Ares Capital amends credit facilities to modify financial covenants

By Sarah Lizee

Olympia, Wash., Oct. 3 – Ares Capital Corp. completed amendments to its secured credit facilities, reducing the asset coverage requirement to 150% from 200%, according to an 8-K filing with the Securities and Exchange Commission.

Ares amended its $2.1 billion credit facility led by arrangers JPMorgan Chase Bank, NA, SunTrust Robinson Humphrey and BofA Merrill Lynch to reduce the asset coverage covenant and to make related changes to the borrowing base calculations.

The facility remains composed of a $1.7 billion revolving loan tranche and a $413.75 million term loan tranche. There is a $1 billion accordion feature.

In addition, Ares Capital amended the documents governing its $1 billion revolving funding facility led by Wells Fargo to allow it to operate under the 150% asset coverage requirement.

Pricing and other significant terms under both facilities are unchanged.

Amendments to adopt the new asset coverage requirement were not necessary for any of Ares Capital’s other debt agreements, the company said.

The company said it completed the amendments to allow it to use the flexibility and incremental leverage provided by the Small Business Credit Availability Act.

The specialty finance company is based in New York.

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