Ares Strategic Income Fund leverage rises to 1.24x after Q3 repurchase payout

Ares Strategic Income Fund's leverage rose to 1.24x debt-to-equity at Sept. 30 from 1.15x a month earlier, after the $9.9 billion nontraded BDC absorbed its third-quarter share repurchases, AltsWire reported.

Shareholders requested 13.1% of outstanding shares in the third-quarter tender against a 5% quarterly cap, and ASIF said it would repurchase 38.2% of the requests, about $515 million at the Aug. 31 NAV, according to AltsWire. It was the third consecutive quarter in which requests exceeded the cap; the second-quarter figure reached 14.4%.

Aggregate net asset value fell to about $9.9 billion from about $10.4 billion, and NAV per share was $26.69 across Class I, S and D shares at Sept. 30, down from $26.74 at Aug. 31. AltsWire reported that the roughly $500 million decline is close to the size of the tender payout.

Debt outstanding rose to about $12.3 billion from about $11.9 billion, while portfolio fair value declined to about $21.4 billion from about $21.8 billion. The debt increase was roughly $400 million and the NAV decline was roughly $500 million. Net of about $463 million of available cash, leverage was 1.19x, and ASIF reported 1.06x as recently as May 31.

Undrawn capacity was about $3.8 billion at Sept. 30, down from about $4.1 billion a month earlier, per AltsWire.

Class I shares returned 0.61% in September and 2.35% over the trailing three months, which ASIF attributed to income generation partly offset by modest net unrealized losses. The annualized distribution rate for Class I shares was 9.64% at Sept. 30, and Ares declared gross monthly distributions of $0.2143 per share for October, November and December.

ASIF's fourth-quarter tender is expected to open in November, according to AltsWire. The fund enters that window with gross leverage at 1.24x and $3.8 billion of undrawn facility capacity.