By Rebecca Melvin
New York, July 15 - Ares Capital Corp. priced $250 million of 5.5-year convertible senior notes at a 1.5% discount to par, or at 98.5, after the market close Monday, and at a 4.375% coupon and initial conversion premium of 15%, according to a syndicate source.
The Rule 144A deal came beyond the cheap end of the talked 99 discount, and at the cheap end of 4.125% to 4.375% coupon talk. The premium had been fixed at 15%.
There is a $50 million over-allotment option that was upsized from $37.5 million.
The deal was sold via active joint bookrunners BofA Merrill Lynch, Morgan Stanley & Co. LLC and Wells Fargo Securities LLC and passive joint bookrunner Deutsche Bank Securities Inc.
The bonds have contingent conversion if shares rise to or exceed 130% of the conversion price and flexible settlement with intention to net share settle. They 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.
| Issuer: | Ares Capital Corp.
|
| Issue: | Convertible senior notes
|
| Amount: | $250 million
|
| Greenshoe: | $50 million, upsized from $37.5 million
|
| Maturity: | Jan. 15, 2019
|
| Bookrunners: | BofA Merrill Lynch, Morgan Stanley & Co. LLC, Wells Fargo Securities LLC (active), Deutsche Bank Securities Inc. (passive)
|
| Coupon: | 4.375%
|
| Price: | Discount to par, 98.5
|
| Yield: | 4.375% plus about 50 basis points
|
| Conversion premium: | 15%
|
| Conversion price: | $20.16
|
| Conversion ratio: | 49.6044
|
| Contingent conversion: | Yes, at 130%
|
| Net share settlement: | Flexible settlement with intention to net share settle
|
| Call protection: | Non-callable
|
| Puts: | None
|
| Dividend protection: | Yes
|
| Takeover protection: | Yes
|
| Price talk: | 4.125%-4.375%, up 15%
|
| Pricing date: | July 15
|
| Settlement date: | July 19
|
| Stock reference price: | $17.53 at close July 15
|
| Distribution: | Rule 144A
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
