UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM10-Q
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2017
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
COMMISSION FILE NUMBER:814-00757
FS Investment CorporationKKR Capital Corp.
(Exact name of registrant as specified in its charter)
Maryland | 26-1630040 | |
(State of Incorporation) | (I.R.S. Employer Identification Number) |
201 Rouse Boulevard Philadelphia, Pennsylvania | 19112 | ||
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code:(215) 495-1150
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of RegulationS-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐ No ☐.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company or an emerging growth company. See definitionthe definitions of “large accelerated filer,” “accelerated filer,” “large accelerated filer” and “smaller reporting company” and “emerging growth company” inRule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer ☐ | Smaller reporting company | ☐ | ||||
Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). Yes ☐ No ☒.
Securities registered pursuant to Section 12(b) of the Act.
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common stock, par value $0.001 | FSK | New York Stock Exchange |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
There were 245,725,416284,965,668 shares of the registrant’s common stock outstanding as of November 8, 2017.
5, 2021.
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Consolidated Balance Sheets as of September 30, | ||||||
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | ||||||
ITEM 3. | 104 | |||||
ITEM 4. | 104 | |||||
ITEM 5. | 104 | |||||
ITEM 6. | 104 | |||||
FS Investment CorporationKKR Capital Corp.
(in thousands,millions, except share and per share amounts)
September 30, 2017 (Unaudited) | December 31, 2016 | September 30, 2021 (Unaudited) | December 31, 2020 | |||||||||||||
Assets | ||||||||||||||||
Investments, at fair value | ||||||||||||||||
Non-controlled/unaffiliated investments (amortized cost—$3,514,012 and $3,509,899, respectively) | $ | 3,594,686 | $ | 3,440,951 | ||||||||||||
Non-controlled/affiliated investments (amortized cost—$173,626 and $153,167, respectively) | 222,275 | 202,795 | ||||||||||||||
Controlled/affiliated investments (amortized cost—$85,201 and $80,874, respectively) | 94,438 | 83,070 | ||||||||||||||
Non-controlled/unaffiliated investments (amortized cost—$12,092 and $5,314, respectively) | $ | 12,279 | $ | 4,986 | ||||||||||||
Non-controlled/affiliated investments (amortized cost—$901 and $629, respectively) | 871 | 534 | ||||||||||||||
Controlled/affiliated investments (amortized cost—$2,731 and $1,510, respectively) | 2,674 | 1,260 | ||||||||||||||
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Total investments, at fair value (amortized cost—$3,772,839 and $3,743,940, respectively) | 3,911,399 | 3,726,816 | ||||||||||||||
Total investments, at fair value (amortized cost—$15,724 and $7,453, respectively) | 15,824 | 6,780 | ||||||||||||||
Cash | 176,445 | 264,594 | 229 | 182 | ||||||||||||
Foreign currency, at fair value (cost—$2,451 and $4, respectively) | 2,546 | 4 | ||||||||||||||
Foreign currency, at fair value (cost—$12 and $8, respectively) | 12 | 9 | ||||||||||||||
Receivable for investments sold and repaid | 1,896 | 75,921 | 365 | 173 | ||||||||||||
Income receivable | 38,811 | 36,106 | 163 | 72 | ||||||||||||
Unrealized appreciation on foreign currency forward contracts | 6 | 1 | ||||||||||||||
Deferred financing costs | 3,712 | 5,828 | 15 | 15 | ||||||||||||
Deferred merger costs | — | 1 | ||||||||||||||
Prepaid expenses and other assets | 654 | 802 | 6 | 4 | ||||||||||||
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Total assets | $ | 4,135,463 | $ | 4,110,071 | $ | 16,620 | $ | 7,237 | ||||||||
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Liabilities | ||||||||||||||||
Payable for investments purchased | $ | 606 | $ | 5,748 | $ | 57 | $ | — | ||||||||
Credit facilities payable (net of deferred financing costs of $3,461 and $0, respectively)(1) | 637,669 | 619,932 | ||||||||||||||
Unsecured notes payable (net of deferred financing costs of $1,563 and $1,884, respectively)(1) | 1,072,714 | 1,070,701 | ||||||||||||||
Secured borrowing, at fair value (amortized proceeds of $2,835 and $2,831, respectively)(1) | 2,891 | 2,880 | ||||||||||||||
Debt (net of deferred financing costs of $24 and $23, respectively)(1) | 8,492 | 3,997 | ||||||||||||||
Unrealized depreciation on foreign currency forward contracts | 1 | 3 | ||||||||||||||
Stockholder distributions payable | 54,733 | 54,364 | 186 | 74 | ||||||||||||
Management fees payable | 18,038 | 18,022 | 58 | 25 | ||||||||||||
Subordinated income incentive fees payable(2) | 12,662 | 12,885 | 20 | — | ||||||||||||
Administrative services expense payable | 495 | 516 | 6 | 2 | ||||||||||||
Interest payable | 17,463 | 20,144 | 55 | 25 | ||||||||||||
Directors’ fees payable | 267 | 281 | ||||||||||||||
Other accrued expenses and liabilities | 1,232 | 7,221 | 9 | 15 | ||||||||||||
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Total liabilities | 1,818,770 | 1,812,694 | 8,884 | 4,141 | ||||||||||||
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Commitments and contingencies(3) | — | — | ||||||||||||||
Stockholders’ equity | ||||||||||||||||
Preferred stock, $0.001 par value, 50,000,000 shares authorized, none issued and outstanding | — | — | — | — | ||||||||||||
Common stock, $0.001 par value, 450,000,000 shares authorized, 245,725,416 and 244,063,357 shares issued and outstanding, respectively | 246 | 244 | ||||||||||||||
Common stock, $0.001 par value, 750,000,000 shares authorized, 285,076,619 and 123,755,965 shares issued and outstanding, respectively | 0 | 0 | ||||||||||||||
Capital in excess of par value | 2,276,946 | 2,261,040 | 7,507 | 3,866 | ||||||||||||
Accumulated undistributed net realized gain/loss on investments and gain/loss on foreign currency(4) | (237,493 | ) | (104,274 | ) | ||||||||||||
Accumulated undistributed (distributions in excess of) net investment income(4) | 133,899 | 148,026 | ||||||||||||||
Net unrealized appreciation (depreciation) on investments and secured borrowing and unrealized gain/loss on foreign currency | 143,095 | (7,659 | ) | |||||||||||||
Retained earnings (accumulated deficit)(4) | 229 | (770 | ) | |||||||||||||
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Total stockholders’ equity | 2,316,693 | 2,297,377 | 7,736 | 3,096 | ||||||||||||
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Total liabilities and stockholders’ equity | $ | 4,135,463 | $ | 4,110,071 | $ | 16,620 | $ | 7,237 | ||||||||
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Net asset value per share of common stock at period end | $ | 9.43 | $ | 9.41 | $ | 27.14 | $ | 25.02 |
(1) | See Note |
(2) | See Note 2 for a discussion of the methodology employed by the Company in calculating the subordinated income incentive fees. |
(3) | See Note |
(4) | See Note 5 for a discussion of the sources of distributions paid by the Company. |
See notes to unaudited consolidated financial statements.
FS Investment CorporationKKR Capital Corp.
Unaudited Consolidated Statements of Operations
(in thousands,millions, except share and per share amounts)
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||
Investment income | ||||||||||||||||||||||||||||||||
Fromnon-controlled/unaffiliated investments: | ||||||||||||||||||||||||||||||||
Interest income | $ | 82,349 | $ | 86,569 | $ | 230,115 | $ | 264,717 | $ | 219 | $ | 93 | $ | 414 | $ | 327 | ||||||||||||||||
Paid-in-kind interest income | 8,430 | 6,811 | 22,899 | 20,434 | 16 | 11 | 35 | 31 | ||||||||||||||||||||||||
Fee income | 5,005 | 4,214 | 34,081 | 21,191 | 29 | 3 | 62 | 21 | ||||||||||||||||||||||||
Dividend income | 21 | — | 21 | — | ||||||||||||||||||||||||||||
Dividend and other income | 8 | 7 | 20 | 10 | ||||||||||||||||||||||||||||
Fromnon-controlled/affiliated investments: | ||||||||||||||||||||||||||||||||
Interest income | 3,448 | 1,851 | 10,485 | 3,656 | 8 | 3 | 12 | 8 | ||||||||||||||||||||||||
Paid-in-kind interest income | 550 | 162 | 1,855 | 436 | 4 | 5 | 12 | 14 | ||||||||||||||||||||||||
Fee income | 1,232 | — | 1,263 | 633 | 2 | — | 2 | 0 | ||||||||||||||||||||||||
Dividend income | — | — | — | 224 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||
From controlled/affiliated investments: | ||||||||||||||||||||||||||||||||
Interest income | 966 | 100 | 3,407 | 134 | 12 | 2 | 16 | 6 | ||||||||||||||||||||||||
Paid-in-kind interest income | 1,690 | 850 | 4,324 | 2,406 | 15 | 1 | 23 | 3 | ||||||||||||||||||||||||
Fee income | 0 | — | 1 | — | ||||||||||||||||||||||||||||
Dividend and other income | 47 | 22 | 120 | 56 | ||||||||||||||||||||||||||||
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Total investment income | 103,691 | 100,557 | 308,450 | 313,831 | 360 | 147 | 717 | 476 | ||||||||||||||||||||||||
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Operating expenses | ||||||||||||||||||||||||||||||||
Management fees | 18,038 | 17,872 | 54,772 | 53,258 | 58 | 24 | 113 | 80 | ||||||||||||||||||||||||
Subordinated income incentive fees(1) | 12,662 | 12,250 | 37,426 | 38,945 | 35 | — | 43 | — | ||||||||||||||||||||||||
Administrative services expenses | 750 | 750 | 2,226 | 2,846 | 5 | 1 | 9 | 6 | ||||||||||||||||||||||||
Accounting and administrative fees | 254 | 243 | 774 | 706 | 1 | 0 | 2 | 1 | ||||||||||||||||||||||||
Interest expense(2) | 19,885 | 18,283 | 58,941 | 55,241 | 70 | 40 | 158 | 128 | ||||||||||||||||||||||||
Directors’ fees | 277 | 277 | 822 | 780 | ||||||||||||||||||||||||||||
Other general and administrative expenses | 1,177 | 1,879 | 3,791 | 6,274 | 5 | 4 | 12 | 8 | ||||||||||||||||||||||||
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Total operating expenses | 53,043 | 51,554 | 158,752 | 158,050 | 174 | 69 | 337 | 223 | ||||||||||||||||||||||||
Incentive fee waiver(1) | (15 | ) | — | (15 | ) | — | ||||||||||||||||||||||||||
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Net expenses | 159 | 69 | 322 | 223 | ||||||||||||||||||||||||||||
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Net investment income | 50,648 | 49,003 | 149,698 | 155,781 | 201 | 78 | 395 | 253 | ||||||||||||||||||||||||
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Realized and unrealized gain/loss | ||||||||||||||||||||||||||||||||
Net realized gain (loss) on investments: | ||||||||||||||||||||||||||||||||
Non-controlled/unaffiliated investments | (24,767) | 2,363 | (87,361) | (19,064) | 60 | (99 | ) | (22 | ) | (239 | ) | |||||||||||||||||||||
Non-controlled/affiliated investments | 6,551 | — | 6,856 | — | 139 | (90 | ) | 203 | (129 | ) | ||||||||||||||||||||||
Controlled/affiliated investments | — | (26) | (52,879) | (26) | (2 | ) | (18 | ) | (58 | ) | (35 | ) | ||||||||||||||||||||
Net realized gain (loss) on foreign currency forward contracts | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Net realized gain (loss) on foreign currency | (19) | 86 | 165 | 264 | (1 | ) | (2 | ) | (4 | ) | (5 | ) | ||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments: | ||||||||||||||||||||||||||||||||
Non-controlled/unaffiliated investments | 29,820 | 64,039 | 149,622 | 96,258 | (49 | ) | 261 | 526 | (114 | ) | ||||||||||||||||||||||
Non-controlled/affiliated investments | 16,951 | (4,463) | (979) | 3,823 | (104 | ) | 27 | 65 | (138 | ) | ||||||||||||||||||||||
Controlled/affiliated investments | 7,408 | 4,354 | 7,041 | 6,692 | 11 | 68 | 193 | (144 | ) | |||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on secured borrowing(2) | 3 | (33) | (7) | (33) | ||||||||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on foreign currency forward contracts | 5 | (1 | ) | 8 | 1 | |||||||||||||||||||||||||||
Net change in unrealized gain (loss) on foreign currency | (1,197) | (954) | (4,923) | (1,266) | 10 | (14 | ) | 28 | 2 | |||||||||||||||||||||||
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Total net realized and unrealized gain (loss) | 34,750 | 65,366 | 17,535 | 86,648 | $ | 69 | $ | 132 | $ | 939 | $ | (801 | ) | |||||||||||||||||||
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Net increase (decrease) in net assets resulting from operations | $ | 85,398 | $ | 114,369 | $ | 167,233 | $ | 242,429 | $ | 270 | $ | 210 | $ | 1,334 | $ | (548 | ) | |||||||||||||||
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Per share information—basic and diluted | ||||||||||||||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations (Earnings per Share) | $ | 0.35 | $ | 0.47 | $ | 0.68 | $ | 1.00 | ||||||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations (Earnings (Losses) per Share) | $ | 0.95 | $ | 1.70 | $ | 7.13 | $ | (4.40 | ) | |||||||||||||||||||||||
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Weighted average shares outstanding | 245,678,745 | 243,488,590 | 245,117,823 | 243,257,941 | 285,124,920 | 123,755,965 | 187,003,417 | 124,470,122 | ||||||||||||||||||||||||
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(1) | See Note 2 for a discussion of the methodology employed by the Company in calculating the subordinated income incentive fee. |
(2) | See Note |
See notes to unaudited consolidated financial statements.
