Summary
Ares Management, L.P. (ARES) filed an 8-K on December 21, 2015, reporting an amendment to its Sixth Amended and Restated Credit Agreement. This amendment, effective December 16, 2015, introduces several key changes primarily impacting covenant calculations and debt incurrence flexibility. Notable adjustments include the exclusion of incentive fees from the Adjusted EBITDA calculation and limitations on the amount of management fees included. The amendment also removes the interest coverage ratio covenant and increases the permitted leverage ratio to 4.00:1.00. Furthermore, it allows for the incurrence of up to $300 million of debt by certain designated subsidiaries, offering increased financial flexibility.
Key Highlights
- 1Ares Management entered into Amendment No. 5 to its Sixth Amended and Restated Credit Agreement.
- 2The amendment was effective as of December 16, 2015.
- 3Adjusted EBITDA calculation was modified to exclude incentive fees.
- 4Limits were placed on the inclusion of management and certain other fees in Adjusted EBITDA.
- 5The interest coverage ratio covenant was eliminated.
- 6The leverage ratio covenant was increased to a maximum of 4.00:1.00.
- 7Specific subsidiaries are now permitted to incur up to $300 million in debt under certain conditions.