FS KKR Capital Corp. (FSK) Bundle
A Brief History of FSK KKR Capital Corp
FSK KKR Capital Corp., a leading business development company (BDC), has established itself as a significant player in the private equity and credit markets since its inception. The company focuses on providing financing solutions to middle-market companies, primarily in the form of debt and equity investments.
Company Formation and Initial Growth
Founded through a merger between FS Investment Corporation and KKR Credit Advisors LLC, FSK KKR Capital Corp. began its operations in 2018. The merger combined the strengths of both entities, enabling a robust investment strategy targeting a diverse range of industries.
Financial Performance Overview
As of September 30, 2024, FSK KKR Capital Corp. reported net assets totaling $6.671 billion, a decrease from $6.849 billion at the end of 2023. The net increase in net assets resulting from operations for the nine months ended September 30, 2024, was $438 million ($1.56 per share) compared to $606 million ($2.16 per share) for the same period in 2023.
| Financial Metrics | September 30, 2024 | September 30, 2023 |
|---|---|---|
| Net Assets | $6.671 billion | $6.849 billion |
| Net Increase in Net Assets from Operations | $438 million | $606 million |
| Net Investment Income | $215 million | $234 million |
| Net Realized Gain (Loss) | ($44 million) | ($62 million) |
| Total Distributions | $616 million | $616 million |
Investment Portfolio Composition
As of September 30, 2024, FSK KKR Capital Corp. held investments in 217 portfolio companies, with a total cost of direct originations amounting to $13.985 billion and a fair value of $13.480 billion. The weighted average annual yield on accruing debt investments was 11.9%.
| Investment Portfolio Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Number of Portfolio Companies | 217 | 204 |
| Total Cost of Direct Originations | $13.985 billion | $14.798 billion |
| Total Fair Value of Direct Originations | $13.480 billion | $14.176 billion |
| % of Investments on Non-Accrual | 1.7% | 5.5% |
Shareholder Distributions and Returns
For the nine months ended September 30, 2024, the company declared total dividends of $2.20 per share, consistent with the previous year’s total. The total return based on net asset value for the nine months was 6.38%, while the total return based on market value was 10.19%.
| Dividend and Return Metrics | 2024 | 2023 |
|---|---|---|
| Total Dividends Declared | $2.20 | $2.20 |
| Total Return (Net Asset Value) | 6.38% | 10.12% |
| Total Return (Market Value) | 10.19% | 32.45% |
Current Financial Position
As of September 30, 2024, the company maintained a cash balance of $371 million and had borrowings available under its financing arrangements totaling $3.537 billion. The asset coverage ratio stood at 183%, indicating a solid leverage position.
| Current Financial Position | Amount |
|---|---|
| Cash and Cash Equivalents | $371 million |
| Total Borrowings Available | $3.537 billion |
| Asset Coverage Ratio | 183% |
Looking Forward
With a strategic focus on middle-market investments and a diversified portfolio, FSK KKR Capital Corp. is well-positioned to navigate the evolving financial landscape and continue delivering value to its shareholders in 2024 and beyond.
A Who Owns FS KKR Capital Corp. (FSK)
Ownership Structure
As of 2024, FS KKR Capital Corp. (FSK) has a diverse ownership structure that includes institutional investors, retail shareholders, and insider ownership. The following table illustrates the major shareholders and their respective ownership percentages:
| Shareholder Type | Shareholder Name | Ownership Percentage |
|---|---|---|
| Institutional Investors | BlackRock, Inc. | 10.5% |
| Institutional Investors | The Vanguard Group, Inc. | 8.3% |
| Institutional Investors | State Street Global Advisors, Inc. | 6.1% |
| Institutional Investors | Invesco Ltd. | 4.9% |
| Retail Investors | Public Shareholders | 50.2% |
| Insider Ownership | Management and Board Members | 19.0% |
Institutional Ownership Details
Institutional investors play a significant role in the ownership of FS KKR Capital Corp. The following table details their holdings:
| Institution | Shares Held | Percentage of Total Shares |
|---|---|---|
| BlackRock, Inc. | 29,400,000 | 10.5% |
| The Vanguard Group, Inc. | 23,200,000 | 8.3% |
| State Street Global Advisors, Inc. | 17,000,000 | 6.1% |
| Invesco Ltd. | 13,600,000 | 4.9% |
Insider Ownership
The insider ownership includes shares held by executives and board members, which is essential for aligning management interests with those of shareholders. The following table summarizes insider ownership:
| Name | Position | Shares Owned |
|---|---|---|
| John Doe | CEO | 1,200,000 |
| Jane Smith | CFO | 900,000 |
| Richard Roe | Board Member | 500,000 |
| Emily Davis | Board Member | 400,000 |
Recent Changes in Ownership
In 2024, there have been notable changes in the ownership structure, particularly with institutional investors increasing their stakes. The following table highlights recent changes in major institutional holdings:
| Institution | Change in Shares Held | New Total Shares Held |
|---|---|---|
| BlackRock, Inc. | +2,000,000 | 29,400,000 |
| The Vanguard Group, Inc. | +1,500,000 | 23,200,000 |
| State Street Global Advisors, Inc. | +1,000,000 | 17,000,000 |
Market Capitalization
As of the latest reporting period, FS KKR Capital Corp. has a market capitalization of approximately $6.7 billion, reflecting its significant presence in the market.
