SecProbe.io

November 15, 2016

VIA E -MAIL

William J. Tuttle, Esq.
Dechert LLP
1900 K Street, NW
Washington, DC  20006
Re: Fifth Street Finance Corp. (the “Company”)
 Registration Statement on Form N -2
 File No. 333-214129

Dear Mr. Tuttle:

We have reviewed the registration statement referenced above that was filed on October 17,
2016 and have the following comments.  Whenever a comment is made in one location, it is
considered applicable to all similar disclosure appearing elsewhere in the registration statement.   Additionally, for convenience, we have generally organized our comments using headings,
defined terms and page numbers found in the registr ation statement.
Prospectus
Prospectus Summary (page 1)
Please present the information appearing in this section, and elsewhere throughout the
prospectus, in non-italic type.
Fifth Street Finance Corp.  (page 2)
Please revise the disclosure appearing in t he third paragraph to clarify that below investment
grade securities are often referred to as “high yield” and “junk.”
Recent Developments (Page 6) and Legal Proceedings (Page 111)
Please confirm whether the disclosure is current through the most recent da te practicable.
Investment Advisory Fees  (page 7)
The disclosure states that the incentive fee payable in respect of the Company’s Pre -Incentive
Fee Net Investment Income is subject to a “catch -up” feature.  Briefly expand the disclosure to
highlight the goal of the “catch -up” feature.

2
 Fees and Expenses  (page 12)
We note the absence of the “Acquired Fund Fees & Expenses” line item from the Company’s fee
table.  See Instruction 10 to Item 3 of Form N -2.  Please confirm to us in your response letter that
the Company does not in the upcoming year intend to make investments in an “Acquired Fund,” as the term is defined in Instruction 10.a. to Item 3.1.  of Form N -2, at a  level that triggers the
need for the additional line item of Acquired Fund Fees & Expenses.  If no such additional line
item is required, please indicate in your response letter that any applicable Acquired Fund Fees
& Expenses is nonetheless included in “Other Expenses” or that the Company does not intend to
invest in an Acquired Fund.
We note the disclosure contained in footnote (6) pertaining to the incentive fee and the
corresponding expanded presentation included under the heading “ Incentive Fee”  beginning on
page 147.  The examples appearing on pages 148 & 149 relate to the calculation of the incentive
fee on Pre -Incentive Fee Net Investment Income, as well as the interplay of the quarterly
“preferred return” or “hurdle” and the “catch -up” features.  Based on these disclosures, it does
not appear that there is an accumulation from quarter to quarter of amounts on either the hurdle rate or the parameters set by the “catch -up” mechanism .  Nor does it appear that there is any
clawback of amounts previousl y paid to the investment a dviser if subsequent quarters are below
the quarterly hurdle or the “catch-up” parameters , or any delay of payment to the investment
adviser  if prior quarters are below the quarterly hurdle or “catch-up.”  Accordingly, please
expand the disclosure contained in footnote (6), and elsewhere throughout the prospectus, to
reflect these observations, if true.  Furthermore, assuming that there is, in fact, no accumulation
of amounts on either the hurdle rate or the “catch-up” parameters f rom quarter to quarter, it
would a ppear that current presentation of these amounts on an “annualized” basis is
inappropriate  and should, therefore, be deleted.
Please expand the text accompanying footnote (9) to clarify that all fees and expenses of the
Company’s consolidated subsidiaries are included in the “Total annual expenses” line item
presentation.
In the June 30, 2016 10-Q, in the Notes to the Financial Statements, the Company disclosed that
a provision for losses of $19.2 related to the lawsuits has been recorded, offset by the accrual of
expected insurance recoveries of $19.1 million in the accompanying consolidated financial
statements as of June  30, 2016.  Please explain what the anticipated impact is on the incentive
fee calculations for the r ecoveries and related expenses due to the shareholder lawsuits.
Example (page 14)
Please include an example assuming a 5% annual return resulting entirely from net realized
capital gains.

