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Ares Capital 10-Q 2012

Documents found in this filing:

  1. 10-Q
  2. Ex-31.1
  3. Ex-31.2
  4. Ex-32.1
  5. Ex-32.1

Table of Contents

 

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 10-Q

 

x      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2012

 

OR

 

o         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period           to          

 

Commission File No. 000-50697

 

ARES CAPITAL CORPORATION

(Exact name of Registrant as specified in its charter)

 

Maryland

 

33-1089684

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification Number)

 

245 Park Avenue, 44th Floor, New York, NY 10167

(Address of principal executive office)   (Zip Code)

 

(212) 750-7300

(Registrant’s telephone number, including area code)

 


 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 


 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:   Yes  x  No  o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes o  No o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer x

 

Accelerated filer o

 

 

 

Non-accelerated filer o

 

Smaller reporting company o

(Do not check if a smaller reporting company)

 

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class

 

Outstanding at May 8, 2012

Common stock, $0.001 par value

 

221,874,996

 

 

 



Table of Contents

 

ARES CAPITAL CORPORATION

 

INDEX

 

Part I.

Financial Information

 

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

Consolidated Balance Sheet as of March 31, 2012 (unaudited) and December 31, 2011

2

 

 

 

 

Consolidated Statement of Operations for the three months ended March 31, 2012 (unaudited) and March 31, 2011 (unaudited)

3

 

 

 

 

Consolidated Schedule of Investments as of March 31, 2012 (unaudited) and December 31, 2011

4

 

 

 

 

Consolidated Statement of Stockholders’ Equity for the three months ended March 31, 2012 (unaudited)

42

 

 

 

 

Consolidated Statement of Cash Flows for the three months ended March 31, 2012 (unaudited) and March 31, 2011 (unaudited)

43

 

 

 

 

Notes to Consolidated Financial Statements (unaudited)

44

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

68

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

86

 

 

 

Item 4.

Controls and Procedures

86

 

 

 

Part II.

Other Information

 

 

 

 

Item 1.

Legal Proceedings

87

 

 

 

Item 1A.

Risk Factors

87

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

87

 

 

 

Item 3.

Defaults Upon Senior Securities

87

 

 

 

Item 4.

Mine Safety Disclosures

87

 

 

 

Item 5.

Other Information

87

 

 

 

Item 6.

Exhibits

88

 



Table of Contents

 

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(in thousands, except per share data)

 

 

 

As of

 

 

 

March 31, 2012

 

December 31, 2011

 

 

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

Investments at fair value

 

 

 

 

 

Non-controlled/non-affiliate investments

 

$

3,064,016

 

$

3,060,084

 

Non-controlled affiliate company investments

 

309,401

 

267,324

 

Controlled affiliate company investments

 

1,831,114

 

1,767,098

 

Total investments at fair value (amortized cost of $5,182,508 and $5,108,663, respectively)

 

5,204,531

 

5,094,506

 

Cash and cash equivalents

 

216,412

 

120,782

 

Receivable for open trades

 

45

 

550

 

Interest receivable

 

101,197

 

99,078

 

Other assets

 

86,953

 

72,521

 

Total assets

 

$

5,609,138

 

$

5,387,437

 

LIABILITIES

 

 

 

 

 

Debt

 

$

2,018,866

 

$

2,073,602

 

Management and incentive fees payable

 

95,329

 

92,496

 

Accounts payable and other liabilities

 

39,035

 

47,691

 

Interest and facility fees payable

 

22,647

 

26,383

 

Total liabilities

 

2,175,877

 

2,240,172

 

Commitments and contingencies (Note 6)

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

Common stock, par value $.001 per share, 400,000 common shares authorized, 221,875 and 205,130 common shares issued and outstanding, respectively

 

222

 

205

 

Capital in excess of par value

 

3,652,760

 

3,390,354

 

Accumulated overdistributed net investment income

 

(15,385

)

(10,449

)

Accumulated net realized loss on investments, foreign currency transactions, extinguishment of debt, other assets and acquisitions

 

(226,359

)

(218,688

)

Net unrealized gain (loss) on investments

 

22,023

 

(14,157

)

Total stockholders’ equity

 

3,433,261

 

3,147,265

 

Total liabilities and stockholders’ equity

 

$

5,609,138

 

$

5,387,437

 

NET ASSETS PER SHARE

 

$

15.47

 

$

15.34

 

 

See accompanying notes to consolidated financial statements.