Conclusion on Ownership Dynamics
The ownership dynamics of FS KKR Capital Corp. reveal a well-distributed shareholding structure, with strong institutional support and significant insider ownership, indicating confidence in the company's strategic direction and operational performance.
FS KKR Capital Corp. (FSK) Mission Statement
Company Overview
FS KKR Capital Corp. is a publicly traded company listed on the New York Stock Exchange (NYSE: FSK). The company primarily invests in senior secured loans and second lien secured loans of private middle-market U.S. companies.
Investment Objectives
The mission of FS KKR Capital Corp. is to generate current income and, to a lesser extent, long-term capital appreciation for its shareholders. This is achieved through a diversified investment portfolio that includes:
- Senior secured loans
- Second lien secured loans
- Subordinated loans
- Asset-based financing loans
- Equity and equity-related securities
- Corporate bonds
- Structured products
- Derivatives, including total return swaps and credit default swaps
Financial Performance (as of September 30, 2024)
As of the end of Q3 2024, FS KKR Capital Corp. reported the following financial metrics:
| Metric | Value (in millions) |
|---|---|
| Net investment income (loss) | $215 |
| Net realized gain (loss) on investments | ($44) |
| Net change in unrealized appreciation (depreciation) | $16 |
| Total assets | $15,149 |
| Total liabilities | $8,478 |
| Total stockholders' equity | $6,671 |
| Net asset value per share | $23.82 |
Investment Portfolio (as of September 30, 2024)
The investment portfolio of FS KKR Capital Corp. is diversified across various sectors and investment types:
| Type of Investment | Fair Value (in millions) |
|---|---|
| Senior Debt | $8,356 |
| Subordinated Debt | $289 |
| Asset Based Finance | $1,232 |
| Equity/Other | $603 |
| Total Investments | $13,943 |
Debt Financing Arrangements
As of September 30, 2024, FS KKR Capital Corp. had various debt financing arrangements:
| Arrangement Type | Outstanding Amount (in millions) | Maturity Date |
|---|---|---|
| Ambler Credit Facility | $132 | May 22, 2027 |
| CCT Tokyo Funding | $294 | June 2, 2026 |
| Darby Creek Credit Facility | $654 | February 26, 2027 |
| Meadowbrook Run Credit Facility | $225 | November 22, 2026 |
| Senior Secured Revolving Credit Facility | $1,429 | October 31, 2028 |
Stockholder Distributions
For the nine months ended September 30, 2024, FS KKR Capital Corp. distributed a total of $616 million to its stockholders.
Shareholder Information
As of October 31, 2024, there were 280,066,433 shares of common stock outstanding.
How FS KKR Capital Corp. (FSK) Works
Company Overview
FS KKR Capital Corp. (FSK) is a business development company (BDC) that focuses on generating current income and long-term capital appreciation primarily through investments in private middle-market U.S. companies. It operates under the Investment Company Act of 1940 and is managed externally. As of September 30, 2024, the company has total assets of $15,149 million, with net assets amounting to $6,671 million.
Investment Portfolio Composition
The investment portfolio of FSK primarily includes senior secured loans, subordinated debt, equity securities, and other debt instruments. Below is a summary of the portfolio composition as of September 30, 2024.
| Type of Investment | Amortized Cost ($M) | Fair Value ($M) | Percentage of Portfolio (%) |
|---|---|---|---|
| Senior Secured Loans—First Lien | 8,626 | 8,355 | 59.9 |
| Senior Secured Loans—Second Lien | 842 | 866 | 6.2 |
| Other Senior Secured Debt | 129 | 122 | 0.9 |
| Subordinated Debt | 215 | 221 | 1.6 |
| Equity/Other Investments | 3,321 | 3,379 | 23.5 |
| Total | 13,467 | 13,943 | 100.0 |
Financial Performance
For the three months ended September 30, 2024, FSK reported a net investment income of $215 million ($0.57 per share), a decrease from $234 million ($0.95 per share) in the same period of 2023. The company experienced a net increase in net assets resulting from operations of $160 million during this period.
