0001414932-16-000027.txt : 20160510 0001414932-16-000027.hdr.sgml : 20160510 20160509184946 ACCESSION NUMBER: 0001414932-16-000027 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20160331 FILED AS OF DATE: 20160510 DATE AS OF CHANGE: 20160509 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: 161633181 BUSINESS ADDRESS: STREET 1: 777 WEST PUTNAM AVENUE STREET 2: 3RD FLOOR CITY: GREENWICH STATE: CT ZIP: 06830 BUSINESS PHONE: (203) 681-3600 MAIL ADDRESS: STREET 1: 777 WEST PUTNAM AVENUE STREET 2: 3RD FLOOR CITY: GREENWICH STATE: CT ZIP: 06830 FORMER COMPANY: FORMER CONFORMED NAME: Fifth Street Finance Corp DATE OF NAME CHANGE: 20071012 10-Q 1 fsc-033116x10xq.htm 10-Q 10-Q

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 March 31, 2016
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
(State or jurisdiction of
incorporation or organization)
 
26-1219283
(I.R.S. Employer
Identification No.)
 
 
 
777 West Putnam Avenue, 3rd Floor
Greenwich, CT
(Address of principal executive office)
 
06830
(Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(203) 681-3600
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 145,304,222 shares of common stock outstanding as of May 9, 2016.




FIFTH STREET FINANCE CORP.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2016
TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 3.
Item 4.
Item 5.




 



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)
 
 
March 31, 2016
 
September 30, 2015
ASSETS
Investments at fair value:
 
 
 
 
Control investments (cost March 31, 2016: $369,462; cost September 30, 2015: $333,520)
 
$
335,988

 
$
318,893

Affiliate investments (cost March 31, 2016: $35,524; cost September 30, 2015: $36,637)
 
39,158

 
40,606

Non-control/Non-affiliate investments (cost March 31, 2016: $2,005,627; cost September 30, 2015: $2,102,781)
 
1,879,987

 
2,042,996

Total investments at fair value (cost March 31, 2016: $2,410,613; cost September 30, 2015: $2,472,938)
 
2,255,133

 
2,402,495

Cash and cash equivalents
 
122,270

 
138,377

Restricted cash
 
12,224

 
5,107

Interest, dividends and fees receivable
 
13,980

 
15,687

Due from portfolio companies
 
3,243

 
2,641

Receivables from unsettled transactions
 

 
5,168

Deferred financing costs
 
13,472

 
16,051

Other assets
 
1,306

 
131

Total assets
 
$
2,421,628

 
$
2,585,657

LIABILITIES AND NET ASSETS
Liabilities:
 

 
 
Accounts payable, accrued expenses and other liabilities
 
$
5,210

 
$
5,006

Base management fee and Part I incentive fee payable
 
14,098

 
16,531

Due to FSC CT
 
2,129

 
2,965

Interest payable
 
7,894

 
4,300

Amounts payable to syndication partners
 
54

 
1,316

Payables from unsettled transactions
 

 
3,648

Credit facilities payable
 
397,295

 
427,295

SBA debentures payable
 
225,000

 
225,000

Unsecured convertible notes payable
 
115,000

 
115,000

Unsecured notes payable
 
410,453

 
410,320

Secured borrowings at fair value (proceeds March 31, 2016: $19,632; proceeds September 30, 2015: $21,787)
 
18,521

 
21,182

Total liabilities
 
1,195,654

 
1,232,563

Commitments and contingencies (Note 16)
 

 
 
Net assets:
 
 
 
 
Common stock, $0.01 par value, 250,000 shares authorized; 147,184 and 150,668 shares issued and outstanding at March 31, 2016 and September 30, 2015, respectively
 
1,472

 
1,507

Additional paid-in-capital
 
1,613,928

 
1,631,523

Treasury stock, 423 shares at September 30, 2015
 

 
(2,538
)
Net unrealized depreciation on investments and secured borrowings
 
(154,369
)
 
(69,838
)
Net realized loss on investments and secured borrowings
 
(206,244
)
 
(180,945
)
Accumulated overdistributed net investment income
 
(28,813
)
 
(26,615
)
Total net assets (equivalent to $8.33 and $9.00 per common share at March 31, 2016 and September 30, 2015, respectively) (Note 12)
 
1,225,974

 
1,353,094

Total liabilities and net assets
 
$
2,421,628

 
$
2,585,657

See notes to Consolidated Financial Statements.

3


Fifth Street Finance Corp.
Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
 
 
Three months ended
March 31, 2016
 
Three months ended
March 31, 2015
(see Note 2)
 
Six months ended
March 31, 2016
 
Six months ended
March 31, 2015 (see Note 2)
Interest income:
 
 
 
 
 
 
 
 
Control investments
 
$
4,000

 
$
4,189

 
$
7,655

 
$
7,883

Affiliate investments
 
1,026

 
1,072

 
2,076

 
2,169

Non-control/Non-affiliate investments
 
44,217

 
49,983

 
90,615

 
99,194

Interest on cash and cash equivalents
 
88

 
10

 
151

 
20

Total interest income
 
49,331

 
55,254

 
100,497

 
109,266

PIK interest income:
 
 
 
 
 
 
 
 
Control investments
 
1,080

 
1,365

 
2,060

 
2,739

Affiliate investments
 
205

 
212

 
415

 
427

Non-control/Non-affiliate investments
 
1,847

 
1,669

 
3,952

 
4,093

Total PIK interest income
 
3,132

 
3,246

 
6,427

 
7,259

Fee income:
 
 
 
 
 
 
 
 
Control investments
 
376

 
384

 
1,219

 
1,008

Affiliate investments
 
263

 
12

 
271

 
24

Non-control/Non-affiliate investments
 
4,548

 
4,189

 
12,509

 
8,170

Total fee income
 
5,187

 
4,585

 
13,999

 
9,202

Dividend and other income:
 
 
 
 
 
 
 
 
Control investments
 
1,692

 
3,210

 
4,118

 
5,598

Non-control/Non-affiliate investments
 
221

 
173

 
(356
)
 
480

Total dividend and other income
 
1,913

 
3,383

 
3,762

 
6,078

Total investment income
 
59,563

 
66,468

 
124,685

 
131,805

Expenses:
 
 
 
 
 
 
 
 
Base management fee
 
10,006

 
13,064

 
21,799

 
27,219

Part I incentive fee
 
4,173

 
7,003

 
7,824

 
13,526

Professional fees
 
4,455

 
982

 
11,424

 
2,146

Board of Directors fees
 
243

 
189

 
599

 
369

Interest expense
 
13,838

 
14,812

 
27,885

 
28,804

Administrator expense
 
514

 
748

 
1,114

 
1,995

General and administrative expenses
 
1,072

 
1,657

 
2,292

 
3,438

Total expenses
 
34,301

 
38,455

 
72,937

 
77,497

Base management fee waived
 
(81
)
 
(111
)
 
(177
)
 
(222
)
Net expenses
 
34,220

 
38,344

 
72,760

 
77,275

Net investment income
 
25,343

 
28,124

 
51,925

 
54,530

Unrealized appreciation (depreciation) on investments:
 
 
 
 
 
 
 
 
Control investments
 
(4,203
)
 
(6,520
)
 
(18,847
)
 
(15,279
)
Affiliate investments
 
(793
)
 
333

 
(335
)
 
198

Non-control/Non-affiliate investments
 
11,005

 
5,925

 
(65,855
)
 
(24,034
)
Net unrealized appreciation (depreciation) on investments
 
6,009

 
(262
)
 
(85,037
)
 
(39,115
)
Net unrealized (appreciation) depreciation on secured borrowings
 
294

 
(227
)
 
506

 
105

Realized gain (loss) on investments and secured borrowings:
 
 
 
 
 
 
 
 
Control investments
 
(8,148
)
 

 
(8,148
)
 

Affiliate investments
 

 
29

 

 
72

Non-control/Non-affiliate investments
 
(18,518
)
 
(1,921
)
 
(17,151
)
 
(18,319
)
Net realized loss on investments and secured borrowings
 
(26,666
)
 
(1,892
)
 
(25,299
)
 
(18,247
)
Net increase (decrease) in net assets resulting from operations
 
$
4,980

 
$
25,743

 
$
(57,905
)
 
$
(2,727
)
Net investment income per common share — basic
 
$
0.17

 
$
0.18

 
$
0.35

 
$
0.36

Earnings (loss) per common share — basic
 
$
0.03

 
$
0.17

 
$
(0.39
)
 
$
(0.02
)
Weighted average common shares outstanding — basic
 
149,207

 
153,340

 
149,738

 
153,340

Net investment income per common share — diluted
 
$
0.16

 
$
0.18

 
$
0.33

 
$
0.36

Earnings (loss) per common share — diluted (Note 5)
 
$
0.03

 
$
0.17

 
$
(0.39
)
 
$
(0.02
)
Weighted average common shares outstanding — diluted
 
156,997

 
161,130

 
157,528

 
161,130

Distributions per common share
 
$
0.18

 
$
0.15

 
$
0.36

 
$
0.43

See notes to Consolidated Financial Statements.

4



Fifth Street Finance Corp.
Consolidated Statements of Changes in Net Assets
(in thousands, except per share amounts)
(unaudited)
 
 
 
Six months
ended
March 31, 2016
 
Six months
ended
March 31, 2015
(see Note 2)
Operations:
 
 
 
 
Net investment income
 
$
51,925

 
$
54,530

Net unrealized depreciation on investments
 
(85,037
)
 
(39,115
)
Net unrealized depreciation on secured borrowings
 
506

 
105

Net realized loss on investments and secured borrowings
 
(25,299
)
 
(18,247
)
Net decrease in net assets resulting from operations
 
(57,905
)
 
(2,727
)
Stockholder transactions:
 
 
 
 
Distributions to stockholders
 
(54,123
)
 
