0001414932-14-000014.txt : 20140206 0001414932-14-000014.hdr.sgml : 20140206 20140205202319 ACCESSION NUMBER: 0001414932-14-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20131231 FILED AS OF DATE: 20140206 DATE AS OF CHANGE: 20140205 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Fifth Street Finance Corp. CENTRAL INDEX KEY: 0001414932 IRS NUMBER: 261219283 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 814-00755 FILM NUMBER: 14577743 BUSINESS ADDRESS: STREET 1: 10 BANK STREET STREET 2: 12TH FLOOR CITY: WHITE PLAINS STATE: NY ZIP: 10606 BUSINESS PHONE: (914) 286-6800 MAIL ADDRESS: STREET 1: 10 BANK STREET STREET 2: 12TH FLOOR CITY: WHITE PLAINS STATE: NY ZIP: 10606 FORMER COMPANY: FORMER CONFORMED NAME: Fifth Street Finance Corp DATE OF NAME CHANGE: 20071012 10-Q 1 fsc-20131231x10q.htm 10-Q FSC- 2013.12.31-10Q
 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
(Mark One)
 
 
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
 
 
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended December 31, 2013
OR
 
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
 
 
OF THE SECURITIES EXCHANGE ACT OF 1934
 
COMMISSION FILE NUMBER: 1-33901
Fifth Street Finance Corp.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
 
 
 
DELAWARE
 
26-1219283
(State or jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
10 Bank Street, 12th Floor
White Plains, NY
 
10606
(Address of principal executive office)
 
(Zip Code)
REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE:
(914) 286-6800
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods as the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES   þ     NO   ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES   ¨   NO   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer  þ
 
Accelerated filer  ¨
 
Non-accelerated filer  ¨
 
Smaller reporting company  ¨
 
 
 
 
(Do not check if a smaller reporting company)
 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act)    YES  ¨     NO  þ
The registrant had 139,137,757 shares of common stock outstanding as of February 5, 2014.
 

 







FIFTH STREET FINANCE CORP.
FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 2013
TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





PART I – FINANCIAL INFORMATION
Item 1.
Consolidated Financial Statements.
Fifth Street Finance Corp.
Consolidated Statements of Assets and Liabilities
(in thousands, except per share amounts)
(unaudited)
 
December 31,
2013
 
September 30,
2013
                         ASSETS
 
 
 
Investments at fair value:
 
 
 
Control investments (cost December 31, 2013: $231,291; cost September 30, 2013: $207,518)
$
239,695

 
$
215,502

Affiliate investments (cost December 31, 2013: $38,803; cost September 30, 2013: $29,807)
41,712

 
31,932

Non-control/Non-affiliate investments (cost December 31, 2013: $2,078,941; cost September 30, 2013: $1,622,326)
2,095,305

 
1,645,612

Total investments at fair value (cost December 31, 2013: $2,349,035; cost September 30, 2013: $1,859,651)
2,376,712

 
1,893,046

Cash and cash equivalents
42,600

 
147,359

Interest and fees receivable
11,782

 
10,379

Due from portfolio company
3,094

 
1,814

Deferred financing costs
19,575

 
19,548

Other assets
720

 
187

Total assets
$
2,454,483

 
$
2,072,333

 
 
 
 
                                 LIABILITIES AND NET ASSETS
 
 
 
Liabilities:
 
 
 
Accounts payable, accrued expenses and other liabilities
$
3,030

 
$
1,166

Base management fee payable
12,059

 
9,625

Incentive fee payable
9,054

 
7,175

Due to FSC, Inc.
2,133

 
840

Interest payable
7,011

 
2,939

Payables from unsettled transactions

 
35,716

Credit facilities payable
564,228

 
188,000

SBA debentures payable
210,750

 
181,750

Unsecured convertible notes payable
115,000

 
115,000

Unsecured notes payable
161,250

 
161,250

Total liabilities
1,084,515

 
703,461

Commitments and contingencies (Note 3)
 
 
 
Net assets:
 
 
 
Common stock, $0.01 par value, 250,000 shares authorized; 139,138 and 139,041 shares issued and outstanding at December 31, 2013 and September 30, 2013, respectively
1,391

 
1,390

 Additional paid-in-capital
1,510,548

 
1,509,546

 Net unrealized appreciation on investments
27,677

 
33,395

 Net realized loss on investments and interest rate swap
(151,385
)
 
(154,591
)
 Accumulated overdistributed net investment income

(18,263
)
 
(20,868
)
Total net assets (equivalent to $9.85 per common share at December 31, 2013 and September 30, 2013) (Note 12)
1,369,968

 
1,368,872

Total liabilities and net assets
$
2,454,483

 
$
2,072,333

 
 
 
 
See notes to Consolidated Financial Statements.