FS Investment CorporationKKR Capital Corp.
Unaudited Consolidated Statements of Changes in Net Assets
(in thousands)millions)
Nine Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2017 | 2016 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Operations | ||||||||||||||||||||||||
Net investment income (loss) | $ | 149,698 | $ | 155,781 | $ | 201 | $ | 78 | $ | 395 | $ | 253 | ||||||||||||
Net realized gain (loss) on investments and foreign currency | (133,219 | ) | (18,826 | ) | ||||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and secured borrowing(1) | 155,677 | 106,740 | ||||||||||||||||||||||
Net realized gain (loss) on investments, foreign currency forward contracts and foreign currency | 196 | (209 | ) | 119 | (408 | ) | ||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency forward contracts(1) | (137 | ) | 355 | 792 | (395 | ) | ||||||||||||||||||
Net change in unrealized gain (loss) on foreign currency | (4,923 | ) | (1,266 | ) | 10 | (14 | ) | 28 | 2 | |||||||||||||||
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Net increase (decrease) in net assets resulting from operations | 167,233 | 242,429 | 270 | 210 | 1,334 | (548 | ) | |||||||||||||||||
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Stockholder distributions(2) | ||||||||||||||||||||||||
Distributions from net investment income | (163,825 | ) | (162,567 | ) | ||||||||||||||||||||
Distributions from net realized gain on investments | — | — | ||||||||||||||||||||||
Distributions to stockholders | (186 | ) | (74 | ) | (335 | ) | (244 | ) | ||||||||||||||||
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Net decrease in net assets resulting from stockholder distributions | (163,825 | ) | (162,567 | ) | (186 | ) | (74 | ) | (335 | ) | (244 | ) | ||||||||||||
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Capital share transactions(3) | ||||||||||||||||||||||||
Reinvestment of stockholder distributions | 15,908 | 5,665 | ||||||||||||||||||||||
Issuance of common stock | — | — | 3,642 | — | ||||||||||||||||||||
Repurchases of common stock | (1 | ) | — | (1 | ) | (47 | ) | |||||||||||||||||
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Net increase (decrease) in net assets resulting from capital share transactions | 15,908 | 5,665 | (1 | ) | — | 3,641 | (47 | ) | ||||||||||||||||
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Total increase (decrease) in net assets | 19,316 | 85,527 | 83 | 136 | 4,640 | (839 | ) | |||||||||||||||||
Net assets at beginning of period | 2,297,377 | 2,208,928 | 7,653 | 2,891 | 3,096 | 3,866 | ||||||||||||||||||
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Net assets at end of period | $ | 2,316,693 | $ | 2,294,455 | $ | 7,736 | $ | 3,027 | $ | 7,736 | $ | 3,027 | ||||||||||||
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Accumulated undistributed (distributions in excess of) net investment income(2) | $ | 133,899 | $ | 141,160 | ||||||||||||||||||||
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(1) | See Note |
(2) | See Note 5 for a discussion of the sources of distributions paid by the Company. |
(3) | See Note 3 for a discussion of the Company’s capital share transactions. |
See notes to unaudited consolidated financial statements.
FS Investment CorporationKKR Capital Corp.
Unaudited Consolidated Statements of Cash Flows
(in thousands)millions)
Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
Cash flows from operating activities | ||||||||
Net increase (decrease) in net assets resulting from operations | $ | 167,233 | $ | 242,429 | ||||
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: | ||||||||
Purchases of investments | (1,021,755 | ) | (662,756 | ) | ||||
Paid-in-kind interest | (29,078 | ) | (23,276 | ) | ||||
Proceeds from sales and repayments of investments | 900,360 | 872,931 | ||||||
Net realized (gain) loss on investments | 133,384 | 19,090 | ||||||
Net change in unrealized (appreciation) depreciation on investments and secured borrowing(1) | (155,677 | ) | (106,740 | ) | ||||
Accretion of discount | (11,810 | ) | (7,371 | ) | ||||
Amortization of deferred financing costs and discount | 3,911 | 2,907 | ||||||
Unrealized (gain)/loss on borrowings in foreign currency | 4,798 | 2,823 | ||||||
(Increase) decrease in receivable for investments sold and repaid | 74,025 | (27,094 | ) | |||||
(Increase) decrease in income receivable | (2,705 | ) | (14,414 | ) | ||||
(Increase) decrease in prepaid expenses and other assets | 148 | 45 | ||||||
Increase (decrease) in payable for investments purchased | (5,142 | ) | 6,984 | |||||
Increase (decrease) in management fees payable | 16 | (543 | ) | |||||
Increase (decrease) in subordinated income incentive fees payable | (223 | ) | (1,124 | ) | ||||
Increase (decrease) in administrative services expense payable | (21 | ) | (232 | ) | ||||
Increase (decrease) in interest payable | (2,681 | ) | (5,948 | ) | ||||
Increase (decrease) in directors’ fees payable | (14 | ) | (78 | ) | ||||
Increase (decrease) in other accrued expenses and liabilities | (5,989 | ) | (5,867 | ) | ||||
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Net cash provided by (used in) operating activities | 48,780 | 291,766 | ||||||
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Cash flows from financing activities | ||||||||
Reinvestment of stockholder distributions | 15,908 | 5,665 | ||||||
Stockholder distributions | (163,456 | ) | (162,424 | ) | ||||
Borrowings under credit facilities(1) | 247,265 | 262,000 | ||||||
Secured borrowing(1) | — | 2,829 | ||||||
Repayments of credit facilities(1) | (230,865 | ) | (218,162 | ) | ||||
Repayments under repurchase agreement(1) | — | (150,000 | ) | |||||
Deferred financing costs paid | (3,239 | ) | — | |||||
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Net cash provided by (used in) financing activities | (134,387 | ) | (260,092 | ) | ||||
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Total increase (decrease) in cash | (85,607 | ) | 31,674 | |||||
Cash and foreign currency at beginning of period | 264,598 | 81,987 | ||||||
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Cash and foreign currency at end of period | $ | 178,991 | $ | 113,661 | ||||
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Supplemental disclosure | ||||||||
Local and excise taxes paid | $ | 5,892 | $ | 5,925 | ||||
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Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities | ||||||||
Net increase (decrease) in net assets resulting from operations | $ | 1,334 | $ | (548 | ) | |||
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: | ||||||||
Purchases of investments(1) | (4,528 | ) | (1,723 | ) | ||||
Paid-in-kind interest | (67 | ) | (64 | ) | ||||
Proceeds from sales and repayments of investments | 3,720 | 1,706 | ||||||
Net realized (gain) loss on investments | (123 | ) | 403 | |||||
Net change in unrealized (appreciation) depreciation on investments(2) | (773 | ) | 396 | |||||
Net change in unrealized (appreciation) depreciation on foreign currency forward contracts | (7 | ) | (1 | ) | ||||
Accretion of discount | (46 | ) | (10 | ) | ||||
Amortization of deferred financing costs and discount | 7 | 8 | ||||||
Unrealized (gain)/loss on borrowings in foreign currency | (5 | ) | (10 | ) | ||||
(Increase) decrease in receivable for investments sold and repaid | (192 | ) | 426 | |||||
(Increase) decrease in income receivable | (91 | ) | (11 | ) | ||||
(Increase) decrease in deferred merger costs | 1 | — | ||||||
(Increase) decrease in prepaid expenses and other assets | (2 | ) | — | |||||
Increase (decrease) in payable for investments purchased | 57 | (10 | ) | |||||
Increase (decrease) in management fees payable | 33 | (6 | ) | |||||
Increase (decrease) in subordinated income incentive fees payable | 20 | — | ||||||
Increase (decrease) in administrative services expense | 4 | 0 | ||||||
Increase (decrease) in interest payable | 30 | 10 | ||||||
Increase (decrease) in other accrued expenses and liabilities | (6 | ) | (7 | ) | ||||
Cash acquired in merger | 293 | — | ||||||
Other assets acquired from merger net of other assets, net of unrealized depreciation on derivatives | 17 | — | ||||||
Merger costs capitalized into purchase price | (8 | ) | — | |||||
Mark-to-market of merged debt | 26 | — | ||||||
|
|
|
| |||||
Net cash provided by (used in) operating activities | (306 | ) | 559 | |||||
|
|
|
| |||||
Cash flows from financing activities | ||||||||
Repurchases of common stock | (1 | ) | (47 | ) | ||||
Stockholder distributions | (316 | ) | (266 | ) | ||||
Borrowings under financing arrangements(3) | 2,689 | 1,512 | ||||||
Repayments of financing arrangements(3) | (2,009 | ) | (1,717 | ) | ||||
Deferred financing costs paid | (7 | ) | (11 | ) | ||||
|
|
|
| |||||
Net cash provided by (used in) financing activities | 356 | (529 | ) | |||||
|
|
|
| |||||
Total increase (decrease) in cash | 50 | 30 | ||||||
Cash, and foreign currency at beginning of period | 191 | 106 | ||||||
|
|
|
| |||||
Cash, and foreign currency at end of period | $ | 241 | $ | 136 | ||||
|
|
|
| |||||
Supplemental disclosure | ||||||||
Non-cash purchases of investments | $ | (198 | ) | $ | (212 | ) | ||
|
|
|
| |||||
Non-cash sales of investments | $ | 198 | $ | 212 | ||||
|
|
|
| |||||
Local and excise taxes paid | $ | 9 | $ | 7 | ||||
|
|
|
|
(1) | Excludes $7,227 of cost of investments acquired from the 2021 Merger. |
(2) | Excludes $11 of unrealized depreciation on unfunded commitments acquired from the 2021 Merger. |
(3) | Excludes $3,794 of debt assumed from the 2021 Merger. See Note |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Unaudited Consolidated Statements of Cash Flows
(in millions)
Supplemental disclosure of non-cash operating and financing activities:
In connection with the 2021 Merger, the Company issued common stock of $3,650 and acquired investments at cost of $7,227 and other assets of $221 and assumed debt of $3,794 and other liabilities of $297.
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor(b) | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||
Senior Secured Loans—First Lien—125.2% | ||||||||||||||||||||||
5 Arch Income Fund 2 LLC | (w)(y)(z)(q)(r) | Diversified Financials | 9.0% | 11/18/23 | $ | 111.1 | $ | 81.3 | $ | 78.1 | ||||||||||||
ABB CONCISE Optical Group LLC | (aa)(v) | Retailing | L+500 | 1.0% | 6/15/23 | 0.7 | 0.7 | 0.7 | ||||||||||||||
Accuride Corp | (aa)(l)(v) | Capital Goods | L+525 | 1.0% | 11/17/23 | 30.0 | 28.6 | 29.1 | ||||||||||||||
Advanced Dermatology & Cosmetic Surgery | (v)(m)(t) | Health Care Equipment & Services | L+625 | 1.0% | 5/7/27 | 40.5 | 38.5 | 40.6 | ||||||||||||||
Advanced Dermatology & Cosmetic Surgery | (x) | Health Care Equipment & Services | L+625 | 1.0% | 5/7/26 | 3.6 | 3.6 | 3.6 | ||||||||||||||
Advanced Dermatology & Cosmetic Surgery | (x) | Health Care Equipment & Services | L+625 | 1.0% | 5/7/27 | 8.7 | 8.7 | 8.7 | ||||||||||||||
Advania Sverige AB | (w)(v) | Software & Services | R+610, 0.0% PIK (2.0% Max PIK) | 0.0% | 3/30/28 | ISK | 1,345.8 | 9.9 | 10.3 | |||||||||||||
Advania Sverige AB | (w)(v) | Software & Services | SR+610 | 0.0% | 4/1/28 | SEK | 629.4 | 67.7 | 72.0 | |||||||||||||
Advania Sverige AB | (w)(x) | Software & Services | SR+610 | 0.0% | 4/1/28 | 304.1 | 37.5 | 37.6 | ||||||||||||||
Affordable Care Inc | (v)(ac) | Health Care Equipment & Services | L+550, 0.0% PIK (1.3% Max PIK) | 0.8% | 8/2/28 | $ | 116.3 | 115.2 | 115.7 | |||||||||||||
Affordable Care Inc | (x)(ac) | Health Care Equipment & Services | L+550, 0.0% PIK (1.3% Max PIK) | 0.8% | 8/2/27 | 12.8 | 12.8 | 12.8 | ||||||||||||||
Affordable Care Inc | (x)(ac) | Health Care Equipment & Services | L+550, 0.0% PIK (1.3% Max PIK) | 0.8% | 8/2/28 | 43.5 | 43.5 | 43.2 | ||||||||||||||
Alera Group Intermediate Holdings Inc | (v) | Insurance | L+550 | 0.8% | 10/2/28 | 32.7 | 32.3 | 32.3 | ||||||||||||||
Alera Group Intermediate Holdings Inc | (x) | Insurance | L+550 | 0.8% | 10/2/28 | 9.3 | 9.2 | 9.2 | ||||||||||||||
American Tire Distributors Inc | (aa)(v) | Automobiles & Components | L+600, 0.0% PIK (1.0% Max PIK) | 1.0% | 9/1/23 | 2.6 | 2.4 | 2.6 | ||||||||||||||
American Tire Distributors Inc | (aa)(v) | Automobiles & Components | L+750, 0.0% PIK (1.5% Max PIK) | 1.0% | 9/2/24 | 43.2 | 40.3 | 43.3 | ||||||||||||||
American Vision Partners | (i)(v) | Health Care Equipment & Services | L+575 | 0.8% | 9/30/27 | 95.0 | 94.0 | 94.0 | ||||||||||||||
American Vision Partners | (x) | Health Care Equipment & Services | L+575 | 0.8% | 9/30/26 | 7.8 | 7.8 | 7.8 | ||||||||||||||
American Vision Partners | (x) | Health Care Equipment & Services | L+575 | 0.8% | 9/30/27 | 38.9 | 38.9 | 38.5 | ||||||||||||||
Amtek Global Technology Pte Ltd | (ad)(w)(g) | Automobiles & Components | E+500 PIK (E+500 Max PIK) | 0.0% | 4/4/24 | € | 56.5 | 68.7 | 55.4 | |||||||||||||
Apex Group Limited | (aa)(w)(v) | Diversified Financials | L+375 | 0.5% | 7/27/28 | $ | 4.2 | 4.2 | 4.2 | |||||||||||||
Apex Group Limited | (aa)(w)(v) | Diversified Financials | E+400 | 0.0% | 7/27/28 | € | 1.6 | 1.9 | 1.9 | |||||||||||||
Arcos LLC/VA | (v)(m) | Software & Services | L+575 | 1.0% | 3/31/28 | $ | 35.0 | 33.0 | 34.7 | |||||||||||||
Arcos LLC/VA | (x) | Software & Services | L+575 | 1.0% | 4/20/27 | 4.5 | 4.5 | 4.5 | ||||||||||||||
Ardonagh Group Ltd | (w)(v) | Insurance | L+725 | 0.8% | 7/14/26 | £ | 0.8 | 1.0 | 1.1 | |||||||||||||
Ardonagh Group Ltd | (w)(x) | Insurance | L+600 | 1.0% | 7/14/26 | 16.7 | 22.8 | 22.4 | ||||||||||||||
Ardonagh Group Ltd | (w)(x) | Insurance | L+600 | 0.8% | 7/14/26 | $ | 54.8 | 54.8 | 53.8 | |||||||||||||
Arrotex Australia Group Pty Ltd | (w)(v) | Pharmaceuticals, Biotechnology & Life Sciences | B+525 | 1.0% | 7/10/24 | A$ | 42.6 | 30.3 | 30.8 | |||||||||||||
Arrotex Australia Group Pty Ltd | (w)(x) | Pharmaceuticals, Biotechnology & Life Sciences | B+525 | 1.0% | 7/10/24 | 3.1 | 2.2 | 2.3 | ||||||||||||||
Aspect Software Inc | (v) | Software & Services | 8.0% PIK (8.0% Max PIK) | 10/15/21 | $ | 0.3 | 0.2 | 0.3 | ||||||||||||||
ATX Networks Corp | (w)(v)(s)(ad) | Capital Goods | L+750 | 1.0% | 8/9/26 | 45.8 | 45.8 | 45.8 | ||||||||||||||
AxiomSL Ltd | (f)(v)(m)(t) | Software & Services | L+600 | 1.0% | 12/3/27 | 35.2 | 34.5 | 34.5 | ||||||||||||||
AxiomSL Ltd | (x) | Software & Services | L+600 | 1.0% | 12/3/25 | 2.5 | 2.4 | 2.4 | ||||||||||||||
AxiomSL Ltd | (x) | Software & Services | L+600 | 1.0% | 12/3/27 | 2.3 | 2.3 | 2.2 | ||||||||||||||
Barbri Inc | (f)(k)(l)(v)(m)(t) | Consumer Services | L+575 | 0.8% | 4/28/28 | 110.1 | 104.5 | 110.1 | ||||||||||||||
Barbri Inc | (x) | Consumer Services | L+575 | 0.8% | 4/28/28 | 30.2 | 30.2 | 30.3 | ||||||||||||||
Belk Inc | (ac)(aa)(v) | Retailing | L+750 | 1.0% | 7/31/25 | 21.9 | 21.7 | 22.1 | ||||||||||||||
Belk Inc | (ac)(aa)(y)(z)(v) | Retailing | 10.0%, 0.0% PIK (8.0% Max PIK) | 7/31/25 | 65.6 | 38.1 | 50.9 | |||||||||||||||
BGB Group LLC | (f)(i)(k)(l)(v)(t) | Media & Entertainment | L+575 | 1.0% | 8/16/27 | 167.6 | 165.9 | 166.2 | ||||||||||||||
BGB Group LLC | (x) | Media & Entertainment | L+575 | 1.0% | 8/16/27 | 19.9 | 19.9 | 19.8 | ||||||||||||||
Borden (New Dairy Opco) | (ac)(v) | Food, Beverage & Tobacco | L+700, 0.0% PIK (1.0% Max PIK) | 1.0% | 7/20/25 | 42.0 | 40.1 | 42.0 | ||||||||||||||
Borden (New Dairy Opco) | (ac)(v) | Food, Beverage & Tobacco | L+250 | 1.0% | 7/20/25 | 19.0 | 18.1 | 19.0 | ||||||||||||||
Borden Dairy Co | (ac)(y)(z)(v) | Food, Beverage & Tobacco | L+825 | 1.0% | 7/6/23 | 65.0 | 25.4 | — |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor(b) | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||
Bowery Farming Inc | (v) | Food, Beverage & Tobacco | L+1,000 | 1.0% | 4/30/26 | $ | 75.0 | $ | 74.3 | $ | 74.3 | |||||||||||
Cimarron Energy Inc | (v) | Energy | L+900 | 1.0% | 12/31/22 | 7.5 | 5.7 | 3.7 | ||||||||||||||
Constellis Holdings LLC | (ac)(v) | Capital Goods | L+750 | 1.0% | 3/27/24 | 15.0 | 13.9 | 15.0 | ||||||||||||||
Corsearch Intermediate Inc | (v)(m) | Software & Services | L+550 | 1.0% | 4/19/28 | 30.1 | 28.3 | 30.0 | ||||||||||||||
Corsearch Intermediate Inc | (x) | Software & Services | L+550 | 1.0% | 4/19/28 | 4.4 | 4.4 | 4.4 | ||||||||||||||
CSafe Global | (f)(k)(l)(v)(m)(s)(t) | Capital Goods | L+625 | 1.0% | 12/23/27 | 139.7 | 131.2 | 140.7 | ||||||||||||||
CSafe Global | (v) | Capital Goods | L+625 | 1.0% | 8/13/28 | 29.5 | 29.5 | 29.7 | ||||||||||||||
CSafe Global | (x) | Capital Goods | L+625 | 1.0% | 12/23/26 | 30.7 | 30.7 | 30.7 | ||||||||||||||
Dental Care Alliance Inc | (f)(k)(v)(m)(t) | Health Care Equipment & Services | L+625 | 0.8% | 3/12/27 | 94.9 | 90.5 | 94.2 | ||||||||||||||
Dental Care Alliance Inc | (x) | Health Care Equipment & Services | L+625 | 0.8% | 3/12/27 | 18.0 | 18.0 | 17.9 | ||||||||||||||
Distribution International Inc | (aa)(v) | Retailing | L+575 | 1.0% | 12/15/23 | 27.4 | 25.5 | 27.4 | ||||||||||||||
Entertainment Benefits Group LLC | (v) | Media & Entertainment | L+575, 2.5% PIK (2.5% Max PIK) | 1.0% | 9/30/24 | 9.1 | 8.3 | 8.6 | ||||||||||||||
Entertainment Benefits Group LLC | (v) | Media & Entertainment | L+575, 2.5% PIK (2.5% Max PIK) | 1.0% | 9/30/24 | 0.3 | 0.3 | 0.3 | ||||||||||||||
Entertainment Benefits Group LLC | (f)(k)(l)(v)(m) | Media & Entertainment | L+575, 2.5% PIK (2.5% Max PIK) | 1.0% | 9/30/25 | 63.6 | 58.4 | 60.4 | ||||||||||||||
Entertainment Benefits Group LLC | (x) | Media & Entertainment | L+575, 2.5% PIK (2.5% Max PIK) | 1.0% | 9/30/24 | 1.2 | 1.2 | 1.1 | ||||||||||||||
Fairway Group Holdings Corp | (ac)(y)(z)(v) | Food & Staples Retailing | 12.0% PIK (12.0% Max PIK) | 11/27/23 | 11.7 | 1.0 | 0.6 | |||||||||||||||
Fairway Group Holdings Corp | (ac)(y)(z)(v) | Food & Staples Retailing | 10.0% PIK (10.0% Max PIK) | 11/28/23 | 7.6 | — | — | |||||||||||||||
FloWorks International LLC | (i)(v)(m) | Capital Goods | L+700 | 1.0% | 10/14/26 | 53.4 | 50.3 | 52.6 | ||||||||||||||
FloWorks International LLC | (x) | Capital Goods | L+700 | 1.0% | 10/14/26 | 21.5 | 21.5 | 21.2 | ||||||||||||||
Follett Software Co | (v) | Software & Services | L+575 | 0.8% | 8/31/27 | 4.2 | 4.2 | 4.2 | ||||||||||||||
Follett Software Co | (f)(k)(l)(v)(t) | Software & Services | L+575 | 0.8% | 8/31/28 | 112.6 | 111.5 | 111.5 | ||||||||||||||
Follett Software Co | (x) | Software & Services | L+575 | 0.8% | 8/31/27 | 5.6 | 5.6 | 5.6 | ||||||||||||||
Foundation Consumer Brands LLC | (v)(m) | Pharmaceuticals, Biotechnology & Life Sciences | L+638 | 1.0% | 2/12/27 | 102.3 | 98.2 | 104.3 | ||||||||||||||
Foundation Consumer Brands LLC | (x) | Pharmaceuticals, Biotechnology & Life Sciences | L+638 | 1.0% | 2/12/27 | 6.6 | 6.6 | 6.6 | ||||||||||||||
Frontline Technologies Group LLC | (i)(v)(m) | Software & Services | L+575 | 1.0% | 9/18/23 | 78.9 | 78.3 | 78.9 | ||||||||||||||
Frontline Technologies Group LLC | (s) | Software & Services | L+575 | 1.0% | 9/18/23 | 53.7 | 50.4 | 54.2 | ||||||||||||||
Frontline Technologies Group LLC | (v) | Software & Services | L+575 | 1.0% | 9/18/23 | 22.0 | 20.9 | 22.2 | ||||||||||||||
Galway Partners Holdings LLC | (k)(l)(v)(t) | Insurance | L+525, 0.0% PIK (1.3% Max PIK) | 0.8% | 9/29/28 | 139.2 | 136.4 | 136.4 | ||||||||||||||