3
 Risk Factors  (page 18)
Expand the disclosure contained in the first paragraph to make clear that this section also describes
the special risks of investing in a business development company, including the risks associated
with investing in a portfolio of small and developing or financially troubled businesses.  See Item
8.6.e. of Form N -2.  In this regard, add any additional risk factors as appropriate.
In your response letter, confirm that Company will not engage in reverse repurchase agreements.
In the alternative, provide a description of reverse repurchase agreements, noting that they
represent borrowing by the Company and, if true, that they are subject to the Company’s overall
limitation on borrowing.  Also highlight the risks pertaining to reverse repurchase agreements.
To the extent that the Company may materially invest in derivatives, please refer to the
disclosure considerations set forth in the  Letter from Barry D. Miller, Associate Director, Division of Investment Management, SEC to Karrie McMillan, General Counsel, ICI (July 30,
2010).
Illustration  (page 22)
Please reconfigure the presentation of the information shown in the illustration to conform to the format prescribed by Item 8.3.b.(3) of Form N -2.
If we default on our obligations to pay our other indebtedness , we may not be able to make
payments on the Notes.  (page  43)
The disclosure states that the ING facility, the Sumitomo facility and the  Notes have, and any
future credit facilities will likely have, customary cross -default provisions, and that if the
indebtedness thereunder or under any future credit facility is accelerated, the Company may be
unable to repay or finance the amounts due.  Please expand the disclosure to highlight, in plain
English, the consequent effect on the holders of debt sec urities issued by the Company where
cross -default provisions are triggered and subsequently enforced by the Company’s creditors.
Price Range of Common Stock and Distributions  (page 48)
The disclosure states that since the Company’s initial public offering in June 2008, shares of
common stock of the Company have at times traded at prices significantly less than net asset
value.  It also appears from the price range information included on page 48, as well as  the recent
price information disclosed on the prospectus outside front cover,  that shares of the Company’s
common stock typically have traded at a discount to its per share NAV over the past two fiscal
years.  If the Company intends to sell shares of its common stock a price below per share NAV
then, in most instances , it must receive shareholder approval prior to doing so.  Please expand the
disclosure to indicate the Company’s plans to seek this authority from the holders of its common
shares.  The disclosure should also clarify that any sales  of shares of the Company’s common
stock at below its NAV per share requiring shareholder approval must occur, if at all, within one
year after receiving such shareholder approval.

4
 Business – General  (page 101)
The disclosure states that, at June 30, 2016, the Company’s portfolio included 17 investments in
private equity funds which represented less than 1% of the fair value of the Company’s assets.
Please expand the disclosure to state that t he Company will limit its investments in entities that
are excluded from the definition of “investment company” under Section 3(c)(1) or Section
3(c)(7) of the Investment Company Act of 1940 (typically private equity funds and hedge funds)
to no more than 15% of its net assets.

Indemnification (page 151)
On page F -87 of the N -2 and in the June 30, 2016 10-Q, the notes to the financial statements
state the following: “The investment advisory agreement provides that, absent willful
misfeasance, bad faith or gross negligence in the performance of their respective duties or by
reason of the reckless disregard of their respective duties and obligations, the Investment Adviser
and its officers, managers, partners, members (and their members, including the owners of their
members), agents, employees, controlling persons and any other person or entity affiliated with
it, are entitled to indemnification from the Company for any damages, liabilities, costs and
expenses (including reasonable attorneys' fees and amounts  reasonably paid in settlement)
arising from the rendering of the Investment Adviser's services under the investment advisory
agreement or otherwise as the Investment Adviser. In this regard, FSAM has indicated that it
intends to seek indemnification under  the investment advisory agreement with respect to any
losses and expenses it may incur in connection with active lawsuits (see Note 16). To date, no
amounts have been recorded in the consolidated financial statements related to these potential
claims.”  P lease include disclosure of a range of reasonably possible losses for the litigation
matters.
Description of  Our Debt Securities (page 163)
In your respons e letter, please describe the types of debt that the Comp any contemplates
offering through this re gistration st atement.  Additiona lly, under take to advise us in advance of
any propos ed debt offeri ng pursuant to this registration st atement and to provide  for staff
review the preliminary prospectus suppl ement relating to any debt offeri ng by the Comp any.
Further undertake to clear all staff comm ents pri or to the comm encement of any such debt
offering whenever the preliminary prospectus suppl ement materially differs from the  form of
prospectus suppl ement filed with, or incorporated by reference into, this registration st atement
at the time of effectiv eness.
We note, from the disclosure appearing on pages 41 &  42, that the indenture does not contain
any provisions that give a holder of debt securities issued thereunder any protection in the event the Company or its subsidiaries issue a large amount of debt or is acquired by another entity.  Additionally, the di sclosure indicates that the debt securities issued by the Company under the
indenture, whether secured or unsecured, will rank structurally junior to all existing and future

