FSFR closes on $309m debt securitisation

One of the BDCs at Fifth Street Asset Management has closed on $309 million in long-term secured notes that refinance its existing $200 million facility with Natixis.  

Fifth Street Senior Floating Rate Corp. (FSFR), one of the BDCs at Fifth Street Asset Management, has closed on a $309 million debt securitisation transaction, the firm announced yesterday (1 June). FSFR is issuing $222.6 million of long-term secured notes to refinance its existing $200 million credit facility arranged by Natixis. The facility was originally created in 2013 and has been refinanced several times since.

The 2015 issuance consists of $126 million of Class A-T notes that bear an interest rate of LIBOR + 1.8 percent; $29 million of Class A-S notes that have an interest rate of LIBOR + 1.55 percent; $20 million of Class A-R revolving notes at commercial paper + 1.8 percent; $25 million of Class B notes that carry an interest rate of LIBOR + 2.65 percent and $22.6 million of Class C notes that have a rate of LIBOR + 3.25 percent and are currently held by FSFR.

FSFR's debt securitization is primarily invested in mid-market senior secured loans that Fifth Street originates in house. The vehicle has a four-year reinvestment period with a ten-year maturity and two-year non-call period. Natixis Securities Americas served as the placement agent and Natixis’ New York branch served as the Class A-R note agent.

“FSFR was able to capitalize on an attractive capital markets environment to optimize our capital structure and lock in low-cost, long-term financing,” FSFR's chief executive, Ivelin Dimitrov, said in a statement. “We believe that FSFR is well-positioned to continue investing in senior secured floating rate loans and take advantage of positive business trends, including declining bank participation in middle market leveraged lending,” he added.

Fifth Street Asset Management, which is publicly-traded under FSAM, runs two BDCs, the FSFR, which went public in July 2013, and its original Fifth Street Finance Corp (FSC) that was publicly listed in 2008. The firm is headquartered in Greenwich, Connecticut, and has about $6 billion in assets under management across the BDCs and other strategies.