Fifth Street Mezzanine Partners IV L.P., a subsidiary of White Plains-based Fifth Street Finance Corp., has been approved for licensure as a small-business investment company (SBIC) by the U.S. Small Business Administration.
As an SBIC subsidiary, Fifth Street may obtain leverage by issuing SBA-guaranteed debentures.
Fifth Street Mezzanine Partners “will be able to utilize Fifth Street”™s origination, underwriting and portfolio management resources to invest in small businesses and help them succeed,” said Bernard Berman, executive vice president, secretary and chief compliance officer of Fifth Street in a statement.
Leonard Tannenbaum, president and CEO of Fifth Street Finance, said the new source of leverage will help fund investments and meet middle-market capital demand.
The SBA-guaranteed debentures are subject to a capital commitment by the SBA, the company said.
Fifth Street Finance Corp. in December structured $208.8 million of senior secured debt financings in connection with four additional portfolio companies. All are sponsor-backed and first lien investments, the company said.
Fifth Street”™s transactions included: $34 million toward the acquisition of a specialty chemical distributor; $35 million toward the acquisition of a franchiser of consumer services; $57.3 million toward the acquisition of a contract manufacturer and a co-arrangement of $82.5 million toward the acquisition of a postsecondary education company.
In the transactions, Fifth Street drew $38 million on a three-year credit facility with Wachovia Bank N.A., a Wells Fargo company.
Fifth Street”™s funding commitment was $137.8 million; the unfunded commitment was $22.8 million.
“In addition to investing alongside one of our core sponsors, we are pleased to be partnering with several new sponsors on these recent transactions,” Tannenbaum said.
“We look forward to developing these relationships and continuing to capture market share in the middle market.”
