Tuesday, 25 October 2016
Last updated 6 min ago
Apr 16 2014 | 8:02am ET
Michael Forman, CEO of Franklin Square Capital Partners, will ring the opening bell on the New York Stock Exchange Wednesday, marking the listing of the FS Investment Corp.
“Today’s listing on the New York Stock Exchange delivers on FSIC’s goal to provide shareholders with greater liquidity and marks a new phase for FSIC,” Forman told FINalternatives in an email. “As a publicly traded vehicle, the company will have further opportunities to build shareholder value.”
FSIC is a $4.5 billion Philadelphia-based business development company sponsored by Franklin Square and sub-advised by GSO Capital Partners, the credit arm of Blackstone. FSIC invests primarily in the floating rate, senior secured debt of private U.S. companies. Together, Franklin Square and GSO/ Blackstone manage over $10 billion across their four BDC funds. GSO co-founder Bennett Goodman will join Forman at the NYSE.
No new shares will be sold on Wednesday, but investors holding $2.7 billion of private FSIC shares will be free to sell into the public market following the listing. Management has launched a tender offer to purchase up to $250 million in shares, the terms of which allow stockholders to tender “all or a portion of their shares at one or more prices between $10.35 and $11.00.” The company said it would “purchase properly tendered shares at the lowest price in this range that would enable FSIC to purchase the maximum number of shares.”
Roughly 60,000 people own FSIC shares.
Market observers believe the tender offer could help alleviate any selling pressure generated once the stock is listed as could two recently announced special $0.10 per share dividends—one to be paid in August and a second in November of this year.
FSIC also increased its monthly cash distribution this month, from $0.0720 to $0.07425 per share, thereby raising its annualized distribution rate from 8.41% to 8.68% based on net asset value per share of $10.27.
Standard & Poor's Rating Services has given FSIC, which has a 16% annualized return since its inception in 2009, an investment grade credit rating of BBB- with a positive outlook.