Business Context and Reporting Period
Company: Ares Capital Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: November 19, 2013
Event: Entry into a Material Definitive Agreement and creation of a direct financial obligation.
Key Financial Metrics
This filing reports a specific debt issuance event rather than periodic financial performance metrics (e.g., revenue, profit, or cash flow).
- Debt Issuance: $600,000,000 aggregate principal amount of 4.875% Senior Notes due 2018.
- Interest Rate: 4.875% per year, payable semiannually.
- Maturity Date: November 30, 2018.
- First Interest Payment: May 30, 2014.
- Use of Proceeds: Repayment of certain outstanding indebtedness under debt facilities and general corporate purposes (including portfolio investments).
Material Changes
The Company entered into a Fourth Supplemental Indenture with U.S. Bank National Association to facilitate the issuance of the new Senior Notes. This transaction closed on November 19, 2013, increasing the Company's outstanding debt obligations by $600 million.
Guidance, Risks, and Covenants
- Redemption: The Notes may be redeemed in whole or in part at the Company's option at redemption prices set forth in the Indenture.
- Change of Control: Upon a change of control repurchase event (defined as a change of control combined with a below investment-grade rating by Fitch and S&P), the Company must offer to purchase the Notes at 100% of the principal amount plus accrued interest.
- Covenants: The Indenture requires compliance with specific sections of the Investment Company Act of 1940 and mandates the provision of financial information to Note holders if the Company ceases to be subject to Exchange Act reporting requirements.
- Trustee Fees: U.S. Bank National Association serves as trustee and custodian, receiving customary fees and expense reimbursements.
Investor Verification Checklist
- Verify the exact redemption schedule and prices in the Fourth Supplemental Indenture (Exhibit 4.1).
- Confirm the specific outstanding indebtedness being repaid with the net proceeds.
- Review the full text of the Indenture for limitations and exceptions to the covenants.
- Monitor the Company's credit ratings with Fitch and S&P to assess potential change of control repurchase triggers.