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Table of Contents

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)

 

  þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
       OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2012

OR

 

  ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
       OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 1-33901

Fifth Street Finance Corp.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

 

DELAWARE    26-1219283

(State or jurisdiction of

incorporation or organization)

  

(I.R.S. Employer

Identification No.)

10 Bank Street, 12th Floor

White Plains, NY

   10606
(Address of principal executive office)    (Zip Code)

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE:

(914) 286-6800

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

 

Title of Each Class

  

Name of Each Exchange

on Which Registered

Common Stock, par value $0.01 per share

5.875% Senior Notes due 2024

  

The NASDAQ Global Select Market

The New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods as the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  þ    NO  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES  ¨     NO  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer  þ    Accelerated filer  ¨    Non-accelerated filer  ¨    Smaller reporting company  ¨
      (Do not check if a smaller reporting company)   

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act)    YES  ¨     NO  þ

The registrant had 106,004,967 shares of common stock outstanding as of February 5, 2013.

 

 

 


Table of Contents

FIFTH STREET FINANCE CORP.

FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 2012

TABLE OF CONTENTS

 

  

PART I — FINANCIAL INFORMATION

  

Item 1.

  

Consolidated Financial Statements (unaudited):

  
  

Consolidated Statements of Assets and Liabilities as of December 31, 2012 and September 30, 2012

     1   
  

Consolidated Statements of Operations for the three months ended December 31, 2012 and December 31, 2011

     2   
  

Consolidated Statements of Changes in Net Assets for the three months ended December 31, 2012 and  December 31, 2011

     3   
  

Consolidated Statements of Cash Flows for the three months ended December 31, 2012 and December 31, 2011

     4   
  

Consolidated Schedule of Investments as of December 31, 2012

     5   
  

Consolidated Schedule of Investments as of September 30, 2012

     14   
  

Notes to Consolidated Financial Statements

     22   

Item 2.

  

Management’s Discussion and Analysis of Financial Condition and Results of Operations

     52   

Item 3.

  

Quantitative and Qualitative Disclosures About Market Risk

     74   

Item 4.

  

Controls and Procedures

     75   
  

PART II — OTHER INFORMATION

  

Item 1.

  

Legal Proceedings

     76   

Item 1A.

  

Risk Factors

     76   

Item 2.

  

Unregistered Sales of Equity Securities and Use of Proceeds

     76   

Item 6.

  

Exhibits

     76   

Signatures

     77   


Table of Contents

PART I – FINANCIAL INFORMATION

 

Item 1. Consolidated Financial Statements

Fifth Street Finance Corp.

Consolidated Statements of Assets and Liabilities

(in thousands, except per share amounts)

(unaudited)

 

     December 31,
2012
    September 30,
2012
 
ASSETS   

Investments at fair value:

    

Control investments (cost December 31, 2012: $58,238; cost September 30, 2012: $58,557)

   $ 51,698      $ 53,240   

Affiliate investments (cost December 31, 2012: $29,964; cost September 30, 2012: $29,496)

     31,499        31,187   

Non-control/Non-affiliate investments (cost December 31, 2012: $1,481,966; cost September 30, 2012: $1,180,436)

     1,497,251        1,203,681   
  

 

 

   

 

 

 

Total investments at fair value (cost December 31, 2012: $1,570,168; cost September 30, 2012: $1,268,489)

     1,580,448        1,288,108   

Cash and cash equivalents

     37,438        74,393   

Interest and fees receivable

     8,583        7,652   

Due from portfolio company

     1,684        3,292   

Receivables from unsettled transactions

     250        1,750   

Deferred financing costs

     18,136        13,751   

Other assets

     145        56   
  

 

 

   

 

 

 

Total assets

   $ 1,646,684      $ 1,389,002   
  

 

 

   

 

 

 
LIABILITIES AND NET ASSETS   

Liabilities:

    

Accounts payable, accrued expenses and other liabilities

   $ 1,377      $ 978   

Base management fee payable

     1,548        6,573   

Incentive fee payable

     1,230        5,579   

Due to FSC, Inc.

     763        1,630   

Interest payable

     5,096        4,219   

Payments received in advance from portfolio companies

     41        40   

Offering costs payable

            162   

Credit facilities payable

     218,000        201,251   

SBA debentures payable

     181,750        150,000   

Convertible senior notes payable

     115,000        115,000   

Senior unsecured notes payable

     75,000          
  

 

 

   

 

 

 

Total liabilities

     599,805        485,432   

Net assets:

    

Common stock, $0.01 par value, 150,000 shares authorized, 105,943 and 91,048 shares issued and outstanding at December 31, 2012 and September 30, 2012

     1,059        910   

Additional paid-in-capital

     1,171,963        1,019,053   

Net unrealized appreciation on investments

     10,658        19,998   

Net realized loss on investments and interest rate swap

     (127,436     (128,062

Accumulated overdistributed net investment income

     (9,365     (8,329
  

 

 

   

 

 

 

Total net assets (equivalent to $9.88 and $9.92 per common share at December 31, 2012 and September 30, 2012) (Note 12)

     1,046,879        903,570   
  

 

 

   

 

 

 

Total liabilities and net assets

   $ 1,646,684      $ 1,389,002   
  

 

 

   

 

 

 

See notes to Consolidated Financial Statements.

 

1


Table of Contents

Fifth Street Finance Corp.

Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

     Three  months
ended
December 31,

2012
    Three  months
ended
December 31,

2011
 

Interest income:

    

Control investments

   $ 882      $ 221   

Affiliate investments

     584        704   

Non-control/Non-affiliate investments

     33,454        29,126   

Interest on cash and cash equivalents

     3        4   
  

 

 

   

 

 

 

Total interest income

     34,923        30,055   
  

 

 

   

 

 

 

PIK interest income:

    

Control investments

     108        38   

Affiliate investments

     456        155   

Non-control/Non-affiliate investments

     3,156        3,222   
  

 

 

   

 

 

 

Total PIK interest income

     3,720        3,415   
  

 

 

   

 

 

 

Fee income:

    

Control investments

     99          

Affiliate investments

     12        108   

Non-control/Non-affiliate investments

     12,683        5,885   
  

 

 

   

 

 

 

Total fee income

     12,794        5,993   
  

 

 

   

 

 

 

Dividend and other income:

    

Non-control/Non-affiliate investments

     346        34   
  

 

 

   

 

 

 

Total dividend and other income

     346        34   
  

 

 

   

 

 

 

Total investment income

     51,783        39,497   
  

 

 

   

 

 

 

Expenses:

    

Base management fee

     8,046        5,741   

Incentive fee

     6,639        5,247   

Professional fees

     1,188        1,091   

Board of Directors fees

     129        56   

Interest expense

     7,156        5,724   

Administrator expense

     930        816   

General and administrative expenses

     1,139        1,138   
  

 

 

   

 

 

 

Total expenses

     25,227        19,813   
  

 

 

   

 

 

 

Gain on extinguishment of convertible senior notes

            1,305   
  

 

 

   

 

 

 

Net investment income

     26,556        20,989   
  

 

 

   

 

 

 

Unrealized appreciation (depreciation) on investments:

    

Control investments

     (1,222     1,114   

Affiliate investments

     (156     (1,283

Non-control/Non-affiliate investments

     (7,961     6,002   
  

 

 

   

 

 

 

Net unrealized appreciation (depreciation) on investments

     (9,339     5,833   
  

 

 

   

 

 

 

Realized gain (loss) on investments:

    

Control investments

              

Affiliate investments

            76   

Non-control/Non-affiliate investments

     626        (16,714 )
  

 

 

   

 

 

 

Net realized gain (loss) on investments

     626        (16,638 )
  

 

 

   

 

 

 

Net increase in net assets resulting from operations

   $ 17,843      $ 10,184   
  

 

 

   

 

 

 

Net investment income per common share — basic

   $ 0.28      $ 0.29   

Earnings per common share — basic

   $ 0.19      $ 0.14   

Weighted average common shares outstanding — basic

     94,889        72,376   

Net investment income per common share — diluted

   $ 0.27      $ 0.27   

Earnings per common share — diluted

   $ 0.19      $ 0.13   

Weighted average common shares outstanding — diluted

     102,679        80,913   

See notes to Consolidated Financial Statements.

 

2


Table of Contents

Fifth Street Finance Corp.