(65,445
)
Net decrease in net assets from stockholder transactions
 
(54,123
)
 
(65,445
)
Capital share transactions:
 
 
 
 
Issuance of common stock under dividend reinvestment plan
 
3,554

 
3,096

Repurchases of common stock under stock repurchase program
 
(15,092
)
 

Repurchases of common stock under dividend reinvestment program
 
(3,554
)
 
(3,096
)
Net decrease in net assets from capital share transactions
 
(15,092
)
 

Total decrease in net assets
 
(127,120
)
 
(68,172
)
Net assets at beginning of period
 
1,353,094

 
1,478,475

Net assets at end of period
 
$
1,225,974

 
$
1,410,303

Net asset value per common share
 
$
8.33

 
$
9.20

Common shares outstanding at end of period
 
147,184

 
153,340

See notes to Consolidated Financial Statements.


5

Fifth Street Finance Corp.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)


 
 
Six months
ended
March 31, 2016
 
Six months
ended
March 31, 2015
(see Note 2)
Operating activities:
 
 
 
 
Net decrease in net assets resulting from operations
 
$
(57,905
)
 
$
(2,727
)
Adjustments to reconcile net decrease in net assets resulting from operations to net cash provided (used) by operating activities:
 
 
 
 
Net unrealized depreciation on investments
 
85,037

 
39,115

Net unrealized depreciation on secured borrowings
 
(506
)
 
(105
)
Net realized loss on investments and secured borrowings
 
25,299

 
18,247

PIK interest income
 
(6,427
)
 
(7,259
)
Recognition of fee income
 
(13,999
)
 
(9,202
)
Accretion of original issue discount on investments
 
(1,951
)
 
(5,110
)
Accretion of original issue discount on unsecured notes payable
 
133

 
310

Amortization of deferred financing costs
 
2,579

 
2,651

Changes in operating assets and liabilities:
 

 
 
Fee income received
 
13,594

 
9,216

(Increase) decrease in restricted cash
 
(7,117
)
 
15,927

(Increase) decrease in interest, dividends and fees receivable
 
1,792

 
(610
)
(Increase) decrease in due from portfolio companies
 
(602
)
 
19,924

(Increase) decrease in receivables from unsettled transactions
 
5,168

 
(33,735
)
Increase in other assets
 
(1,175
)
 
(410
)
Increase in accounts payable, accrued expenses and other liabilities
 
204

 
107

Decrease in base management fee and Part I incentive fee payable
 
(2,433
)
 
(3,915
)
Increase (decrease) in due to FSC CT
 
(836
)
 
330

Increase in interest payable
 
3,594

 
1,999

Decrease in payables from unsettled transactions
 
(3,648
)
 

Decrease in amounts payable to syndication partners
 
(1,262
)
 
(3,256
)
Purchases of investments and net revolver activity
 
(425,877
)
 
(906,339
)
Principal payments received on investments (scheduled payments)
 
12,508

 
12,993

Principal payments received on investments (payoffs)
 
294,554

 
324,220

PIK interest income received in cash
 
1,037

 
1,102

Proceeds from the sale of investments
 
163,502

 
481,413

Net cash provided (used) by operating activities
 
85,263

 
(45,114
)
Financing activities:
 
 
 
 
Distributions paid in cash
 
(50,569
)
 
(62,350
)
Borrowings under credit facilities
 
320,000

 
521,400

Repayments of borrowings under credit facilities
 
(350,000
)
 
(326,500
)
Repayments of secured borrowings
 
(2,155
)
 
(62,324
)
Repurchases of common stock under stock repurchase program
 
(15,092
)
 

Repurchases of common stock under dividend reinvestment plan
 
(3,554
)
 
(3,096
)
Net cash provided (used) by financing activities
 
(101,370
)
 
67,130

Net increase (decrease) in cash and cash equivalents
 
(16,107
)
 
22,016

Cash and cash equivalents, beginning of period
 
138,377

 
86,731

Cash and cash equivalents, end of period
 
$
122,270

 
$
108,747

Supplemental information:
 
 
 
 
Cash paid for interest
 
$
21,579

 
$
23,958

Non-cash investing and financing activities:
 
 
 
 
Purchases of investments and net revolver activity
 
$
(17,370
)
 
$

Proceeds from the sale of investments
 
$
16,783

 
$

Issuance of shares of common stock under dividend reinvestment plan
 
$
3,554

 
$
3,096

See notes to Consolidated Financial Statements.

