Fifth Street Finance announced that Standard & Poor’s Rating Services has revised FSC’s outlook to “positive” from “stable,” citing the company’s consistent performance, focus on senior secured lending and the continued diversification of its funding sources. S&P has also affirmed FSC’s investment grade BBB- rating. FSC is one of only six business development companies to have an investment grade rating from both S&P and Fitch Ratings, which also recently reaffirmed FSC’s rating of BBB-.
“We are very pleased with the outlook revision by Standard & Poor’s, which is a reflection of Fifth Street Finance Corp.’s credit risk management, profitability and sound operational management,” said Leonard Tannenbaum, CEO of FSC, adding “The improvement in our outlook highlights FSC’s high quality portfolio as well as the strength of Fifth Street’s origination and underwriting platform, which is a key differentiator from many of our peers. We believe that investing in FSC stock provides a unique opportunity for risk averse investors who seek a diversified portfolio of assets and are looking for a stable income stream.”
S&P stated in its report dated May 2, 2014, that the revision of FSC’s outlook from ‘stable’ to ‘positive’ reflects that “Fifth Street Finance Corp. has maintained strong leverage, a relatively conservative portfolio weighted heavily toward first lien senior secured loans, and has improved its funding profile.”