1




Fifth Street Finance Corp.
Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
 
 
Three months
ended
December 31, 2013

Three months
ended
December 31, 2012

Interest income:
 
 
 
 
Control investments
$
2,419

 
$
882

 
Affiliate investments
766

 
584

 
Non-control/Non-affiliate investments
45,296

 
33,454

 
Interest on cash and cash equivalents
3

 
3

 
Total interest income
48,484

 
34,923

 
PIK interest income:
 
 
 
 
Control investments
2,408

 
108

 
Affiliate investments
335

 
456

 
Non-control/Non-affiliate investments
2,870

 
3,156

 
Total PIK interest income
5,613

 
3,720

 
Fee income:
 
 
 
 
Control investments
567

 
99

 
Affiliate investments
170

 
12

 
Non-control/Non-affiliate investments
16,401

 
12,683

 
Total fee income
17,138

 
12,794

 
Dividend and other income:
 
 
 
 
Non-control/Non-affiliate investments
96

 
346

 
Total dividend and other income
96

 
346

 
Total investment income
71,331

 
51,783

 
Expenses:
 
 
 
 
Base management fee
12,059

 
8,046

 
Incentive fee
9,054

 
6,639

 
Professional fees
1,025

 
1,188

 
Board of Directors fees
155

 
129

 
Interest expense
10,213

 
7,156

 
Administrator expense
853

 
930

 
General and administrative expenses
1,754

 
1,139

 
Total expenses
35,113

 
25,227

 
Net investment income
36,218


26,556

 
Unrealized appreciation (depreciation) on investments:
 
 
 
 
Control investments
420

 
(1,222
)
 
Affiliate investments
783

 
(156
)
 
Non-control/Non-affiliate investments
(6,921
)
 
(7,961
)
 
Net unrealized depreciation on investments
(5,718
)
 
(9,339
)
 
Realized gain (loss) on investments:
 
 
 
 
Non-control/Non-affiliate investments
3,206

 
626

 
Net realized gain on investments
3,206

 
626

 
Net increase in net assets resulting from operations
$
33,706

 
$
17,843

 
Net investment income per common share — basic
$
0.26

 
$
0.28

 
Earnings per common share — basic
$
0.24

 
$
0.19

 
Weighted average common shares outstanding — basic
139,126


94,889


Net investment income per common share — diluted
$
0.26

 
$
0.27

 
Earnings per common share — diluted
$
0.24

 
$
0.19

 
Weighted average common shares outstanding — diluted
146,916

 
102,679

 
See notes to Consolidated Financial Statements.

2


Fifth Street Finance Corp.
Consolidated Statements of Changes in Net Assets
(in thousands, except per share amounts)
(unaudited)
 
 
Three months
ended
December 31, 2013
 
Three months
ended
December 31, 2012
Operations:
 
 
 
Net investment income
$
36,218

 
$
26,556

Net unrealized depreciation on investments
(5,718
)
 
(9,339
)
Net realized gain on investments
3,206

 
626

Net increase in net assets resulting from operations
33,706

 
17,843

Stockholder transactions:
 
 
 
Distributions to stockholders from ordinary income
(33,613
)
 
(27,593
)
Net decrease in net assets from stockholder transactions
(33,613
)
 
(27,593
)
Capital share transactions:
 
 
 
Issuance of common stock, net

 
151,334

Issuance of common stock under dividend reinvestment plan
3,411

 
1,725

Repurchases of common stock under stock repurchase program
(406
)
 

Repurchases of common stock under dividend reinvestment plan
(2,002
)
 

Net increase in net assets from capital share transactions
1,003

 
153,059

Total increase in net assets
1,096

 
143,309

Net assets at beginning of period
1,368,872

 
903,570

Net assets at end of period
$
1,369,968

 
$
1,046,879

Net asset value per common share
$
9.85

 
$
9.88

Common shares outstanding at end of period
139,138

 
105,943

See notes to Consolidated Financial Statements.
 

3


Fifth Street Finance Corp.
Consolidated Statements of Cash Flows
(in thousands, except per share amounts)
(unaudited)
 
 
Three months
ended
December 31, 2013
 
Three months
ended
December 31, 2012
Cash flows from operating activities:
 
 
 
Net increase in net assets resulting from operations
$
33,706

 
$
17,843

Adjustments to reconcile net increase in net assets resulting from operations to net cash used by operating activities:
 
 
 
Net unrealized depreciation on investments
5,718

 
9,339

Net realized gains on investments
(3,206
)
 
(626
)
PIK interest income
(5,613
)
 
(3,720
)
Recognition of fee income
(17,138
)
 
(12,794
)
Accretion of original issue discount on investments
(164
)
 
(132
)
Amortization of deferred financing costs
1,405

 
1,275

Changes in operating assets and liabilities:
 
 
 
Fee income received
16,920

 
10,862

Increase in interest and fees receivable
(1,342
)
 
(635
)
(Increase) decrease in due from portfolio company
(1,280
)
 
1,608

Decrease in receivables from unsettled transactions

 
1,500

Increase in other assets
(135
)
 
(89
)
Increase in accounts payable, accrued expenses and other liabilities
1,982

 
400

Increase (decrease) in base management fee payable
2,435

 
(5,025
)
Increase (decrease) in incentive fee payable
1,879

 
(4,349
)
Increase (decrease) in due to FSC, Inc.
1,293

 
(867
)
Increase in interest payable
4,072

 
877

Decrease in payables from unsettled transactions
(35,716
)
 

Purchases of investments and net revolver activity, net of syndications
(650,118
)
 
(398,808
)
Principal payments received on investments (scheduled payments)
10,346

 
12,630

Principal payments received on investments (payoffs)
43,746

 
56,250

PIK interest income received in cash
4,226

 
313

Proceeds from the sale of investments
111,556

 
34,051

Net cash used by operating activities
(475,428
)
 
(280,097
)
Cash flows from financing activities:
 
 
 
Distributions paid in cash
(30,202
)
 
