Ares Capital to sell stock to fund U.S. middle-market investments

By Toni Weeks

San Luis Obispo, Calif., July 16 – Ares Capital Corp. is selling shares of its common stock in a public offering, according to a 497 filing with the Securities and Exchange Commission.

The specialty finance company, a closed-end, non-diversified management investment company, seeks to generate current income and capital appreciation through debt and equity investments by investing primarily in first- and second-lien senior secured loans and mezzanine debt of U.S. middle-market companies.

The company is selling 11.85 million shares of common stock with an over-allotment option for an additional 1,777,500 shares. The closing sales price of Ares Capital stock was $17.02 (Nasdaq: ARCC) on Wednesday.

The portfolio management team includes Michael J. Arougheti, R. Kipp deVeer, Mitchell Goldstein and Michael L. Smith.

The joint bookrunners for the offering are Morgan Stanley & Co LLC, Wells Fargo Securities, LLC, UBS Securities LLC and J.P. Morgan Securities LLC. RBC Capital Markets, LLC is the lead manager, and Barclays and Keefe, Bruyette & Woods, Inc. are co-managers.

Total annual expenses are expected to be 10.5%, which includes management fees of 2.5%.

Los Angeles-based Ares Capital Management LLC is the investment adviser.

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