6

Fifth Street Finance Corp.
Consolidated Schedule of Investments
March 31, 2016
(dollar amounts in thousands)
(unaudited)

Portfolio Company/Type of Investment (1)(2)(5)(14)
 
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
 
 
 
$
17,183

 
$
17,177

 
$
17,206

 LC Facility, 8.5% cash due 12/31/2016
 
 
 
1,444

 
1,442

 
1,444

 746,114 Series A Preferred Units
 
 
 
 
 
17,353

 
20,414

 746,114 Common Stock Units
 
 
 
 
 
5,316

 
1,605

 
 
 
 
 
 
41,288

 
40,669

 TransTrade Operators, Inc. (9)
 
Air freight & logistics
 
 
 
 
 
 
 First Lien Term Loan, 11% cash 3% PIK due 5/31/2016
 
 
 
15,973

 
15,573

 
9,456

 First Lien Revolver, 8% cash due 5/31/2016
 
 
 
4,215

 
4,215

 

 596.67 Series A Common Units
 
 
 
 
 

 

 4,000,000 Series A Preferred Units in TransTrade Holdings LLC
 
 
 
 
 
4,000

 

 5,200,000 Series B Preferred Units in TransTrade Holdings LLC
 
 
 
 
 
5,200

 

 
 
 
 
 
 
28,988

 
9,456

 First Star Aviation, LLC (16)
 
Airlines
 
 
 
 
 
 
 First Lien Term Loan, 9% cash 3% PIK due 1/9/2018
 
 
 
3,390

 
3,389

 
3,288

 10,104,401 Common Units (6)
 
 
 
 
 
10,104

 
6,238

 
 
 
 
 
 
13,493

 
9,526

 First Star Speir Aviation 1 Limited (11)(16)
 
Airlines
 
 
 
 
 
 
 First Lien Term Loan, 9% cash due 12/15/2020
 
 
 
55,395

 
53,313

 
54,488

 2,058,411.64 Common Units (6)
 
 
 
 
 

 
1,012

 
 
 
 
 
 
53,313

 
55,500

 First Star Bermuda Aviation Limited (11)(16)
 
Airlines
 
 
 
 
 
 
 First Lien Term Loan, 9% cash 3% PIK due 8/19/2018
 
 
 
24,869

 
24,869

 
24,583

 4,293,736 Common Units (6)
 
 
 
 
 
2,424

 
3,148

 
 
 
 
 
 
27,293

 
27,731

 Eagle Hospital Physicians, LLC
 
Healthcare services
 
 
 
 
 
 
 First Lien Term Loan A, 8% PIK due 8/1/2016
 
 
 
13,648

 
13,648

 
13,599

 First Lien Term Loan B, 8.1% PIK due 8/1/2016
 
 
 
3,732

 
3,732

 
3,720

 First Lien Revolver, 8% cash due 8/1/2016
 
 
 
1,913

 
1,913

 
1,913

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

 
5,421

 
 
 
 
 
 
23,393

 
24,653

 Senior Loan Fund JV I, LLC (11)(15)
 
Multi-sector holdings (17)
 
 
 
 
 
 
 Subordinated Notes, LIBOR+8% cash due 5/2/2021 (13)
 
 
 
144,841

 
144,841

 
135,033

 87.5% LLC equity interest (6)
 
 
 
 
 
16,093

 
12,660

 
 
 
 
 
 
160,934

 
147,693

 Express Group Holdings LLC (18)
 
Oil & gas equipment services
 
 
 
 
 
 
 First Lien Term Loan, LIBOR+6% (1% floor) cash due 9/3/2019 (13)
 
 
 
11,863

 
11,863

 
11,863

 First Lien Revolver, LIBOR+4.5% (1% floor) cash due 3/4/2019 (13)
 
 
 
3,322

 
3,322

 
3,322

 14,033,391 Series B Preferred Units
 
 
 
 
 
3,982

 
3,982

 280,668 Series A Preferred Units
 
 
 
 
 
1,593

 
1,593

 1,456,344 Common Units
 
 
 
 
 

 

 
 
 
 
 
 
20,760

 
20,760

 Total Control Investments (27.4% of net assets)
 
 
 
 
 
$
369,462

 
$
335,988

 Affiliate Investments (4)
 
 
 
 
 
 
 
 
 Caregiver Services, Inc.
 
Healthcare services
 
 
 
 
 
 
 Second Lien Term Loan, 10% cash 2% PIK due 6/30/2019
 
 
 
$
9,428

 
$
9,427

 
$
9,320

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

 
4,039

 
 
 
 
 
 
10,507

 
13,359

 AmBath/ReBath Holdings, Inc.
 
Home improvement retail
 
 
 
 
 
 
 First Lien Term Loan B, 12.5% cash 2.5% PIK due 8/31/2017
 
 
 
25,053

 
25,017

 
24,689

 4,668,788 Shares of Preferred Stock
 
 
 
 
 

 
1,110

 
 
 
 
 
 
25,017

 
25,799

 Total Affiliate Investments (3.2% of net assets)
 
 
 
 
 
$
35,524

 
$
39,158

See notes to Consolidated Financial Statements.