(25,868
)
Borrowings under SBA debentures payable
29,000

 
31,750

Borrowings under credit facilities
475,057


323,000

Repayments of borrowings under credit facilities
(98,829
)

(306,251
)
Proceeds from the issuance of unsecured notes

 
72,465

Proceeds from the issuance of common stock

 
151,668

Repurchases of common stock under stock repurchase program
(406
)
 

Repurchases of common stock under dividend reinvestment plan
(2,002
)
 

Deferred financing costs paid
(1,432
)
 
(3,125
)
Offering costs paid
(517
)
 
(497
)
Net cash provided by financing activities
370,669

 
243,142

Net decrease in cash and cash equivalents
(104,759
)
 
(36,955
)
Cash and cash equivalents, beginning of period
147,359

 
74,393

Cash and cash equivalents, end of period
$
42,600

 
$
37,438

Supplemental information:
 
 
 
Cash paid for interest
$
4,834

 
$
5,107

Non-cash financing activities:
 
 
 
Issuance of shares of common stock under dividend reinvestment plan
$
3,411

 
$
1,725

 
See notes to Consolidated Financial Statements.

4

Fifth Street Finance Corp.
Consolidated Schedule of Investments
(dollar amounts in thousands)
December 31, 2013
(unaudited)

Portfolio Company/Type of Investment (1)(2)(5)
 
Industry
 
Principal (8)

 
Cost

 
Fair Value

Control Investments (3)
 
 
 
 
 
 
 
 
 Traffic Solutions Holdings, Inc.
 
Construction and engineering
 
 
 
 
 
 
 Second Lien Term Loan, 12% cash 3% PIK due 12/31/2016
 
 
 
$
14,606

 
$
14,597

 
$
14,635

 LC Facility, 8.5% cash due 12/31/2016 (10)
 
 
 
 
 
(3
)
 

 746,114 Series A Preferred Units
 
 
 
 
 
13,193

 
16,297

 746,114 Class A Common Stock Units
 
 
 
 
 
5,316

 
10,589

 
 
 
 
 
 
33,103

 
41,521

TransTrade Operators, Inc. (9)
 
Air freight and logistics
 
 
 
 
 
 
 First Lien Term Loan, 11% cash 3% PIK due 5/31/2016
 
 
 
14,154

 
14,154

 
14,021

First Lien Revolver, 8% cash due 5/31/2016
 
 
 

 

 

 596.67 Series A Common Units in TransTrade Holding LLC
 
 
 
 
 

 

 3,033,333.33 Preferred Units in TransTrade Holding LLC
 
 
 
 
 
4,117

 
685

 
 
 
 
 
 
18,271

 
14,706

 HFG Holdings, LLC
 
Specialized finance
 
 
 
 
 
 
 First Lien Term Loan, 6% cash 4% PIK due 6/10/2019
 
 
 
94,087

 
94,087

 
94,187

 860,000 Class A Units (12)
 
 
 
 
 
22,347

 
22,782

 
 
 
 
 
 
116,434

 
116,969

 First Star Aviation, LLC
 
Airlines
 
 
 
 
 
 
 First Lien Term Loan, 9% cash 3% PIK due 1/9/2018
 
 
 
33,862

 
33,862

 
33,900

10,104,401 Common Units
 
 
 
 
 
10,104

 
11,057

 
 
 
 
 
 
43,966

 
44,957

 Eagle Hospital Physicians, LLC
 
Healthcare services
 
 
 
 
 
 
 First Lien Term Loan A, 8% PIK due 8/1/2016
 
 
 
11,379

 
11,379

 
11,344

 First Lien Term Loan B, 8.1% PIK due 8/1/2016
 
 
 
3,105

 
3,105

 
3,103

 First Lien Revolver, 8% cash due 8/1/2016
 
 
 
933

 
933

 
932

 4,100,000 Class A Common Units
 
 
 
 
 
4,100

 
6,163

 
 
 
 
 
 
19,517

 
21,542

 Total Control Investments (17.5% of net assets)
 
 
 
 
 
$
231,291

 
$
239,695

 Affiliate Investments (4)
 
 
 
 
 
 
 
 
 Caregiver Services, Inc.
 
Healthcare services
 
 
 
 
 
 
Second Lien Term Loan, 10% cash 2% PIK due 6/30/2019
 
 
 
$
9,007

 
$
9,007

 
$
9,015

 1,080,399 shares of Series A Preferred Stock
 
 
 
 
 
1,080

 
3,569

 
 
 
 
 
 
10,087

 
12,584

 AmBath/ReBath Holdings, Inc. (9)
 
Home improvement retail
 
 
 
 
 
 
 First Lien Term Loan A, LIBOR+7% (3% floor) cash due 4/30/2016
 
 
 
2,873

 
2,873

 
2,947

 First Lien Term Loan B, 12.5% cash 2.5% PIK due 4/30/2016
 
 
 
25,843

 
25,843

 
25,665

 4,668,788 Shares of Preferred Stock
 
 
 
 
 

 
516

 
 
 
 
 
 
28,716

 
29,128

 Total Affiliate Investments (3.0% of net assets)
 
 
 
 
 
$
38,803

 
$
41,712

 Non-Control/Non-Affiliate Investments (7)
 
 
 
 
 
 
 
 
 Fitness Edge, LLC
 
Leisure facilities
 
 
 
 
 
 
 1,000 Common Units (6)
 
 
 
 
 
$
43

 
$
215

 
 
 
 
 
 
43

 
215

Thermoforming Technology Group LLC (formerly Capital Equipment Group, Inc.)
 
