SOURCE: The Bedford Report

The Bedford Report

December 06, 2011 08:16 ET

American Capital Limited and Ares Capital Corp Benefit From Tight Credit Conditions

The Bedford Report Provides Equity Research on American Capital Limited & Ares Capital Corporation

NEW YORK, NY--(Marketwire - Dec 6, 2011) - Business Development Companies (BDCs) have garnered more attention from investors in recent quarters. Although interest rates remain at historic lows, several sectors are still finding credit conditions to be tight. This had led more investors and target businesses to pursue alternative funding from BDCs. The Bedford Report examines the outlook for companies in the Business Development Company (BDC) Industry and provides stock analysis on American Capital Ltd. (NASDAQ: ACAS) and Ares Capital Corporation (NASDAQ: ARCC). Access to the full company reports can be found at:

BCDs traditionally provide capital to small companies -- American BDCs are required to invest at least 70 percent of assets in private US companies. These companies will typically borrow at a relatively low interest rate, and lend out capital at a much higher rate, leading to larger profits in the current economic landscape. Because BDCs are treated as regulated investment companies (RICs) they must distribute at least 90 percent of taxable income as dividends to investors. With net interest income improving, and profits on the upswing, several BCDs currently yield more ten percent.

The Bedford Report releases investment research on the Business Development Company (BDC) Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at and get exclusive access to our numerous analyst reports and industry newsletters.

American Capital Ltd swung to a loss in the third quarter as some of its investments depreciated sharply and operating income declined. The company's operating income fell to $130 million from $142 million a year earlier, due in part to lower interest and dividend income. ACAS reported a loss of $464 million, or $1.34 a share, for the reported quarter.

For the quarter ended September 30, 2011, Ares Capital reported GAAP net income of $40.6 million or $0.20 per share (basic and diluted). Ares Capital made $1,429.8 million in new commitments, including commitments to five new portfolio companies, 11 existing portfolio companies and four additional companies during the most recent quarter.

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