WHITE PLAINS, N.Y., March 21, 2011 (GLOBE NEWSWIRE) -- Fifth Street Finance Corp. (NYSE:FSC) released its March newsletter today.
Despite very sad circumstances in Japan and current market conditions, Fifth Street remains optimistic. Mergers and acquisitions activity in the middle market continues to be very active, pricing in the middle market is stable and Fifth Street is one of only a few firms that can provide a variety of flexible financing solutions, including one-stop. Meanwhile, banks, while lending much more aggressively than last year, are focusing on safer asset protected credits, leaving much of the cash flow lending to alternative providers such as Fifth Street.As we previously announced, we have already closed over $180 million of investments for the quarter ending March 31, 2011. We continue to see good deal flow in the $10-20 million EBITDA range and expect to originate loans at strong risk-adjusted returns. Many of our new loans have low or no floors on LIBOR, allowing us to benefit from a potential increase in rates later this year. Over 50% of our loans are floating and we anticipate that number may rise to 75% floating by year end. With $65.3 million of SBA debt expected to be fixed this week, we will have $138.3 million of total fixed rate debt outstanding. We are also looking at ways to further fix our borrowings in preparation for an anticipated rise in LIBOR. Our strong loan growth and lowered cost of capital from our re-negotiated credit facilities should provide ample support for our dividend with potential upside should rates increase. We continue to take a disciplined, proactive portfolio management approach in connection with our category 3, 4 and 5 rated securities. We have ramped up our portfolio monitoring systems and have broadened our institutional platform, and we expect to be well-prepared for the next down cycle whenever it may come. In addition, with over 85% of our loans in first lien secured investments, we believe we have one of the safest portfolios in our space. We anticipate continuing to operate with prudent leverage and we believe we will climb towards our target leverage ratio of 0.6x during the year.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV