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WHITE PLAINS, N.Y., Oct. 23, 2012 (GLOBE NEWSWIRE) -- Fifth Street Finance Corp. (Nasdaq:FSC) released its October newsletter today.
Fifth Street Posts Record Originations for Month of October
The "risk on" trade in credit markets continues as the increase in deal volumes meets a wall of liquidity. From our vantage point, we are seeing sponsors and lenders pricing transactions as if the liquidity spigot never shuts off. While this may work in the short-term, Fifth Street does not believe it is a long-term plan for success. Markets face multiple risks after the election and in 2013 with either candidate for U.S. President likely to make the tough decisions early in their term.
As a result, we are using our broad platform and deep sponsor relationships to pick our spots. We continue to work with sponsors that value a partnership with their lenders rather than the tightest terms the market can bear. Our ability to hold positions across the debt capital structure in larger hold sizes enables us to generate a premium when investing in quality transactions. Furthermore, we are able to take advantage of the frothiness in credit markets by exiting certain positions and realizing gains. So far, the December quarter is off to a strong start with $120 million in gross originations closed in the beginning of October. This is the most Fifth Street has ever originated in the month of October, and positions us well for a potential record December quarter in gross originations.
Our sponsor relationships, underwriting expertise and market reputation are creating opportunities for Fifth Street's capital markets platform to agent and syndicate attractive risk/reward deals, while producing a wider universe of potential investments. Our ability to invest up and down a company's debt structure enables us to generate excess returns where there is relative value within the structure. We see our capital markets activities growing over time to enhance our market presence and become a meaningful contributor to growth in our net asset value.