Fifth Street Finance Corp.’s (Nasdaq: FSC) work during the first quarter underscores both the recapitalization and refinancing trends seen in the middle market lately.
The White Plains, N.Y.-based specialty finance company provided two facilities of more than $100 million each, to support private equity sponsors. One sponsor refinanced an existing credit facility and the other completed a dividend recapitalization.
Fifth Street expanded its credit facility in 2012 so that it could keep lending as its loan volume increases. The loan went from $230 million with a $300 million accordion feature, to $380 million with a $600 million accordion feature. For more, see "Finance Finesse: Fifth Street Gets New Lenders, Expands Credit Facility."
Companies have continued refinancing deals in recent parts, partly because of low interest rates. To read more about businesses that have refinanced, see “Finance Finesse: Low Interest Rates Spark Refinancing.” Many companies, including Diamond Foods Inc. (Nasdaq: DMND) and AlixPartners LLP have been recently recapitalized.