Attached files

file filename
EX-32.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 - Oaktree Specialty Lending Corpd387193dex321.htm
EX-31.2 - CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 - Oaktree Specialty Lending Corpd387193dex312.htm
EX-31.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 - Oaktree Specialty Lending Corpd387193dex311.htm
EX-32.2 - CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 - Oaktree Specialty Lending Corpd387193dex322.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 June 30, 2012

OR

 

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

For the transition period from:                     to                     

Commission File Number: 01-33901

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    The NASDAQ Global Select Market

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 82,511,619 shares of common stock outstanding as of August 8, 2012.

 

 

 


Table of Contents

FIFTH STREET FINANCE CORP.

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2012

TABLE OF CONTENTS

 

  

PART I — FINANCIAL INFORMATION

  

Item 1.

  

Consolidated Financial Statements (unaudited):

  
  

Consolidated Statements of Assets and Liabilities as of June 30, 2012 and September 30, 2011

     1   
  

Consolidated Statements of Operations for the three and nine months ended June 30, 2012 and June 30, 2011

     2   
  

Consolidated Statements of Changes in Net Assets for the nine months ended June 30, 2012 and  June 30, 2011

     3   
  

Consolidated Statements of Cash Flows for the nine months ended June 30, 2012 and June 30, 2011

     4   
  

Consolidated Schedule of Investments as of June 30, 2012

     5   
  

Consolidated Schedule of Investments as of September 30, 2011

     14   
  

Notes to Consolidated Financial Statements

     21   

Item 2.

  

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

     55   

Item 3.

  

Quantitative and Qualitative Disclosures About Market Risk

     76   

Item 4.

  

Controls and Procedures

     78   
  

PART II — OTHER INFORMATION

  

Item 1.

  

Legal Proceedings

     79   

Item 1A.

  

Risk Factors

     79   

Item 2.

  

Unregistered Sales of Equity Securities and Use of Proceeds

     79   

Item 6.

  

Exhibits

     79   

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 data)

(unaudited)

 

     June 30,
2012
    September 30,
2011
 
ASSETS   

Investments at fair value:

    

Control investments (cost June 30, 2012: $15,542; cost September 30, 2011: $13,726)

   $ 14,916      $ 14,500   

Affiliate investments (cost June 30, 2012: $1,080; cost September 30, 2011: $34,182)

     2,444        25,897   

Non-control/Non-affiliate investments (cost June 30, 2012: $1,203,770; cost September 30, 2011: $1,108,174)

     1,180,737        1,079,440   
  

 

 

   

 

 

 

Total investments at fair value (cost June 30, 2012: $1,220,392; cost September 30, 2011: $1,156,082)

     1,198,097        1,119,837   

Cash and cash equivalents

     105,694        67,644   

Interest and fees receivable

     5,922        6,752   

Due from portfolio company

     449        552   

Deferred financing costs

     14,216        14,668   

Collateral posted to bank and other assets

     113        264   
  

 

 

   

 

 

 

Total assets

   $ 1,324,491      $ 1,209,717   
  

 

 

   

 

 

 
LIABILITIES AND NET ASSETS   

Liabilities:

    

Accounts payable, accrued expenses and other liabilities

   $ 1,146      $ 1,175   

Base management fee payable

     6,094        5,710   

Incentive fee payable

     5,477        4,997   

Due to FSC, Inc.

     2,152        1,480   

Interest payable

     3,965        4,669   

Payments received in advance from portfolio companies

     36        35   

Offering costs payable

     9          

Credit facilities payable

     228,541        178,024   

SBA debentures payable

     150,000        150,000   

Convertible senior notes payable

     115,000        135,000   
  

 

 

   

 

 

 

Total liabilities

     512,420        481,090   
  

 

 

   

 

 

 

Net assets:

    

Common stock, $0.01 par value, 150,000 shares authorized, 82,462 and 72,376 shares issued and outstanding at June 30, 2012 and September 30, 2011

     825        724   

Additional paid-in-capital

     930,188        829,620   

Net unrealized depreciation on investments and interest rate swap

     (21,916     (35,976

Net realized loss on investments and interest rate swap

     (90,904     (63,485

Accumulated overdistributed net investment income

     (6,122     (2,256
  

 

 

   

 

 

 

Total net assets (equivalent to $9.85 and $10.07 per common share at June 30, 2012 and September 30, 2011) (Note 12)

     812,071        728,627   
  

 

 

   

 

 

 

Total liabilities and net assets

   $ 1,324,491      $ 1,209,717   
  

 

 

   

 

 

 

See notes to Consolidated Financial Statements.

 

1


Table of Contents

Fifth Street Finance Corp.

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

     Three  months
ended

June 30,
2012
    Three months
ended
June 30,
2011
    Nine months
ended
June 30,
2012
    Nine months
ended
June 30,
2011
 

Interest income:

        

Control investments

   $ 2      $ 40      $ 434      $ 54   

Affiliate investments

     835        1,126        2,229        3,416   

Non-control/Non-affiliate investments

     27,822        24,271        85,131        61,963   

Interest on cash and cash equivalents

     11        4        29        17   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total interest income

     28,670        25,441        87,823        65,450   
  

 

 

   

 

 

   

 

 

   

 

 

 

PIK interest income:

        

Control investments

     211        105        249        239   

Affiliate investments

     158        278        467        835   

Non-control/Non-affiliate investments

     3,557        3,179        9,516        9,103   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total PIK interest income

     3,926        3,562        10,232        10,177   
  

 

 

   

 

 

   

 

 

   

 

 

 

Fee income:

        

Control investments

                          127   

Affiliate investments

     377        283        630        550   

Non-control/Non-affiliate investments

     7,954        2,992        23,744        11,000   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total fee income

     8,331        3,275        24,374        11,677   
  

 

 

   

 

 

   

 

 

   

 

 

 

Dividend and other income:

        

Non-control/Non-affiliate investments

     81        164        154        174   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total dividend and other income

     81        164        154        174   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income

     41,008        32,442        122,583        87,478   
  

 

 

   

 

 

   

 

 

   

 

 

 

Expenses:

        

Base management fee

     6,094        5,381        17,226        13,946   

Incentive fee

     5,477        4,132        16,422        11,785   

Professional fees

     619        456        2,310        1,654   

Board of Directors fees

     30        46        156        132   

Interest expense

     5,611        4,977        16,936        9,640   

Administrator expense

     690        395        2,214        1,140   

General and administrative expenses

     807        529        3,201        2,043   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     19,328        15,916        58,465        40,340   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gain on extinguishment of convertible senior notes

     230               1,571          
  

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

     21,910        16,526        65,689        47,138   
  

 

 

   

 

 

   

 

 

   

 

 

 

Unrealized appreciation (depreciation) on interest rate swap

            (919            51   

Unrealized appreciation (depreciation) on investments:

        

Control investments

     (2,493     5,225        (1,404 )     12,538   

Affiliate investments

     322        13,931        9,649        3,760   

Non-control/Non-affiliate investments

     2,350        215        5,815        18,573   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net unrealized appreciation on investments

     179        19,371        14,060        34,871   
  

 

 

   

 

 

   

 

 

   

 

 

 

Realized loss on investments:

        

Control investments

                          (7,806

Affiliate investments

            (14,146     (10,620     (14,146 )

Non-control/Non-affiliate investments

                   (16,800 )     (6,157
  

 

 

   

 

 

   

 

 

   

 

 

 

Net realized loss on investments

            (14,146     (27,420 )     (28,109 )
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase in net assets resulting from operations

   $ 22,089      $ 20,832      $ 52,329      $ 53,951   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income per common share — basic

   $ 0.27      $ 0.25      $ 0.84      $ 0.77   

Earnings per common share — basic

   $ 0.27      $ 0.31      $ 0.67      $ 0.88   

Weighted average common shares outstanding — basic

     82,421        67,081        78,089        61,254   

Net investment income per common share — diluted

   $ 0.26      $ 0.24      $ 0.80      $ 0.76   

Earnings per common share — diluted

   $ 0.26      $ 0.30      $ 0.64      $ 0.87   

Weighted average common shares outstanding — diluted

     90,279        76,020        86,325        64,233   

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 data)

(unaudited)

 

     Nine months ended
June 30,

2012
    Nine months ended
June 30,

2011
 

Operations:

    

Net investment income

   $ 65,689      $ 47,138   

Net unrealized appreciation on investments and interest rate swap

     14,060        34,922   

Net realized loss on investments

     (27,420     (28,109
  

 

 

   

 

 

 

Net increase in net assets from operations

     52,329        53,951   

Stockholder transactions:

    

Distributions to stockholders

     (69,555     (57,644
  

 

 

   

 

 

 

Net decrease in net assets from stockholder transactions

     (69,555 )      (57,644 ) 

Capital share transactions:

    

Issuance of common stock, net

     99,815        206,079   

Issuance of common stock under dividend reinvestment plan

     855        4,091   
  

 

 

   

 

 

 

Net increase in net assets from capital share transactions

     100,670        210,170   
  

 

 

   

 

 

 

Total increase in net assets

     83,444        206,477   
  

 

 

   

 

 

 

Net assets at beginning of period

     728,627        569,172   
  

 

 

   

 

 

 

Net assets at end of period

   $ 812,071      $ 775,649   
  

 

 

   

 

 

 

Net asset value per common share

   $ 9.85      $ 10.72   
  

 

 

   

 

 

 

Common shares outstanding at end of period

     82,462        72,376   

 

 

 

 

 

See notes to Consolidated Financial Statements.

 

3


Table of Contents

Fifth Street Finance Corp.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

     Nine months
ended
June 30,
2012
    Nine months
ended
June 30,
2011
 

Cash flows from operating activities:

    

Net increase in net assets resulting from operations

   $ 52,329      $ 53,951   

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

     (1,571       

Net unrealized appreciation on investments and interest rate swap

     (14,060     (34,922

Net realized losses on investments and interest rate swap

     27,420        28,109   

PIK interest income

     (10,232     (10,177

Recognition of fee income

     (24,374     (11,677

Accretion of original issue discount on investments

     (1,367     (1,239

Amortization of deferred financing costs

     3,241        1,816   

Change in operating assets and liabilities:

    

Fee income received

     19,336        16,866   

(Increase) decrease in interest and fees receivable

     385        (2,252

(Increase) decrease in due from portfolio company

     103        (329 )

(Increase) decrease in collateral posted to bank and other assets

     151        (218 )

Increase (decrease) in accounts payable, accrued expenses and other liabilities

     (29 )     262   

Increase in base management fee payable

     384        2,505   

Increase in incentive fee payable

     480        1,272   

Increase (decrease) in due to FSC, Inc.

     672        (263

Increase (decrease) in interest payable

     (704     3,185   

Decrease in payments received in advance from portfolio companies

     (1     (545

Purchases of investments and net revolver activity, net of syndications

     (407,854     (566,835 )

Principal payments received on investments (scheduled payments)

     32,795        19,559   

Principal payments received on investments (payoffs)

     283,966        62,447   

PIK interest income received in cash

     5,007        7,030   

Proceeds from the sale of investments

     11,549          
  

 

 

   

 

 

 

Net cash used by operating activities

     (22,374 )     (431,455
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Dividends paid in cash

     (68,699     (53,553

Borrowings under SBA debentures payable

            77,000   

Borrowings under credit facilities

     409,297        406,000   

Repayments of borrowings under credit facilities

     (358,780     (406,000

Proceeds from the issuance of convertible senior notes

            152,000   

Repurchases of convertible senior notes

     (17,939       

Proceeds from the issuance of common stock

     100,700        206,788   

Deferred financing costs paid

     (3,279     (9,230

Offering costs paid

     (876     (709
  

 

 

   

 

 

 

Net cash provided by financing activities

     60,424        372,296   
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     38,050        (59,159

Cash and cash equivalents, beginning of period

     67,644        76,765   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 105,694      $ 17,606   
  

 

 

   

 

 

 

Supplemental Information:

    

Cash paid for interest

   $ 14,720      $ 4,639   

Non-cash financing activities:

    

Issuance of shares of common stock under dividend reinvestment plan

   $ 855      $ 4,091   

See notes to Consolidated Financial Statements.

 

4


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

June 30, 2012

(dollar amounts in thousands)

(unaudited)

 

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

  

Industry

   Principal(8)      Cost      Fair Value  

Control Investments(3)

           

Lighting By Gregory, LLC(9)(13)(14)

   Housewares & specialties         

First Lien Term Loan A, 9.75% PIK due 2/28/2013

      $ 4,700       $ 3,996       $ 737   

First Lien Bridge Loan, 8% PIK due 3/31/2012(16)

        113         113           

97.38% membership interest

           1,210           
        

 

 

    

 

 

 
           5,319         737   

Coll Materials Group LLC(9)

   Environmental & facilities services         

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

        7,096         7,096         7,071   

50% Membership interest in CD Holdco, LLC

           3,127         7,108   
        

 

 

    

 

 

 
           10,223         14,179   
        

 

 

    

 

 

 

Total Control Investments (1.8% of net assets)

         $ 15,542       $ 14,916   
        

 

 

    

 

 

 

Affiliate Investments(4)

           

Caregiver Services, Inc.

   Healthcare services         

1,080,399 shares of Series A Preferred Stock

         $ 1,080       $ 2,444   
        

 

 

    

 

 

 
           1,080         2,444   
        

 

 

    

 

 

 

Total Affiliate Investments (0.3% of net assets)

         $ 1,080       $ 2,444   
        

 

 

    

 

 

 

Non-Control/Non-Affiliate Investments(7)

           

Repechage Investments Limited(13)(14)

   Restaurants         

First Lien Term Loan, 12.75% cash 2.75% PIK due 10/16/2011(16)

      $ 3,632       $ 3,412       $ 898   

7,500 shares of Series A Preferred Stock of Elephant & Castle, Inc.

           750           
        

 

 

    

 

 

 
           4,162         898   

Traffic Control & Safety Corporation(9)(14)(16)

   Construction & engineering         

Senior Debtor-in-Possession Loan, LIBOR+12% cash due 10/20/2012

        7,899         7,899         7,899   

Senior Term Loan A, LIBOR+9% cash due 6/29/2012

        5,000         5,000         5,000   

Senior Revolver, LIBOR+9% cash due 6/29/2012

        8,587         8,587         8,587   

Second Lien Term Loan, 12% cash 3% PIK due 5/28/2015(13)

        22,595         21,247         11,518   

Subordinated Term Loan, 15% PIK due 5/28/2015

        6,024         5,531           

24,750 shares of Series B Preferred Stock

           248           

43,494 shares of Series D Preferred Stock

           435           

25,000 shares of Common Stock

           3           
        

 

 

    

 

 

 
           48,950         33,004   

TBA Global, LLC

   Advertising         

53,994 Senior Preferred Shares

           216         326   

191,977 Shares A Shares

           192           
        

 

 

    

 

 

 
           408         326   

Fitness Edge, LLC

   Leisure facilities         

1,000 Common Units(6)

           43         201   
        

 

 

    

 

 

 
           43         201   

Capital Equipment Group, Inc.(9)

   Industrial machinery         

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

        10,436         10.350         10,516   

33,463 shares of Common Stock

           345         593   
        

 

 

    

 

 

 
           10,695         11,109   

Rail Acquisition Corp.(14)

   Electronic manufacturing services         

First Lien Term Loan, 12% PIK due 9/1/2013

        20,167         15,637         3,454   

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

        4,958         4,958         4,958   
        

 

 

    

 

 

 
           20,595         8,412   

 

5


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

June 30, 2012

(dollar amounts in thousands)

(unaudited)

 

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

  

Industry

   Principal(8)      Cost      Fair Value  

Western Emulsions, Inc.

   Construction materials         

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

        6,975         6,896         7,114   
        

 

 

    

 

 

 
           6,896         7,114   

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

        5,001         4,880         5,105   

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

        10,361         10,321         10,412   

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

        1,250         1,246         1,266   
        

 

 

    

 

 

 
           16,447         16,783   

idX Corporation

   Distributors         

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

        19,185         18,993         19,663   
        

 

 

    

 

 

 
           18,993         19,663   

Cenegenics, LLC

   Healthcare services         

414,419 Common Units(6)

           598         1,308   
        

 

 

    

 

 

 
           598         1,308   

Trans-Trade, Inc.

   Air freight & logistics         

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

        12,762         12,603         12,786   

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

        6,040         5,993         1,437   
        

 

 

    

 

 

 
           18,596         14,223   

Riverlake Equity Partners II, LP

   Multi-sector holdings         

1.89% limited partnership interest(15)

           240         240   
        

 

 

    

 

 

 
           240         240   

Riverside Fund IV, LP

   Multi-sector holdings         

0.33% limited partnership interest(6)(15)

           598         598   
        

 

 

    

 

 

 
           598         598   

Ambath/Rebath Holdings, Inc.(9)

   Home improvement retail         

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

        4,272         4,264         3,782   

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

        23,707         23,691         21,206   
        

 

 

    

 

 

 
           27,955         24,988   

Tegra Medical, LLC(9)

   Healthcare equipment         

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

        20,217         20,011         20,169   

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

        23,042         22,827         22,808   

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

        1,032         1,032         993   

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

        2,500         2,461         2,472   
        

 

 

    

 

 

 
           46,331         46,442   

Psilos Group Partners IV, LP

   Multi-sector holdings         

2.52% limited partnership interest(12)(15)

                     
        

 

 

    

 

 

 
                     

 

6


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

June 30, 2012

(dollar amounts in thousands)

(unaudited)

 

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

  

Industry

   Principal(8)      Cost     Fair Value  

Mansell Group, Inc.

   Advertising        

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

        9,846         9,727        9,819   

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

        9,247         9,135        9,153   

First Lien Revolver, LIBOR+6% (3% floor) cash due 4/30/2015(11)

           (23 )       
        

 

 

   

 

 

 
           18,839        18,972   

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         21,687        21,590   

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

        8,153         8,153        8,187   

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

        3,500         3,474        3,478   

2,000 Series D Preferred Units

           2,564        2,564   
        

 

 

   

 

 

 
           35,878        35,819   

Eagle Hospital Physicians, Inc.(9)

   Healthcare services        

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

        24,617         24,239        24,570   

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

        1,100         1,069        1,046   
        

 

 

   

 

 

 
           25,308        25,616   

Enhanced Recovery Company, LLC

   Diversified support services        

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

        11,345         11,183        11,362   

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

        11,070         10,933        11,059   

First Lien Revolver, LIBOR+7% (2% floor) cash due 8/13/2015(11)

           (50 )       
        

 

 

   

 

 

 
           22,066        22,421   

Specialty Bakers LLC

   Food distributors        

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

        4,476         4,264        4,463   

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

        11,000         10,820        10,888   

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

        2,500         2,435        2,493   
        

 

 

   

 

 

 
           17,519        17,844   

Welocalize, Inc.

   Internet software & services        

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

        20,685         20,393        20,865   

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

        23,971         23,639        24,189   

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

           (172       

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

           3,393        3,985   
        

 

 

   

 

 

 
           47,253        49,039   

Miche Bag, LLC

   Apparel, accessories & luxury goods        

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

        9,300         9,101        9,336   

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

        17,827         15,825        17,648   

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

        1,500         1,413        1,511   

10,371 Preferred Equity units in Miche Holdings, LLC

           1,037        1,169   

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

           1,463        427   
        

 

 

   

 

 

 
           28,839        30,091   

Bunker Hill Capital II (QP), LP

   Multi-sector holdings        

0.50% limited partnership interest(15)

           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         7,169        7,323   

First Lien Revolver, LIBOR+5% (1.75% floor) cash due 12/22/2015(11)

           (4       
        

 

 

   

 

 

 
           7,165        7,323   

 

7


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

June 30, 2012

(dollar amounts in thousands)

(unaudited)

 

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

  

Industry

   Principal(8)      Cost     Fair Value  

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

        11,540         11,368        11,701   

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

        8,492         8,378        8,711   

First Lien Revolver, LIBOR+6% (1% floor) cash due 12/30/2015(11)

           (55       
        

 

 

   

 

 

 
           19,691        20,412   

Saddleback Fence and Vinyl Products, Inc.

   Building products        

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

        648         648        648   

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

        100         100        100   
        

 

 

   

 

 

 
           748        748   

Best Vinyl Fence & Deck, LLC

   Building products        

First Lien Term Loan B, 8% PIK due 6/30/2012(16)

        4,275         4,275        1,365   
        

 

 

   

 

 

 
           4,275        1,365   

Physicians Pharmacy Alliance, Inc.

   Healthcare services        

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

        16,105         15,840        15,923   

First Lien Revolver, LIBOR+6% cash due 1/4/2016(11)

           (31       
        

 

 

   

 

 

 
           15,809        15,923   

Cardon Healthcare Network, LLC(9)

   Diversified support services        

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

        10,530         10,358        10,714   

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

        22,001         21,788        22,099   

First Lien Revolver, LIBOR+6.5% (1.75% floor) cash due 1/24/2017(11)

           (40       

65,903 Class A Units(6)

           250        385   
        

 

 

   

 

 

 
           32,356        33,198   

U.S. Retirement Partners, Inc.

   Diversified financial services        

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

        32,600         32,196        32,822   
        

 

 

   

 

 

 
           32,196        32,822   

Phoenix Brands Merger Sub LLC(9)

   Household products        

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

        7,125         6,980        7,146   

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

        20,989         20,595        20,332   

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

        2,571         2,451        2,661   
        

 

 

   

 

 

 
           30,026        30,139   

U.S. Collections, Inc.

   Diversified support services        

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

        10,084         9,962        10,045   
        

 

 

   

 

 

 
           9,962        10,045   

CCCG, LLC(9)

   Oil & gas equipment services        

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

        34,747         34,056        34,887   
        

 

 

   

 

 

 
           34,056        34,887   

Maverick Healthcare Group, LLC

   Healthcare equipment        

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

        24,625         24,163        24,424   
        

 

 

   

 

 

 
           24,163        24,424   

Refac Optical Group

   Specialty stores        

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

        12,673         12,402        12,721   

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

        20,281         19,866        20,429   

First Lien Revolver, LIBOR+7.5% cash due 3/23/2016(11)

           (106       

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

           1          

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

           999        998   
        

 

 

   

 

 

 
           33,162        34,148   

 

8


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

June 30, 2012

(dollar amounts in thousands)

(unaudited)

 

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

  

Industry

   Principal(8)      Cost     Fair Value  

Pacific Architects & Engineers, Inc.

   Diversified support services        

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

        3,994         3,939        4,002   

First Lien Term Loan B, LIBOR+6% (1.5% floor) cash due 4/4/2017

        4,700         4,639        4,725   
        

 

 

   

 

 

 
           8,578        8,727   

Securus Technologies, Inc.(9)

   Integrated telecommunication services        

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

        22,500         22,103        22,382   
        

 

 

   

 

 

 
           22,103        22,382   

Gundle/SLT Environmental, Inc.

   Environmental & facilities services        

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

        8,925         8,843        8,976   
        

 

 

   

 

 

 
           8,843        8,976   

Titan Fitness, LLC

   Leisure facilities        

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

        15,625         15,484        15,649   

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

        11,677         11,574        11,795   

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

        3,111         3,088        3,139   

First Lien Revolver, LIBOR+8.75% (1.25% floor) cash due 6/30/2016(11)

           (31       
        

 

 

   

 

 

 
           30,115        30,583   

Baird Capital Partners V, LP

   Multi-sector holdings        

0.4% limited partnership interest(15)

           386        386   
        

 

 

   

 

 

 
           386        386   

Charter Brokerage, LLC(9)

   Oil & gas equipment services        

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

        16,413         16,272        16,329   

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

        10,195         10,115        10,086   

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

        882         824        987   
        

 

 

   

 

 

 
           27,211        27,402   

Stackpole Powertrain International ULC(15)

   Auto parts & equipment        

Subordinated Term Loan, 12% cash 2% PIK due 8/1/2018

        18,335         18,179        19,047   

1,000 Common Units

           1,000        1,514   
        

 

 

   

 

 

 
           19,179        20,561   

Discovery Practice Management, Inc.

   Healthcare services        

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

        6,570         6,506        6,538   

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

        6,392         6,335        6,476   

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

        400         371        449   
        

 

 

   

 

 

 
           13,212        13,463   

CTM Group, Inc.

   Leisure products        

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

        10,691         10,594        10,732   

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

        3,636         3,607        3,766   
        

 

 

   

 

 

 
           14,201        14,498   

Bojangles

   Restaurants        

First Lien Term Loan, LIBOR+6.5% (1.5% floor) cash due 8/17/2017

        5,603         5,504        5,703   
        

 

 

   

 

 

 
           5,504        5,703   

Milestone Partners IV, LP

   Multi-sector holdings        

3.07% limited partnership interest(15)

           657        657   
        

 

 

   

 

 

 
           657        657   

Insight Pharmaceuticals, LLC

   Pharmaceuticals        

First Lien Term Loan, LIBOR+6% (1.5% floor) cash due 8/25/2016

        9,925         9,861        10,072   

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

        17,500         17,355        17,480   
        

 

 

   

 

 

 
           27,216        27,552   

 

9


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

June 30, 2012

(dollar amounts in thousands)

(unaudited)

 

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

  

Industry

   Principal(8)      Cost     Fair Value  

National Spine and Pain Centers, LLC

   Healthcare services        

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

        26,939         26,703        27,172   

300,700.98 Class A Units(6)

           301        248   
        

 

 

   

 

 

 
           27,004        27,420   

RCPDirect, LP.

   Multi-sector holdings        

0.91% limited partnership interest(15)

           348        348   
        

 

 

   

 

 

 
           348        348   

The MedTech Group, Inc.

   Healthcare equipment        

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

        12,870         12,772        12,818   
        

 

 

   

 

 

 
           12,772        12,818   

Digi-Star Acquisition Holdings, Inc.

   Industrial machinery        

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

        10,094         9,983        10,226   

225 Class A Preferred Units

           225        225   

2,500 Class A Common Units

           25        80   
        

 

 

   

 

 

 
           10,233        10,531   

CPASS Acquisition Company

   Internet software & services        

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

        4,906         4,811        4,978   

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

           (17       
        

 

 

   

 

 

 
           4,794        4,978   

Genoa Healthcare Holdings, LLC

   Pharmaceuticals        

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

        12,648         12,536        12,755   

500,000 Preferred units

           475        500   

500,000 Class A Common Units

           25        84   
        

 

 

   

 

 

 
           13,036        13,339   

SolutionSet, Inc.

   Advertising        

Senior Term Loan, LIBOR+6% (1% floor) cash due 12/21/2016

        9,739         9,652        9,736   
        

 

 

   

 

 

 
           9,652        9,736   

Slate Pharmaceuticals Acquisition Corp.

   Healthcare services        

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

        20,154         19,973        20,534   
        

 

 

   

 

 

 
           19,973        20,534   

ACON Equity Partners III, LP

   Multi-sector holdings        

0.31% limited partnership interest(15)

           14        14   
        

 

 

   

 

 

 
           14        14   

Blue Coat Systems, Inc.

   Internet software & services        

First Lien Term Loan, LIBOR+6% (1.5% floor) cash due 2/15/2018

        15,000         14,858        15,140   

Second Lien Term Loan, LIBOR+10% (1.5% floor) cash due 8/15/2018

        7,000         6,934        6,975   
        

 

 

   

 

 

 
           21,792        22,115   

CRGT, Inc.

   IT consulting & other services        

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

        25,741         25,500        25,967   
        

 

 

   

 

 

 
           25,500        25,967   

Riverside Fund V, LP

   Multi-sector holdings        

0.4% limited partnership interest(12)(15)

                    
        

 

 

   

 

 

 
                    

World 50, Inc.

   Research & consulting services        

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

        8,819         8,686        8,820   

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

        5,500         5,420        5,505   

Senior Revolver, LIBOR+6.25% (1.5% floor) cash due 3/30/2017(11)

           (58 )       
        

 

 

   

 

 

 
           14,048        14,325   

 

10


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

June 30, 2012

(dollar amounts in thousands)

(unaudited)

 

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

  

Industry

   Principal(8)      Cost     Fair Value  

Huddle House, Inc.

   Restaurants        

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

        13,907         13,776        13,843   
        

 

 

   

 

 

 
           13,776        13,843   

Nixon, Inc.

   Apparel, accessories & luxury goods        

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

        10,057         9,961        10,057   
        

 

 

   

 

 

 
           9,961        10,057   

JTC Education, Inc.(10)

   Education services        

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

        11,500         11,388        11,535   

17,391 Shares of Series A-1 Preferred Stock

           313        307   

17,391 Shares of Common Stock

           187          
        

 

 

   

 

 

 
           11,888        11,842   

BMC Acquisition, Inc.

   Diversified financial services        

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

        5,750         5,708        5,750   

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

        350         341        350   

500 Series A Preferred Shares

           500        500   

50,000 Common Shares

           1        1   
        

 

 

   

 

 

 
           6,550        6,601   

Ansira Partners, Inc.

   Advertising        

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

        12,500         12,410        12,500   

First Lien Revolver, LIBOR+5.5% (1.5% floor) cash due 5/4/2017(11)

           (9       

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

           250        250   
        

 

 

   

 

 

 
           12,651        12,750   

MX USA, Inc.

   Healthcare services        

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

        20,000         19,806        20,000   
        

 

 

   

 

 

 
           19,806        20,000   

PLATO, Inc.

   Education services        

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

        15,000         15,000        15,000   

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

        10,000         10,000        10,000   
        

 

 

   

 

 

 
           25,000        25,000   

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        27,000   

First Lien Revolver, LIBOR+6.5% (1.5% floor) cash due 5/25/2017(11)

           (1       

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

           750        750   
        

 

 

   

 

 

 
           27,745        27,750   

ConvergeOne Holdings Corp.

   Integrated telecommunication services        

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

        10,000         10,000        10,000   
        

 

 

   

 

 

 
           10,000        10,000   

Yeti Acquisition, LLC

   Leisure products        

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

        28,000         27,962        28,000   

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

        12,005         11,989        12,005   

First Lien Revolver, LIBOR+8% (1.25% floor) cash due 6/15/2017(11)

           (14       

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

           1,500        1,500   
        

 

 

   

 

 

 
           41,437        41,505   

Specialized Education Services, Inc.

   Education services        

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

        10,000         10,000        10,000   

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

        17,501         17,501        17,501   
        

 

 

   

 

 

 
           27,501        27,501   

Total Non-Control/Non-Affiliate Investments (145.4% of net assets)

         $ 1,203,770      $ 1,180,737   
        

 

 

   

 

 

 

Total Portfolio Investments (147.5% of net assets)

         $ 1,220,392      $ 1,198,097   
        

 

 

   

 

 

 

 

11


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

June 30, 2012

(dollar amounts in thousands)

(unaudited)

 

 

(1) 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 has rights to maintain 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.

 

(9) Interest rates have been adjusted on certain term loans and revolvers. These rate adjustments are temporary in nature due to 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

Securus Technologies Holdings, Inc.   June 6, 2012   + 0.75% on Term Loan     Per loan amendment
Charter Brokerage, LLC   May 9, 2012   - 0.5% on Senior Term Loan & Revolver     Tier pricing per loan agreement
Coll Materials Group LLC   April 1, 2012   - 12.0% on Second Lien Term Loan   + 12.0% on Second Lien Term Loan   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  

- 2.5% on Term Loan A

- 1.25% on Term Loan B

    Tier pricing per loan agreement
Traffic Control & Safety Corporation   January 1, 2012   + 3.0% on Senior Term Loan & Senior Revolver  

+ 2.0% on Subordinated Term Loan

+ 2.0% on Second Lien Term Loan

 

Default interest

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;

+ 0.50% on Senior Term Loan & Revolver

    Per loan amendment
CCCG, LLC   November 15, 2011   + 0.5% on Term Loan     Per waiver agreement
Eagle Hospital Physicians, Inc.   July 1, 2011   – 0.25% on Term Loan & Revolver     Per loan amendment
Lighting By Gregory, LLC   March 11, 2011   + 6.0% on Bridge Loan   – 8.0% on Bridge Loan   Per loan amendment
Capital Equipment Group, Inc.   July 1, 2010   – 2.0% on Term Loan   – 0.75% on Term Loan   Per waiver agreement

 

12


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

June 30, 2012

(dollar amounts in thousands)

(unaudited)

 

(10) In May 2012, the Company received a cash payment from JTC Education, Inc. in full satisfaction of all obligations under the senior loan agreement. As part of this refinancing, the Company closed on an $11.5 million subordinated debt investment in JTC Education, Inc.

 

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

 

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

 

(13) Investment was on cash non-accrual status as of June 30, 2012.

 

(14) Investment was on PIK non-accrual status as of June 30, 2012.

 

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

 

(16) Investment is under negotiation and, as such, the maturity date of the loan has been temporarily suspended.

 

13


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

September 30, 2011

 

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

  

Industry

   Principal(8)      Cost      Fair Value  

Control Investments(3)

           

Lighting By Gregory, LLC(9)(13)(14)

   Housewares & specialties         

First Lien Term Loan A, 9.75% PIK due 2/28/2013

      $ 4,366       $ 3,996       $ 2,526   

First Lien Bridge Loan, 8% PIK due 3/31/2012

        112         113           

97.38% membership interest

           1,210           
        

 

 

    

 

 

 
           5,319         2,526   

Nicos Polymers & Grinding, Inc.

   Environmental & facilities services         

First Lien Term Loan, 8% cash due 12/4/2017

        5,347         5,280         5,189   

First Lien Revolver, 8% cash due 12/4/2017

        1,500         1,500         1,551   

50% Membership interest in CD Holdco, LLC

           1,627         5,234   
        

 

 

    

 

 

 
           8,407         11,974   
        

 

 

    

 

 

 

Total Control Investments (2.0% of net assets)

         $ 13,726       $ 14,500   
        

 

 

    

 

 

 

Affiliate Investments(4)

           

O’Currance, Inc.(13)(14)

   Data Processing & outsourced services         

First Lien Term Loan A, 12.875% cash 4% PIK due 3/21/2012

      $ 11,414       $ 11,254       $ 3,173   

First Lien Term Loan B, 12.875% cash 4% PIK 3/21/2012

        1,164         1,140         324   

1.75% Preferred Membership interest in O’Currance Holding Co., LLC

           130           

3.3% Membership Interest in O’Currance Holding Co., LLC

           250           
        

 

 

    

 

 

 
           12,774         3,497   

Caregiver Services, Inc.

   Healthcare services         

Second Lien Term Loan A, LIBOR+6.85% (5.15% floor) cash due 2/25/2013

        5,712         5,527         5,843   

Second Lien Term Loan B, 12.5% cash 4% PIK due 2/25/2013

        15,161         14,801         15,067   

1,080,399 shares of Series A Preferred Stock

           1,080         1,490   
        

 

 

    

 

 

 
           21,408         22,400   
        

 

 

    

 

 

 

Total Affiliate Investments (3.6% of net assets)

         $ 34,182       $ 25,897   
        

 

 

    

 

 

 

Non-Control/Non-Affiliate Investments(7)

           

Repechage Investments Limited(13)(14)

   Restaurants         

First Lien Term Loan, 12.75% cash 2.75% PIK due 10/16/2011

      $ 3,558       $ 3,412       $ 1,829   

7,500 shares of Series A Preferred Stock of Elephant & Castle, Inc.

           750           
        

 

 

    

 

 

 
           4,162         1,829   

Traffic Control & Safety Corporation(9)

   Construction & engineering         

Senior Term Loan, LIBOR+9% cash due 6/29/2012

        5,000         4,870         4,957   

Senior Revolver, LIBOR+9% cash due 6/29/2012

        11,986         11,754         11,966   

Second Lien Term Loan, 12% cash 3% PIK due 5/28/2015

        20,795         20,602         17,545   

Subordinated Loan, 15% PIK due 5/28/2015

        5,325         5,325         1,346   

24,750 shares of Series B Preferred Stock

           247           

43,494 shares of Series D Preferred Stock

           435           

25,000 shares of Common Stock

           3           
        

 

 

    

 

 

 
           43,236         35,814   

TBA Global, LLC

   Advertising         

53,994 Senior Preferred Shares

           216         388   

191,977 Shares A Shares

           192         74   
        

 

 

    

 

 

 
           408         462   

Fitness Edge, LLC

   Leisure facilities         

First Lien Term Loan A, LIBOR+5.25% (4.75% floor) cash due 7/31/2012

        750         749         757   

First Lien Term Loan B, 12.5% cash 2.5% PIK due 7/31/2012

        5,776         5,750         5,814   

1,000 Common Units(6)

           43         181   
        

 

 

    

 

 

 
           6,542         6,752   

 

14


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

September 30, 2011

 

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

  

Industry

   Principal(8)      Cost     Fair Value  

Boot Barn

   Apparel, accessories & luxury goods and footwear        

255.78 shares of Series A&B Preferred Stock

           247        71   

1,354 shares of Common Stock

           9        9   
        

 

 

   

 

 

 
           256        80   

Premier Trailer Leasing, Inc.(9)(13)(14)

   Trucking        

Second Lien Term Loan, 13.25% cash 3.25% PIK due 10/23/2012

        19,070         17,064          

285 shares of Common Stock

           1          
        

 

 

   

 

 

 
           17,065          

Capital Equipment Group, Inc.(9)

   Industrial machinery        

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

        10,278         10,112        10,226   

33,463 shares of Common Stock

           345        634   
        

 

 

   

 

 

 
           10,457        10,860   

Rail Acquisition Corp.

   Electronic manufacturing services        

First Lien Term Loan, 12% PIK due 9/1/2013

        18,415         15,636        4,106   

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

        4,554         4,554        4,554   
        

 

 

   

 

 

 
           20,190        8,660   

Western Emulsions, Inc.

   Construction materials        

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

        6,844         6,736        6,840   
        

 

 

   

 

 

 
           6,736        6,840   

Storyteller Theaters Corporation

   Movies & entertainment        

1,692 shares of Common Stock

                  62   

20,000 shares of Preferred Stock

           200        200   
        

 

 

   

 

 

 
           200        262   

HealthDrive Corporation

   Healthcare services        

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

        6,263         6,049        6,352   

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

        10,282         10,212        10,217   

First Lien Revolver, 12% cash due 7/17/2013(11)

           (7 )       
        

 

 

   

 

 

 
           16,254        16,569   

idX Corporation

   Distributors        

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

        18,895         18,631        18,938   
        

 

 

   

 

 

 
           18,631        18,938   

Cenegenics, LLC

   Healthcare services        

414,419 Common Units(6)

           598        1,060   
        

 

 

   

 

 

 
           598        1,060   

IZI Medical Products, Inc.

   Healthcare technology        

First Lien Term Loan A, 12% cash due 3/31/2014

        3,236         3,215        3,244   

First Lien Term Loan B, 13% cash 3% PIK due 3/31/2014

        17,258         16,861        17,061   

First Lien Revolver, 10% cash due 3/31/2014(11)

           (25 )       

453,755 Preferred units of IZI Holdings, LLC

           454        642   
        

 

 

   

 

 

 
           20,505        20,947   

Trans-Trade, Inc.

   Air freight & logistics        

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

        12,523         12,287        11,763   

First Lien Revolver, 12% cash due 9/10/2014

        5,800         5,697        5,479   
        

 

 

   

 

 

 
           17,984        17,242   

Riverlake Equity Partners II, LP

   Multi-sector holdings        

1.89% limited partnership interest(16)

           122        122   
        

 

 

   

 

 

 
           122        122   

Riverside Fund IV, LP

   Multi-sector holdings        

0.33% limited partnership interest(16)

           445        445   
        

 

 

   

 

 

 
           445        445   

 

15


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

September 30, 2011

 

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

  

Industry

   Principal(8)      Cost     Fair Value  

ADAPCO, Inc.

   Fertilizers & agricultural chemicals        

First Lien Term Loan A, 10% cash due 12/17/2014

        8,000         7,871        8,010   

First Lien Term Loan B, 12% cash 2% PIK due 12/17/2014

        15,521         15,306        15,371   

First Lien Term Revolver, 10% cash due 12/17/2014

        5,750         5,623        5,809   
        

 

 

   

 

 

 
           28,800        29,190   

Ambath/Rebath Holdings, Inc.

   Home improvement retail        

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

        3,500         3,500        3,497   

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

        22,999         22,999        22,600   

First Lien Term Revolver, LIBOR+6.5% (3% floor) cash due 12/30/2014(10)

        1,500         1,500        1,479   
        

 

 

   

 

 

 
           27,999        27,576   

JTC Education, Inc.

   Education services        

First Lien Term Loan, LIBOR+9.5% (3% floor) cash due 12/31/2014

        30,134         29,467        29,780   

First Lien Revolver, LIBOR+9.5% (3.25% floor) cash due 12/31/2014(11)

           (305 )       

17,391 Shares of Series A-1 Preferred Stock

           313        313   

17,391 Shares of Common Stock

           187        83   
        

 

 

   

 

 

 
           29,662        30,176   

Tegra Medical, LLC

   Healthcare equipment        

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

        22,540         22,244        22,744   

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

        22,551         22,270        22,226   

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

        2,500         2,449        2,501   
        

 

 

   

 

 

 
           46,963        47,471   

Psilos Group Partners IV, LP

   Multi-sector holdings        

2.52% limited partnership interest(12)(16)

                    
        

 

 

   

 

 

 
                    

Mansell Group, Inc.

   Advertising        

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

        10,675         10,512        10,654   

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

        9,142         9,001        9,067   

First Lien Revolver, LIBOR+6% (3% floor) cash due 4/30/2015(11)

           (29 )       
        

 

 

   

 

 

 
           19,484        19,721   

NDSSI Holdings, LLC

   Electronic equipment & instruments        

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

        29,788         29,370        29,278   

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

        3,500         3,435        3,538   

2,000 Series D Preferred Units

           2,047        2,047   
        

 

 

   

 

 

 
           34,852        34,863   

Eagle Hospital Physicians, Inc.(9)

   Healthcare services        

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

        25,400         24,907        25,246   

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

           (42 )       
        

 

 

   

 

 

 
           24,865        25,246   

Enhanced Recovery Company, LLC

   Diversified support services        

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

        13,961         13,713        13,945   

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

        11,070         10,882        11,015   

First Lien Revolver, LIBOR+7% (2% floor) cash due 8/13/2015(11)

           (69 )       
        

 

 

   

 

 

 
           24,526        24,960   

Epic Acquisition, Inc.

   Healthcare services        

First Lien Term Loan A, LIBOR+8% (3% floor) cash due 8/13/2015

        8,329         8,189        8,343   

First Lien Term Loan B, 12.25% cash 3% PIK due 8/13/2015

        17,246         16,962        17,281   

First Lien Revolver, LIBOR+6.5% (3% floor) cash due 8/13/2015(11)

           (50 )       
        

 

 

   

 

 

 
           25,101        25,624   

 

16


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

September 30, 2011

 

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

  

Industry

   Principal(8)      Cost     Fair Value  

Specialty Bakers LLC

   Food distributors        

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

        8,325         8,148        8,220   

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

        11,000         10,770        10,756   

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

        2,000         1,916        2,029   
        

 

 

   

 

 

 
           20,834        21,005   

CRGT, Inc.

   IT consulting & other services        

First Lien Term Loan A, LIBOR+7.5% cash due 10/1/2015

        27,913         27,495        27,659   

First Lien Term Loan B, 12.5% cash 10/1/2015

        22,000         21,648        21,869   

First Lien Revolver, LIBOR+7.5% cash due 10/1/2015(11)

           (200 )       
        

 

 

   

 

 

 
           48,943        49,528   

Welocalize, Inc.

   Internet software & services        

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

        15,990         15,720        15,668   

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

        21,231         20,888        20,983   

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

        5,250         5,152        5,162   

2,086,163 Common Units in RPWL Holdings, LLC

           2,086        1,973   
        

 

 

   

 

 

 
           43,846        43,786   

Miche Bag, LLC

   Apparel, accessories & luxury goods        

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

        13,708         13,353        13,735   

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

        17,425         14,983        17,115   

First Lien Revolver, LIBOR+7% (3% floor) cash due 12/7/2015(11)

           (105 )       

10,371 Preferred Equity units in Miche Holdings, LLC(6)

           1,037        1,169   

146,289 Series D Common Equity units in Miche Holdings, LLC(6)

           1,463        1,496   
        

 

 

   

 

 

 
           30,731        33,515   

Bunker Hill Capital II (QP), LP

   Multi-sector holdings        

0.50% limited partnership interest(16)

           40        40   
        

 

 

   

 

 

 
           40        40   

Dominion Diagnostics, LLC(9)

   Healthcare services        

First Lien Term Loan A, LIBOR+7% (2.5% floor) cash due 12/17/2015

        29,550         29,030        29,442   

First Lien Term Loan B, LIBOR+10.5% (2.5% floor) cash 1% PIK due 12/17/2015

        20,008         19,675        19,546   

First Lien Revolver, LIBOR+6.5% (2.5% floor) cash due 12/17/2015(11)

           (83 )       
        

 

 

   

 

 

 
           48,622        48,988   

Advanced Pain Management

   Healthcare services        

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

        8,046         7,923        8,007   

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

        133         129        135   
        

 

 

   

 

 

 
           8,052        8,142   

DISA, Inc.

   Human resources & employment services        

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

        12,460         12,256        12,542   

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

        8,395         8,264        8,410   

First Lien Revolver, LIBOR+6% (1% floor) cash due 12/30/2015(11)

           (63 )       
        

 

 

   

 

 

 
           20,457        20,952   

Saddleback Fence and Vinyl Products, Inc.

   Building products        

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

        773         773        773   

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

                    
        

 

 

   

 

 

 
           773        773   

 

17


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

September 30, 2011

 

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

  

Industry

   Principal(8)      Cost     Fair Value  

Best Vinyl Fence & Deck, LLC

   Building products        

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

        2,061         1,947        2,061   

First Lien Term Loan B, 8% PIK due 7/31/2011(15)

        3,969         3,969        2,000   

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

                    
        

 

 

   

 

 

 
           5,916        4,061   

Physicians Pharmacy Alliance, Inc.

   Healthcare services        

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

        16,766         16,461        16,702   

First Lien Revolver, LIBOR+6% cash due 1/4/2016(11)

           (35 )       
        

 

 

   

 

 

 
           16,426        16,702   

Cardon Healthcare Network, LLC

   Diversified support services        

First Lien Term Loan, LIBOR+10% (1.75% floor) cash due 1/6/2016(9)

        11,250         11,051        11,210   

First Lien Revolver, LIBOR+6.5% (1.75% floor) cash due 1/6/2016(11)

           (35 )       
        

 

 

   

 

 

 
           11,016        11,210   

U.S. Retirement Partners, Inc.

   Diversified financial services        

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

        13,600         13,311        13,329   
        

 

 

   

 

 

 
           13,311        13,329   

IOS Acquisitions, Inc.

   Oil & gas equipment & services        

First Lien Term Loan A, LIBOR+8% (2% floor) cash due 1/14/2016

        8,700         8,576        8,656   

First Lien Term Loan B, LIBOR+10% (2% floor) cash 2% PIK due 1/14/2016

        10,618         10,466        10,480   

First Lien Revolver, LIBOR+8% (2% floor) cash due 1/14/2016

        750         714        777   
        

 

 

   

 

 

 
           19,756        19,913   

Actient Pharmaceuticals, LLC

   Healthcare services        

First Lien Term Loan, LIBOR+6.25% (2% floor) cash due 7/29/2015

        9,180         9,018        9,169   
        

 

 

   

 

 

 
           9,018        9,169   

Phoenix Brands Merger Sub LLC

   Household products        

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

        8,036         7,875        7,674   

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

        20,390         20,035        19,071   

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

        3,429         3,303        3,198   
        

 

 

   

 

 

 
           31,213        29,943   

U.S. Collections, Inc.

   Diversified support services        

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

        10,847         10,649        10,828   
        

 

 

   

 

 

 
           10,649        10,828   

CCCG, LLC

   Oil & gas equipment & services        

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

        34,738         34,115        34,152   
        

 

 

   

 

 

 
           34,115        34,152   

Maverick Healthcare Group, LLC

   Healthcare equipment        

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

        24,813         24,292        24,440   
        

 

 

   

 

 

 
           24,292        24,440   

Refac Optical Group

   Specialty stores        

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

        14,220         13,920        14,273   

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

        20,162         19,731        20,078   

First Lien Revolver, LIBOR+7.5% cash due 3/23/2016(11)

           (113 )       

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

           1          

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

           999        847   
        

 

 

   

 

 

 
           34,538        35,198   

 

18


Table of Contents

Fifth Street Finance Corp.

Consolidated Schedule of Investments

(dollar amounts in thousands)

September 30, 2011

 

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

  

Industry

   Principal(8)      Cost     Fair Value  

Pacific Architects & Engineers, Inc.

   Diversified support services        

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

        4,416         4,352        4,332   

First Lien Term Loan B, LIBOR+6% (1.5% floor) cash due 4/4/2017

        5,000         4,929        4,903   
        

 

 

   

 

 

 
           9,281        9,235   

Ernest Health, Inc.

   Healthcare services        

Second Lien Term Loan, LIBOR+8.5% (1.75% floor) cash due 5/13/2017

        25,000         24,656        25,049   
        

 

 

   

 

 

 
           24,656        25,049   

Securus Technologies, Inc.

   Integrated telecommunication services        

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

        26,500         25,995        26,374   
        

 

 

   

 

 

 
           25,995        26,374   

Gundle/SLT Environmental, Inc.

   Environmental & facilities services        

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

        7,980         7,904        7,977   
        

 

 

   

 

 

 
           7,904        7,977   

Titan Fitness, LLC

   Leisure facilities        

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

        17,063         16,878        16,938   

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

        11,545         11,422        11,343   

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

        2,721         2,693        2,593   

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

        543         506        821   
        

 

 

   

 

 

 
           31,499        31,695   

Baird Capital Partners V, LP

   Multi-sector holdings        

0.4% limited partnership interest(16)

           299        299   
        

 

 

   

 

 

 
           299        299   

Charter Brokerage, LLC

   Oil & gas equipment services        

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

        17,411         17,242        17,411   

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

        10,043         9,948        10,043   

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

        1,176         1,107        1,177   
        

 

 

   

 

 

 
           28,297        28,631   

Stackpole Powertrain International ULC(16)

   Auto parts & equipment        

Subordinated Term Loan, 12% cash 2% PIK due 8/1/2018

        18,059         17,883        18,059   

1,000 Common Units