Good day, ladies and gentlemen, and welcome to the Fiscal Third Quarter 2011 Fifth Street Finance Earnings Conference call. My name is Keith and I’ll be your operator for today. At this time, all participants are in a listen-only mode. Later on, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, today’s conference is being recorded for replay purposes. And I would now like to turn the conference over to your host for today Ms. Stacey Thorne, Executive Director of Investor Relations. Please proceed, ma’am.

Thank you, Keith. Good morning, and welcome everyone. My name is Stacey Thorne. I’m the Head of Investor Relations for Fifth Street Finance Corp. This conference call is to discuss Fifth Street Finance Corp’s third fiscal quarter ending June 30, 2011. I have with me this morning Leonard Tannenbaum, CEO; Bernard Berman, President; and William Craig, Chief Financial Officer. Before I begin, I would like to point out that this call is being recorded. Replay information is included in our July 8, 2011 press release and is posted on our website www.fifthstreetfinance.com. Please note that this call is the property of Fifth Street Finance Corp. Any unauthorized rebroadcast of this call in any form is strictly prohibited. Before we go into our earnings portion of the call, I would like to call your attention to the customary Safe Harbor disclosure in our July 8, 2011 press release regarding forward-looking information. Today’s conference call includes forward-looking statements and projections and we ask that you refer to our most recent filings with the SEC for important factors that could cause actual results to differ materially from these forward-looking statements and projections. We do not undertake to update our forward-looking statements unless required by law. To obtain copies of our latest SEC filings, please visit our website or call Investor Relations at 914-286-6811. The format for today’s call is as follows. Len will provide an overview, Bernie will provide an update on our capital structure, and Bill will summarize the financials, and then we will open the line for Q&A. I will now turn the call over to our CEO, Len Tannenbaum.

Thank you, Stacey. This has been a year of changing debt markets. Pricing has fluctuated quickly from floppy to normal and back again during the entire first half of the year. So far, we have been premature on our view of interest rates as the Federal Reserve seems determine to keep interest rates near zero. However, we are well position to realize an immediate earnings benefit when interest rates eventually begin to rise. Our investment grade rating and expanded leading capacity are beginning to pay dividends both in terms of our relationships with lenders, as well as the private equity community. Our newly earned rating enables us to lower our cost of capital so further and later add our liability structure. The increased size and flexibility in our financing vehicles also enables us to offer more complete solutions for our clients, and senior only, one step, secondly in mezzanine and equity call investments. As we alluded to in the past two monthly news about us, we are also continuing to work on an enhanced solution to the senior only product with a low cost of capital from an overseas deep-pocketed lending partner. We continue to make significant progress that I have nothing final to announce as the yet. Our earnings were in the middle range of previously issued guidance. Well, I’m personally disappointed that we are still shy of the $0.32 dividend for the quarter. I’m hopeful that we’ll be able to close the gap substantially in the second half of the calendar year. We anticipate that part of the additional earnings will come from better matching our targeted leverage of 0.6 times debt-to-equity, a part will come from better utilization of our credit lines and part of it will come from more closely matching our 75% first lien and…

Thanks, Len. In July, we lowered the interest rate on our ING led credit facility to LIBOR plus 300 basis points with no LIBOR floor at all times while we were at least 35% drawn. And LIBOR plus 325 basis points with no LIBOR floor at all other times. These rates are contingent upon us maintaining our investment grade credit rating. The size of the facility was also increased to $230 million with an accordion, which would allow for future expansion up to a total of $350 million. We are appreciative of ING, as well as the rest of the lending group for working with us to lower our cost of debt and to increase our borrowing capacity. We continue to make progress towards our second SBIC license. In the spring, we received a green light letter to file an application for our second fund, which we recently filed. We continue to move through the licensing process and we will provide an update on our next earnings call well sooner as we have something definitive to report. Our first SBIC fund is fully drawn on the maximum $150 million in debentures. Of the $150 million, $138.3 million is fixed to extremely favorable pricing, which we previously announced and the final $11.7 million, we’ll have its pricing fixed in about a month. I’m now going to turn it over to our CFO, Bill Craig.

