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WHITE PLAINS, NY, March 19, 2014 (GLOBE NEWSWIRE) -- Fifth Street Finance Corp. (NASDAQ:FSC) ("FSC") released its March 2014 newsletter today.
March Quarter on Track
Our established origination platform and sponsor relationships are combining to drive strong, attractive originations during the second half of the March quarter. The initiatives to improve net investment income, which we discussed in past earnings conference calls and newsletters, are generating the returns we anticipated. As a result, we estimate that we are on pace for the March quarter to cover the current dividend level declared by the Board of Directors. We anticipate future earnings should continue to benefit from maintaining leverage within our target range and further progress on our initiatives should result in the addition of higher yielding assets to the portfolio with favorable risk-adjusted returns. This may provide our Board of Directors the opportunity to declare a higher dividend level in the future.
Venture Lending Producing Results
We are pleased to report that momentum continues to build in venture lending. We closed three financings totaling $55 million of gross originations in recent weeks, with additional opportunities in the pipeline. The venture loans in our portfolio have higher yields than the portfolio average, and most include warrants which may generate future capital gains. For example, one of the companies in our venture portfolio in which we own a small warrant position has recently filed for an IPO. A successful public offering may enable us to monetize our warrant position after the lock-up period expires.
SSLP Nears Completion
As we previously discussed during our earnings conference call in February, we are currently in the documentation stage and making progress towards forming a partnership to establish a Senior Secured Loan Program (SSLP). We are also in discussions with several other parties about additional partnerships. We anticipate that these types of partnerships, if completed, can ultimately generate a mid-teens return on equity for FSC.