5
 indebtedness (including trade payables) incurred by the Company’s subsidiaries, fi nancing
vehicles or similar facilities.  It also appears that the Company’s creditor s have secured a first
priority security interest in all of the Company’s portfolio investments, the equity interests in
certain of its direct and indirect subsidiaries and substantially all of its other assets.
Accordingly, please note that the prospectus supplement used with an offering of the Company’s
debt securities should include the following disclosure, as applicable:
(1) The outside front cover of the prospectus supplement should, disclose, if true, that as of the offering date of the debt securities being offered thereby, none of the Company's indebtedness is
currently subordinated to the debt securities.  Accompany that disclosure with a statement as to
whether it is the current intention of the Company to issue indebtedness which expressly states
that it is subordinated to the debt securities being offered.
(2) The outside front cover of the prospectus supplement should disclose that the debt securities are "struct urally subordinated" and are “effectively subordinated” to all existing and future
indebtedness of the Company and other obligations of its subsidiaries, financing vehicles and similar facilities.  The outside front cover of the prospectus supplement shoul d also disclose the
approximate total dollar amount, as of the debt securities offering date, of all liabilit ies and
obligations to which the debt securities being offered are structurally subordinated and effectively subordinated.  The prospectus suppleme nt summary section should also explain, in
plain English, the significance of  the debt securities being structural ly subordinated and
effectively subordinated, specifically highlighting how such subordination affects the rights and
priorities of the holde rs of the debt securities.
 (3) Refrain from using the word "senior" in the title of any debt securities issued by the
Company, or when describing/identifying their ranking, if the debt securities are not
contractually senior in right of repayment to the other outstanding obligations of the Company.  Even where debt securities being offered by the Company are contractually senior in right of
repayment to the other outstanding obligations of the Company, consider the appropriateness of
referring to the debt securities as “senior” when they are also are structurally subordinated to the
obligations of the Company’s subsidiaries, financing vehicles and similar facilities.
(4) Disclose that the debt securities being offered will not be subject to any sinking fund and explain the significance thereof; for example, state that no amounts will be set aside for the express purpose of repayment of principal and any unpaid interest on the debt securities, and that
repayment of the debt securities will depend upon the f inancial condition of the Company and its
subsidiaries as they exist as of the maturity date of the debt securities.
Plan of Distribution (page 193)
Please confirm to the  staff in your response  letter that the Comp any will s ubmit any
under written offeri ng to FINRA for its prior approva l of the underwriting  terms.

6
 In your respons e letter, undertake to include in any prospectus suppl ement, as applicable, unde r
a section captione d “Additiona l Und erwriter Comp ensation” a description of  the terms of  any
agreement that the Comp any will h ave entered into with the  under writers or their affilia tes in
connection with any offering, and speci fy the nature of the services that the under writers or their
affilia tes have provide d or will p rovide  thereunder.  Further under take to dis close whether any
such fee payable thereunder is a one-time  fee or whether it is p ayable annually. Also unde rtake
to file all such agreements as exhibits  in a post -effe ctive amendment to the  registration
statement.
Item 25 Financial Statements and Exhibits   (page C-1)
Exhibit  (l)
We note from the Opinion and Consent of Dechert LLP  that the terms of  the actual offerings
from this re gistration st atement ha ve not yet been authori zed by the Comp any’s Board of
Directors.  Th erefore, in your response  letter, provide  an unde rtaking on behalf of the Comp any
to file, in a post-effective  amendment with each t akedown from this she lf registration
statement, an unqua lified legality opinion and related consent of counsel, and that the content
of which will be c onsist ent with  the views set forth in Staff Legal Bulle tin No. 19 (CF).
Exhibit (n)(2)
In Exhibit (n)(2), the audit opinion is addressed to the Board of Directors.  Please explain why
the audit opinion is not also addressed to shareholders as well as the Board.
Annual Report on Form 10 -K for the  fiscal year ended September 30, 2015
On page 95, Consolidated Statements of Assets and Liabilities, please confirm  whether  there are
any director fees payable at year end.    If there are any such payables, in future filings, these
should be disclosed separately on the balance sheet, in accordance wit h Regulation S -X, Article
6-04.12.
On page 104, Consolidated Schedule of Investments, please confirm whether or not the warrants listed expire.    If so, please include the expiration date in the description on the Consolidated
Schedule of Investments in future filings.
On page 111, Consolidated Schedule of Investments, we noted that footnote 12 indicates which investment is n