Fifth Street Senior Floating Rate Corp. has closed on a $309 million securitization of loans to small and medium-sized companies.

It’s the business development’s second collateralized loan obligation; the first closed in the first quarter.

The deal, FS Senior Funding, refinance a warehouse facility. It was supported by repeat investors and represents the tightest print for a middle market CLO this year, Ivelin M. Dimitrov, Fifth Street’s chief executive, said in the statement.

The trust issued three classes of notes rated ‘Aaa’ by Moody’s Investors Service: $126.0 million of class A-T notes bear interest at a rate of LIBOR plus 180 basis points; $29.0 million class A-S notes initially pay LIBOR plus 155 basis ponts, but this rate steps up after an initial period; and $20.0 million of class A-R revolving notes pay commercial paper plus 180 basis points.

There are also two subordinated tranches: $25.0 million of class B notes are rated ‘Aa2’ and pay LIBOR plus 265 basis points and $22.6 million of class C notes are rated ‘A2’ and pay LIBOR plus 325 basis points. The class C notes are being retained by Fifth Street.

The deal is collateralized primarily by middle market senior secured loans that are sourced and originated through the Fifth Street platform.  The vehicle has a four-year reinvestment period with a 10-year maturity and two-year non-call period. 

According to Moody’s, Fifth Street had acquired approximately 78% of the collateral at closing.

Natixis Securities Americas LLC served as the placement agent.

Editor's Note: An earlier version of this story mistated the use of proceeds.

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