Ares greenshoe exercised; 5.125% convertibles lifted to $230 million

By Devika Patel

Knoxville, Tenn., March 28 - Underwriters for Ares Capital Corp.'s 5.125% five-year convertible senior notes exercised their over-allotment option in full for $30 million more of the convertibles, increasing the size of the issue to $230 million, the company said in an 8-K filed Monday with the Securities and Exchange Commission.

As previously reported, the company sold the notes at par on March 22 after the close in a Rule 144A offering via bookrunners Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Merrill Lynch and Wells Fargo Securities LLC.

The convertibles have an initial conversion premium of 17.5% and an $11.16 conversion price, which equals a conversion ratio of 52.5348. There is a contingent conversion threshold at 130% of the conversion price.

The notes, which will mature June 1, 2016, are non-callable and have no puts. They have standard dividend and takeover protection.

Proceeds will be used to redeem the company's outstanding $161.2 million of 6% unsecured 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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