Ares Management Corporation filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Other Events
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On October 11, 2024, Ares Management Corporation (the “Company”) issued $750,000,000 aggregate principal amount of its 5.600% Senior Notes due 2054 (the “Notes”) pursuant to a previously announced underwritten public offering (the “Offering”). The Notes were issued pursuant to a base indenture, dated as of November 10, 2023 (the “Base Indenture”), between the Company and U.S. Bank Trust Company, National Association, as Trustee (the “Trustee”), as supplemented by the second supplemental indenture, dated as of October 11, 2024, among the Company, Ares Finance Co. LLC, a Delaware limited liability company (“AFC”), Ares Finance Co. II LLC, a Delaware limited liability company (“AFC II”), Ares Finance Co. III LLC, a Delaware limited liability company (“AFC III”), Ares Finance Co. IV LLC, a Delaware limited liability company (“AFC IV”), Ares Holdings L.P., a Delaware limited partnership (“Ares Holdings”), Ares Management LLC, a Delaware limited liability company (“Ares Management”), and Ares Investments Holdings LLC, a Delaware limited liability company (together with AFC, AFC II, AFC III, AFC IV, Ares Holdings, and Ares Management, the “Guarantors”), and the Trustee (the “Second Supplemental Indenture” and together with the Base Indenture, the “Indenture”).
The Notes were sold pursuant to an effective automatic shelf registration statement on Form S-3 (as amended, the “Registration Statement”) (File Nos. 333-270053, 333-270053-01, 333-270053-02, 333-270053-03, 333-270053-04, 333-270053-05, 333-270053-06 and 333-270053-07), filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 27, 2023. The terms of the Offering are described in a prospectus, dated February 27, 2023, as supplemented by a prospectus supplement, dated October 9, 2024.
The information contained in Item 2.03 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 1.01.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The Notes bear interest at a rate of 5.600% per annum accruing from October 11, 2024. Interest is payable semi-annually in arrears on April 11 and October 11 of each year, commencing on April 11, 2025. The Notes will mature on October 11, 2054 unless earlier redeemed or repurchased. The Notes are unsecured and unsubordinated obligations of the Company. The Notes are fully and unconditionally guaranteed (the “Guarantees”), jointly and severally, by each of the Guarantors. The Guarantees are unsecured and unsubordinated obligations of the Guarantors.
The Indenture includes covenants, including limitations on the Company’s and the Guarantors’ ability to, subject to exceptions, incur indebtedness secured by liens on voting stock or profit participating equity interests of their subsidiaries or merge, consolidate, sell, assign, transfer, lease or convey all or substantially all of their assets. The Indenture also provides for customary events of default and further provides that the Trustee or the holders of not less than 25% in aggregate principal amount of the outstanding Notes may declare the principal amount of all Notes, together with any accrued and unpaid interest thereon, to be due and payable immediately upon the occurrence and during the continuance of any event of default after expiration of any applicable grace period. In the case of specified events of bankruptcy, insolvency, receivership or reorganization, the principal amount of the Notes and any accrued and unpaid interest on the Notes automatically will become due and payable. On or after April 11, 2054, the Notes may be redeemed at the Company’s option in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of any Notes being redeemed, plus in each case any accrued and unpaid interest to, but excluding, the date of redemption. In addition, the Notes may be redeemed, in whole or in part, at any time prior to April 11, 2054, at a redemption price equal to the greater of (i) 100% of the principal amount of any Notes being redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest (exclusive of interest accrued to the Redemption Date) on any Notes being redeemed, discounted to the Redemption Date on a semiannual basis, at the Treasury Rate (as defined in the Indenture) plus 20 basis points, plus in each case accrued and unpaid interest, if any, on the principal amount of the Notes being redeemed to, but excluding, the date of redemption.
The preceding is a summary of the terms of the Indenture and the form of the Notes, and is qualified in its entirety by reference to the Base Indenture filed as Exhibit 4.1 to this Current Report on Form 8-K, the Second Supplemental Indenture filed as Exhibit 4.2 to this Current Report on Form 8-K, and the form of the Notes filed as Exhibit 4.3 to this Current Report on Form 8-K and incorporated herein by reference as though they were fully set forth herein.
| Item 8.01 | Other Events. |
The information set forth above under Item 1.01 and 2.03 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 8.01.
Underwriting Agreement
In connection with the issuance and sale of the Notes, the Company entered into an underwriting agreement, dated October 9, 2024 (the “Underwriting Agreement”), with Morgan Stanley & Co. LLC and Citigroup Global Markets Inc., as representatives of the several underwriters named therein, relating to the Notes. The Underwriting Agreement is filed as Exhibit 1.1 hereto and is incorporated by reference herein.
Opinion of Counsel
The opinion of Kirkland & Ellis LLP, relating to the validity of the Notes, is filed as Exhibit 5.1 hereto and is incorporated by reference into the Registration Statement.
| 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.
| ARES MANAGEMENT CORPORATION | ||
| Dated: October 11, 2024 | ||
| By: | /s/ Jarrod Phillips | |
| Name: | Jarrod Phillips | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |