Fifth Street Senior Floating Rate Corp. Releases Its June 2014 Newsletter: Continued Positive Momentum
June 18 2014 - 7:30AM
Fifth Street Senior Floating Rate Corp. (NASDAQ:FSFR) ("FSFR")
released its June 2014 newsletter today.
Continuing on FSFR's Positive Growth
Trajectory
As FSFR approaches its one-year anniversary as a public company,
we have successfully deployed the equity raised during our July
2013 IPO, reached and maintained leverage within our target range
of 0.8x to 0.9x debt-to-equity and consistently increased net
investment income per share. On the heels of these accomplishments,
our Board of Directors recently declared a quarterly dividend of
$0.30 per share, representing an annualized run rate of $1.20 per
share and an 11% quarter-over-quarter increase. The September
quarterly dividend represents our fourth consecutive quarterly
dividend increase.
Today, FSFR has a high-quality portfolio consisting of 100%
senior secured floating rate loans to 38 portfolio companies. After
becoming fully deployed in the March quarter, FSFR has continued to
optimize its portfolio by rotating out of certain assets into new
originations. FSFR benefits from the broad platform of our
investment adviser and its existing relationships with sponsors and
middle market investment banks. The power of the Fifth Street
platform provides a steady source of deal flow, which allows FSFR
to selectively invest in middle market opportunities that generate
more favorable risk-adjusted returns. So far, during the June
quarter, we exited nine portfolio company investments and
redeployed the capital into 13 new portfolio companies. This
strategy continues to be successful, since it allows us to operate
within our target leverage range while continuing to fund new
investments with more attractive risk/return characteristics.
Partnership Should Provide Additional Upside and Drive
Growth
We are excited about the strategic partnership that we are
currently in the process of structuring between FSFR and GF Funding
2014, an entity controlled by the Glick family, to establish a
joint venture to co-invest primarily in middle market senior
secured loans. This partnership should allow FSFR to enhance the
returns on its invested equity, broaden its investment opportunity
set and improve its long-term growth potential.
We anticipate that this partnership will be structured similar
to Senior Loan Fund JV 1, a recently formed joint venture between
Fifth Street Finance Corp. (NASDAQ:FSC) ("FSC") and a subsidiary of
Kemper Corporation. FSFR will need additional capital to fully ramp
the strategic partnership, which we consider important to our
long-term growth and success. Once fully ramped, we believe this
partnership could generate an estimated 13% to 16% return on FSFR's
invested equity, which would be accretive to net investment income
per share.
Sincerely,
The Fifth Street Team
About Fifth Street Senior Floating Rate Corp.
Fifth Street Senior Floating Rate Corp. is a specialty finance
company that provides financing solutions in the form of floating
rate senior secured loans to small and mid-sized companies,
primarily in connection with investments by private equity
sponsors. The company's investment objective is to maximize its
portfolio's total return by generating current income from its debt
investments while seeking to preserve its capital. The company has
elected to be regulated as a business development company and is
externally managed by Fifth Street Management LLC. Named 2013
"Lender Firm of the Year" by The M&A Advisor and "Lender of the
Year" by Mergers & Acquisitions, Fifth Street Management LLC is
an SEC-registered investment adviser and leading alternative asset
manager with over $4 billion in assets under management. With a
track record of more than 15 years, Fifth Street's nationally
recognized platform has the ability to hold loans up to $150
million, commit up to $250 million and structure and syndicate
transactions up to $500 million. FSFR's website can be found at
fsfr.fifthstreetfinance.com.
Forward-Looking Statements
This press release may contain certain forward-looking
statements, including statements with regard to the future
performance of the company. Words such as "believes," "expects,"
"estimates," "projects," "anticipates," and "future" or similar
expressions are intended to identify forward-looking statements.
These forward-looking statements are subject to the inherent
uncertainties in predicting future results and conditions. Certain
factors could cause actual results to differ materially from those
projected in these forward-looking statements, and these factors
are identified from time to time in the company's filings with the
Securities and Exchange Commission. The company undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
CONTACT: Investor Contact:
Dean Choksi, Executive Director of Finance &
Head of Investor Relations
(914) 286-6855
dchoksi@fifthstreetfinance.com
Media Contact:
Nick Rust
Prosek Partners
(212) 279-3115 ext. 252
pro-fifthstreet@prosek.com
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