FS Investment Corporation and FS Investment Corporation II Make Proprietary
Investment in Billabong
PHILADELPHIA, July 23, 2013
PHILADELPHIA, July 23, 2013 /PRNewswire/ --On July 16, 2013, FS Investment
Corporation ("FSIC") and FS Investment Corporation II ("FSIC II"), together
with the private equity firm Altamont Capital Partners ("Altamont"), committed
to a $294 million proprietary loan financing for Billabong International
Limited ("Billabong"). Billabong is an international manufacturer and
distributor of surfwear and extreme sports apparel.
The financing commitment provided by FSIC, FSIC II and Altamont consists of a
$294 million bridge loan with an interest rate of 12% per year, a maturity
date of December 31, 2013, and meaningful call protections. The financing
arrangement also includes an option to acquire a 15% equity stake in
Billabong. The proceeds from the bridge loan are expected to be used to
refinance an existing loan facility and to provide Billabong with cash for
working capital purposes. The final terms of the financing commitment are
subject to change.
Billabong is also working with FSIC, FSIC II and Altamont on a long-term
financing solution. Billabong has signed a commitment letter with FSIC, FSIC
II and Altamont for a 5-year term loan for up to $254 million, the proceeds of
which are expected to be used to repay the bridge loan. Under the terms of the
commitment letter, the term loan will pay an interest rate of 12% per year, of
which 7% must be in cash and up to 5% may be paid-in-kind. FSIC, FSIC II and
Altamont have also committed to provide Billabong with $40 million in
convertible notes, which if converted into shares would equate to
approximately 25% of Billabong's equity.
"We are pleased with the structure, downside protection and return potential
of our latest proprietary transaction," said Michael C. Forman, Chairman and
Chief Executive Officer of FSIC and FSIC II. "This transaction is possible
because of the scale of our platform, our ability to co-invest across our
funds and our access to the deal flow sourced by our partners at GSO /
Blackstone. We are also pleased to provide this interim financing solution for
Billabong and look forward to working with Billabong's new management to
provide a long-term financing solution for the company."
About FS Investment Corporation
FSIC, an investment fund sponsored by Franklin Square Holdings, L.P.
("Franklin Square"), is a publicly registered, non-traded business development
company ("BDC"). A BDC such as FSIC is a type of investment fund that enables
investors, including non-accredited investors (subject to certain
state-specific suitability standards), to access the private debt asset class.
FSIC 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 is managed by FB Income Advisor, LLC and
is sub-advised by GSO / Blackstone Debt Funds Management LLC ("GDFM"), an
affiliate of GSO Capital Partners LP ("GSO"). GSO, with approximately $58.1
billion in assets under management as of March 31, 2013, is the credit
platform of The Blackstone Group L.P. For more information, please visit
About FS Investment Corporation II
FSIC II, Franklin Square's third publicly registered, non-traded BDC, 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 II is managed by FSIC II Advisor, LLC and is sub-advised by GDFM. For
more information, please visit www.fsinvestmentcorpII.com.
About Franklin Square
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
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 currently manages three funds with approximately $6.9 billion* in assets.
Forbes Magazine ranked Franklin Square 13^th on its 2013 list of America's
Most Promising Companies. Franklin Square distributes its funds through its
affiliated broker-dealer, FS^2 Capital Partners, LLC. For more information,
please visit www.franklinsquare.com.
* Assets under management as of March 31, 2013.
This announcement may contain certain forward-looking statements, including
statements with regard to the future performance of FSIC and FSIC II. Words
such as "believes," "expects," "projects" and "future" or similar expressions
are intended to identify forward-looking statements. These forward-looking
statements are subject to the inherent uncertainties in predicting future
results and conditions. Certain factors could cause actual results to differ
materially from those projected in these forward-looking statements, and some
of these factors are enumerated in the filings FSIC and FSIC II make with the
SEC. Neither FSIC nor FSIC II undertakes any obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
Jennifer Connelly Public Relations
SOURCE FS Investment Corporation; FS Investment Corporation II
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