Ares Capital talks $200 million five-year convertible notes to yield 4.875%-5.375%, up 15%-20%

By Kenneth Lim

Boston, March 22 - Ares Capital Corp. planned to price $200 million five-year convertible senior notes Tuesday after the market close, talked at a coupon of 4.875% to 5.375% and an initial conversion premium of 15% to 20%.

The notes will be priced at par.

Bookrunners Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Merrill Lynch and Wells Fargo Securities LLC have an over-allotment option for an additional $30 million.

The notes will be non-callable and will have no puts.

There will be a contingent conversion threshold at 130% of the conversion price.

The notes will have standard dividend and takeover protection.

Proceeds will be used to redeem the company's outstanding $161.2 million of 6% notes due April 1, 2012, to repay revolving debt and for other general corporate purposes.

Ares is a New York-based private equity firm targeting middle market companies.

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