Ares Capital lifts debt facilities to $3.5 billion, extends maturities

By Marisa Wong

Morgantown, W.Va., Jan. 4 – Ares Capital Corp. increased its total debt facility capacity to $3.5 billion from $2.2 billion through commitment increases and extensions on two of its three facilities, according to a press release.

The company said it increased its total borrowing capacity in connection with the closing of its previously announced acquisition of American Capital, Ltd.

Ares Capital increased and extended the maturity of its senior secured credit facility with a syndicate of banks led by JPMorgan, SunTrust, BofA Merrill Lynch, Bank of Montreal and Sumitomo Mitsui Banking Corp. The company increased total commitments to $2,095,000,000 from $1,265,000,000 and extended the final maturity to January 2022 from May 2021 on $2 billion of the commitments.

The total commitments include revolving capacity of $1,713,000,000 and a term loan of $382 million. The stated interest rate on the senior secured facility remains unchanged at Libor plus 175 basis points.

The facility also includes an accordion feature that allows the company to increase the size by up to $1 billion, according to an 8-K filing with the Securities and Exchange Commission.

In addition, the company expanded and extended the maturity of its revolving funding facility with Wells Fargo and BofA Merrill Lynch. Total commitments to the facility increased to $1 billion from $540 million, and the final maturity of the facility was extended to January 2022 from May 2019.

The stated interest rate on the revolving funding facility was changed to Libor plus 230 bps from Libor plus an applicable spread ranging from 225 bps to 250 bps.

Including these debt facilities, Ares Capital now has $3.5 billion of total senior secured debt capacity with a blended stated interest rate of Libor plus 190 bps.

As of Jan. 4, the company had $1.5 billion of borrowings outstanding under these facilities, the filing noted.

In addition to growing these debt facilities, in September the company issued $600 million of 3.625% senior notes due 2022.

“Through our September notes offering and these credit facility expansions, we have fortified our already strong balance sheet, enabling us to lock in attractive funding, extend the tenor of our financings and further improve our liquidity position,” Kipp deVeer, chief executive officer of Ares Capital, said in the press release.

“We believe we are well positioned to execute on our strategic plans for long term earnings growth and to support a significantly larger balance sheet post the American Capital acquisition.”

Ares Capital is a specialty finance company based in New York City.

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