Len Tannenbaum: "There's Been Major Capitulation"
Since BDCs rely on their stock for liquidity, it's safe to say they're in a world of hurt right now. We saw American Capital and Allied Capital post losses and either reduce or possibly eliminate their dividends last week, for example. Today Fifth Street Finance, a lower middle market BDC that went public in June (one of the whopping two financial services IPOs this year), released its monthly shareholder update. I spoke with CEO Len Tannenbaum about fake term sheets, who's really in business (he names names), nosebleed lending rates and what his firm will do when it runs out of money: What do you mean by "fake term sheets"? Are lenders really trying that hard to keep up the appearance of being open for business? Some of them have submitted term sheets that have no way or desire to be completed. They have no money to do it, so they're trying to do it with such onerous terms, and not negotiating
