Tue, Sep. 13, 11:26 AM
Mon, Sep. 12, 10:04 AM
- The sector has been a big beneficiary of the rates lower-for-longer thesis, the bounce in oil and the related major move higher in high-yield.
- All three of those themes have been called into question since Labor Day. SA author BDC Buzz reminds not all BDCs are created equal, and says the higher risk ones will likely be underperformers in a correction ... Think Prospect Capital (PSEC -4%), TICC Capital (TICC -1%) and KCAP Financial (KCAP -2.7%). Fifth Street Finance (FSC -2%), Medley Capital (MCC -2.6%) and Full Circle Capital (FULL -0.4%) also fit the bill, and PennantPark (PNNT -1.5%), Gladstone (GLAD -3.4%), and Apollo Investment (AINV -1.2%) have the highest amount of oil exposure.
- Those BDCs with "true" first-lien assets and stable NAV will be the outperformers: New Mountain Finance (NMFC -1.8%), Solar Senior (SUNS -0.1%), Goldman Sachs BDC (GSBD -0.7%), Golub Capital (GBDC -0.5%), FS Investment (FSIC -1.7%), Monroe Capital (MRCC -0.1%), TPG (TSLX -0.6%), Main Street (MAIN -0.1%), PennatPark Floating Rate (PFLT -0.1%), Hercules (HTGC -1.4%), Horizon (HRZN -1.8%), and TCP Capital (TCPC -0.7%) are worth a look.
- ETFs: BDCL, BDCS, BIZD, FGB, LBDC
Fri, Aug. 26, 5:35 PM
Tue, Aug. 9, 7:24 AM
- FQ3 net investment income of $29.1M or $0.20 per share vs. $26.5M and $0.18 in FQ2. Dividend run rate is $0.18.
- Net asset value per share of $8.15 slips from $8.33 three months earlier. Last night's close was $5.83.
- 1.9M shares repurchased during quarter for $10M.
- Dial-in CC at 10 ET.
- Previously: Fifth Street Finance beats by $0.02, beats on total investment income (Aug. 9)
- FSC +2% in very thin premarket action.
Tue, Aug. 9, 6:37 AM
Thu, Aug. 4, 9:08 AM
- Fifth Street Finance (NASDAQ:FSC), along with Fifth Street Asset Management (NASDAQ:FSAM) and Fifth Street Senior Floating Rate (NASDAQ:FSFR) in late March were subpoenaed by the SEC for production of documents relating to a variety of issues.
- Among the issues under investigation are the valuation of FSC's portfolio companies and investments, expenses allocated or charged to FSC and FSFR, and Fifth Street Opportunities Fund's trading in the securities of publicly-traded BDCs.
Fri, Jun. 3, 7:47 AM
Tue, May 24, 10:59 AM
- Zigging (modestly lower) while most of the rest of the BDC sector and the market in general heads higher is Fifth Street Finance (FSC -0.6%) as Maxim downgrades to Hold from Buy.
- The stock's down 22% this year, and 28% Y/Y.
Wed, May 11, 7:56 AM
- Fifth Street Asset Management (NASDAQ:FSAM) affiliate Fifth Street Management served as joint lead arranger and joint book manager for a first lien credit facility supporting GTCR's acquisition of Onvoy, LLC.
- The facility included investments from Fifth Street Finance (NASDAQ:FSC) and Fifth Street Senior Floating Rate (NASDAQ:FSFR).
- Private-equity firm GTCR is a longtime client of Fifth Street, and this their 11th deal together, including two acquisitions this year.
- Source: Press Release
Tue, May 10, 7:17 AM
- FQ2 adjusted net investment income of $26.5M or $0.18 per share vs. $26.6M and $0.18 in FQ1. Dividend quarterly run rate is $0.18. This Q's adjusted NII excludes professional fees related to pending litigation and the now-resolved proxy contest.
- Net asset value per share of $8.33 falls from $8.41 three months ago. Last night's close was $5.10, a near-39% discount to book.