7

Fifth Street Finance Corp.
Consolidated Schedule of Investments
March 31, 2016
(dollar amounts in thousands)
(unaudited)

Portfolio Company/Type of Investment (1)(2)(5)(14)
 
Industry
 
Principal (8)

 
Cost
 
Fair Value

 Non-Control/Non-Affiliate Investments (7)
 
 
 
 
 
 
 
 
 HealthDrive Corporation (9)
 
Healthcare services
 
 
 
 
 
 
 First Lien Term Loan A, 10% cash due 12/31/2016
 
 
 
$
4,307

 
$
4,308

 
$
4,348

 First Lien Term Loan B, 12% cash 1% PIK due 12/31/2016
 
 
 
11,817

 
11,817

 
11,842

 First Lien Revolver, 12% cash due 12/31/2016
 
 
 
1,866

 
1,866

 
1,866

 
 
 
 
 
 
17,991

 
18,056

 Cenegenics, LLC (9)
 
Healthcare services
 
 
 
 
 
 
 First Lien Term Loan, 9.75% cash due 9/30/2019
 
 
 
30,259

 
30,244

 
29,923

 First Lien Revolver, 15% cash due 9/30/2019
 
 
 
200

 
200

 
200

 452,914.87 Common Units
 
 
 
 
 
598

 
1,216

 345,380.141 Preferred Units in Cenegenics, LLC
 
 
 
 
 
300

 
300

 
 
 
 
 
 
31,342

 
31,639

 Riverlake Equity Partners II, LP
 
Multi-sector holdings
 
 
 
 
 
 
 1.78% limited partnership interest (11)
 
 
 
 
 
762

 
651

 
 
 
 
 
 
762

 
651

 Riverside Fund IV, LP
 
Multi-sector holdings
 
 
 
 
 
 
 0.34% limited partnership interest (11)
 
 
 
 
 
643

 
435

 
 
 
 
 
 
643

 
435

 JTC Education, Inc. (9)
 
Education services
 
 
 
 
 
 
 Subordinated Term Loan, 13% cash due 11/1/2017
 
 
 
16,006

 
14,436

 

 First Lien Term Loan, LIBOR+5% (1% floor) cash due 5/1/2017 (13)
 
 
 
42,500

 
3,624

 
7,174

 First Lien Revolver, LIBOR+5% cash due 5/1/2017 (13)
 
 
 
10,276

 
876

 

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

 

 17,391 Shares of Common Stock
 
 
 
 
 
187

 

 
 
 
 
 
 
19,436

 
7,174

 Mansell Group, Inc.
 
Advertising
 
 
 
 
 
 
 First Lien Term Loan A, LIBOR+7% (3% floor) cash due 4/1/2017 (13)
 
 
 
3,654

 
3,654

 
3,654

 First Lien Term Loan B, LIBOR+9% (3% floor) cash 1.5% PIK due 4/1/2017 (13)
 
 
 
9,790

 
9,790

 
9,570

 
 
 
 
 
 
13,444

 
13,224

 Bunker Hill Capital II (QP), L.P.
 
Multi-sector holdings
 
 
 
 
 
 
 0.51% limited partnership interest (11)
 
 
 
 
 
810

 
695

 
 
 
 
 
 
810

 
695

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

 
1,137

 
 
 
 
 
 
265

 
1,137

 Phoenix Brands Merger Sub LLC (9)
 
Household products
 
 
 
 
 
 
 Senior Term Loan, LIBOR+5% (1.5% floor) cash due 1/31/2016 (13)
 
 
 
1,608

 
1,609

 
1,609

 Subordinated Term Loan, 10% cash 3.875% PIK due 2/1/2017
 
 
 
40,341

 
31,389

 
1,046

 First Lien Revolver, LIBOR+5% (1.5% floor) cash due 1/31/2016 (13)
 
 
 
2,671

 
2,671

 
2,671

 
 
 
 
 
 
35,669

 
5,326


See notes to Consolidated Financial Statements.


8

Fifth Street Finance Corp.
Consolidated Schedule of Investments
March 31, 2016
(dollar amounts in thousands)
(unaudited)

Portfolio Company/Type of Investment (1)(2)(5)(14)
 
Industry
 
Principal (8)

 
Cost
 
Fair Value

 Maverick Healthcare Group, LLC (9)
 
Healthcare equipment
 
 
 
 
 
 
 First Lien Term Loan A, LIBOR+5.5% cash (1.75% floor) cash due 12/31/2016 (13)
 
 
 
$
16,149

 
$
15,977

 
$
16,187

 First Lien Term Loan B, LIBOR+9% cash (1.75% floor) cash due 12/31/2016 (13)
 
 
 
38,386

 
38,294

 
37,793

 CapEx Line, LIBOR+5.75% (1.75% floor) cash due 12/31/2016 (13)
 
 
 
1,253

 
1,222

 
1,240

 
 
 
 
 
 
55,493

 
55,220

 Refac Optical Group
 
Specialty stores
 
 
 
 
 
 
 First Lien Term Loan A, LIBOR+7.5% cash due 9/30/2018 (13)
 
 
 
7,553

 
7,472

 
7,504

 First Lien Term Loan B, LIBOR+8.5% cash, 1.75% PIK due 9/30/2018 (13)
 
 
 
34,127

 
33,937

 
33,951

 First Lien Term Loan C, 12% cash due 9/30/2018
 
 
 
