By Rebecca Melvin
New York, March 9 - Ares Capital Corp. priced $150 million of five-year convertible senior notes on Thursday at the cheap end of talk at par to yield 4.875% with an initial conversion premium of 17.5%, according to a syndicate source.
Price talk was for a coupon of 4.375% to 4.875% and a premium of 17.5% to 20%.
The Rule 144A deal has a greenshoe of $22.5 million and was 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 are non-callable and may not be put. They have contingent conversion at a 130% threshold of the conversion price.
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 targeting middle market companies.
| Issuer: | Ares Capital Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $150 million
|
| Greenshoe: | $22.5 million
|
| Maturity: | March 15, 2017
|
| Bookrunners: | J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Wells Fargo Securities LLC, Morgan Stanley & Co. LLC
|
| Coupon: | 4.875%
|
| Price: | Par
|
| Yield: | 4.875%
|
| Conversion premium: | 17.5%
|
| Conversion price: | $19.34
|
| Conversion ratio: | 51.7050
|
| Contingent conversion: | 130%
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Price talk: | 4.375%-4.875%, up 17.5%-20%
|
| Pricing date: | March 8, after the market close
|
| Settlement date: | March 14
|
| Stock reference price: | $16.46 at close March 8
|
| Distribution: | Rule 144A
|
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