Ares Capital Corporation
04/17/2024 | Press release | Distributed by Public on 04/17/2024 14:14
Material Agreement - Form 8-K
Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Credit Facility.
On April 12, 2024, Ares Capital Corporation (the "Company") amended and restated its senior secured credit facility, among the Company, the lenders party thereto, and JPMorgan Chase Bank, N.A., as the administrative agent (as amended and restated, the "A&R Credit Facility"). The A&R Credit Facility, among other things, (a) reduced the total commitment under the A&R Credit Facility from approximately $4.8 billion to approximately $4.5 billion, (b) extended the expiration of the revolving period for lenders electing to extend their revolving commitments in an amount equal to approximately $3.0 billion from April 19, 2027 to April 12, 2028, during which period the Company, subject to certain conditions, may make borrowings under the A&R Credit Facility, (c) extended the stated maturity date for lenders electing to extend their revolving commitments in an amount equal to approximately $3.0 billion from April 19, 2028 to April 12, 2029 and (d) extended the stated maturity date for approximately $1.0 billion of the lenders electing to extend their term loan commitments from April 19, 2028 to April 12, 2029. Lenders who elected not to extend their revolving commitments in an amount equal to approximately $269 million and $107 million will remain subject to a revolving period expiration of March 31, 2026 and March 31, 2025, respectively, and a stated maturity date of March 31, 2027 and March 31, 2026, respectively. Lenders who elected not to extend their term loan commitments in an amount equal to $70 million, $41 million and $28 million will remain subject to a maturity date of April 19, 2028, March 31, 2027 and March 31, 2026, respectively.
The A&R Credit Facility is composed of a revolving loan tranche equal to approximately $3.4 billion and a term loan tranche in an amount equal to approximately $1.1 billion. The A&R Credit Facility includes an "accordion" feature that allows the Company, under certain circumstances, to increase the size of the facility by an amount up to approximately $2.2 billion.
The A&R Credit Facility continues to be secured by a material portion of the Company's assets (excluding, among other things, investments held in and by certain subsidiaries of the Company or investments in certain portfolio companies of the Company) and guaranteed by certain subsidiaries of the Company.
Under the A&R Credit Facility, the Company has made certain representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for similar credit facilities, including, without limitation, covenants related to: (a) limitations on the incurrence of additional indebtedness and liens, (b) limitations on certain investments, (c) limitations on certain asset transfers and restricted payments, (d) maintaining a certain minimum stockholders' equity, (e) maintaining a ratio of total assets (less total liabilities not representing indebtedness) to total indebtedness, of the Company and its subsidiaries (subject to certain exceptions), of not less than 1.5:1.0, and (f) limitations on the creation or existence of agreements that prohibit liens on certain properties of the Company and certain of its subsidiaries. The A&R Credit Facility also continues to include usual and customary events of default for senior secured credit facilities of this nature.
In addition to the asset coverage ratio described above, borrowings under the A&R Credit Facility (and the incurrence of certain other permitted debt) will continue to be subject to compliance with a borrowing base that will apply different advance rates to different types of assets in the Company's portfolio.
The description above is only a summary of the material provisions of the A&R Credit Facility and is qualified in its entirety by reference to a copy of the A&R Credit Facility, which is filed as Exhibit 10.1 to this current report on Form 8-K and incorporated by reference herein.
Amendment to BNP Funding Facility.
On April 12, 2024, the Company and ARCC FB Funding LLC, a wholly owned subsidiary of the Company ("AFB LLC"), amended the document governing AFB LLC's revolving funding facility (the "BNP Funding Facility") by entering into a Seventh Amendment to the Revolving Credit and Security Agreement (the "BNP Amendment"). The BNP Amendment, among other things, adjusted the interest rate charged on the BNP Funding Facility from an applicable SOFR or a "base rate" (as defined in the BNP Funding Facility) plus a margin of (i) 2.65% during the reinvestment period and (ii) 3.15% following the reinvestment period to an applicable SOFR or a "base rate" plus a margin of (i) 2.50% during the reinvestment period and (ii) 3.00% following the reinvestment period. The other terms of the BNP Funding Facility remained materially unchanged.
The description above is only a summary of the material provisions of the BNP Amendment and is qualified in its entirety by reference to a copy of the BNP Amendment, which is filed as Exhibit 10.2 to this current report on Form 8-K and incorporated by reference herein.