v3.25.2
DEBT
 6 Months Ended
Jun. 30, 2025
Debt Disclosure [Abstract]  
DEBT
5. DEBT

In accordance with the Investment Company Act, the Company is allowed to borrow amounts such that its asset coverage, calculated pursuant to the Investment Company Act, is at least 150% after such borrowing. The Company’s asset coverage requirement applicable to senior securities was reduced from 200% to 150% effective June 21, 2019. As of June 30, 2025, the aggregate principal amount outstanding of the senior securities issued by the Company was $14,114 and the Company’s asset coverage was 199%.

The Company’s outstanding debt as of June 30, 2025 and December 31, 2024 was as follows:

 As of 
June 30, 2025December 31, 2024
Total Aggregate Principal Amount Committed/ Outstanding (1)Principal Amount OutstandingCarrying ValueTotal Aggregate Principal Amount Committed/ Outstanding (1)Principal Amount OutstandingCarrying Value
Revolving Credit Facility$5,393 (2)$1,144 $1,144 $4,513 (2)$1,113 $1,113 
Revolving Funding Facility2,150 750 750 2,150 1,065 1,065 
SMBC Funding Facility800 (3)400 400 800 (3)502 502 
BNP Funding Facility1,265 450 450 1,265 889 889 
April 2036 CLO Notes(4)476 476 473 (5)476 476 473 (5)
October 2036 CLO Secured Loans(4)544 544 541 (5)544 544 541 (5)
March 2025 Notes— — — (5)600 600 600 (5)
July 2025 Notes1,250 1,250 1,250 (5)1,250 1,250 1,252 (5)
January 2026 Notes1,150 1,150 1,149 (5)1,150 1,150 1,148 (5)
July 2026 Notes1,000 1,000 997 (5)1,000 1,000 996 (5)
January 2027 Notes900 900 901 (5)(6)900 900 891 (5)(6)
June 2027 Notes500 500 497 (5)500 500 497 (5)
June 2028 Notes1,250 1,250 1,248 (5)1,250 1,250 1,248 (5)
March 2029 Notes1,000 1,000 999 (5)(6)1,000 1,000 985 (5)(6)
July 2029 Notes850 850 862 (5)(6)850 850 835 (5)(6)
September 2030 Notes750 750 742 (5)(6)— — — 
November 2031 Notes700 700 693 (5)700 700 692 (5)
March 2032 Notes1,000 1,000 1,013 (5)(6)— — — 
Total$20,978 $14,114 $14,109 $18,948 $13,789 $13,727 
________________________________________

(1)Represents the total aggregate amount committed or outstanding, as applicable, under such instrument. Borrowings under the committed Revolving Credit Facility, Revolving Funding Facility, SMBC Funding Facility and BNP Funding Facility (each as defined below) are subject to borrowing base and other restrictions.

(2)Provides for an “accordion” feature that allows the Company, under certain circumstances, to increase the size of the Revolving Credit Facility to a maximum of approximately $7,925 and $6,732 as of June 30, 2025 and December 31, 2024, respectively.
(3)Provides for an “accordion” feature that allows ACJB (as defined below), under certain circumstances, to increase the size of the SMBC Funding Facility to a maximum of $1,000.

(4)Excludes the April 2036 CLO Subordinated Notes and the October 2036 CLO Subordinated Notes (each as defined below), which were retained by the Company and, as such, eliminated in consolidation.

(5)Represents the aggregate principal amount outstanding, less unamortized debt issuance costs and the net unaccreted/amortized discount or premium recorded upon issuance. In March 2025, the Company repaid in full the March 2025 Notes (as defined below) upon their maturity. See Note 15 for a subsequent event relating to the July 2025 Notes (as defined below).

(6)The carrying value of the January 2027 Notes, the March 2029 Notes, the July 2029 Notes, the September 2030 Notes and the March 2032 Notes (each as defined below) as of June 30, 2025 includes adjustments as a result of effective hedge accounting relationships. The carrying value of the January 2027 Notes, the March 2029 Notes and the July 2029 Notes as of December 31, 2024 includes adjustments as a result of effective hedge accounting relationships. See Note 6 for more information on the interest rate swaps related to these unsecured notes issuances.

