ARES CAPITAL CORPORATION (NASDAQ:ARCC) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On May 28, 2021, Ares Capital Corporation (the “Company”) issued an additional $500 million aggregate principal amount of its 3.250% notes due 2025 (the “New 2025 Notes”) to a Purchase Agreement, dated May 26, 2021 (the “Purchase Agreement”), among the Company, Ares Capital Management LLC, Ares Operations LLC and J.P. Morgan Securities LLC. The New 2025 Notes were issued as additional notes under the Indenture, dated October 21, 2010 (the “Base Indenture”), between the Company and U.S. Bank National Association (the “Trustee”), as supplemented by the Eleventh Supplemental Indenture, dated January 15, 2020 (the “Eleventh Supplemental Indenture,” and together with the Base Indenture, the “Indenture”), to which, on January 15, 2020, the Company issued $750 million aggregate principal amount of its 3.250% notes due 2025 (the “Existing 2025 Notes”). The New 2025 Notes are being treated as a single series with the Existing 2025 Notes under the Indenture and have the same terms as the Existing 2025 Notes. The New 2025 Notes have the same CUSIP number and are fungible and rank equally with the Existing 2025 Notes.
The New 2025 Notes were issued at a premium of 104.745% of their principal amount, resulting in estimated net proceeds, after estimated offering expenses, of approximately $519.8 million. Aggregate estimated offering expenses in connection with the offering of the New 2025 Notes, including the underwriting discount of $2.5 million, were approximately $3.9 million. The Company expects to use the net proceeds of this offering to repay certain outstanding indebtedness under its credit facilities. The Company may reborrow under its credit facilities for general corporate purposes, which include investing in portfolio companies in accordance with its investment objective.
The New 2025 Notes will mature on July 15, 2025 and may be redeemed in whole or in part at the Company’s option at any time at the redemption prices set forth in the Eleventh Supplemental Indenture. The New 2025 Notes bear interest at a rate of 3.250% per year payable semiannually on January 15 and July 15 of each year. The New 2025 Notes are direct senior unsecured obligations of the Company.
The New 2025 Notes were offered and sold to the Registration Statement on Form N-2 (File No. 333- 248831), the preliminary prospectus supplement filed with the Securities and Exchange Commission (the “SEC”) on May 26, 2021 and the pricing term sheet filed with the SEC on May 26, 2021.
The foregoing description of the New 2025 Notes does not purport to be complete and is qualified in its entirety by reference to the full text of the Eleventh Supplemental Indenture and the accompanying Form of 3.250% Notes due 2025, filed as Exhibits 4.1 and 4.2, respectively, to the Company’s Current Report on Form 8-K filed with the SEC on January 15, 2020 and incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
| Exhibit Number | Description |
| 1.1 | Purchase Agreement, dated May 26, 2021, among Ares Capital Corporation, Ares Capital Management LLC, Ares Operations LLC and J.P. Morgan Securities LLC |
| 5.1 | Opinion of Venable LLP |
| 5.2 | Opinion of Kirkland & Ellis LLP |
| 23.1 | Consent of Venable LLP (contained in the opinion filed as Exhibit 5.1 hereto) |
| 23.2 | Consent of Kirkland & Ellis LLP (contained in the opinion filed as Exhibit 5.2 hereto) |
ARES CAPITAL CORP Exhibit
EX-1.1 2 tm2117468d5_ex1-1.htm EXHIBIT 1.1 Exhibit 1.1 EXECUTION VERSION ARES CAPITAL CORPORATION (a Maryland corporation) $500,…
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About ARES CAPITAL CORPORATION (NASDAQ:ARCC)
Ares Capital Corporation is a specialty finance company that is a closed-end, non-diversified management investment company. The Company’s investment objective is to generate both current income and capital appreciation through debt and equity investments. The Company invests primarily in the United States middle-market companies. The Company invests in first lien senior secured loans (including unitranche loans, which are loans that combine both senior and mezzanine debt, generally in a first lien position), second lien senior secured loans and mezzanine debt, which in some cases includes an equity component. The Company focuses on self-originating most of its investments by pursuing an array of investment opportunities in middle-market companies, venture capital backed businesses and power generation projects across multiple channels. It also makes preferred and/or common equity investments. The Company is externally managed by its investment advisor, Ares Capital Management LLC.
