Business Context and Reporting Period
Company: Ares Capital Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: December 14, 2018
Event: Entry into a Material Definitive Agreement regarding an amendment to the Revolving Funding Facility.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, or liquidity metrics. It focuses exclusively on the terms of a debt facility amendment.
| Metric | Previous Term | New Term |
|---|---|---|
| Facility Maturity Date | January 3, 2022 | January 3, 2024 |
| Reinvestment Period | Through January 3, 2019 | Through January 3, 2022 |
| Interest Rate Spread (over LIBOR) | 2.15% | 2.00% |
Material Changes
On December 14, 2018, Ares Capital Corporation and its subsidiary, Ares Capital CP Funding LLC, amended their revolving funding facility (CP Funding Facility) with Wells Fargo Bank, National Association, Bank of America, N.A., and other parties. The material changes include:
- Extension of Maturity: The stated maturity date was extended by two years from January 3, 2022, to January 3, 2024.
- Extension of Reinvestment Period: The reinvestment period was extended from January 3, 2019, to January 3, 2022.
- Interest Rate Reduction: The interest rate spread was reduced from 2.15% over LIBOR to 2.00% over LIBOR.
- Fee Adjustments: The ranges of the unused portion of the facility subject to certain fees were adjusted.
Guidance, Outlook, and Risks
Management Commentary: The filing states that borrowings under the CP Funding Facility remain subject to the facility's various covenants and leverage restrictions contained in the Investment Company Act of 1940.
Risks and Contingencies: No new risks or contingencies were disclosed in this specific filing beyond the standard covenants and regulatory leverage restrictions applicable to the facility.
Unusual Items: None reported.
Investor Verification Checklist
- Verify the full text of Exhibit 10.1 (Amendment No. 11 to Loan and Servicing Agreement) for detailed fee structures and covenant specifics.
- Confirm the impact of the reduced interest rate spread (2.00% vs. 2.15%) on future interest expense projections.
- Review the extended reinvestment period to understand the timeline for potential portfolio rebalancing or maturity management.
- Ensure compliance with the Investment Company Act of 1940 leverage restrictions remains intact under the new terms.