Franklin Square Investment Corporation III’s Net Investment Income Increases 44 Percent in 2015
FS Investment Corporation III, a non-traded business development company sponsored by Franklin Square Capital Partners, announced its operating results for the quarter and full year ended December 31, 2015.
“Despite increased market volatility and broad market declines that pressured underlying portfolio valuations during the fourth quarter, FSIC III’s focus on generating a high level of current income helped deliver another strong quarter of consistent distributions for our stockholders,” commented Michael C. Forman, chairman and chief executive officer of FSIC III.
Financial Highlights for the Quarter Ended December 31, 2015
● Net investment income of $0.19 per share, compared to $0.15 per share for the quarter ended December 31, 2014.
● Net decrease in net assets resulting from operations of $0.28 per share, compared to a net decrease in net assets resulting from operations of $0.15 per share for the quarter ended December 31, 2014.
● Paid regular cash distributions to stockholders totaling approximately $0.18 per share.
Financial Highlights for the Year Ended December 31, 2015
● Net investment income of $0.65 per share, compared to $0.45 per share for the year ended December 31, 2014.
● Net decrease in net assets resulting from operations of $0.51 per share, compared to a net decrease in net assets resulting from operations of $0.17 per share for the year ended December 31, 2014.
● Paid regular cash distributions to stockholders totaling approximately $0.70 per share.
Portfolio Highlights
● As of December 31, 2015, the fair value of FSIC III’s investment portfolio was approximately $2.7 billion.
● Committed approximately $914 million and $1.9 billion to direct originations during the quarter and year ended December 31, 2015, respectively, of which 89 percent and 93 percent were in senior secured debt (first and second lien senior secured loans and senior secured bonds), respectively.
● FSIC III’s portfolio consisted of investments in 130 portfolio companies as of December 31, 2015.
● Core investment strategies represented 90 percent of the portfolio by fair value as of December 31, 2015, including 69 percent in direct originations and 21 percent in opportunistic investments. Broadly syndicated/other investments represented 10 percent of the portfolio by fair value.
● Gross portfolio yield prior to leverage (based on amortized cost and excluding non-income producing assets) was 10 percent as of December 31, 2015, which is unchanged from September 30, 2015.
● One investment representing 0.02 percent of the company’s net assets was on non-accrual as of December 31, 2015.
In other Franklin Square BDC news, last week The DI Wire reported that FS Energy and Power Fund’s board of trustees approved the closing of its public offering to new investors, which is anticipated to occur near the end of the second quarter or the beginning of the third quarter of 2016.
FSIC III focuses primarily on investing in the debt securities of private companies throughout the United States. The company is advised by FSIC III Advisor, an affiliate of Franklin Square, and is sub-advised by GSO / Blackstone Debt Funds Management, an affiliate of GSO Capital Partners LP. Founded in Philadelphia in 2007, Franklin Square is the largest manager of BDC assets with approximately $15.7 billion in BDC assets, as of September 30, 2015.
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