Industrial machinery
 
 
 
 
 
 
2.28% membership interest
 
 
 
 
 
849

 
849

 
 
 
 
 
 
849

 
849

 HealthDrive Corporation (9)
 
Healthcare services
 
 
 
 
 
 
 First Lien Term Loan A, 10% cash due 7/17/2014
 
 
 
$
4,164

 
4,162

 
4,076

 First Lien Term Loan B, 12% cash 1% PIK due 7/17/2014
 
 
 
10,791

 
10,791

 
10,790

 First Lien Revolver, 12% cash due 7/17/2014
 
 
 
2,266

 
2,266

 
2,282

 
 
 
 
 
 
17,219

 
17,148

Cenegenics, LLC
 
Healthcare services
 
 
 
 
 
 
First Lien Term Loan, 9.75% cash due 9/30/2019
 
 
 
33,200

 
33,177

 
33,239

414,419 Common Units (6)
 
 
 
 
 
598

 
1,303

 
 
 
 
 
 
33,775

 
34,542

See notes to Consolidated Financial Statements.

5

Fifth Street Finance Corp.
Consolidated Schedule of Investments
(dollar amounts in thousands)
December 31, 2013
(unaudited)

Portfolio Company/Type of Investment (1)(2)(5)
 
Industry
 
Principal (8)

 
Cost

 
Fair Value

Riverlake Equity Partners II, LP
 
Multi-sector holdings
 
 
 
 
 
 
1.78% limited partnership interest (6)(12)
 
 
 
 
 
436

 
427

 
 
 
 
 
 
436

 
427

Riverside Fund IV, LP
 
Multi-sector holdings
 
 
 
 
 
 
0.34% limited partnership interest (6)(12)
 
 
 
 
 
713

 
654

 
 
 
 
 
 
713

 
654

Psilos Group Partners IV, LP
 
Multi-sector holdings
 
 
 
 
 
 
2.35% limited partnership interest (11)(12)
 
 
 
 
 

 

 
 
 
 
 
 

 

Mansell Group, Inc. (9)
 
Advertising
 
 
 
 
 
 
First Lien Term Loan A, LIBOR+7% (3% floor) cash due 4/30/2015
 
 
 
5,998

 
5,956

 
6,060

First Lien Term Loan B, LIBOR+9% (3% floor) cash 1.5% PIK due 4/30/2015
 
 
 
9,461

 
9,408

 
9,547

First Lien Revolver, LIBOR+6% (3% floor) cash due 4/30/2015 (10)
 
 
 


 
(11
)
 

 
 
 
 
 
 
15,353

 
15,607

Enhanced Recovery Company, LLC
 
Diversified support services
 
 
 
 
 
 
First Lien Term Loan A, LIBOR+7% (2% floor) cash due 8/13/2015
 
 
 
11,500

 
11,416

 
11,497

First Lien Term Loan B, LIBOR+10% (2% floor) cash 1% PIK due 8/13/2015
 
 
 
16,014

 
15,930

 
16,021

First Lien Revolver, LIBOR+7% (2% floor) cash due 8/13/2015
 
 
 
500

 
470

 
500

 
 
 
 
 
 
27,816

 
28,018

Specialty Bakers LLC
 
Food distributors
 
 
 
 
 
 
First Lien Term Loan A, LIBOR+8.5% cash due 9/15/2015
 
 
 
3,139

 
3,035

 
3,138

First Lien Term Loan B, LIBOR+11% (2.5% floor) cash due 9/15/2015
 
 
 
11,000

 
10,899

 
10,995

First Lien Revolver, LIBOR+8.5% cash due 9/15/2015
 
 
 
2,000

 
1,963

 
2,003

 
 
 
 
 
 
15,897

 
16,136

Welocalize, Inc.
 
Internet software & services
 
 
 
 
 
 
3,393,060 Common Units in RPWL Holdings, LLC
 
 
 
 
 
3,393

 
7,277

 
 
 
 
 
 
3,393

 
7,277

Miche Bag, LLC (9)
 
Apparel, accessories & luxury goods
 
 
 
 
 
 
First Lien Term Loan B, LIBOR+10% (3% floor) 3% PIK due 12/7/2015
 
 
 
17,666

 
16,543

 
17,409

First Lien Revolver, LIBOR+7% (3% floor) cash due 12/7/2015 (10)
 
 
 
 
 
(29
)
 

10,371 Series A Preferred Equity units in Miche Bag Holdings, LLC
 
 
 
 
 
1,037

 
40

1,358.854 Series C Preferred Equity units in Miche Bag Holdings, LLC
 
 
 
 
 
136

 

19,417 Series A Common Equity units in Miche Bag Holdings, LLC
 
 
 
 
 

 

146,289 Series D Common Equity units in Miche Bag Holdings, LLC
 
 
 
 
 
1,463

 

 
 
 
 
 
 
19,150

 
17,449

Bunker Hill Capital II (QP), LP
 
Multi-sector holdings
 
 
 
 
 
 
0.51% limited partnership interest (12)
 
 
 
 
 
361

 
263

 
 
 
 
 
 
361

 
263

Drugtest, Inc. (9)
 
Human resources & employment services
 
 
 
 
 
 
First Lien Term Loan A, LIBOR+7.5% (0.75% floor) cash due 6/27/2018
 
 
 
