Ares Capital Completes $544.0 Million Debt Securitization

Ares Capital Corporation (NASDAQ: ARCC) recently finalized a significant financial transaction involving a term debt securitization. On November 19, 2024, the company through its subsidiary, Ares Direct Lending CLO 4 LLC, successfully concluded a $544.0 million collateralized loan obligation known as the November 2024 Debt Securitization.

The November 2024 Debt Securitization encompasses $464.0 million of Class A Senior Floating Rate Loans and $80.0 million of Class B Senior Floating Rate Loans. These loans bear interest rates at Term SOFR plus certain percentages, with maturity scheduled for October 24, 2036. Ares Capital issued various classes of notes in connection with this securitization, including Class A and Class B Senior Floating Rate Notes, along with Subordinated Notes due in 2036.

ADL CLO 4, the borrowe, secured these Collateralized Loan Obligation (CLO) loans under specific credit agreements. The obligations of ADL CLO 4 are supported by a diversified portfolio of senior secured loans contributed by Ares Capital to ADL CLO 4 on the Closing Date in accordance with the Contribution Agreement.

Furthermore, additional mechanisms are in place for ADL CLO 4 to acquire new collateral under the guidance of the Asset Manager, Ares Capital Management LLC. U.S. Bank serves as the collateral administrator for ADL CLO 4 under a collateral administration agreement.

The CLO Credit Agreements and the CLO Indenture include standard covenants and events of default. It is important to note that the CLO Notes issued have not been registered under relevant securities laws.

The net proceeds from this offering are anticipated to be utilized for repaying existing indebtedness under Ares Capital’s debt facilities. The company retains the flexibility to reborrow under these facilities for general corporate purposes, aligning with its investment objectives.

The specifics of the Contribution Agreement, CLO Credit Agreements, CLO Indenture, and related agreements are outlined in the full text of the filings with the SEC, offering a comprehensive view of the recent financial activities of Ares Capital.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Ares Capital’s 8K filing here.

About Ares Capital

Ares Capital Corporation is a business development company specializing in acquisition, recapitalization, mezzanine debt, restructurings, rescue financing, and leveraged buyout transactions of middle market companies. It also makes growth capital and general refinancing. It prefers to make investments in companies engaged in the basic and growth manufacturing, business services, consumer products, health care products and services, and information technology service sectors.