 

2



Table of Contents

 

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share data)

 

 

 

For the three months ended

 

 

 

March 31, 2012

 

March 31, 2011

 

 

 

(unaudited)

 

(unaudited)

 

INVESTMENT INCOME:

 

 

 

 

 

From non-controlled/non-affiliate company investments:

 

 

 

 

 

Interest income

 

$

72,168

 

$

61,860

 

Capital structuring service fees

 

7,877

 

5,365

 

Dividend income

 

3,802

 

1,515

 

Management fees

 

328

 

154

 

Other income

 

2,748

 

1,236

 

Total investment income from non-controlled/non-affiliate company investments

 

86,923

 

70,130

 

 

 

 

 

 

 

From non-controlled affiliate company investments:

 

 

 

 

 

Interest income

 

4,592

 

10,132

 

Dividend income

 

316

 

2,376

 

Management fees

 

63

 

188

 

Other income

 

25

 

576

 

Total investment income from non-controlled affiliate company investments

 

4,996

 

13,272

 

 

 

 

 

 

 

From controlled affiliate company investments:

 

 

 

 

 

Interest income

 

56,125

 

38,621

 

Capital structuring service fees

 

9,783

 

5,593

 

Dividend income

 

5,101

 

4,900

 

Management fees

 

4,541

 

3,107

 

Other income

 

269

 

68

 

Total investment income from controlled affiliate company investments

 

75,819

 

52,289

 

 

 

 

 

 

 

Total investment income

 

167,738

 

135,691

 

 

 

 

 

 

 

EXPENSES:

 

 

 

 

 

Interest and credit facility fees

 

32,776

 

30,175

 

Incentive management fees

 

26,386

 

30,941

 

Base management fees

 

19,986

 

16,730

 

Professional fees

 

3,686

 

2,632

 

Administrative fees

 

2,320

 

2,425

 

Other general and administrative

 

2,801

 

2,918

 

Total expenses

 

87,955

 

85,821

 

 

 

 

 

 

 

NET INVESTMENT INCOME BEFORE INCOME TAXES

 

79,783

 

49,870

 

 

 

 

 

 

 

Income tax expense, including excise tax

 

2,745

 

2,047

 

 

 

 

 

 

 

NET INVESTMENT INCOME

 

77,038

 

47,823

 

 

 

 

 

 

 

REALIZED AND UNREALIZED NET GAINS (LOSSES) ON INVESTMENTS:

 

 

 

 

 

Net realized gains (losses):

 

 

 

 

 

Non-controlled/non-affiliate company investments

 

462

 

72,412

 

Non-controlled affiliate company investments

 

3

 

(3,596

)

Controlled affiliate company investments

 

(8,136

)

(6,247

)

Net realized gains (losses)

 

(7,671

)

62,569

 

 

 

 

 

 

 

Net unrealized gains (losses):

 

 

 

 

 

Non-controlled/non-affiliate company investments

 

6,017

 

(13,054

)

Non-controlled affiliate company investments

 

10,093

 

6,547

 

Controlled affiliate company investments

 

20,070

 

28,741

 

Net unrealized gains

 

36,180

 

22,234

 

 

 

 

 

 

 

Net realized and unrealized gains on investments

 

28,509

 

84,803

 

 

 

 

 

 

 

REALIZED LOSS ON EXTINGUISHMENT OF DEBT

 

 

(8,860

)

 

 

 

 

 

 

NET INCREASE IN STOCKHOLDERS’ EQUITY RESULTING FROM OPERATIONS

 

$

105,547

 

$

123,766

 

 

 

 

 

 

 

BASIC AND DILUTED EARNINGS PER COMMON SHARE (see Note 9)

 

$

0.49

 

$

0.61

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING — BASIC AND DILUTED (see Note 9)

 

217,044

 

204,419

 

 

See accompanying notes to consolidated financial statements.

