FS Investment Corporation IV Amends Distribution Reinvestment and Share Repurchase Programs, Will Close Offering November 1
October 16, 2017 | James Sprow | Blue Vault
On October 13, 2017, FS Investment Corporation IV (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. FS Investment Corporation IV was declared effective in October 2015. Since commencing its continuous public offering and through August 1, 2017, it has issued 26,070,591 shares of Class T common stock for gross proceeds of approximately $291.52 million, including Class T common stock issued under the distribution reinvestment plan and approximately $9.11 million in gross proceeds raised from the principal of FSIC IV Advisor, certain members of its board of directors and other individuals and entities affiliated with FSIC IV Advisor and GDFM, the Company’s investment sub-adviser.
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. The Company seeks to generate superior risk-adjusted returns by focusing on debt investments in a broad array of private U.S. companies, including middle market companies, which the Company defines as companies with annual revenues of $50 million to $2.5 billion at the time of investment.
Learn more about FS Investments on the Blue Vault Sponsor Focus page.
Blue Vault is just what advisors need to size up the different offerings in the nontraded REIT market. Just as importantly, it’s what the industry needs to encourage best practices among REITs.