CION Ares Diversified Credit Fund: Repurchases, NAV and Leverage

What CADC is, and a label to correct

CION Ares Diversified Credit Fund is registered under the Investment Company Act of 1940 as an interval fund. The fund's own fact sheet says so: it is “registered under the 1940 Act as an interval fund.” It is not a business development company, even though some databases tag it as one, and it is not the same vehicle as CION Investment Corp, the listed BDC from the same sponsor. It invests across directly originated loans, syndicated loans, bonds, structured products and other credit, with total managed assets of $7.1 billion and 934 issues at June 30, 2026. At June 30, 2026, $5.93 billion of its $6.95 billion of investments, 85.4% (our arithmetic), were valued with unobservable inputs (Level 3) in the report's fair value table.

It sells seven share classes. Class I holds most of the money: $3.80 billion of $4.73 billion of net assets, or 80.4% (our arithmetic), with 158.9 million shares. The adviser charges a base fee of 1.25% of total assets less liabilities other than debt, so borrowed money is charged too, plus an incentive fee of 15% of income above a 6.00% annual hurdle with catch-up. For the six months the fund booked $46.2 million of management fee and $31.4 million of incentive fee. For how this fund's fees compare with the other 27 private credit funds open to US individuals, see private credit funds in 2026.

Fourteen quarterly offers, and the two that moved

The fund runs an offer every quarter, with the notice filed in March, June, September and December. Its prospectus says “it is expected the Fund will offer to repurchase only the minimum amount of 5% of its outstanding Shares,” while the board may set an amount between 5% and 25%. The reports show what the fund bought each time. Shares are in thousands.

Twelve straight offers stayed between 2.09% and 3.67%. January 2026 was the first above 3.67% and April 2026 reached the whole 5% on offer. Two timing notes: the offer notices set the April 2026 deadline at April 9 while the report lists April 10, and the January 2025 deadline was moved from January 9 to January 10 because the New York Stock Exchange closed on January 9, 2025 (Form N-23c-3/A).

Calendar-year dollars repurchased: $304.6 million in 2023, $385.6 million in 2024, $480.0 million in 2025 and, in only the January and April offers of 2026, $463.5 million, 96.6% of the whole of 2025 (our arithmetic). The January 2026 report also shows the offer was not fully used: 8,630 thousand shares bought against 10,308 thousand offered, 83.7% of the room (our arithmetic). April used all of it.

What the offer that closed on October 8, 2026 does and does not tell you

The notice filed on September 4, 2026 (accession 0001104659-26-105242) says the fund “is offering to repurchase, for cash, up to five percent (5%) of its issued and outstanding shares” at NAV on the pricing date, October 8, 2026. Requests were due by 4:00 p.m. Eastern that day. The terms that matter to a holder:

• Payment: one to three business days after pricing is expected, seven calendar days at the latest. The notice says “The Fund will not charge a repurchase fee.” Class C shares held under 365 days carry a 1.00% contingent deferred sales charge.
• If tenders exceed 5%, the fund “may, but is not required to,” buy up to 2% more. Beyond that, “the Fund will repurchase the shares on a pro rata basis,” and unfilled requests do not carry over: a new request is needed in the next offer.
• Holders of fewer than 100 shares who tender everything may be accepted in full before proration.
• Requests could be withdrawn or changed at any time before the deadline.

What is not public as of October 20, 2026: the result of the July 9 offer and of the October 8 offer. The fund reports repurchases in its shareholder reports; the next one covering these offers is the annual report for the year ending December 31, 2026, expected around March 2027 (the 2025 report was filed March 6, 2026). The quarterly Form N-PORT for September 30, 2026, due around late November, will show whether net assets kept falling. The fund's own last SEC filing is the September 4, 2026 notice.

For a sense of what proration looks like at a comparable fund, see Ares Strategic Income Fund's tender results, and for the other quarter-end deadlines, Q4 2026 redemption deadlines.

NAV: the 5.9% decline in a year

Each notice quotes NAV from about a week before it is filed. Class A carries a sales load of up to 5.75% on purchase only; the repurchase price is NAV.

Class A NAV held between $24.91 and $25.16 from March 2024 to November 2025, then dropped $0.82 between November 2025 and February 2026 and kept falling. From August 29, 2025 to August 28, 2026, Class A fell 5.9% and Class I 6.0% (our arithmetic). The semiannual report puts the six-month loss in context: net unrealized losses of $201.7 million against net investment income of $178.2 million, a net decrease from operations of $26.0 million before distributions. On August 28, 2026 the other classes were $23.54 (C), $23.68 (L), $23.76 (U), $23.74 (U-2) and $23.87 (W).