Galway Partners Holdings LLC | (x) | Insurance | L+525, 0.0% PIK (1.3% Max PIK) | 0.8% | 9/30/27 | 12.0 | 11.7 | 11.7 | ||||||||||||||
Galway Partners Holdings LLC | (x) | Insurance | L+525, 0.0% PIK (1.3% Max PIK) | 0.8% | 9/29/28 | 32.0 | 31.7 | 31.4 | ||||||||||||||
General Datatech LP | (f)(k)(l)(v)(m)(t) | Software & Services | L+625 | 1.0% | 6/18/27 | 180.4 | 178.6 | 179.2 | ||||||||||||||
Greystone Equity Member Corp | (w)(v) | Diversified Financials | L+725 | 3.8% | 4/1/26 | 194.8 | 182.3 | 193.8 | ||||||||||||||
Heniff Transportation Systems LLC | (v) | Transportation | L+575 | 1.0% | 12/3/24 | 6.5 | 6.2 | 6.1 | ||||||||||||||
Heniff Transportation Systems LLC | (f)(i)(k)(l)(v)(m) | Transportation | L+575 | 1.0% | 12/3/26 | 138.0 | 130.5 | 128.0 | ||||||||||||||
Heniff Transportation Systems LLC | (v) | Transportation | L+625 | 1.0% | 12/3/26 | 19.4 | 18.6 | 18.4 | ||||||||||||||
Heniff Transportation Systems LLC | (x) | Transportation | L+575 | 1.0% | 12/3/24 | 11.3 | 11.3 | 10.5 | ||||||||||||||
Hermes UK Ltd | (w)(v) | Transportation | SA+650 | 0.0% | 11/30/27 | £ | 14.7 | 19.7 | 19.2 | |||||||||||||
hibu Inc | (f)(k)(l)(v)(m)(t) | Commercial & Professional Services | L+625 | 1.0% | 5/4/27 | $ | 102.2 | 97.0 | 102.6 | |||||||||||||
Higginbotham Insurance Agency Inc | (v) | Insurance | L+550 | 0.8% | 11/25/26 | 60.8 | 57.3 | 61.4 | ||||||||||||||
Higginbotham Insurance Agency Inc | (x) | Insurance | L+550 | 0.8% | 11/25/26 | 2.6 | 2.6 | 2.6 | ||||||||||||||
HM Dunn Co Inc | (ad)(v) | Capital Goods | L+600 | 1.0% | 6/30/26 | 33.0 | 33.0 | 33.0 | ||||||||||||||
HM Dunn Co Inc | (ad)(v) | Capital Goods | L+600 | 1.0% | 6/30/26 | 2.0 | 2.0 | 2.0 | ||||||||||||||
Hudson Technologies Co | (w)(v) | Commercial & Professional Services | L+1,025 | 1.0% | 10/10/23 | 81.2 | 72.9 | 81.5 |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor(b) | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||
Individual FoodService | (v) | Capital Goods | L+625 | 1.0% | 11/22/24 | $ | 0.2 | $ | 0.2 | $ | 0.2 | |||||||||||
Individual FoodService | (v)(m)(s) | Capital Goods | L+625 | 1.0% | 11/22/25 | 72.3 | 67.7 | 72.6 | ||||||||||||||
Individual FoodService | (x) | Capital Goods | L+625 | 1.0% | 11/22/24 | 4.5 | 4.5 | 4.5 | ||||||||||||||
Individual FoodService | (x) | Capital Goods | L+625 | 1.0% | 11/22/25 | 3.3 | 3.3 | 3.3 | ||||||||||||||
Industria Chimica Emiliana Srl | (w)(v) | Pharmaceuticals, Biotechnology & Life Sciences | E+725 | 0.0% | 9/27/26 | € | 88.8 | 101.1 | 107.4 | |||||||||||||
Industry City TI Lessor LP | (v)(s) | Consumer Services | 10.8%, 1.0% PIK (1.0% Max PIK) | 6/30/26 | $ | 30.9 | 31.0 | 33.6 | ||||||||||||||
Insight Global LLC | (i)(v) | Commercial & Professional Services | L+600 | 0.8% | 9/22/28 | 268.6 | 265.9 | 265.9 | ||||||||||||||
Insight Global LLC | (x) | Commercial & Professional Services | L+600 | 0.8% | 9/22/27 | 21.1 | 21.1 | 21.1 | ||||||||||||||
J S Held LLC | (f)(i)(v)(m)(s) | Insurance | L+550 | 1.0% | 7/1/25 | 150.2 | 144.3 | 151.7 | ||||||||||||||
J S Held LLC | (v) | Insurance | L+550 | 1.0% | 7/1/25 | 8.2 | 8.2 | 8.4 | ||||||||||||||
J S Held LLC | (x) | Insurance | L+550 | 1.0% | 7/1/25 | 14.1 | 13.9 | 14.1 | ||||||||||||||
J S Held LLC | (x) | Insurance | L+550 | 1.0% | 7/1/25 | 24.1 | 24.1 | 24.6 | ||||||||||||||
Jarrow Formulas Inc | (f)(i)(k)(l)(v)(m)(s)(t) | Household & Personal Products | L+625 | 1.0% | 11/30/26 | 187.8 | 177.9 | 191.6 | ||||||||||||||
Karman Space Inc | (v)(m) | Capital Goods | L+675 | 1.0% | 12/21/25 | 92.9 | 89.2 | 94.0 | ||||||||||||||
Karman Space Inc | (v) | Capital Goods | L+675 | 1.0% | 12/21/25 | 1.9 | 1.7 | 1.9 | ||||||||||||||
Karman Space Inc | (x) | Capital Goods | L+675 | 1.0% | 12/21/25 | 3.6 | 3.6 | 3.6 | ||||||||||||||
KBP Investments LLC | (x) | Food & Staples Retailing | L+500 | 0.8% | 5/26/27 | 27.4 | 26.7 | 27.2 | ||||||||||||||
Kellermeyer Bergensons Services LLC | (f)(i)(k)(l)(v)(m)(s)(t) | Commercial & Professional Services | L+575 | 1.0% | 11/7/26 | 326.2 | 313.6 | 327.6 | ||||||||||||||
Kellermeyer Bergensons Services LLC | (x) | Commercial & Professional Services | L+575 | 1.0% | 11/7/26 | 47.4 | 47.4 | 47.6 | ||||||||||||||
Lakeview Farms Inc | (l)(v)(m) | Food, Beverage & Tobacco | L+625 | 1.0% | 6/10/27 | 92.9 | 90.9 | 92.4 | ||||||||||||||
Lakeview Farms Inc | (v) | Food, Beverage & Tobacco | L+625 | 1.0% | 6/10/27 | 0.8 | 0.8 | 0.8 | ||||||||||||||
Lakeview Farms Inc | (x) | Food, Beverage & Tobacco | L+625 | 1.0% | 6/10/27 | 10.8 | 10.8 | 10.8 | ||||||||||||||
Lakeview Farms Inc | (x) | Food, Beverage & Tobacco | L+625 | 1.0% | 6/10/27 | 6.0 | 6.0 | 5.9 | ||||||||||||||
Lexitas Inc | (i)(k)(l)(v)(m) | Commercial & Professional Services | L+600 | 1.0% | 11/14/25 | 102.4 | 98.8 | 104.4 | ||||||||||||||
Lexitas Inc | (x) | Commercial & Professional Services | L+600 | 1.0% | 11/14/25 | 15.0 | 15.0 | 15.3 | ||||||||||||||
Lexitas Inc | (x) | Commercial & Professional Services | L+600 | 1.0% | 11/14/25 | 5.4 | 5.4 | 5.4 | ||||||||||||||
Lionbridge Technologies Inc | (f)(k)(s)(t) | Consumer Services | L+700 | 1.0% | 12/29/25 | 69.9 | 64.6 | 70.8 | ||||||||||||||
Lipari Foods LLC | (f)(v)(m)(s) | Food & Staples Retailing | L+575 | 1.0% | 1/6/25 | 273.4 | 261.9 | 276.2 | ||||||||||||||
Matchesfashion Ltd | (w)(v) | Consumer Durables & Apparel | L+463, 3.0% PIK (3.0% Max PIK) | 0.0% | 10/11/24 | 12.7 | 12.2 | 8.4 | ||||||||||||||
MB2 Dental Solutions LLC | (k)(l)(v)(m)(t) | Health Care Equipment & Services | L+600 | 1.0% | 1/29/27 | 198.3 | 187.2 | 198.9 | ||||||||||||||
MB2 Dental Solutions LLC | (x) | Health Care Equipment & Services | L+600 | 1.0% | 1/29/27 | 90.0 | 90.0 | 90.3 | ||||||||||||||
Med-Metrix | (v) | Software & Services | L+600 | 1.0% | 9/15/27 | 62.6 | 61.9 | 61.9 | ||||||||||||||
Med-Metrix | (x) | Software & Services | L+600 | 1.0% | 9/15/27 | 31.3 | 31.3 | 31.0 | ||||||||||||||
Med-Metrix | (x) | Software & Services | L+600 | 1.0% | 9/15/27 | 7.8 | 7.8 | 7.8 | ||||||||||||||
Miami Beach Medical Group LLC | (k)(l)(v)(m)(t) | Health Care Equipment & Services | L+650 | 1.0% | 12/14/26 | 181.0 | 171.4 | 179.6 | ||||||||||||||
Micronics Filtration Holdings Inc | (ac)(y)(z)(v) | Capital Goods | 7.5% PIK (7.5% Max PIK) | 3/29/24 | 50.4 | 45.0 | 40.0 | |||||||||||||||
Monitronics International Inc | (aa)(f)(v) | Commercial & Professional Services | L+650 | 1.3% | 3/29/24 | 18.9 | 17.1 | 18.5 | ||||||||||||||
Monitronics International Inc | (v) | Commercial & Professional Services | L+500 | 1.5% | 7/3/24 | 36.2 | 33.5 | 34.5 | ||||||||||||||
Monitronics International Inc | (x) | Commercial & Professional Services | L+500 | 1.5% | 7/3/24 | 33.8 | 33.8 | 32.2 | ||||||||||||||
Motion Recruitment Partners LLC | (v)(m)(t) | Commercial & Professional Services | L+650 | 1.0% | 12/19/25 | 85.2 | 80.2 | 83.8 | ||||||||||||||
Motion Recruitment Partners LLC | (x) | Commercial & Professional Services | L+650 | 1.0% | 12/19/25 | 59.6 | 59.6 | 58.6 | ||||||||||||||
NBG Home | (v) | Consumer Durables & Apparel | L+550 | 1.0% | 4/26/24 | 68.1 | 67.9 | 57.8 |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor(b) | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||
NCI Inc | (v) | Software & Services | L+750, 0.0% PIK (2.5% Max PIK) | 1.0% | 8/15/24 | $ | 78.8 | $ | 77.6 | $ | 69.7 | |||||||||||
Net Documents | (v) | Software & Services | L+675 | 1.0% | 6/30/27 | 24.6 | 24.4 | 24.2 | ||||||||||||||
Net Documents | (x) | Software & Services | L+675 | 1.0% | 6/30/27 | 7.4 | 7.3 | 7.3 | ||||||||||||||
Net Documents | (x) | Software & Services | L+675 | 1.0% | 6/30/27 | 3.0 | 2.9 | 2.9 | ||||||||||||||
New Era Technology Inc | (i)(l)(v)(m)(t) | Software & Services | L+625 | 1.0% | 10/31/26 | 88.0 | 83.7 | 87.3 | ||||||||||||||
New Era Technology Inc | (x) | Software & Services | L+625 | 1.0% | 10/31/26 | 18.5 | 18.5 | 18.4 | ||||||||||||||
New Era Technology Inc | (x) | Software & Services | L+625 | 1.0% | 10/31/26 | 4.7 | 4.6 | 4.6 | ||||||||||||||
Omnimax International Inc | (f)(i)(k)(l)(v)(m) | Capital Goods | L+725 | 1.0% | 10/8/26 | 219.9 | 210.3 | 221.2 | ||||||||||||||
One Call Care Management Inc | (ad)(aa)(v) | Health Care Equipment & Services | L+550 | 0.8% | 4/22/27 | 5.0 | 4.7 | 5.0 | ||||||||||||||
Oxford Global Resources LLC | (f)(k)(l)(v)(t) | Commercial & Professional Services | L+600 | 0.0% | 8/17/27 | 88.6 | 87.8 | 87.9 | ||||||||||||||
Oxford Global Resources LLC | (v) | Commercial & Professional Services | L+600 | 0.0% | 8/17/27 | 1.2 | 1.2 | 1.2 | ||||||||||||||
Oxford Global Resources LLC | (x) | Commercial & Professional Services | L+600 | 0.0% | 8/17/27 | 15.3 | 15.3 | 15.2 | ||||||||||||||
Oxford Global Resources LLC | (x) | Commercial & Professional Services | L+600 | 0.0% | 8/17/27 | 6.4 | 6.4 | 6.4 | ||||||||||||||
P2 Energy Solutions Inc. | (v) | Software & Services | L+675 | 1.0% | 1/31/25 | 4.6 | 4.2 | 4.2 | ||||||||||||||
P2 Energy Solutions Inc. | (f)(i)(k)(v)(m)(s)(t) | Software & Services | L+675 | 1.0% | 2/2/26 | 249.7 | 232.5 | 232.5 | ||||||||||||||
P2 Energy Solutions Inc. | (x) | Software & Services | L+675 | 1.0% | 1/31/25 | 10.6 | 10.6 | 9.9 | ||||||||||||||