Thanks, Bernie. With respect to our balance sheet as of June 30, 2011, total assets were $1.05 billion, which included total investments of $1.05 billion at fair value, cash and cash equivalents of $17.6 million, and total assets of $1.09 billion. Liabilities were $318.1 million, which included $150.0 million of SBA debentures payable and $152.0 million of convertible senior notes payable. At June 30, 2011 net assets were $775.6 million, and our net asset value per share was $10.72. With respect to our operations, total investment income for the three months ended June 30, 2011 was $32.4 million. This was comprised of $29.0 million of interest income including $3.6 million of fixed interest and $3.3 million of fee income. We ended with net investment income per common share of $0.25 and earnings per common share of $0.31. For the three months ended June 30, 2011 we recorded net unrealized appreciation of $18.5 million. This gives us $14.0 million of net reclassifications to realize losses and $7.1 million of net unrealized depreciation on equity investments offset by a $1.7 million net unrealized depreciation on debt investments and $0.9 million of net unrealized depreciation on our interest rate swap. Our weighted average yield on debt investments at June 30, 2011 was 12.6%, which included a cash component of 11.2%. Our average portfolio company investment was $20.3 million. This compares to the previous quarter with a weighted average yield on debt investments at March 31, 2011 of 12.8%, which included cash component of 11.3% and our average portfolio company investment of $19.6 million. With respect to the portfolio, during the quarter ended June 30, 2011 we closed $120.1 million dollars of investments in six new and three existing portfolio of companies, and funded $119.2 million across the portfolio. At June 30, 2011 our…

Thank you, [Bern]. Before, I open the line for Q&A, I would like to remind everyone that for the month when Fifth Street is providing full quarterly earnings, we generally release a newsletter. If you like to be added to our mailing list and receive these communications directly, please either call me at 914-286-6811 or send a request e-mail to ir@fifthstreetfinance.com. Thank you for participating on the call today. Keith, may you please open the lines for Q&A.

Certainly. (Operator Instructions) And your first question is from the line of Ram Shankar with FBR. Please proceed. Ram Shankar – FBR: Hi guys, how are you?

Good morning. Ram Shankar – FBR: Just based on what I’m looking at my screen today and based on your conversations with your sponsors, is there anything that suggests, with the economy today that would suggest that middle market M&A would be down for the remainder of this year?

You have to remember, the answer is the pipeline, and for a company to sell itself takes a long lead-time. And so these things go, first to prepare a company and it goes to auction, and the auction process which terms a winner is an LOI, is a long-long process. So I think that M&A activity will still stay really good, the market dislocation of course should allow rates to flex higher and allow us to deploy our capital at better rates. But if anything, I think M&A activity for the next 3 to 6 months will be robust. Beyond that, I think you’re definitely questioning, it’s a question whether it’s January next year, the rate continues. Ram Shankar – FBR: Okay. And you alluded to some commentary on the FASB and the liquidity, even though profits of the Q3 coming or potential for that. Is there any change in the number of floating rate loans that you want to have on your book? You’re still targeting the 65% to 75%?

I think, yeah we got, look, every time we’ve set a target, whether it’s 75% first lien and 25% second lien to Mezz or 65% floating, we’ve gotten to our targets pretty fast. I think we’re actually positioning the firm exactly where we want. We’re in a much, much safer position than we were a year ago, even two years ago, both in bigger deals and plenty of first lien loans in more stable companies. And I think as we worry about the economy today, the two most dangerous sectors in 2007 for us was definitely food and retail. And food and retail today only represent approximately 10% of the portfolio, and three, four years ago that was up over 20% of the portfolio. So we’ve seen a lot of tension even to sector allocation. Ram Shankar – FBR: Okay. Thanks for taking my question.

Your next question is from the line of Joel Houck with Wells Fargo. Please proceed. Joel Houck – Wells Fargo: Yeah, I’m wondering what's your perspective on maybe moving the portfolio more towards the second lien loan, particularly in light of the dislocation that we’re seeing currently as well as what we may see later this year.

I think even as we move – if we move to the 25% second lien to Mezz rating, we’re moving in much bigger companies. The average EBITDA is easily over 10, often over $15 million or $20 million. The second lien loans are, the first lien loans often have substantial asset coverage. So what we’re really watching our rotation and therefore the second lien loans are not going to be at the rates that you see some of our competitors do like 12 and 3 or 13 and 3. We’re talking about second lien loans at the 11% or 12% or 13% interest rate because these are much safer securities. Having said that, I think a 75, 25 split is probably the right proportion for us. Joel Houck – Wells Fargo: Okay. And another question on leverage. I mean, obviously you guys have raised some capitals above booking and have delevered the balance sheet. Is there some level of, I mean, make commitments to sharing the reward to shareholders, but some level leverage that you’re willing to run the company so that shareholders kind of get the benefit of leverage at BDC, it seems like in the last year or so, history has been quick to raise equity when you haven't been fully leveraged. So I'm just kind of wondering your perspective on that.

