By Rebecca Melvin
New York, Oct. 4 - Ares Capital Corp. priced $200 million of convertible senior notes due Jan. 15, 2018 after the market close Wednesday at a discount to par, or 99.25, and with a 4.75% coupon and a 17.5% initial conversion premium, according to a syndicate source.
The Rule 144A offering has a $30 million over-allotment option and priced at the cheap end of talk, which was for a 4.25% to 4.75% coupon and 17.5% to 22.5% initial conversion premium.
Joint bookrunners were J.P. Morgan Securities LLC and Goldman Sachs & Co. Deutsche Bank Securities Inc. was a passive bookrunner.
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. Conversions can be settled in cash, stock or a combination.
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.
| Issuer: | Ares Capital Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $200 million
|
| Greenshoe: | $30 million
|
| Maturity: | Jan. 15, 2018
|
| Bookrunners: | J.P. Morgan Securities LLC, Goldman Sachs & Co. and passive bookrunner Deutsche Bank Securities Inc.
|
| Co-managers: | BMO Capital Markets Corp., SunTrust Robinson Humphrey Inc.
|
| Coupon: | 4.75%
|
| Price: | 99.25
|
| Initial conversion premium: | 17.5%
|
| Initial conversion price: | $19.87
|
| Initial conversion rate: | 50.3290 in cash, stock or both
|
| Calls: | Non-callable
|
| Puts: | No puts
|
| Takeover protection: | Yes
|
| Dividend protection: | Yes, in the form of a conversion rate adjustment for dividend above $0.38
|
| Price talk: | 4.25%-4.75%, up 17.5%-22.5%
|
| Distribution: | Rule 144A
|
| Pricing date: | Oct. 3
|
| Settlement date: | Oct. 10
|
| Stock symbol: | Nasdaq: ARCC
|
| Stock price: | $16.91, as of close Oct. 3
|
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