Parata Systems | (f)(v)(m) | Health Care Equipment & Services | L+575 | 1.0% | 6/30/27 | 132.1 | 131.1 | 131.7 | ||||||||||||||
Parata Systems | (x) | Health Care Equipment & Services | L+575 | 1.0% | 6/30/27 | 22.0 | 22.0 | 21.9 | ||||||||||||||
Parata Systems | (x) | Health Care Equipment & Services | L+575 | 1.0% | 6/30/27 | 5.5 | 5.5 | 5.5 | ||||||||||||||
Peak 10 Holding Corp | (aa)(v) | Telecommunication Services | L+350 | 0.0% | 8/1/24 | 20.1 | 17.3 | 18.7 | ||||||||||||||
Peraton Corp | (aa)(v) | Capital Goods | L+375 | 0.8% | 2/1/28 | 9.0 | 8.7 | 9.1 | ||||||||||||||
Performance Health Holdings Inc | (f)(i)(v) | Health Care Equipment & Services | L+600 | 1.0% | 7/12/27 | 121.0 | 119.8 | 120.3 | ||||||||||||||
Petroplex Acidizing Inc | (ac)(y)(z)(v) | Energy | L+900 PIK (L+900 Max PIK) | 1.0% | 12/30/21 | 26.5 | 22.9 | 6.9 | ||||||||||||||
Polyconcept North America Inc | (aa)(v) | Household & Personal Products | L+450 PIK (L+450 Max PIK) | 1.0% | 8/16/23 | 22.5 | 22.2 | 22.4 | ||||||||||||||
Premium Credit Ltd | (w)(v) | Diversified Financials | L+650 | 0.0% | 1/16/26 | £ | 58.0 | 75.1 | 78.2 | |||||||||||||
Pretium Packaging LLC | (aa)(v) | Household & Personal Products | L+400 | 0.5% | 9/22/28 | $ | 1.6 | 1.6 | 1.6 | |||||||||||||
Production Resource Group LLC | (ad)(v) | Media & Entertainment | L+750, 0.0% PIK (3.1% Max PIK) | 1.0% | 8/21/24 | 60.6 | 56.0 | 60.6 | ||||||||||||||
Production Resource Group LLC | (ad)(v) | Media & Entertainment | L+300, 5.5% PIK (5.5% Max PIK) | 0.3% | 8/21/24 | 130.1 | 121.0 | 130.1 | ||||||||||||||
Production Resource Group LLC | (ad)(v) | Media & Entertainment | L+550 PIK (L+550 Max PIK) | 1.0% | 8/21/24 | 0.1 | 0.1 | 0.1 | ||||||||||||||
Production Resource Group LLC | (ad)(v) | Media & Entertainment | L+500 | 1.0% | 8/21/24 | 3.4 | 3.3 | 3.4 | ||||||||||||||
Production Resource Group LLC | (ad)(v) | Media & Entertainment | L+750, 0.0% PIK (3.1% Max PIK) | 1.0% | 8/21/24 | 10.1 | 10.0 | 10.1 | ||||||||||||||
Production Resource Group LLC | (ad)(x) | Media & Entertainment | L+750, 0.0% PIK (3.1% Max PIK) | 1.0% | 8/21/24 | 20.2 | 20.2 | 20.2 | ||||||||||||||
Propulsion Acquisition LLC | (f)(l)(v)(s)(t) | Capital Goods | L+700 | 1.0% | 7/13/24 | 60.7 | 56.7 | 61.3 | ||||||||||||||
PSKW LLC | (i)(l)(v)(s)(t) | Health Care Equipment & Services | L+625 | 1.0% | 3/9/26 | 295.5 | 283.7 | 298.5 | ||||||||||||||
Qdoba Restaurant Corp | (aa)(v)(m) | Consumer Services | L+700 | 1.0% | 3/21/25 | 11.0 | 10.8 | 10.8 | ||||||||||||||
Reliant Rehab Hospital Cincinnati LLC | (f)(i)(l)(v)(m)(s) | Health Care Equipment & Services | L+675 | 0.0% | 9/2/24 | 160.5 | 152.2 | 155.3 | ||||||||||||||
Revere Superior Holdings Inc | (v)(m) | Software & Services | L+575 | 1.0% | 9/30/26 | 23.1 | 22.4 | 23.3 | ||||||||||||||
Revere Superior Holdings Inc | (x) | Software & Services | L+575 | 1.0% | 9/30/26 | 3.2 | 3.2 | 3.2 | ||||||||||||||
Rise Baking Company | (v) | Food, Beverage & Tobacco | L+625 | 1.0% | 8/13/27 | 0.9 | 0.7 | 0.8 | ||||||||||||||
Rise Baking Company | (l)(v)(m) | Food, Beverage & Tobacco | L+625 | 1.0% | 8/13/27 | 43.5 | 42.4 | 42.6 | ||||||||||||||
Rise Baking Company | (x) | Food, Beverage & Tobacco | L+625 | 1.0% | 8/13/27 | 4.4 | 4.4 | 4.3 | ||||||||||||||
RSC Insurance Brokerage Inc | (f)(i)(k)(l)(v)(m)(s) | Insurance | L+550 | 1.0% | 10/30/26 | 240.3 | 230.5 | 242.7 | ||||||||||||||
RSC Insurance Brokerage Inc | (x) | Insurance | L+550 | 1.0% | 9/30/26 | 7.7 | 7.6 | 7.7 | ||||||||||||||
RSC Insurance Brokerage Inc | (x) | Insurance | L+550 | 1.0% | 10/30/26 | 23.2 | 23.2 | 23.5 |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor(b) | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||
Safe-Guard Products International LLC | (f)(m)(t) | Diversified Financials | L+500 | 0.5% | 1/27/27 | $ | 45.1 | $ | 42.4 | $ | 45.1 | |||||||||||
SAMBA Safety Inc | (v) | Software & Services | L+575 | 1.0% | 9/1/27 | 27.4 | 27.1 | 27.1 | ||||||||||||||
SAMBA Safety Inc | (x) | Software & Services | L+575 | 1.0% | 9/1/27 | 6.1 | 6.1 | 6.0 | ||||||||||||||
SAMBA Safety Inc | (x) | Software & Services | L+575 | 1.0% | 9/1/27 | 2.4 | 2.4 | 2.4 | ||||||||||||||
Sequa Corp | (aa)(v)(m) | Capital Goods | L+675, 0.0% PIK (1.0% Max PIK) | 1.0% | 11/28/23 | 16.0 | 15.3 | 16.3 | ||||||||||||||
Sequa Corp | (v) | Capital Goods | L+900, 0.0% PIK (9.5% Max PIK) | 1.0% | 7/31/25 | 16.4 | 15.9 | 17.1 | ||||||||||||||
Sequel Youth & Family Services LLC | (y)(z)(v) | Health Care Equipment & Services | L+800 | 1.0% | 9/1/23 | 170.0 | 112.4 | 53.3 | ||||||||||||||
Sequel Youth & Family Services LLC | (y)(z)(v) | Health Care Equipment & Services | L+700 | 1.0% | 9/1/23 | 29.2 | 19.3 | 9.2 | ||||||||||||||
Sequel Youth & Family Services LLC | (v) | Health Care Equipment & Services | L+700 | 1.0% | 9/1/23 | 27.5 | 27.5 | 27.5 | ||||||||||||||
Sequel Youth & Family Services LLC | (x) | Health Care Equipment & Services | L+700 | 1.0% | 9/1/23 | 14.5 | 14.5 | 14.5 | ||||||||||||||
Sequential Brands Group Inc. | (v) | Consumer Durables & Apparel | 5.0% | 11/24/21 | 126.4 | 125.8 | 126.4 | |||||||||||||||
Sequential Brands Group Inc. | (y)(z)(k)(l)(v) | Consumer Durables & Apparel | L+875 | 0.0% | 2/7/24 | 266.8 | 216.8 | 230.5 | ||||||||||||||
Sequential Brands Group Inc. | (x) | Consumer Durables & Apparel | 5.0% | 11/24/21 | 7.7 | 7.7 | 7.7 | |||||||||||||||
Sorenson Communications LLC | (ac)(aa)(f)(k)(v)(t) | Telecommunication Services | L+550 | 0.8% | 3/17/26 | 61.8 | 58.5 | 62.3 | ||||||||||||||
Source Code LLC | (k)(l)(t) | Software & Services | L+650 | 1.0% | 6/30/27 | 53.4 | 52.4 | 52.5 | ||||||||||||||
Source Code LLC | (x) | Software & Services | L+650 | 1.0% | 6/30/27 | 15.3 | 15.0 | 15.0 | ||||||||||||||
Spins LLC | (v)(m)(s)(t) | Software & Services | L+550 | 1.0% | 1/20/27 | 60.8 | 57.3 | 61.7 | ||||||||||||||
Spins LLC | (x) | Software & Services | L+550 | 1.0% | 1/20/27 | 7.9 | 7.9 | 7.9 | ||||||||||||||
Summit Interconnect Inc | (f)(k)(l)(v)(t) | Capital Goods | L+600 | 1.0% | 9/22/28 | 118.3 | 117.1 | 117.1 | ||||||||||||||
Summit Interconnect Inc | (x) | Capital Goods | L+600 | 1.0% | 9/22/28 | 48.7 | 48.7 | 48.2 | ||||||||||||||
Sungard Availability Services Capital Inc | (ac)(v) | Software & Services | L+375, 3.8% PIK (3.8% Max PIK) | 1.0% | 7/1/24 | 5.7 | 5.6 | 6.0 | ||||||||||||||
Sweeping Corp of America Inc | (v)(m) | Commercial & Professional Services | L+575 | 1.0% | 11/30/26 | 54.6 | 52.0 | 55.1 | ||||||||||||||
Sweeping Corp of America Inc | (v) | Commercial & Professional Services | L+575 | 1.0% | 11/30/26 | 1.8 | 1.8 | 1.8 | ||||||||||||||
Sweeping Corp of America Inc | (x) | Commercial & Professional Services | L+575 | 1.0% | 11/30/26 | 1.3 | 1.3 | 1.4 | ||||||||||||||
Sweeping Corp of America Inc | (x) | Commercial & Professional Services | L+575 | 1.0% | 11/30/26 | 3.9 | 3.9 | 3.9 | ||||||||||||||
Tangoe LLC | (f)(i)(v)(m)(s) | Software & Services | L+650 | 1.0% | 11/28/25 | 190.5 | 170.9 | 155.0 | ||||||||||||||
ThermaSys Corp | (ac)(y)(z)(v) | Capital Goods | L+1,100 PIK (L+1,100 Max PIK) | 1.0% | 1/1/24 | 8.2 | 8.3 | 3.2 | ||||||||||||||
ThreeSixty Group | (v)(m) | Retailing | L+500, 2.5% PIK (2.5% Max PIK) | 1.5% | 3/1/23 | 48.4 | 48.2 | 47.8 | ||||||||||||||
ThreeSixty Group | (v)(m) | Retailing | L+500, 2.5% PIK (2.5% Max PIK) | 1.5% | 3/1/23 | 48.1 | 47.8 | 47.5 | ||||||||||||||
Total Safety US Inc | (aa)(f) | Capital Goods | L+600 | 1.0% | 8/16/25 | 0.9 | 0.9 | 0.9 | ||||||||||||||
Trace3 Inc | (f)(i)(k)(l)(v)(m)(s) | Software & Services | L+675 | 1.0% | 8/3/24 | 249.3 | 237.7 | 249.3 | ||||||||||||||
Transaction Services Group Ltd | (w)(v) | Software & Services | B+650 | 0.0% | 10/15/26 | A$ | 80.3 | 55.5 | 56.9 | |||||||||||||
Transaction Services Group Ltd | (w)(v) | Software & Services | L+650 | 0.0% | 10/15/26 | $ | 126.2 | 122.1 | 123.5 | |||||||||||||
Transaction Services Group Ltd | (w)(v) | Software & Services | L+650 | 0.0% | 10/15/26 | £ | 13.9 | 17.6 | 18.3 | |||||||||||||
Truck-Lite Co LLC | (f)(i)(k)(v)(m)(s) | Capital Goods | L+625 | 1.0% | 12/14/26 | $ | 268.7 | 257.5 | 268.7 | |||||||||||||
Truck-Lite Co LLC | (x) | Capital Goods | L+625 | 1.0% | 12/13/24 | 25.4 | 25.2 | 25.4 | ||||||||||||||
Warren Resources Inc | (ad)(v) | Energy | L+900, 1.0% PIK (1.0% Max PIK) | 1.0% | 5/22/24 | 18.6 | 17.3 | 18.6 | ||||||||||||||
Wealth Enhancement Group LLC | (w)(v) | Diversified Financials | L+625 | 1.0% | 10/31/25 | 1.3 | 1.3 | 1.3 | ||||||||||||||
Wealth Enhancement Group LLC | (w)(x) | Diversified Financials | L+625 | 1.0% | 10/31/25 | 28.3 | 28.2 | 28.3 | ||||||||||||||
Wealth Enhancement Group LLC | (w)(x) | Diversified Financials | L+625 | 1.0% | 10/31/25 | 0.4 | 0.4 | 0.4 | ||||||||||||||
Woolpert Inc | (f)(k)(l)(v)(m)(t) | Capital Goods | L+600 | 1.0% | 4/5/28 | 139.6 | 132.6 | 140.2 | ||||||||||||||
Woolpert Inc | (x) | Capital Goods | L+600 | 1.0% | 4/5/28 | 25.6 | 25.6 | 25.7 | ||||||||||||||
|
|
|
| |||||||||||||||||||
Total Senior Secured Loans—First Lien | 10,722.8 | 10,880.8 | ||||||||||||||||||||
Unfunded Loan Commitments | (1,192.1 | ) | (1,192.1 | ) | ||||||||||||||||||
|
|
|
| |||||||||||||||||||
Net Senior Secured Loans—First Lien | 9,530.7 | 9,688.7 | ||||||||||||||||||||
|
|
|
|
See notes to unaudited consolidated financial statements.