38,317

 
38,189

 
38,605

First Lien Term Loan B, LIBOR+10% (1% floor) 1.5% PIK due 6/27/2018
 
 
 
15,792

 
15,712

 
15,767

First Lien Revolver, LIBOR+6% (1% floor) cash due 6/27/2018 (10)
 
 
 
 
 
(38
)
 

 
 
 
 
 
 
53,863

 
54,372

Physicians Pharmacy Alliance, Inc. (9)
 
Healthcare services
 
 
 
 
 
 
First Lien Term Loan, LIBOR+9% cash 1.5% PIK due 1/4/2016
 
 
 
11,433

 
11,293

 
11,434

First Lien Revolver, LIBOR+6% cash due 1/4/2016 (10)
 
 
 
 
 
(16
)
 

 
 
 
 
 
 
11,277

 
11,434

Cardon Healthcare Network, LLC
 
Diversified support services
 
 
 
 
 
 
69,487 Class A Units
 
 
 
 
 
265

 
507

 
 
 
 
 
 
265

 
507

Phoenix Brands Merger Sub LLC (9)
 
Household products
 
 
 
 
 
 
Senior Term Loan, LIBOR+5% (1.5% floor) cash due 1/31/2016
 
 
 
5,196

 
5,122

 
5,119

Subordinated Term Loan, 10% cash 3.875% PIK due 2/1/2017
 
 
 
21,821

 
21,556

 
21,001

Senior Revolver, LIBOR+5% (1.5% floor) cash due 1/31/2016
 
 
 
3,000

 
2,930

 
3,000

 
 
 
 
 
 
29,608

 
29,120

See notes to Consolidated Financial Statements.

6

Fifth Street Finance Corp.
Consolidated Schedule of Investments
(dollar amounts in thousands)
December 31, 2013
(unaudited)

Portfolio Company/Type of Investment (1)(2)(5)
 
Industry
 
Principal (8)

 
Cost

 
Fair Value

CCCG, LLC (9)
 
Oil & gas equipment services
 
 
 
 
 
 
First Lien Term Loan, LIBOR+8% (1.75% floor) cash 1% PIK due 12/29/2017
 
 
 
35,328

 
34,926

 
34,727

First Lien Revolver, LIBOR+5.5% (1.75% floor) cash due 12/31/2014
 
 
 
 
 

 

 
 
 
 
 
 
34,926

 
34,727

Maverick Healthcare Group, LLC
 
Healthcare equipment
 
 
 
 
 
 
First Lien Term Loan A, LIBOR+9% (1.75% floor) cash due 12/31/2016
 
 
 
9,900

 
9,900

 
9,919

First Lien Term Loan B, LIBOR+9% (1.75% floor) cash due 12/31/2016
 
 
 
38,800

 
38,470

 
38,745

 
 
 
 
 
 
48,370

 
48,664

Refac Optical Group
 
Specialty stores
 
 
 
 
 
 
First Lien Term Loan A, LIBOR+7.5% cash due 9/30/2018
 
 
 
23,846

 
23,704

 
23,928

First Lien Term Loan B, LIBOR+8.5% cash 1.75% PIK due 9/30/2018
 
 
 
33,023

 
32,752

 
33,131

First Lien Term Loan C, 12% cash due 12/31/2014
 
 
 
7,757

 
7,757

 
7,757

First Lien Revolver, LIBOR+7.5% cash due 9/30/2018
 
 
 
4,400

 
4,341

 
4,400

1,550.9435 Shares of Common Stock in Refac Holdings, Inc.
 
 
 
 
 
1

 

500.9435 Shares of Series A-2 Preferred Stock in Refac Holdings, Inc.
 
 
 
 
 
305

 

1,000 Shares of Series A Preferred Stock in Refac Holdings, Inc.
 
 
 
 
 
999

 
889

 
 
 
 
 
 
69,859

 
70,105

GSE Environmental, Inc. (9)
 
Environmental & facilities services
 
 
 
 
 
 
First Lien Term Loan, LIBOR+5.5% (1.5% floor) cash due 5/27/2016
 
 
 
3,780

 
3,730

 
3,175

 
 
 
 
 
 
3,730

 
3,175

Baird Capital Partners V, LP
 
Multi-sector holdings
 
 
 
 
 
 
0.40% limited partnership interest (12)
 
 
 
 
 
649

 
743

 
 
 
 
 
 
649

 
743

Charter Brokerage, LLC
 
Oil & gas equipment services
 
 
 
 
 
 
Senior Term Loan, LIBOR+6.5% (1.5% floor) cash due 10/10/2016
 
 
 
28,534

 
28,458

 
28,840

Subordinated Term Loan, 11.75% cash 2% PIK due 10/10/2017
 
 
 
12,036

 
11,986

 
11,999

Senior Revolver, LIBOR+6.5% (1.5% floor) cash due 10/10/2016
 
 
 
1,067

 
1,030

 
1,067

 
 
 
 
 
 
41,474

 
41,906

Discovery Practice Management, Inc. (9)
 
Healthcare services
 
 
 
 
 
 
First Lien Term Loan, LIBOR+9.75% cash due 11/4/2018
 
 
 
20,568

 
20,481

 
20,568

First Lien Revolver, LIBOR+6% cash due 11/4/2018
 
 
 
600

 
580

 
600

 
 
 
 
 
 
21,061

 
21,168

Milestone Partners IV, LP
 
Multi-sector holdings
 
 
 
