ARCC extends maturity, reduces cost on credit facility

The Ares Capital Corporation has extended the maturity and reduced pricing on its existing $400 million revolving credit facility with Sumitomo Mitsui Banking Corporation, a Japanese bank  

The Ares Capital Corporation has received and extension and reduced the cost on an existing $400 million revolving credit facility with the Sumitomo Mitsui Banking Corporation (SMBC). The reinvestment period has been extended by one year to September 14 2017, while the stated maturity was also increased by one year to September 14 2022. The interest rate on the facility was changed from LIBOR plus 2 percent to either LIBOR plus 1.75 percent or LIBOR plus 2 percent, based on usage levels, according to a statement from ARCC, the publicly-traded BDC of Ares Management.

“The extension and favorable pricing changes shows the confidence our lenders have in ARCC. We have built a strong relationship with Sumitomo Mitsui Banking Corporation and appreciate their support in helping us to continue to lower the cost of our revolving debt capital,” Penni Roll, chief financial officer at Ares Capital, said in a statement.

In addition to this $400 million facility, Ares Capital has two other revolving credit facilities with total commitments of $1.8 billion, bringing all its revolving credit capacity to about $2.2 billion.

Ares Capital is a specialty finance company that provides one-stop debt and equity financing to US mid-market companies, venture capital-backed businesses and power generation projects. The firm originates and invests in senior secured loans, mezzanine debt and, to some extent, equity investments through its direct origination platform.

Ares Capital is externally managed by a subsidiary of Ares Management, an alternative investment firm that is publicly-traded on the New York Stock Exchange. ARCC trades on the NASDAQ at around $16.50 per share today (1 July).