FS Investment CorporationKKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 20172021
(in thousands,millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||
Senior Secured Loans—First Lien—102.4% | ||||||||||||||||||||||
5 Arch Income Fund 2, LLC | (g)(i)(n) | Diversified Financials | 10.5% | 11/18/21 | $ | 21,274 | $ | 21,322 | $ | 21,274 | ||||||||||||
5 Arch Income Fund 2, LLC | (g)(i)(n)(p) | Diversified Financials | 10.5% | 11/18/21 | 16,726 | 16,726 | 16,726 | |||||||||||||||
A.P. Plasman Inc. | (e)(f)(g)(h)(i) | Capital Goods | L+900 | 1.0% | 12/29/19 | 197,909 | 196,516 | 192,714 | ||||||||||||||
Actian Corp. | (e) | Software & Services | L+796 | 1.0% | 6/30/22 | 11,429 | 11,429 | 11,514 | ||||||||||||||
AG Group Merger Sub, Inc. | (e)(g) | Commercial & Professional Services | L+750 | 1.0% | 12/29/23 | 89,394 | 89,394 | 90,511 | ||||||||||||||
All Systems Holding LLC | (e)(f)(g)(h) | Commercial & Professional Services | L+770 | 1.0% | 10/31/23 | 44,000 | 44,000 | 44,660 | ||||||||||||||
Altus Power America, Inc. | (g) | Energy | L+750 | 1.5% | 9/30/21 | 2,866 | 2,866 | 2,905 | ||||||||||||||
Altus Power America, Inc. | (g)(p) | Energy | L+750 | 1.5% | 9/30/21 | 884 | 884 | 896 | ||||||||||||||
Aspect Software, Inc. | (g)(s) | Software & Services | L+1000 | 1.0% | 5/25/18 | 992 | 992 | 989 | ||||||||||||||
Aspect Software, Inc. | (g)(p)(s) | Software & Services | L+1000 | 1.0% | 5/25/18 | 25 | 25 | 25 | ||||||||||||||
Aspect Software, Inc. | (g)(s) | Software & Services | L+1000 | 1.0% | 5/25/20 | 684 | 684 | 684 | ||||||||||||||
Aspect Software, Inc. | (g)(p)(s) | Software & Services | L+1200 | 1.0% | 5/25/18 | 361 | 361 | 361 | ||||||||||||||
Atlas Aerospace LLC | (g) | Capital Goods | L+802 | 1.0% | 5/8/19 | 20,000 | 20,000 | 20,300 | ||||||||||||||
AVF Parent, LLC | (e)(h) | Retailing | L+725 | 1.3% | 3/1/24 | 31,600 | 31,600 | 32,791 | ||||||||||||||
AVF Parent, LLC | (g)(p) | Retailing | L+725 | 1.3% | 3/1/24 | 9,600 | 9,600 | 9,962 | ||||||||||||||
BenefitMall Holdings, Inc. | (e)(h) | Commercial & Professional Services | L+725 | 1.0% | 11/24/20 | 14,100 | 14,100 | 14,100 | ||||||||||||||
Borden Dairy Co. | (e)(g)(h) | Food, Beverage & Tobacco | L+825 | 1.0% | 7/6/23 | 70,000 | 70,000 | 69,682 | ||||||||||||||
Cadence Aerospace Finance, Inc. | (g) | Capital Goods | L+625 | 1.3% | 5/9/18 | 73 | 73 | 70 | ||||||||||||||
ConnectiveRX, LLC | (e)(g)(h) | Health Care Equipment & Services | L+829 | 1.0% | 11/25/21 | 30,000 | 30,000 | 29,987 | ||||||||||||||
Crestwood Holdings LLC | (g) | Energy | L+800 | 1.0% | 6/19/19 | 4,203 | 4,195 | 4,197 | ||||||||||||||
CSafe Acquisition Co., Inc. | (g) | Capital Goods | L+725 | 1.0% | 11/1/21 | 2,152 | 2,152 | 2,166 | ||||||||||||||
CSafe Acquisition Co., Inc. | (g)(p) | Capital Goods | L+725 | 1.0% | 11/1/21 | 3,717 | 3,717 | 3,741 | ||||||||||||||
CSafe Acquisition Co., Inc. | (g)(h) | Capital Goods | L+725 | 1.0% | 10/31/23 | 46,932 | 46,932 | 47,225 | ||||||||||||||
CSafe Acquisition Co., Inc. | (g)(p) | Capital Goods | L+725 | 1.0% | 10/31/23 | 25,122 | 25,122 | 25,279 | ||||||||||||||
Dade Paper & Bag, LLC | (e)(g)(h) | Capital Goods | L+750 | 1.0% | 6/10/24 | 83,815 | 83,815 | 84,863 | ||||||||||||||
Eastman Kodak Co. | (g) | Consumer Durables & Apparel | L+625 | 1.0% | 9/3/19 | 10,415 | 10,335 | 10,291 | ||||||||||||||
Empire Today, LLC | (e)(g) | Retailing | L+800 | 1.0% | 11/17/22 | 81,385 | 81,385 | 82,199 | ||||||||||||||
Greystone Equity Member Corp. | (g)(i) | Diversified Financials | L+1050 | 3/31/21 | 1,879 | 1,884 | 1,884 | |||||||||||||||
Greystone Equity Member Corp. | (g)(i) | Diversified Financials | L+1100 | 3/31/21 | 50,000 | 50,000 | 50,750 | |||||||||||||||
Greystone Equity Member Corp. | (g)(i) | Diversified Financials | L+1100 | 3/31/21 | 1,022 | 1,022 | 1,041 | |||||||||||||||
Greystone Equity Member Corp. | (g)(i)(p) | Diversified Financials | L+1100 | 3/31/21 | 1,099 | 1,099 | 1,120 | |||||||||||||||
H.M. Dunn Co., Inc. | (g) | Capital Goods | L+947 | 1.0% | 3/26/21 | 1,071 | 1,071 | 1,082 | ||||||||||||||
Imagine Communications Corp. | (e)(g)(h) | Media | L+825 | 1.0% | 4/29/20 | 75,725 | 75,725 | 76,672 | ||||||||||||||
Industrial Group Intermediate Holdings, LLC | (g) | Materials | L+800 | 1.3% | 5/31/20 | 21,504 | 21,504 | 21,611 | ||||||||||||||
Industry City TI Lessor, L.P. | (g) | Consumer Services | 10.8%, 1.0% PIK (1.0% Max PIK) | 6/30/26 | 31,278 | 31,278 | 31,747 | |||||||||||||||
International Aerospace Coatings, Inc. | (e)(f)(h) | Capital Goods | L+750 | 1.0% | 6/30/20 | 45,213 | 45,116 | 45,609 | ||||||||||||||
JMC Acquisition Merger Corp. | (g) | Capital Goods | L+854 | 1.0% | 11/6/21 | 6,832 | 6,832 | 6,917 | ||||||||||||||
JSS Holdings, Inc. | (e)(g) | Capital Goods | L+800, 0.0% PIK (2.5% Max PIK) | 1.0% | 3/31/23 | 110,775 | 109,736 | 110,847 |
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor(b) | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||
Senior Secured Loans—Second Lien—21.6% | ||||||||||||||||||||||
Advanced Lighting Technologies Inc | (v) | Materials | L+600 | 1.0% | 3/16/27 | $ | 10.8 | $ | 10.5 | $ | 10.6 | |||||||||||
Ammeraal Beltech Holding BV | (w)(f)(v)(s) | Capital Goods | L+775 | 0.0% | 9/12/26 | 51.3 | 46.4 | 50.8 | ||||||||||||||
Amtek Global Technology Pte Ltd | (ad)(w)(z)(g)(v) | Automobiles & Components | E+500 PIK (E+500 Max PIK) | 0.0% | 4/4/24 | € | 34.3 | 38.8 | — | |||||||||||||
Apex Group Limited | (w)(v) | Diversified Financials | L+675 | 0.5% | 7/12/29 | $ | 40.0 | 39.6 | 39.6 | |||||||||||||
Belk Inc | (ac)(y)(z)(v) | Retailing | 10.0% PIK (10.0% Max PIK) | 7/31/25 | 24.9 | 4.2 | 4.6 | |||||||||||||||
Byrider Finance LLC | (v)(u) | Automobiles & Components | L+1,000, 0.5% PIK (0.5% Max PIK) | 1.3% | 6/7/22 | 54.2 | 51.9 | 54.3 | ||||||||||||||
Constellis Holdings LLC | (ac)(f)(v) | Capital Goods | L+100, 10.0% PIK (10.0% Max PIK) | 1.0% | 3/27/25 | 13.5 | 12.5 | 13.5 | ||||||||||||||
Cubic Corp | (v) | Software & Services | L+763 | 0.8% | 5/25/29 | 54.8 | 51.7 | 54.7 | ||||||||||||||
Datatel Inc | (v) | Software & Services | L+800 | 1.0% | 10/9/28 | 179.2 | 169.9 | 180.2 | ||||||||||||||
Excelitas Technologies Corp | (aa)(l) | Technology Hardware & Equipment | L+750 | 1.0% | 12/1/25 | 6.6 | 6.1 | 6.7 | ||||||||||||||
Fairway Group Holdings Corp | (ac)(y)(z)(v) | Food & Staples Retailing | 11.0% PIK (11.0% Max PIK) | 2/24/24 | 6.9 | — | — | |||||||||||||||
Misys Ltd | (aa)(w)(v) | Software & Services | L+725 | 1.0% | 6/13/25 | 21.8 | 20.4 | 22.0 | ||||||||||||||
NBG Home | (v) | Consumer Durables & Apparel | L+1,275 PIK (L+1,275 Max PIK) | 1.0% | 9/30/24 | 30.4 | 27.2 | 18.7 | ||||||||||||||
NEP Broadcasting LLC | (aa)(v) | Media & Entertainment | L+700 | 0.0% | 10/19/26 | 6.8 | 6.1 | 6.6 | ||||||||||||||
OEConnection LLC | (f)(v)(s) | Software & Services | L+825 | 0.0% | 9/25/27 | 77.0 | 73.4 | 77.0 | ||||||||||||||
Paradigm Acquisition Corp | (aa)(l)(v) | Health Care Equipment & Services | L+750 | 0.0% | 10/26/26 | 2.3 | 2.2 | 2.3 | ||||||||||||||
Peraton Corp | (v)(s) | Capital Goods | L+800 | 1.0% | 2/1/29 | 175.0 | 165.1 | 179.3 | ||||||||||||||
Peraton Corp | (v) | Capital Goods | L+775 | 0.8% | 2/1/29 | 156.4 | 149.8 | 157.4 | ||||||||||||||
Petrochoice Holdings Inc | (v) | Capital Goods | L+875 | 1.0% | 8/21/23 | 65.0 | 64.3 | 57.8 | ||||||||||||||
Polyconcept North America Inc | (v) | Household & Personal Products | 11.0% PIK (11.0% Max PIK) | 2/16/24 | 9.8 | 9.6 | 9.4 | |||||||||||||||
Pretium Packaging LLC | (v)(m)(s) | Household & Personal Products | L+825 | 0.8% | 11/6/28 | 15.1 | 14.4 | 15.4 | ||||||||||||||
Pretium Packaging LLC | (v) | Household & Personal Products | L+675 | 0.5% | 9/22/29 | 39.9 | 39.5 | 39.5 | ||||||||||||||
Pure Fishing Inc | (f)(v)(m) | Consumer Durables & Apparel | L+838 | 1.0% | 12/31/26 | 177.0 | 170.4 | 177.0 | ||||||||||||||
Sequa Corp | (aa)(v)(m) | Capital Goods | L+1,075, 0.0% PIK (6.8% Max PIK) | 1.0% | 4/28/24 | 5.9 | 5.7 | 5.9 | ||||||||||||||
SIRVA Worldwide Inc | (aa)(v) | Commercial & Professional Services | L+950 | 0.0% | 8/3/26 | 6.5 | 5.3 | 5.8 | ||||||||||||||
Solera LLC | (aa)(v) | Software & Services | L+800 | 1.0% | 6/4/29 | 312.4 | 295.4 | 319.4 | ||||||||||||||
Sorenson Communications LLC | (ac)(v)(m)(s)(u) | Telecommunication Services | L+1,150 PIK (L+1,150 Max PIK) | 3/17/26 | 6.9 | 6.6 | 6.9 | |||||||||||||||
Sungard Availability Services Capital Inc | (ac)(v) | Software & Services | L+400, 2.8% PIK (2.8% Max PIK) | 1.0% | 8/1/24 | 14.5 | 13.5 | 14.5 | ||||||||||||||
Vantage Specialty Chemicals Inc | (aa)(v) | Materials | L+825 | 1.0% | 10/27/25 | 0.8 | 0.7 | 0.7 | ||||||||||||||
WireCo WorldGroup Inc | (aa)(v)(m) | Capital Goods | L+900 | 1.0% | 9/30/24 | 14.9 | 13.6 | 14.8 | ||||||||||||||
Wittur Holding GmbH | (w)(v) | Capital Goods | E+850, 0.5% PIK (0.5% Max PIK) | 0.0% | 9/23/27 | € | 112.50 | 120.3 | 123.5 | |||||||||||||
|
|
|
| |||||||||||||||||||
Total Senior Secured Loans—Second Lien | 1,635.1 | 1,668.9 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||
Other Senior Secured Debt—1.8% | ||||||||||||||||||||||
Angelica Corp | (y)(z)(h) | Health Care Equipment & Services | 10.0% PIK (10.0% Max PIK) | 12/30/22 | $ | 50.8 | 42.3 | 21.2 | ||||||||||||||
