Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934


Date of report (Date of earliest event reported) November 13, 2012



(Exact Name of Registrant as Specified in Charter)







(State or Other Jurisdiction
of Incorporation)


File Number)


(IRS Employer
Identification No.)


245 Park Avenue, 44th Floor, New York, NY



(Address of Principal Executive Offices)


(Zip Code)


Registrant’s telephone number, including area code (212) 750-7300



(Former Name or Former Address, if Changed Since Last Report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.03  Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.


On November 13, 2012, Ares Capital Corporation (“Ares Capital”) issued an additional $40 million aggregate principal amount of 4.75% Convertible Senior Notes due 2018 (the “Additional Convertible Notes”) in connection with an inbound inquiry from a fundamental institutional investor.  The Additional Convertible Notes were issued pursuant to the Indenture, dated October 10, 2012 (the “Indenture”), between Ares Capital and U.S. Bank National Association, as trustee (the “Trustee”).  The Additional Convertible Notes constitute additional notes under the Indenture and will be treated as a single series with, have the same terms and same CUSIP number as, and are fungible with, the $230 million aggregate principal amount of Ares Capital’s 4.75% Convertible Senior Notes due 2018 previously issued under the Indenture on October 10, 2012 (the “Existing Convertible Notes” and, together with the Additional Convertible Notes, the “Convertible Notes”).


The sale of the Additional Convertible Notes generated net proceeds of approximately $38.9 million.  Aggregate estimated offering expenses in connection with the transaction, including the initial purchaser’s discount of $0.7 million, were approximately $1.1 million.  Ares Capital expects to use the net proceeds of this offering to repay or repurchase certain outstanding indebtedness, which may include repaying outstanding indebtedness under its debt facilities and, to the extent not applied for such purpose, for general corporate purposes, including investing in portfolio companies in accordance with its investment objective.


The Convertible Notes mature on January 15, 2018 (the “Maturity Date”), unless previously converted or repurchased in accordance with their terms.  The Convertible Notes bear interest at a rate of 4.75% per year payable semiannually in arrears on January 15 and July 15 of each year, commencing on July 15, 2013.  The Convertible Notes are Ares Capital’s senior unsecured obligations and rank senior in right of payment to Ares Capital’s existing and future indebtedness that is expressly subordinated in right of payment to the Convertible Notes; equal in right of payment to Ares Capital’s existing and future unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of Ares Capital’s secured indebtedness (including existing unsecured indebtedness that Ares Capital later secures) to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness (including trade payables) incurred by Ares Capital’s subsidiaries, financing vehicles or similar facilities.


Prior to the close of business on the business day immediately preceding July 15, 2017 holders may convert their Convertible Notes only under certain circumstances set forth in the Indenture.  On or after July 15, 2017 until the close of business on the scheduled trading day immediately preceding the Maturity Date, holders may convert their Convertible Notes at any time. Upon conversion, Ares Capital will pay or deliver, as the case may be, at its election, cash, shares of its common stock or a combination of cash and shares of its common stock.  The conversion rate is currently 50.3290 shares of common stock per $1,000 principal amount of Convertible Notes (equivalent to a current conversion price of approximately $19.87 per share of common stock). The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, if certain corporate events occur prior to the Maturity Date, the conversion rate will be increased for converting holders.


Ares Capital may not redeem the Convertible Notes prior to maturity. No sinking fund is provided for the Convertible Notes. In addition, if certain corporate events occur in respect of Ares Capital, holders of the Convertible Notes may require Ares Capital to repurchase for cash all or part of their Convertible Notes at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest through, but excluding, the required repurchase date.


The foregoing description of the Convertible Notes does not purport to be complete and is qualified in its entirety by reference to the full text of the Indenture and the accompanying Form of 4.75% Convertible Note due 2018, filed as Exhibits 4.1 and 4.2 to Ares Capital’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 10, 2012 and incorporated by reference herein.


Item 3.02  Unregistered Sales of Equity Securities.


The information set forth under Item 2.03 of this Form 8-K is incorporated herein by reference.


Ares Capital offered and sold the Additional Convertible Notes to the initial purchaser in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), for resale by the initial purchaser to qualified institutional buyers (as defined in the Securities Act) pursuant to the exemption from registration provided by Rule 144A under the Securities Act. Ares Capital relied on these exemptions from registration based in part on representations made by the initial purchaser in the purchase agreement executed in connection with the sale of the Additional Convertible Notes.


Neither the Convertible Notes nor the common stock that may be issued upon conversion thereof will be registered under the Securities Act.  Neither the Convertible Notes nor the common stock that may be issued upon conversion thereof may be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.  This Current Report on Form 8-K does not constitute an offer to sell, or a solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful.






Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.







Date:   November 13, 2012








/s/ Penni F. Roll



Penni F. Roll



Chief Financial Officer