PE Tech Report


Like this article?

Sign up to our free newsletter

Ares Capital Corporation and Varagon Capital Partners expand senior direct loan programme to USD6.4bn

Ares Capital Corporation and Varagon Capital Partners have increased the investment capacity of their joint venture, the Senior Direct Lending Program (SDLP), to approximately USD6.4 billion from USD2.9 billion.

AIG (NYSE:AIG), an existing investor in SDLP, increased its capital available to the program by USD500 million to USD2.75 billion and another leading global insurance company newly made available USD2.0 billion. Ares Capital and Varagon have agreed to make available an incremental approximately USD1.0 billion on a pro rata basis based on their respective ownership of subordinated certificates in the SDLP.
During 2017, the SDLP made USD1.1 billion of new financing commitments to middle-market companies, bringing its total commitments to USD2.4 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,” says Mitch Goldstein, Co-President of Ares Capital. “Together with Varagon, by partnering with a well-capitalised 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,” says 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.”

Like this article? Sign up to our free newsletter