Fifth Street Finance Corp. Prices Private Offering of Unsecured Convertible Senior Notes

/ Source: GlobeNewswire

WHITE PLAINS, N.Y., April 7, 2011 (GLOBE NEWSWIRE) -- Fifth Street Finance Corp. (NYSE:FSC) ("Fifth Street") today announced that it has agreed to sell to initial purchasers in a private offering $150 million aggregate principal amount of its 5.375% convertible senior notes due 2016. Fifth Street has also granted the initial purchasers for the offering the option to purchase up to an additional $22.5 million aggregate principal amount of the convertible senior notes. The convertible senior notes will be offered only to qualified institutional buyers (as defined in the Securities Act of 1933) pursuant to Rule 144A under the Securities Act. The closing of the transaction is subject to customary closing conditions and the convertible senior notes are expected to be delivered and paid for on April 12, 2011.

The convertible senior notes are unsecured and bear interest at a rate of 5.375% per year, payable semiannually. In certain circumstances, the convertible senior notes will be convertible into shares of Fifth Street's common stock at an initial conversion rate of 67.7415 shares of common stock per $1,000 principal amount of convertible senior notes, which is equivalent to an initial conversion price of approximately $14.76 per share of Fifth Street's common stock, subject to customary anti-dilution adjustments. The conversion price is approximately 10% above the $13.42 per share closing price of Fifth Street's common stock on April 6, 2011. Fifth Street will not have the right to redeem the convertible senior notes prior to maturity. The convertible senior notes will mature on April 1, 2016, unless repurchased or converted in accordance with their terms prior to such date.

Fifth Street intends to use substantially all of the net proceeds from this offering to reduce outstanding borrowings, make investments in small and mid-sized companies in accordance with its investment objective and strategies and for general corporate purposes.

Neither the convertible senior notes nor the common stock that may be issued upon conversion thereof will be registered under the Securities Act. Neither the convertible senior notes nor the common stock that may be issued upon conversion thereof may be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.

This press release does not constitute an offer to sell any securities of Fifth Street and is not soliciting an offer to buy such securities in any state where such offer and sale is not permitted. It is issued pursuant to Rule 135c under the Securities Act.

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Forward-Looking Statements

This press release contains certain forward-looking statements, including statements with regard to Fifth Street Finance Corp.'s securities offering and the anticipated use of the net proceeds of the offering. Words such as "believes," "expects," "projects," "anticipates," "intends," "plans," and "future" or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future events and conditions and no assurance can be given that the securities offering discussed above will be consummated on the terms described or at all. Completion of the securities offering and the terms thereof are subject to numerous factors, many of which are beyond the control of Fifth Street Finance Corp., including, without limitation, market conditions and changes in interest rates, and other similar matters. Fifth Street Finance Corp. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT: Fifth Street Finance Corp. Stacey Thorne, Executive Director, Investor Relations (914) 286-6811