Fifth Street Finance Corp. (Nasdaq: FSC) has amended and expanded its credit facility in a move that chief executive Leonard Tannenbaum says will keep the company levered and generate returns for its shareholders. The increased facility will give the specialty-finance company the money it needs to keep lending as its loan volume increases and the company grows.

"We have more loans to make and needed to borrow more money to do it," says Tannenbaum. Fifth Street is a specialty-finance company that invests in middle-market companies primarily in connection with private equity firms.

Fifth Street, headquartered in White Plains, N.Y., raised about $150 million in capital in December through offering 14 million shares of stock. It also raised about $75 million in October through offering 5.875 percent senior unsecured notes, and another $91.2 million when it offered 8.45 million shares of common stock in September. The new facility will help the company to stay levered as it continues to grow, Tannenbaum says.

The company's facility, which was originally a $230 million loan with a $300 million accordion feature, with interest at LIBOR plus 300 or LIBOR plus 325, was amended to increase the amount the company could borrow and decrease the interest rate in December.

The decrease in the interest rate could positively affect the company's credit rating, which Fitch Ratings rated at BBB- in December, Tannenbaum said.

Fifth Street's new facility is for $380 million, with a $600 million accordion feature and interest rate of LIBOR plus 275. The loan's maturity date, through the amendment, was extended from Feb. 29, 2016 to Nov. 30, 2016. Five more banks are participating in the funding, according to Fifth Street chief executive Len Tannenbaum, bringing the total to 10 banks.

The change in the accordion feature is probably the biggest change, not just because it's a bigger loan, but because it allows other lenders that want to get involved with Fifth Street the chance to lend to them.

Securities and Exchange Commission (SEC) filings show that ING Capital LLC, UBS Loan Finance LLC, Morgan Stanley Bank NA, Royal Bank of Canada, Key Equipment Finance Inc., Barclays Bank PLC, Stifel Bank & Trust, Raymond James Bank NA, Sumitomo Mitsui Banking Corp. and Goldman Sachs Bank USA are the lenders for the facility.

ING and Key Banc were the two lead banks, according to Tannenbaum.

Barclays, Stifel Bank, Raymond James, Sumitomo and Goldman Sachs are new lenders to the facility, according to SEC filings.

Tannenbaum started Fifth Street in a New York basement in 1998. The company grew and went public in June 2008. Its stock was trading at around $10 in December.