Ares Commercial Real Estate Corp current report, 13 December 2012

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Business Context and Reporting Period

Company: Ares Commercial Real Estate Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: December 13, 2012
Event: Announcement of a private offering of unsecured Convertible Senior Notes due 2015.

Key Financial Metrics

This filing does not report revenue, profit, cash flow, margins, or existing debt levels. It details a proposed capital raise:

  • Primary Offering Amount: $50 million aggregate principal amount of Convertible Senior Notes.
  • Overallotment Option: Up to an additional $7.5 million.
  • Affiliate Participation: Directors, officers, and affiliates expected to purchase at least $5 million.
  • Interest Payment: Semiannual (rate not specified in text).
  • Maturity Date: December 15, 2015.

Material Changes

The filing announces a material change in the Company's capital structure through the issuance of new debt securities. The Convertible Senior Notes are unsecured and convertible into cash, common stock, or a combination thereof at the Company's election. The Company does not have the right to redeem the notes prior to maturity, except as necessary to maintain Real Estate Investment Trust (REIT) qualification.

Guidance, Outlook, and Use of Proceeds

Use of Proceeds:

  • Repayment of certain outstanding indebtedness under secured funding facilities.
  • Increasing availability of funds under secured facilities for investment in target assets.
  • General corporate purposes, including investing in target assets.
Regulatory Status: The notes and underlying common stock are not registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption. Notes purchased by affiliates will be treated as "restricted securities" under Rule 144.

Investor Verification Checklist

  • Verify the final conversion rate and interest rate, which were not specified in this filing.
  • Confirm the specific secured funding facilities to be repaid with the proceeds.
  • Review the full Offering Memorandum (Exhibit 99.2) for detailed terms and risk factors.
  • Monitor the completion of the offering and the actual amount raised versus the $50 million target.