$2.5 Billion of New Capital Available for the Program from AIG and Another Large, Global Insurance Company
Successful Joint Venture Has Invested More than $2.4 Billion Since Inception
NEW YORK—February 13, 2018—Ares Capital Corporation (NASDAQ:ARCC) and Varagon Capital Partners announced today an increase in the investment capacity of their joint venture, the Senior Direct Lending Program (“SDLP”), to approximately $6.4 billion from $2.9 billion. AIG (NYSE:AIG), an existing investor in SDLP, increased its capital available to the program by $500 million to $2.75 billion and another leading global insurance company newly made available $2.0 billion. Ares Capital and Varagon have agreed to make available an incremental approximately $1.0 billion on a pro rata basis based on their respective ownership of subordinated certificates in the SDLP.
During 2017, the SDLP made $1.1 billion of new financing commitments to middle-market companies, bringing its total commitments to $2.4 billion. As of December 31, 2017, the SDLP was comprised 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,” said Mitch Goldstein, Co-President of Ares Capital. “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.”
"These sizeable commitments from two highly-reputable global insurers validate the SDLP’s competitive position in the market and the strong risk-adjusted returns it delivers to our investors,” said Walter Owens, Chief Executive Officer of Varagon. “We look forward to continuing our partnership with Ares Capital and providing flexible financing solutions that meet the needs of our borrowers and sponsors.”
About the Senior Direct Lending Program
SDLP invests in senior secured loans to middle market companies, including stretch senior and unitranche loans, and has a hold size of up to $300 million. SDLP lends to borrowers across industries that seek the speed and certainty of closing provided by large commitments and simplicity of documentation. SDLP is a joint venture between Ares Capital Corporation and Varagon Capital Partners.
About Ares Capital Corporation
Ares Capital is a leading specialty finance company that provides one-stop debt and equity financing solutions to U.S. middle market companies and power generation projects. Ares Capital originates and invests in senior secured loans, mezzanine debt and, to a lesser extent, equity investments through its national direct origination platform. Ares Capital’s investment objective is to generate both current income and capital appreciation through debt and equity investments primarily in private companies. Ares Capital has elected to be regulated as a business development company (“BDC”) and as of December 31, 2017, was the largest BDC by total assets and market capitalization. Ares Capital is externally managed by a subsidiary of Ares Management, L.P. (NYSE:ARES), a publicly traded, leading global alternative asset manager. For more information about Ares Capital, visit www.arescapitalcorp.com. However, the contents of such website are not and should not be deemed to be incorporated by reference herein.
About Varagon Capital Partners
Varagon is a leading lender to middle market companies and private equity firms. Varagon invests across the capital structure and delivers flexible financing solutions that meet the needs of borrowers. Varagon provides investors with exposure to high-quality, directly-originated middle market loans through products designed for sophisticated institutions. Since inception, Varagon has made over $6 billion of commitments to over 100 middle market companies. For more information about Varagon, visit www.varagon.com.
Ares Capital Corporation
Carl Drake, (888) 818-5298
John Stilmar, (888) 818-5298
Mendel Communications LLC
Bill Mendel, (212) 397-1030
Varagon Capital Partners
Marina Greene, (212) 235-2647
Noelle Barcenas, (212) 235-2637
Jonathan Gasthalter/Amanda Klein, (212) 257-4170