By Stephanie N. Rotondo
Seattle, Jan. 24 – Ares Capital Corp. sold $350 million of five-year convertible notes at par to yield 3.75% with an initial conversion premium of 15% on Tuesday, the company said in a press release.
The deal came upsized from $250 million. The coupon was at the cheap end of the 3.25% to 3.75% yield talk and the 15% to 20% conversion premium talk.
J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, BMO Capital Markets and Goldman Sachs & Co. are the joint bookrunners.
The Rule 144A deal will include a $52.5 million over-allotment option, up from $37.5 million.
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, at a rate of 51.5756 shares per each $1,000 of notes, equal to $19.39 per share.
The notes have a contingent conversion provision.
Proceeds will be used to repay outstanding debt.
Ares is a New York-based business development company.
| Issuer: | Ares Capital Corp.
|
| Securities: | Convertible notes
|
| Amount: | $350 million
|
| Greenshoe: | $52.5 million
|
| Maturity: | Feb. 1, 2022
|
| Bookrunners: | J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, BMO Capital Markets, Goldman Sachs & Co.
|
| Coupon: | 3.75%
|
| Price: | Par of $1,000
|
| Yield: | 3.75%
|
| Conversion premium: | 15%
|
| Conversion price: | $19.39 per share
|
| Conversion rate: | 51.5756 shares
|
| Call options: | Non-callable
|
| Net share settlement: | Yes
|
| Contingent conversion: | Yes
|
| Pricing date: | Jan. 24
|
| Settlement date: | Jan. 27
|
| Distribution: | Rule 144A
|
| Talk: | 3.25% to 3.75% yield, with initial conversion premium of 15% to 20%
|
| Stock symbol: | Nasdaq: ARCC
|
| Stock price: | $16.86 as of Jan. 23 close
|
| Market capitalization: | $7.18 billion
|
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