FS KKR Capital Corp. Announces Third Quarter 2024 Results

PR Newswire

PHILADELPHIA and NEW YORK, Nov. 6, 2024

PHILADELPHIA and NEW YORK, Nov. 6, 2024 /PRNewswire/ -- FS KKR Capital Corp. (NYSE: FSK), or the Company, today announced its financial and operating results for the quarter ended September 30, 2024, and that its board of directors previously, on October 8, 2024, declared a fourth quarter 2024 distribution of $0.70 per share.

Financial and Operating Highlights for the Quarter Ended September 30, 2024(1)

   -- Net investment income of $0.77 per share, compared to $0.77 per share for 
      the quarter ended June 30, 2024 
 
          -- Adjusted net investment income(2) of $0.74 per share, compared to 
             $0.75 per share for the quarter ended June 30, 2024 
 
   -- Net asset value of $23.82 per share, compared to $23.95 per share as of 
      June 30, 2024 
 
   -- Total net realized and unrealized loss of $0.20 per share, compared to a 
      total net realized and unrealized loss of $0.39 per share for the quarter 
      ended June 30, 2024 
 
          -- Adjusted net realized and unrealized loss(2) of $0.17 per share, 
             compared to adjusted net realized and unrealized loss of $0.37 per 
             share for the quarter ended June 30, 2024 
 
   -- Earnings per Share of $0.57, compared to Earnings per Share of $0.37 for 
      the quarter ended June 30, 2024 
 
   -- Total purchases of $1,136 million versus $1,321 million of sales and 
      repayments, including $370 million of sales to the Company's joint 
      venture Credit Opportunities Partners JV, LLC 
 
   -- Net debt to equity ratio(3) as of September 30, 2024 was 109%, compared 
      to 109% as of June 30, 2024 
 
   -- Paid cash distributions to stockholders totaling $0.70 per share(4) 

"During the third quarter FSK outperformed its public guidance by earning $0.74 per share of Adjusted Net Investment Income. We also originated approximately $1.1 billion of new investments and further reduced our non-accrual investments. As we begin focusing on 2025, we are optimistic that the economy's strong underpinnings will help facilitate what could be a measurable increase in M&A activity," stated Michael C. Forman, Chief Executive Officer & Chairman.

Distribution for Fourth Quarter 2024

On October 8, 2024, FSK's board of directors declared a distribution for the fourth quarter of $0.70 per share, consisting of a base distribution of $0.64 per share and a supplemental distribution of $0.06 per share, which will be paid on or about December 18, 2024 to stockholders of record as of the close of business on December 4, 2024.

Portfolio Highlights as of September 30, 2024

   -- Total fair value of investments was $13.9 billion of which 67% was 
      invested in senior secured securities. 
 
   -- Weighted average annual yield on accruing debt investments(5) was 11.9%, 
      compared to 12.3% as of June 30, 2024. Excluding the impact of merger 
      accounting, weighted average annual yield on accruing debt investments 
      was 11.5%, compared to 12.0% as of June 30, 2024. 
 
   -- Weighted average annual yield on all debt investments(5) was 11.2%, 
      compared to 11.5% as of June 30, 2024. Excluding the impact of merger 
      accounting, weighted average annual yield on all debt investments was 
      10.8%, compared to 11.1% as of June 30, 2024. 
 
   -- Exposure to the top ten largest portfolio companies by fair value was 20%, 
      compared to 20% as of June 30, 2024. 
 
   -- As of September 30, 2024, investments on non-accrual status represented 
      1.7% and 3.8% of the total investment portfolio at fair value and 
      amortized cost, respectively, compared to 1.8% and 4.3% as of June 30, 
      2024. 
 
