Published on 1/6/2022 in the Prospect News Investment Grade Daily.
New Issue: Ares Capital sells $500 million 2.875% notes due 2027 at Treasuries plus 150 bps
By Wendy Van Sickle and Cristal Cody
Columbus, Ohio, Jan. 6 – Ares Capital Corp. priced $500 million of 2.875% notes due June 15, 2027 (Baa3/BBB-/BBB) at 99.504 to yield 2.975%, or a spread of Treasuries plus 150 basis points, according to an FWP filing with the Securities and Exchange Commission.
The notes priced tight to talk to yield in the Treasuries plus 165 bps area, as reported by a market source.
The notes have a make-whole call and a par call a month before the maturity date.
Should there be a change of control, the company will need to make an offer to repurchase the notes at par.
BofA Securities, Inc., J.P. Morgan Securities LLC, SMBC Nikko Securities America, Inc., Wells Fargo Securities, LLC, Mizuho Securities USA LLC, MUFG, RBC Capital Markets, LLC and Truist Securities, Inc. are the bookrunners.
Joint lead managers are BNP Paribas Securities Corp., Capital One Securities, Inc., CIBC World Markets Corp., Goldman Sachs & Co. LLC, HSBC Securities (USA) Inc., ICBC Standard Bank plc, Natixis Securities Americas LLC, R. Seelaus & Co., LLC, Regions Securities LLC and SG Americas Securities, LLC
U.S. Bank NA is the trustee.
Kirkland & Ellis LLP is working as counsel to the issuer.
Venable LLP is advising the underwriters.
Proceeds will be used to repay outstanding debt under two revolving facilities with $1.8 billion and $763 million outstanding as of Dec. 29 and repay borrowings on an SMBC funding facility for which there was $401 million outstanding on Dec. 29.
Ares is a New York specialty finance company.
| Issuer: | Ares Capital Corp.
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| Amount: | $500 million
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| Issue: | Notes
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| Maturity: | June 15, 2027
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| Bookrunners: | BofA Securities, Inc., J.P. Morgan Securities LLC, SMBC Nikko Securities America, Inc., Wells Fargo Securities, LLC, Mizuho Securities USA LLC, MUFG, RBC Capital Markets, LLC and Truist Securities, Inc.
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| Lead managers: | BNP Paribas Securities Corp., Capital One Securities, Inc., CIBC World Markets Corp., Goldman Sachs & Co. LLC, HSBC Securities (USA) Inc., ICBC Standard Bank plc, Natixis Securities Americas LLC, R. Seelaus & Co., LLC, Regions Securities LLC and SG Americas Securities, LLC
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| Co-managers: | Barclays, BNY Mellon Capital Markets, LLC, ING Financial Markets LLC, Morgan Stanley & Co. LLC, Santander Investment Securities Inc., Academy Securities, Inc., Citigroup Global Markets Inc., Comerica Securities, Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Keefe, Bruyette & Woods, Inc., Loop Capital Markets LLC, Samuel A. Ramirez & Co., Inc. and Siebert Williams Shank & Co., LLC
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| Coupon: | 2.875%
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| Price: | 99.504
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| Yield: | 2.975%
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| Spread: | Treasuries plus 150 bps
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| Call: | Make-whole call at Treasuries plus 25 bps until one month prior to maturity, then par call
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| Pricing date: | Jan. 6
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| Settlement date: | Jan. 13
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| Ratings: | Moody’s: Baa3
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| S&P: BBB-
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| Fitch: BBB
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| Distribution: | SEC registered
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| Talk: | Treasuries plus 165 bps area
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| Cusip: | 04010LBD4
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