Business Context and Reporting Period
This Form 8-K Current Report was filed by Ares Capital Corporation on January 28, 2015. The report details a specific corporate finance event: the issuance of additional senior notes to raise capital.
Key Financial Metrics
- Debt Issuance: $200 million aggregate principal amount of 3.875% Notes due 2020.
- Net Proceeds: Approximately $198.4 million after estimated offering expenses.
- Offering Expenses: Approximately $2.0 million total, including a $1.3 million underwriting discount.
- Issuance Price: 100.185% of principal amount.
- Interest Rate: 3.875% per annum, payable semiannually.
- Maturity Date: January 15, 2020.
Material Changes
The Company increased its outstanding indebtedness by issuing $200 million in new notes. These "New 2020 Notes" are fungible with and rank equally with $400 million of "Existing 2020 Notes" issued in November 2014, creating a combined series of $600 million in 3.875% Notes due 2020.
Use of Proceeds and Outlook
Management intends to use the net proceeds primarily to repay or repurchase certain outstanding indebtedness, including debt under existing facilities. Any remaining funds will be used for general corporate purposes, including investing in portfolio companies in accordance with the Company's investment objective. The notes are direct senior unsecured obligations and may be redeemed at the Company's option at specified redemption prices.
Investor Verification Checklist
- Verify the total outstanding principal of the 2020 Notes series (now $600 million).
- Confirm the specific debt facilities or obligations targeted for repayment with the $198.4 million in net proceeds.
- Review the Fifth Supplemental Indenture for specific redemption price schedules and covenants.
- Check subsequent filings for the actual allocation of proceeds between debt repayment and new investments.