FS KKR Capital Corp. Announces First Quarter 2024 Results
Declares Second Quarter 2024 Distribution of $0.70 per share, Which When Combined with the Company's Previously Declared $0.05 per share Special Distribution, Results in a Total Second Quarter Distribution of $0.75 per share
PHILADELPHIA and NEW YORK, May 8, 2024 /PRNewswire/ -- FS KKR Capital Corp. (NYSE: FSK), or the Company, today announced its financial and operating results for the quarter ended March 31, 2024, and that its board of directors has declared a second quarter 2024 distribution of $0.70 per share, which when combined with the Company's previously declared $0.05 per share special distribution, results in a total second quarter distribution of $0.75 per share.
Financial and Operating Highlights for the Quarter Ended March 31, 2024(1)
- Net investment income of $0.76 per share, compared to $0.71 per share for the quarter ended December 31, 2023
- Adjusted net investment income(2) of $0.73 per share, compared to $0.75 per share for the quarter ended December 31, 2023
- Net asset value of $24.32 per share, compared to $24.46 per share as of December 31, 2023
- Total net realized and unrealized loss of $0.14 per share, compared to a total net realized and unrealized loss of $0.39 per share for the quarter ended December 31, 2023
- Adjusted net realized and unrealized loss(2) of $0.11 per share, compared to adjusted net realized and unrealized loss of $0.36 per share for the quarter ended December 31, 2023
- Earnings per Share of $0.62, compared to Earnings per Share of $0.32 for the quarter ended December 31, 2023
- Total purchases of $1,444 million versus $1,855 million of sales and repayments, including $190 million of sales to its joint venture Credit Opportunities Partners JV, LLC
- Net debt to equity ratio(3) as December 31, 2023 was 109%, compared to 113% as of December 31, 2023
- Paid cash distributions to stockholders totaling $0.75 per share(4)
"We had an active start to 2024, as FSK generated $0.73 per share of Adjusted Net Investment Income and an annualized ROE of 10%," said Michael C. Forman, Chief Executive Officer & Chairman. "During the first quarter our investment activity increased, our liquidity position remained strong, and we made significant progress restructuring certain non-accruing investments. We believe the long-term earnings power of FSK continues to be healthy, and we have confidence in our ability to continue to reward shareholders with attractive distributions."
Declaration of Distribution for Second Quarter 2024
FSK's board of directors has declared a cash distribution for the second 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 July 2, 2024 to stockholders of record as of the close of business on June 12, 2024. FSK's board of directors previously declared special distributions totaling $0.10 per share to be paid in two equal installments during 2024. The first $0.05 per share special distribution was paid on February 28, 2024 to stockholders of record as of February 14, 2024. The second $0.05 per share special distribution will be paid on or about May 29, 2024 to stockholders of record as of May 15, 2024.
Portfolio Highlights as of March 31, 2024
- Total fair value of investments was $14.2 billion of which 65% was invested in senior secured securities.
- Weighted average annual yield on accruing debt investments(5) was 12.5%, compared to 12.7% as of December 31, 2023. Excluding the impact of merger accounting, weighted average annual yield on accruing debt investments was 12.1%, compared to 12.2% as of December 31, 2023.
- Weighted average annual yield on all debt investments(5) was 11.4%, compared to 11.2% as of December 31, 2023. Excluding the impact of merger accounting, weighted average annual yield on all debt investments was 10.9%, compared to 10.7% as of December 31, 2023.
- Exposure to the top ten largest portfolio companies by fair value was 20%, compared to 19% as of December 31, 2023.
- As of March 31, 2024, investments on non-accrual status represented 4.2% and 6.5% of the total investment portfolio at fair value and amortized cost, respectively, compared to 5.5% and 8.9% as of December 31, 2023.
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Portfolio Data |
As of March 31, 2024 |
As of December 31, 2023 |
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Total fair value of investments |
$14,221 |
$14,649 |
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Asset Class (based on fair value) |
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Senior Secured Loans — First Lien |
57.0 % |
58.2 % |
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Senior Secured Loans — Second Lien |
7.1 % |
7.5 % |
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Other Senior Secured Debt |
1.1 % |
0.7 % |
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Subordinated Debt |
2.3 % |
2.2 % |
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Asset Based Finance |
14.6 % |
14.2 % |
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Credit Opportunities Partners JV, LLC |
9.8 % |
9.5 % |
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Equity/Other |
8.1 % |
7.7 % |
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Interest Rate Type (based on fair value) |
||||
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% Variable Rate Debt Investments |
68.0 % |
66.0 % |
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% Fixed Rate Debt Investments |
7.5 % |
7.9 % |
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% Other Income Producing Investments |
16.0 % |
15.2 % |
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% Non-Income Producing Investments(7) |
4.3 % |
5.4 % |
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% of Investments on Non-Accrual(6) |
4.2 % |
5.5 % |
Leverage and Liquidity as of March 31, 2024
- Net debt to equity ratio(3) of 109%, based on $8.0 billion in total debt outstanding, $242 million of cash and foreign currency and $329 million of net receivable for investments sold and repaid and stockholders' equity of $6.8 billion. FSK's weighted average effective interest rate (including the effect of non-usage fees) was 5.35%.
- Cash and foreign currency of $242 million and availability under the Company's financing arrangements of $3.6 billion, subject to borrowing base and other limitations.
- As of March 31, 2024, 65% of the Company's $7,968 million of total debt outstanding was in unsecured debt and 35% in secured debt.
Conference Call Information
FSK will host a conference call at 9:00 a.m. (Eastern Time) on Thursday, May 9, 2024, to discuss its first quarter 2024 results. All interested parties are welcome to participate and can access the live conference call by registering using the following URL: https://register.vevent.com/register/BI8601374284864feab0b87119f13f1f4b. Participants are requested to register a day in advance or at a minimum 15 minutes before the start of the call. Once registered, they will receive the dial-in numbers and their unique PIN number. When they dial in, they will input their PIN and be placed into the call. 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/yic9kctw.
Supplemental Information
An investor presentation containing financial and operating information will be made available prior to the call in the Investor Relations section of FSK's website at www.fskkradvisor.com under Earnings presentations.
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 $78 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. (NYSE: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.
Forward-Looking Statements and Important Disclosure Notice
This announcement ...
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