DEBT (Tables)

12 Months Ended

Dec. 31, 2016

The following table shows the activity of the Company's debt issuance costs:



	Credit Facility(1)			Senior Notes(2)			Term Loans(2)			AFC II Notes(3)
Unamortized debt issuance costs as of December 31, 2014	$	5,330		$	2,261		$	—		$	—
Debt issuance costs incurred	2,271			6			214			3,709
Amortization of debt issuance costs	(1,360		)	(232		)	(7		)	(75		)
Debt extinguishment expense	—			—			—			(3,634		)
Unamortized debt issuance costs as of December 31, 2015	6,241			2,035			207			—
Debt issuance costs incurred	548			—			340			—
Amortization of debt issuance costs	(1,989		)	(232		)	(21		)	—
Unamortized debt issuance costs as of December 31, 2016	$	4,800		$	1,803		$	526		$	—

(1) Unamortized debt issuance costs of the Credit Facility are included in other assets in the Consolidated Statements of Financial Condition.

(2) Unamortized debt issuance costs of the Senior Notes and Term Loans are included in the net carrying value of the Company’s debt obligations in the Consolidated Statements of Financial Condition.

(3) Represents $325.0 million aggregate principal amount of 5.250% senior notes (the "AFC II Notes") issued by a subsidiary of the Company in August 2015 and subsequently redeemed in November 2015. The related debt issuance costs and discount were written off at the time of redemption.

The following table summarizes the Company’s and its subsidiaries’ debt obligations:



				As of December 31, 2016				As of December 31, 2015
	Maturity	Original Borrowing Amount		Carrying Value		Interest Rate		Carrying Value		Interest Rate
Credit Facility(1)	4/30/2019	N/A		$	—	—		$	110,000	2.11%
Senior Notes(2)	10/8/2024	$	250,000	244,684		4.21	%	244,077		4.21%
2015 Term Loan(3)	7/29/2026	$	35,250	35,063		2.74	%	35,043		2.18%
2016 Term Loan(4)	1/15/2029	$	26,376	26,037		2.66	%	—		N/A
Total debt obligations				$	305,784			$	389,120

(1)

The AOG entities are borrowers under the Credit Facility, which provides a $1.03 billion revolving line of credit with the ability to upsize to $1.28 billion (subject to obtaining commitments for any such additional borrowing capacity). It has a variable interest rate based on either LIBOR or a base rate plus an applicable margin with an unused commitment fee paid quarterly, which is subject to change with the Company’s underlying credit agency rating. As of December 31, 2016, base rate loans bear interest calculated based on the base rate plus 0.75% and the LIBOR rate loans bear interest calculated based on LIBOR plus 1.75%. The unused commitment fee is 0.25% per annum. There is a base rate and LIBOR floor of zero.


(2)	The Senior Notes were issued in October 2014 by Ares Finance Co. LLC (“AFC”), a subsidiary of the Company, at 98.268% of the face amount with interest paid semi-annually. The Company may redeem the Senior Notes prior to maturity, subject to the terms of the indenture.

(3)

The 2015 Term Loan was entered into in August 2015 by a subsidiary of the Company that acts as a manager to a CLO. The 2015 Term Loan is secured by collateral in the form of CLO senior tranches owned by the Company. To the extent the assets are not sufficient to cover the Term Loan, there is no further recourse to the Company to fund or repay the remaining balance. Interest is paid quarterly, and the Company also pays a fee of 0.025% of a maximum investment amount.

(4)

The 2016 Term Loan was entered into in December 2016 by a subsidiary of the Company that acts as a manager to a CLO. The 2016 Term Loan is secured by collateral in the form of CLO senior tranches and subordinated notes owned by the Company. To the extent the assets are not sufficient to cover the Term Loan, there is no further recourse to the Company to fund or repay the remaining balance. Interest is paid quarterly, and the Company also pays a fee of 0.03% of a maximum investment amount.

Consolidated Funds

DEBT

Schedule of borrowings outstanding

The Consolidated Funds had the following revolving bank credit facilities outstanding as of December 31, 2016 and 2015:



				As of December 31, 2016				As of December 31, 2015
Type of Facility	Maturity Date	Total Capacity		Outstanding Loan(1)		Effective Rate		Outstanding Loan(1)		Effective Rate
Consolidated Funds credit facility	1/1/2023	$	18,000	$	12,942	2.38%		$	11,734	2.00%
Consolidated Funds credit facility	6/30/2018	$	42,128	42,128		1.55%	(2)	—		N/A
Total borrowings of Consolidated Funds				$	55,070			$	11,734


(1)	The fair values of the borrowings approximate the carrying value, as the interest rate on the borrowings is a floating rate.


(2)	The effective rate is based on the three month EURIBOR plus an applicable margin.

Consolidated Funds | Fixed income-collateralized loan obligations

DEBT

Schedule of borrowings outstanding

As of December 31, 2016 and 2015, the following loan obligations were outstanding and classified as liabilities of the Company’s Consolidated CLOs:



	As of December 31, 2016					As of December 31, 2015
	Loan Obligations		Fair Value of Loan Obligations		Weighted Average Remaining Maturity In Years	Loan Obligations		Fair Value of Loan Obligations		Weighted Average Remaining Maturity In Years
Senior secured notes(1)	$	2,839,779	$	2,841,440	9.68	$	2,101,506	$	2,054,123	9.55
Subordinated notes(2)	284,046		189,672		9.97	194,443		120,229		9.53
Total loan obligations of Consolidated CLOs	$	3,123,825	$	3,031,112		$	2,295,949	$	2,174,352


(1)	Original borrowings under the senior secured notes totaled $3 billion, with various maturity dates ranging from October 2024 to February 2030. The weighted average interest rate as of December 31, 2016 was 3.55%.


(2)	Original borrowings under the subordinated notes totaled $256 million, with various maturity dates ranging from October 2024 to February 2030. They do not have contractual interest rates, but instead receive distributions from the excess cash flows generated by each Consolidated CLO.