Ares greenshoe exercised, lifts 4.625% convertibles to $402.5 million

By Devika Patel

Knoxville, Tenn., March 20 – Underwriters for Ares Capital Corp.’s offering of 4.625% five-year convertible notes exercised their over-allotment option in full for $52.5 million more of the convertibles, increasing the size of the issue to $402.5 million, the company said in an 8-K filed with the Securities and Exchange Commission.

As previously reported, the company sold the convertibles at 98 on March 5 in a registered offering, via joint bookrunners J.P. Morgan Securities LLC, BofA Merrill Lynch and RBC Capital Markets LLC.

Joint lead managers were BMO Capital Markets Corp., MUFG, Mizuho Securities USA Inc., SMBC Nikko Securities America Inc., SunTrust Robinson Humphrey Inc. and Wells Fargo Securities LLC.

The convertibles have an initial conversion premium of 15% and an initial conversion price of $19.88, which equals a conversion rate of 50.293.

The notes are non-callable and have no put features.

There is dividend and takeover protection.

Net proceeds were $390.7 million and will be used to repay outstanding debt under the New York-based specialty finance company’s debt facilities.

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