JW Aluminum Co | (ad)(aa)(v)(s) | Materials | 10.3% | 6/1/26 | 76.5 | 75.4 | 82.2 | |||||||||||||||
One Call Care Management Inc | (ad)(v) | Health Care Equipment & Services | 8.5% PIK (8.5% Max PIK) | 11/1/28 | 22.5 | 20.6 | 22.3 | |||||||||||||||
TruckPro LLC | (aa)(v) | Capital Goods | 11.0% | 10/15/24 | 9.2 | 9.2 | 10.0 | |||||||||||||||
|
|
|
| |||||||||||||||||||
Total Other Senior Secured Debt | 147.5 | 135.7 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||
Subordinated Debt—1.2% | ||||||||||||||||||||||
Ardonagh Group Ltd | (aa)(w)(v) | Insurance | 12.8% PIK (12.8% Max PIK) | 1/15/27 | 0.9 | 0.9 | 0.9 | |||||||||||||||
ATX Networks Corp | (w)(y)(z)(v)(s)(ad) | Capital Goods | 10.0% PIK (10.0% Max PIK) | 8/9/28 | 18.3 | 4.8 | 4.8 | |||||||||||||||
ClubCorp Club Operations Inc | (aa)(v) | Consumer Services | 8.5% | 9/15/25 | 37.3 | 35.3 | 36.3 | |||||||||||||||
Hilding Anders | (ad)(w)(y)(v) | Consumer Durables & Apparel | € | 24.8 | 26.9 | — | ||||||||||||||||
Hilding Anders | (ad)(w)(y)(v) | Consumer Durables & Apparel | 110.5 | — | — | |||||||||||||||||
Hilding Anders | (ad)(w)(y)(z)(v) | Consumer Durables & Apparel | 13.0% PIK (13.0% Max PIK) | 11/30/25 | 126.0 | 99.4 | 51.1 | |||||||||||||||
|
|
|
| |||||||||||||||||||
Total Subordinated Debt | 167.3 | 93.1 | ||||||||||||||||||||
|
|
|
|
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor(b) | Maturity | Principal Amount(c)/ Shares | Amortized Cost | Fair Value(d) | ||||||||||||||
Asset Based Finance—25.8% | ||||||||||||||||||||||
801 5th Ave, Seattle, Private Equity | (ad)(w)(y)(v) | Real Estate | 8,554,983 | $ | 14.1 | $ | 22.5 | |||||||||||||||
801 5th Ave, Seattle, Structure Mezzanine | (ad)(w)(v) | Real Estate | 8.0%, 3.0% PIK (3.0% Max PIK) | 12/19/29 | $ | 55.5 | 53.4 | 55.5 | ||||||||||||||
Abacus JV, Private Equity | (w)(v) | Insurance | 40,241,018 | 39.2 | 42.9 | |||||||||||||||||
Accelerator Investments Aggregator LP, Private Equity | (w)(y)(v) | Diversified Financials | 5,397,365 | 6.3 | 4.7 | |||||||||||||||||
Altavair AirFinance, Private Equity | (w)(v) | Capital Goods | 121,889,043 | 122.9 | 143.5 | |||||||||||||||||
Australis Maritime, Common Stock | (w)(v) | Transportation | 43,889,942 | 42.2 | 43.4 | |||||||||||||||||
Avida Holding AB, Common Stock | (ad)(w)(y)(v) | Diversified Financials | 405,023,756 | 43.9 | 52.4 | |||||||||||||||||
Bank of Ireland, Class B Credit Linked Floating Rate Note | (w)(g) | Banks | L+1,185 | 12/4/27 | $ | 14.7 | 14.7 | 14.2 | ||||||||||||||
Byrider Finance LLC, Structured Mezzanine | (v) | Automobiles & Components | L+1,050 | 0.3% | 6/3/28 | $ | 12.0 | 12.0 | 12.0 | |||||||||||||
Byrider Finance LLC, Structured Mezzanine | (x) | Automobiles & Components | L+1,050 | 0.3% | 6/3/28 | $ | 11.0 | 11.0 | 11.0 | |||||||||||||
Callodine Commercial Finance LLC, 2L Term Loan A | (v) | Diversified Financials | L+900 | 1.0% | 11/3/25 | $ | 125.0 | 117.7 | 125.3 | |||||||||||||
Callodine Commercial Finance LLC, 2L Term Loan B | (x) | Diversified Financials | L+900 | 1.0% | 11/3/25 | $ | 40.3 | 40.3 | 40.4 | |||||||||||||
Capital Automotive LP, Private Equity | (w)(v) | Real Estate | 21,640,936 | 23.7 | 27.5 | |||||||||||||||||
Capital Automotive LP, Structured Mezzanine | (w)(v) | Real Estate | 11.0% | 12/22/28 | $ | 42.7 | 40.9 | 42.7 | ||||||||||||||
Global Jet Capital LLC, Preferred Stock | (y)(j)(v)(u) | Commercial & Professional Services | 149,494,590 | 69.4 | — | |||||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (v) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 1/30/25 | $ | 4.5 | 3.5 | 3.6 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (v) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 4/30/25 | $ | 28.3 | 22.3 | 22.7 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (v) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 9/3/25 | $ | 5.9 | 4.6 | 4.7 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (v) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 9/29/25 | $ | 5.5 | 4.3 | 4.4 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (j)(v)(u) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 12/4/25 | $ | 271.3 | 218.2 | 217.8 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (j)(v)(u) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 12/9/25 | $ | 44.4 | 35.7 | 35.6 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (j)(v)(u) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 1/29/26 | $ | 23.2 | 18.7 | 18.6 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (v) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 2/17/26 | $ | 25.6 | 19.3 | 20.5 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (v) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 4/14/26 | $ | 39.6 | 32.2 | 31.8 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (v) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 12/2/26 | $ | 50.2 | 40.2 | 40.3 | ||||||||||||||
Global Lending Services LLC, Private Equity | (w)(v) | Diversified Financials | 13,725,159 | 15.7 | 18.1 | |||||||||||||||||
Global Lending Services LLC, Private Equity | (w)(v) | Diversified Financials | 18,291,830 | 20.2 | 22.1 | |||||||||||||||||
Home Partners JV 2, Private Equity | (ac)(w)(y)(v) | Real Estate | 1,016,252 | 1.0 | 1.0 | |||||||||||||||||
Home Partners JV 2, Private Equity | (ac)(w)(y)(v) | Real Estate | 38,343 | 0.0 | 0.0 | |||||||||||||||||
Home Partners JV 2, Structured Mezzanine | (ac)(w)(v) | Real Estate | 11.0% PIK (11.0% Max PIK) | 3/20/30 | $ | 2.2 | 2.1 | 2.2 | ||||||||||||||
Home Partners JV 2, Structured Mezzanine | (ac)(w)(x) | Real Estate | 11.0% PIK (11.0% Max PIK) | 3/20/30 | $ | 14.8 | 14.8 | 14.8 | ||||||||||||||
Home Partners JV, Common Stock | (ac)(w)(y)(v) | Real Estate | 32,659,547 | 47.6 | 73.6 | |||||||||||||||||
Home Partners JV, Private Equity | (ac)(w)(y)(v) | Real Estate | 4,127,355 | 5.4 | 8.5 | |||||||||||||||||
Home Partners JV, Structured Mezzanine | (ac)(w)(v) | Real Estate | 11.0% PIK (11.0% Max PIK) | 3/25/29 | $ | 88.0 | 83.0 | 88.0 | ||||||||||||||
Jet Edge International LLC, Preferred Stock | (v)(ac) | Transportation | 8.0%, 0.0% PIK (8.0% Max PIK) | 20,878,236 | 20.9 | 16.6 | ||||||||||||||||
Jet Edge International LLC, Term Loan | (v)(ac) | Transportation | 10.0%, 2.0% PIK (2.0% Max PIK) | 4/2/26 | $ | 39.5 | 38.7 | 39.3 | ||||||||||||||
Jet Edge International LLC, Term Loan | (x)(ac) | Transportation | 10.0%, 2.0% PIK (2.0% Max PIK) | 4/2/26 | $ | 38.3 | 38.3 | 38.0 | ||||||||||||||
Jet Edge International LLC, Warrant | (y)(h)(ac) | Transportation | 3,963 | — | 4.3 | |||||||||||||||||
Kilter Finance, Preferred Stock | (ad)(w)(v) | Insurance | 6.0%, 6.0% PIK (6.0% Max PIK) | 34,060,490 | 32.6 | 34.1 | ||||||||||||||||
Kilter Finance, Private Equity | (ad)(w)(y)(v) | Insurance | 536,709 | 0.5 | 0.5 |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor(b) | Maturity | Principal Amount(c)/ Shares | Amortized Cost | Fair Value(d) | ||||||||||||||||||||||
KKR Central Park Leasing Aggregator L.P., Partnership Interest | (w)(y)(z)(v) | Capital Goods | 5/31/23 | $ | 39.1 | $ | 39.1 | $ | 27.6 | |||||||||||||||||||||
KKR Chord IP Aggregator LP, Partnership Interest | (w)(v) | Media & Entertainment | 61,994,246 | 60.5 | 66.4 | |||||||||||||||||||||||||
KKR Rocket Loans Aggregator LLC, Partnership Interest | (w)(v)(ad) | Diversified Financials | 764,880 | 0.8 | 0.8 | |||||||||||||||||||||||||
KKR Zeno Aggregator LP (K2 Aviation), Partnership Interest | (w)(y)(v) | Capital Goods | 23,664,954 | 23.0 | 22.5 | |||||||||||||||||||||||||
Lenovo Group Ltd, Structured Mezzanine | (w)(v) | Technology Hardware & Equipment | 7.8% | 9/22/24 | € | 7.8 | 9.2 | 9.1 | ||||||||||||||||||||||
Lenovo Group Ltd, Structured Mezzanine | (w)(v) | Technology Hardware & Equipment | 7.8% | 9/22/24 | $ | 12.1 | 12.1 | 12.1 | ||||||||||||||||||||||
Lenovo Group Ltd, Structured Mezzanine | (w)(v) | Technology Hardware & Equipment | 11.8% | 9/22/24 | € | 5.9 | 6.9 | 6.8 | ||||||||||||||||||||||
Lenovo Group Ltd, Structured Mezzanine | (w)(v) | Technology Hardware & Equipment | 11.8% | 9/22/24 | £ | 1.6 | 2.2 | 2.1 | ||||||||||||||||||||||
Lenovo Group Ltd, Structured Mezzanine | (w)(v) | Technology Hardware & Equipment | 7.8% | 9/22/24 | £ | 2.1 | 2.9 | 2.9 | ||||||||||||||||||||||
Lenovo Group Ltd, Structured Mezzanine | (w)(v) | Technology Hardware & Equipment | 11.8% | 9/22/24 | $ | 9.1 | 9.1 | 9.1 | ||||||||||||||||||||||
NewStar Clarendon 2014-1A Class D | (w)(v) | Diversified Financials | 18.1% | 1/25/27 | $ | 8.3 | 2.5 | 3.5 | ||||||||||||||||||||||
Opendoor Labs Inc, 2L Term Loan | (w)(v) | Real Estate | 10.0% | 1/23/26 | $ | 151.0 | 148.9 | 151.0 | ||||||||||||||||||||||
Orchard Marine Limited, Class B Common Stock | (ac)(w)(y)(v) | Transportation | 1,964 | 3.1 | — | |||||||||||||||||||||||||
Orchard Marine Limited, Series A Preferred Stock | (ac)(w)(y)(v) | Transportation | 62,976 | 62.0 | 51.7 | |||||||||||||||||||||||||
Pretium Partners LLC P1, Structured Mezzanine | (w)(v) | Real Estate | 2.8%, 5.3% PIK (5.3% Max PIK) | 10/22/26 | $ | 6.7 | 6.2 | 6.7 | ||||||||||||||||||||||
Prime ST LLC, Private Equity | (ad)(w)(y)(v) | Real Estate | 6,634,509 | 8.3 | 10.8 | |||||||||||||||||||||||||