3,416

 
3,416

 
3,381

 First Lien Revolver, LIBOR+7.5% cash due 9/30/2018 (13)
 
 
 
1,600

 
1,589

 
1,600

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

 

 550.9435 Series A-2 Preferred Stock in Refac Holdings, Inc.
 
 
 
 
 
305

 

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

 
717

 
 
 
 
 
 
47,719

 
47,153

 Baird Capital Partners V, LP
 
Multi-sector holdings
 
 
 
 
 
 
 0.4% limited partnership interest (11)
 
 
 
 
 
1,000

 
859

 
 
 
 
 
 
1,000

 
859

 Discovery Practice Management, Inc. (9)
 
Healthcare services
 
 
 
 
 
 
 Senior Term Loan, LIBOR+7.5% cash due 11/4/2018 (13)
 
 
 
25,458

 
25,413

 
25,543

 Senior Revolver, LIBOR+7% cash due 11/4/2018 (13)
 
 
 
1,000

 
996

 
1,000

 Capex Line A, LIBOR+7% cash due 11/4/2018 (13)
 
 
 
1,313

 
1,313

 
1,313

 Capex Line B, LIBOR+7% cash due 11/4/2018 (13)
 
 
 
1,500

 
1,500

 
1,500

 
 
 
 
 
 
29,222

 
29,356

 Milestone Partners IV, L.P.
 
Multi-sector holdings
 
 
 
 
 
 
 0.85% limited partnership interest (11)
 
 
 
 
 
1,727

 
1,899

 
 
 
 
 
 
1,727

 
1,899

 National Spine and Pain Centers, LLC
 
Healthcare services
 
 
 
 
 
 
 Mezzanine Term Loan, 11% cash 1.6% PIK due 9/27/2020
 
 
 
30,472

 
30,406

 
30,350

 317,282.97 Class A Units
 
 
 
 
 
317

 
525

 
 
 
 
 
 
30,723

 
30,875

 RCPDirect, L.P.
 
Multi-sector holdings
 
 
 
 
 
 
 0.91% limited partnership interest (11)
 
 
 
 
 
802

 
971

 
 
 
 
 
 
802

 
971

 Riverside Fund V, L.P.
 
Multi-sector holdings
 
 
 
 
 
 
 0.48% limited partnership interest (11)
 
 
 
 
 
976

 
600

 
 
 
 
 
 
976

 
600

See notes to Consolidated Financial Statements.

9

Fifth Street Finance Corp.
Consolidated Schedule of Investments
March 31, 2016
(dollar amounts in thousands)
(unaudited)

Portfolio Company/Type of Investment (1)(2)(5)(14)
 
Industry
 
Principal (8)

 
Cost
 
Fair Value

 ACON Equity Partners III, LP
 
 
 
 
 
 
 
 
 0.13% limited partnership interest (11)
 
Multi-sector holdings
 
 
 
$
722

 
$
548

 
 
 
 
 
 
722

 
548

 BMC Acquisition, Inc.
 
Other diversified financial services
 
 
 
 
 
 
 500 Series A Preferred Shares
 
 
 
 
 
500

 
677

 50,000 Common Shares
 
 
 
 
 
1

 

 
 
 
 
 
 
501

 
677

 Ansira Partners, Inc.
 
Advertising
 
 
 
 
 
 
 Second Lien Term Loan, LIBOR+8.5% (1% floor) cash due 4/5/2021 (13)
 
 
 
$
38,000

 
38,000

 
37,649

 250 Preferred Units of Ansira Holdings, LLC (6)
 
 
 
 
209

 
221

 250 Class A Common Units of Ansira Holdings, LLC
 
 
 
 
 

 
288

 
 
 
 
 
 
38,209

 
38,158

 Edmentum, Inc.
 
Education services
 
 
 
 
 
 
 Unsecured Senior PIK Note, 8.5% PIK due 6/9/2020
 
 
 
2,141

 
2,141

 
1,934

 Unsecured Junior PIK Note, 10% PIK due 6/9/2020
 
 
9,727

 
9,727

 
8,756

 Unsecured Revolver, 5% cash due 6/9/2020
 
 
 
932

 
932

 
932

 126,127.80 Class A Common Units
 
 
 
 
 
126

 

 
 
 
 
 
 
12,926

 
11,622

 I Drive Safely, LLC
 
Education services
 
 
 
 
 
 
125,079 Class A Common Units of IDS Investments, LLC
 
 
 
 
 
1,000

 
642

 
 
 
 
 
 
1,000

 
642

 Yeti Acquisition, LLC (9)
 
Leisure products
 
 
 
 
 
 
 First Lien Term Loan A, LIBOR+8% (1.25% floor) cash due 6/15/2017 (13)
 
 
 
29,041

 
29,034

 
29,066

 First Lien Term Loan B, LIBOR+11.25% (1.25% floor) cash 1% PIK, due 6/15/2017 (13)
 
 
 
3,375

 
3,372

 
3,382

 First Lien Revolver, LIBOR+8% (1.25% floor) cash due 6/15/2017 (13)
 
 
 
7,500

 
7,497

 
7,500

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

 
31,371

 
 
 
 
 
 
41,403

 
71,319

 Vitalyst Holdings, Inc.
 