Consolidated Statements of Changes in Net Assets

(in thousands, except per share amounts)

(unaudited)

 

     Three months
ended
December 31,
2012
    Three months
ended
December 31,
2011
 

Operations:

    

Net investment income

   $ 26,556      $ 20,989   

Net unrealized appreciation (depreciation) on investments

     (9,339     5,833   

Net realized gain (loss) on investments

     626        (16,638 )
  

 

 

   

 

 

 

Net increase in net assets resulting from operations

     17,843        10,184   
  

 

 

   

 

 

 

Stockholder transactions:

    

Distributions to stockholders

     (27,593     (23,146
  

 

 

   

 

 

 

Net decrease in net assets from stockholder transactions

     (27,593     (23,146
  

 

 

   

 

 

 

Capital share transactions:

    

Issuance of common stock, net

     151,334          

Issuance of common stock under dividend reinvestment plan

     1,725          
  

 

 

   

 

 

 

Net increase in net assets from capital share transactions

     153,059          
  

 

 

   

 

 

 

Total increase (decrease) in net assets

     143,309        (12,962
  

 

 

   

 

 

 

Net assets at beginning of period

     903,570        728,627   
  

 

 

   

 

 

 

Net assets at end of period

   $ 1,046,879      $ 715,665   
  

 

 

   

 

 

 

Net asset value per common share

   $ 9.88      $ 9.89   
  

 

 

   

 

 

 

Common shares outstanding at end of period

     105,943        72,376   

See notes to Consolidated Financial Statements.

 

3


Table of Contents

Fifth Street Finance Corp.

Consolidated Statements of Cash Flows

(in thousands, except per share amounts)

(unaudited)

 

     Three months
ended

December  31,
2012
    Three months
ended

December  31,
2011
 

Cash flows from operating activities:

    

Net increase in net assets resulting from operations

   $ 17,843      $ 10,184   

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided (used) by operating activities:

    

Gain on extinguishment of convertible senior notes

            (1,305

Net unrealized (appreciation) depreciation on investments

     9,339        (5,833

Net realized (gains) losses on investments

     (626 )     16,638   

PIK interest income

     (3,720     (3,415

Recognition of fee income

     (12,794     (5,993

Accretion of original issue discount on investments

     (132     (606

Amortization of deferred financing costs

     1,275        979   

Changes in operating assets and liabilities:

    

Fee income received

     10,862        4,962   

Increase in interest and fees receivable

     (635     (419

(Increase) decrease in due from portfolio company

     1,608        (728

(Increase) decrease in receivables from unsettled transactions

     1,500        (6,000

(Increase) decrease in other assets

     (89     126   

Increase in accounts payable, accrued expenses and other liabilities

     399        443   

Increase (decrease) in base management fee payable

     (5,025     30   

Increase (decrease) in incentive fee payable

     (4,349     250   

Increase (decrease) in due to FSC, Inc.

     (867     281   

Increase (decrease) in interest payable

     877        (399

Increase in payments received in advance from portfolio companies

     1        367   

Purchases of investments and net revolver activity, net of syndications

     (398,808     (84,519

Principal payments received on investments (scheduled payments)

     12,630        12,721   

Principal payments received on investments (payoffs)

     56,250        53,499   

PIK interest income received in cash

     313        1,131   

Proceeds from the sale of investments

     34,051        11,636   
  

 

 

   

 

 

 

Net cash provided (used) by operating activities

     (280,097     4,030   
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Dividends paid in cash

     (25,868     (23,146

Borrowings under SBA debentures payable

     31,750          

Borrowings under credit facilities

     323,000        151,500   

Repayments of borrowings under credit facilities

     (306,251     (120,255

Proceeds from the issuance of senior unsecured notes

     72,465          

Repurchases of convertible senior notes

            (8,926

Proceeds from the issuance of common stock

     151,668          

Deferred financing costs paid

     (3,125     (215

Offering costs paid

     (497     (296
  

 

 

   

 

 

 

Net cash provided (used) by financing activities

     243,142        (1,338
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     (36,955 )     2,692   

Cash and cash equivalents, beginning of period

     74,393        67,644   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 37,438      $ 70,336   
  

 

 

   

 

 

 

Supplemental information:

    

Cash paid for interest

   $ 5,107      $ 5,143   

Non-cash financing activities:

    

Issuance of shares of common stock under dividend reinvestment plan

   $ 1,725      $   

 

4


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

December 31, 2012

(unaudited)

 

Portfolio Company/Type of Investment (1)(2)(5)

  

Industry

   Principal (8)      Cost     Fair Value  

Control Investments (3)

          

Coll Materials Group LLC (9)(12)

   Environmental & facilities services        

Second Lien Term Loan A, 12% cash due 11/1/2014

      $ 7,658       $ 7,096      $   

Second Lien Term Loan B, 14% PIK due 11/1/2014

        2,113         2,000        1,072   

50% Membership interest in CD Holdco, LLC

           3,128          
        

 

 

   

 

 

 
           12,224        1,072   
        

 

 

   

 

 

 

Traffic Solutions Holdings, Inc. (formerly Statewide Holdings, Inc.)

   Construction and Engineering        

First Lien Term Loan A, LIBOR+8.5% (1.25% floor) cash due 8/10/2015

        14,557         14,544        14,625   

First Lien Term Loan B, 12% cash 3% PIK due 8/10/2015

        14,168         14,155        14,219   

First Lien Revolver, LIBOR+8.5% (1.25% floor) cash due 8/10/2015 (10)

           (4       

LC Facility, 8.5% cash due 8/10/2015 (10)

           (4       

746,114 Series A Preferred Units

           12,007        14,744   

746,114 Common Stock Units

           5,316        7,038   
        

 

 

   

 

 

 
           46,014        50,626   
        

 

 

   

 

 

 

Total Control Investments (4.9% of net assets)

         $ 58,238      $ 51,698   
        

 

 

   

 

 

 

Affiliate Investments (4)

          

Caregiver Services, Inc.

   Healthcare services        

1,080,399 shares of Series A Preferred Stock

         $ 1,080      $ 3,008   
        

 

 

   

 

 

 
           1,080        3,008   
        

 

 

   

 

 

 

Ambath/Rebath Holdings, Inc. (9)

   Home improvement retail        

First Lien Term Loan A, LIBOR+7% (3% floor) cash due 12/30/2014

      $ 4,315         4,315        4,257   

First Lien Term Loan B, 12.5% cash 2.5% PIK due 12/30/2014

        24,568         24,569        24,234   

4,668,788 shares of Preferred Stock

                    
        

 

 

   

 

 

 
           28,884        28,491   
        

 

 

   

 

 

 

Total Affiliate Investments (3.0% of net assets)

         $ 29,964      $ 31,499   
        

 

 

   

 

 

 

Non-Control/Non-Affiliate Investments (7)

          

TBA Global, LLC

   Advertising        

53,994 Senior Preferred Shares

         $ 216      $   

191,977 Shares A Shares

           192          
        

 

 

   

 

 

 
           408          
        

 

 

   

 

 

 

Fitness Edge, LLC

   Leisure Facilities        

1,000 Common Units

           43        204   
        

 

 

   

 

 

 
           43        204   
        

 

 

   

 

 

 

Capital Equipment Group, Inc. (9)

   Industrial machinery        

Second Lien Term Loan, 12% cash 2.75% PIK due 7/10/2013

      $ 3,950         3,918        4,017   

33,786 shares of Common Stock

           345        735   
        

 

 

   

 

 

 
           4,263        4,752   
        

 

 

   

 

 

 

Western Emulsions, Inc.

   Construction materials        

Second Lien Term Loan, 12.5% cash 2.5% PIK due 6/30/2014

        7,065         7,006        7,203   
        

 

 

   

 

 

 
           7,006        7,203   
        

 

 

   

 

 

 

Storyteller Theaters Corporation

   Movies & entertainment        

1,692 shares of Common Stock

                  62   

20,000 shares of Preferred Stock

           200        200   
        

 

 

   

 

 

 
           200        262   
        

 

 

   

 

 

 

HealthDrive Corporation (9)

   Healthcare services        

First Lien Term Loan A, 10% cash due 7/17/2013

        4,201         4,141        4,237   

First Lien Term Loan B, 12% cash 1% PIK due 7/17/2013

        10,414         10,394        10,531   

First Lien Revolver, 12% cash due 7/17/2013

        1,250         1,248        1,265   
        

 

 

   

 

 

 
           15,783        16,033   
        

 

 

   

 

 

 

idX Corporation

   Distributors        

Second Lien Term Loan, 12.5% cash 2% PIK due 7/1/2014

        19,382         19,238        20,231   
        

 

 

   

 

 

 
           19,238        20,231   
        

 

 

   

 

 

 

 

5


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

December 31, 2012

(unaudited)

 

Portfolio Company/Type of Investment (1)(2)(5)

  

Industry

   Principal (8)      Cost     Fair Value  

Cenegenics, LLC

   Healthcare services        

414,419 Common Units (6)

           598        1,499   
        

 

 

   

 

 

 
           598        1,499   
        

 

 

   

 

 

 

Trans-Trade, Inc. (9)

   Air freight & logistics        

First Lien Term Loan A, 13% cash 2.5% PIK due 9/10/2014

        12,994         12,865        12,260   

First Lien Term Loan B, 12% cash due 9/10/2014 (12)

        6,291         6,203          
        

 

 

   

 

 

 
           19,068        12,260   
        

 

 

   

 

 

 

Riverlake Equity Partners II, LP

   Multi-sector holdings        

1.78% limited partnership interest (13)

           362        326   
        

 

 

   

 

 

 
           362        326   
        

 

 

   

 

 

 

Riverside Fund IV, LP

   Multi-sector holdings        

0.34% limited partnership interest (13)

           649        699   
        

 

 

   

 

 

 
           649        699   
        

 

 

   

 

 

 

Tegra Medical, LLC (9)

   Healthcare equipment        

First Lien Term Loan A, LIBOR+7% (3% floor) cash due 12/31/2014

        18,945         18,792        18,967   

First Lien Term Loan B, 12% cash 2% PIK due 12/31/2014

        23,338         23,168        23,103   

First Lien Term Loan C, 30% PIK due 12/31/2014

        1,196         1,196        1,162   

First Lien Revolver, LIBOR+7% (3% floor) cash due 12/31/2014

        2,500         2,469        2,481   
        

 

 

   

 

 

 
           45,625        45,713   
        

 

 

   

 

 

 

Psilos Group Partners IV, LP

   Multi-sector holdings        

2.35% limited partnership interest (11)(13)

                    
        

 

 

   

 

 

 
                    
        

 

 

   

 

 

 

Mansell Group, Inc.

   Advertising        

First Lien Term Loan A, LIBOR+7% (3% floor) cash due 4/30/2015

        8,914         8,823        9,152   

First Lien Term Loan B, LIBOR+9% (3% floor) cash 1.5% PIK due 4/30/2015

        9,318         9,226        9,495   

First Lien Revolver, LIBOR+6% (3% floor) cash due 4/30/2015 (10)

           (19 )       
        

 

 

   

 

 

 
           18,030        18,647   
        

 

 

   

 

 

 

NDSSI Holdings, LLC (9)(14)

  

Electronic equipment

& instruments

       

First Lien Term Loan A, LIBOR+9.75% (3% floor) cash 1% PIK due 12/31/2012

        21,864         21,864        21,864   

First Lien Term Loan B, LIBOR+9.75% (3% floor) cash 3.75% PIK due 12/31/2012

        8,310         8,310        8,310   

First Lien Revolver, LIBOR+7% (3% floor) cash due 12/31/2012

        3,500         3,500        3,500   

2,000 Series D Preferred Units

           2,871        2,967   
        

 

 

   

 

 

 
           36,545        36,641   
        

 

 

   

 

 

 

Eagle Hospital Physicians, Inc. (9)(15)

   Healthcare services        

First Lien Term Loan, LIBOR+8.75% (3% floor) cash due 8/11/2015

        24,256         23,929        22,059   

First Lien Revolver, LIBOR+5.75% (3% floor) cash due 8/11/2015

        1,100         1,071          
        

 

 

   

 

 

 
           25,000        22,059   
        

 

 

   

 

 

 

Enhanced Recovery Company, LLC

   Diversified support services        

First Lien Term Loan A, LIBOR+7% (2% floor) cash due 8/13/2015

        10,183         10,043        10,301   

First Lien Term Loan B, LIBOR+10% (2% floor) cash 1% PIK due 8/13/2015

        11,080         10,952        11,195   

First Lien Revolver, LIBOR+7% (2% floor) cash due 8/13/2015 (10)

           (46 )       
        

 

 

   

 

 

 
           20,949        21,496   
        

 

 

   

 

 

 

Specialty Bakers LLC (15)

   Food distributors        

First Lien Term Loan A, LIBOR+8.5% cash due 9/15/2015

        4,069         3,892        4,069   

First Lien Term Loan B, LIBOR+11% (2.5% floor) cash due 9/15/2015

        11,000         10,843        11,000   

First Lien Revolver, LIBOR+8.5% cash due 9/15/2015

        3,250         3,193        123   
        

 

 

   

 

 

 
           17,928        15,192   
        

 

 

   

 

 

 

Welocalize, Inc.

   Internet software & services        

First Lien Term Loan A, LIBOR+8% (2% floor) cash due 11/19/2015

        20,423         20,201        20,834   

First Lien Term Loan B, LIBOR+9% (2% floor) 1.25% PIK due 11/19/2015

        24,125         23,871        24,647   

First Lien Revolver, LIBOR+7% (2% floor) cash due 11/19/2015 (10)

           (137 )       

3,393,060 Common Units in RPWL Holdings, LLC

           3,393        7,318   
        

 

 

   

 

 

 
           47,328        52,799   
        

 

 

   

 

 

 

 

6


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

December 31, 2012

(unaudited)

 

Portfolio Company/Type of Investment (1)(2)(5)

  

Industry

   Principal (8)      Cost     Fair Value  

Miche Bag, LLC

   Apparel, accessories & luxury goods        

First Lien Term Loan A, LIBOR+9% (3% floor) cash due 12/7/2013

        5,466         5,355        5,459   

First Lien Term Loan B, LIBOR+10% (3% floor) 3% PIK due 12/7/2015

        18,103         16,393        17,856   

First Lien Revolver, LIBOR+7% (3% floor) cash due 12/7/2015

        1,482         1,438        1,469   

10,371 Series A Preferred Equity units in Miche Bag Holdings, LLC

           1,037        1,406   

1,358.854 Series C Preferred Equity units in Miche Bag Holdings, LLC

           136        143   

19,417 Series A Common Equity units in Miche Bag Holdings, LLC

                    

146,289 Series D Common Equity units in Miche Bag Holdings, LLC

           1,463          
        

 

 

   

 

 

 
           25,822        26,333   
        

 

 

   

 

 

 

Bunker Hill Capital II (QP), LP

   Multi-sector holdings        

0.51% limited partnership interest(13)

           85        19   
        

 

 

   

 

 

 
           85        19   
        

 

 

   

 

 

 

Advanced Pain Management

   Healthcare services        

First Lien Term Loan, LIBOR+5% (1.75% floor) cash due 12/22/2015

        7,134         7,047        7,137   

First Lien Revolver, LIBOR+5% (1.75% floor) cash due 12/22/2015 (10)

           (4 )       
        

 

 

   

 

 

 
           7,043        7,137   
        

 

 

   

 

 

 

Drugtest, Inc.

   Human resources & employment services        

First Lien Term Loan A LIBOR+7.5% (0.75% floor) cash due 12/30/2015

        10,890         10,727        11,115   

First Lien Term Loan B, LIBOR+10% (1% floor) 1.5% PIK due 12/30/2015

        8,557         8,447        8,755   

First Lien Revolver, LIBOR+6% (1% floor) cash due 12/30/2015

        4,500         4,447        4,515   
        

 

 

   

 

 

 
           23,621        24,385   
        

 

 

   

 

 

 

Saddleback Fence and Vinyl Products, Inc. (9)

   Building products        

First Lien Term Loan, 8% cash due 11/30/2013

        635         635        636   

First Lien Revolver, 8% cash due 11/30/2013

        100         100        101   
        

 

 

   

 

 

 
           735        737   
        

 

 

   

 

 

 

Physicians Pharmacy Alliance, Inc.

   Healthcare services        

First Lien Term Loan, LIBOR+9% cash 1.5% PIK due 1/4/2016

        13,387         13,184        13,331   

First Lien Revolver, LIBOR+6% cash due 1/4/2016 (10)

           (24 )       
        

 

 

   

 

 

 
           13,160        13,331   
        

 

 

   

 

 

 

Cardon Healthcare Network, LLC (9)

   Diversified support services        

First Lien Term Loan A, LIBOR+10% (1.75% floor) cash due 1/24/2017

        10,260         10,119        10,465   

First Lien Term Loan B, LIBOR+9% (1.75% floor) cash due 1/24/2017

        21,437         21,255        21,866   

First Lien Revolver, LIBOR+6.5% (1.75% floor) cash due 1/24/2017 (10)

           (34 )       

65,903 Class A Units

           250        492   
        

 

 

   

 

 

 
           31,590        32,823   
        

 

 

   

 

 

 

U.S. Retirement Partners, Inc.

   Diversified financial services        

First Lien Term Loan, LIBOR+9.5% (2% floor) cash due 1/6/2016

        34,250         33,859        34,787   
        

 

 

   

 

 

 
           33,859        34,787   
        

 

 

   

 

 

 

Phoenix Brands Merger Sub LLC (9)

   Household products        

Senior Term Loan, LIBOR+5% (1.5% floor) cash due 1/31/2016

        6,482         6,363        6,432   

Subordinated Term Loan, 10% cash 3.875% PIK due 2/1/2017

        21,194         20,843        20,708   

First Lien Revolver, LIBOR+5% (1.5% floor) cash due 1/31/2016

        2,143         2,039        2,160   
        

 

 

   

 

 

 
           29,245        29,300   
        

 

 

   

 

 

 

U.S. Collections, Inc.

