Ares greenshoe fully exercised, lifting convertibles to $230 million

By Devika Patel

Knoxville, Tenn., Oct. 10 - Underwriters for Ares Capital Corp.'s offering of 4.75% convertible senior notes due Jan. 15, 2018 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 Wednesday with the Securities and Exchange Commission.

As previously reported, the company sold the convertibles at 99.25 on Oct. 3 in a Rule 144A offering via joint bookrunners J.P. Morgan Securities LLC and Goldman Sachs & Co. Deutsche Bank Securities Inc. was a passive bookrunner.

The convertibles have an initial conversion premium of 17.5% and an initial conversion price of $19.87, which equals an initial conversion rate of 50.3290.

The notes are 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.

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