CHICAGO--(BUSINESS WIRE)--
Ares Commercial Real Estate Corporation (NYSE: ACRE) announced that it
has agreed to sell in a private offering $60.0 million aggregate
principal amount of its unsecured 7.00% Convertible Senior Notes due
2015. Of this aggregate amount, $51.5 million will be sold to initial
purchasers and $8.5 million will be purchased by certain directors,
officers and other affiliates of the Company in a private placement.
Ares Commercial Real Estate Corporation has also granted the initial
purchasers an option to purchase up to an additional $9.0 million
aggregate principal amount of the Convertible Senior Notes to cover
over-allotments, if any. The Convertible Senior Notes sold to the
initial purchasers will be resold by them 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. The closing of the transaction is subject to customary
closing conditions and the Convertible Senior Notes are expected to be
delivered and paid for on December 19, 2012.
The Convertible Senior Notes are unsecured and bear interest at a rate
of 7.00% per year, payable semiannually. In certain circumstances, the
Convertible Senior Notes will be convertible into cash, shares of Ares
Commercial Real Estate Corporation’s common stock or a combination of
cash and shares of Ares Commercial Real Estate Corporation’s common
stock, at Ares Commercial Real Estate Corporation’s election, at an
initial conversion rate of 53.6107 shares of common stock per $1,000
principal amount of Convertible Senior Notes, which is equivalent to an
initial conversion price of approximately $18.65 per share of Ares
Commercial Real Estate Corporation’s common stock, subject to customary
anti-dilution adjustments. The conversion price is approximately 15%
above the $16.22 per share closing price of Ares Commercial Real Estate
Corporation’s common stock on December 13, 2012. 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.
Ares Commercial Real Estate Corporation intends to use the entire amount
of the net proceeds of this offering to repay outstanding amounts under
its secured funding facilities (which will increase the availability of
funds under such facilities that it can use to invest in additional
target assets).
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