   Diversified support services        

First Lien Term Loan, LIBOR+5.25% (1.75% floor) cash due 3/31/2016

        9,686         9,582        9,692   
        

 

 

   

 

 

 
           9,582        9,692   
        

 

 

   

 

 

 

CCCG, LLC (9)

   Oil & gas equipment services        

First Lien Term Loan, LIBOR+8% (1.75% floor) cash 1% PIK due 7/29/2015

        34,794         34,210        35,347   
        

 

 

   

 

 

 
           34,210        35,347   
        

 

 

   

 

 

 

Maverick Healthcare Group, LLC

   Healthcare equipment        

First Lien Term Loan, LIBOR+9% (1.75% floor) cash due 12/31/2016

        24,500         24,080        24,678   
        

 

 

   

 

 

 
           24,080        24,678   
        

 

 

   

 

 

 

 

7


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

December 31, 2012

(unaudited)

 

Portfolio Company/Type of Investment (1)(2)(5)

  

Industry

   Principal (8)      Cost     Fair Value  

Refac Optical Group

   Specialty stores        

First Lien Term Loan A, LIBOR+7.5% cash due 3/23/2016

        12,190         11,979        12,321   

First Lien Term Loan B, LIBOR+8.5% cash 1.75% PIK due 3/23/2016

        20,362         20,012        20,562   

First Lien Revolver, LIBOR+7.5% cash due 3/23/2016 (10)

           (85 )       

1,000 Shares of Common Stock in Refac Holdings, Inc.

           1          

1,000 Shares of Preferred Stock in Refac Holdings, Inc.

           999        869   
        

 

 

   

 

 

 
           32,906        33,752   
        

 

 

   

 

 

 

Securus Technologies, Inc. (9)

  

Integrated telecommunication

services

       

Second Lien Term Loan, LIBOR+8.25% (1.75% floor) cash due 5/31/2018

        12,500         12,297        12,749   
        

 

 

   

 

 

 
           12,297        12,749   
        

 

 

   

 

 

 

Gundle/SLT Environmental, Inc.

   Environmental & facilities services        

First Lien Term Loan, LIBOR+5.5% (1.5% floor) cash due 5/27/2016

        8,857         8,785        8,943   
        

 

 

   

 

 

 
           8,785        8,943   
        

 

 

   

 

 

 

Titan Fitness, LLC

   Leisure facilities        

First Lien Term Loan A, LIBOR+8.75% (1.25% floor) cash due 6/30/2016

        29,451         29,339        29,255   

First Lien Term Loan B, LIBOR+10.75% (1.25% floor) cash 1.5% PIK due 6/30/2016

        17,831         17,741        17,664   

First Lien Revolver, LIBOR+8.75% (1.25% floor) cash due 6/30/2016 (10)

           (27 )       
        

 

 

   

 

 

 
           47,053        46,919   
        

 

 

   

 

 

 

Baird Capital Partners V, LP

   Multi-sector holdings        

0.40% limited partnership interest (13)

           609        592   
        

 

 

   

 

 

 
           609        592   
        

 

 

   

 

 

 

Charter Brokerage, LLC

   Oil & gas equipment services        

Senior Term Loan, LIBOR+6.5% (1.5% floor) cash due 7/13/2016

        30,613         30,492        30,731   

Mezzanine Term Loan, 11.75% cash 2% PIK due 7/13/2017

        11,798         11,728        12,107   

Senior Revolver, LIBOR+6.5% (1.5% floor) cash due 7/13/2016

        1,600         1,549        1,685   
        

 

 

   

 

 

 
           43,769        44,523   
        

 

 

   

 

 

 

Stackpole Powertrain International ULC

   Auto parts & equipment        

1,000 Common Units (13)

           1,000        2,108   
        

 

 

   

 

 

 
           1,000        2,108   
        

 

 

   

 

 

 

Discovery Practice Management, Inc.

   Healthcare services        

Senior Term Loan A, LIBOR+7.5% cash due 8/8/2016

        6,265         6,204        6,286   

Senior Term Loan B, 12% cash 3% PIK due 8/8/2016

        6,490         6,435        6,565   

Senior Revolver, LIBOR+7% cash due 8/8/2016

        300         273        352   
        

 

 

   

 

 

 
           12,912        13,203   
        

 

 

   

 

 

 

CTM Group, Inc.

   Leisure products        

Mezzanine Term Loan A, 11% cash 2% PIK due 2/10/2017

        10,801         10,714        10,844   

Mezzanine Term Loan B, 18.4% PIK due 2/10/2017

        3,978         3,952        4,107   
        

 

 

   

 

 

 
           14,666        14,951   
        

 

 

   

 

 

 

Milestone Partners IV, LP

   Multi-sector holdings        

1.36% limited partnership interest (13)

           895        1,121   
        

 

 

   

 

 

 
           895        1,121   
        

 

 

   

 

 

 

Insight Pharmaceuticals LLC

   Pharmaceuticals        

Second Lien Term Loan, LIBOR+11.75% (1.5% floor) cash due 8/25/2017

        13,517         13,419        13,718   
        

 

 

   

 

 

 
           13,419        13,718   
        

 

 

   

 

 

 

National Spine and Pain Centers, LLC

   Healthcare services        

Mezzanine Term Loan, 11% cash 1.6% PIK due 9/27/2017

        28,909         28,696        29,453   

300,700.98 Class A Units

           301        342   
        

 

 

   

 

 

 
           28,997        29,795   
        

 

 

   

 

 

 

RCPDirect, LP

   Multi-sector holdings        

0.91% limited partnership interest (6)(13)

           461        496   
        

 

 

   

 

 

 
           461        496   
        

 

 

   

 

 

 

 

8


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

December 31, 2012

(unaudited)

 

Portfolio Company/Type of Investment (1)(2)(5)

  

Industry

   Principal (8)      Cost     Fair Value  

The MedTech Group, Inc.

   Healthcare equipment        

Senior Term Loan, LIBOR+5.5% (1.5% floor) cash due 9/7/2016

        12,740         12,654        12,872   
        

 

 

   

 

 

 
           12,654        12,872   
        

 

 

   

 

 

 
          

Digi-Star Acquisition Holdings, Inc.

   Industrial machinery        

Mezzanine Term Loan, 12% cash 1.5% PIK due 11/18/2017

        12,177         12,076        12,300   

225 Class A Preferred Units

           264        286   

2,500 Class A Common Units

           36        134   
        

 

 

   

 

 

 
           12,376        12,720   
        

 

 

   

 

 

 

CPASS Acquisition Company

   Internet software & services        

Senior Term Loan, LIBOR+9% (1.5% floor) cash 1% PIK due 11/21/2016

        4,806         4,708        4,902   

Senior Revolver, LIBOR+9% (1.5% floor) cash due 11/21/2016 (10)

           (15 )       
        

 

 

   

 

 

 
           4,693        4,902   
        

 

 

   

 

 

 

Genoa Healthcare Holdings, LLC

   Pharmaceuticals        

Mezzanine Term Loan, 12% cash 2% PIK due 6/1/2017

        12,777         12,677        13,033   

500,000 Preferred units

           475        530   

500,000 Class A Common Units

           25        296   
        

 

 

   

 

 

 
           13,177        13,859   
        

 

 

   

 

 

 

Slate Pharmaceuticals Acquisition Corp.

   Healthcare services        

Subordinated Term Loan, 12% cash 1.5% PIK due 12/29/2017

        20,308         20,145        20,910   
        

 

 

   

 

 

 
           20,145        20,910   
        

 

 

   

 

 

 

ACON Equity Partners III, LP

   Multi-sector holdings        

0.31% limited partnership interest (13)

           242        228   
        

 

 

   

 

 

 
           242        228   
        

 

 

   

 

 

 

CRGT, Inc.

   IT consulting & other services        

Mezzanine Term Loan, 12.5% cash 3% PIK due 3/9/2018

        26,138         25,919        26,721   
        

 

 

   

 

 

 
           25,919        26,721   
        

 

 

   

 

 

 

Riverside Fund V, LP

   Multi-sector holdings        

0.48% limited partnership interest (11)(13)

                    
        

 

 

   

 

 

 
                    
        

 

 

   

 

 

 

World 50, Inc.

   Research & consulting services        

Senior Term Loan A, LIBOR+6.25% (1.5% floor) cash due 3/30/2017

        7,762         7,647        7,831   

Senior Term Loan B, 12.5% cash due 3/30/2017

        5,500         5,431        5,573   

Senior Revolver, LIBOR+6.25% (1.5% floor) cash due 3/30/2017 (10)

           (51 )       
        

 

 

   

 

 

 
           13,027        13,404   
        

 

 

   

 

 

 

Huddle House, Inc.

   Restaurants        

Subordinated Term Loan, 11% cash 1.6% PIK due 3/30/2018

        14,021         13,901        14,390   
        

 

 

   

 

 

 
           13,901        14,390   
        

 

 

   

 

 

 

Nixon, Inc.

   Apparel, accessories & luxury goods        

First Lien Term Loan, 8.75% cash 2.75% PIK due 4/16/2018

        10,199         10,112        10,283   
        

 

 

   

 

 

 
           10,112        10,283   
        

 

 

   

 

 

 

JTC Education, Inc.

   Education services        

Subordinated Term Loan, 13% cash due 11/1/2017

        14,500         14,399        14,505   

17,391 Shares of Series A-1 Preferred Stock

           313        153   

17,391 Shares of Common Stock

           187          
        

 

 

   

 

 

 
           14,899        14,658   
        

 

 

   

 

 

 

BMC Acquisition, Inc.

   Diversified financial services        

Senior Term Loan, LIBOR+5.5% (1% floor) cash due 5/1/2017

        5,620         5,583        5,616   

Senior Revolver, LIBOR+5% (1% floor) cash due 5/1/2017

        200         192        241   

500 Series A Preferred Shares

           499        413   

50,000 Common Shares

           1          
        

 

 

   

 

 

 
           6,275        6,270   
        

 

 

   

 

 

 

 

9


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

December 31, 2012

(unaudited)

 

Portfolio Company/Type of Investment (1)(2)(5)

  

Industry

   Principal (8)      Cost     Fair Value  

Ansira Partners, Inc.

   Advertising        

First Lien Term Loan, LIBOR+5.5% (1.5% floor) cash due 5/4/2017

        11,986         11,907        12,093   

First Lien Revolver, LIBOR+5.5% (1.5% floor) cash due 5/4/2017 (10)

           (8 )       

250 Preferred Units & 250 Class A Common Units of Ansira Holdings, LLC

           250        243   
        

 

 

   

 

 

 
           12,149        12,336   
        

 

 

   

 

 

 

MX USA, Inc.

   Healthcare services        

Second Lien Term Loan, LIBOR+10.5% (1.25% floor) cash due 10/31/2017

        27,000         26,824        27,364   
        

 

 

   

 

 

 
           26,824        27,364   
        

 

 

   

 

 

 

Edmentum, Inc. (formerly PLATO, Inc.)

   Education services        

First Lien Term Loan, LIBOR+6% (1.5% floor) cash due 5/17/2018

        14,625         14,625        14,597   

Second Lien Term Loan, LIBOR+9.75% (1.5% floor) cash due 5/17/2019

        17,000         17,000        17,065   
        

 

 

   

 

 

 
           31,625        31,662   
        

 

 

   

 

 

 

I Drive Safely, LLC

   Education services        

First Lien Term Loan, LIBOR+8.5% (1.5% floor) cash due 5/25/2017

        27,000         27,007        27,809   

First Lien Revolver, LIBOR+6.5% (1.5% floor) cash due 5/25/2017

           1          

75,000 Class A Common Units of IDS Investments, LLC

           750        684   
        

 

 

   

 

 

 
           27,758        28,493   
        

 

 

   

 

 

 

ConvergeOne Holdings Corp.

   Integrated telecommunication

services

       

First Lien Term Loan, LIBOR+7% (1.5% floor) cash due 6/8/2017

        9,750         9,750        9,851   
        

 

 

   

 

 

 
           9,750        9,851   
        

 

 

   

 

 

 

Yeti Acquisition, LLC (9)

   Leisure products        

First Lien Term Loan A, LIBOR+8% (1.25% floor) cash due 6/15/2017

        27,300         27,283        27,705   

First Lien Term Loan B, LIBOR+11.25% (1.25% floor) cash 1% PIK due 6/15/2017

        12,000         11,992        12,175   

First Lien Revolver, LIBOR+8% (1.25% floor) cash due 6/15/2017 (10)

           (6 )       

1,500 Common Stock Units of Yeti Holdings, Inc.

           1,500        2,316   
        

 

 

   

 

 

 
           40,769        42,196   
        

 

 

   

 

 

 

Specialized Education Services, Inc.

   Education services        

Senior Term Loan, LIBOR+5.5% (1.5% floor) cash due 6/28/2017

        9,276         9,276        9,399   

Subordinated Term Loan, 11% cash 1.5% PIK due 6/28/2018

        17,636         17,636        17,641   
        

 

 

   

 

 

 
           26,912        27,040   
        

 

 

   

 

 

 

InvestRx Corporation

   Diversified support services        

First Lien Term Loan A, LIBOR+7.75% (1.25% floor) cash due 7/2/2017

        24,480         24,467        24,475   

First Lien Term Loan B, LIBOR+9.75% (1.25% floor) cash 1% PIK due 7/2/2017

        18,370         18,361        18,262   

First Lien Delayed Draw Term Loan, LIBOR+8.25% (1.25% floor) cash due 7/2/2014

                    

First Lien Revolver, LIBOR+7.75% (1.25% floor) cash due 7/2/2017

        700         697        866   
        

 

 

   

 

 

 
           43,525        43,603   
        

 

 

   

 

 

 

eResearch Technology, Inc.

   Healthcare services        

First Lien Term Loan, LIBOR+6.5% (1.5% floor) cash due 5/2/2018

        9,975         9,975        10,069   
        

 

 

   

 

 

 
           9,975        10,069   
        

 

 

   

 

 

 

PC Helps Support, LLC

   IT consulting & other
services
       

Subordinated Term Loan, 12% cash 1.5% PIK due 9/5/2018

        18,591         18,591        18,710   

675 Series A Preferred Units of PCH Support Holdings, Inc.

           675        697   

7,500 Class A Common Stock Units of PCH Support Holdings, Inc.

           75        84   
        

 

 

   

 

 

 
           19,341        19,491   
        

 

 

   

 

 

 

Ikaria Acquisition, Inc.

   Healthcare services        

First Lien Term Loan, LIBOR+6.5% (1.25% floor) cash due 9/25/2017

        9,975         9,975        10,054   
        

 

 

   

 

 

 
           9,975        10,054   
        

 

 

   

 

 

 

Olson + Co., Inc.

   Advertising        

First Lien Term Loan, LIBOR+5.5% (1.5% floor) cash due 9/30/2017

        13,634         13,634        13,636   

First Lien Revolver, LIBOR+5.5% (1.5% floor) cash due 9/30/2017

                    
        

 

 

   

 

 

 
           13,634        13,636   
        

 

 

   

 

 

 

 

10


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

December 31, 2012

(unaudited)

 

Portfolio Company/Type of Investment (1)(2)(5)

  

Industry

   Principal (8)      Cost     Fair Value  

Beecken Petty O’Keefe Fund IV, L.P.

   Multi-sector holdings        

0.5% limited partnership interest (11)(13)

                    
        

 

 

   

 

 

 
                    
        

 

 

   

 

 

 

CompuCom Systems, Inc.

   IT consulting & other services        

Second Lien Term Loan, LIBOR+9% (1.25% floor) cash due 10/4/2019

        35,000         35,000        35,000   
        

 

 

   

 

 

 
           35,000        35,000   
        

 

 

   

 

 

 

Deltek, Inc.

   IT consulting & other services        

Second Lien Term Loan, LIBOR+8.75% (1.25% floor) cash due 10/10/2019

        20,000         20,000        20,000   

First Lien Revolver, LIBOR+4.75% (1.25% floor) cash due 10/10/2017

                    
        

 

 

   

 

 

 
           20,000        20,000   
        

 

 

   

 

 

 

First American Payment Systems, LP

   Diversified support services        

Second Lien Term Loan, LIBOR+9.5% (1.25% floor) cash due 4/12/2019

        25,000         25,000        25,000   

First Lien Revolver, LIBOR+4.5% (1.25% floor) cash due 10/12/2017

                    
        

 

 

   

 

 

 
           25,000        25,000   
        

 

 

   

 

 

 

Dexter Axle Company

   Auto parts & equipment        

Subordinated Term Loan, 11.25% cash 2% PIK due 11/1/2019

        30,102         30,102        30,102   

1,500 Common Shares in Dexter Axle Holding Company

           1,500        1,500   
        

 

 

   

 

 

 
           31,602        31,602   
        

 

 

   

 

 

 

IG Investments Holdings, LLC

   IT consulting & other services        

Second Lien Term Loan, LIBOR+9% (1.25% floor) cash due 10/31/2020

        10,000         10,000        10,000   
        

 

 

   

 

 

 
           10,000        10,000   
        

 

 

   

 

 

 

SumTotal Systems LLC

   Internet software & services        

Second Lien Term Loan, LIBOR+9% (1.25% floor) cash due 5/16/2019

        15,000         15,000        15,000   
        

 

 

   

 

 

 
           15,000        15,000   
        

 

 

   

 

 

 

Comprehensive Pharmacy Services, LLC

   Pharmaceuticals        

Subordinated Term Loan, 11.25% cash 1.5% PIK due 11/30/2019

        10,013         10,013        10,013   

20,000 Common Shares in MCP CPS Group Holdings, Inc.

           2,000        2,000   
        

 

 

   

 

 

 
           12,013        12,013   
        

 

 

   

 

 

 

Reliance Communications, LLC

   Internet software & services        

First Lien Term Loan A, LIBOR+7% (1% floor) cash due 12/18/2017

        22,667         22,640        22,667   

First Lien Term Loan B, LIBOR+11.5% (1% floor) cash due 12/18/2017

        11,333         11,320        11,333   

First Lien Revolver, LIBOR+7% (1% floor) cash due 12/18/2017 (10)

           (6 )       
        

 

 

   

 

 

 
           33,954        34,000   
        

 

 

   

 

 

 

Garretson Firm Resolution Group, Inc.

   Diversified support services        

First Lien Senior Term Loan, LIBOR+5% (1.25% floor) cash due 12/20/2018

        7,450         7,450        7,450   

Subordinated Term Loan, 11% cash 1.5% PIK due 6/20/2019

        5,003         5,003        5,003   

First Lien Revolver, LIBOR+5% (1.25% floor) cash due 12/20/2017

        188         188        188   

4,950,000 Preferred Units in GRG Holdings, LP

           495        495   

50,000 Common Units in GRG Holdings, LP

           5        5   
        

 

 

   

 

 

 
           13,141        13,141   
        

 

 

   

 

 

 

Teaching Strategies, LLC

   Education services        

First Lien Term Loan A, LIBOR+6% (1.25% floor) cash due 12/21/2017

        31,400         31,372        31,400   

First Lien Term Loan B, LIBOR+8.35% (1.25% floor) cash 3.15% PIK due 12/21/2017

        14,614         14,601        14,614   

First Lien Revolver, LIBOR+6% (1.25% floor) cash due 12/21/2017

        500         495        500   
        

 

 

   

 

 

 
           46,468        46,514   
        

 

 

   

 

 

 

Omniplex World Services Corporation

   Security & alarm services        

Subordinated Term Loan, 12.25% cash 1.25% PIK due 12/21/2018

        12,505         12,505        12,505   

500 Class A Common Units in Omniplex Holdings Corp.

           500        500   
        

 

 

   

 

 

 
           13,005        13,005   
        

 

 

   

 

 

 

Dominion Diagnostics, LLC

   Healthcare services        

Subordinated Term Loan, 11% cash 2% PIK due 12/21/2018

        15,509         15,509        15,509   
        

 

 

   

 

 

 
           15,509        15,509   
        

 

 

   

 

 

 

 

11


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

December 31, 2012

(unaudited)

 

Portfolio Company/Type of Investment (1)(2)(5)

  

Industry

   Principal (8)      Cost      Fair Value  

Affordable Care, Inc.

   Healthcare services         

Second Lien Term Loan, LIBOR+9.25% (1.25% floor) cash due 12/26/2019

        21,500         21,500         21,500   
        

 

 

    

 

 

 
           21,500         21,500   
        

 

 

    

 

 

 

Aderant North America, Inc.

   Internet software & services         

Second Lien Term Loan, LIBOR+8.75% (1.25% floor) cash due 6/20/2019

        7,000         7,000         7,000   
        

 

 

    

 

 

 
           7,000         7,000   
        

 

 

    

 

 

 

AdVenture Interactive, Corp.

   Advertising         

First Lien Term Loan, LIBOR+8.25% (1.25% floor) cash due 12/27/2017

        15,000         15,000         15,000   
        

 

 

    

 

 

 
           15,000         15,000   
        

 

 

    

 

 

 

RP Crown Parent, LLC

   Application software         

Second Lien Term Loan, LIBOR+10% (1.25% floor) cash due 12/21/2019

        3,000         2,941         3,000   
        

 

 

    

 

 

 
           2,941         3,000   
        

 

 

    

 

 

 

TransFirst Holdings, Inc.

   Consumer finance         

Second Lien Term Loan, LIBOR+9.75% (1.25% floor) cash due 6/27/2018

        5,000         4,852         5,000   
        

 

 

    

 

 

 
           4,852         5,000   
        

 

 

    

 

 

 

CoAdvantage Corporation

   Human resources & employment services         

Subordinated Term Loan, 11.5% cash 1.25% PIK due 12/31/2018

        10,000         10,000         10,000   

50,000 Class A Units in CIP CoAdvantage Investments LLC

           500         500   
        

 

 

    

 

 

 
           10,500         10,500   
        

 

 

    

 

 

 

Total Non-Control/Non-Affiliate Investments (143.0% of net assets)

         $ 1,481,966       $ 1,497,251   
        

 

 

    

 

 

 

Total Portfolio Investments (151.0% of net assets)

         $ 1,570,168       $ 1,580,448   
        

 

 

    

 

 

 

 

 

(1) All debt investments are income producing unless otherwise noted. Equity is non-income producing unless otherwise noted.

 

(2) See Note 3 to the Consolidated Financial Statements for portfolio composition by geographic region.

 

(3) Control Investments are defined by the Investment Company Act of 1940 (“1940 Act”) as investments in companies in which the Company owns more than 25% of the voting securities or maintains greater than 50% of the board representation.

 

(4) Affiliate Investments are defined by the 1940 Act as investments in companies in which the Company owns between 5% and 25% of the voting securities.

 

(5) Equity ownership may be held in shares or units of companies related to the portfolio companies.

 

(6) Income producing through payment of dividends or distributions.

 

(7) Non-Control/Non-Affiliate Investments are defined by the 1940 Act as investments that are neither Control Investments nor Affiliate Investments.

 

(8) Principal includes accumulated PIK interest and is net of repayments.

 

12


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

December 31, 2012

(unaudited)

 

(9) Interest rates have been adjusted on certain term loans and revolvers. These rate adjustments are temporary in nature due to tier pricing arrangements or financial or payment covenant violations in the original credit agreements, or permanent in nature per loan amendment or waiver documents. The table below summarizes these rate adjustments by portfolio company:

 

Portfolio Company

  

Effective date

  

Cash interest

  

PIK interest

  

Reason

Saddleback Fence & Vinyl Products, Inc.

   December 1, 2012   

+ 4.0% on Term Loan

+ 4.0% on Revolver

      Per loan amendment

Trans-Trade, Inc.

   December 1, 2012   

– 6.0% on Term Loan A

– 12.0% on Term Loan B

  

+ 6.0% on Term Loan A

+ 12.0% on Term Loan B

   Per agreement

Capital Equipment Group, Inc.

   November 30, 2012       – 1.25% on Term Loan    Per loan amendment

CCCG, LLC

   November 15, 2012    + 0.5% on Term Loan    + 1.0% on Term Loan    Per loan amendment

Yeti Acquisition, LLC

   October 1, 2012    – 1.0% on Term Loan A, Term Loan B & Revolver       Tier pricing per loan agreement

Securus Technologies Holdings, Inc.

   June 6, 2012    + 0.75% on Term Loan       Per loan amendment

Coll Materials Group LLC

   July 1, 2012    – 12.0% on Term Loan A    + 15.0% on Term Loan A    Per loan amendment

HealthDrive Corporation

   April 1, 2012    + 2.0% on Term Loan A       Tier pricing per loan agreement

Ambath/Rebath Holdings, Inc.

   April 1, 2012   

– 2.0% on Term Loan A

– 4.5% on Term Loan B

   + 2.0% on Term Loan A + 4.5% on Term Loan B    Per loan amendment

Cardon Healthcare Network, LLC

   April 1, 2012   

– 2.25% on Term Loan A

– 1.25% on Term Loan B

      Tier pricing per loan agreement

Tegra Medical, LLC

   January 1, 2012       + 0.5% on Term Loan B    Per loan amendment

NDSSI Holdings, Inc.

   December 31, 2011       – 1.0% on Term Loan A    Per loan amendment

Phoenix Brands Merger Sub LLC

   December 22, 2011   

+ 0.75% on Subordinated Term Loan

+ 0.5% on Senior Term Loan & Revolver

      Per loan amendment

Eagle Hospital Physicians, Inc.

   July 1, 2011    – 0.25% on Term Loan & Revolver       Per loan amendment

 

(10) Cost amounts represent unearned income related to undrawn commitments.

 

(11) Represents an unfunded commitment to fund limited partnership interest.

 

(12) Investment was on PIK non-accrual status as of December 31, 2012.

 

(13) Investment is not a qualifying asset as defined under Section 55(a) of the 1940 Act.

 

(14) NDSSI Holdings, LLC was under negotiation and, as such, the maturity date of the facility had been temporarily suspended. The term loans and revolver were repaid in full in January 2013.

 

(15) The legal documents for the Eagle Hospital Physicians, Inc. and Specialty Bakers LLC credit facilities state that the term loans are senior to the revolvers in the capital structures of those facilities. Thus, the unrealized appreciation (depreciation) on the loan tranches of these facilities has been allocated accordingly.

 

13


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

September 30, 2012

 

Portfolio Company/Type of Investment (1)(2)(5)

  

Industry

  

Principal (8)

    

Cost

   

Fair Value

 

Control Investments (3)

          

Coll Materials Group LLC (9)(12)

   Environmental & facilities services        

Second Lien Term Loan A, 12% cash due 11/1/2014

      $ 7,372       $ 7,096      $ 1,238   

Second Lien Term Loan B, 14% PIK due 11/1/2014

        2,040         2,000        1,999   

50% Membership interest in CD Holdco, LLC

           3,127          
        

 

 

   

 

 

 
           12,223        3,237   
        

 

 

   

 

 

 

Statewide Holdings, Inc. (formerly Traffic Control and Safety Corp.)

   Construction and Engineering        

First Lien Term Loan A, LIBOR+8.5% (1.25% floor) cash due 8/10/2015

        15,000         14,981        15,023   

First Lien Term Loan B, 12% cash 3% PIK due 8/10/2015

        14,059         14,042        14,068   

First Lien Revolver, LIBOR+8.5% (1.25% floor) cash due 8/10/2015 (10)

           (6       

LC Facility, 8.5% cash due 8/10/2015 (10)

           (6       

746,114 Series A Preferred Units

           12,007        14,377   

746,114 Common Stock Units

           5,316        6,535   
           46,334        50,003   
        

 

 

   

 

 

 

Total Control Investments (5.9% of net assets)

         $ 58,557      $ 53,240   
        

 

 

   

 

 

 

Affiliate Investments (4)

          

Caregiver Services, Inc.

   Healthcare services        

1,080,399 shares of Series A Preferred Stock

         $ 1,080      $ 2,924   
        

 

 

   

 

 

 
           1,080        2,924   
        

 

 

   

 

 

 

Ambath/Rebath Holdings, Inc. (9)

   Home improvement retail        

First Lien Term Loan A, LIBOR+7% (3% floor) cash due 12/30/2014

      $ 4,293         4,290        4,268   

First Lien Term Loan B, 12.5% cash 2.5% PIK due 12/30/2014

        24,134         24,126        23,995   

4,668,788 shares of Preferred Stock

                    
           28,416        28,263   
        

 

 

   

 

 

 

Total Affiliate Investments (3.5% of net assets)

         $ 29,496      $ 31,187   
        

 

 

   

 

 

 

Non-Control/Non-Affiliate Investments (7)

          

TBA Global, LLC

   Advertising        

53,994 Senior Preferred Shares

         $ 216      $   

191,977 Shares A Shares

           192          
        

 

 

   

 

 

 
           408          
        

 

 

   

 

 

 

Fitness Edge, LLC

   Leisure Facilities        

1,000 Common Units (6)

           43        200   
        

 

 

   

 

 

 
           43        200   
        

 

 

   

 

 

 

Capital Equipment Group, Inc. (9)

   Industrial machinery        

Second Lien Term Loan, 12% cash 2.75% PIK due 7/10/2013

      $ 10,489         10,430        10,577   

33,786 shares of Common Stock

           345        568   
        

 

 

   

 

 

 
           10,775        11,145   
        

 

 

   

 

 

 

Rail Acquisition Corp.

   Electronic manufacturing services        

First Lien Revolver, 7.85% cash due 9/1/2013

        3,835         3,835        3,835   
        

 

 

   

 

 

 
           3,835        3,835   
        

 

 

   

 

 

 

Western Emulsions, Inc.

   Construction materials        

Second Lien Term Loan, 12.5% cash 2.5% PIK due 6/30/2014

        7,020         6,951        7,200   
        

 

 

   

 

 

 
           6,951        7,200   
        

 

 

   

 

 

 

Storyteller Theaters Corporation

   Movies & entertainment        

1,692 shares of Common Stock

                  62   

20,000 shares of Preferred Stock

           200        200   
        

 

 

   

 

 

 
           200        262   
        

 

 

   

 

 

 

HealthDrive Corporation (9)

   Healthcare services        

First Lien Term Loan A, 10% cash due 7/17/2013

        4,601         4,511        4,697   

First Lien Term Loan B, 12% cash 1% PIK due 7/17/2013

        10,387         10,357        10,473   

First Lien Revolver, 12% cash due 7/17/2013

        1,250         1,247        1,268   
        

 

 

   

 

 

 
           16,115        16,438   
        

 

 

   

 

 

 

idX Corporation

   Distributors        

Second Lien Term Loan, 12.5% cash 2% PIK due 7/1/2014

        19,283         19,115        20,153   
        

 

 

   

 

 

 
           19,115        20,153   
        

 

 

   

 

 

 

 

14


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

September 30, 2012

 

 

Portfolio Company/Type of Investment (1)(2)(5)

  

Industry

  

Principal (8)

    

Cost

   

Fair Value

 

Cenegenics, LLC

   Healthcare services        

414,419 Common Units (6)

           598        1,394   
        

 

 

   

 

 

 
           598        1,394   
        

 

 

   

 

 

 

Trans-Trade, Inc.

   Air freight & logistics        

First Lien Term Loan A, 13% cash 2.5% PIK due 9/10/2014

        12,845         12,700        12,738   

First Lien Term Loan B, 12% cash due 9/10/2014

        6,226         6,203        3,193   
        

 

 

   

 

 

 
           18,903        15,931   
        

 

 

   

 

 

 

Riverlake Equity Partners II, LP

   Multi-sector holdings        

1.78% limited partnership interest (13)

           240        240   
        

 

 

   

 

 

 
           240        240   
        

 

 

   

 

 

 

Riverside Fund IV, LP

   Multi-sector holdings        

0.34% limited partnership interest (6)(13)

           677        677   
        

 

 

   

 

 

 
           677        677   
        

 

 

   

 

 

 

Tegra Medical, LLC (9)

   Healthcare equipment        

First Lien Term Loan A, LIBOR+7% (3% floor) cash due 12/31/2014

        19,581         19,402        19,604   

First Lien Term Loan B, 12% cash 2% PIK due 12/31/2014

        23,190         22,997        23,052   

First Lien Term Loan C, 30% PIK due 12/31/2014

        1,111         1,111        1,083   

First Lien Revolver, LIBOR+7% (3% floor) cash due 12/31/2014

        2,500         2,465        2,483   
        

 

 

   

 

 

 
           45,975        46,222   
        

 

 

   

 

 

 

Psilos Group Partners IV, LP

   Multi-sector holdings        

2.35% limited partnership interest (11)(13)

                    
        

 

 

   

 

 

 
                    
        

 

 

   

 

 

 

Mansell Group, Inc.

   Advertising        

First Lien Term Loan A, LIBOR+7% (3% floor) cash due 4/30/2015

        9,467         9,362        9,659   

First Lien Term Loan B, LIBOR+9% (3% floor) cash 1.5% PIK due 4/30/2015

        9,282         9,181        9,464   

First Lien Revolver, LIBOR+6% (3% floor) cash due 4/30/2015 (10)

           (21 )       
        

 

 

   

 

 

 
           18,522        19,123   
        

 

 

   

 

 

 

NDSSI Holdings, LLC (9)

   Electronic equipment
& instruments
       

First Lien Term Loan A, LIBOR+9.75% (3% floor) cash 1% PIK due 12/31/2012

        21,864         21,774        21,809   

First Lien Term Loan B, LIBOR+9.75% (3% floor) cash 3.75% PIK due 12/31/2012

        8,231         8,231        8,281   

First Lien Revolver, LIBOR+7% (3% floor) cash due 12/31/2012

        3,500         3,487        3,504   

2,000 Series D Preferred Units

           2,671        2,671   
        

 

 

   

 

 

 
           36,163        36,265   
        

 

 

   

 

 

 

Eagle Hospital Physicians, Inc. (9)

   Healthcare services        

First Lien Term Loan, LIBOR+8.75% (3% floor) cash due 8/11/2015

        24,256         23,890        24,184   

First Lien Revolver, LIBOR+5.75% (3% floor) cash due 8/11/2015

        1,100         1,068        1,060   
        

 

 

   

 

 

 
           24,958        25,244   
        

 

 

   

 

 

 

Enhanced Recovery Company, LLC

   Diversified support
services
       

First Lien Term Loan A, LIBOR+7% (2% floor) cash due 8/13/2015

        10,764         10,597        10,804   

First Lien Term Loan B, LIBOR+10% (2% floor) cash 1% PIK due 8/13/2015

        11,080         10,935        11,098   

First Lien Revolver, LIBOR+7% (2% floor) cash due 8/13/2015 (10)

           (53 )       
        

 

 

   

 

 

 
           21,479        21,902   
        

 

 

   

 

 

 

Specialty Bakers LLC

   Food distributors        

First Lien Term Loan A, LIBOR+8.5% cash due 9/15/2015

        4,301         4,103        4,277   

First Lien Term Loan B, LIBOR+11% (2.5% floor) cash due 9/15/2015

        11,000         10,826        10,888   

First Lien Revolver, LIBOR+8.5% cash due 9/15/2015

        3,250         3,187        3,236   
        

 

 

   

 

 

 
           18,116        18,401   
        

 

 

   

 

 

 

Welocalize, Inc.

   Internet software &
services
       

First Lien Term Loan A, LIBOR+8% (2% floor) cash due 11/19/2015

        20,553         20,297        21,037   

First Lien Term Loan B, LIBOR+9% (2% floor) 1.25% PIK due 11/19/2015

        24,048         23,755        24,669   

First Lien Revolver, LIBOR+7% (2% floor) cash due 11/19/2015 (10)

           (155 )       

3,393,060 Common Units in RPWL Holdings, LLC

           3,393        6,278   
        

 

 

   

 

 

 
           47,290        51,984   
        

 

 

   

 

 

 

 

15


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

September 30, 2012

 

Portfolio Company/Type of Investment (1)(2)(5)

  

Industry

  

Principal (8)

    

Cost

   

Fair Value

 

Miche Bag, LLC

   Apparel, accessories
& luxury goods
       

First Lien Term Loan A, LIBOR+9% (3% floor) cash due 12/7/2013

        8,008         7,854        8,039   

First Lien Term Loan B, LIBOR+10% (3% floor) 3% PIK due 12/7/2015

        17,964         16,108        17,818   

First Lien Revolver, LIBOR+7% (3% floor) cash due 12/7/2015

        1,500         1,420        1,513   

10,371 Preferred Equity units in Miche Holdings, LLC

           1,037        878   

146,289 Series D Common Equity units in Miche Holdings, LLC

           1,463          
        

 

 

   

 

 

 
           27,882        28,248   
        

 

 

   

 

 

 

Bunker Hill Capital II (QP), LP

   Multi-sector holdings        

0.51% limited partnership interest(13)

           66        66   
        

 

 

   

 

 

 
           66        66   
        

 

 

   

 

 

 

Advanced Pain Management

   Healthcare services        

First Lien Term Loan, LIBOR+5% (1.75% floor) cash due 12/22/2015

        7,271         7,177        7,402   

First Lien Revolver, LIBOR+5% (1.75% floor) cash due 12/22/2015 (10)

           (4 )       
        

 

 

   

 

 

 
           7,173        7,402   
        

 

 

   

 

 

 

Drugtest, Inc. (formerly DISA, Inc.)

   Human resources &
employment services
       

First Lien Term Loan A LIBOR+7.5% (0.75% floor) cash due 12/30/2015

        11,215         11,066        11,445   

First Lien Term Loan B, LIBOR+10% (1% floor) 1.5% PIK due 12/30/2015

        8,524         8,424        8,751   

First Lien Revolver, LIBOR+6% (1% floor) cash due 12/30/2015 (10)

           (49 )       
        

 

 

   

 

 

 
           19,441        20,196   
        

 

 

   

 

 

 

Saddleback Fence and Vinyl Products, Inc. (9)

   Building products        

First Lien Term Loan, 8% cash due 11/30/2013

        648         648        648   

First Lien Revolver, 8% cash due 11/30/2012

        100         100        102   
        

 

 

   

 

 

 
           748        750   
        

 

 

   

 

 

 

Physicians Pharmacy Alliance, Inc.

   Healthcare services        

First Lien Term Loan, LIBOR+9% cash 1.5% PIK due 1/4/2016

        13,653         13,419        13,654   

First Lien Revolver, LIBOR+6% cash due 1/4/2016 (10)

           (28 )       
        

 

 

   

 

 

 
           13,391        13,654   
        

 

 

   

 

 

 

Cardon Healthcare Network, LLC (9)

   Diversified support
services
       

First Lien Term Loan A, LIBOR+10% (1.75% floor) cash due 1/24/2017

        10,395         10,239        10,601   

First Lien Term Loan B, LIBOR+9% (1.75% floor) cash due 1/24/2017

        21,719         21,521        22,016   

First Lien Revolver, LIBOR+6.5% (1.75% floor) cash due 1/24/2017 (10)

           (37 )       

65,903 Class A Units (6)

           250        456   
        

 

 

   

 

 

 
           31,973        33,073   
        

 

 

   

 

 

 

U.S. Retirement Partners, Inc.

          

First Lien Term Loan, LIBOR+9.5% (2% floor) cash due 1/6/2016

   Diversified financial
services
     32,350         31,991        32,767   
        

 

 

   

 

 

 
           31,991        32,767   
        

 

 

   

 

 

 

Phoenix Brands Merger Sub LLC (9)

   Household products        

Senior Term Loan, LIBOR+5% (1.5% floor) cash due 1/31/2016

        6,804         6,671        6,803   

Subordinated Term Loan, 10% cash 3.875% PIK due 2/1/2017

        21,194         20,821        20,630   

First Lien Revolver, LIBOR+5% (1.5% floor) cash due 1/31/2016

        2,357         2,245        2,447   
        

 

 

   

 

 

 
           29,737        29,880   
        

 

 

   

 

 

 

U.S. Collections, Inc.

   Diversified support
services
       

First Lien Term Loan, LIBOR+5.25% (1.75% floor) cash due 3/31/2016

        9,885         9,772        9,871   
        

 

 

   

 

 

 
           9,772        9,871   
        

 

 

   

 

 

 

CCCG, LLC (9)

   Oil & gas equipment
services
       

First Lien Term Loan, LIBOR+8% (1.75% floor) cash 1% PIK due 7/29/2015

        34,748         34,111        35,280   
        

 

 

   

 

 

 
           34,111        35,280   
        

 

 

   

 

 

 

Maverick Healthcare Group, LLC

   Healthcare equipment        

First Lien Term Loan, LIBOR+9% (1.75% floor) cash due 12/31/2016

        24,563         24,121        24,859   
        

 

 

   

 

 

 
           24,121        24,859   
        

 

 

   

 

 

 

 

16


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

September 30, 2012

 

Portfolio Company/Type of Investment (1)(2)(5)

  

Industry

  

Principal (8)

    

Cost

   

Fair Value

 

Refac Optical Group

   Specialty stores        

First Lien Term Loan A, LIBOR+7.5% cash due 3/23/2016

        12,431         12,191        12,530   

First Lien Term Loan B, LIBOR+8.5% cash 1.75% PIK due 3/23/2016

        20,322         19,939        20,565   

First Lien Revolver, LIBOR+7.5% cash due 3/23/2016 (10)

           (96 )       

1,000 Shares of Common Stock in Refac Holdings, Inc.

           1          

1,000 Shares of Preferred Stock in Refac Holdings, Inc.

           999        1,011   
        

 

 

   

 

 

 
           33,034        34,106   
        

 

 

   

 

 

 

Securus Technologies, Inc. (9)

   Integrated
telecommunication
services
       

Second Lien Term Loan, LIBOR+8.25% (1.75% floor) cash due 5/31/2018

        22,500         22,119        22,952   
        

 

 

   

 

 

 
           22,119        22,952   
        

 

 

   

 

 

 

Gundle/SLT Environmental, Inc.

   Environmental &
facilities services
       

First Lien Term Loan, LIBOR+5.5% (1.5% floor) cash due 5/27/2016

        8,880         8,803        8,939   
        

 

 

   

 

 

 
           8,803        8,939   
        

 

 

   

 

 

 

Titan Fitness, LLC

   Leisure facilities        

First Lien Term Loan A, LIBOR+8.75% (1.25% floor) cash due 6/30/2016

        14,906         14,779        14,969   

First Lien Term Loan B, LIBOR+10.75% (1.25% floor) cash 1.5% PIK due 6/30/2016

        11,722         11,626        11,919   

First Lien Term Loan C, 18% PIK due 6/30/2016

        3,254         3,232        3,271   

First Lien Revolver, LIBOR+8.75% (1.25% floor) cash due 6/30/2016 (10)

           (29 )       
        

 

 

   

 

 

 
           29,608        30,159 &nbs