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Ares Capital is rated Hold, with a 10.3% yield and a 4% discount to NAV, pending further clarity on software loan quality.

ARCC's loans to Cornerstone OnDemand are marked down to 64% of cost, highlighting risks from high leverage and AI-era competition in software portfolios.

Key triggers to monitor include nonaccruals rising above 3%, a dividend cut below $0.48, or core earnings dropping below $0.45/share for two quarters.

I would maintain a small position until after the Oct. 27 earnings report, focusing on dividend sustainability and loan book resilience.

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Ares Capital has marked down its Cornerstone OnDemand software loans by about a third, and Clearlake Capital Group owns the company.…