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GlobeNewswire (Wed, 6:30PM)
Fifth Street Finance Corp. Releases Its March 2014 Newsletter: Multi-Point Plan Positively Impacting EarningsGlobeNewswire (Mar 19, 2014)
GlobeNewswire (Mar 7, 2014)
GlobeNewswire (Feb 14, 2014)
GlobeNewswire (Feb 6, 2014)
GlobeNewswire (Feb 6, 2014)
GlobeNewswire (Jan 29, 2014)
at CNBC.com (Feb 18, 2011)
at MarketWatch.com (Jun 16, 2010)
FSC vs. ETF Alternatives
Wednesday, Mar 199:02 AM
Wednesday, Mar 199:02 AM| 5 Comments
- "The initiatives to improve net investment income ... are generating the returns we anticipated," says Fifth Street Finance (FSC) in its March 2014 newsletter. "As a result, we estimate that we are on pace for the March quarter to cover the current dividend level."
- "Further progress on our initiatives should result in the addition of higher yielding assets to the portfolio with favorable risk-adjusted returns. This may provide our Board of Directors the opportunity to declare a higher dividend level in the future."
- Shares +0.2% premarket
Wednesday, Mar 198:56 AM
Wednesday, Mar 198:56 AM| Comment!
- Fifth Street Senior Floating Rate (FSFR) announces plans to form a partnership with GF Funding (controlled by the Glick family) to invest in senior secured loans of middle market companies. The Glick family was an initial investor is FSFR's IPO last year and holds about a 2% stake in the company.
- The deal "should allow for accelerated growth and significant earnings accretion for FSFR," says CEO Len Tannenbaum.
- FSFR is externally managed by Fifth Street Finance (FSC).
- Press release
Monday, Mar 107:51 AM
Monday, Mar 107:51 AM| Comment!
- Fifth Street Technology Partners has closed three new investments totaling $55M YTD. Fifth Street Finance (FSC) funded the deals and received warrants for each, boosting the size of the company's venture lending portfolio to $79M.
- Michael David, chief of Fifth Street Technology Partners: "We continue to build our brand with the venture capital community, along with a robust pipeline of pending opportunities."
- Press release
Friday, Mar 77:43 AM|Friday, Mar 77:43 AM| 2 Comments
Tuesday, Mar 43:30 PM
Tuesday, Mar 43:30 PM| 16 Comments
- Unless the SEC changes the sector's fee-reporting standards by May 15, Russell told clients last night it will remove BDCs from its indexes during its June reconstitution.
- Earlier calling such a move somewhat of a nonevent, Wells' team sounds like it's singing a different tune now. They believe there's a chance the SEC does change the rules, because not doing so would "likely drive sophisticated institutional capital away from the space." More: "We believe this is the very capital that is adept on calling out subpar BDCs. … In our view, a healthy and sophisticated public market is needed to ensure that only those deserving BDCs are the ones to receive the capital."
- It's no little deal as an estimated 8% of all BDC shares are owned by funds benchmarked to the Russell 2000 index.
- Index maker CRSP, whose benchmarks are tracked by Vanguard, already bars BDCs, calling them "essentially publicly traded private investment vehicles ... [we] excluded BDCs from the get-go, recognizing that they really don’t represent equity securities of the type that are trying to be captured in equity indexes."
- In a big green down for the markets, most of the BDC sector is in the red. Prospect (PSEC -0.5%), Fifth Street (FSC -1.5%), Ares(ARCC -0.9%), BlackRock Kelso (BKCC -1.6%), Medley (MCC -0.9%) THL (TCPC -1.6%), NGP (NGPC -2.9%), New Mountain (NMFC -1.6%), PennantPark (PNNT -0.5%), Triangle (TCAP -0.7%).
- ETFs: BDCL, BDCS, BIZD
Wednesday, Feb 261:16 PM
Wednesday, Feb 261:16 PM| 14 Comments
- WIth business development companies getting the boot from S&P indices, will the Russell follow suit? It's a significant issue as investors are far more heavily invested in BDCs though the Russell indices than through S&P, writes Brendan Conway. He notes ownership of BDCs by Russell-tracking index funds are as high as 38 days worth of trading volume, and Wells Fargo estimates there are 24 BDCs where 10 or more days of average volume would be required to unload them.
- Wells, however, does not see Russell following S&P's lead, with item #1 being Russell's desire to "represent small cap reality." "Russell Indices receive acclaim because they are willing to provide investors access to the true investable small cap universe. To the extent BDCs are excluded, this would deprive investors the opportunity to invest in what has become a very large/growing industry."
- The following list is those BDCs with 10 or more days of average volume in index funds tracking Russell indices.
- NGPC 38.23 days of volume, CSWC 29 days, SCM 23.5, FDUS 20.7, GARS 20, MVC 19.7, SUNS 18, WHF 17.8, SLRC 17.2, CPTA 16, MCGC 15.1, BKCC 14.9, TCRD 14, HRZN 14, TCAP 13.9, PNNT 13.3, HTGC 12.6, TICC 12.6, GLAD, 12.4, GBDC 12.3, KCAP 12.2, TAXI 11.8, MAIN 11.4, NMFC 9.98.
