Ares Capital offers $250 million five-year convertible notes; price talk 3.25%-3.75%, up 15%-20%

By Stephanie N. Rotondo

Seattle, Jan. 23 – Ares Capital Corp. is offering $250 million of five-year convertible notes with a coupon of 3.25% to 3.75% and an initial conversion premium of 15% to 20%, according to market sources.

J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are the joint bookrunners.

The Rule 144A deal will include a $37.5 million over-allotment option.

The company cannot call the issue prior to maturity. Conversions will be settled with cash, common stock or a combination of the two, at the company’s option.

Proceeds will be used to repay certain outstanding debt.

Ares is a New York-based business development company.

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