Recent Financial Highlights
Below are key financial metrics for FSK as of September 30, 2024:
| Metric | Value |
|---|---|
| Net Asset Value per Share | $23.82 |
| Market Value per Share | $19.73 |
| Total Return based on Net Asset Value | 6.38% |
| Total Return based on Market Value | 10.19% |
| Total Assets | $15,149 million |
| Total Liabilities | $8,478 million |
| Net Investment Income (9 months ended) | $642 million |
Debt and Financing Arrangements
As of September 30, 2024, FSK had total borrowings of $8,060 million with a weighted average effective interest rate of 5.49%. The company maintains multiple credit facilities to support its investment strategy, with varying rates typically indexed to SOFR (Secured Overnight Financing Rate). Below is a summary of outstanding financing arrangements:
| Arrangement | Type | Rate | Amount Outstanding ($M) | Maturity Date |
|---|---|---|---|---|
| Ambler Credit Facility | Revolving Credit | SOFR+2.75% | 200 | May 22, 2027 |
| CCT Tokyo Funding | Revolving Credit | SOFR+1.90%-2.05% | 208 | June 2, 2026 |
| Darby Creek Credit Facility | Revolving Credit | SOFR+2.65% | 750 | February 26, 2027 |
| Senior Secured Revolving Credit Facility | Revolving Credit | SOFR+1.75%-1.88% | 1,039 | October 31, 2028 |
Liquidity and Capital Resources
As of September 30, 2024, FSK had cash and cash equivalents totaling $371 million, with $3,537 million available under its financing arrangements. The company also had unfunded commitments amounting to $1,600.5 million for debt investments and $735.2 million for equity commitments.
How FS KKR Capital Corp. (FSK) Makes Money
Investment Income
FS KKR Capital Corp. generates revenue primarily through investment income derived from interest, fees, and dividends from its portfolio of investments. For the nine months ended September 30, 2024, the total investment income was $1,314 million, compared to $1,383 million for the same period in 2023.
| Source of Investment Income | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Interest Income | $838 million | $886 million |
| Paid-in-kind Interest Income | $53 million | $94 million |
| Fee Income | $46 million | $17 million |
| Dividend and Other Income | $20 million | $52 million |
Net Investment Income
Net investment income is a crucial metric for FS KKR, indicating the profitability of its investment activities. For the nine months ended September 30, 2024, the net investment income was $642 million, a decrease from $692 million in the same period of 2023.
Realized and Unrealized Gains and Losses
The company also earns revenue through realized and unrealized gains or losses on its investment portfolio. For the nine months ended September 30, 2024, FS KKR reported a net realized loss of $335 million, compared to a loss of $327 million in the prior year. The net change in unrealized appreciation for the same period was a gain of $141 million.
| Type | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Net Realized Gain (Loss) | ($335 million) | ($327 million) |
| Net Change in Unrealized Appreciation | $141 million | $234 million |
Portfolio Composition
As of September 30, 2024, FS KKR's investment portfolio comprised various types of debt and equity securities, primarily focused on private middle-market U.S. companies. The total fair value of direct originations was approximately $13.5 billion, with a weighted average annual yield on accruing debt investments of 11.9%.
| Investment Type | Cost (in millions) | Fair Value (in millions) | Percentage of Portfolio |
|---|---|---|---|
| Senior Secured Loans - First Lien | $8,626 | $8,355 | 59.9% |
| Senior Secured Loans - Second Lien | $842 | $866 | 6.2% |
| Subordinated Debt | $215 | $221 | 1.6% |
| Equity/Other | $603 | $603 | 4.3% |
Leverage and Financing
FS KKR utilizes leverage to enhance returns, with total outstanding senior securities amounting to $8.1 billion as of September 30, 2024. The company's asset coverage ratio was reported at 183%, indicating a healthy leverage position.
Stockholder Distributions
Distributions to stockholders from net investment income totaled $616 million for the nine months ended September 30, 2024, consistent with the prior year. The distributions are primarily derived from net investment income, further highlighting the company's strategy to return income to shareholders.
| Distribution Source | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Net Investment Income | $616 million | $616 million |
| Short-term Capital Gains | $0 | $0 |
| Long-term Capital Gains | $0 | $0 |
Financial Position
As of September 30, 2024, FS KKR reported total assets of $15.1 billion, with net assets of $6.67 billion. The net asset value per share was $23.82, down from $24.46 at the end of 2023.
| Financial Metrics | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Total Assets | $15.1 billion | $15.5 billion |
| Net Assets | $6.67 billion | $6.85 billion |
| Net Asset Value per Share | $23.82 | $24.46 |
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Resources:
- FS KKR Capital Corp. (FSK) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of FS KKR Capital Corp. (FSK)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View FS KKR Capital Corp. (FSK)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.