FS KKR Capital prices $400 million notes offering at 6.125%

PHILADELPHIA/NEW YORK - FS KKR Capital Corp. (NYSE:FSK), a business development company with a market capitalization of $4.4 billion and currently trading near its 52-week low at $15.87, has priced a $400 million public offering of unsecured notes with a 6.125% interest rate due January 15, 2031, the company announced Friday.

The notes may be redeemed at any time at par plus a "make-whole" premium, or at par one month before maturity. The offering is expected to close on September 25, 2025, subject to customary closing conditions. According to InvestingPro data, FSK maintains strong liquidity with a current ratio of 2.24, indicating solid ability to meet its short-term obligations.

BofA Securities, BMO Capital Markets, ING Financial Markets, J.P. Morgan Securities, KKR Capital Markets, SMBC Nikko Securities, and Truist Securities are acting as joint book-running managers for the offering, alongside multiple joint lead managers and co-managers.

FSK stated it plans to use the net proceeds for general corporate purposes, which may include repaying outstanding debt under credit facilities and certain notes.

The publicly traded business development company focuses on providing customized credit solutions to private middle market U.S. companies, primarily investing in senior secured debt and, to a lesser extent, subordinated debt of private middle market companies. Notable for investors, FSK has maintained dividend payments for 12 consecutive years, currently offering a substantial 17.64% dividend yield.

FSK is advised by FS/KKR Advisor, LLC, a partnership between Future Standard (formerly FS Investments) and KKR Credit.

The offering is being made pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission, according to the company’s press release statement.

In other recent news, FS KKR Capital Corp reported its second-quarter 2025 earnings, which did not meet analysts’ expectations. The company posted an earnings per share of $0.60, falling short of the projected $0.63. Additionally, revenue was reported at $398 million, which was below the anticipated $401.63 million. Shareholders of FS KKR Capital approved a proposal to allow the company to sell shares below net asset value in future offerings. This decision followed a reconvened meeting where 140,529,598 shares were voted in person or by proxy. Furthermore, Fitch Ratings has affirmed FS KKR Capital’s long-term issuer default rating at ’BBB-’ but revised its outlook from stable to negative. This revision reflects ongoing challenges such as elevated non-accruals and realized losses from portfolio restructurings. RBC Capital has also adjusted its price target for FS KKR Capital to $18.00, citing revised net investment income per share estimates and credit concerns.

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