 The weighted average stated interest rate and weighted average maturity, both on aggregate principal amount outstanding, of all the Company’s outstanding debt as of June 30, 2025 were 4.9% and 3.8 years, respectively, and as of December 31, 2024 were 4.9% and 3.8 years, respectively. The weighted average stated interest rate of all the Company’s outstanding debt as of June 30, 2025 and December 31, 2024 includes the impact of interest rate swaps. See Note 6 for more information on the interest rate swaps.
 
Revolving Credit Facility
 
The Company is party to a senior secured revolving credit facility (as amended and restated, the “Revolving Credit Facility”) that allows the Company to borrow up to $5,393 at any one time outstanding. The Revolving Credit Facility consists of an approximately $4,249 revolving tranche and an approximately $1,144 term loan tranche. As of June 30, 2025, the end of the revolving periods and the stated maturity dates of the various revolving and term loan tranches of the Revolving Credit Facility were as follows:

Total Aggregate Principal Amount Committed/ OutstandingEnd of Revolving PeriodMaturity Date
Revolving tranche$3,958 April 15, 2029April 15, 2030
246March 31, 2026March 31, 2027
45April 12, 2028April 12, 2029
4,249 
Term loan tranche1,035 April 15, 2030
45April 12, 2029
40April 19, 2028
24March 31, 2027
1,144 
$5,393 

The Revolving Credit Facility also provides for an “accordion” feature that allows the Company, under certain circumstances, to increase the overall size of the Revolving Credit Facility to a maximum of approximately $7,925. The Revolving Credit Facility generally requires payments of interest at the end of each SOFR interest period, but no less frequently than quarterly, on SOFR based loans, and monthly payments of interest on other loans. Subsequent to the end of the respective revolving periods and prior to the respective stated maturity dates, the Company is required to repay the relevant outstanding principal amounts under both the term loan tranche and revolving tranche on a monthly basis in an amount equal to 1/12th of the outstanding principal amount at the end of the respective revolving periods. See Note 15 for a subsequent event relating to the Revolving Credit Facility.

Under the Revolving Credit Facility, the Company is required to comply with various covenants, reporting requirements and other customary requirements for similar revolving credit facilities, including, without limitation, covenants related to: (a) limitations on the incurrence of additional indebtedness and liens, (b) limitations on certain investments, (c) limitations on certain restricted payments, (d) maintaining a certain minimum stockholders’ equity, (e) maintaining a ratio of
total assets (less total liabilities not representing indebtedness) to total indebtedness of the Company and its consolidated subsidiaries (subject to certain exceptions) of not less than 1.5:1.0, (f) limitations on pledging certain unencumbered assets, and (g) limitations on the creation or existence of agreements that prohibit liens on certain properties of the Company and certain of its subsidiaries. These covenants are subject to important limitations and exceptions that are described in the documents governing the Revolving Credit Facility. Amounts available to borrow under the Revolving Credit Facility (and the incurrence of certain other permitted debt) are also subject to compliance with a borrowing base that applies different advance rates to different types of assets (based on their value as determined pursuant to the Revolving Credit Facility) that are pledged as collateral. As of June 30, 2025, the Company was in compliance in all material respects with the terms of the Revolving Credit Facility.
 
As of June 30, 2025 and December 31, 2024, there was $1,144 and $1,113 outstanding, respectively, under the Revolving Credit Facility. The Revolving Credit Facility also provides for a sub-limit for the issuance of letters of credit for up to an aggregate amount of $400. As of June 30, 2025 and December 31, 2024, the Company had $53 and $52, respectively, in letters of credit issued through the Revolving Credit Facility. The amount available for borrowing under the Revolving Credit Facility is reduced by any letters of credit and swingline loans issued. As of June 30, 2025, there was $4,196, available for borrowing (net of letters of credit and swingline loans issued) under the Revolving Credit Facility, subject to borrowing base restrictions.
 
