Ares Capital Corp Enters Material Agreement, New Financial Obligation

TL;DR

**Ares Capital just took on a new material financial obligation.**

AI Summary

Ares Capital Corporation filed an 8-K on January 23, 2024, to report an "Entry into a Material Definitive Agreement" and the "Creation of a Direct Financial Obligation." This filing indicates that Ares Capital has entered into a significant new financial commitment, which could impact its future earnings and debt levels. For investors, this matters because new financial obligations can affect the company's profitability, risk profile, and ultimately, the stock's valuation.

Why It Matters

This filing signals a new financial commitment for Ares Capital, which could alter its balance sheet, cash flow, and future earnings potential, directly impacting shareholder value.

Risk Assessment

Risk Level: medium — The filing indicates a new financial obligation without specifying its nature or size, introducing uncertainty about its potential impact on the company's risk profile.

Analyst Insight

Investors should monitor subsequent filings or press releases from Ares Capital Corporation for details regarding the nature and terms of the new material definitive agreement and financial obligation to assess its impact on the company's financial health and future prospects.

Key Players & Entities

• ARES CAPITAL CORPORATION (company) — the registrant filing the 8-K
• January 23, 2024 (date) — date of earliest event reported
• 814-00663 (other) — Commission File Number
• 33-1089684 (other) — IRS Employer Identification No.

FAQ

Key Financial Figures

• $0.001 — nge on which registered Common stock, $0.001 par value ARCC NASDAQ Global Select
• $1,000,000,000 — e Company's issuance, offer and sale of $1,000,000,000 aggregate principal amount of its 5.875

Filing Documents

• tm243887d1_8k.htm (8-K) — 36KB
• tm243887d1_ex1-1.htm (EX-1.1) — 259KB
• tm243887d1_ex4-1.htm (EX-4.1) — 125KB
• tm243887d1_ex5-1.htm (EX-5.1) — 29KB
• tm243887d1_ex5-2.htm (EX-5.2) — 15KB
• tm243887d1_ex5-2img012.jpg (GRAPHIC) — 9KB
• tm243887d1_ex5-2img013.jpg (GRAPHIC) — 40KB
• tm243887d1_ex5-2img014.jpg (GRAPHIC) — 20KB
• tm243887d1_ex5-2img015.jpg (GRAPHIC) — 20KB
• tm243887d1_ex5-2img016.jpg (GRAPHIC) — 20KB
• tm243887d1_ex5-2img02.jpg (GRAPHIC) — 12KB
• 0001104659-24-005898.txt ( ) — 891KB
• arcc-20240123.xsd (EX-101.SCH) — 3KB
• arcc-20240123_lab.xml (EX-101.LAB) — 33KB
• arcc-20240123_pre.xml (EX-101.PRE) — 22KB
• tm243887d1_8k_htm.xml (XML) — 3KB

01. Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement. On January 23, 2024, Ares Capital Corporation (the "Company") and U.S. Bank Trust Company, National Association, as successor in interest to U.S. Bank National Association (the "Trustee"), entered into an Eighteenth Supplemental Indenture (the "Eighteenth Supplemental Indenture") to the Indenture, dated October 21, 2010, between the Company and the Trustee (the "Indenture"). The Eighteenth Supplemental Indenture relates to the Company's issuance, offer and sale of $1,000,000,000 aggregate principal amount of its 5.875% notes due 2029 (the "Notes"). The Notes will mature on March 1, 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 Eighteenth Supplemental Indenture. The Notes bear interest at a rate of 5.875% per year payable semiannually on March 1 and September 1 of each year, commencing on September 1, 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 Indenture, as supplemented by the Eighteenth 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 ar

03. Creation of a Direct Financial Obligation or an Obligation

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.

01. Other Events

Item 8.01. Other Events. On January 16, 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 Securities, LLC to swap from a fixed rate of interest to a floating rate of interest. The notional amount of the interest rate swap is $1,000,000,000, pursuant to which the Company will receive fixed rate interest at 5.875% and pay floating rate interest based on one-month SOFR + 2.026%. The interest rate swap matures on March 1, 2029.

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (d) Exhibits: Exhibit Number Description 1.1 Purchase Agreement, dated as of January 16, 2024, among Ares Capital Corporation, 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 4.1 Eighteenth Supplemental Indenture, dated as of January 23, 2024, relating to the 5.875% Notes due 2029, between the Company and U.S. Bank Trust Company, National Association, as trustee 4.2 Form of 5.875% Notes due 2029 (contained in the Eighteenth Supplemental Indenture filed as Exhibit 4.1 hereto) 5.1 Opinion of Venable LLP 5.2 Opinion of Kirkland & Ellis LLP 23.1 Consent of Venable LLP (contained in the opinion filed as Exhibit 5.1 hereto) 23.2 Consent of Kirkland & Ellis LLP (contained in the opinion filed as Exhibit 5.2 hereto) 104 Cover Page Interactive Data File (embedded within Inline XBRL Document)

SIGNATURES

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: January 23, 2024 By: /s/ Penni F. Roll Name: Penni F. Roll Title: Chief Financial Officer

View Full Filing

View this 8-K filing on SEC EDGAR