On November 22, 2019, Ares Commercial Real Estate Corporation, a Maryland corporation (the “Company”), and its manager, Ares Commercial Real Estate Management LLC, a Delaware limited liability company, entered into an equity distribution agreement (the “Equity Distribution Agreement”) with JMP Securities LLC and Raymond James & Associates, Inc. (collectively the “Placement Agents”), to which the Company may offer and sell, from time to time, through the Placement Agents or directly to the Placement Agents, acting as principals, shares of the Company’s common stock, par value $0.01 per share, having an aggregate offering price of up to $100.0 million (the “Shares”). The Company’s current intention is to only sell any Shares under the Equity Distribution Agreement at or above book value from time to time in the market. Any Shares sold under the Equity Distribution Agreement will be issued to the Company’s registration statement on Form S-3 (File No. 333- 232742), initially filed with the Securities and Exchange Commission (“SEC”) on June 19, 2019, the base prospectus filed as part of such registration statement on August 2, 2019 and the prospectus supplement, dated November 22, 2019, filed by the Company with the SEC or a subsequent registration statement on Form S-3.

The Company is not obligated to sell any Shares under the Equity Distribution Agreement. None of the Placement Agents are required to sell any specific number of or dollar amount of Shares. Each Placement Agent will use commercially reasonable efforts consistent with its normal trading and sales practices to sell Shares from time to time under the terms and subject to the conditions set forth in the Equity Distribution Agreement. Subject to the terms and conditions of the Equity Distribution Agreement, sales of Shares, if any, may be made in transactions that are deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”), including without limitation sales made directly on or through the New York Stock Exchange, sales made to or through market makers and sales made through any other existing trading market or electronic communications network, and by any other method permitted by law, including but not limited to privately negotiated transactions, which may include block trades, as the Company and the Placement Agents may agree.

The Company will pay the Placement Agent a commission of up to 2.0% of the aggregate gross proceeds from each sale of Shares for which such Placement Agent acts as an agent and/or principal under the terms of the Equity Distribution Agreement. The Company has agreed to provide the Placement Agents with customary indemnification and contribution rights and certain expense reimbursements.

The Equity Distribution Agreement contains customary representations, warranties and agreements of the Company, the Manager and the Placement Agents. The Equity Distribution Agreement may be terminated by the relevant Placement Agent or the Company at any time upon notice to the other party, or by the relevant Placement Agent at any time in certain circumstances, including any suspension or limitation on the trading of the Company’s common stock on the New York Stock Exchange.

The foregoing description is qualified in its entirety by reference to the full text of the Equity Distribution Agreement, which is filed as Exhibit 1.1 to this Current Report and is incorporated herein by reference.

Venable LLP has issued an opinion, dated November 22, 2019, to the Company regarding certain legal matters with respect to the at-the-market offering, a copy of which is filed as Exhibit 5.1 hereto.

Kirkland & Ellis LLP has issued an opinion, dated November 22, 2019, to the Company regarding certain tax matters with respect to the at-the-market offering, a copy of which is filed as Exhibit 8.1 hereto.

This Current Report shall not constitute an offer to sell or the solicitation of an offer to buy any Shares under the Equity Distribution Agreement, nor shall there be any sale of such Shares in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Ares Commercial Real Estate Corp Exhibit
EX-1.1 2 exh11-acrexequitydistribut.htm EXHIBIT 1.1 Exhibit Exhibit 1.1Execution VersionAres Commercial Real Estate Corporation$100,…
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About ARES COMMERCIAL REAL ESTATE CORPORATION (NYSE:ACRE)

Ares Commercial Real Estate Corporation is a specialty finance company. The Company is focused on directly originating, managing and servicing a portfolio of commercial real estate (CRE) debt-related investments for its own account. It operates in two segments: principal lending and mortgage banking. Its target investments include senior loans, bridge loans, subordinated debt, preferred equity and other CRE investments. The Company is also engaged in the mortgage banking business through its subsidiary, ACRE Capital LLC (ACRE Capital). Its Principal Lending Business includes all business activities of the Company, which represents investments in real estate related loans and securities that are held for investment. In mortgage banking business, the Company directly originates long-term senior loans collateralized by multifamily and senior-living properties, and sells them to third parties pursuant to programs overseen by government agencies and government-sponsored enterprises.