What is the primary impact of the Credit Facility Amendment on Ares Management's debt obligations?

The primary impact is the restructuring of guarantees. While the Registrant (Ares Management, L.P.) and some key holding companies were released from their guarantees under the credit agreement, certain other subsidiaries were added as new guarantors. This suggests a shift in where the primary guarantee obligations lie within the corporate structure.

How do the changes to the 'Adjusted EBITDA' definition affect financial reporting?

The amendments provide more flexibility in calculating 'Adjusted EBITDA'. Limiting deductions for net income attributable to non-Loan Parties means that such income will only be deducted if not otherwise distributed to a Loan Party. Allowing pro forma effect for certain acquisitions and excluding the 'KA Merger' from certain limitations on management fees of acquired entities can positively impact reported EBITDA, potentially making financial covenants easier to meet.

What is the significance of excluding certain non-recourse debt from the 'Debt' calculation?

Excluding non-recourse debt from the leverage covenant calculation is beneficial for Ares. It means that debt which is not backed by the assets or credit of the primary 'Loan Parties' (and their subsidiaries) will not count towards the leverage ratio, potentially improving the company's reported leverage metrics and providing more room for additional financing.

What was the purpose of amending the indenture for the 2024 Senior Notes?

The amendment to the indenture for the 2024 Senior Notes was primarily to align it with the changes in the credit facility and potentially the broader corporate structure. It added reporting obligations and introduced new subsidiaries as additional guarantors, reinforcing the security for the noteholders in light of the other amendments.

ARES/ARES-PB 8-K: Material Agreements

Summary

Ares Management Corp (ARES) filed an 8-K on August 6, 2015, reporting material definitive agreements related to its credit facilities and senior notes. Specifically, on August 5, 2015, the company executed Amendment No. 4 to its Sixth Amended and Restated Credit Agreement. This amendment involved the release of certain Ares entities, including the Registrant itself, from guarantees under the credit agreement and the addition of other subsidiaries as guarantors. Key changes were also made to financial definitions, particularly 'Adjusted EBITDA' and 'Debt', to provide greater flexibility and account for acquisitions and non-recourse debt. The letter of credit subfacility was also increased. Subsequent to the credit facility amendment, on August 7, 2015, Ares Finance Co. LLC entered into a first amendment to its senior notes indenture. This amendment added reporting obligations and certain subsidiaries as additional guarantors for the 4.000% senior notes due 2024. These changes appear to be part of a broader restructuring or optimization of Ares' debt and guarantee arrangements, aiming to enhance financial flexibility and potentially streamline operations following significant corporate events or structures.

Key Highlights

1Amendment No. 4 to the Sixth Amended and Restated Credit Agreement executed on August 5, 2015.
2Release of Ares Management, L.P. and certain holding entities from guarantees under the Credit Agreement.
3Addition of certain subsidiaries as new guarantors under the Credit Agreement.
4Amendments to 'Adjusted EBITDA' definition to include pro forma effect of acquisitions and limit deductions from non-Loan Parties' net income.
5Refinement of the 'Debt' definition to exclude certain non-recourse debt and purchase price adjustments.
6Increase of the letter of credit subfacility to $200 million.
7First Amendment to the indenture governing the 4.000% senior notes due 2024, adding reporting obligations and new guarantors.

Ares Management Corp 8-K Report, Material Agreement (Aug 7, 2015)

Summary

Key Highlights

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