FS Investment Corporation III 8-K
Exhibit 99.1
FOR IMMEDIATE RELEASE
FSIC III Reports Fourth Quarter and Full Year 2015 Financial Results
PHILADELPHIA, PA,March 11,2016 –FSInvestmentCorporationIII(FSICIII),a businessdevelopment company (BDC) focused on providing customized credit solutions to private middle-market U.S. companies, announced its operating results for the quarter and full year ended December 31, 2015. As previously disclosed, FSIC III will hold a conference call to discuss these results at 12:00 p.m. Eastern Time on Monday, March 14, 2016. Information for those interestedinparticipatingin the call can befound below.
“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 CEO of FSIC III.
Financial Highlights for the Quarter Ended December 31, 20151
| ● | 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, 20151
| ● | 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% and 93% 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% of the portfolio by fair value as of December 31, 2015, including 69% in direct originations and 21% in opportunistic investments. Broadly syndicated/other investments represented 10% of the portfolio by fair value as of December 31, 2015. |
| ● | Gross portfolio yield prior to leverage (based on amortized cost and excluding non-income producing assets)2 was 10.0% as of December 31, 2015, which is unchanged from September 30, 2015. |
| ● | One investment representing 0.02% of the Company’s net assets was on non-accrual as of December 31, 2015. |
Annual Stockholder Conference Call
FSIC III will hold its annual stockholder conference call on Monday, March 14, 2016, at 12:00 p.m. Eastern Time. In order to participate, interested parties should dial (877) 443-2408 at least 10 minutes prior to the beginning of the conference call and provide the confirmation code 51796458 when prompted. An audio archive of the call will be available for replay. The link to the audio archive can be found under FSIC III’s “Literature” page atwww.franklinsquare.com and will be available for a period of 30 days following the call.
About FSIC III
FSIC III is a publicly registered, non-traded BDC sponsored by Franklin Square Capital Partners (Franklin Square). FSIC III focuses primarily on investing in the debt securities of private companies throughout the United States, with the investment objectives of generating current income and, to a lesser extent, long-term capital appreciation for its investors. FSIC III is advised by FSIC III Advisor, LLC, an affiliate of Franklin Square, and is sub-advised by GSO / Blackstone Debt Funds Management LLC, an affiliate of GSO Capital Partners LP (GSO). GSO, with approximately $79.0 billion in assets under management as of December 31, 2015, is the credit platform of Blackstone, one of the world’s leading managers of alternative investments. For more information, please visitwww.franklinsquare.com.
About FranklinSquare
Franklin Square is a leading manager of alternative investment funds designed to enhance investors’ portfolios by providing access to asset classes, strategies and asset managers that typically have been available to only the largest institutional investors. The firm’s funds offer “endowment-style” investment strategies that help construct diversified portfolios and manage risk. Franklin Square strives not only to maximize investment returns but also to set the industry standard for best practices by focusing on transparency, investor protection and education for investment professionals and their clients.
Founded in Philadelphia in 2007, Franklin Square quickly established itself as a leader in the world of alternative investments by introducing innovative credit-based income funds, including the industry’s first non-traded BDC. The firm managed approximately $17.0 billion in assets as of September 30, 2015, and is the largest manager of BDC assets with approximately $15.7 billion in BDC assets as of September 30, 2015. For more information, please visitwww.franklinsquare.com.
Forward-Looking Statements and Important Disclosure Notice
This pressreleasemay containcertainforward-looking statements, including statements with regard future events or tothe future performance or operations of FSIC III.Words such as“believes,” “expects,”“projects”and “future”orsimilar expressions are intended to identify forward-looking statements. These forward-lookingstatements are subjecttothe inherentuncertainties in predicting future results andconditions. Certainfactorscouldcause actual results todiffermaterially fromthose projected inthese forward-lookingstatements, andsome of these factors are enumeratedinthe filings FSIC IIImakes with theSEC.
The press release above contains summaries of certain financial and statistical information about FSIC III. The information contained in this press release is summary information that is intended to be considered in the context of FSIC III’s SEC filings and other public announcements that FSIC III may make, by press release or otherwise, from time to time. FSIC III undertakes no duty or obligation to update or revise the information contained in this press release. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. Investors should not view the past performance of FSIC III, or information about the market, as indicative of FSIC III’s future results.
Individual investors and endowments may have different investment horizons, liquidity needs and risk tolerances. In addition, fees that may be incurred by an investor in a fund sponsored by Franklin Square may be different than fees incurred by an endowment investing in similar assets as those in which the funds invest.
Other Information
Theinformation in thispress release is summary informationonly and shouldbereadinconjunction with FSIC III’s Annual Reporton Form10-K for the year endedDecember31,2015,whichFSIC III filed withthe U.S.Securities and Exchange Commission (SEC)on March 11, 2016,as well asFSIC III’s otherreports filedwith the SEC.A copy ofFSIC III’sAnnual Report onForm10-K forthe yearended December31, 2015,and FSIC III’sotherreportsfiledwith theSEC can be found under FSIC III’s “Literature” page atwww.franklinsquare.comand on theSEC’s website atwww.sec.gov.
Please note that certain financial figures in the press release may have been rounded.
Certain Information About Distributions
The determination of the tax attributes of FSIC III’s distributions is made annually as of the end of its fiscal year based upon its taxable income and distributions paid, in each case, for the full year. Therefore, a determination made on a quarterly basis may not be representative of the actual tax attributes of FSIC III’s distributions for a full year. FSIC III intends to update stockholders quarterly with an estimated percentage of its distributions that resulted from taxable ordinary income. The actual tax characteristics of distributions to stockholders will be reported to stockholders annually on Form 1099-DIV.
The payment of future distributions on FSIC III’s shares of common stock is subject to the discretion of its board of directors and applicable legal restrictions and, therefore, there can be no assurance as to the amount or timing of any such future distributions.
FSIC III may fund its cash distributions to stockholders from any sources of funds legally available to it, including expense reimbursements from Franklin Square, as well as offering proceeds, borrowings, net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets and dividends or other distributions paid to it on account of preferred and common equity investments in portfolio companies. FSIC III has not established limits on the amount of funds it may use from available sources to make distributions. There can be no assurance that FSIC III will be able to pay distributions at a specific rate or at all.
1The per share data was derived by using the weighted average shares of FSIC III’s common stock outstanding during the applicable period. Per share numbers may not sum due to rounding.
2FSIC III’s gross portfolio yield prior to leverage (based on amortized cost and excluding non-income producing assets) represents the expected annualized yield to be generated by FSIC III on the income producing assets in its investment portfolio based on the composition of its portfolio as of December 31, 2015. The portfolio yield does not represent an actual investment return to stockholders.