 

3



Table of Contents

 

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of March 31, 2012

(dollar amounts in thousands)

(unaudited)

 

Company(1)

 

Business Description

 

Investment

 

Interest (5)(11)

 

Acquisition
Date

 

Amortized
Cost

 

Fair Value

 

Percentage
of Net
Assets

 

Investment Funds and Vehicles

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AGILE Fund I, LLC (7)(9)

 

Investment partnership

 

Member interest (0.50% interest)

 

 

 

4/1/2010

 

$

207

 

$

104

 

 

 

CIC Flex, LP (9)

 

Investment partnership

 

Limited partnership units (0.94 unit)

 

 

 

9/7/2007

 

2,452

 

3,648

 

 

 

Covestia Capital Partners, LP (9)

 

Investment partnership

 

Limited partnership interest (46.67% interest)

 

 

 

6/17/2008

 

1,059

 

1,111

 

 

 

Dynamic India Fund IV, LLC (9)

 

Investment company

 

Member interest (5.44% interest)

 

 

 

4/1/2010

 

4,822

 

3,509

 

 

 

Firstlight Financial Corporation (6)(9)

 

Investment company

 

Senior subordinated loan ($71,720 par due 12/2016)

 

1.00% PIK

 

12/31/2006

 

71,462

 

74,342

 

 

 

 

 

 

 

Class A common stock (10,000 shares)

 

 

 

12/31/2006

 

10,000

 

 

 

 

 

 

 

 

Class B common stock (30,000 shares)

 

 

 

12/31/2006

 

30,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

111,462

 

74,342

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HCI Equity, LLC (7)(8)(9)

 

Investment company

 

Member interest (100.00% interest)

 

 

 

4/1/2010

 

808

 

736

 

 

 

Imperial Capital Private Opportunities, LP (9)

 

Investment partnership

 

Limited partnership interest (80.00% interest)

 

 

 

5/10/2007

 

6,643

 

5,120

 

 

 

Ivy Hill Middle Market Credit Fund, Ltd. (7)(8)(9)

 

Investment company

 

Class B deferrable interest notes ($40,000 par due 11/2018)

 

6.47% (Libor + 6.00%/Q)

 

11/20/2007

 

40,000

 

38,000

 

 

 

 

 

 

 

Subordinated notes ($16 par due 11/2018)

 

15.00%

 

11/20/2007

 

15,515

 

16,480

 

 

 

 

 

 

 

 

 

 

 

 

 

55,515

 

54,480

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kodiak Funding, LP (9)

 

Investment partnership

 

Limited partnership interest (3.96% interest)

 

 

 

4/1/2010

 

859

 

823

 

 

 

Novak Biddle Venture Partners III, L.P. (9)

 

Investment partnership

 

Limited partnership interest (2.46% interest)

 

 

 

4/1/2010

 

83

 

184

 

 

 

Partnership Capital Growth Fund I, L.P. (9)

 

Investment partnership

 

Limited partnership interest (25.00% interest)

 

 

 

6/16/2006

 

1,721

 

4,225

 

 

 

Partnership Capital Growth Fund III, L.P. (9)

 

Investment partnership

 

Limited partnership interest (2.50% interest)

 

 

 

10/5/2011

 

1,342

 

1,266

 

 

 

Senior Secured Loan Fund LLC (7)(10)(17)

 

Co-investment vehicle

 

Subordinated certificates ($1,110,966 par due 12/2020)

 

8.47% (Libor + 8.00%/Q)

 

10/30/2009

 

1,100,243

 

1,125,702

 

 

 

VSC Investors LLC (9)

 

Investment company

 

Membership interest (1.95% interest)

 

 

 

1/24/2008

 

1,394

 

790

 

 

 

 

 

 

 

 

 

 

 

 

 

1,288,610

 

1,276,040

 

37.17

%

Healthcare-Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BenefitMall Holdings Inc. and Centerstone Insurance and Financial Services (7)

 

Employee benefits broker services company

 

Senior subordinated loan ($40,326 par due 6/2014)

 

18.00%

 

4/1/2010

 

40,326

 

40,326

 

 

 

 

 

 

 

Common stock (39,274,290 shares)

 

 

 

4/1/2010

 

53,510

 

60,096

 

 

 

 

 

 

 

Warrants

 

 

 

4/1/2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

93,836

 

100,422

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CCS Group Holdings, LLC

 

