Ares Dynamic Credit Allocation Fund Announces $100 Million Private Placement of Preferred Stock

Rhea-AI Summary

Ares Dynamic Credit Allocation Fund (NYSE: ARDC) has successfully completed a $20 million closing as part of a total $100 million issuance of mandatory redeemable preferred stock (MRPS). The second closing of $80 million is anticipated in Q3 2021. Proceeds will be allocated for debt repayment and general corporate purposes. The MRPS consists of three series with varying amounts and fixed dividend rates, with a total weighted average dividend rate of 2.81%. The MRPS will not be registered under the Securities Act.

Positive

• Successful completion of $20 million initial closing for MRPS.
• A total of $100 million in MRPS will improve liquidity and financial flexibility.
• Weighted average dividend rate of 2.81% suggests attractive income potential for investors.

Negative

• Initial closing of only $20 million suggests potential market hesitation or limited investor interest.
• Dependence on future closing for remaining $80 million may introduce uncertainty.

Ares Dynamic Credit Allocation Fund, Inc. (NYSE: ARDC) (the “Fund”) announced today that it completed an initial $20 million closing in the first of two closings for a total of $100 million in privately placed mandatory redeemable preferred stock (“MRPS”). The second closing for the remaining $80 million of MRPS is expected to be completed in the third quarter of 2021. Net proceeds from the MRPS will be used to repay existing debt and for investment and general corporate purposes.

The table below summarizes key terms of the MRPS.

Series	Size	Dividend Rate	Mandatory Redemption Date
Series A	$20 million	2.58%	July 15, 2026
Series B	$30 million	2.58%	September 15, 2026
Series C	$50 million	3.03%	September 15, 2028
Total	$100 million	2.81%*

*Represents the weighted average fixed rate of the MRPS.

The MRPS will not be and have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws and may not be offered or sold absent registration under the Securities Act, or pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

This press release is not an offer to sell securities and is not soliciting an offer to buy securities in any jurisdiction where the offer or sale is not permitted. An investor should consider the Fund’s investment objective, risks, charges and expenses carefully before investing.

Statements included herein may constitute “forward-looking statements” within the meaning of the U.S. securities laws, and may relate to future events or our future performance or financial condition. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties, including the impact of COVID-19 and related changes in interest rates and significant market volatility on our portfolio companies, our industry and the global economy. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in our filings with the Securities and Exchange Commission and others beyond the Fund’s control. The Fund undertakes no duty to update any forward-looking statements made herein.

About Ares Dynamic Credit Allocation Fund, Inc.

ARDC is a closed-end management company that is externally managed by Ares Capital Management II LLC, a subsidiary of Ares Management Corporation. ARDC seeks to provide an attractive level of total return primarily through current income and, secondarily, through capital appreciation. ARDC invests in a broad, dynamically-managed portfolio of credit investments. There can be no assurance that ARDC will achieve its investment objective. ARDC’s net asset value may be accessed through its NASDAQ ticker symbol, XADCX. Additional information is available at www.arespublicfunds.com.

About Ares Management Corporation

Ares Management Corporation (NYSE: ARES) is a leading global alternative investment manager offering clients complementary primary and secondary investment solutions across the credit, private equity, real estate and infrastructure asset classes. We seek to provide flexible capital to support businesses and create value for our stakeholders and within our communities. By collaborating across our investment groups, we aim to generate consistent and attractive investment returns throughout market cycles. As of March 31, 2021, including the acquisition of Landmark Partners, which closed on June 2, 2021, and the acquisition of Black Creek Group, which closed on July 1, 2021, Ares Management's global platform had approximately $239 billion of assets under management with approximately 2,000 employees operating across North America, Europe, Asia Pacific and the Middle East. For more information, please visit www.aresmgmt.com. Follow Ares on Twitter @Ares_Management.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210715005823/en/

FAQ

What is the amount of the mandatory redeemable preferred stock issuance by ARDC?

ARDC announced a total issuance of $100 million in mandatory redeemable preferred stock.

What will the proceeds from the MRPS be used for?

The proceeds will be used to repay existing debt and for investment and general corporate purposes.

When is the second closing for ARDC's MRPS expected to occur?

The second closing for the remaining $80 million of MRPS is expected in the third quarter of 2021.

What is the dividend rate for the MRPS issued by ARDC?

The total weighted average dividend rate for the MRPS is 2.81%.

Is the MRPS registered under the Securities Act?

No, the MRPS will not be registered under the Securities Act of 1933.