Since April 15, 2025, subject to certain exceptions, the interest rate charged on the Revolving Credit Facility is based on SOFR plus a credit spread adjustment of 0.10% (or an alternate rate of interest for certain loans, commitments and/or other extensions of credit denominated in certain approved foreign currencies plus a spread adjustment, if applicable) plus an applicable spread of either 1.525%, 1.650% or 1.775% or an “alternate base rate” (as defined in the documents governing the Revolving Credit Facility) plus an applicable spread of either 0.525%, 0.650% or 0.775%, in each case, determined monthly based on the total amount of the borrowing base relative to the sum of (i) the greater of (a) the aggregate amount of revolving credit exposure and term loans outstanding under the Revolving Credit Facility and (b) 85% of the total commitments of the Revolving Credit Facility (or, if higher, the total revolving exposure) plus (ii) other debt, if any, secured by the same collateral as the Revolving Credit Facility. Prior to April 15, 2025, the interest rate charged on the Revolving Credit Facility was based on SOFR plus a credit spread adjustment of 0.10% (or an alternate rate of interest for certain loans, commitments and/or other extensions of credit denominated in certain approved foreign currencies plus a spread adjustment, if applicable) plus an applicable spread of either 1.750% or 1.875% or an “alternate base rate” plus an applicable spread of either 0.750% or 0.875%, in each case, determined monthly based on the total amount of the borrowing base relative to the sum of (i) the greater of (a) the aggregate amount of revolving exposure and term loans outstanding under the Revolving Credit Facility and (b) 85% of the total commitments of the Revolving Credit Facility (or, if higher, the total revolving credit exposure) plus (ii) other debt, if any, secured by the same collateral as the Revolving Credit Facility. The Revolving Credit Facility allows for borrowings to be made using one, three or six month SOFR. As of June 30, 2025, the one, three and six month SOFR was 4.32%, 4.29% and 4.15%, respectively. As of June 30, 2025, the applicable spread in effect was 1.65%. In addition to the stated interest expense on the Revolving Credit Facility, subject to certain exceptions, the Company is required to pay a commitment fee of 0.325% per annum on any unused portion of the Revolving Credit Facility. The Company is also required to pay a letter of credit fee of either 1.775%, 1.900% or 2.025% per annum on letters of credit issued, determined monthly based on the total amount of the borrowing base relative to the total commitments of the Revolving Credit Facility and other debt, if any, secured by the same collateral as the Revolving Credit Facility.

The Revolving Credit Facility is secured by certain assets in the Company’s portfolio and excludes investments held by Ares Capital CP (as defined below) under the Revolving Funding Facility, those held by ACJB under the SMBC Funding Facility, those held by AFB (as defined below) under the BNP Funding Facility and those held by ADL CLO 1 (as defined below) and ADL CLO 4 (as defined below) and certain other investments.

For the three and six months ended June 30, 2025 and 2024, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the Revolving Credit Facility were as follows:
 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2025202420252024
Stated interest expense$18 $23 $35 $45 
Credit facility fees4 3 7 7 
Amortization of debt issuance costs2 3 4 5 
Total interest and credit facility fees expense$24 $29 $46 $57 
Cash paid for interest expense$22 $23 $43 $61 
Average stated interest rate6.01 %7.34 %6.10 %7.31 %
Average outstanding balance$1,183 $1,242 $1,151 $1,220 
 
Letter of Credit Facility

The Company and Deutsche Bank AG New York Branch (the “DB Issuer”) are party to an uncommitted continuing agreement (the “Letter of Credit Facility”), which allows the DB Issuer to issue letters of credit or demand guarantees, at the request of the Company, on behalf of certain portfolio companies. The Company is required to make payments to the DB Issuer if the portfolio companies were to default on their related payment obligations. The Letter of Credit Facility is secured on a pari passu basis with the Revolving Credit Facility and pursuant to substantially the same collateral as the Revolving Credit Facility. As of June 30, 2025 and December 31, 2024, the DB Issuer had $211 and $140, respectively, in letters of credit issued under the Letter of Credit Facility.

Revolving Funding Facility
 
The Company and the Company’s consolidated subsidiary, Ares Capital CP Funding LLC (“Ares Capital CP”), are party to a revolving funding facility (as amended, the “Revolving Funding Facility”), that allows Ares Capital CP to borrow up to $2,150 at any one time outstanding. The Revolving Funding Facility is secured by all of the assets held by, and the membership interest in, Ares Capital CP. The end of the reinvestment period and the stated maturity date for the Revolving Funding Facility are October 8, 2027 and October 8, 2029, respectively. See Note 15 for a subsequent event relating to the Revolving Funding Facility.