- Related ETFs: BDCL, BDCS, BIZD
- Other major names - no doubt included in the indices, but whose holdings are less than 10 days of average trading volume: PSEC, FSC, ARCC, AINV, MCC, HTGC, TCPC, FULL, GBDC
Tuesday, Feb 2512:20 PM
Tuesday, Feb 2512:20 PM| 40 Comments
- "After consulting with clients concerned with certain reporting requirements, expenses, and investment restrictions relating to business development companies (BDCs), S&P Dow Jones has decided to remove all identified BDCs from its U.S. Indices.
- Press release
- BDC ETFs: BDCL, BDCS, BIZD
- Earlier: Prospect Capital (PSEC -2.7%) is removed from the S&P 600 SmallCap Index and Apollo Investment (AINV -7.3%) is removed from the S&P 400 MidCap Index.
- Prospect's market cap is $3.4B, Apollo's $1.9B. Other BDCs with market caps over $1B: Fifth Street (FSC -0.8%), Ares Capital (ARCC -1.5%), American Capital (ACAS -1.7%), Main Street (MAIN -1.7%), Hercules Technology (HTGC -2%). Close enough to $1B for an argument: Solar Capital (SLRC -1.8%) and Golub Capital (GBDC -0.2%).
Monday, Feb 244:41 PM|Monday, Feb 244:41 PM| Comment!
Thursday, Feb 67:15 AM
Thursday, Jan 309:00 AM
Thursday, Jan 309:00 AM| 5 Comments
- Funded originations of $645M during Q4 and $156M of exits brought leverage to the low-end of the target range of 0.6x-0.7x debt-to-equity, says Fifth Street Finance (FSC) in its January newsletter. Management expects maintaining this leverage range in the March quarter, "provid(ing) confidence in future net investment income per share that we expect should meet or exceed the current dividend level."
- Earnings results are set for February 6.
- Previous: FSC tumbles in late November after cutting the dividend.
Thursday, Dec 192013, 8:34 PM
Thursday, Dec 192013, 8:34 PM| 4 Comments
- Generating net investment income exceeding the current dividend level "should be achievable," says Fifth Street Finance (FSC) in its December newsletter, noting the company's average yield on debt investments has stabilized, leverage is near the target range, and multiple initiatives are underway to grow NII.
- Thus far in Q4, originations of $528M, sales, repayments, and syndications of $143M, and the current pipeline should bring leverage to near the low end of the 0.6x to 0.7x debt-to-equity range. Net asset value per share should be stable with the end of Q3 ($9.85), and management does not expect to issue more shares as long as the stock remains below NAV.
- FSC shares have fallen and can't get up ever since the company's "frustrating" Q3 and surprise dividend cut.
- The stock's off 0.2% AH to $9.11, a 7.5% discount to the $9.85 NAV.
Tuesday, Dec 172013, 2:52 PM
Tuesday, Dec 172013, 2:52 PM| 4 Comments
- Fifth Street Finance (FSC +0.2%) CEO Leonard Tannenbaum takes advantage of the recent dip in the stock price (off about 10% since disappointing earnings and a cut in the dividend) to add a small bit to his stake, buying 20K shares on Friday at $8.98 each.
- He now owns more than 2M shares of company stock.
- SEC Form 4
Wednesday, Dec 112013, 4:05 PM
Monday, Dec 22013, 10:22 AM
Monday, Dec 22013, 10:22 AM| Comment!
- "The market seems to have recalibrated expectations lower," on Fifth Street Finance (FSC -2.2%) following its "disappointing" FQ4 and dividend cut last week, says JPMorgan, restating its Buy rating but cutting the price target by one dollar to $10. The team notes the dividend yield remains a "secure" 10% and the stock trades below NAV.
- UBS last week cuts its price target by one dollar to $10.50, but also rates the stock a Buy.
- Last week's earnings coverage
Monday, Dec 22013, 8:36 AM|Monday, Dec 22013, 8:36 AM| Comment!
Wednesday, Nov 272013, 2:15 PM
Wednesday, Nov 272013, 2:15 PM| 1 Comment
- "It's been extremely frustrating," says Fifth Street Finance (FSC -1.4%) CEO Len Tannenbaum on the earnings call (transcript), as the company has struggled executing on its five-point plan and yesterday cut the dividend to be more in line with reduced earnings.
- He blames this FQ4's particularly weak result on prepayments being front-loaded coupled with a "lousy" origination number of $120M as several deal closing slipped into FQ1. "The board looked at $0.24 (NII) versus our dividend level, and said, all right, we just have not earned our dividend for several quarters and we have to put it at least temporarily in line with the current earnings level."
- Responding to a question about whether the board will consider cutting the fee structure in light of the company's move into first lien, safer, lower-yielding assets, President Bernard Berman dances around a bit, but does promise an improvement in general and administrative expenses next year.
- One thing investors don't have to worry about in the short-term is a stock offering as Fifth Street - given the tough deal environment - is sitting on plenty of excess capital (there was a secondary in September).
- Company specific? Thus far, the rest of the BDC sector is shrugging off FSC's weak results.
- BDC ETFs: BDCL, BDCS, BIZD