IT consulting & other services
 
 
 
 
 
 
 Subordinated Term Loan, 12% cash 1.5% PIK due 9/5/2018
 
 
 
19,532

 
19,532

 
19,067

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

 
475

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

 

 
 
 
 
 
 
20,282

 
19,542

 Beecken Petty O'Keefe Fund IV, L.P.
 
Multi-sector holdings
 
 
 
 
 
 
 0.5% limited partnership interest (11)
 
 
 
 
 
1,302

 
1,252

 
 
 
 
 
 
1,302

 
1,252

 First American Payment Systems, LP
 
Diversified support services
 
 
 
 
 
 
 Second Lien Term Loan, LIBOR+9.5% (1.25% floor) cash due 4/12/2019 (13)
 
 
 
23,304

 
23,304

 
22,488

 First Lien Revolver, LIBOR+4.5% (1.25% floor) cash due 10/12/2017 (13)
 
 
 
2,875

 
2,875

 
2,720

 
 
 
 
 
 
26,179

 
25,208

 Dexter Axle Company
 
Auto parts & equipment
 
 
 
 
 
 
 1,500 Common Shares in Dexter Axle Holding Company
 
 
 
 
 
1,643

 
3,186

 
 
 
 
 
 
1,643

 
3,186

 Comprehensive Pharmacy Services LLC
 
Pharmaceuticals
 
 
 
 
 
 
 Mezzanine Term Loan, 11.25% cash 1.5% PIK due 11/30/2019
 
 
 
14,688

 
14,688

 
14,560

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

 
2,011

 
 
 
 
 
 
16,688

 
16,571

See notes to Consolidated Financial Statements.


10

Fifth Street Finance Corp.
Consolidated Schedule of Investments
March 31, 2016
(dollar amounts in thousands)
(unaudited)

Portfolio Company/Type of Investment (1)(2)(5)(14)
 
Industry
 
Principal (8)

 
Cost
 
Fair Value

 Garretson Firm Resolution Group, Inc.
 
Diversified support services
 
 
 
 
 
 
 First Lien Revolver, LIBOR+6.5% (1% floor) cash due 5/22/2020 (13)
 
 
 
 
 
$

 
$

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

 
640

 50,000 Common Units in GRG Holdings, LP
 
 
 
 
 
5

 
18

 
 
 
 
 
 
500

 
658

 Teaching Strategies, LLC
 
Education services
 
 
 
 
 
 
 Senior Term Loan, LIBOR+5.5% (0.5% floor) cash due 10/1/2019 (13)
 
 
 
$
7,467

 
7,461

 
7,440

 Senior Revolver, LIBOR+5.5% (0.5% floor) cash due 10/1/2019 (10)(13)
 
 
 
 
 
(1
)
 

 
 
 
 
 
 
7,460

 
7,440

 Omniplex World Services Corporation (9)
 
Security & alarm services
 
 
 
 
 
 
 Subordinated Term Loan, 12.25% cash 1.25% PIK due 12/21/2018
 
 
 
13,097

 
13,097

 
12,918

 500 units of Class A Common Units in Omniplex Holdings Corp.
 
 
 
 
 
500

 
622

 64.041 units of Class A-1 Common Units in Omniplex Holdings Corp.
 
 
 
 
 
64

 

 
 
 
 
 
 
13,661

 
13,540

 Dominion Diagnostics, LLC (9)
 
Healthcare services
 
 
 
 
 
 
 Subordinated Term Loan, 11% cash 2% PIK due 10/8/2019
 
 
 
16,235

 
16,195

 
2,807

 
 
 
 
 
 
16,195

 
2,807

 AdVenture Interactive, Corp. (9)
 
Advertising
 
 
 
 
 
 
 First Lien Term Loan, LIBOR+6.75% (1.25% floor) cash due 3/22/2018 (13)
 
 
 
90,720

 
90,677

 
88,051

 First Lien Revolver, LIBOR+6.75% (1.25% floor) cash due 3/22/2018 (10)(13)
 
 
 
 
 
(2
)
 

 2,419.7 Preferred Units of AVI Holdings, L.P.
 
 
 
 
 
1,696

 
421

 
 
 
 
 
 
92,371

 
88,472

 Sterling Capital Partners IV, L.P.
 
Multi-sector holdings
 
 
 
 
 
 
 0.2% limited partnership interest (11)
 
 
 
 
 
1,479

 
976

 
 
 
 
 
 
1,479

 
976

 RP Crown Parent, LLC
 
Application software
 
 
 
 
 
 
 First Lien Revolver, LIBOR+5.5% (1.25% floor) cash due 12/21/2017 (10)(13)
 
 
 


 
(269
)
 

 
 
 
 
 
 
(269
)
 

 Advanced Pain Management
 
Healthcare services
 
 
 
 
 
 
 First Lien Term Loan, LIBOR+8.5% (1.25% floor) cash due 2/26/2018 (13)
 
 
 
24,000

 
24,000

 
23,722

 
 
 
 
 
 
24,000

 
23,722

 Rocket Software, Inc.
 
