December 1, 2016 Comments (0) Blog, Current Investigations

FS Investment Corporation Announces Public Offering

(Last Updated On: January 11, 2017)

Are you concerned about your investment losses with FS Investments (FSCI)? If so, The White Law Group may be able to help by filing a FINRA arbitration claim against the brokerage firm that sold you the investment.

Founded in 2007, Franklin Square Capital Partners manage a variety of BDCs including non-traded, as well as a publicly traded BDC on the NYSE. Besides managing BDCs, Franklin Square manages a global credit opportunities fund.

Franklin Square has various BDCs, both traded and non-traded. The first, FS Investment Corporation, is publicly traded and focuses on providing customized credit solutions to middle market companies. This BDC seek to invest in the senior secured debt, as well as the subordinated debt of private middle market US companies. FSIC launched this publicly traded BDC in 2009 and has 23% of investments in capital goods, while 11% is invested in consumer services. More information can be found here.

FS Investment Corporation announced December 1, that it has priced an underwritten public offering of an additional $80 million in aggregate principal amount of its 4.250% unsecured notes due 2020 pursuant to a reopening of such notes.  The newly issued notes are priced at a premium to par at an issue price of 100.531%, plus accrued and unpaid interest from July 15, 2016 up to, but not including, the date of delivery of such newly issued notes.

The notes will mature on January 15, 2020 and may be redeemed in whole or in part at FSIC’s option at any time at par plus a “make-whole” premium, if applicable. The offering is expected to close on December 8, 2016, subject to customary closing conditions.

FSIC expects to use the net proceeds of this offering to repay outstanding indebtedness.

A Business Development Company (“BDC”) is a form of investment company that invests in small and mid-sized businesses. Investors can buy shares in a BDC, and the money from their investment are used to fund the businesses. In turn, investors can profit from dividends paid on their investments, or, in some cases, the sale of their shares. For an in depth look at BDCs, go here.

Like all investments, BDCs do not come without risks. Limited liquidity, distributions that may not be guaranteed in frequency or amount, and limited operating history are just a few risks that investors take on when investing in a BDC. Business Development Companies can be a good investment for the right investor, along with a diversified portfolio and sufficient due diligence.

BDCs should only be recommended to those investors who are able to both handle substantial losses and those who are not in need of immediate liquidity. Investors should be particularly cautious of riskier non-public and non-traded BDCs.

If you invested in FS Investments or another BDC and would like a free consultation with a securities attorney, please call The White Law Group at 888-637-5510.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.  For more information on the firm and its representation of investors, visit http://www.whitesecuritieslaw.com.