UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT
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Item 1.01. Entry into a Material Definitive Agreement.
On May 13, 2024, Ares Capital Corporation (the “Company”) and U.S. Bank Trust Company, National Association (the “Trustee”), entered into an Indenture, dated May 13, 2024, between the Company and the Trustee (the “Base Indenture”) and a First Supplemental Indenture, dated May 13, 2024, between the Company and the Trustee (the “First Supplemental Indenture” and, together with the “Base Indenture,” the “Indenture”). The First Supplemental Indenture relates to the Company’s issuance, offer and sale of $850,000,000 aggregate principal amount of its 5.950% notes due 2029 (the “Notes”).
The Notes will mature on July 15, 2029, and may be redeemed in whole or in part at the Company’s option at any time at the redemption price set forth in the First Supplemental Indenture. The Notes bear interest at a rate of 5.950% per year payable semiannually on January 15 and July 15 of each year, commencing on July 15, 2024. The Notes are direct unsecured obligations of the Company.
The Company expects to use the net proceeds of this offering to repay certain outstanding indebtedness under its debt facilities. The Company may reborrow under its debt facilities for general corporate purposes, which include investing in portfolio companies in accordance with its investment objective.
The Base Indenture, as supplemented by the First Supplemental Indenture, contains certain covenants including covenants requiring the Company to comply with Section 18(a)(1)(A) as modified by Section 61(a) of the Investment Company Act of 1940, as amended, or any successor provisions, as such obligation may be amended or superseded but giving effect to any exemptive relief granted to the Company by the Securities and Exchange Commission (the “SEC”), and to provide financial information to the holders of the Notes and the Trustee if the Company should no longer be subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the Indenture.
In addition, upon the occurrence of a change of control repurchase event (which involves the occurrence of both a change of control and a below investment grade rating of the Notes by Fitch, Inc., Moody’s Investor Services, Inc. and Standard & Poor’s Ratings Services), the Company will be required to make an offer to purchase the Notes at a price equal to 100% of the principal amount plus accrued and unpaid interest to the date of purchase.
The Notes were offered and sold pursuant to the Registration Statement on Form N-2 (File No. 333-279023) filed with the SEC on May 1, 2024, the preliminary prospectus supplement filed with the SEC on May 6, 2024 and the pricing term sheet filed with the SEC on May 6, 2024. The transaction closed on May 13, 2024.
The Trustee also serves as the Company’s custodian under the terms of a custody agreement, pursuant to which it receives customary fees and expenses as custodian.
The foregoing descriptions of the Base Indenture, First Supplemental Indenture and the Notes do not purport to be complete and are qualified in their entirety by reference to the full text of the Base Indenture, First Supplemental Indenture and the Notes, respectively, each filed as exhibits hereto and incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information required by Item 2.03 contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 8.01. Other Events.
On May 6, 2024, the Company, Ares Capital Management LLC, Ares Operations LLC and BofA Securities, Inc., J.P. Morgan Securities LLC, SMBC Nikko Securities America, Inc. and Wells Fargo Securities, LLC, as representatives of the several underwriters named on Schedule A thereto (collectively, the “Underwriters”), entered into a Purchase Agreement (the “Purchase Agreement”) with respect to the issuance and sale of the Notes.
In connection with the issuance of the Notes, the Company entered into an interest rate swap with Wells Fargo Bank, N.A. to swap from a fixed rate of interest to a floating rate of interest. The notional amount of the interest rate swap is $850,000,000, pursuant to which the Company will receive fixed rate interest at 5.950% and pay floating rate interest based on one-month SOFR + 1.643%. The interest rate swap matures on July 15, 2029.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits:
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ARES CAPITAL CORPORATION | ||
| Date: May 13, 2024 | ||
| By: | /s/ Scott C. Lem | |
| Name: | Scott C. Lem | |
| Title: | Chief Financial Officer and Treasurer | |