Leverage: $2.4 billion borrowed against $4.7 billion of equity

An interval fund can borrow, and CADC does so two ways: three bank credit facilities and a stack of mandatory redeemable preferred shares (MRPS), which are a fixed-date debt-like claim that ranks ahead of common shareholders.

At June 30, 2026, debt plus MRPS was $2,395.8 million: 50.7% of net assets and 32.9% of total assets of $7,279.6 million (our arithmetic). Total liabilities were 0.54 times net assets. Form N-PORT for the same date shows total assets of $7.55 billion, liabilities of $2.83 billion and net assets of $4.72 billion, which is why other pages quote a ratio near 0.60; this page uses the fund's shareholder report. The fund reports asset coverage of $74.03 per $25 MRPS share, or 2.96 times (our arithmetic), against a 225% covenant and a 300% limit for new borrowing.

Average debt over the six months was $1,543.4 million at a stated 5.46%, and interest and credit facility fees were $74.2 million. The shift under way is in the preferred shares. The Series F ($85.0 million, 7.16%) was redeemed on June 1, 2026. Series A ($60.0 million, 2.68%) was redeemed on July 30, 2026, and on August 28, 2026 the fund filed notice that it intends to redeem all 3,600,000 Series B shares ($90.0 million, 2.68%) on September 30, 2026. The remaining preferred shares then total $835.0 million at a weighted rate of about 5.25% (our arithmetic from the series table), up from 4.86%. Next in line are Series D ($55.0 million, 2.96%) on January 6, 2027 and Series H ($100.0 million, 6.25%) on June 7, 2027. Cheap leverage is rolling off, and the debt averaged a 5.46% stated rate.

Distributions against what the fund earns

The fund pays monthly and declared $0.172298 (Class A) and $0.180544 (Class I) per share for both July and August 2026. At the August NAVs that is about 8.75% and 9.09% annualized (our arithmetic). The fund's own figure for Class I at June 30, 2026 is 8.89%.

Across all classes the fund earned $178.2 million of net investment income and distributed $205.9 million in the six months (86.6%, our arithmetic); $57.3 million of that was reinvested. In 2025 the figures were $376.5 million and $393.5 million (95.7%). Class I expenses were 6.73% of average net assets including interest and 3.65% excluding it.

What a reader can do with this

• If you hold shares and the October 8 deadline has passed: the next chance to tender is the offer expected to open around December 4, 2026 (the notice was filed on the first Friday of December in 2024 and 2025 and ran about five weeks). The fund gives 21 to 42 days of notice, so the deadline would fall in early January 2027. Requests go through your adviser or broker, or on the form in the notice.
• If you are weighing a tender: price is the NAV on the pricing date, not the NAV in the notice, and requests can be withdrawn until the deadline. A hypothetical in our arithmetic: $100,000 of Class I at $23.83 is 4,196 shares. If tenders were twice the 5% on offer and the fund bought only 5%, half would be filled: about $50,000 paid, with the rest to be requested again at a later NAV.
• If you have an IRA or required minimum distribution: the prospectus warns that proration “may result in the Fund not honoring the full amount of a required minimum distribution”.
• If you sell at a loss: a tender is a taxable sale. See wash-sale rules for tenders and reporting the sale on Form 8949.
• What to watch: the percentage repurchased in the 2026 annual report. Another 5.00% or a figure with a 2% extension means demand is above the offer; a return to about 3% means the first half of 2026 was a spike. Compare with a larger peer: Cliffwater Corporate Lending Fund bought 7.00%, the most it can buy, in March 2026. The structure is explained in what an interval fund is, and the full field in the list of interval funds.

FAQ

All figures are from SEC filings of CION Ares Diversified Credit Fund (CIK 1678124) read on EDGAR on October 20, 2026: the annual reports on Form N-CSR for 2023, 2024 and 2025 (accessions 0001104659-24-032297, 0001104659-25-021413 and 0001104659-26-024607), the semiannual reports for June 30, 2024, 2025 and 2026 (0001104659-24-097289, 0001104659-25-087822 and 0001104659-26-105023), eleven Form N-23c-3 notices from March 2024 to September 2026 and one amendment, the Form N-23c-2 notices of May 11, June 29 and August 28, 2026, the 486BPOS of April 29, 2026 (0001104659-26-051754) and Form N-PORT for June 30, 2026 (0001049169-26-002064). The number of shares tendered in each offer is not disclosed in these filings. Percentages, ratios and projected dates are our arithmetic. This is analysis of public documents, not investment, legal or tax advice.