Citibank provides credit facility to Fifth Street BDC

The $175 million senior credit facility from Citi follows a $200 million credit line provided by Natixis in September.

The Fifth Street Senior Floating Rate Corp, a BDC managed by Fifth Street Asset Management, has signed a $175 million senior secured revolving credit facility with Citibank, according to a statement from Fifth Street on 21 January. The facility is available for drawdown for three years and matures in January 2020. The interest rate ranges between LIBOR plus 200 and 225 basis points for the first three years. 

The loan from Citibank follows a $200 million credit facility provided by French lender Natixis last year. The increased leverage offers FSFR additional capital to achieve its strategy of providing floating rate, senior secured loans to private equity sponsor-backed companies.  

FSFR also expects to benefit from the diversification of institutional lender relationships, the firm said in the statement. 

“The additional debt capacity should allow FSFR to continue investing in senior secured floating rate loans with strong risk-adjusted returns in support of our private equity clients,” said Ivelin Dimitrov, chief executive of FSFR, in a statement. “We appreciate Citibank's support and view their partnership as a testament to the strength of FSFR's value proposition and the Fifth Street platform.” 

Fifth Street Senior Floating Rate Corp is a specialty finance provider that provides floating rate senior secured loans to mid-sized companies, primarily in connection with investments by PE sponsors.  

The business development company is externally managed by a subsidiary of Fifth Street Asset Management, a Greenwich, Connecticut-based credit manager with $6 billion in assets. Fifth Street's platform has the ability to hold loans up to $250 million and structure and syndicate transactions of up to $500 million.