Summary
On June 8, 2016, Ares Management, L.P. announced the issuance of 11,000,000 7.00% Series A Preferred Units through an underwritten public offering. This filing details the material modifications to the company's governing agreements to accommodate this new class of preferred units. These amendments, including updates to the Amended and Restated Limited Partnership Agreement and associated operating partnerships' agreements, establish the specific rights, preferences, and powers of the Series A Preferred Units. The issuance of these preferred units represents a significant capital raise for Ares Management. Investors in these Series A Preferred Units are entitled to a fixed 7.00% annual distribution rate, payable quarterly, though these distributions are non-cumulative. The terms also include provisions that restrict the payment of distributions on junior units if preferred distributions are not met, and outline redemption rights for the company starting June 30, 2021, with specific terms triggered by a Change of Control event.
Key Highlights
- 1Ares Management, L.P. issued 11,000,000 7.00% Series A Preferred Units via a public offering.
- 2Key agreements, including the Limited Partnership Agreement, were amended to create and define the Series A Preferred Units.
- 3Series A Preferred Units carry a fixed non-cumulative distribution rate of 7.00% per annum, payable quarterly.
- 4The company has implemented provisions to protect preferred unit holders, restricting junior unit distributions and repurchases if preferred distributions are in arrears.
- 5Ares Management has the option to redeem the Series A Preferred Units beginning June 30, 2021, at $25.00 per unit plus accrued but unpaid distributions.
- 6A 'Change of Control' event prior to June 30, 2021, allows for redemption at $25.25 per unit, with an option for an increased distribution rate (5.00% uplift) if redemption does not occur.
- 7The filing incorporates by reference several amended partnership agreements and legal opinions related to the issuance.