Amounts available to borrow under the Revolving Funding Facility are subject to a borrowing base that applies different advance rates to different types of assets held by Ares Capital CP. Ares Capital CP is also subject to limitations with respect to the loans securing the Revolving Funding Facility, including restrictions on sector concentrations, loan size, payment frequency and status, collateral interests and loans with fixed rates, as well as restrictions on portfolio company leverage, all of which may also affect the borrowing base and therefore amounts available to borrow. The Company and Ares Capital CP are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. These covenants are subject to important limitations and exceptions that are described in the documents governing the Revolving Funding Facility. As of June 30, 2025, the Company and Ares Capital CP were in compliance in all material respects with the terms of the Revolving Funding Facility.
 
As of June 30, 2025 and December 31, 2024, there was $750 and $1,065 outstanding, respectively, under the Revolving Funding Facility. Since October 8, 2024, the interest rate charged on the Revolving Funding Facility is based on SOFR or a “base rate” (as defined in the documents governing the Revolving Funding Facility) plus an applicable spread of 2.00% per annum. Prior to October 8, 2024, the interest rate charged on the Revolving Funding Facility was based on SOFR plus a credit spread adjustment of 0.10% or a “base rate” plus an applicable spread of 1.90% per annum. Ares Capital CP is also required to pay a commitment fee of between 0.50% and 1.25% per annum depending on the size of the unused portion of the Revolving Funding Facility. See Note 15 for a subsequent event relating to the Revolving Funding Facility.
  
For the three and six months ended June 30, 2025 and 2024, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the Revolving Funding Facility were as follows:
 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2025202420252024
Stated interest expense$14 $14 $30 $24 
Credit facility fees2 2 4 4 
Amortization of debt issuance costs2 1 3 2 
Total interest and credit facility fees expense$18 $17 $37 $30 
Cash paid for interest expense$18 $13 $35 $26 
Average stated interest rate6.31 %7.40 %6.32 %7.39 %
Average outstanding balance$921 $747 $954 $645 

SMBC Funding Facility
 
The Company and the Company’s consolidated subsidiary, Ares Capital JB Funding LLC (“ACJB”), are party to a revolving funding facility (as amended, the “SMBC Funding Facility”), with ACJB, as the borrower, and Sumitomo Mitsui Banking Corporation, as the administrative agent and collateral agent, that allows ACJB to borrow up to $800 at any one time outstanding. The SMBC Funding Facility also provides for an “accordion” feature that allows ACJB, under certain circumstances, to increase the overall size of the SMBC Funding Facility to $1,000. The SMBC Funding Facility is secured by all of the assets held by ACJB. The end of the reinvestment period and the stated maturity date for the SMBC Funding Facility are December 6, 2027 and December 6, 2029, respectively. The reinvestment period and the stated maturity date are both subject to two one-year extensions by mutual agreement. See Note 15 for a subsequent event relating to the SMBC Funding Facility.
 
Amounts available to borrow under the SMBC Funding Facility are subject to a borrowing base that applies an advance rate to assets held by ACJB. ACJB is also subject to limitations with respect to the loans securing the SMBC Funding Facility, including restrictions on sector concentrations, loan size, payment frequency and status, collateral interests and loans with fixed rates, as well as restrictions on portfolio company leverage, all of which may also affect the borrowing base and therefore amounts available to borrow. The Company and ACJB are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. These covenants are subject to important limitations and exceptions that are described in the documents governing the SMBC Funding Facility. As of June 30, 2025, the Company and ACJB were in compliance in all material respects with the terms of the SMBC Funding Facility.
 
