Schedule of borrowings outstanding |
The following table summarizes the Company’s and its subsidiaries’ debt obligations: | | | | | | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2017 | | As of December 31, 2016 | | Debt Origination Date | Maturity | | Original Borrowing Amount | | Carrying Value | | Interest Rate | | Carrying Value | | Interest Rate | Credit Facility(1) | Revolver | 2/24/2022 | | N/A |
| | $ | 210,000 |
| | 3.09 | % | | $ | — |
| | —% | Senior Notes(2) | 10/8/2014 | 10/8/2024 | | $ | 250,000 |
| | 245,308 |
| | 4.21 | % | | 244,684 |
| | 4.21% | 2015 Term Loan(3) | 9/2/2015 | 7/29/2026 | | $ | 35,205 |
| | 35,037 |
| | 2.86 | % | | 35,063 |
| | 2.74% | 2016 Term Loan(4) | 12/21/2016 | 1/15/2029 | | $ | 26,376 |
| | 25,948 |
| | 3.08 | % | | 26,037 |
| | 2.66% | 2017 Term Loan A(4) | 3/22/2017 | 1/22/2028 | | $ | 17,600 |
| | 17,407 |
| | 2.90 | % | | N/A |
| | N/A | 2017 Term Loan B(4) | 5/10/2017 | 10/15/2029 | | $ | 35,198 |
| | 35,062 |
| | 2.90 | % | | N/A |
| | N/A | 2017 Term Loan C(4) | 6/22/2017 | 7/30/2029 | | $ | 17,211 |
| | 17,078 |
| | 2.88 | % | | N/A |
| | N/A | 2017 Term Loan D(4) | 11/16/2017 | 10/15/2030 | | $ | 30,450 |
| | 30,336 |
| | 2.77 | % | | N/A |
| | N/A | Total debt obligations | | | | | | $ | 616,176 |
| | | | $ | 305,784 |
| | |
| | (1) | The AOG entities are borrowers under the Credit Facility, which, as amended in February 2017 and increased in September 2017, provides a $1.065 billion revolving line of credit. It has a variable interest rate based on LIBOR or a base rate plus an applicable margin with an unused commitment fee paid quarterly, which is subject to change with the Company’s underlying credit agency rating. As of December 31, 2017, base rate loans bear interest calculated based on the base rate plus 0.50% and the LIBOR rate loans bear interest calculated based on LIBOR plus 1.50%. The unused commitment fee is 0.20% per annum. There is a base rate and LIBOR floor of zero. |
| | (2) | The Senior Notes were issued in October 2014 by Ares Finance Co. LLC (“AFC”), a subsidiary of the Company, at 98.268% of the face amount with interest paid semi-annually. The Company may redeem the Senior Notes prior to maturity, subject to the terms of the indenture. |
| | (3) | The 2015 Term Loan was entered into in August 2015 by a subsidiary of the Company that acts as a manager to a CLO. The 2015 Term Loan is secured by collateral in the form of CLO senior tranches owned by the Company. To the extent the assets are not sufficient to cover the Term Loan, there is no further recourse to the Company to fund or repay the remaining balance. Interest is paid quarterly, and the Company also pays a fee of 0.025% of a maximum investment amount. |
| | (4) | The 2016 and 2017 Term Loans ("Term Loans") were entered into by a subsidiary of the Company that acts as a manager to a CLO. The Term Loans are secured by collateral in the form of CLO senior tranches and subordinated notes owned by the Company. Collateral associated with one of the Term Loans may be used to satisfy outstanding liabilities of another term loan should the collateral fall short. To the extent the assets associated with these Term Loans are not sufficient, there is no further recourse to the Company to fund or repay the remaining balance. Interest is paid quarterly, and the Company also pays a fee of 0.03% of a maximum investment amount. |
The Consolidated Funds had the following revolving bank credit facilities and term loans outstanding as of December 31, 2017 and 2016: | | | | | | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2017 | | As of December 31, 2016 | | Type of Facility | | Maturity Date | | Total Capacity | | Outstanding Loan(1) | | Effective Rate | | Outstanding Loan(1) | | Effective Rate | | Credit Facilities: | | | | | | | | | | | | | | | | 1/1/2023 | | $ | 18,000 |
| | $ | 12,942 |
| | 2.88% | | $ | 12,942 |
| | 2.38% | | | | 6/30/2018 | | $ | 48,042 |
| | 48,042 |
| | 1.55% | (2) | 42,128 |
| | 1.55% | (2) | | | 3/7/2018 | | $ | 71,500 |
| | 71,500 |
| | 2.89% | | N/A |
| | N/A | | Revolving Term Loan | | 8/19/2019 | | $ | 11,429 |
| | 5,714 |
| | 5.86% | | N/A |
| | N/A | | Total borrowings of Consolidated Funds | | | | | | $ | 138,198 |
| | | | $ | 55,070 |
| | | |
| | (1) | The fair values of the borrowings approximate the carrying value, as the interest rate on the borrowings is a floating rate. |
| | (2) | The effective rate is based on the three month EURIBOR or zero, whichever is higher, plus an applicable margin. |
The following table shows the activity of the Company's debt issuance costs: | | | | | | | | | | | | | | | Credit Facility | | Senior Notes | | Term Loans | | Unamortized debt issuance costs as of December 31, 2015 | $ | 6,241 |
| | $ | 2,035 |
| | $ | 207 |
| | Debt issuance costs incurred | 548 |
| | — |
| | 340 |
| | Amortization of debt issuance costs | (1,989 | ) | | (232 | ) | | (21 | ) | | Unamortized debt issuance costs as of December 31, 2016 | 4,800 |
| | 1,803 |
| | 526 |
| | Debt issuance costs incurred | 3,394 |
| | — |
| | 733 |
| | Amortization of debt issuance costs | (1,651 | ) | | (232 | ) | | (88 | ) | | Unamortized debt issuance costs as of December 31, 2017 | $ | 6,543 |
| | $ | 1,571 |
| | $ | 1,171 |
| |
As of December 31, 2017 and 2016, the following loan obligations were outstanding and classified as liabilities of the Company’s Consolidated CLOs: | | | | | | | | | | | | | | | | | | | | | | As of December 31, 2017 | | As of December 31, 2016 | | Loan Obligations | | Fair Value of Loan Obligations | | Weighted Average Remaining Maturity In Years | | Loan Obligations | | Fair Value of Loan Obligations | | Weighted Average Remaining Maturity In Years | Senior secured notes(1) | $ | 4,801,582 |
| | $ | 4,776,883 |
| | 10.57 | | $ | 2,839,779 |
| | $ | 2,841,440 |
| | 9.68 | Subordinated notes(2) | 276,169 |
| | 186,311 |
| | 11.25 | | 284,046 |
| | 189,672 |
| | 9.97 | Total loan obligations of Consolidated CLOs | $ | 5,077,751 |
| | $ | 4,963,194 |
| | | | $ | 3,123,825 |
| | $ | 3,031,112 |
| | |
| | (1) | Original borrowings under the senior secured notes totaled $4.8 billion, with various maturity dates ranging from October 2024 to October 2030. The weighted average interest rate as of December 31, 2017 was 4.48%. |
| | (2) | Original borrowings under the subordinated notes totaled $276.2 million, with various maturity dates ranging from October 2024 to October 2030. They do not have contractual interest rates, but instead receive distributions from the excess cash flows generated by each Consolidated CLO. |
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