Internet & software services
 
 
 
 
 
 
 Second Lien Term Loan, LIBOR+8.75% (1.5% floor) cash due 2/8/2019 (13)
 
 
 
10,475

 
10,454

 
10,383

 
 
 
 
 
 
10,454

 
10,383

See notes to Consolidated Financial Statements.


11

Fifth Street Finance Corp.
Consolidated Schedule of Investments
March 31, 2016
(dollar amounts in thousands)
(unaudited)

Portfolio Company/Type of Investment (1)(2)(5)(14)
 
Industry
 
Principal (8)

 
Cost
 
Fair Value

 TravelClick, Inc.
 
Internet software & services
 
 
 
 
 
 
 Second Lien Term Loan, LIBOR+7.75% (1% floor) cash due 11/8/2021 (13)
 
 
 
$
4,450

 
$
3,963

 
$
3,961

 
 
 
 
 
 
3,963

 
3,961

 Pingora MSR Opportunity Fund I-A, LP
 
Thrift & mortgage finance
 
 
 
 
 
 
 1.9% limited partnership interest (11)
 
 
 
 
 
9,545

 
9,369

 
 
 
 
 
 
9,545

 
9,369

 Credit Infonet, Inc. (9)
 
Data processing & outsourced services
 
 
 
 
 
 
 Subordinated Term Loan, 12.25% cash 1.25% PIK due 10/26/2018
 
 
 
13,654

 
13,654

 
13,081

 
 
 
 
 
 
13,654

 
13,081

 Bracket Holding Corp. (9)
 
Healthcare services
 
 
 
 
 
 
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 2/15/2020 (13)
 
 
 
32,000

 
32,000

 
31,351

 50,000 Common Units in AB Group Holdings, LP
 
 
 
 
 
500

 
552

 
 
 
 
 
 
32,500

 
31,903

 HealthEdge Software, Inc.
 
Application software
 
 
 
 
 
 
 482,453 Series A-3 Preferred Stock Warrants (exercise price $1.450918)
 
 
 
 
 
213

 
731

 
 
 
 
 
 
213

 
731

 InMotion Entertainment Group, LLC
 
Consumer electronics
 
 
 
 
 
 
 First Lien Term Loan A, LIBOR+7.75% (1.25% floor) cash due 10/1/2018 (13)
 
 
 
13,295

 
13,277

 
13,047

 First Lien Term Loan B, LIBOR+7.75% (1.25% floor) cash due 10/1/2018 (13)
 
 
 
5,795

 
5,585

 
5,660

 First Lien Revolver, LIBOR+6.75% (1.25% floor) cash due 10/1/2018 (13)
 
 
 
4,904

 
4,901

 
4,904

 CapEx Line, LIBOR+7.75% (1.25% floor) cash due 10/1/2018 (13)
 
 
 
861

 
857

 
861

 1,000,000 Class A Units in InMotion Entertainment Holdings, LLC
 
 
 
 
 
1,000

 
1,147

 
 
 
 
 
 
25,620

 
25,619

 BMC Software Finance, Inc.
 
Application software
 
 
 
 
 
 
 First Lien Revolver, LIBOR+4% (1% floor) cash due 9/10/2018 (13)
 
 
 
 
 

 

 
 
 
 
 
 

 

 Thing5, LLC (9)
 
Data processing & outsourced services
 
 
 
 
 
 
 First Lien Term Loan, LIBOR+7% (1% floor) cash due 10/11/2018 (12)(13)
 
 
 
54,383

 
54,361

 
51,142

 First Lien Revolver, LIBOR+7% (1% floor) cash due 10/11/2018 (13)
 
 
 
1,000

 
997

 
1,000

 2,000,000 in T5 Investment Vehicle, LLC
 
 
 
 
 
2,000

 
40

 
 
 
 
 
 
57,358

 
52,182

 Epic Health Services, Inc.
 
 
 
 
 
 
 
 
 Second Lien Term Loan, LIBOR+8.25% (1% floor) cash due 8/17/2021 (13)
 
Healthcare services
 
24,667

 
24,263

 
24,322

 
 
 
 
 
 
24,263

 
24,322

See notes to Consolidated Financial Statements.

12

Fifth Street Finance Corp.
Consolidated Schedule of Investments
March 31, 2016
(dollar amounts in thousands)
(unaudited)

Portfolio Company/Type of Investment (1)(2)(5)(14)
 
Industry
 
Principal (8)

 
Cost
 
Fair Value

 Kason Corporation
 
Industrial machinery
 
 
 
 
 
 
 Mezzanine Term Loan, 11.5% cash 1.75% PIK due 10/28/2019
 
 
 
$
5,849

 
$
5,849

 
$
5,719

 498.6 Class A Preferred Units in Kason Investment, LLC