As of June 30, 2025 and December 31, 2024, there was $400 and $502 outstanding, respectively, under the SMBC Funding Facility. Since December 6, 2024, the interest rate charged on the SMBC Funding Facility is based on an applicable spread of either (i) 2.00% over SOFR or (ii) 1.00% over a “base rate” (as defined in the documents governing the SMBC Funding Facility), in each case, determined monthly based on the amount of the average borrowings outstanding under the SMBC Funding Facility. From March 28, 2024 to December 5, 2024, the interest rate charged on the SMBC Funding Facility was based on an applicable spread of either (i) 2.50% over SOFR or (ii) 1.50% over a “base rate”, in each case, determined monthly based on the amount of the average borrowings outstanding under the SMBC Funding Facility. Prior to March 28, 2024, the interest rate charged on the SMBC Funding Facility was based on an applicable spread of either (i) 1.75% or 2.00% over one month SOFR plus a credit spread adjustment of 0.10% or (ii) 0.75% or 1.00% over a “base rate”, in each case, determined monthly based on the amount of the average borrowings outstanding under the SMBC Funding Facility. ACJB is required to pay a commitment fee of between 0.50% and 1.00% per annum depending on the size of the unused portion of the SMBC Funding Facility. See Note 15 for a subsequent event relating to the SMBC Funding Facility.
 
For the three and six months ended June 30, 2025 and 2024, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the SMBC Funding Facility were as follows:
 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2025202420252024
Stated interest expense$7 $7 $14 $12 
Credit facility fees1 1 1 2 
Amortization of debt issuance costs— — 1 1 
Total interest and credit facility fees expense$8 $8 $16 $15 
Cash paid for interest expense$8 $6 $15 $12 
Average stated interest rate6.32 %7.95 %6.32 %7.66 %
Average outstanding balance$449 $346 $432 $316 
    
BNP Funding Facility
 
The Company and the Company’s consolidated subsidiary, ARCC FB Funding LLC (“AFB”), are party to a revolving funding facility (as amended, the “BNP Funding Facility”) with AFB, as the borrower, and BNP Paribas, as the administrative agent and lender, that allows AFB to borrow up to $1,265 at any one time outstanding. The BNP Funding Facility is secured by all of the assets held by AFB. The end of the reinvestment period and the stated maturity date for the BNP Funding Facility are March 20, 2028 and March 20, 2030, respectively.
 
Amounts available to borrow under the BNP Funding Facility are subject to a borrowing base that applies an advance rate to assets held by AFB. AFB is also subject to limitations with respect to the loans securing the BNP Funding Facility, including restrictions on sector concentrations, loan size, payment frequency and status, collateral interests and loans with fixed rates, as well as restrictions on portfolio company leverage, all of which may also affect the borrowing base and therefore amounts available to borrow. The Company and AFB are also required to comply with various covenants, reporting requirements and other customary requirements for similar facilities. These covenants are subject to important limitations and exceptions that are described in the documents governing the BNP Funding Facility. As of June 30, 2025, the Company and AFB were in compliance in all material respects with the terms of the BNP Funding Facility.
 
As of June 30, 2025 and December 31, 2024, there was $450 and $889, respectively, outstanding under the BNP Funding Facility. Since March 20, 2025, the interest rate charged on the BNP Funding Facility is based on an applicable SOFR or a “base rate” (as defined in the documents governing the BNP Funding Facility) plus a margin of (i) 1.90% during the reinvestment period and (ii) 2.40% following the reinvestment period. From April 20, 2023 to March 19, 2025, the range of interest rate charged on the BNP Funding Facility was based on an applicable SOFR or a “base rate” plus a margin of between 2.10% and 2.80% during the reinvestment period.

For the three and six months ended June 30, 2025 and 2024, the components of interest and credit facility fees expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the BNP Funding Facility were as follows:

For the Three Months Ended June 30,For the Six Months Ended June 30,
 2025202420252024
Stated interest expense$11 $10 $22 $23 
Credit facility fees1 — 1 — 
Amortization of debt issuance costs— — 1 — 
Total interest and credit facility fees expense$12 $10 $24 $23 
Cash paid for interest expense$13 $11 $25 $23 
Average stated interest rate6.20 %7.93 %6.31 %8.03 %
Average outstanding balance$664 $537 $687 $555 