Correctional facility healthcare operator

 

Class A units (601,937 units)

 

 

 

8/19/2010

 

602

 

1,064

 

 

 

CT Technologies Intermediate Holdings, Inc. and CT Technologies Holdings LLC (6)

 

Healthcare analysis services

 

Senior secured loan ($7,227 par due 3/2017)

 

7.75% (Libor + 6.50%/Q)

 

3/15/2011

 

7,227

 

6,938

(2)(16)

 

 

 

 

 

 

Senior secured loan ($7,623 par due 3/2017)

 

7.75% (Libor + 6.50%/Q)

 

3/15/2011

 

7,623

 

7,318

(3)(16)

 

 

 

 

 

 

Class A common stock (9,679 shares)

 

 

 

6/15/2007

 

4,000

 

9,019

 

 

 

 

 

 

 

Class C common stock (1,546 shares)

 

 

 

6/15/2007

 

 

1,441

 

 

 

 

 

 

 

 

 

 

 

 

 

18,850

 

24,716

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INC Research, Inc.

 

Pharmaceutical and biotechnology consulting services

 

Common stock (1,410,000 shares)

 

 

 

9/27/2010

 

1,512

 

1,403

 

 

 

 

4



Table of Contents

 

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of March 31, 2012

(dollar amounts in thousands)

(unaudited)

 

Company(1)

 

Business Description

 

Investment

 

Interest (5)(11)

 

Acquisition
Date

 

Amortized
Cost

 

Fair Value

 

Percentage
of Net
Assets

 

Magnacare Holdings, Inc., Magnacare Administrative Services, LLC, and Magnacare, LLC

 

Healthcare professional provider

 

Senior secured loan ($20,711 par due 3/2018)

 

9.75% (Libor + 8.75%/Q)

 

9/15/2010

 

20,711

 

20,711

(16)

 

 

 

 

 

 

Senior secured loan ($44,001 par due 3/2018)

 

9.75% (Libor + 8.75%/Q)

 

9/15/2010

 

44,001

 

44,001

(2)(16)

 

 

 

 

 

 

Senior secured loan ($56,798 par due 3/2018)

 

9.75% (Libor + 8.75%/Q)

 

3/16/2012

 

56,798

 

56,798

(16)

 

 

 

 

 

 

Senior secured loan ($15,999 par due 3/2018)

 

9.75% (Libor + 8.75%/Q)

 

3/16/2012

 

15,999

 

15,999

(2)(16)

 

 

 

 

 

 

 

 

 

 

 

 

137,509

 

137,509

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MW Dental Holding Corp.

 

Dental services

 

Senior secured revolving loan ($1,700 par due 4/2017)

 

8.50% (Libor + 7.00%/M)

 

4/12/2011

 

1,700

 

1,700

(16)

 

 

 

 

 

 

Senior secured loan ($4,000 par due 4/2017)

 

8.50% (Libor + 7.00%/M)

 

4/12/2011

 

4,000

 

4,000

(16)

 

 

 

 

 

 

Senior secured loan ($5,371 par due 4/2017)

 

8.50% (Libor + 7.00%/M)

 

4/12/2011

 

5,371

 

5,371

(16)

 

 

 

 

 

 

Senior secured loan ($49,625 par due 4/2017)

 

8.50% (Libor + 7.00%/M)

 

4/12/2011

 

49,625

 

49,625

(2)(16)

 

 

 

 

 

 

Senior secured loan ($9,975 par due 4/2017)

 

8.50% (Libor + 7.00%/M)

 

4/12/2011

 

9,975

 

9,975

(4)(16)

 

 

 

 

 

 

Senior secured loan ($2,680 par due 4/2017)

 

8.50% (Libor + 7.00%/M)

 

4/12/2011

 

2,680

 

2,680

(3)(16)

 

 

 

 

 

 

 

 

 

 

 

 

73,351

 

73,351

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Napa Management Services Corporation

 

Anesthesia management services provider

 

Senior secured loan ($10,822 par due 4/2016)

 

7.50% (Libor + 6.00%/Q)

 

4/15/2011

 

10,504

 

10,822

(16)

 

 

 

 

 

 

Senior secured loan ($29,250 par due 4/2016)

 

7.50% (Libor + 6.00%/Q)

 

4/15/2011

 

29,250

 

29,250

(2)(16)

 

 

 

 

 

 

Senior secured loan ($7,702 par due 4/2016)

 

7.50% (Libor + 6.00%/Q)

 

4/15/2011

 

7,702

 

7,702

(3)(16)

 

 

 

 

 

 

Common units (5,000 units)

 

 

 

4/15/2011

 

5,000

 

5,700

 

 

 

 

 

 

 

 

 

 

 

 

 

52,456

 

53,474

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NS Merger Sub. Inc. and NS Holdings, Inc.

