Ares Capital plans $200 million 5.25-year convertibles to yield 4.25%-4.75%, up 17.5%-22.5%

By Rebecca Melvin

New York, Oct. 3 - Ares Capital Corp. planned to price $200 million of convertible senior notes due Jan. 15, 2018 after the market close Wednesday that were talked to yield 4.25% to 4.75% with an initial conversion premium of 17.5% to 22.5%, according to a market source.

The Rule 144A offering has a $30 million over-allotment option and was being sold via joint bookrunners J.P. Morgan Securities LLC and Goldman Sachs & Co. and via passive bookrunner Deutsche Bank Securities Inc.

The notes will be non-callable with no puts. There is one-way dividend protection in the form of a conversion rate adjustment for dividends above $0.38, and there is change-of-control protection.

Proceeds will be used to repay or repurchase debt and for general corporate purposes, including investing in portfolio companies in accordance with its investment objective.

Ares is a New York-based private equity firm.

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