Ares greenshoe exercised in part, lifts convertibles to $162.5 million

By Devika Patel

Knoxville, Tenn., March 14 - The underwriters for Ares Capital Corp.'s offering of 4.875% five-year convertible senior notes exercised their over-allotment option in part for $12.5 million more of the convertibles, increasing the size of the issue to $162.5 million, the company said in an 8-K filed Wednesday with the Securities and Exchange Commission.

As previously reported, the company sold $150 million of the convertibles at par on March 8, after the market close, in a Rule 144A offering via joint bookrunners J.P. Morgan Securities LLC, Bank of America Merrill Lynch, Wells Fargo Securities LLC and Morgan Stanley & Co. LLC.

The convertibles have an initial conversion premium of 17.5% and an initial conversion price of $19.34, which equals a conversion ratio of 51.7050.

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.

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