Two FS Investment BDCs Announce Offering Close Dates, Amend DRIP and Repurchase Plans
The boards of FS Investment Corporation III and FS Investment Corporation IV, two non-traded business development companies, have approved the closing of each company’s public offering on November 1, 2017. The companies also amended their respective distribution reinvestment plans and share repurchase programs.
In February 2016, FS Investment Corporation III closed its public offering to investors in the independent broker-dealer channel, and currently offers shares to investors in the institutional channel and to certain affiliated investors.
Beginning November 29, 2017, cash distributions will be reinvested at a purchase price determined by the board. The price will not be less than the net asset value per share, and no more than 2.5 percent greater than the NAV per share.
Under the current plan, distributions are reinvested at a purchase price equal to 90 percent of the public offering price. As of the second quarter of 2017, the offering price was $8.55 per share, and the company’s net asset value per share was $8.54, according to Summit Investment Research.
FS Investment Corporation III amended the terms of its share repurchase program, which will apply to the fourth quarter 2017 repurchase offer that is expected to commence in late November 2017. The company will repurchase shares for the same price that shares are issued under the distribution reinvestment plan.
Under the existing share repurchase program, FS Investment Corporation III repurchases shares for a price equal to 90 percent of the public offering price per share.
FS Investment Corporation IV, which currently offer Class T shares of common stock, also amended its distribution reinvestment plan, effective November 29th. Like FS Investment III, DRIP shares will be reinvested at a price no less than the net asset value per share, and no more than 2.5 percent greater than the NAV per share.
Under the current program, distributions are reinvested in additional shares of Class T common stock at a purchase price equal to the net offering price as of the date of issuance. As of the second quarter of 2017, the offering price was $11.65 per share, and the company’s net asset value per share was $11.07, according to Summit Investment Research. The net investment price per share is $11.15.
For FS Investment IV’s amended share repurchase program, which will commence in late November, the company will repurchase shares for the same price that shares are issued under the distribution reinvestment plan.
Under the existing share repurchase program, shares are repurchased on a quarterly basis at a price equal to the net offering price in effect on the date of repurchase.
FS Investment Corporation III, which was declared effective in December 2013, has raised $2.8 billion in investor equity as of the second quarter of 2017 and oversees a $3.4 billion investment portfolio.
FS Investment Corporation IV was declared effective in October 2015 and has raised $280 million in investor equity as of the second quarter 2017. FSIC IV’s portfolio consists of investments in 44 portfolio companies with a fair value of $201.6 million.
The BDCs are sponsored by FS Investments, formerly Franklin Square Capital Partners, and focus primarily on investing in the debt securities of private companies throughout the United States.
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