DEBT (Tables)

3 Months Ended

Mar. 31, 2017

As of March 31, 2017 and December 31, 2016 the following loan obligations were outstanding and classified as liabilities of the Company’s Consolidated CLOs:



	As of March 31, 2017					As of December 31, 2016
	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)	$	2,797,784	$	2,786,644	9.47	$	2,839,779	$	2,841,440	9.68
Subordinated notes(2)	257,303		188,840		9.63	284,046		189,672		9.97
Total loan obligations of Consolidated CLOs	$	3,055,087	$	2,975,484		$	3,123,825	$	3,031,112


(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 March 31, 2017 was 3.58%.


(2)	Original borrowings under the subordinated notes totaled $257.3 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.

The Consolidated Funds had the following revolving bank credit facilities and term loan outstanding as of March 31, 2017 and December 31, 2016:



				As of March 31, 2017			As of December 31, 2016
Consolidated Funds' Debt Facilities	Maturity Date	Total Capacity		Outstanding Loan(1)		Effective Rate	Outstanding Loan(1)		Effective Rate
Credit Facilities:
	1/1/2023	$	18,000	$	12,942	2.38%	$	12,942	2.38%
	6/30/2018	42,736		—		N/A	42,128		1.55%	(2)
	3/7/2018	71,500		25,000		2.23%	N/A		N/A
Revolving Term Loan	8/19/2019	26,786		10,714		5.28%	N/A		N/A
Total borrowings				$	48,656		$	55,070


(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.

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



	Credit Facility(1)			Senior Notes(2)			Term Loans(2)
Unamortized debt issuance costs as of December 31, 2016	$	4,800		$	1,803		$	526
Debt issuance costs incurred	3,353			—			330
Amortization of debt issuance costs	(473		)	(58		)	(13		)
Unamortized debt issuance costs as of March 31, 2017	$	7,680		$	1,745		$	843

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

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



				As of March 31, 2017			As of December 31, 2016
	Maturity	Original Borrowing Amount		Carrying Value		Interest Rate	Carrying Value		Interest Rate
Credit Facility(1)	2/24/2022	N/A		$	165,000	2.39%	$	—	—%
Senior Notes(2)	10/8/2024	$	250,000	244,837		4.21%	244,684		4.21%
2015 Term Loan(3)	7/29/2026	$	35,250	35,068		2.89%	35,063		2.74%
2016 Term Loan(4)	1/15/2029	$	26,376	26,034		2.66%	26,037		2.66%
2017 Term Loan(5)	1/22/2028	$	17,600	17,282		2.70%	N/A		N/A
Total debt obligations				$	488,221		$	305,784

(1)

The AOG entities are borrowers under the Credit Facility, which, as amended in February 2017, provides a $1.04 billion revolving line of credit. It has a variable interest rate based on 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 March 31, 2017, base rate loans bear interest calculated based on the base rate plus 0.50% and the LIBOR rate loans bear interest calculated based on LIBOR plus 1.50%. The unused commitment fee is 0.20% 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.

(5)

The 2017 Term Loan was entered into in March 2017 by a subsidiary of the Company that acts as a manager to a CLO. The 2017 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.