Fifth Street BDCs originate $563m

Fifth Street Management’s BDCs exited a combined $235m during the quarter. 

Fifth Street Management’s business development companies (BDC) – Fifth Street Senior Floating Rate Corp. and Fifth Street Finance Corp. – closed a combined $563 million in gross originations during the first quarter.

Fifth Street Finance originated $467 million and Senior Floating Rate Corp. originated $96 million, according to a pair of announcements released this week.

Fifth Street Finance funded $418 million in new originations through its two revolving credit facilities. That BDC issued $250 million of five-year unsecured institutional notes with an annual coupon of 4.875 percent. Fifth Street Finance maintained average leverage within a range of 0.6x to 0.7x debt-to-equity.

“We exited $188 million of portfolio investments in the March quarter, of which $98 million were related to syndications to other investors,” according to a statement from Fifth Street Finance. “Our capital markets platform is starting to scale and we are in various stages of discussions with multiple parties regarding syndications of other loans.” 

Fifth Street Senior Floating Rate exited $47 million during the quarter.

While both BDCs specialise in mid-market lending, Fifth Street Senior Floating Rate’s investment strategy calls for investments in senior secured floating rate products, which include first lien, unitranche and second lien debt instruments. Fifth Street Finance’s strategy includes one-stop financings, first lien, second lien as well as mezzanine debt and equity co-investments. 

Fifth Street Management has more than $4 billion under management. The firm maintains offices in New York, Greenwich, Chicago, Los Angeles, Palo Alto and Dallas.