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FS Investment Corporation III Amends Distribution Reinvestment and Share Repurchase Programs, Will Close Offering November 1

October 17, 2017

FS Investment Corporation III Amends Distribution Reinvestment and Share Repurchase Programs, Will Close Offering November 1

October 16, 2017 | James Sprow | Blue Vault

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On October 13, 2017, FS Investment Corporation III (a nontraded BDC) amended its distribution reinvestment plan (“DRP”). The amended DRP will be effective as of, and will first apply to the reinvestment of cash distributions paid on or after November 29, 2017.

Under the amended DRP, cash distributions to participating stockholders will be reinvested in additional shares at a purchase price determined by the board of directors of the Company or a committee thereof, in its sole discretion, that is (i) not less than the net asset value per share (“NAV”) determined in good faith by the Board immediately prior to the payment of the distribution and (ii) not more than 2.5% greater than the NAV per share as of such date. No other material terms of the DRP have been amended.

On October 13, 2017, the Company amended the terms of its share repurchase program (“SRP”). The amendments to the SRP will be effective as of the commencement of the Company’s quarterly repurchase offer for the fourth quarter of 2017, which the Company expects will commence in late November 2017.

Under the amended SRP, the Company will offer to repurchase shares at a repurchase price equal to the price at which shares are issued pursuant to the amended DRP on the distribution date coinciding with such share repurchase date.

On October 13, 2017, the Board approved the closing of the Company’s public offering to new investors on or around November 1, 2017. During the first two quarters of 2017 the Company raised $16.0 million in gross offering proceeds, including $5.7 million from the DRP. The Company is currently offering shares of its common stock only to investors with “wrap” accounts or through its institutional channel. In February 2016, the Company closed its offering to investors investing through the IBD channel.

FS Investment Corporation III was declared effective in December 2013, has raised $2.8 billion in investor equity as of the second quarter of 2017 and had $3.9 billion in total assets at June 30, 2017. The Company’s investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation by investing primarily in senior secured loans and second lien secured loans of private U.S. companies.

 

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