 

Healthcare technology provider

 

Senior subordinated loan ($579 par due 6/2017)

 

13.50%

 

6/21/2010

 

579

 

579

 

 

 

 

 

 

 

Senior subordinated loan ($50,000 par due 6/2017)

 

13.50%

 

6/21/2010

 

50,000

 

50,000

(2)

 

 

 

 

 

 

Common stock (2,500,000 shares)

 

 

 

6/21/2010

 

2,500

 

3,530

 

 

 

 

 

 

 

 

 

 

 

 

 

53,079

 

54,109

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OnCURE Medical Corp.

 

Radiation oncology care provider

 

Common stock (857,143 shares)

 

 

 

8/18/2006

 

3,000

 

1,361

 

 

 

Passport Health Communications, Inc., Passport Holding Corp. and Prism Holding Corp.

 

Healthcare technology provider

 

Series A preferred stock (1,594,457 shares)

 

 

 

7/30/2008

 

11,156

 

9,962

 

 

 

 

 

 

 

Common stock (16,106 shares)

 

 

 

7/30/2008

 

100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,256

 

9,962

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PG Mergersub, Inc. and PGA Holdings, Inc.

 

Provider of patient surveys, management reports and national databases for the integrated healthcare delivery system

 

Senior secured loan ($9,085 par due 11/2015)

 

6.75% (Libor + 5.00%/Q)

 

11/3/2010

 

9,063

 

9,085

(3)(16)

 

 

 

 

 

 

Senior subordinated loan ($4,000 par due 3/2016)

 

12.50%

 

3/12/2008

 

3,958

 

4,000

 

 

 

 

 

 

 

Preferred stock (333 shares)

 

 

 

3/12/2008

 

125

 

16

 

 

 

 

 

 

 

Common stock (16,667 shares)

 

 

 

3/12/2008

 

167

 

789

 

 

 

 

 

 

 

 

 

 

 

 

 

13,313

 

13,890

 

 

 

 

5



Table of Contents

 

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of March 31, 2012

(dollar amounts in thousands)

(unaudited)

 

Company(1)

 

Business Description

 

Investment

 

Interest (5)(11)

 

Acquisition
Date

 

Amortized
Cost

 

Fair Value

 

Percentage
of Net
Assets

 

PRA Holdings, Inc.

 

Drug testing services

 

Senior secured loan ($11,330 par due 12/2014)

 

4.48% (Libor + 4.00%/Q)

 

12/14/2007

 

11,057

 

11,103

(4)

 

 

 

 

 

 

Senior secured loan ($12,000 par due 12/2014)

 

4.48% (Libor + 4.00%/Q)

 

12/14/2007

 

11,707

 

11,760

(3)

 

 

 

 

 

 

 

 

 

 

 

 

22,764

 

22,863

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RCHP, Inc.

 

Operator of general acute care hospitals

 

Junior secured loan ($15,000 par due 5/2019)

 

11.50% (Libor + 10.00%/Q)

 

11/4/2011

 

15,000

 

15,000

(16)

 

 

 

 

 

 

Junior secured loan ($50,000 par due 5/2019)

 

11.50% (Libor + 10.00%/Q)

 

11/4/2011

 

50,000

 

50,000

(2)(16)

 

 

 

 

 

 

 

 

 

 

 

 

65,000

 

65,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reed Group, Ltd.

