 for substantially all of the facility.

“The successful extension of these facilities, and in particular a significant increase in new capital to the ASIF facility, underscores the depth of our relationships, the confidence that our banking partners have in Ares’ direct lending credit capabilities and our long-term differentiated performance,” said Scott Lem, chief financial officer of Ares Capital and ASIF.

ASIF opened its second quarter tender offer on May 20, the same week as the credit facility amendment. The fund prorated Q1 2026 redemption requests, accepting 43.1% of tendered shares and paying out $523.5 million in late March after investors submitted more than $1.2 billion in redemption requests against a 5% quarterly cap. April inflows of $51.9 million represented a slowdown from prior months, a dynamic the fund attributed to its decision to cap first-quarter repurchases.

The Q2 2026 tender window carries an additional forward-looking dimension. Certain Class I shareholders who originally purchased shares through a private placement under Regulation D are subject to restrictions on the percentage of their shares they can tender in any quarterly offer before the fourth quarter of 2026, the company said. Those restrictions lift at the start of Q4 2026, potentially opening a new pool of redemption demand.

The credit facility expansion and simultaneous tender activity reflect a pattern across the nontraded BDC sector. NAV BDCs returned $6.9 billion in Q1 2026 liquidity across the industry as proration hit sector-wide for the first time, prompting larger sponsors to expand leverage capacity while managing quarterly repurchase caps.

ASIF primarily invests in directly originated, senior secured, floating rate loans to U.S. companies. As of April 30, 2026, the fund had approximately $4.3 billion available for additional borrowings under its existing credit facilities, the company reported. Ares Management Corporation had more than $644 billion in assets under management as of March 31.

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