* Sees merger adding to EPS in yr-1

* Ares says trying to increase credit pact

* Ares Q3 core EPS $0.36 vs est $0.35 * Allied posts $117.5 million loss on debt repayment

* Ares up 7 pct, Allied rises 8 pct (Adds conference call comments, background, updates stock

Nov 5 (Reuters) - Small-business lender Ares Capital Corp (ARCC.O: Quote, Profile, Research) posted a quarterly profit that beat analysts' estimates by a penny, while struggling rival Allied Capital Corp (ALD.N: Quote, Profile, Research), which Ares agreed to buy last month, posted a quarterly loss.

The companies, which held a joint conference call with analysts, said they expect the merger to add to net asset value and core earnings per share of the combined company in the first year, and reduce the need to sell Allied's assets to deleverage its balance sheet.

Allied and old rival American Capital Ltd (ACAS.O: Quote, Profile, Research) have struggled as the economic downturn reduced the value of their portfolio companies, to which they make loans in return for equity stakes, leaving them with no option but to sell assets at distressed prices to raise cash.

Ares Capital is considering increasing a JP Morgan revolving credit facility to a range of $750 million to $1 billion in commitments from current $525 million in commitments, with an expected new three year term, a company official said on a conference call with analysts.

The company, which would look to access capital to de-leverage balance sheet and reinvest in current portfolio, said it may consider accessing the debt and equity capital markets.