Daily News: September 5, 2012

Fifth Street Originates $220.6MM in New Deals Through June 2012

Fifth Street Finance announced it originated $220.6 million of investments from April 1, 2012 to June 30, 2012, an increase in $76.7 million from the previous quarter. Fifth Street ended the second calendar quarter of 2012 with approximate total assets of $1.3 billion.

“Middle-market M&A volumes declined in the second calendar quarter, but Fifth Street generated strong originations while maintaining our underwriting standards,” said Ivelin Dimitrov, chief investment officer of Fifth Street, adding “We have started to see a pickup in deal flow in the current quarter and expect it to continue through the remainder of the year.”

Of the total commitments in the quarter ended June 30, 2012, $156.1 million was originated in first lien debt, $61.5 million in mezzanine or second lien debt, and $3 million in equity. Additional activity included the amendment of Fifth Street’s Wells Fargo Bank credit facility in April, expanding the size from $100 million to $150 million and extending the maturity through April 2016.

Fifth Street also received its second SBIC license from the United States Small Business Administration (SBA) to operate as a Small Business Investment Company (SBIC) through one of its subsidiaries, and was assigned an investment grade rating of BBB- by Standard & Poor’s Ratings Services (S&P). The S&P rating follows Fitch Ratings’ assignment of a BBB- issuer rating in April 2011, giving Fifth Street investment grade ratings from two nationally recognized rating organizations.

Fifth Street continued to bolster its Midwest presence in the second calendar quarter of 2012 by moving into a larger Chicago office and adding a fully staffed underwriting team. Fifth Street also has two senior originators in this office, which is led by Sunny Khorana.

Notable transactions completed in the quarter ended June 30, 2012 include:

  • A $49 million one-stop debt facility and equity co-investment in support of Cortec Group