Summary
Ares Management Corp (ARES) filed an 8-K on June 15, 2020, to report the entry into a material definitive agreement concerning the issuance of new debt. Specifically, Ares Finance Co. II LLC, an indirect subsidiary, along with several other indirect subsidiaries acting as guarantors, entered into an indenture for the issuance of $400 million in aggregate principal amount of 3.250% Senior Notes due 2030. These notes are unsecured and unsubordinated obligations, with interest payable semi-annually. The issuance represents a strategic move to raise capital with a long-term maturity, indicating the company's financial strategy. Investors should note the covenants included in the indenture, which place limitations on the company's ability to incur certain secured debt and engage in significant corporate actions like mergers or asset sales, aimed at protecting noteholders.
Key Highlights
- 1Ares Finance Co. II LLC issued $400 million of 3.250% Senior Notes due 2030.
- 2The issuance is guaranteed by multiple indirect subsidiaries of Ares Management Corporation.
- 3The notes mature on June 15, 2030, with interest paid semi-annually.
- 4The notes are unsecured and unsubordinated obligations.
- 5The indenture includes covenants restricting the incurrence of secured debt and limitations on mergers or asset sales.
- 6A change of control repurchase event would trigger a mandatory repurchase at 101% of the principal amount.
- 7The company has the option to redeem the notes prior to maturity at a make-whole price, or at par on or after March 15, 2030.