 
 
 
0.86% limited partnership interest (6)(12)
 
 
 
 
 
709

 
772

 
 
 
 
 
 
709

 
772

Insight Pharmaceuticals LLC
 
Pharmaceuticals
 
 
 
 
 
 
Second Lien Term Loan, LIBOR+11.75% (1.5% floor) cash due 8/25/2017
 
 
 
13,517

 
13,445

 
13,599

 
 
 
 
 
 
13,445

 
13,599

National Spine and Pain Centers, LLC
 
Healthcare services
 
 
 
 
 
 
Subordinated Term Loan, 11% cash 1.6% PIK due 9/27/2017
 
 
 
29,382

 
29,215

 
29,655

317,282.97 Class A Units
 
 
 
 
 
317

 
428

 
 
 
 
 
 
29,532

 
30,083

RCPDirect, LP
 
Multi-sector holdings
 
 
 
 
 
 
0.91% limited partnership interest (6)(12)
 
 
 
 
 
641

 
559

 
 
 
 
 
 
641

 
559

The MedTech Group, Inc. (9)
 
Healthcare equipment
 
 
 
 
 
 
Senior Term Loan, LIBOR+5.5% (1.25% floor) cash due 9/7/2016
 
 
 
12,366

 
12,303

 
12,373

 
 
 
 
 
 
12,303

 
12,373

Digi-Star Acquisition Holdings, Inc.
 
Industrial machinery
 
 
 
 
 
 
Subordinated Term Loan, 12% cash 1.5% PIK due 11/18/2017
 
 
 
16,509

 
16,428

 
16,694

264.37 Class A Preferred Units
 
 
 
 
 
115

 
115

2,954.87 Class A Common Units (6)
 
 
 
 
 
36

 
359

 
 
 
 
 
 
16,579

 
17,168

See notes to Consolidated Financial Statements.

7

Fifth Street Finance Corp.
Consolidated Schedule of Investments
(dollar amounts in thousands)
December 31, 2013
(unaudited)

Portfolio Company/Type of Investment (1)(2)(5)
 
Industry
 
Principal (8)

 
Cost

 
Fair Value

CPASS Acquisition Company
 
Internet software & services
 
 
 
 
 
 
First Lien Term Loan, LIBOR+9% (1.5% floor) cash 1% PIK due 11/21/2016
 
 
 
7,986

 
7,909

 
8,058

First Lien Revolver, LIBOR+9% (1.5% floor) cash due 11/21/2016
 
 
 
250

 
239

 
250

 
 
 
 
 
 
8,148

 
8,308

Genoa Healthcare Holdings, LLC
 
Pharmaceuticals
 
 
 
 
 
 
Senior Term Loan, LIBOR+5.25% (1.25% floor) cash due 12/1/2016
 
 
 
8,663

 
8,663

 
8,663

Subordinated Term Loan, 12% cash 2% PIK due 6/1/2017
 
 
 
13,039

 
12,961

 
13,163

Senior Revolver, LIBOR+5.25% (1.25% floor) cash due 12/1/2016
 
 
 
 
 

 

500,000 Preferred units (6)
 
 
 
 
 
261

 
282

500,000 Class A Common Units
 
 
 
 
 
25

 
651

 
 
 
 
 
 
21,910

 
22,759

ACON Equity Partners III, LP
 
Multi-sector holdings
 
 
 
 
 
 
0.15% limited partnership interest (6)(12)
 
 
 
 
 
336

 
151

 
 
 
 
 
 
336

 
151

CRGT, Inc.
 
IT consulting & other services
 
 
 
 
 
 
Subordinated Term Loan, 12.5% cash 3% PIK due 3/9/2018
 
 
 
26,947

 
26,770

 
27,753

 
 
 
 
 
 
26,770

 
27,753

Riverside Fund V, LP
 
Multi-sector holdings
 
 
 
 
 
 
0.48% limited partnership interest (12)
 
 
 
 
 
418

 
354

 
 
 
 
 
 
418

 
354

World 50, Inc.
 
Research & consulting services
 
 
 
 
 
 
First Lien Term Loan A, LIBOR+6.25% (1.5% floor) cash due 3/30/2017
 
 
 
10,537

 
10,451

 
10,701

First Lien Term Loan B, 12.5% cash due 3/30/2017
 
 
 
7,000

 
6,947

 
7,111

Senior Revolver, LIBOR+6.25% (1.5% floor) cash due 3/30/2017 (10)
 
 
 
 
 
(39
)
 

 
 
 
 
 
 
17,359

 
17,812

Nixon, Inc.
 
Apparel, accessories & luxury goods
 
 
 
 
 
 
First Lien Term Loan, 8.75% cash 2.75% PIK due 4/16/2018
 
 
 
9,242

 
9,171

 
9,341

 
 
 
 
 
 
9,171

 
9,341

JTC Education, Inc. (9)
 
Education services
 
 
 
 
 
 
Subordinated Term Loan, 13% cash due 11/1/2017
 
 
 
14,500

 
14,420

 
14,605

17,391 Shares of Series A-1 Preferred Stock
 
 
 
 
 
313

 
393

17,391 Shares of Common Stock
 
 
 
 
 
187

 
11

 
 
 
 
 
 
14,920

 
15,009

BMC Acquisition, Inc.
 
