SecProbe.io

CORRESP
1
filename1.htm

  BOCA RATON

  BOSTON

  LONDON

  NEW ORLEANS

  2049
  Century Park East

  NEW YORK

  Suite 3200

  NEWARK

  Los Angeles, CA
  90067-3206

  PARIS

  Telephone 310.557.2900

  SÃO PAULO

  Fax
  310.557.2193

  WASHINGTON

  Monica
  J. Shilling

  Member of the Firm

  Direct Dial 310.284.4544

  mshilling@proskauer.com

May 28, 2009

United States Securities and Exchange
Commission

Division of Investment Management

100 F Street, N.W.

Mail Stop 4720

Washington, D.C. 20549

Attention:  Christian T. Sandoe, Senior Counsel

Re:       Ares Capital
Corporation (File No. 333-158211)

Dear Mr. Sandoe:

Ares Capital Corporation (the “Fund”) has today
filed Amendment No. 1 to its registration statement filed on Form N-2
on March 25, 2009 (the “Registration Statement”).  The amendment sets forth the responses to the
comments of the Staff of the Division of Investment Management (the “Staff”)
contained in your letter dated April 23, 2009 relating to the
above-referenced filing.

Two copies of the amended filing, marked to show changes
from the Registration Statement, are enclosed for your convenience with the
hard copy of this letter.

Set forth below are the comments of the Staff
contained in the Staff’s letter and immediately below each comment is the
response with respect thereto and, where applicable, the location in the
relevant filing of the requested disclosure.
Responses to comments given in one section are applicable to other
sections of the Registration Statement that contain similar disclosure.

PROSPECTUS

In
Addition to Regulatory Restrictions that Restrict Our Ability to Raise Capital,
the Revolving Credit Facility and the CP Funding Facility Contain Various
Covenants Which, If Not Complied With, Could Accelerate Repayment Under These
Facilities, Thereby. Materially and Adversely Affecting Our Liquidity,
Financial Condition and Results of Operations (Page 24)

1.         The first sentence of the second
paragraph states that, as of December 31, 2008, the Fund was in compliance
with its financial and operational covenants. Has the Fund determined its
compliance

May 28, 2009

Page 2

with the
covenants as of a more recent date? If so, please update this disclosure to
reflect whether the Fund is in compliance with these covenants as of a more
recent date.

1.         The
Fund has revised the disclosure on page 24 of the Registration Statement
to reflect that the Fund continues to be in compliance with the financial and
operational covenants of its Facilities (as defined in the Registration
Statement) as of the date of the prospectus that forms a part of the
Registration Statement.  In addition,
please see pages 64 and 65 of the Registration Statement in “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,”
which describes the Fund’s continued compliance with the limitations and
requirements of the Fund’s CP Funding Facility and the JPM Revolving Facility
(each as defined in the Registration Statement).

There Are
Significant Potential Conflicts of Interest that Could Impact Our Investment
Returns (Page 28)

2.         The second sentence of the fifth
paragraph states that to the extent that the Fund or the Adviser is able to
exert influence over the Fund’s portfolio companies, the hurdles applicable to
the Fund’s incentive fee may provide the Adviser (subject to its fiduciary duty
to us) with an incentive to induce portfolio companies to accelerate or defer
interest or other obligations owed to the Fund from one calendar quarter to
another under circumstances where accrual would not otherwise occur, such as
acceleration or deferral of the declaration of a dividend or the timing of a
voluntary redemption. Please describe in this section the circumstances under
which the Adviser could engage in this activity without breaching its fiduciary
duty to the Fund.

2.         The
Fund notes that it received a similar comment from the Staff in the Staff’s
letter dated May 20, 2004 in connection with the Fund’s IPO.  In response to the comment, the Fund revised
the disclosure to make it clear that any such behavior would be subject to the
investment adviser’s fiduciary duty to the Fund.  In the Fund’s response letter to the SEC
dated September 16, 2004, the Fund noted that it would be a breach of the
investment adviser’s fiduciary duty to the Fund to the extent it induced any of
the Fund’s portfolio companies to engage in such activity solely for the
purpose of adjusting the incentive fees.
The Fund has therefore left the disclosure as drafted but is happy to discuss
any additional concerns that the Staff has with respect to the disclosure.