Yes. We did try to achieve scale, which we’ve accomplished, we won't raise equity book and we haven't asked for commission rates for our book. So and we’re prepared not to raise equity for the remainder of the year unless the stock is in the right place. I mean, we have a fully financed business plan. The last year was partially going to finance the second SBA license and partially going to finance this new relationship that we’re trying to work on. So we feel really good about the amount of equity capital we have and we’re ready to lever to about 0.6 target. I mean, that’s the target, they’ll go a little bit higher and a little bit lower at different times. But we will utilize our credit lines. One of the big drag on earnings this quarter of course was the fact we didn’t utilize our credit lines appropriately. And we have an unused fee, which is a bit higher if they’re undrawn. And we offset the amortization of the points upfront, both of which increased our cost of debt capital. We believe that will come down in the future quarters. Joel Houck – Wells Fargo: Right. Thanks, Len.

Your next question is from the line of Casey Alexander with Gilford Securities. Please proceed. Casey Alexander – Gilford Securities: Hi. Len, did you guys say you have $71.7 million already funded in the current quarter?

Yes. Casey Alexander – Gilford Securities: Okay. I wasn’t sure if I caught that straight. The two deals that you got paid back here during the month of July Filet of Chicken and Cenegenics. Those weren’t doing until 2012 and 2014. Now you’ve been carrying a bank of potential prepayment fees. Did those pay any prepayment fees or premiums or anything like that?

Yes. Casey Alexander – Gilford Securities: Okay. All right. I think that’s all I have. Yeah, I’m good. Thank you.

Thanks, Casey.

Your next question is from the line of Dean Choksi with UBS. Please proceed. . Dean Choksi – UBS Investment Bank: Thanks for taking my question. When you’re talking about the pipeline, you kind of qualified it by saying that a lot of deals were in auction stages. I mean, is there some kind of uncertainty about how many deals will close or how do see your competitive position or how do you see the market? Just kind of curious why you kind of qualified that there is a pipeline legacy in the past, there was qualification on it.

I think I’d point in good catch. Look, I’m surprised the pipeline is as robust as it is and the M&A activity has (inaudible) but we’re also finding depending on the deal, some regional bank sometimes, some alternative lenders step in at rates far below where we would have been. So if that doesn’t happen, our win rate is relatively high sometimes, recently that’s been happening more. And in auction stages, we’re only with a number of sponsors. So we don’t know that our sponsors are going to win. So just because it’s in our pipeline doesn’t mean our sponsor is going to turn out the winner. So it’s really, we don’t, and our existing relationships are co-relationships as predominantly in the pipeline. It’s a lot of new relationships, which is great with less certain about the win rates of those relationships. Dean Choksi – UBS Investment Bank: Thanks.

Your next question is from the line of Greg Mason with Stifel Nicolaus. Please proceed. Greg Mason – Stifel Nicolaus & Company: Great, thanks. To follow-up on Casey’s question on the extra fees prepayments, Len would you be able to provide any color as to the magnitude of any exit fees or prepayment fees on those two exits?

Not really. Needless to say when you exit something early, usually within the first three years, there is a prepayment penalty, in years four and five, it’s minimal of anything, I think it’s down, but what we do is to being conservative at the amortization of the points upfront. So any time you’re exiting early, obviously those will get written up in the quarter, if it’s prepaid early. In some cases like Cenegenics, the really winner here is the fact that we made a great loan, we were well with the management team, we were refinanced out and we still own three point something percent of the equity that we get distributions through to. So, we still get additional payments even though we completely refinanced, and that’s the goal. In that equity, we have an equity gain yet, but that equity someday will be sold hopefully and that our goal against our carry forwards are losses. Greg Mason – Stifel Nicolaus & Company: Great. And then could you talk about prepayments at kind of as the portfolio seasons, you really have not had a lot of prepayments over the past several quarters because you’ve got such a young portfolio, what are your expectations for prepayments, not just in the next quarter but say over the next 6 to 12 months. You don’t have a lot of maturities coming due, but what are your prepayment expectations?

I think, you never – which quarter these things fall into. But our internal estimate is about $25 million a quarter, but it could be $51 a quarter, and it will be zero the next quarter. I mean we obviously don’t have control over refinancing to repayments. But right now that’s our general expectation, that’s about the best we can do. Greg Mason – Stifel Nicolaus & Company: Great. Thanks, Len.

There are no other questions at this time. (Operator Instructions) And it looks like we have no other questions for the day. So with that, I’d like to close up the conference. Ladies and gentlemen thank you for joining us and everyone may disconnect.