Ares Capital has acquired Allied Capital’s interests in the Senior Secured Loan Fund (SSLF, formerly known as the Unitranche Fund) for $165m in cash. The company said that SSLF was formed in December 2007, with approximately $3.6 billion of committed capital to invest in senior secured debt of middle-market companies through a partnership with GE Capital Americas.
Currently, SSLF holds loans to middle market borrowers totaling approximately $900m.
As a result of this transaction, Ares Capital and GE Capital will be able to make new commitments of up to $270m in a single transaction for borrowers across a wide range of industry sectors to fund new transactions with the remaining $2.7 billion of capital available. SSLF expects to continue to retain all or a majority of each loan.
The company claimed that borrowers will benefit from SSLF structure by virtue of its simplified documentation through a single credit agreement, greater certainty of execution and reduced decision-making complexity throughout the life of the loan.
Michael Arougheti, president of Ares Capital, said: “We are excited to be partnering with GE Capital’s Sponsor Finance business, a leading middle-market senior debt provider who consistently and reliably delivers for private equity sponsors and borrowers. We expect that the partnership will provide a significant amount of flexible capital for new investments to our sponsor relationships and middle market clients.”
Stuart Aronson, president of sponsor finance at GE Capital, said: “We are pleased to re-open the Fund for new investments in partnership with Ares Capital, an experienced investor with an outstanding track record of providing senior loans, second lien loans, and subordinated debt in the middle market.”