- 3.1M shares bought back during quarter, and another 1.9M repurchased since quarter's end - a total of 5M shares for $25.1M (average $5.02 each).
- The permanent reduction in base management fees (a cut of more than 10%) went into effect during FQ2.
- Conference call (dial-in) at 10 ET
- Previously: Fifth Street Finance NII in-line, misses on total investment income (May 10)
- FSC flat premarket
Tue, May 10, 6:34 AM
Mon, May 9, 7:30 AM
- Fifth Street Finance (NASDAQ:FSC) portfolio company First Star Aviation sold one 2002 Airbus A320-200 airplane to Finnair Aircraft Finance, realizing an unlevered IRR of 19.1% from the combined rents collected and subsequent sale. First Star had originally purchased the plane in February 2014.
- Since its launch in 2013, First Star has invested in 11 mid-life aircraft and traded five of them.
- Source: Press release
Mon, Apr. 25, 12:46 PM
- With book values in decline, leverage naturally rises, says Fitch, but some in the sector are borrowing to buy back stock, pushing leverage even more.
- Fitch has had a negative outlook on the sector for two years, and earlier this year downgraded Apollo Investment (NASDAQ:AINV) and Fifth Street Finance (NASDAQ:FSC). This new report raises the concern that more downgrades are in the offing.
- Along with the price of oil and the broader market, BDCs have enjoyed a sizable rally since mid-February, with at least some of the sector now sitting in the green for the year.
- ETFs: BDCL, BDCS, BIZD, FGB
- Now read: Prospect Capital: A Flat Q3 NAV Is All I Am Looking For (April 25)
Fri, Feb. 19, 3:59 PM
- Analyst Jonathan Bock had upgraded Fifth Street Finance (FSC -4.6%) one month ago on hope activist investor RiverNorth Capital Management could drive meaningful change at the woefully underperforming company. After this morning's deal to pay off RiverNorth to make it go away, he downgrades.
- “[L]ittle change has occurred, in our view, and the same poorly performing manager (NASDAQ:FSAM) remains in place," says Bock. "Overall, we see this as a net negative for shareholders in that while the BDC will be relieved of potential proxy expenses, there are still class action lawsuits and the manager is now more entrenched than ever."
- It's "old fashioned greenmail" says Cantor's David Chiaverini, and he recommends BDC fans ignore the 15% dividend yield and cheap valuation, and look elsewhere.
- Of course, Len Tannenbaum notes he and FSAM now own 14.6% of Fifth Street Finance, so he's got an interest in seeing FSC do well.
- Previously: Fifth Street Asset Management soars after activist is paid off (Feb. 19)
Fri, Feb. 19, 10:13 AM
- RiverNorth Capital Management had been calling for an end to FIfth Street Asset Management's (FSAM +119.9%) management contract with Fifth Street Finance (FSC -5.8%), but Fifth Street ponied up some greenmail to make the activist go away.
- While the news may not be so good for beleaguered FSC shareholders, FSAM is no longer under the cloud of maybe losing its management deals.
- Throwing a small bone to its shareholders, FSC promises to buy back at least $50M of stock this year, including $25M as soon as practicable. The reduced management fee being paid to FSAM stays in place for now.
- Previously: Fifth Street comes to terms with activist (Feb. 19)
Fri, Feb. 19, 7:43 AM
- Under the terms of the deal, RiverNorth Capital Management - an owner of 8.7% of Fifth Street Finance (NASDAQ:FSC) and 5.7% of Fifth Street Floating Rate (NASDAQ:FSFR) - will sell its holdings of FSC to Fifth Street Asset Management (NASDAQ:FSAM) and Len Tannenbaum for $6.25 per share (vs. last night's close of $4.85).
- FSAM and Tannenbaum together will hold about 14.6% of FSC stock, making it the company's largest shareholder.
- RiverNorth also gets a warrant expiring in March 2017 to purchase shares in FSAM.
- RiverNorth won't contest any of FSC's board nominees, and drops its demand for a termination of the management agreement between FSC and FSAM.