8-KMaterial AgreementsExhibits & Filings

Ares Management Corp 8-K Report, Material Agreement (Apr 2, 2020)

Filed April 2, 2020For Securities:ARESARES-PB

Summary

Ares Management Corp (ARES) filed an 8-K on April 1, 2020, reporting an amendment to its credit facility. The key event is the extension of the maturity date for its $1.065 billion revolving line of credit from March 21, 2024, to March 30, 2025. This extension provides the company with greater financial flexibility and a longer runway for its operations and strategic initiatives. Furthermore, the amendment includes favorable adjustments to the credit facility's terms, specifically a reduction in the unused commitment fee and, in certain circumstances, a reduction in the applicable margin for LIBOR rate loans. These changes indicate a potentially improved cost of capital for Ares Management, especially for its unsecured debt ratings below BBB+/Baa1, and signal continued confidence from lenders during a period of market uncertainty.

Key Highlights

  • 1Extended maturity date of the $1.065 billion revolving credit facility from March 21, 2024, to March 30, 2025.
  • 2Amended the credit agreement to reduce the unused commitment fee across various debt rating tiers.
  • 3Reduced the applicable margin for LIBOR rate loans under certain conditions, with greater reductions for lower credit ratings.
  • 4The amendment was entered into on March 30, 2020, and is the ninth amendment to the Sixth Amended and Restated Credit Agreement.
  • 5The borrowing entity remains Ares Holdings L.P. and Ares Investments L.P.
  • 6The credit facility is provided by JPMorgan Chase Bank, N.A., as agent.
  • 7The filing includes the Credit Facility Amendment as an exhibit.

Frequently Asked Questions

This 8-K filing announces a material definitive agreement, specifically an amendment to Ares Management's existing credit facility. The primary changes involve extending the maturity date and adjusting fees and interest margins.

Extending the maturity date of the $1.065 billion revolving credit facility by one year (to March 30, 2025) provides Ares Management with enhanced financial flexibility and a longer-term source of liquidity, which is particularly valuable in uncertain market conditions.

Yes, the amendment includes reductions in the unused commitment fee and, for certain credit ratings, a reduction in the applicable margin for LIBOR rate loans. This suggests a potential decrease in the cost of borrowing for the company.

The amendment was entered into by Ares Holdings L.P. and Ares Investments L.P. (the borrowers), certain subsidiaries of Ares Management Corporation, the guarantors party to the agreement, the lenders, and JPMorgan Chase Bank, N.A., as the agent.