Ares Capital (ARCC) 8-KEntry into a Material Definitive Agreement

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported) May 24, 2024

ARES CAPITAL CORPORATION

(Exact Name of Registrant as Specified in Charter)

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):

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

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

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

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

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 1.01 Entry into a Material Definitive Agreement.

On May 24, 2024 (the “Closing Date”), through its wholly owned, consolidated subsidiary Ares Direct Lending CLO 1 LLC (“ARCC CLO”), Ares Capital Corporation (the “Company”) completed a $701.6 million term debt securitization (the “2024 Debt Securitization”). The 2024 Debt Securitization is also known as a collateralized loan obligation and is an on-balance-sheet financing for the Company.

The notes offered in the 2024 Debt Securitization (the “CLO Notes”) were issued by ARCC CLO pursuant to an indenture (the “CLO Indenture”) dated as of the Closing Date and include (i) $406.0 million of Class A Senior Floating Rate Notes due April 25, 2036 that were issued to third parties and bear interest at Term SOFR (as defined in the CLO Indenture) plus 1.80% (the “Class A CLO Notes”); (ii) $70.0 million Class B Senior Floating Rate Notes due April 25, 2036 that were issued to third parties and bear interest at Term SOFR plus 2.20% (the “Class B CLO Notes” and, together with the Class A CLO Notes, the “Secured CLO Notes”); and (iii) $225.6 million Subordinated Notes due April 25, 2036, which do not bear interest (the “Subordinated CLO Notes”). The Company acquired all of the Subordinated CLO Notes, which are unsecured obligations of ARCC CLO.

The Secured CLO Notes are the secured obligation of ARCC CLO and are backed by a diversified portfolio of senior secured and second lien loans contributed by the Company to ARCC CLO on the Closing Date pursuant to the terms of a contribution agreement (the “Contribution Agreement”). The CLO Indenture contains certain conditions pursuant to which additional loans can be acquired by ARCC CLO, in accordance with rating agency criteria or as otherwise agreed with certain institutional investors who purchased the Secured CLO Notes. Through April 25, 2028, all principal collections received on the underlying collateral may be used by ARCC CLO to purchase new collateral under the direction of Ares Capital Management LLC, the Company’s investment adviser, in its capacity as asset manager (the “Asset Manager”) to ARCC CLO under an asset management agreement (the “Asset Management Agreement”) and in accordance with the Company’s investment strategy, including additional collateral that may be purchased from the Company, pursuant to the terms of a master purchase and sale agreement (the “Master Purchase Agreement”) between the Company as seller and ARCC CLO as buyer. The Asset Manager will waive any management fees that relate to the Company's ownership of the Subordinated CLO Notes. In addition, U.S. Bank Trust Company, National Association (the “Collateral Administrator”) serves as collateral administrator for ARCC CLO under a collateral administration agreement (the “Collateral Administration Agreement”) among ARCC CLO, the Asset Manager and the Collateral Administrator.

The CLO Indenture includes customary covenants and events of default. The CLO Notes have not been, and will not be, registered under the Securities Act of 1933, as amended, or any state securities or “blue sky” laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from registration.

The Company expects to use the net proceeds of the offering to repay certain outstanding indebtedness under its debt facilities. The Company may reborrow under its debt facilities for general corporate purposes, which include investing in portfolio companies in accordance with its investment objective.

The foregoing descriptions of the Contribution Agreement, the CLO Indenture, the Class A CLO Notes, the Class B CLO Notes, the Subordinated CLO Notes, the Asset Management Agreement, the Collateral Administration Agreement and the Master Purchase Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Contribution Agreement, the CLO Indenture, the Class A CLO Notes, the Class B CLO Notes, the Subordinated CLO Notes, the Asset Management Agreement, the Collateral Administration Agreement and the Master Purchase Agreement, respectively, each filed as exhibits hereto or included within such exhibits, as applicable, and incorporated by reference herein.

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

The information contained in Item 1.01 to this current report on Form 8-K is by this reference incorporated in this Item 2.03.

Item 9.01 Financial Statements and Exhibits.

(d)            Exhibits:

SIGNATURES

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.