Ares Capital talks $150 million five-year convertibles at 4.375%-4.875%, up 17.5%-20%

By Rebecca Melvin

New York, March 8 - Ares Capital Corp. plans to price $150 million five-year convertible senior notes on Thursday after the market closes, talked at a coupon of 4.375% to 4.875% and an initial conversion premium of 17.5% to 20%, a market source said.

The Rule 144A offering has a greenshoe of $22.5 million and is being sold via joint bookrunners J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Wells Fargo Securities LLC and Morgan Stanley & Co. LLC.

The notes will be non-callable and may not be put. They have contingent conversion at a 130% threshold.

The notes have standard change-of-control protection and dividend protection for payments above $0.37 per share per quarter.

Proceeds will be used to repay outstanding debt, which may include borrowings under the company's revolving credit facility and other facilities, and for general corporate purposes.

Ares is a New York-based private equity firm.

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