Attached files

file filename
EX-32.1 - EX-32.1 - Oaktree Specialty Lending Corpd527293dex321.htm
EX-31.1 - EX-31.1 - Oaktree Specialty Lending Corpd527293dex311.htm
EX-31.2 - EX-31.2 - Oaktree Specialty Lending Corpd527293dex312.htm
EX-32.2 - EX-32.2 - Oaktree Specialty Lending Corpd527293dex322.htm
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 March 31, 2013

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

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 120,755,545 shares of common stock outstanding as of May 7, 2013.

 

 

 


Table of Contents

FIFTH STREET FINANCE CORP.

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2013

TABLE OF CONTENTS

 

   PART I — FINANCIAL INFORMATION   
Item 1.    Consolidated Financial Statements (unaudited, except as noted below):   
  

Consolidated Statements of Assets and Liabilities as of March 31, 2013 and September 30, 2012

     1   
  

Consolidated Statements of Operations for the three and six months ended March 31, 2013 and March 31, 2012

     2   
  

Consolidated Statements of Changes in Net Assets for the six months ended March 31, 2013 and March 31, 2012

     3   
  

Consolidated Statements of Cash Flows for the six months ended March 31, 2013 and March 31, 2012

     4   
  

Consolidated Schedule of Investments as of March 31, 2013

     5   
  

Consolidated Schedule of Investments as of September 30, 2012 (audited)

     15   
  

Notes to Consolidated Financial Statements

     23   
Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations      54   
Item 3.    Quantitative and Qualitative Disclosures about Market Risk      78   
Item 4.    Controls and Procedures      79   
   PART II — OTHER INFORMATION   
Item 1.    Legal Proceedings      80   
Item 1A.    Risk Factors      80   
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds      80   
Item 6.    Exhibits      80   
Signatures      80   


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)

 

     March 31,
2013
    September 30,
2012
 
ASSETS   

Investments at fair value:

    

Control investments (cost March 31, 2013: $58,360; cost September 30, 2012: $58,557)

   $ 56,514      $ 53,240   

Affiliate investments (cost March 31, 2013: $30,236; cost September 30, 2012: $29,496)

     31,864        31,187   

Non-control/Non-affiliate investments (cost March 31, 2013: $1,647,340; cost September 30, 2012: $1,180,436)

     1,660,517        1,203,681   
  

 

 

   

 

 

 

Total investments at fair value (cost March 31, 2013: $1,735,936; cost September 30, 2012: $1,268,489)

     1,748,895        1,288,108   

Cash and cash equivalents

     38,169        74,393   

Interest and fees receivable

     10,584        7,652   

Due from portfolio company

     855        3,292   

Receivables from unsettled transactions

            1,750   

Deferred financing costs

     17,108        13,751   

Other assets

     736        56   
  

 

 

   

 

 

 

Total assets

   $ 1,816,347      $ 1,389,002   
  

 

 

   

 

 

 
                                             LIABILITIES AND NET ASSETS     

Liabilities:

    

Accounts payable, accrued expenses and other liabilities

   $ 1,878      $ 978   

Base management fee payable

     7,591        6,573   

Incentive fee payable

     7,001        5,579   

Due to FSC, Inc.

     1,252        1,630   

Interest payable

     2,342        4,219   

Payments received in advance from portfolio companies

     24        40   

Offering costs payable

            162   

Credit facilities payable

     373,548        201,251   

SBA debentures payable

     181,750        150,000   

Unsecured convertible notes payable

     115,000        115,000   

Unsecured notes payable

     75,000          
  

 

 

   

 

 

 

Total liabilities

     765,386        485,432   

Net assets:

    

Common stock, $0.01 par value, 250,000 and 150,000 shares authorized at March 31, 2013 and September 30, 2012, respectively; 106,209 and 91,048 shares issued and outstanding at March 31, 2013 and September 30, 2012, respectively

     1,062        910   

Additional paid-in-capital

     1,174,678        1,019,053   

Net unrealized appreciation on investments

     13,337        19,998   

Net realized loss on investments and interest rate swap

     (127,584     (128,062

Accumulated overdistributed net investment income

     (10,532     (8,329
  

 

 

   

 

 

 

Total net assets (equivalent to $9.90 and $9.92 per common share at March 31, 2013 and September 30, 2012, respectively) (Note 12)

     1,050,961        903,570   
  

 

 

   

 

 

 

Total liabilities and net assets

   $ 1,816,347      $ 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

March  31,
2013
    Three months
ended
March 31,
2012
    Six months
ended
March 31,
2013
    Six months
ended
March 31,
2012
 

Interest income:

        

Control investments

   $ 876      $ 211      $ 1,758      $ 432   

Affiliate investments

     725        690        1,309        1,394   

Non-control/Non-affiliate investments

     36,019        28,183        69,473        57,309   

Interest on cash and cash equivalents

     5        14        8        18   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total interest income

     37,625        29,098        72,548        59,153   
  

 

 

   

 

 

   

 

 

   

 

 

 

PIK interest income:

        

Control investments

     108               216        38   

Affiliate investments

     308        155        765        310   

Non-control/Non-affiliate investments

     3,631        2,737        6,786        5,959   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total PIK interest income

     4,047        2,892        7,767        6,307   
  

 

 

   

 

 

   

 

 

   

 

 

 

Fee income:

        

Control investments

     114               213          

Affiliate investments

     12        146        24        254   

Non-control/Non-affiliate investments

     11,800        9,905        24,483        15,790   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total fee income

     11,926        10,051        24,720        16,044   
  

 

 

   

 

 

   

 

 

   

 

 

 

Dividend and other income:

        

Non-control/Non-affiliate investments

     1,089        39        1,435        72   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total dividend and other income

     1,089        39        1,435        72   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income

     54,687        42,080        106,470        81,576   
  

 

 

   

 

 

   

 

 

   

 

 

 

Expenses:

        

Base management fee

     8,891        5,391        16,937        11,132   

Incentive fee

     7,001        5,698        13,640        10,945   

Professional fees

     784        600        1,972        1,691   

Board of Directors fees

     122        70        251        126   

Interest expense

     7,761        5,602        14,917        11,326   

Administrator expense

     670        708        1,600        1,524   

General and administrative expenses

     1,455        1,256        2,594        2,394   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     26,684        19,325        51,911        39,138   
  

 

 

   

 

 

   

 

 

   

 

 

 

Base management fee waived

     (1,300            (1,300       
  

 

 

   

 

 

   

 

 

   

 

 

 

Net expenses

     25,384        19,325        50,611        39,138   

Gain on extinguishment of unsecured convertible notes

            36               1,341   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

     29,303        22,791        55,859        43,779   
  

 

 

   

 

 

   

 

 

   

 

 

 

Unrealized appreciation (depreciation) on investments:

        

Control investments

     4,693        (25     3,471        1,089   

Affiliate investments

     93        10,610        (63     9,327   

Non-control/Non-affiliate investments

     (2,106     (2,538 )     (10,067     3,465   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net unrealized appreciation (depreciation) on investments

     2,680        8,047        (6,659     13,881   
  

 

 

   

 

 

   

 

 

   

 

 

 

Realized gain (loss) on investments:

        

Control investments

                            

Affiliate investments

            (10,693 )            (10,620 )

Non-control/Non-affiliate investments

     (149     (89     478        (16,800
  

 

 

   

 

 

   

 

 

   

 

 

 

Net realized gain (loss) on investments

     (149     (10,782 )     478        (27,420 )
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase in net assets resulting from operations

   $ 31,834      $ 20,056      $ 49,678      $ 30,240   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income per common share — basic

   $ 0.28      $ 0.29      $ 0.56      $ 0.58   

Earnings per common share — basic

   $ 0.30      $ 0.25      $ 0.49      $ 0.40   

Weighted average common shares outstanding — basic

     106,022        79,534        100,394        75,935   

Net investment income per common share — diluted

   $ 0.27      $ 0.28      $ 0.54      $ 0.54   

Earnings per common share — diluted

   $ 0.29      $ 0.24      $ 0.48      $ 0.38   

Weighted average common shares outstanding — diluted

     113,812        87,943        108,266        84,084   

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)

 

     Six months
ended
March 31,
2013
    Six months
ended
March 31,
2012
 

Operations:

    

Net investment income

   $ 55,859      $ 43,779   

Net unrealized appreciation (depreciation) on investments

     (6,659     13,881   

Net realized gain (loss) on investments

     478        (27,420
  

 

 

   

 

 

 

Net increase in net assets resulting from operations

     49,678        30,240   
  

 

 

   

 

 

 

Stockholder transactions:

    

Distributions to stockholders

     (58,063     (45,867 )
  

 

 

   

 

 

 

Net decrease in net assets from stockholder transactions

     (58,063     (45,867 )
  

 

 

   

 

 

 

Capital share transactions:

    

Issuance of common stock, net

     151,309        99,876   

Issuance of common stock under dividend reinvestment plan

     4,467        446   
  

 

 

   

 

 

 

Net increase in net assets from capital share transactions

     155,776        100,322   
  

 

 

   

 

 

 

Total increase in net assets

     147,391        84,695   
  

 

 

   

 

 

 

Net assets at beginning of period

     903,570        728,627   
  

 

 

   

 

 

 

Net assets at end of period

   $ 1,050,961      $ 813,322   
  

 

 

   

 

 

 

Net asset value per common share

   $ 9.90      $ 9.87   
  

 

 

   

 

 

 

Common shares outstanding at end of period

     106,209        82,421   

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)

 

     Six months
ended
March 31,
2013
    Six months
ended
March 31,
2012
 

Cash flows from operating activities:

    

Net increase in net assets resulting from operations

   $ 49,678      $ 30,240   

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

    

Gain on extinguishment of convertible notes

            (1,341

Net unrealized (appreciation) depreciation on investments

     6,659        (13,881

Net realized (gain) loss on investments

     (478     27,420   

PIK interest income

     (7,767 )     (6,307

Recognition of fee income

     (24,720     (16,044

Accretion of original issue discount on investments

     (283 )     (914

Amortization of deferred financing costs

     2,623        2,051   

Changes in operating assets and liabilities:

    

Fee income received

     21,148        12,578   

Increase in interest and fees receivable

     (2,596     (225

(Increase) decrease in due from portfolio company

     2,437        (105

Decrease in receivables from unsettled transactions

     1,750          

(Increase) decrease in other assets

     (680 )     26   

Increase in accounts payable, accrued expenses and other liabilities

     900        483   

Increase (decrease) in base management fee payable

     1,018        (319

Increase in incentive fee payable

     1,422        700   

Decrease in due to FSC, Inc.

     (378 )     (63

Decrease in interest payable

     (1,877 )     (360

Decrease in payments received in advance from portfolio companies

     (16 )     (8

Purchases of investments and net revolver activity, net of syndications

     (735,531 )     (204,346

Principal payments received on investments (scheduled payments)

     22,328        23,309   

Principal payments received on investments (payoffs)

     198,463        228,604   

PIK interest income received in cash

     4,598        1,798   

Proceeds from the sale of investments

     54,461        11,549   
  

 

 

   

 

 

 

Net cash provided (used) by operating activities

     (406,841 )     94,845   
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Distributions paid in cash

     (53,595 )     (45,421

Borrowings under SBA debentures payable

     31,750          

Borrowings under credit facilities

     575,548        223,500   

Repayments of borrowings under credit facilities

     (403,251 )     (314,024

Proceeds from the issuance of unsecured notes

     72,465          

Repurchases of unsecured convertible notes

            (9,378

Proceeds from the issuance of common stock

     151,667        100,700   

Deferred financing costs paid

     (3,445 )     (1,973

Offering costs paid

     (522 )     (715
  

 

 

   

 

 

 

Net cash provided (used) by financing activities

     370,617        (47,311
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     (36,224     47,534   

Cash and cash equivalents, beginning of period

     74,393        67,644   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 38,169      $ 115,178   
  

 

 

   

 

 

 

Supplemental information:

    

Cash paid for interest

   $ 14,371      $ 9,840   

Non-cash financing activities:

    

Issuance of shares of common stock under dividend reinvestment plan

   $ 4,467      $ 446   

 

4


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

March 31, 2013

(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        1,000   

50% Membership interest in CD Holdco, LLC

           3,128          
        

 

 

   

 

 

 
           12,224        1,000   
        

 

 

   

 

 

 

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         14,550        14,646   

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

        14,275         14,268        14,346   

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

           (3       

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

           (3       

746,114 Series A Preferred Units

           12,008        15,113   

746,114 Common Stock Units

           5,316        11,409   
        

 

 

   

 

 

 
           46,136        55,514   
        

 

 

   

 

 

 

Total Control Investments (5.4% of net assets)

         $ 58,360      $ 56,514   
        

 

 

   

 

 

 

Affiliate Investments (4)

          

Caregiver Services, Inc.

   Healthcare services        

1,080,399 shares of Series A Preferred Stock

         $ 1,080      $ 3,053   
        

 

 

   

 

 

 
           1,080        3,053   
        

 

 

   

 

 

 

Ambath/Rebath Holdings, Inc. (9)

   Home improvement retail        

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

      $ 4,315         4,304        4,253   

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

        24,877         24,852        24,558   

4,668,788 shares of Preferred Stock

                    
        

 

 

   

 

 

 
           29,156        28,811   
        

 

 

   

 

 

 

Total Affiliate Investments (3.0% of net assets)

         $ 30,236      $ 31,864   
        

 

 

   

 

 

 

Non-Control/Non-Affiliate Investments (7)

          

Fitness Edge, LLC

   Leisure Facilities        

1,000 Common Units

         $ 43      $ 210   
        

 

 

   

 

 

 
           43        210   
        

 

 

   

 

 

 

Capital Equipment Group, Inc. (9)

   Industrial machinery        

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

      $ 3,965         3,952        3,972   

33,786 shares of Common Stock

           345        861   
        

 

 

   

 

 

 
           4,297        4,833   
        

 

 

   

 

 

 

Western Emulsions, Inc.

   Construction materials        

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

        7,109         7,060        7,243   
        

 

 

   

 

 

 
           7,060        7,243   
        

 

 

   

 

 

 

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         4,170        4,283   

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

        10,466         10,456        10,488   

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

        2,500         2,499        2,514   
        

 

 

   

 

 

 
           17,125        17,285   
        

 

 

   

 

 

 

 

5


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

March 31, 2013

(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        1,335   
        

 

 

   

 

 

 
           598        1,335   
        

 

 

   

 

 

 

Trans-Trade Brokers, Inc. (9)

   Air freight & logistics        

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

        13,464         13,351        13,463   

First Lien Term Loan B, 12% cash due 9/10/2014 (13)

        6,482         6,203          
        

 

 

   

 

 

 
           19,554        13,463   
        

 

 

   

 

 

 

Riverlake Equity Partners II, LP

   Multi-sector holdings        

1.78% limited partnership interest (14)

           362        337   
        

 

 

   

 

 

 
           362        337   
        

 

 

   

 

 

 

Riverside Fund IV, LP

   Multi-sector holdings        

0.34% limited partnership interest (6)(14)

           731        679   
        

 

 

   

 

 

 
           731        679   
        

 

 

   

 

 

 

Tegra Medical, LLC (9)

   Healthcare equipment        

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

        17,545         17,417        17,619   

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

        23,485         23,336        23,426   

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

        1,286         1,286        1,260   

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

        2,500         2,473        2,500   
        

 

 

   

 

 

 
           44,512        44,805   
        

 

 

   

 

 

 

Psilos Group Partners IV, LP

   Multi-sector holdings        

2.35% limited partnership interest (11)(14)

                    
        

 

 

   

 

 

 
                    
        

 

 

   

 

 

 

Mansell Group, Inc. (9)

   Advertising        

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

        8,362         8,283        8,549   

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

        9,353         9,271        9,582   

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

           (17       
        

 

 

   

 

 

 
           17,537        18,131   
        

 

 

   

 

 

 

Eagle Hospital Physicians, Inc. (9)(12)(15)

   Healthcare services        

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

        24,256         23,929        18,733   

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

        1,100         1,071          
        

 

 

   

 

 

 
           25,000        18,733   
        

 

 

   

 

 

 

Enhanced Recovery Company, LLC

   Diversified support services        

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

        9,408         9,295        9,418   

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

        11,080         10,969        11,001   

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

           (40       
        

 

 

   

 

 

 
           20,224        20,419   
        

 

 

   

 

 

 

Specialty Bakers LLC (15)

   Food distributors        

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

        3,836         3,680        3,836   

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

        11,000         10,860        11,000   

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

        2,750         2,699        69   
        

 

 

   

 

 

 
           17,239        14,905   
        

 

 

   

 

 

 

Welocalize, Inc.

   Internet software & services        

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

           3,393        7,457   
        

 

 

   

 

 

 
           3,393        7,457   
        

 

 

   

 

 

 

 

6


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

March 31, 2013

(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         5,393        5,463   

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

        18,240         16,677        17,700   

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

        1,482         1,442        1,480   

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

           1,037        1,442   

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

           136        29   

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          
        

 

 

   

 

 

 
           26,148        26,114   
        

 

 

   

 

 

 

Bunker Hill Capital II (QP), LP

   Multi-sector holdings        

0.51% limited partnership interest (14)

           94        4   
        

 

 

   

 

 

 
           94        4   
        

 

 

   

 

 

 

Drugtest, Inc.

   Human resources &
employment services
       

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

        10,493         10,351        10,607   

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

        8,589         8,493        8,675   

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

        4,500         4,453        4,541   
        

 

 

   

 

 

 
           23,297        23,823   
        

 

 

   

 

 

 

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. (9)

   Healthcare services        

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

        11,415         11,190        11,401   

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

           (27       
        

 

 

   

 

 

 
           11,163        11,401   
        

 

 

   

 

 

 

Cardon Healthcare Network, LLC (9)

   Diversified support
services
       

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

        10,058         9,906        10,156   

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

        21,014         20,833        21,222   

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

           (35       

65,903 Class A Units

           250        508   
        

 

 

   

 

 

 
           30,954        31,886   
        

 

 

   

 

 

 

U.S. Retirement Partners, Inc.

   Diversified financial
services
       

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

        33,563         33,217        33,847   
        

 

 

   

 

 

 
           33,217        33,847   
        

 

 

   

 

 

 

Phoenix Brands Merger Sub LLC (9)

   Household products        

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

        6,161         6,054        6,108   

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

        21,197         20,866        20,851   

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

        2,357         2,262        2,365   
        

 

 

   

 

 

 
           29,182        29,324   
        

 

 

   

 

 

 

U.S. Collections, Inc.

   Diversified support
services
       

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

        9,387         9,293        9,368   
        

 

 

   

 

 

 
           9,293        9,368   
        

 

 

   

 

 

 

CCCG, LLC (9)

   Oil & gas equipment
services
       

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

        34,881         34,348        35,174   
        

 

 

   

 

 

 
           34,348        35,174   
        

 

 

   

 

 

 

Maverick Healthcare Group, LLC

   Healthcare equipment        

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

        24,438         24,039        24,444   
        

 

 

   

 

 

 
           24,039        24,444   
        

 

 

   

 

 

 

Refac Optical Group

   Specialty stores        

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

        11,948         11,726        12,004   

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

        20,402         20,042        20,453   

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

           (90       

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

           1          

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

           999        309   
        

 

 

   

 

 

 
           32,678        32,766   
        

 

 

   

 

 

 

 

7


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

March 31, 2013

(unaudited)

 

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

  

Industry

   Principal (8)      Cost     Fair Value  

Securus Technologies, Inc. (9)

   Integrated telecommunication

services

       

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

        12,500         12,306        12,735   
        

 

 

   

 

 

 
           12,306        12,735   
        

 

 

   

 

 

 

Gundle/SLT Environmental, Inc.

   Environmental & facilities
services
       

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

        8,857         8,790        8,916   
        

 

 

   

 

 

 
           8,790        8,916   
        

 

 

   

 

 

 

Titan Fitness, LLC

   Leisure facilities        

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

        28,696         28,593        28,692   

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

        17,898         17,815        17,935   

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

           (25       
        

 

 

   

 

 

 
           46,383        46,627   
        

 

 

   

 

 

 

Baird Capital Partners V, LP

   Multi-sector holdings        

0.40% limited partnership interest (14)

           649        733   
        

 

 

   

 

 

 
           649        733   
        

 

 

   

 

 

 

Charter Brokerage, LLC

   Oil & gas equipment services        

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

        30,225         30,117        30,810   

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

        11,857         11,792        11,850   

Senior Revolver, LIBOR+6.5% (1.5% floor) cash due 7/13/2016 (10)

           (48 )       
        

 

 

   

 

 

 
           41,861        42,660   
        

 

 

   

 

 

 

Stackpole Powertrain International ULC

   Auto parts & equipment        

1,000 Common Units (14)

           1,000        2,687   
        

 

 

   

 

 

 
           1,000        2,687   
        

 

 

   

 

 

 

Discovery Practice Management, Inc.

   Healthcare services        

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

        6,112         6,059        6,177   

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

        6,539         6,490        6,596   

First Lien Revolver, LIBOR+7% cash due 8/8/2016

        850         825        894   
        

 

 

   

 

 

 
           13,374        13,667   
        

 

 

   

 

 

 

CTM Group, Inc.

   Leisure products        

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

        10,856         10,774        10,908   

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

        4,163         4,139        4,289   
        

 

 

   

 

 

 
           14,913        15,197   
        

 

 

   

 

 

 

Milestone Partners IV, LP

   Multi-sector holdings        

1.36% limited partnership interest (14)

           895        1,021   
        

 

 

   

 

 

 
           895        1,021   
        

 

 

   

 

 

 

Insight Pharmaceuticals LLC

   Pharmaceuticals        

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

        13,517         13,426        13,703   
        

 

 

   

 

 

 
           13,426        13,703   
        

 

 

   

 

 

 

National Spine and Pain Centers, LLC

   Healthcare services        

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

        29,026         28,825        29,535   

300,700.98 Class A Units

           301        316   
        

 

 

   

 

 

 
           29,126        29,851   
        

 

 

   

 

 

 

RCPDirect, LP

   Multi-sector holdings        

0.91% limited partnership interest (6)(14)

           461        523   
        

 

 

   

 

 

 
           461        523   
        

 

 

   

 

 

 

The MedTech Group, Inc.

   Healthcare equipment        

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

        12,610         12,530        12,620   
        

 

 

   

 

 

 
           12,530        12,620   
        

 

 

   

 

 

 

 

8


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

March 31, 2013

(unaudited)

 

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

  

Industry

   Principal (8)      Cost     Fair Value  

Digi-Star Acquisition Holdings, Inc.

   Industrial
machinery
       

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

        12,223         12,127        12,349   

264.37 Class A Preferred Units

           264        292   

2,954.87 Class A Common Units

           36        145   
        

 

 

   

 

 

 
           12,427        12,786   
        

 

 

   

 

 

 

CPASS Acquisition Company

   Internet
software &
services
       

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

        4,724         4,638        4,780   

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

           (14       
        

 

 

   

 

 

 
           4,624        4,780   
        

 

 

   

 

 

 

Genoa Healthcare Holdings, LLC

   Pharmaceuticals        

Senior Term Loan, LIBOR+5.25% (1.25% floor) cash due 12/1/2016

        9,000         9,000        9,025   

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

        12,842         12,747        13,094   

Senior Revolver, LIBOR+5.25% (1.25% floor) cash due 12/1/2016

                    

500,000 Preferred units (6)

           261        261   

500,000 Class A Common Units

           25        421   
        

 

 

   

 

 

 
           22,033        22,801   
        

 

 

   

 

 

 

Slate Pharmaceuticals Acquisition Corp.

   Healthcare
services
       

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

        20,385         20,230        21,005   
        

 

 

   

 

 

 
           20,230        21,005   
        

 

 

   

 

 

 

ACON Equity Partners III, LP

   Multi-
sector holdings
       

0.31% limited partnership interest (6)(14)

           222        208   
        

 

 

   

 

 

 
           222        208   
        

 

 

   

 

 

 

CRGT, Inc.

   IT consulting &
other services
       

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

        26,337         26,128        27,064   
        

 

 

   

 

 

 
           26,128        27,064   
        

 

 

   

 

 

 

Riverside Fund V, LP

   Multi-sector
holdings
       

0.48% limited partnership interest (14)

           147        147   
        

 

 

   

 

 

 
           147        147   
        

 

 

   

 

 

 

World 50, Inc.

   Research &
consulting
services
       

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

        11,080         10,965        11,174   

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

        7,000         6,930        7,063   

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

           (50       
        

 

 

   

 

 

 
           17,845        18,237   
        

 

 

   

 

 

 

Huddle House, Inc.

   Restaurants        

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

        14,077         13,964        14,355   
        

 

 

   

 

 

 
           13,964        14,355   
        

 

 

   

 

 

 

Nixon, Inc.

   Apparel,
accessories &
luxury goods
       

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

        10,270         10,187        10,490   
        

 

 

   

 

 

 
           10,187        10,490   
        

 

 

   

 

 

 

JTC Education, Inc. (9)

   Education
services
       

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

        14,500         14,404        14,621   

17,391 Shares of Series A-1 Preferred Stock

           313        195   

17,391 Shares of Common Stock

           187          
        

 

 

   

 

 

 
           14,904        14,816   
        

 

 

   

 

 

 

 

9


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

March 31, 2013

(unaudited)

 

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

  

Industry

   Principal (8)      Cost     Fair Value  

BMC Acquisition, Inc.

   Diversified financial services        

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

        5,555         5,520        5,534   

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

        115         107        146   

500 Series A Preferred Shares

           500        450   

50,000 Common Shares

           1          
        

 

 

   

 

 

 
           6,128        6,130   
        

 

 

   

 

 

 

Ansira Partners, Inc.

   Advertising        

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

        11,730         11,655        11,730   

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

           (7       

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

           250        277   
        

 

 

   

 

 

 
           11,898        12,007   
        

 

 

   

 

 

 

MX USA, Inc.

   Healthcare services        

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

        27,000         26,833        27,620   
        

 

 

   

 

 

 
           26,833        27,620   
        

 

 

   

 

 

 

Edmentum, Inc. (formerly PLATO, Inc.)

   Education services        

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

        17,000         17,000        17,232   
        

 

 

   

 

 

 
                 17,000     17,232  
        

 

 

   

 

 

 

I Drive Safely, LLC

   Education services        

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

        27,000         26,996        27,683   

First Lien Revolver, LIBOR+6.5% (1.5% floor) cash due 5/25/2017 (10)

           (1 )       

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

           750        689   
        

 

 

   

 

 

 
           27,745        28,372   
        

 

 

   

 

 

 

ConvergeOne Holdings Corp.

   Integrated telecommunication

services

       

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

        9,625         9,625        9,718   
        

 

 

   

 

 

 
           9,625        9,718   
        

 

 

   

 

 

 

Yeti Acquisition, LLC (9)

   Leisure products        

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

        26,950         26,943        27,566   

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

        12,000         11,997        12,185   

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

           (3       

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

           1,500        3,219   
        

 

 

   

 

 

 
           40,437        42,970   
        

 

 

   

 

 

 

Specialized Education Services, Inc.

   Education services        

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

        9,180         9,180        9,227   

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

        17,703         17,703        18,021   
        

 

 

   

 

 

 
           26,883        27,248   
        

 

 

   

 

 

 

InvestRx Corporation

   Diversified support services        

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

        24,155         24,149        24,157   

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

        18,371         18,366        18,271   

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

        600         599        788   
        

 

 

   

 

 

 
           43,114        43,216   
        

 

 

   

 

 

 

PC Helps Support, LLC

   IT consulting & other

services

       

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

        18,661         18,661        18,944   

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

           675        714   

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

           75        109   
        

 

 

   

 

 

 
           19,411        19,767   
        

 

 

   

 

 

 

Ikaria Acquisition, Inc.

   Healthcare services        

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

        9,950         9,950        10,045   
        

 

 

   

 

 

 
           9,950        10,045   
        

 

 

   

 

 

 

 

10


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

March 31, 2013

(unaudited)

 

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

  

Industry

   Principal (8)      Cost      Fair Value  

Olson + Co., Inc.

   Advertising         

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

        13,374         13,374         13,374   

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

                     
        

 

 

    

 

 

 
           13,374         13,374   
        

 

 

    

 

 

 

Beecken Petty O’Keefe Fund IV, L.P.

   Multi-sector
holdings
        

0.5% limited partnership interest (11)(14)

                     
        

 

 

    

 

 

 
                     
        

 

 

    

 

 

 

CompuCom Systems, Inc.

   IT consulting &
other services
        

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

        30,850         30,850         31,144   
        

 

 

    

 

 

 
           30,850         31,144   
        

 

 

    

 

 

 

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         20,037   

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

                     
        

 

 

    

 

 

 
           20,000         20,037   
        

 

 

    

 

 

 

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         25,281   

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

                     
        

 

 

    

 

 

 
           25,000         25,281   
        

 

 

    

 

 

 

Dexter Axle Company

   Auto parts &
equipment
        

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

        30,252         30,252         30,298   

1,500 Common Shares in Dexter Axle Holding Company

           1,500         1,403   
        

 

 

    

 

 

 
           31,752         31,701   
        

 

 

    

 

 

 

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         10,010   
        

 

 

    

 

 

 
           10,000         10,010   
        

 

 

    

 

 

 

SumTotal Systems LLC

   Internet
software &
services
        

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

        15,000         15,000         15,013   
        

 

 

    

 

 

 
           15,000         15,013   
        

 

 

    

 

 

 

Comprehensive Pharmacy Services, LLC

   Pharmaceuticals         

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

        10,050         10,050         10,142   

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

           2,000         2,216   
        

 

 

    

 

 

 
           12,050         12,358   
        

 

 

    

 

 

 

Reliance Communications, LLC

   Internet
software &
services
        

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

        22,369         22,350         22,391   

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

        11,333         11,324         11,344   

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

        1,250         1,246         1,348   
        

 

 

    

 

 

 
           34,920         35,083   
        

 

 

    

 

 

 

Garretson Firm Resolution Group, Inc.

   Diversified
support services
        

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

        7,450         7,450         7,446   

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

        5,000         5,000         4,997   

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

        219         219         251   

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

           495         475   

50,000 Common Units in GRG Holdings, LP

           5           
        

 

 

    

 

 

 
           13,169         13,169   
        

 

 

    

 

 

 

 

11


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

March 31, 2013

(unaudited)

 

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

  

Industry

   Principal (8)      Cost     Fair Value  

Teaching Strategies, LLC

   Education services        

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

        31,025         31,004        31,297   

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

        14,601         14,592        14,614   

First Lien Revolver, LIBOR+6% (1.25% floor) cash due 12/21/2017 (10)

           (3       
        

 

 

   

 

 

 
           45,593        45,911   
        

 

 

   

 

 

 

Omniplex World Services Corporation

   Security & alarm services        

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

        12,544         12,544        12,543   

500 Class A Common Units in Omniplex Holdings Corp.

           500        438   
        

 

 

   

 

 

 
           13,044        12,981   
        

 

 

   

 

 

 

Dominion Diagnostics, LLC

   Healthcare services        

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

        15,587         15,587        15,608   
        

 

 

   

 

 

 
           15,587        15,608   
        

 

 

   

 

 

 

Affordable Care, Inc.

   Healthcare services        

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

        21,500         21,500        21,556   
        

 

 

   

 

 

 
           21,500        21,556   
        

 

 

   

 

 

 

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        7,013   
        

 

 

   

 

 

 
           7,000        7,013   
        

 

 

   

 

 

 

AdVenture Interactive, Corp.

   Advertising        

First Lien Term Loan, LIBOR+6.75% (1.25% floor) cash due 3/22/2018

        114,000         113,956        114,000   

First Lien Revolver, LIBOR+6.75% (1.25% floor) cash due 3/22/2018 (10)

           (2       

2,000 Preferred Units of AVI Holdings, L.P. (6)

           2,000        2,041   
        

 

 

   

 

 

 
           115,954        116,041   
        

 

 

   

 

 

 

CoAdvantage Corporation

   Human resources &
employment services
       

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

        10,031         10,031        10,135   

50,000 Class A Units in CIP CoAdvantage Investments LLC

           500        624   
        

 

 

   

 

 

 
           10,531        10,759   
        

 

 

   

 

 

 

EducationDynamics, LLC

   Education services        

Subordinated Term Loan, 12% cash 6% PIK due 1/16/2017

        10,733         10,733        10,733   
        

 

 

   

 

 

 
           10,733        10,733   
        

 

 

   

 

 

 

Vestcom International, Inc.

   Data processing &
outsourced services
       

First Lien Term Loan, LIBOR+5.75% (1.25% floor) cash due 12/26/2018

        10,000         10,000        10,000   
        

 

 

   

 

 

 
           10,000        10,000   
        

 

 

   

 

 

 

Sterling Capital Partners IV, L.P.

   Multi-sector holdings        

0.20% limited partnership interest (6)(14)

           389        389   
        

 

 

   

 

 

 
           389        389   
        

 

 

   

 

 

 

 

12


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

March 31, 2013

(unaudited)

 

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

  

Industry

   Principal (8)      Cost      Fair Value  

Devicor Medical Products, Inc.

   Healthcare equipment         

First Lien Term Loan, LIBOR+5% (2% floor) cash due 7/8/2015

        10,000         10,000         10,000   
        

 

 

    

 

 

 
           10,000         10,000   
        

 

 

    

 

 

 

RP Crown Parent, LLC

   Application software         

First Lien Revolver, LIBOR+5.5% (1.25% floor) cash due 12/21/2017

        1,000         305         1,000   
        

 

 

    

 

 

 
           305         1,000   
        

 

 

    

 

 

 

SESAC Holdco II LLC

   Diversified support
services
        

Second Lien Term Loan, LIBOR+8.75% (1.25% floor) cash due 6/28/2019

        4,000         4,000         4,000   
        

 

 

    

 

 

 
           4,000         4,000   
        

 

 

    

 

 

 

Advanced Pain Management Holdings, Inc.

   Healthcare services         

First Lien Term Loan, LIBOR+8.5% (1.25% floor) cash due 2/26/2018

        24,000         24,000         24,192   
        

 

 

    

 

 

 
           24,000         24,192   
        

 

 

    

 

 

 

Rocket Software, Inc.

   Internet software &
services
        

Second Lien Term Loan, LIBOR+8.75% (1.5% floor) cash due 2/8/2018

        5,225         5,186         5,225   
        

 

 

    

 

 

 
           5,186         5,225   
        

 

 

    

 

 

 

TravelClick, Inc.

   Internet software &
services
        

Second Lien Term Loan, LIBOR+8.5% (1.25% floor) cash due 3/26/2018

        15,000         15,000         15,000   
        

 

 

    

 

 

 
           15,000         15,000   
        

 

 

    

 

 

 

American Renal Holdings, Inc.

   Healthcare services         

Second Lien Term Loan, LIBOR+7.25% (1.25% floor) cash due 2/27/2018

        3,000         3,000         3,000   
        

 

 

    

 

 

 
           3,000         3,000   
        

 

 

    

 

 

 

ISG Services, LLC

   Diversified support
services
        

First Lien Term Loan, LIBOR+8% (1% floor) cash due 3/28/2018

        95,000         94,938         95,000   

First Lien Revolver, LIBOR+8% (1% floor) cash due 3/28/2018

        4,000         3,993         4,000   
        

 

 

    

 

 

 
           98,931         99,000   
        

 

 

    

 

 

 

Joerns Healthcare, LLC

   Healthcare services         

Second Lien Term Loan, LIBOR+8.75% (1.25% floor) cash due 9/28/2018

        20,000         20,000         20,000   
        

 

 

    

 

 

 
           20,000         20,000   
        

 

 

    

 

 

 

Total Non-Control/Non-Affiliate Investments (157.9% of net assets)

         $ 1,647,340       $ 1,660,517   
        

 

 

    

 

 

 
        

 

 

    

 

 

 

Total Portfolio Investments (166.3% of net assets)

         $ 1,735,936       $ 1,748,895   
        

 

 

    

 

 

 

 

 

(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.

 

13


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

March 31, 2013

(unaudited)

 

(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.

 

(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

Phoenix Brands Merger Sub LLC

   March 1, 2013   

+ 0.25% on Senior Term Loan

+ 0.25% on Revolver

+ 0.75% on Subordinated Term Loan

      Tier pricing per loan amendment

HealthDrive Corporation

   January 1, 2013    + 2.0% on Term Loan A    + 1.0% on Term Loan B    Per loan amendment

JTC Education, Inc.

   January 1, 2013    + 0.25% on Term Loan       Per loan amendment

Mansell Group, LLC

   January 1, 2013    + 2.0% on Term Loan A, Term Loan B & Revolver       Per loan agreement

Physicians Pharmacy Alliance, Inc.

   January 1, 2013   

+ 1.0% on Term Loan

+ 3.0% on Revolver

   + 1.0% on Term Loan    Per loan amendment

Coll Materials Group LLC

   January 1, 2013       – 3.0% on Term Loan B    Per loan amendment

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    – 12.0% on Term Loan B    + 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

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

Eagle Hospital Physicians, Inc.

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

 

(10) Investment has undrawn commitments and a negative cost basis as a result of unamortized fees. Unamortized fees are classified as unearned income which reduces cost basis.

 

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

 

(12) Investment was on cash non-accrual status as of March 31, 2013.

 

(13) Investment was on PIK non-accrual status as of March 31, 2013.

 

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

 

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

 

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  

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   
        

 

 

   

 

 

 

 

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  

Cenegenics, LLC

   Healthcare services        

414,419 Common Units (6)

           598        1,394   
        

 

 

   

 

 

 
           598        1,394   
        

 

 

   

 

 

 

Trans-Trade Brokers, 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)(14)

   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 (14)

   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   
        

 

 

   

 

 

 

 

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  

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 Holdings, Inc.

   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