Markets

Financial Stocks Rising With Broader Market Gains; Ares Management Slipping After Buying Asset-Based Lender

Financial stocks were mostly higher Thursday, with the NYSE Financial Sector Index climbing about 0.7% and the S&P Financial 100 Index rising about 0.7%.

In company news, Ares Management ( ARES ) shares retreated Thursday after the asset manager late Wednesday announced the acquisition of a privately held commercial finance company.

Financial terms of ARES' purchase of Keltic Financial Services and Keltic Financial Partners II were not disclosed. The transaction included Keltic's $155 million asset-based loan portfolio, with its newly formed Ares Commercial Finance unit part of its existing Direct Lending Group.

Los Angeles-based ARES said it plans to operate its new commercial finance operation targeting small- and mid-market firms from Keltic's current location in suburban New York, offering asset-based loans between $1 million to $30 million in size.

ARES shares were down about 2% in recent afternoon trading, earlier declining to a session low of $18.11 a share. The stock has traded in range of $16.68 to $19.10 a share, slipping about 1% since pricing its initial public offering at $19 per unit on May 2.

Separately Thursday, ARES said underwriters for its IPO exercised options to purchase 225,795 units at the offering price less their underwriter discounts and boosting the company's gross proceeds to $220.2 million.

In other sector news,

(+) RATE, (+4.5%) Raised to Outperform from Sector Perform at RBC Capital, citing valuation following the stock's 30% slide from its recent highs.

(-) RCAP, (-11.2%) Prices offering of 19 mln shares of its Class A stock at $20.25 each, a 10.3% discount to Tuesday's closing price and raising $384.75 mln in gross proceeds. Controlling shareholder RCAP Holdings sold 5 mln shares in the offering, pocketing $101.3 mln.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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