Ares Capital increased its total borrowing capacity in conjunction with the closing of its acquisition of American Capital from $2.2 billion to $3.5 billion, including commitment increases and extensions on two of its three facilities.
Ares Capital increased and extended the maturity of its senior secured credit facility with a syndicate of banks led by JPMorgan, SunTrust, Bank of America Merrill Lynch, Bank of Montreal and Sumitomo Mitsui, increasing total commitments from $1.265 billion to $2.095 billion, and extending the final maturity from May 2021 to January 2022 on $2 billion of the commitments. The total commitments include revolving capacity of $1.713 billion and a term loan of $382 million. The stated interest rate on the facility remains unchanged at LIBOR+1.75%.
In addition, Ares Capital expanded and extended the maturity of its revolving funding facility with Wells Fargo and Bank of America Merrill Lynch. Total commitments to the facility increased from $540 million to $1 billion, and the final maturity of the facility was extended from May 2019 to January 2022. The stated interest rate on the facility was changed to LIBOR+2.30% from LIBOR plus an applicable spread ranging from 2.25% to 2.50%.
Including these debt facilities, Ares Capital now has $3.5 billion in total senior secured debt capacity with a blended stated interest rate of LIBOR+1.90%.
In addition to growing these debt facilities, in September 2016, Ares Capital issued $600 million in senior unsecured notes due 2022 with a stated interest rate of 3.625%.
“Through our September notes offering and these credit facility expansions, we have fortified our already strong balance sheet, enabling us to lock in attractive funding, extend the tenor of our financings and further improve our liquidity position,” said Kipp deVeer, CEO of Ares Capital. “We believe we are well positioned to execute on our strategic plans for long-term earnings growth and to support a significantly larger balance sheet post the American Capital acquisition.”
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Ares Management Acquires American Capital