Ares Capital plans $250 million of 5.5-year convertibles at discount with coupon of 4.125%-4.375%, up 15%

By Rebecca Melvin

New York, July 15 - Ares Capital Corp. launched Monday a $250 million offering of 5.5-year convertible senior notes that were seen pricing at a 1% discount to par after the market close, and were talked at a coupon of 4.125% to 4.375% and a fixed initial conversion premium of 15%, according to market sources.

The Rule 144A offering has a $37.5 million overallotment option and was being sold via active joint bookrunners BofA Merrill Lynch, Morgan Stanley & Co. Inc. and Wells Fargo Securities LLC and passive joint bookrunner Deutsche Bank Securities Inc.

The bonds are non-callable for life and will mature on Jan. 15, 2019.

Proceeds will be used to repay or repurchase debt including borrowings under Ares' revolving credit facility, and for other general corporate purposes, which include investing in portfolio companies.

Ares is a New York-based private equity firm.

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