 

Medical disability management services provider

 

Senior secured revolving loan ($1,448 par due 12/2013)

 

 

 

4/1/2010

 

1,080

 

1,231

(15)

 

 

 

 

 

 

Senior secured loan ($12,457 par due 12/2013)

 

 

 

4/1/2010

 

9,285

 

10,588

(15)

 

 

 

 

 

 

Senior secured loan ($26,469 par due 12/2013)

 

 

 

4/1/2010

 

16,658

 

2,036

(15)

 

 

 

 

 

 

Equity interests

 

 

 

4/1/2010

 

203

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,226

 

13,855

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Soteria Imaging Services, LLC (6)

 

Outpatient medical imaging provider

 

Junior secured loan ($1,177 par due 11/2010)

 

 

 

4/1/2010

 

1,003

 

770

(15)

 

 

 

 

 

 

Junior secured loan ($1,681 par due 11/2010)

 

 

 

4/1/2010

 

1,461

 

1,099

(15)

 

 

 

 

 

 

Preferred member units (1,823,179 units)

 

 

 

4/1/2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,464

 

1,869

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sunquest Information Systems, Inc.

 

Laboratory software solutions provider

 

Junior secured loan ($67,000 par due 6/2017)

 

9.75% (Libor + 8.50%/Q)

 

12/16/2010

 

67,000

 

67,000

(16)

 

 

 

 

 

 

Junior secured loan ($58,000 par due 6/2017)

 

9.75% (Libor + 8.50%/Q)

 

12/16/2010

 

58,000

 

58,000

(2)(16)

 

 

 

 

 

 

 

 

 

 

 

 

125,000

 

125,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Renal Care, Inc.

 

Dialysis provider

 

Senior secured loan ($7,425 par due 12/2016)

 

5.50% (Libor + 4.00%/M)

 

6/9/2011

 

7,388

 

7,425

(16)

 

 

 

 

 

 

Senior subordinated loan ($50,824 par due 6/2018)

 

11.25% Cash, 2.00% PIK

 

5/24/2010

 

50,824

 

50,824

(2)

 

 

 

 

 

 

 

 

 

 

 

 

58,212

 

58,249

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vantage Oncology, Inc.

 

Radiation oncology care provider

 

Common stock (62,157 shares)

 

 

 

2/3/2011

 

4,670

 

4,132

 

 

 

 

 

 

 

 

 

 

 

 

 

764,100

 

762,229

 

22.20

%

Education

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

American Academy Holdings, LLC

 

Provider of education, training, certification, networking, and consulting services to medical coders and other healthcare professionals

 

Senior secured revolving loan ($100 par due 3/2016)

 

9.50% (Libor + 8.50%/Q)

 

3/18/2011

 

100

 

100

(16)

 

 

 

 

 

 

Senior secured loan ($21,415 par due 3/2016)

 

9.50% (Libor + 8.50%/Q)

 

3/18/2011

 

21,415

 

21,415

(16)

 

 

 

 

 

 

Senior secured loan ($55,437 par due 3/2016)

 

9.50% (Libor + 8.50%/Q)

 

3/18/2011

 

55,437

 

55,437

(2)(16)

 

 

 

 

 

 

 

 

 

 

 

 

76,952

 

76,952

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Campus Management Corp. and Campus Management Acquisition Corp. (6)

 

Education software developer

 

Preferred stock (485,159 shares)

 

 

 

2/8/2008

 

10,520

 

12,560

 

 

 

Community Education Centers, Inc.

 

Offender re-entry and in-prison treatment services provider

 

Senior secured loan ($17,143 par due 12/2014)

 

6.25% (Libor + 5.25%/Q)

 

12/10/2010

 

17,143

 

17,143

(16)

 

 

 

6



Table of Contents

 

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of March 31, 2012

(dollar amounts in thousands)

(unaudited)

 

Company(1)

 

Business Description

 

Investment

 

Interest (5)(11)

 

Acquisition
Date

 

Amortized
Cost

 

Fair Value

 

Percentage
of Net
Assets

 

 

 

 

 

Junior secured loan ($32,161 par due 12/2015)

 

15.57% (Libor + 11.57% Cash, 4.00% PIK /Q)

 

12/10/2010

 

32,161

 

30,553

 

 

 

 

 

 

 

Junior secured loan ($9,680 par due 12/2015)

 

15.50% (Libor + 11.50% Cash, 4.00% PIK /Q)

 

12/10/2010

 

9,680

 

9,196

 

 

 

 

 

 

 

