Published on 7/27/2023 in the Prospect News Investment Grade Daily.
New Issue: Ares Capital sells $600 million 7% long three-year notes at 265 bps over Treasuries
By Wendy Van Sickle
Columbus, Ohio, July 27 – Ares Capital Corp. priced an upsized $600 million of 7% long three-year notes (Baa3/BBB-/BBB) at Treasuries plus 265 basis points on Thursday, according to filings with the Securities and Exchange Commission.
The notes priced at 99.257 to yield 7.249%.
The issue was upsized from an initial $500 million.
BofA Securities Inc., J.P. Morgan Securities LLC, SMBC Nikko Securities America Inc., Wells Fargo Securities LLC, Mizuho Securities USA Inc., MUFG Securities Americas Inc., RBC Capital Markets, LLC, Santander US Capital Markets LLC and Truist Securities Inc. were the bookrunners.
Proceeds will be used to repay outstanding debt under two revolving facilities with $1.9 billion and $850 million outstanding as of July 19 and repay borrowings on an SMBC funding facility for which there was $401 million outstanding on July 19 and/or a BNP funding facility with $475 million outstanding on July 19.
Ares is a New York specialty finance company.
| Issuer: | Ares Capital Corp.
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| Amount: | $600 million (upsized from $500 million)
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| Issue: | Notes
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| Maturity: | Jan. 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 Inc., MUFG Securities Americas Inc., RBC Capital Markets, LLC, Santander US Capital Markets LLC and Truist Securities Inc.
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| Joint lead managers: | CIBC World Markets Corp., ICBC Standard Bank plc, Morgan Stanley & Co. LLC, Barclays, BNP Paribas Securities Corp., BNY Mellon Capital Markets, LLC, Capital One Securities, Inc., Goldman Sachs & Co. LLC, Natixis Securities Americas LLC, Regions Securities LLC, SG Americas Securities, LLC and U.S. Bancorp Investments, Inc.
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| Co-managers: | ING Financial Markets LLC, R. Seelaus & Co., LLC, Academy Securities, Inc., Citigroup Global Markets Inc., Comerica Securities, Inc., 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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| Trustee: | U.S. Bank NA
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| Counsel to issuer: | Kirkland & Ellis LLP, Eversheds Sutherland (US) LLP and Venable LLP
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| Counsel to underwriters: | Freshfields Bruckhaus Deringer US LLP
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| Coupon: | 7%
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| Price: | 99.257
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| Yield: | 7.249%
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| Spread: | Treasuries plus 265 bps
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| Call: | Make-whole call at Treasuries plus 40 bps
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| Change-of-control put: | At par
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| Trade date: | July 27
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| Settlement date: | Aug. 3
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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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| Cusip: | 04010LBE2
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