Ares Capital increases RCF to $1.29bn

The cost of the facility for the business development company has also fallen.

Business development company (BDC) Ares Capital Corporation has increased its revolving credit facility by around $400 million, the mid-market lender said in a statement.

The NASDAQ-listed BDC has increased the senior secured revolving credit facility provided by 20 banks, including 19 existing and one new lender, from $1.25 billion to $1.29 billion.

In addition, the stated interest rate on the facility has reduced from LIBOR plus 2 percent to LIBOR plus 1.75 percent and the final maturity was extended by one year to 4 May 2020.

“We are pleased that our banking relationships continue to show significant confidence in ARCC,” said Penni Roll, chief financial officer of Ares Capital Corporation. “Reducing our cost of capital is a key area of focus for us, and we are grateful that our lenders have supported us by providing long-dated capital on attractive terms.”

Through another two wholly-owned financing subsidiaries, Ares has two separate revolving funding facilities with total commitments of $940 million. This brings total credit capacity to around $2.2 billion, subject to borrowing base and leverage restrictions, with a blended stated interest rate on these commitments of LIBOR plus 1.92 percent.

The ARCC BDC is one of the largest BDCs by market capitalisation and total assets, with around $9.5 billion of total assets as of 31 December 2014. It is managed by New York-headquartered Ares Management, a debt and equity manager, which has roughly $86 billion of assets under management.