Nontraded business development company plans to list on NYSE on April 16

FS Investments also will increase its monthly cash distribution rate

Apr 1, 2014 @ 12:19 pm

By Bruce Kelly

NYSE, nontraded business development companies,
+ Zoom

Following through on earlier announcements, the $4.5 billion FS Investment Corp. said Tuesday that it would list on the New York Stock Exchange April 16.

It will trade under the ticker FSIC.

In February, the nontraded business development company said that it intended to list its shares this month.

FS Investment initially indicated last April that it planned to complete a liquidity event and return capital to investors.

The company has generated a 16% annualized return since its inception in 2009, FS Investment chief executive and chairman Michael Forman said in a statement.

The company also is increasing its monthly cash distribution rate to 8.68%, from 8.41%, based on its last publicly reported net asset value of $10.27 a share at the end of February.

Shareholders will also receive two 10 cents a share special cash dividends in mid-August and mid-November.

“These distributions should build on [the company's] record and enhance shareholder value,” Mr. Forman said.

FS Investment was popular with representatives at independent broker-dealers seeking alternative investments for clients in need of income in a zero-interest-rate environment. It stopped raising equity capital in 2012.

FS Investment had an offering price of $10.80 a share.

A half-dozen other nontraded BDCs have been launched in the wake of FS Investment's success.

BDCs typically are closed-end investment companies that invest primarily in debt and equity of private companies. Yields can be attractive due to the BDCs' exposure to high credit risks, amplified by leverage.

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