High yield loan specialist Ares Capital Management - an affiliate of Los Angeles-based investment manager Ares Management LLC - has formed a new entity to lend to the middle market and second lien secured loan market, as well as mezzanine and private equity. The new company, called Ares Capital Corp., plans to use securitization as a funding source for portfolio growth, although it is currently in the process of raising cash through a stock offering of $450 million via Merrill Lynch.

Through it subsidiaries, Ares Management has been a repeat issuer of high yield loan CLOs, structuring eight since 1998. In March, the firm priced $550 million of fixed- and floating-rate series VIII paper via JPMorgan Securities.

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