Ares Capital, Varagon up Senior Direct Lending Program to $6.4 billion

By Tali Rackner

Minneapolis, Feb. 13 – Ares Capital Corp. and Varagon Capital Partners increased the investment capacity of Senior Direct Lending Program (SDLP) to roughly $6.4 billion from $2.9 billion, according to a press release.

American International Group, Inc., an existing investor in SDLP, increased its capital available to the program by $500 million to $2.75 billion and another global insurance company newly made available $2 billion.

Ares Capital and Varagon agreed to make available an incremental roughly $1 billion on a pro rata basis based on their respective ownership of subordinated certificates in the SDLP, the release said.

During 2017, the SDLP made $1.1 billion of new financing commitments to middle-market companies, lifting its total commitments to $2.4 billion.

As of Dec. 31, the SDLP was made up of 19 different borrowers.

“The expansion of the SDLP reflects the compelling market opportunity for scaled lenders to provide creative financing solutions for sponsors and management teams of high quality middle-market companies,” Ares co-president Mitch Goldstein said in the release.

“Together with Varagon, by partnering with a well-capitalized and sophisticated new institutional investor, we expect to grow our invested capital in the SDLP and ultimately drive attractive risk-adjusted returns for our shareholders.”

Ares Capital is a specialty finance company based in New York. Varagon is an asset manager also based in New York.

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