ARES CAPITAL CORPORATION (NYSE:AFC) Files An 8-K Entry into a Material Definitive Agreement
Item1.01 Entry into a Material Definitive Agreement.
Amendment to Revolving Funding Facility.
On January3, 2017, Ares Capital Corporation (the Registrant) and
Ares Capital CP Funding LLC, an indirect wholly owned subsidiary
of the Registrant (Ares Capital CP), entered into an amendment
(the CP Amendment) to the documents governing Ares Capital CPs
revolving funding facility (the CP Funding Facility) with Wells
Fargo Securities, LLC and each of the other parties thereto. The
CP Amendment, among other things, (a)increased the commitments
under the facility from $540 million to $1.0 billion, (b)extended
the reinvestment period from May14, 2017 to January3, 2019,
(c)extended the stated maturity date from May14, 2019 to
January3, 2022, (d)modified the interest rate charged on the CP
Funding Facility from a rate based on LIBOR plus applicable
spreads ranging from 2.25% to 2.50% or on a base rate (as defined
in the agreements governing the CP Funding Facility) over
applicable spreads ranging from 1.25% to 1.50%, in each case,
determined monthly based on the composition of the borrowing base
relative to outstanding borrowings under the facility, to a rate
based on LIBOR plus 2.30% per annum or a base rate plus 1.30% per
annum, (e)added a commitment termination premium in an amount
equal to 1.00% for any commitment reduction prior to January3,
2018 and 0.50% for any commitment reduction prior to July3, 2018,
and (f)modified certain loan portfolio concentration limits.
Borrowings under the CP Funding Facility will continue to be
subject to the facilitys various covenants and the leverage
restrictions contained in the Investment Company Act of 1940, as
amended (the 1940 Act).
The description above is only a summary of the material
provisions of the CP Amendment and is qualified in its entirety
by reference to a copy of the CP Amendment, which is filed as
Exhibit10.1 to this current report on Form8-K and incorporated by
reference herein.
Amendment to Credit Facility.
On January4, 2017, the Registrant entered into an agreement to
amend and restate its senior secured credit facility (as amended
and restated, the AR Credit Facility). The AR Credit Facility,
among other things, (a)added a term loan tranche in an amount
equal to $382.5 million with maturity dates equal to the extended
maturity dates applicable to the extending revolving lenders,
(b)extended the expiration of the revolving period for certain
lenders electing to extend their commitments in an amount equal
to $1.6 billion from May4, 2020 to January4, 2021, during which
period the Registrant, subject to certain conditions, may make
borrowings under the facility, (c)extended the stated maturity
date for certain lenders electing to extend their revolving
commitments in an amount equal to $1.6 billion from May4, 2021 to
January4, 2022, (d)permitted certain lenders who previously
elected not to extend their commitments in an amount equal to $45
million to remain subject to the revolving period and stated
maturity in respect of their non-extending commitments applicable
to such lenders in the existing revolver, and (e)permitted
certain lenders electing not to extend their commitments in an
amount equal to $75 million to remain subject to the revolving
period and stated maturity in the credit facility prior to this
amendment in respect of their non-extending commitments.
The total size of the AR Credit Facility is $2.1 billion
following the amendment and restatement thereof. The AR Credit
Facility includes an accordion feature that allows the
Registrant, under certain circumstances, to increase the size of
the facility by an amount up to $1.0 billion.
The AR Credit Facility continues to be secured by a material
portion of the Registrants assets (excluding, among other things,
investments held in and by certain subsidiaries of the Registrant
or investments in certain portfolio companies of the Registrant)
and guaranteed by certain subsidiaries of the Registrant.
Under the AR Credit Facility, the Registrant has made certain
representations and warranties and is required to comply with
various covenants, reporting requirements and other customary
requirements for similar credit facilities, including, without
limitation, covenants related to: (a)limitations on the
incurrence of additional indebtedness and liens, (b)limitations
on certain investments, (c)limitations on certain asset transfers
and restricted payments, (d)maintaining a certain minimum
stockholders equity, (e)maintaining a ratio of total assets (less
total liabilities) to total indebtedness, of the Registrant and
its subsidiaries (subject to certain exceptions), of not less
than 2.0:1.0, and (f)limitations on the creation or existence of
agreements that prohibit liens on certain properties of the
Registrant and certain of its subsidiaries. The AR Credit
Facility also continues to include usual and customary events of
default for senior secured credit facilities of this nature.
In addition to the asset coverage ratio described above,
borrowings under the AR Credit Facility (and the incurrence of
certain other permitted debt) will continue to be subject to
compliance with a borrowing base that will apply different
advance rates to different types of assets in the Registrants
portfolio.
Borrowings under the AR Credit Facility will also continue to
be subject to the leverage restrictions contained in the 1940
Act.
The description above is only a summary of the material
provisions of the AR Credit Facility and is qualified in its
entirety by reference to a copy of the AR Credit Facility,
which is filed as Exhibit10.2 to this current report on Form8-K
and incorporated by reference herein.
Borrowings Under Debt Facilities.
Including the CP Funding Facility and the AR Credit Facility,
the Registrant now has $3.5 billion in committed senior secured
debt facilities. As of January4, 2017, the Registrant had $1.5
billion of borrowings outstanding under these facilities.
Item 2.03 Creation of a Direct Financial Obligation
or an Obligation under an Off-Balance Sheet Arrangement of
Registrant.
The information contained in Item 1.01 to this current report
on Form8-K is by this reference incorporated in this Item 2.03.
Item7.01 Regulation FD Disclosure.
On January4, 2017, the Registrant issued a press release,
included herewith as Exhibit99.1, and by this reference
incorporated herein.
The information disclosed under this Item 7.01, including
Exhibit99.1 hereto, is being furnished and shall not be deemed
filed for purposes of Section18 of the Securities Exchange Act
of 1934 and shall not be deemed incorporated by reference into
any filing made under the Securities Act of 1933, except as
expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits:
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ExhibitNumber |
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Description |
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10.1 |
Amendment No.8 to Loan and Servicing Agreement, dated as |
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10.2 |
Seventh Amended and Restated Senior Secured Credit |
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99.1 |
Press Release, dated as of January4, 2017 |
ARES CAPITAL CORPORATION (NYSE:AFC) Recent Trading Information
ARES CAPITAL CORPORATION (NYSE:AFC) closed its last trading session down -0.09 at 25.22 with 9,143 shares trading hands.