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Fifth Street Finance Corp. (FSC) is adding new deals at a feverish pace. Monday, the Company announced on Global Newswire the signing of $135.5 million in term sheets during its third fiscal quarter of 2010 to date, all of which are first lien investments. These term sheets are in addition to the $46.5M of deals that Fifth Street has already closed during the current quarter. That’s just over $180M. To put this into perspective, Fifth Street added just $33M in new investments in the last reported fiscal quarter.

The signed term sheets are as follows:

On May 10, 2010, Fifth Street executed a non-binding term sheet for $54.5M for an investment in a clinical drug testing laboratory.

On May 17, 2010, Fifth Street executed a non-binding term sheet for $33.0M for an investment in a manufacturer and distributor of connectivity products for industrial and commercial markets.

On May 20, 2010, Fifth Street executed a non-binding term sheet for $48.0M for an investment in a provider of pediatric home health services.

Of course, term sheets are not the same as closed and funded transactions. The proposed investments are subject to the completion of Fifth Street’s due diligence, approval process and documentation, and may not result in completed investments. Fifth Street may syndicate a portion of any of these investments.

The BDC Reporter was worrying a few weeks ago that with the dilution from a fresh equity offering and the relatively tepid new asset formation in the quarter ended March 2010 that FSC might be a few quarters off having its earnings catch up with its (recently increased) dividend of $0.32 a quarter. No longer. Distributable Net Investment Income Per Share (FSC’s metric for recurring earnings per share) seems poised to meet or exceed the dividend. That suggests another dividend increase in possibly on the cards.

Disclosure: Long FSC

Source: Fifth Street Finance: Another Dividend Increase Ahead?