Warrants to purchase up to 578,427 shares

 

 

 

12/10/2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

58,984

 

56,892

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

eInstruction Corporation

 

Developer, manufacturer and retailer of educational products

 

Junior secured loan ($17,000 par due 7/2014)

 

 

 

4/1/2010

 

15,396

 

7,532

(15)

 

 

 

 

 

 

Senior subordinated loan ($28,396 par due 1/2015)

 

 

 

4/1/2010

 

24,151

 

(15)

 

 

 

 

 

 

Common stock (2,406 shares)

 

 

 

4/1/2010

 

926

 

 

 

 

 

 

 

 

 

 

 

 

 

 

40,473

 

7,532

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ELC Acquisition Corp., ELC Holdings Corporation, and Excelligence Learning Corporation (6)

 

Developer, manufacturer and retailer of educational products

 

Preferred stock (99,492 shares)

 

 

 

8/1/2011

 

10,149

 

8,213

 

 

 

 

 

 

 

Common stock (50,800 shares)

 

 

 

8/1/2011

 

51

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10,200

 

8,213

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Infilaw Holding, LLC

 

Operator of for-profit law schools

 

Senior secured loan ($29,850 par due 8/2016)

 

9.50% (Libor + 8.50%/Q)

 

8/25/2011

 

29,850

 

29,850

(2)(16)

 

 

 

 

 

 

Series A preferred units (131,000 units)

 

10.75% (Base Rate + 7.50%/Q)

 

8/25/2011

 

131,000

 

131,000

(16)

 

 

 

 

 

 

 

 

 

 

 

 

160,850

 

160,850

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Instituto de Banca y Comercio, Inc. & Leeds IV Advisors, Inc.

 

Private school operator

 

Series B preferred stock (1,750,000 shares)

 

 

 

8/5/2010

 

5,000

 

6,386

 

 

 

 

 

 

 

Series C preferred stock (2,512,586 shares)

 

 

 

6/7/2010

 

689

 

323

 

 

 

 

 

 

 

Common stock (20 shares)

 

 

 

6/7/2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,689

 

6,709

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

JTC Education Holdings, Inc.

 

Postsecondary school operator

 

Senior secured revolving loan ($2,175 par due 12/2014)

 

12.75% (Base Rate + 9.50%/Q)

 

12/31/2009

 

2,175

 

2,175

(16)

 

 

 

 

 

 

Senior secured loan ($19,810 par due 12/2014)

 

12.50% (Libor + 9.50%/M)

 

12/31/2009

 

19,810

 

19,810

(16)

 

 

 

 

 

 

Senior secured loan ($9,594 par due 12/2014)

 

12.50% (Libor + 9.50%/M)

 

12/31/2009

 

9,594

 

9,594

(3)(16)

 

 

 

 

 

 

 

 

 

 

 

 

31,579

 

31,579

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lakeland Tours, LLC

 

Educational travel provider

 

Senior secured loan ($13,201 par due 12/2016)

 

6.00% (Libor + 4.50%/Q)

 

10/4/2011

 

13,161

 

13,201

(16)

 

 

 

 

 

 

Senior secured loan ($9,470 par due 12/2016)

 

6.00% (Libor + 4.50%/Q)

 

10/4/2011

 

9,441

 

9,470

(2)(16)

 

 

 

 

 

 

Senior secured loan ($1,894 par due 12/2016)

 

6.00% (Libor + 4.50%/Q)

 

10/4/2011

 

1,888

 

1,894

(4)(16)

 

 

 

 

 

 

Senior secured loan ($56,265 par due 12/2016)

 

10.00% (Libor + 8.50%/Q)

 

10/4/2011

 

56,093

 

56,265

(14)(16)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior secured loan ($40,362 par due 12/2016)

 

10.00% (Libor + 8.50%/Q)

 

10/4/2011

 

40,238

 

40,362

(2)(14)(16)

 

 

 

 

 

 

Senior secured loan ($8,072 par due 12/2016)

 

10.00% (Libor + 8.50%/Q)

 

10/4/2011

 

8,047

 

8,072

(4)(14)(16)

 

 

 

 

 

 

Common stock (5,000 shares)

 

 

 

10/4/2011

 

5,000

 

4,637

 

 