Diversified financial services
 
 
 
 
 
 
Senior Term Loan, LIBOR+5.5% (1% floor) cash due 5/1/2017
 
 
 
5,220

 
5,192

 
5,212

Senior Revolver, LIBOR+5% (1% floor) cash due 5/1/2017 (10)
 
 
 
 
 
(6
)
 

500 Series A Preferred Shares
 
 
 
 
 
499

 
553

50,000 Common Shares
 
 
 
 
 
1

 

 
 
 
 
 
 
5,686

 
5,765

Ansira Partners, Inc. (9)
 
Advertising
 
 
 
 
 
 
First Lien Term Loan, LIBOR+5.5% (1.5% floor) cash due 5/4/2017
 
 
 
10,320

 
10,261

 
10,328

First Lien Revolver, LIBOR+5.5% (1.5% floor) cash due 5/4/2017 (10)
 
 
 
 
 
(6
)
 

250 Preferred Units & 250 Class A Common Units of Ansira Holdings, LLC
 
 
 
 
 
250

 
323

 
 
 
 
 
 
10,505

 
10,651

 Edmentum, Inc.
 
Education services
 
 
 
 
 
 
 Second Lien Term Loan, LIBOR+9.75% (1.5% floor) cash due 5/17/2019
 
 
 
17,000

 
17,000

 
17,100

 
 
 
 
 
 
17,000

 
17,100

I Drive Safely, LLC
 
Education services
 
 
 
 
 
 
First Lien Term Loan, LIBOR+8.5% (1.5% floor) cash due 5/25/2017
 
 
 
27,000

 
26,986

 
27,440

First Lien Revolver, LIBOR+6.5% (1.5% floor) cash due 5/25/2017 (10)
 
 
 
 
 
(3
)
 

75,000 Class A Common Units of IDS Investments, LLC
 
 
 
 
 
750

 
946

 
 
 
 
 
 
27,733

 
28,386

See notes to Consolidated Financial Statements.

8

Fifth Street Finance Corp.
Consolidated Schedule of Investments
(dollar amounts in thousands)
December 31, 2013
(unaudited)

Portfolio Company/Type of Investment (1)(2)(5)
 
Industry
 
Principal (8)

 
Cost

 
Fair Value

Yeti Acquisition, LLC (9)
 
Leisure products
 
 
 
 
 
 
First Lien Term Loan A, LIBOR+8% (1.25% floor) cash due 6/15/2017
 
 
 
18,100

 
18,082

 
18,186

First Lien Term Loan B, LIBOR+11.25% (1.25% floor) cash 1% PIK due 6/15/2017
 
 
 
12,000

 
11,993

 
12,025

First Lien Revolver, LIBOR+8% (1.25% floor) cash due 6/15/2017 (10)
 
 
 
 
 
(6
)
 

1,500 Common Stock Units of Yeti Holdings, Inc.
 
 
 
 
 
1,500

 
3,451

 
 
 
 
 
 
31,569

 
33,662

Specialized Education Services, Inc.
 
Education services
 
 
 
 
 
 
Senior Term Loan, LIBOR+5.5% (1.5% floor) cash due 6/28/2017
 
 
 
8,891

 
8,891

 
8,887

Subordinated Term Loan, 11% cash 1.5% PIK due 6/28/2018
 
 
 
17,907

 
17,907

 
17,949

 
 
 
 
 
 
26,798

 
26,836

PC Helps Support, LLC
 
IT consulting & other services
 
 
 
 
 
 
Subordinated Term Loan, 12% cash 1.5% PIK due 9/5/2018
 
 
 
18,876

 
18,876

 
19,046

675 Series A Preferred Units of PCH Support Holdings, Inc.
 
 
 
 
 
675

 
515

7,500 Class A Common Stock Units of PCH Support Holdings, Inc.
 
 
 
 
 
75

 

 
 
 
 
 
 
19,626

 
19,561

Olson + Co., Inc. (9)
 
Advertising
 
 
 
 
 
 
First Lien Term Loan, LIBOR+5.5% (1.5% floor) cash due 9/30/2017
 
 
 
13,853

 
13,853

 
13,854

First Lien Revolver, LIBOR+5.5% (1.5% floor) cash due 9/30/2017
 
 
 
 
 

 

 
 
 
 
 
 
13,853

 
13,854

Beecken Petty O’Keefe Fund IV, L.P.
 
Multi-sector holdings
 
 
 
 
 
 
0.5% limited partnership interest (12)
 
 
 
 
 
211

 
211

 
 
 
 
 
 
211

 
211

Deltek, Inc. (9)
 
IT consulting & other services
 
 
 
 
 
 
Second Lien Term Loan, LIBOR+8.75% (1.25% floor) cash due 10/10/2019
 
 
 
25,000

 
25,000

 
25,371

First Lien Revolver, LIBOR+4.75% (1.25% floor) cash due 10/10/2017
 
 
 


 

 

 
 
 
 
 
 
25,000

 
25,371

First American Payment Systems, LP
 
Diversified support services
 
 
 
 
 
 
Second Lien Term Loan, LIBOR+9.5% (1.25% floor) cash due 4/12/2019
 
 
 
25,000

 
25,000

 
25,178

First Lien Revolver, LIBOR+4.5% (1.25% floor) cash due 10/12/2017
 
 
 
233

 
233

 
233

 
 
 
 
 
 
25,233

 
25,411

Dexter Axle Company
 
Auto parts & equipment
 
 
 
 
 
