ARES
Ares Management CORP
NYSE
8-K: Ares Management Corporation Issues $750 Million in Senior Notes
Sentiment:
Debt Issuance
11 October 2024 4:42 PM
Ares Management Corporation has successfully issued $750 million in senior notes due in 2054, with a 5.600% interest rate.
Capital raise
Ares Management Corporation issued $750 million in senior notes.
The company also entered into an underwriting agreement to issue 27,000,000 shares of 6.75% Series B Mandatory Convertible Preferred Stock, with an option for an additional 3,000,000 shares to cover over-allotments.
Summary
- Ares Management Corporation issued $750 million of 5.600% Senior Notes due in 2054.
- The notes were issued as part of a previously announced underwritten public offering.
- The notes are unsecured and unsubordinated obligations of the company.
- Interest is payable semi-annually on April 11 and October 11, starting April 11, 2025.
- The notes will mature on October 11, 2054, unless redeemed or repurchased earlier.
- The notes are fully and unconditionally guaranteed by several Ares entities.
- The company may redeem the notes on or after April 11, 2054, at 100% of the principal amount plus accrued interest.
- Prior to April 11, 2054, the notes may be redeemed at a price equal to the greater of 100% of the principal amount or a make-whole price plus accrued interest.
Sentiment
Score: 7
Explanation: The document reflects a standard corporate finance transaction, with no significant positive or negative surprises. The issuance of debt is a routine activity for a company of this size, and the terms are generally in line with market expectations. The sentiment is therefore moderately positive.
Positives
- The issuance provides Ares Management with a significant amount of capital.
- The notes are guaranteed by multiple Ares entities, which may provide additional security for investors.
- The company has the option to redeem the notes, providing flexibility in managing its debt.
Negatives
- The notes are unsecured and unsubordinated, which means they are not backed by specific assets and are lower in priority than secured debt.
- The company is subject to covenants that limit its ability to incur secured debt or merge, consolidate, or sell assets.
Risks
- The notes are subject to interest rate risk, as changes in interest rates could affect their value.
- The company's ability to repay the notes depends on its financial performance and cash flow.
- The covenants in the indenture could restrict the company's operational flexibility.
Future Outlook
The company intends to use the net proceeds from the issuance and sale of the Preferred Shares and the Securities, together with borrowings under its credit facilities for (i) the payment of the cash consideration due in respect of the Acquisition and related fees, costs and expenses and (ii) general corporate purposes, including repayment of debt other strategic acquisitions and growth initiatives.
Industry Context
This issuance is part of Ares Management's broader capital strategy, which includes both debt and equity financing, to fund acquisitions and general corporate purposes. The company is taking advantage of current market conditions to secure long-term financing.
Comparison to Industry Standards
- The 5.600% interest rate on the senior notes is within the typical range for investment-grade corporate debt of this maturity.
- Comparable companies such as Blackstone and Apollo Global Management have also issued senior notes with similar terms.
- The make-whole redemption provision is a common feature in corporate debt issuances, providing protection to investors while allowing the company flexibility.
- The use of proceeds for acquisitions and general corporate purposes is a standard practice for companies in the asset management industry.
Stakeholder Impact
- Shareholders: The issuance of debt may impact the company's leverage and financial ratios.
- Employees: The acquisition and growth initiatives funded by the debt may create new opportunities.
- Creditors: The new debt increases the company's overall debt obligations.
- Customers: The acquisition may lead to changes in the services offered by the company.
Next Steps
- The company will use the proceeds from the note issuance for the acquisition of GLP Capital Partners Ltd and for general corporate purposes.
- The company will make semi-annual interest payments on the notes starting April 11, 2025.
- The company may redeem the notes at its option, subject to the terms of the indenture.
Key Dates
- 2023-11-10: Date of the base indenture between Ares Management Corporation and U.S. Bank Trust Company, National Association.
- 2023-02-27: Date of the effective automatic shelf registration statement on Form S-3.
- 2024-10-04: Date of the Transaction Agreement (Purchase Agreement) related to the acquisition of GLP Capital Partners Ltd.
- 2024-10-08: Date the company entered into an underwriting agreement for the issuance of preferred shares.
- 2024-10-09: Date of the underwriting agreement for the senior notes and the pricing term sheet.
- 2024-10-11: Date of the second supplemental indenture and the issuance of the senior notes.
- 2025-04-11: First interest payment date for the senior notes.
- 2054-04-11: Date on or after which the notes may be redeemed at 100% of principal.
- 2054-10-11: Maturity date of the senior notes.
Keywords
Senior Notes, Debt Financing, Ares Management Corporation, Fixed Income, Capital Markets, Public Offering, Debt Securities
ARES
Ares Management CORP
NYSE
Sector: Financial Services
Filings with Classifications
Worse than expected
13 June 2025 4:32 PM
Insider Transaction Report
- The sale of 2,250,000 shares by a significant insider (10% owner and director) like Ares Management LLC is generally perceived negatively by the market, as it can signal a lack of confidence or a strategic reduction in exposure to the company.
- Such a large divestment can put downward pressure on the stock price and may be interpreted as a bearish signal.
Worse than expected
10 May 2025 12:28 AM
Quarterly Report
- Net income attributable to Ares Management Corporation Class A and non-voting common stockholders decreased to $21.9 million from $73 million in the prior year period.