Use of
Proceeds (Page 43)

3.         Please disclose in this section how
long it is expected to take to fully invest net proceeds in accordance with the
Fund’s investment objectives and policies, the reasons for any anticipated
lengthy delay in investing the net proceeds, and the consequences of any delay.
See Item 7.2 of Form N-2.

3.         In the
last sentence of the first paragraph of page 43, the Fund indicates that
it anticipates that the net proceeds from any offering of securities pursuant
to the prospectus that is a part of the Registration Statement and the related
prospectus supplement will be invested within three months of such offering,
depending on the availability of appropriate investment opportunities

May 28, 2009

Page 3

consistent
with the Fund’s investment objective and strategies and market conditions. The
Fund has made this sentence a separate paragraph so that it is more prominent
and revised the language to indicate that the Fund anticipates that it will
invest substantially all of the net proceeds within no longer than six months
of any offering.

GENERAL
COMMENTS

4.         Where a comment is made in one
location, it is applicable to all similar disclosure appearing elsewhere in the
registration statement.

4.         The
Fund acknowledges that where a comment is made in one location, it is
applicable to all similar disclosure appearing elsewhere in the Registration
Statement.

5.         We note that portions of the filing is incomplete. We may
have additional comments on such portions when you complete them in
pre-effective amendments, on disclosures made in response to this letter, on
information supplied supplementally, or on exhibits added in any pre-effective
amendments.

5.         The Fund acknowledges that the Staff may have additional comments on
the disclosures made in response to Staff comments, on information supplied in
this letter or otherwise supplementally or on any exhibits added in
pre-effective amendments.

6.         If you intend to omit certain
information from the form of prospectus included with the registration
statement that are declared effective in reliance on Rule 430A under the
Securities Act, please identify the omitted information to us supplementally,
preferably before filing the final pre-effective amendments.

6.         The
Fund intends to omit information with respect to the following items from the
form of prospectus included with the registration statement that is declared
effective in reliance on 430C under the Securities Act:  public offering price, underwriting syndicate
(including any material relationships between the registrant and underwriters
not named therein), underwriting discounts or commissions, discounts or
commissions to dealers, amount of proceeds, conversion rates, call prices and
other items dependent upon the offering price, delivery dates and terms of
securities dependent upon the offering date.
The Fund has furnished the undertaking required by Item 34.4 of Form N-2
and will file the form of prospectus with the Commission pursuant to Rule 497
of the Securities Act of 1933.

7.         Please advise us if you have submitted
or expect to submit an exemptive application or no-action request in connection
with your registration statement.

7.         The
Fund has not submitted, and does not expect to submit, an exemptive application
or no-action request in connection with its Registration
Statement.

May 28, 2009

Page 4

8.         Response to this letter should be in
the form of a pre-effective amendment filed pursuant to Rule 472 under the
Securities Act. Where no change will be made in the filing in response to a
comment, please indicate this fact in a supplemental letter and briefly state
the basis for your position.

8.         The
Fund notes that Amendment No. 1 to its Registration Statement filed on Form N-2
today and this letter dated May 28, 2009 set forth the Fund’s responses to
the Staff’s comments.

9.         We urge all persons who are responsible
for the accuracy and adequacy of the disclosure in the filings reviewed by the
staff to be certain that they have provided all information investors require
for an informed decision. Since the Fund and its management are in possession
of all facts relating to the Fund’s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.

9.         The
Fund understands that:

(a)        the
Fund is responsible for the adequacy and accuracy of the disclosure in the
filings;

(b)        Staff
comments or changes to disclosure in response to Staff comments in the filings
reviewed by the Staff do not foreclose the Commission from taking any action
with respect to the filings; and

(c)        the
Fund may not assert Staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United
States.

We
look forward to discussing with you any additional questions you may have
regarding the Fund’s Registration Statement.
Please do not hesitate to call me at (310) 284-4544.  In addition, we would greatly appreciate any
additional comments by facsimile to (310) 557-2193.

Very
truly yours,

/s/
Monica J. Shilling

Monica
J. Shilling

Enclosures

  cc:

  Michael J. Arougheti, Ares Capital Corporation

  Michael D. Weiner, Ares Capital Corporation

  Michael A. Woronoff