Ares Capital Corp Enters Material Definitive Agreement

TL;DR

ARCC just signed a big deal, expect financial obligations to change.

AI Summary

On May 24, 2024, Ares Capital Corporation entered into a material definitive agreement related to a direct financial obligation. The filing indicates the creation of a direct financial obligation or an obligation under an off-balance sheet arrangement for the registrant. Specific details of the agreement, including dollar amounts and terms, are expected to be further elaborated in the accompanying exhibits.

Why It Matters

This filing signals a significant financial commitment or obligation for Ares Capital Corp, which could impact its financial structure and future operations.

Risk Assessment

Risk Level: medium — The creation of a direct financial obligation can introduce new risks related to debt servicing and financial commitments.

Key Players & Entities

• Ares Capital Corporation (company) — Registrant
• May 24, 2024 (date) — Date of earliest event reported

FAQ

Key Financial Figures

• $0.001 — nge on which registered Common stock, $0.001 par value ARCC NASDAQ Global Select
• $701.6 million — Corporation (the "Company") completed a $701.6 million term debt securitization (the "2024 Deb
• $406.0 million — as of the Closing Date and include (i) $406.0 million of Class A Senior Floating Rate Notes d
• $70.0 million — s 1.80% (the "Class A CLO Notes"); (ii) $70.0 million Class B Senior Floating Rate Notes due
• $225.6 million — es, the "Secured CLO Notes"); and (iii) $225.6 million Subordinated Notes due April 25, 2036,

Filing Documents

• tm2415797d1_8k.htm (8-K) — 35KB
• tm2415797d1_ex4-1.htm (EX-4.1) — 1664KB
• tm2415797d1_ex10-1.htm (EX-10.1) — 169KB
• tm2415797d1_ex10-2.htm (EX-10.2) — 227KB
• tm2415797d1_ex10-3.htm (EX-10.3) — 117KB
• tm2415797d1_ex10-4.htm (EX-10.4) — 140KB
• 0001104659-24-067213.txt ( ) — 3000KB
• arcc-20240524.xsd (EX-101.SCH) — 3KB
• arcc-20240524_lab.xml (EX-101.LAB) — 33KB
• arcc-20240524_pre.xml (EX-101.PRE) — 22KB
• tm2415797d1_8k_htm.xml (XML) — 4KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. On May 24, 2024 (the "Closing Date"), through its wholly owned, consolidated subsidiary Ares Direct Lending CLO 1 LLC ("ARCC CLO"), Ares Capital Corporation (the "Company") completed a $701.6 million term debt securitization (the "2024 Debt Securitization"). The 2024 Debt Securitization is also known as a collateralized loan obligation and is an on-balance-sheet financing for the Company. The notes offered in the 2024 Debt Securitization (the "CLO Notes") were issued by ARCC CLO pursuant to an indenture (the "CLO Indenture") dated as of the Closing Date and include (i) $406.0 million of Class A Senior Floating Rate Notes due April 25, 2036 that were issued to third parties and bear interest at Term SOFR (as defined in the CLO Indenture) plus 1.80% (the "Class A CLO Notes"); (ii) $70.0 million Class B Senior Floating Rate Notes due April 25, 2036 that were issued to third parties and bear interest at Term SOFR plus 2.20% (the "Class B CLO Notes" and, together with the Class A CLO Notes, the "Secured CLO Notes"); and (iii) $225.6 million Subordinated Notes due April 25, 2036, which do not bear interest (the "Subordinated CLO Notes"). The Company acquired all of the Subordinated CLO Notes, which are unsecured obligations of ARCC CLO. The Secured CLO Notes are the secured obligation of ARCC CLO and are backed by a diversified portfolio of senior secured and second lien loans contributed by the Company to ARCC CLO on the Closing Date pursuant to the terms of a contribution agreement (the "Contribution Agreement"). The CLO Indenture contains certain conditions pursuant to which additional loans can be acquired by ARCC CLO, in accordance with rating agency criteria or as otherwise agreed with certain institutional investors who purchased the Secured CLO Notes. Through April 25, 2028, all principal collections received on the underlying collateral may be used by ARCC CLO to purchase new collateral under the direction

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 Registrant. The information contained in Item 1.01 to this current report on Form 8-K is by this reference incorporated in this Item 2.03.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits: Exhibit Number Description 4.1 Indenture, dated as of May 24, 2024, by and between Ares Direct Lending CLO 1 LLC, as issuer, and U.S. Bank Trust Company, National Association, as trustee 4.2 Form of Class A Senior Floating Rate Notes due 2036 (contained in the Indenture filed as Exhibit 4.1 hereto) 4.3 Form of Class B Senior Floating Rate Notes due 2036 (contained in the Indenture filed as Exhibit 4.1 hereto) 4.4 Form of Subordinated Notes due 2036 (contained in the Indenture filed as Exhibit 4.1 hereto) 10.1 Collateral Administration Agreement, dated as of May 24, 2024, by and between Ares Direct Lending CLO 1 LLC, as issuer, Ares Capital Management LLC, as asset manager, and U.S. Bank Trust Company, National Association as collateral administrator 10.2 Asset Management Agreement, dated as of May 24, 2024, by and between Ares Direct Lending CLO 1 LLC , as issuer and Ares Capital Management LLC, as asset manager 10.3 Master Purchase and Sale Agreement, dated as of May 24, 2024, by and between Ares Capital Corporation, as seller, and Ares Direct Lending CLO 1 LLC, as buyer 10.4 Contribution Agreement, dated as of May 24, 2024, by and between Ares Capital Corporation, as transferor, and Ares Direct Lending CLO 1 LLC, as transferee 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: May 31, 2024 By: /s/ Scott C. Lem Name: Scott C. Lem Title: Chief Financial Officer and Treasurer

View Full Filing

View this 8-K filing on SEC EDGAR