CHICAGO--(BUSINESS WIRE)--
Ares Commercial Real Estate Corporation (NYSE: ACRE) announced that it
plans to make a private offering of $50 million aggregate principal
amount of its Convertible Senior Notes due 2015. Ares Commercial Real
Estate Corporation also plans to grant the initial purchasers an option
to purchase up to an additional $7.5 million principal amount of the
Convertible Senior Notes to cover overallotments, if any. Other than as
noted herein, the Convertible Senior Notes will be offered only to
qualified institutional buyers (as defined in the Securities Act of
1933, as amended (the “Securities Act”)) pursuant to Rule 144A under the
Securities Act. In addition, certain directors, officers and other
affiliates of Ares Commercial Real Estate Corporation are expected to
purchase at least $5 million aggregate principal amount of the
Convertible Senior Notes, subject to applicable rules of The New York
Stock Exchange. Any such notes purchased by our directors, officers or
other affiliates will be treated as “restricted securities” as defined
under Rule 144 under the Securities Act.
The Convertible Senior Notes are unsecured, expected to pay interest
semiannually and will be convertible under specified circumstances based
on a conversion rate to be determined. Upon conversion, Ares Commercial
Real Estate Corporation will pay or deliver, subject to the terms of the
documents governing the Convertible Senior Notes, cash, shares of Ares
Commercial Real Estate Corporation’s common stock or a combination of
cash and shares of common stock, at Ares Commercial Real Estate
Corporation’s election. Ares Commercial Real Estate Corporation will not
have the right to redeem the Convertible Senior Notes prior to maturity,
except to the extent necessary to preserve its qualification as a real
estate investment trust. The Convertible Senior Notes will mature on
December 15, 2015, unless repurchased or converted in accordance with
their terms prior to such date. The interest rate, conversion rate and
other financial terms of the Convertible Senior Notes will be determined
by negotiations between Ares Commercial Real Estate Corporation and the
initial purchasers.
We intend to use the net proceeds from this offering to repay certain
outstanding indebtedness under our secured funding facilities (which
will increase the availability of funds under such facilities that we
can use to invest in additional target assets) and for other general
corporate purposes, which include investing in our target assets in
accordance with our investment objectives.
Neither the Convertible Senior Notes nor the common stock that may be
issued upon conversion thereof will be registered under the Securities
Act. Neither the Convertible Senior Notes nor the common stock that may
be issued upon conversion thereof may be offered or sold in the United
States absent registration or an applicable exemption from the
registration requirements of the Securities Act.
This press release is not an offer to sell any securities of the Company
and is not soliciting an offer to buy such securities in any state where
such offer and sale is not permitted. It is issued pursuant to Rule 135c
under the Securities Act.
FORWARD-LOOKING STATEMENTS
Statements included herein may constitute “forward-looking statements,”
which 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.
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. Ares Commercial Real Estate Corporation undertakes no duty
to update any forward-looking statements made herein.
Ares Commercial Real Estate Corporation
Carl Drake, 404-814-5204
Source: Ares Commercial Real Estate Corporation