Ares Capital Corporation and Varagon Capital Partners Extend Senior Direct Lending Program to $ 6.4 Billion
NEW YORK–(COMMERCIAL THREAD) – Ares Capital Corporation (NASDAQ: ARCC) and Varagon Capital Partners today announced an increase in the investment capacity of their joint venture, the Senior Direct Lending Program (“SDLP”), to approximately $ 6.4 billion. dollars against 2.9 billion dollars. AIG (NYSE: AIG), an existing investor in SDLP, increased its capital available for the program from $ 500 million to $ 2.75 billion and another leading global insurance company recently made available 2 , 0 billion dollars. Ares Capital and Varagon have agreed to make available an additional amount of approximately $ 1.0 billion in proportion to their respective ownership of subordinated certificates in the SDLP.
In 2017, the SDLP made $ 1.1 billion in new funding commitments to mid-market companies, bringing its total commitments to $ 2.4 billion. As of December 31, 2017, the SDLP was made up of 19 different borrowers.
“SDLP’s expansion reflects the attractive market opportunity for large-scale lenders to provide creative financing solutions to sponsors and management teams of high-quality mid-market companies,” said Mitch Goldstein, co -Chairman of Ares Capital. “Together with Varagon, by partnering with a well-capitalized and sophisticated new institutional investor, we expect to increase our capital invested in SDLP and ultimately generate attractive risk-adjusted returns for our shareholders. ”
“These significant commitments from two highly reputable global insurers validate SDLP’s competitive position in the market and the strong risk-adjusted returns it offers our investors,” said Walter Owens, CEO 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 loan program
SDLP invests in senior secured loans to mid-market companies, including extended senior and unitranche loans, and has a holding size of up to $ 300 million. SDLP lends to borrowers in all industries who 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 providing one-stop debt and equity financing solutions to mid-market US businesses and power generation projects. Ares Capital initiates and invests in senior guaranteed 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 investments in debt and equities, primarily in private companies. Ares Capital elected to be regulated as a Business Development Company (“BDC”) and, as of December 31, 2017, was the largest BDC in terms of total assets and market capitalization. Ares Capital is managed externally by a subsidiary of Ares Management, LP (NYSE: ARES), one of the world’s leading listed alternative asset managers. For more information on Ares Capital, visit www.arescapitalcorp.com. However, the content of this website is not and should not be construed as being incorporated by reference herein.
About Varagon Capital Partners
Varagon is a leading lender to mid-market companies and private equity firms. Varagon invests across the entire capital structure and offers flexible financing solutions that meet the needs of borrowers. Varagon provides investors with exposure to high quality middle market loans, issued directly through products designed for sophisticated institutions. Since its inception, Varagon has made more than $ 6 billion in commitments with more than 100 mid-market companies. For more information on Varagon, visit www.varagon.com.
