Daily News: April 23, 2014

Fifth Street Finance Closes $467MM in Gross Originations in March

Fifth Street Finance said it released its April 2014 newsletter. Highlights include:

Active March Quarter

Fifth Street was able to source deals early in the March quarter through its established sponsor relationships, with many deals closing in the second half of the quarter. As a result, Fifth Street closed $467 million in gross originations for the March quarter. The company funded $418 million of new originations by increasing leverage through borrowings under our two revolving credit facilities and issuing $250 million of five-year unsecured institutional notes at an annual coupon of 4.875%. FSC is one of only three BDCs to access the institutional high-grade bond market, which is one of the largest global capital markets.

Strategic Partnership in Final Stages

Fifth Street said it is establishing its first strategic partnership to co-invest in middle-market credits via a Senior Loan Fund (SLF). The company is also in active discussions with several other parties about additional SLF partnerships. Adding SLF type structures would allow FSC to continue originating loans in our core markets at a higher return on equity, which should enhance the overall return profile of our portfolio.

Growing our Venture Lending Portfolio

The venture loan team is continuing to find attractive investment opportunities. After closing three loans in the March quarter totaling $40 million, the venture loan portfolio is approaching $100 million. The venture loans in the portfolio generally have higher yields than the portfolio average and most include warrants which may generate future capital gains.

To read the entire news release, click here.