Fifth Street to price $150 million five-year convertibles to yield 4.875%-5.375%, up 10%-15%

By Rebecca Melvin

New York, April 6 - Fifth Street Finance Corp. launched a $150 million overnight offering of five-year convertible senior notes that was seen pricing ahead of the open Thursday and talked at a coupon of 4.875% to 5.375% with a 10% to 15% initial conversion premium, according to a syndicate source.

The Rule 144A offering was being sold via J. P. Morgan Securities LLC, Morgan Stanley & Co. Inc. and Wells Fargo Securities LLC.

There is a $22.5 million greenshoe.

The notes are non-callable with no puts.

Proceeds will be used to reduce outstanding borrowings, to make investments in small and mid-sized companies and for general corporate purposes.

White Plains, N.Y.-based Fifth Street is a specialty finance company that lends to and invests in small and mid-sized companies in connection with an investment by private equity sponsors.

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