Portfolio Data                   As of September 30, 2024  As of June 30, 2024 
-------------------------------  ------------------------  ------------------- 
Total fair value of investments          $13,943                 $14,087 
Asset Class (based on fair 
value) 
  Senior Secured Loans -- First 
   Lien                                   59.9 %                 58.1 % 
  Senior Secured Loans -- 
   Second Lien                            6.2 %                   6.6 % 
  Other Senior Secured Debt               0.9 %                   0.9 % 
  Subordinated Debt                       1.6 %                   2.5 % 
  Asset Based Finance                     14.3 %                 14.4 % 
  Credit Opportunities Partners 
   JV, LLC                                9.9 %                   9.8 % 
  Equity/Other                            7.2 %                   7.7 % 
Interest Rate Type (based on 
fair value) 
  % Variable Rate Debt 
   Investments                            68.6 %                 68.8 % 
  % Fixed Rate Debt Investments           8.2 %                   7.8 % 
  % Other Income Producing 
   Investments                            15.8 %                 15.5 % 
  % Non-Income Producing 
   Investments(7)                         5.7 %                   6.1 % 
  % of Investments on 
   Non-Accrual(6)                         1.7 %                   1.8 % 
 

Leverage and Liquidity as of September 30, 2024

   -- Net debt to equity ratio(3) of 109%, based on $8.1 billion in total debt 
      outstanding, $371 million of cash, cash equivalents and foreign currency 
      and $467 million of net receivable for investments sold and repaid and 
      stockholders' equity of $6.7 billion. FSK's weighted average effective 
      interest rate (including the effect of non-usage fees) was 5.49%. 
 
   -- Cash, cash equivalents and foreign currency of $371 million and 
      availability under the Company's financing arrangements of $3.5 billion, 
      subject to borrowing base and other limitations. 
 
   -- As of September 30, 2024, 66% of the Company's $8.1 billion of total debt 
      outstanding was in unsecured debt and 34% in secured debt. 

Conference Call Information

FSK will host a conference call at 9:00 a.m. (Eastern Time) on Thursday, November 7, 2024, to discuss its third quarter 2024 results. All interested parties are welcome to participate via telephone or live webcast. Domestic callers can access the conference call toll free by dialing +1 (800) 715-9871. International callers can access the conference call by dialing +1 (646) 307-1963. All callers are asked to dial in 10 minutes prior to the call and reference conference ID 4020608. The conference call will also be webcast, which can be accessed from the Investor Relations section of FSK's website at www.fskkradvisor.com under Events.

A replay of the call will be available shortly after the end of the call by visiting the Investor Relations section of FSK's website, under Events, or by using the following URL: https://edge.media-server.com/mmc/p/sf6nn9zu.

Supplemental Information

An investor presentation of financial information will be available by visiting the Investor Relations section of FSK's website at www.fskkradvisor.com, under Presentations, after the market close on Wednesday, November 6, 2024.

About FS KKR Capital Corp.

FSK is a leading publicly traded business development company $(BDC)$ focused on providing customized credit solutions to private middle market U.S. companies. FSK seeks to invest primarily in the senior secured debt and, to a lesser extent, the subordinated debt of private middle market companies. FSK is advised by FS/KKR Advisor, LLC. For more information, please visit www.fskkradvisor.com.

About FS/KKR Advisor, LLC

FS/KKR Advisor, LLC (FS/KKR) is a partnership between FS Investments and KKR Credit that serves as the investment adviser to FSK and other business development companies.

FS Investments is a global alternative asset manager dedicated to delivering superior performance and innovative investment and capital solutions. The firm manages over $82 billion in assets for a wide range of clients, including institutional investors, financial professionals and individual investors. FS Investments provides access to a broad suite of alternative asset classes and strategies through its best-in-class investment teams and partners. With its diversified platform and flexible capital solutions, the firm is a valued partner to general partners, asset owners and portfolio companies. FS Investments is grounded in its high-performance culture and guided by its commitment to building value for its clients, investing in its colleagues and giving back to its communities. The firm has more than 500 employees across offices in the U.S., Europe and Asia and is headquartered in Philadelphia.

KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR's insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR's investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. $(KKR)$, please visit KKR's website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group's website at www.globalatlantic.com.

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