Debt Securitizations

ADL CLO 1 Debt Securitization

In May 2024, the Company, through its wholly owned, consolidated subsidiary, Ares Direct Lending CLO 1 LLC (“ADL CLO 1”), completed a $702 term debt securitization (the “ADL CLO 1 Debt Securitization”). The ADL CLO 1 Debt Securitization is also known as a collateralized loan obligation and is an on-balance sheet financing incurred by the Company,
which is consolidated by the Company for financial reporting purposes and subject to its overall asset coverage requirement. The notes offered in the ADL CLO 1 Debt Securitization that mature on April 25, 2036 (collectively, the “April 2036 CLO Notes”) were issued by ADL CLO 1 pursuant to the indenture governing the April 2036 CLO Notes (the “April 2036 CLO Indenture”) and include (i) $406 of Class A Senior Notes (the “April 2036 Class A CLO Notes”); (ii) $70 of Class B Senior Notes (the “April 2036 Class B CLO Notes” and, together with the April 2036 Class A CLO Notes, the “April 2036 CLO Secured Notes”); and (iii) approximately $226 of subordinated notes (the “April 2036 CLO Subordinated Notes”). The Company retained all of the April 2036 CLO Subordinated Notes, as such, the April 2036 CLO Subordinated Notes are eliminated in consolidation. The following table presents information on the April 2036 CLO Notes as of June 30, 2025:

ClassTypePrincipal OutstandingMaturity DateInterest Rate
April 2036 Class A CLO NotesSenior Secured Floating Rate$406 April 25, 2036
SOFR+1.80%
April 2036 Class B CLO NotesSenior Secured Floating Rate70 April 25, 2036
SOFR+2.20%
Total April 2036 CLO Secured Notes476 
April 2036 CLO Subordinated NotesSubordinated226 April 25, 2036None
Total April 2036 CLO Notes$702 

The April 2036 CLO Secured Notes are the secured obligations of ADL CLO 1 and are backed by a diversified portfolio of first lien senior secured loans contributed by the Company to ADL CLO 1 pursuant to the terms of a contribution agreement. The April 2036 CLO Indenture contains certain conditions pursuant to which additional loans can be acquired by ADL CLO 1, in accordance with rating agency criteria or as otherwise agreed with certain institutional investors who purchased the April 2036 CLO Secured Notes. Through April 25, 2028, all principal collections received on the underlying collateral may be used by ADL CLO 1 to purchase new collateral under the direction of the Company’s investment adviser in its capacity as asset manager to ADL CLO 1 under an asset management agreement and in accordance with the Company’s investment strategy, including additional collateral that may be purchased from the Company, pursuant to the terms of a master purchase and sale agreement between the Company as seller and ADL CLO 1 as buyer.

The April 2036 CLO Indenture includes customary covenants and events of default. The Company’s investment adviser serves as asset manager to ADL CLO 1 under an asset management agreement and is entitled to receive certain management fees for providing these services under the agreement. The Company’s investment adviser has agreed to waive any management fees from ADL CLO 1.

ADL CLO 4 Debt Securitization

In November 2024, the Company, through its wholly owned, consolidated subsidiary, Ares Direct Lending CLO 4 LLC (“ADL CLO 4”), completed a $544 term debt securitization (the “ADL CLO 4 Debt Securitization”). The ADL CLO 4 Debt Securitization is also known as a collateralized loan obligation and is an on-balance sheet financing incurred by the Company, which is consolidated by the Company for financial reporting purposes and subject to its overall asset coverage requirement. The loans incurred by ADL CLO 4 in the ADL CLO 4 Debt Securitization that mature on October 24, 2036 (collectively, the “October 2036 CLO Secured Loans”) were issued by ADL CLO 4 pursuant to the indenture governing the October 2036 CLO Secured Loans (the “October 2036 CLO Indenture”) and include (i) $464 of Class A Senior Loans (the “October 2036 Class A CLO Loans”), and (ii) $80 of Class B Senior Loans (the “October 2036 Class B CLO Loans”). In addition, in connection with the ADL CLO 4 Debt Securitization, ADL CLO 4 issued approximately $260 of subordinated notes (the “October 2036 CLO Subordinated Notes”). The Company retained all of the October 2036 CLO Subordinated Notes, as such, the October 2036 CLO Subordinated Notes are eliminated in consolidation. The October 2036 CLO Secured Loans may be converted by the lender into notes issued by ADL CLO 4 and bearing the same economic terms, subject to certain conditions under the documents governing the October 2036 CLO Secured Loans and the indenture governing such notes (the “October 2036 CLO Indenture”). The following table presents information on the October 2036 CLO Secured Loans as of June 30, 2025:

ClassTypePrincipal OutstandingMaturity DateInterest Rate
October 2036 Class A CLO Loans
Senior Secured Floating Rate$464 October 24, 2036
SOFR+1.54%
October 2036 Class B CLO Loans
Senior Secured Floating Rate80 October 24, 2036
SOFR+1.83%
Total October 2036 CLO Secured Loans$544 
The October 2036 CLO Secured Loans are the secured obligations of ADL CLO 4 and are backed by a diversified portfolio of first lien senior secured loans contributed by the Company to ADL CLO 4 pursuant to the terms of a contribution agreement. The documents governing the October 2036 CLO Secured Loans contain certain conditions pursuant to which additional loans can be acquired by ADL CLO 4, in accordance with rating agency criteria or as otherwise agreed with lenders who extended the October 2036 CLO Secured Loans. Through October 24, 2028, all principal collections received on the underlying collateral may be used by ADL CLO 4 to purchase new collateral under the direction of the Company’s investment adviser in its capacity as asset manager to ADL CLO 4 under an asset management agreement and in accordance with the Company’s investment strategy, including additional collateral that may be purchased from the Company, pursuant to the terms of a master purchase and sale agreement between the Company as seller and ADL CLO 4 as buyer.

The October 2036 CLO Indenture includes customary covenants and events of default. The Company’s investment adviser serves as asset manager to ADL CLO 4 under an asset management agreement and is entitled to receive certain management fees for providing these services under the agreement. The Company’s investment adviser has agreed to waive any management fees from ADL CLO 4.

The interest rate charged on the April 2036 CLO Secured Notes and the October 2036 CLO Secured Loans is based on SOFR plus a blended weighted average spread of 1.71%. For the three and six months ended June 30, 2025, the components of interest expense, cash paid for interest expense, average stated interest rates (i.e., rate in effect plus the spread) and average outstanding balances for the April 2036 CLO Secured Notes and the October 2036 CLO Secured Loans were as follows.

 For the Three Months Ended June 30, 2025For the Six Months Ended June 30, 2025
Stated interest expense$15 $31 
Amortization of debt issuance costs1 1 
Total interest expense$16 $32 
Cash paid for interest expense$21 $29 
Average stated interest rate5.90 %6.04 %
Average outstanding balance$1,020 $1,020 

2024 Convertible Unsecured Notes

In March 2024, the Company repaid in full the $403 in aggregate principal amount of unsecured convertible notes, which bore interest at a rate of 4.625% per year (the “2024 Convertible Notes”) upon their maturity, resulting in a realized loss on extinguishment of debt of $14. In accordance with the indenture governing the 2024 Convertible Notes, the Company settled the repayment of the 2024 Convertible Notes with a combination of cash and shares of its common stock. Approximately $393 of aggregate principal amount was settled with approximately 20 shares of the Company’s common stock and the remaining $10 of aggregate principal amount was settled with available cash.

For the three and six months ended June 30, 2024, the components of interest expense and cash paid for interest expense for the 2024 Convertible Notes were as follows.
 For the Three Months Ended June 30, 2024For the Six Months Ended June 30, 2024
Stated interest expense$— $3 
Total interest expense$— $3 
Cash paid for interest expense$— $9 

Unsecured Notes
 
The Company has issued certain unsecured notes (the Company refers to each series of unsecured notes using the defined term set forth under the “Unsecured Notes” column of the table below and collectively refers to all such series as the “Unsecured Notes”), that pay interest semi-annually and all principal amounts are due upon maturity. Each of the Unsecured Notes may be redeemed in whole or in part at any time at the Company’s option at a redemption price equal to par plus a “make whole” premium, if applicable, as determined pursuant to the indentures governing each of the Unsecured Notes, plus any accrued and unpaid interest. Certain key terms related to the features for the Unsecured Notes as of June 30, 2025 are listed below.