 
Subordinated Term Loan, 11.25% cash 2% PIK due 11/1/2019
 
 
 
30,717

 
30,717

 
31,073

1,500 Common Shares in Dexter Axle Holding Company
 
 
 
 
 
1,500

 
1,809

 
 
 
 
 
 
32,217

 
32,882

SumTotal Systems, LLC
 
Internet software & services
 
 
 
 
 
 
Second Lien Term Loan, LIBOR+9% (1.25% floor) cash due 5/16/2019
 
 
 
20,000

 
20,000

 
20,002

 
 
 
 
 
 
20,000

 
20,002

Comprehensive Pharmacy Services, LLC
 
Pharmaceuticals
 
 
 
 
 
 
Subordinated Term Loan, 11.25% cash 1.5% PIK due 11/30/2019
 
 
 
14,201

 
14,201

 
14,572

20,000 Common Shares in MCP CPS Group Holdings, Inc. (6)
 
 
 
 
 
2,000

 
2,319

 
 
 
 
 
 
16,201

 
16,891

Reliance Communications, LLC
 
Internet software & services
 
 
 
 
 
 
First Lien Term Loan A, LIBOR+7% (1% floor) cash due 12/18/2017
 
 
 
21,477

 
21,450

 
21,562

First Lien Term Loan B, LIBOR+11.5% (1% floor) cash due 12/18/2017
 
 
 
11,333

 
11,320

 
11,379

First Lien Revolver, LIBOR+7% (1% floor) cash due 12/18/2017 (10)
 
 
 


 
(6
)
 

 
 
 
 
 
 
32,764

 
32,941

Garretson Firm Resolution Group, Inc.
 
Diversified support services
 
 
 
 
 
 
First Lien Term Loan, LIBOR+5% (1.25% floor) cash due 12/20/2018
 
 
 
7,124

 
7,124

 
7,163

Subordinated Term Loan, 11% cash 1.5% PIK due 6/20/2019
 
 
 
5,038

 
5,038

 
5,063

First Lien Revolver, LIBOR+5% (1.25% floor) cash due 12/20/2017
 
 
 
713

 
712

 
713

4,950,000 Preferred Units in GRG Holdings, LP
 
 
 
 
 
495

 
378

50,000 Common Units in GRG Holdings, LP
 
 
 
 
 
5

 

 
 
 
 
 
 
13,374

 
13,317

See notes to Consolidated Financial Statements.

9

Fifth Street Finance Corp.
Consolidated Schedule of Investments
(dollar amounts in thousands)
December 31, 2013
(unaudited)

Portfolio Company/Type of Investment (1)(2)(5)
 
Industry
 
Principal (8)

 
Cost

 
Fair Value

Teaching Strategies, LLC
 
Education services
 
 
 
 
 
 
First Lien Term Loan A, LIBOR+6% (1.25% floor) cash due 12/21/2017
 
 
 
59,850

 
59,822

 
60,346

First Lien Term Loan B, LIBOR+8.35% (1.25% floor) cash 3.15% PIK due 12/21/2017
 
 
 
27,902

 
27,889

 
28,019

First Lien Revolver, LIBOR+6% (1.25% floor) cash due 12/21/2017
 
 
 
1,000

 
996

 
1,000

 
 
 
 
 
 
88,707

 
89,365

Omniplex World Services Corporation
 
Security & alarm services
 
 
 
 
 
 
Subordinated Term Loan, 12.25% cash 1.25% PIK due 12/21/2018
 
 
 
12,664

 
12,664

 
12,652

500 Class A Common Units in Omniplex Holdings Corp.
 
 
 
 
 
500

 
542

 
 
 
 
 
 
13,164

 
13,194

Dominion Diagnostics, LLC
 
Healthcare services
 
 
 
 
 
 
Subordinated Term Loan, 11% cash 2% PIK due 12/21/2018
 
 
 
15,827

 
15,827

 
16,073

 
 
 
 
 
 
15,827

 
16,073

Affordable Care, Inc.
 
Healthcare services
 
 
 
 
 
 
Second Lien Term Loan, LIBOR+9.25% (1.25% floor) cash due 12/26/2019
 
 
 
21,500

 
21,500

 
21,920

 
 
 
 
 
 
21,500

 
21,920

Aderant North America, Inc.
 
Internet software & services
 
 
 
 
 
 
Second Lien Term Loan, LIBOR+8.75% (1.25% floor) cash due 6/20/2019
 
 
 
7,000

 
7,000

 
7,047

 
 
 
 
 
 
7,000

 
7,047

AdVenture Interactive, Corp.
 
Advertising
 
 
 
 
 
 
First Lien Term Loan, LIBOR+6.75% (1.25% floor) cash due 3/22/2018
 
 
 
91,989

 
91,981

 
92,068

First Lien Revolver, LIBOR+6.75% (1.25% floor) cash due 3/22/2018
 
 
 
 
 

 

2,000 Preferred Units of AVI Holdings, L.P. (6)
 
 
 
 
 
2,000

 
1,271

 
 
 
 
 
 
93,981

 
93,339

CoAdvantage Corporation
 
Human resources & employment services
 
 
 
 
 
 
Subordinated Term Loan, 11.5% cash 1.25% PIK due 12/31/2018
 
 
 
10,126

 
10,126

 
10,329

50,000 Class A Units in CIP CoAdvantage Investments LLC
 
 
 
 
 
500

 
388

 
 
 
 
 
 
10,626