Better than expected
3 May 2025 12:51 AM
Quarterly Report
- Ares Management Corporation's AUM surpassed $545 billion in Q1 2025, exceeding expectations.
- After-tax realized income reached $381.4 million, translating to $1.09 per share, which is better than anticipated.
- Fee related earnings were $367.3 million for the quarter, surpassing previous forecasts.
Better than expected
5 February 2025 6:17 AM
Earnings Release
- Ares Management reported record fundraising and AUM, indicating strong investor confidence and growth potential.
- The company's key financial metrics, such as Fee Related Earnings and Realized Income, showed significant increases compared to the previous year.
Worse than expected
29 November 2024 4:50 PM
SEC Form 4 Filing
- Ares Management, a significant shareholder, selling shares is generally viewed negatively by the market as it can indicate a lack of confidence in the company's future prospects.
Worse than expected
26 November 2024 4:39 PM
SEC Form 4 Filing
- The document indicates a reduction in stake by a major shareholder, which is generally viewed negatively by the market.
Capital raise
8 November 2024 6:07 AM
Quarterly Report
- In October 2024, Ares issued 30,000,000 shares of its Series B mandatory convertible preferred stock for total proceeds of $1,462.5 million.
- In October 2024, Ares issued $750.0 million in aggregate principal amount of 5.60% senior notes with a maturity date of October 2054.
Better than expected
8 November 2024 6:07 AM
Quarterly Report
- The company's total revenues, management fees, carried interest allocation, and net income all increased significantly compared to the same period last year.
Capital raise
31 October 2024 7:19 PM
Quarterly Report
- In October 2024, Ares issued 30,000,000 shares of its Series B mandatory convertible preferred stock, for total proceeds of $1,462.5 million (after deducting underwriting discounts but before offering expenses).
Better than expected
31 October 2024 7:19 PM
Quarterly Report
- The company's financial results exceeded expectations with strong growth in key metrics, including AUM, fee-related earnings, and realized income.
- The company's fundraising momentum and capital deployment were better than anticipated, leading to an optimistic outlook for the remainder of the year.
Capital raise
11 October 2024 4:42 PM
Debt Issuance
- Ares Management Corporation issued $750 million in senior notes.
- The company also entered into an underwriting agreement to issue 27,000,000 shares of 6.75% Series B Mandatory Convertible Preferred Stock, with an option for an additional 3,000,000 shares to cover over-allotments.
Capital raise
10 October 2024 4:50 PM
Capital Raise Announcement
- Ares Management Corporation issued 30 million shares of 6.75% Series B Mandatory Convertible Preferred Stock, raising $1.5 billion.
- The offering included an underwriter option for an additional 3 million shares, which was fully exercised.
- The net proceeds from the offering will be used to fund a portion of the cash consideration for the acquisition of GLP Capital Partners' international business and for general corporate purposes.
Capital raise
8 October 2024 6:03 AM
Merger Announcement
- Ares has secured a $2.0 billion bridge loan facility to finance the cash portion of the acquisition.
- The company expects to finance the cash portion of the acquisition with a combination of cash on hand and other equity or debt financing, which may include equity or debt securities issued in one or more capital markets transactions.
Worse than expected
6 August 2024 7:27 PM
Quarterly Report
- Net income attributable to common stockholders decreased compared to the same period last year.
- Carried interest allocation was negative for both the quarter and six months ended June 30, 2024, compared to positive figures in the same periods of 2023.
Capital raise
6 August 2024 7:27 PM
Quarterly Report
- The company issued and sold 2,650,000 shares of Class A common stock in an offering that closed on June 14, 2024, resulting in net proceeds of approximately $354.4 million.
- Subsequent to June 30, 2024, the underwriters exercised the 30-day option to purchase additional shares of Class A common stock, resulting in additional proceeds of $52.9 million.
Better than expected
1 August 2024 9:13 PM
Quarterly Report
- The company achieved record gross fundraising and the second-highest level of capital deployment in its history, indicating better than expected operational performance.
Capital raise
11 July 2024 5:14 PM
Capital Raise Update
- Ares Management Corporation raised approximately $52.92 million through the sale of additional shares.
- The total net proceeds from the offering, including the initial sale, reached approximately $408.21 million.
Capital raise
14 June 2024 4:15 PM
Capital Raise Announcement
- Ares Management Corporation raised approximately $356 million through the sale of 2,650,000 shares of Class A common stock.
- The underwriters have an option to purchase an additional 397,500 shares within 30 days, which could result in further capital being raised.
Worse than expected
8 May 2024 8:28 PM
Quarterly Report
- Net income attributable to common stockholders decreased by 22% year-over-year, indicating worse than expected results.
- Carried interest allocation decreased significantly to a loss of $32.5 million, primarily due to reversals in private equity and real estate funds, indicating worse than expected results.
Better than expected
1 May 2024 9:54 PM
Quarterly Report
- The company's AUM grew by 19% year-over-year, exceeding expectations.
- The company raised $17.4 billion in gross new capital, indicating strong investor confidence.
- Available capital reached a record high of $114.6 billion, positioning the company for future growth.
Better than expected
7 February 2024 9:30 PM
Quarterly Report
- The company's AUM, FPAUM, and available capital all reached record levels, indicating strong growth and investor confidence.
- The company's fundraising efforts were highly successful, exceeding expectations and positioning them for future growth.
- The company's after-tax realized income per share increased year-over-year, demonstrating improved profitability.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.