Unsecured Notes		Aggregate Principal Amount IssuedEffective Stated Interest RateOriginal Issuance DateMaturity Date
July 2025 Notes$1,250 3.250%January 15, 2020July 15, 2025
January 2026 Notes$1,150 3.875%July 15, 2020January 15, 2026
July 2026 Notes$1,000 2.150%January 13, 2021July 15, 2026
January 2027 Notes(1)$900 6.893%August 3, 2023January 15, 2027
June 2027 Notes $500 2.875%January 13, 2022June 15, 2027
June 2028 Notes$1,250 2.875%June 10, 2021June 15, 2028
March 2029 Notes(1)$1,000 6.347%January 23, 2024March 1, 2029
July 2029 Notes(1)$850 5.955%May 13, 2024July 15, 2029
September 2030 Notes(1)$750 6.093%June 3, 2025September 1, 2030
November 2031 Notes$700 3.200%November 4, 2021November 15, 2031
March 2032 Notes$1,000 5.800%January 8, 2025March 8, 2032
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(1)The effective stated interest rates for the January 2027 Notes, the March 2029 Notes, the July 2029 Notes and the September 2030 Notes include the impact of interest rate swaps.

In March 2025, the Company repaid in full the $600 in aggregate principal amount outstanding of unsecured notes (the “March 2025 Notes”) upon their maturity. The March 2025 Notes bore interest at a rate of 4.250% per annum.

See Note 15 for a subsequent event relating to the July 2025 Notes.

In connection with certain of the unsecured notes issued by the Company, the Company has entered into interest rate swaps to more closely align the interest rates of such liabilities with the Company’s investment portfolio, which consists primarily of floating rate loans. Under the interest rate swaps, the Company receives a fixed interest rate and pays a floating interest rate of one-month SOFR plus an applicable spread, as disclosed below. The Company designated these interest rate swaps and the associated unsecured notes as qualifying fair value hedge accounting relationships. Certain information related to the Company’s interest rate swaps as of June 30, 2025 is presented below.

DescriptionHedged ItemCompany ReceivesCompany PaysMaturity DateNotional Amount
Interest rate swap January 2027 Notes7.000 %
SOFR +2.5810%
January 15, 2027$900 
Interest rate swapMarch 2029 Notes5.875 %
SOFR +2.0230%
March 1, 2029$1,000 
Interest rate swapJuly 2029 Notes5.950 %
SOFR +1.6430%
July 15, 2029$850 
Interest rate swapSeptember 2030 Notes5.500 %
SOFR +1.7705%
September 1, 2030$750 
Interest rate swap(1)March 2032 Notes5.800 %
SOFR +1.6995%
March 8, 2032$1,000 
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(1)In connection with the issuance of the March 2032 Notes, the Company entered into a forward-starting interest rate swap with an effective date of January 8, 2026.

See Note 6 for more information on the interest rate swaps.
For the three and six months ended June 30, 2025 and 2024, the components of interest expense and cash paid for interest expense for the Unsecured Notes, as well as any other unsecured notes outstanding during the periods presented were as follows.
 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2025202420252024
Stated interest expense(1)$108 $103 $215 $196 
Amortization of debt issuance costs4 4 8 8 
Net amortization of original issue premium/discount(1)(1)(2)(3)
Net gain on interest rate swaps accounted for as hedge instruments and the related hedged items(1)— (2)— 
Total interest expense$110 $106 $219 $201 
Cash paid for interest expense(1)$81 $59 $192 $157 
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(1)Includes the impact of the interest rate swaps.
 
The Unsecured Notes contain certain covenants, including covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a) of the Investment Company Act, or any successor provisions, and to provide financial information to the holders of such notes under certain circumstances. These covenants are subject to important limitations and exceptions set forth in the indentures governing such notes. As of June 30, 2025, the Company was in compliance in all material respects with the terms of the respective indentures governing each of the Unsecured Notes.
 
The Unsecured Notes are the Company’s senior unsecured obligations and rank senior in right of payment to any future indebtedness that is expressly subordinated in right of payment to the Unsecured Notes; equal in right of payment to the Company’s existing and future unsecured indebtedness that is not expressly subordinated; effectively junior in right of payment to any of its secured indebtedness (including existing unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.