 

 

 

 

 

 

 

 

 

 

 

133,868

 

133,901

 

 

 

 

7



Table of Contents

 

ARES CAPITAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED SCHEDULE OF INVESTMENTS

As of March 31, 2012

(dollar amounts in thousands)

(unaudited)

 

Company(1)

 

Business Description

 

Investment

 

Interest (5)(11)

 

Acquisition
Date

 

Amortized
Cost

 

Fair Value

 

Percentage
of Net
Assets

 

R3 Education, Inc. and EIC Acquisitions Corp. (8)

 

Medical school operator

 

Senior secured loan ($1,882 par due 4/2013)

 

9.00% (Libor + 6.00%/Q)

 

9/21/2007

 

1,882

 

4,522

(3)(16)

 

 

 

 

 

 

Senior secured loan ($2,437 par due 4/2013)

 

9.00% (Libor + 6.00%/Q)

 

9/21/2007

 

2,437

 

5,857

(3)(16)

 

 

 

 

 

 

Senior secured loan ($6,719 par due 4/2013)

 

13.00% PIK

 

12/8/2009

 

4,568

 

16,146

 

 

 

 

 

 

 

Preferred stock (8,800 shares)

 

 

 

7/30/2008

 

2,200

 

1,760

 

 

 

 

 

 

 

Common membership interest (26.27% interest)

 

 

 

9/21/2007

 

15,800

 

23,936

 

 

 

 

 

 

 

Warrants to purchase up to 27,890 shares

 

 

 

12/8/2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26,887

 

52,221

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

556,002

 

547,409

 

15.94

%

Restaurants and Food Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ADF Capital, Inc. & ADF Restaurant Group, LLC

 

Restaurant owner and operator

 

Senior secured revolving loan ($1,968 par due 11/2013)

 

6.50% (Libor + 3.50%/Q)

 

11/27/2006

 

1,968

 

1,968

(16)

 

 

 

 

 

 

Senior secured loan ($7,205 par due 11/2013)

 

6.50% (Libor + 3.50%/Q)

 

11/27/2006

 

7,205

 

7,205

(16)

 

 

 

 

 

 

Senior secured loan ($11,238 par due 11/2014)

 

12.50% (Libor + 9.50%/Q)

 

11/27/2006

 

11,241

 

11,238

(2)(16)

 

 

 

 

 

 

Senior secured loan ($9,370 par due 11/2014)

 

12.50% (Libor + 9.50%/Q)

 

11/27/2006

 

9,370

 

9,370

(3)(16)

 

 

 

 

 

 

Promissory note ($14,897,360 par due 11/2016)

 

 

 

11/27/2006

 

14,886

 

15,339

 

 

 

 

 

 

 

Warrants to purchase up to 0.61 shares

 

 

 

6/1/2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

44,670

 

45,120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hojeij Branded Foods, Inc.

 

Airport restaurant operator

 

Senior secured revolving loan ($1,200 par due 2/2017)

 

10.25% (Base Rate + 7.00%/Q)

 

2/15/2012

 

1,200

 

1,164

(16)

 

 

 

 

 

 

Senior secured loan ($15,000 par due 2/2017)

 

9.00% (Libor + 8.00%/Q)

 

2/15/2012

 

15,000

 

14,550

(16)

 

 

 

 

 

 

Warrants to purchase up to 324 shares of Class A common stock

 

 

 

2/15/2012

 

 

669

 

 

 

 

 

 

 

Warrants to purchase up to 7.5% of membership interest

 

 

 

2/15/2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,200

 

16,383

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Orion Foods, LLC (fka Hot Stuff Foods, LLC) (7)

 

Convenience food service retailer

 

Senior secured revolving loan ($7,300 par due 9/2014)

 

10.75% (Base Rate + 7.50%/M)

 

4/1/2010

 

7,300

 

7,300

(16)

 

 

 

 

 

 

Senior secured loan ($33,807 par due 9/2014)

 

10.00% (Libor + 8.50%/Q)

 

4/1/2010

 

33,807

 

33,807

(2)(16)

 

 

 

 

 

 

Junior secured loan ($37,552 par due 9/2014)

 

14.00%

 

4/1/2010

 

26,397

 

27,443

 

 

 

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