Fifth Street raises cash to invest in middle-market floating-rate loans

By Angela McDaniels

Tacoma, Wash., July 11 - Fifth Street Senior Floating Rate Corp. raised $100 million in its initial public offering of common stock and will use the proceeds to make investments in middle-market companies, according to a company news release.

Fifth Street is a newly organized business development company that will invest primarily in floating-rate senior secured loans, including first-lien, unitranche and second-lien debt instruments, made to private middle-market companies whose debt is rated speculative grade.

The White Plains, N.Y.-based company's investment objective is to maximize its portfolio's total return by generating current income from its debt investments while seeking to preserve its capital.

The company will be managed by Fifth Street Management LLC.

The company sold 6,666,668 shares for $15 each. The IPO has a $15 million over-allotment option.

The lead bookrunners were Morgan Stanley & Co. LLC, Deutsche Bank Securities Inc., UBS Investment Bank and Barclays with RBC Capital Markets and Oppenheimer & Co. acting as joint bookrunners. Maxim Group LLC, JMP Securities, Ladenburg Thalmann & Co. Inc., Wunderlich Securities and National Securities Corp. were co-managers.

The IPO is expected to settle Wednesday.

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