Prime ST LLC, Structured Mezzanine | (ad)(w)(v) | Real Estate | 5.0%, 6.0% PIK (6.0% Max PIK) | 3/12/30 | $ | 49.4 | 47.3 | 49.4 | ||||||||||||||||||||||
Star Mountain Diversified Credit Income Fund III, LP, Private Equity | (w)(o) | Diversified Financials | 21,000,000 | 21.0 | 21.1 | |||||||||||||||||||||||||
Toorak Capital Funding LLC, Membership Interest | (ad)(w)(y)(v) | Real Estate | 1,723,140 | 1.9 | 1.7 | |||||||||||||||||||||||||
Toorak Capital Partners LLC, Private Equity | (ad)(v) | Real Estate | 198,139,270 | 198.1 | 248.4 | |||||||||||||||||||||||||
Toorak Capital Partners LLC, Structured Mezzanine | (ad)(x) | Real Estate | L+650 PIK (L+650 Max PIK) | 11/11/21 | $ | 20.0 | 20.0 | 20.0 | ||||||||||||||||||||||
Wind River CLO Ltd. 2012 1A Class Subord. B | (w)(y)(v) | Diversified Financials | 1/15/26 | $ | 42.5 | 13.5 | 1.2 | |||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||
Total Asset Based Finance | 2,070.1 | 2,124.0 | ||||||||||||||||||||||||||||
Unfunded commitments | (124.4 | ) | (124.4 | ) | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||
Net Asset Based Finance | 1,945.7 | 1,999.6 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||
Credit Opportunities Partners JV, LLC—18.1% | ||||||||||||||||||||||||||||||
Credit Opportunities Partners JV, LLC | (v)(w)(ad) | Diversified Financials | $ | 1,462.3 | 1,396.7 | 1,398.8 | ||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||
Credit Opportunities Partners JV, LLC | 1,396.7 | 1,398.8 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor(b) | Maturity | Number of Shares | Amortized Cost | Fair Value(d) | ||||||||||||||||||||||
Equity/Other—10.9%(e) | ||||||||||||||||||||||||||||||
Abaco Energy Technologies LLC, Common Stock | (y)(v) | Energy | 3,055,556 | $ | 0.2 | $ | 0.3 | |||||||||||||||||||||||
Abaco Energy Technologies LLC, Preferred Stock | (y)(v) | Energy | 12,734,481 | 1.5 | 1.8 | |||||||||||||||||||||||||
Affordable Care Inc, Preferred Stock | (v)(ac) | Health Care Equipment & Services | 11.8% PIK (11.8% Max PIK) | 49,073,000 | 48.1 | 49.3 | ||||||||||||||||||||||||
American Vision Partners, Private Equity | (y)(v) | Health Care Equipment & Services | 2,450,230 | 2.5 | 2.5 | |||||||||||||||||||||||||
Amtek Global Technology Pte Ltd, Common Stock | (ad)(w)(y)(g)(v) | Automobiles & Components | 7,046,126 | — | — | |||||||||||||||||||||||||
Amtek Global Technology Pte Ltd, Ordinary Shares | (ad)(w)(y)(g) | Automobiles & Components | 5,735,804,056 | 30.7 | — |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor(b) | Maturity | Number of Shares | Amortized Cost | Fair Value(d) | ||||||||||||||
Amtek Global Technology Pte Ltd, Private Equity | (ad)(w)(y)(g) | Automobiles & Components | 4,097 | $ | — | $ | — | |||||||||||||||
Angelica Corp, Limited Partnership Interest | (y)(h) | Health Care Equipment & Services | 877,044 | 47.7 | — | |||||||||||||||||
Ap Plasman Inc, Warrant | (w)(y)(v) | Capital Goods | 5/25/26 | 6,985 | 2.5 | — | ||||||||||||||||
Arcos LLC/VA, Preferred Stock | (v) | Software & Services | L+950 PIK (L+950 Max PIK) | 1.0% | 4/30/31 | 15,000,000 | 13.9 | 15.2 | ||||||||||||||
Ardonagh Ltd, Ordinary Shares | (w)(y)(v) | Insurance | 16,450 | — | — | |||||||||||||||||
Ardonagh Ltd, Ordinary Shares | (w)(y)(v) | Insurance | 116,814 | 0.2 | 0.3 | |||||||||||||||||
Ardonagh Ltd, Preferred Stock | (w)(y)(v) | Insurance | 6,113,719 | 9.1 | 13.3 | |||||||||||||||||
Arena Energy LP, Warrants | (y)(v) | Energy | 68,186,525 | 0.4 | 0.5 | |||||||||||||||||
Ascent Resources Utica Holdings LLC / ARU Finance Corp, Common Stock | (y)(p) | Energy | 10,193 | 9.7 | 2.5 | |||||||||||||||||
Ascent Resources Utica Holdings LLC / ARU Finance Corp, Trade Claim | (y)(p) | Energy | 86,607,143 | 19.4 | 21.3 | |||||||||||||||||
Aspect Software Inc, Common Stock | (y)(l)(v)(s) | Software & Services | 1,309,955 | 2.3 | 2.7 | |||||||||||||||||
Aspect Software Inc, Warrant | (y)(l)(v)(s) | Software & Services | 1/15/24 | 181,730 | 0.3 | 0.3 | ||||||||||||||||
ATX Networks Corp, Common Stock | (w)(y)(v)(s)(ad) | Capital Goods | 3,483 | — | — | |||||||||||||||||
AVF Parent LLC, Trade Claim | (y)(v) | Retailing | 44,507 | — | — | |||||||||||||||||
Belk Inc, Common Stock | (ac)(y)(v) | Retailing | 94,950 | — | — | |||||||||||||||||
Borden (New Dairy Opco), Common Stock | (ac)(y)(h)(n) | Food, Beverage & Tobacco | 11,167,000 | 9.1 | 10.1 | |||||||||||||||||
Bowery Farming Inc, Warrants | (y)(v) | Food, Beverage & Tobacco | 4/30/26 | 161,828 | 0.0 | 0.0 | ||||||||||||||||
Catalina Marketing Corp, Common Stock | (y)(v) | Media & Entertainment | 6,522 | — | — | |||||||||||||||||
CDS US Intermediate Holdings Inc, Warrant | (w)(y)(v) | Media & Entertainment | 2,023,714 | — | — | |||||||||||||||||
Cengage Learning, Inc, Common Stock | (y)(v) | Media & Entertainment | 227,802 | 7.5 | 4.6 | |||||||||||||||||
Charlotte Russe Inc, Common Stock | (ac)(y)(v) | Retailing | 22,575 | 12.5 | — | |||||||||||||||||
Chisholm Oil & Gas Operating LLC, Series A Units | (y)(v)(n)(o) | Energy | 300,000 | 0.1 | — | |||||||||||||||||
Cimarron Energy Inc, Common Stock | (y)(v) | Energy | 4,302,293 | — | — | |||||||||||||||||
Cimarron Energy Inc, Participation Option | (y)(v) | Energy | 25,000,000 | — | — | |||||||||||||||||
Constellis Holdings LLC, Private Equity | (ac)(y)(f)(v) | Capital Goods | 849,702 | 10.3 | 9.4 | |||||||||||||||||
CTI Foods Holding Co LLC, Common Stock | (y)(v) | Food, Beverage & Tobacco | 5,892 | 0.7 | 0.0 | |||||||||||||||||
Cubic Corp, Preferred Stock | (v) | Software & Services | 11.0% PIK (11.0% Max PIK) | 42,141,600 | 39.7 | 42.2 | ||||||||||||||||
Empire Today LLC, Common Stock | (v) | Retailing | 1,005 | 5.7 | 10.0 | |||||||||||||||||
Envigo Laboratories Inc, Series A Warrant | (y)(s) | Health Care Equipment & Services | 4/29/24 | 10,924 | — | — | ||||||||||||||||
Envigo Laboratories Inc, Series B Warrant | (y)(s) | Health Care Equipment & Services | 4/29/24 | 17,515 | — | — | ||||||||||||||||
Fairway Group Holdings Corp, Common Stock | (ac)(y)(v) | Food & Staples Retailing | 103,091 | — | — | |||||||||||||||||
Fox Head Inc, Common Stock | (y)(j)(v) | Consumer Durables & Apparel | 10,000,000 | 8.0 | 10.4 | |||||||||||||||||
Fronton BV, Common Stock | (ac)(y)(o) | Consumer Services | 14,943 | — | 1.5 | |||||||||||||||||
Genesys Telecommunications Laboratories Inc, Class A Shares | (y)(v) | Technology Hardware & Equipment | 40,529 | — | — | |||||||||||||||||
Genesys Telecommunications Laboratories Inc, Ordinary Shares | (y)(v) | Technology Hardware & Equipment | 41,339 | — | — | |||||||||||||||||
Genesys Telecommunications Laboratories Inc, Preferred Stock | (y)(v) | Technology Hardware & Equipment | 1,050,465 | — | — | |||||||||||||||||
Harvey Industries Inc, Common Stock | (y)(v) | Capital Goods | 5,000,000 | 2.2 | 4.2 | |||||||||||||||||
Hilding Anders, Class A Common Stock | (ad)(w)(y)(v) | Consumer Durables & Apparel | 4,503,411 | 0.1 | — |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor(b) | Maturity | Number of Shares | Amortized Cost | Fair Value(d) | ||||||||||||||
Hilding Anders, Class B Common Stock | (ad)(w)(y)(v) | Consumer Durables & Apparel | 574,791 | $ | 0.0 | $ | — | |||||||||||||||
Hilding Anders, Class C Common Stock | (ad)(w)(y)(v) | Consumer Durables & Apparel | 213,201 | — | — | |||||||||||||||||
Hilding Anders, Equity Options | (ad)(w)(y)(v) | Consumer Durables & Apparel | 11/30/25 | 236,160,807 | 15.0 | — | ||||||||||||||||
HM Dunn Co Inc, Preferred Stock, Series A | (ad)(y)(v)(s) | Capital Goods | 85,385 | 7.1 | 8.6 | |||||||||||||||||
HM Dunn Co Inc, Preferred Stock, Series B | (ad)(y)(v)(s) | Capital Goods | 15,000 | — | — | |||||||||||||||||
Imagine Communications Corp, Common Stock | (y)(v) | Media & Entertainment | 33,034 | 3.8 | 2.5 | |||||||||||||||||
Jones Apparel Holdings, Inc., Common Stock | (y)(v) | Consumer Durables & Apparel | 5,451 | 0.9 | — | |||||||||||||||||
JW Aluminum Co, Common Stock | (ad)(y)(j)(v)(u) | Materials | 2,105 | 0.0 | — | |||||||||||||||||
JW Aluminum Co, Preferred Stock | (ad)(j)(v)(u) | Materials | 12.5% PIK (12.5% Max PIK) | 2/15/28 | 15,279 | 171.1 | 119.0 | |||||||||||||||
Maverick Natural Resources LLC, Common Stock | (y)(n)(o) | Energy | 259,211 | 84.5 | 133.9 | |||||||||||||||||
MB Precision Holdings LLC, Class A—2 Units | (y)(n)(o) | Capital Goods | 8,081,288 | 0.5 | — | |||||||||||||||||
Med-Metrix, Common Stock | (y)(h) | Software & Services | 29,403 | 2.9 | 2.9 | |||||||||||||||||
Miami Beach Medical Group LLC, Common Stock | (y)(v) | Health Care Equipment & Services | 5,000,000 | 4.8 | 4.1 | |||||||||||||||||
Micronics Filtration Holdings Inc, Common Stock | (ac)(y)(v) | Capital Goods | 53,073 | 0.6 | — | |||||||||||||||||
Micronics Filtration Holdings Inc, Preferred Stock, Series A | (ac)(y)(v) | Capital Goods | 55 | 0.6 | — | |||||||||||||||||
Micronics Filtration Holdings Inc, Preferred Stock, Series B | (ac)(y)(v) | Capital Goods | 23 | 0.2 | — | |||||||||||||||||
Micronics Filtration Holdings Inc, Preferred Stock, Series B PIK | (ac)(y)(v) | Capital Goods | 112,780 | — | — | |||||||||||||||||
Micronics Filtration Holdings Inc, Preferred Stock, Series C PIK | (ac)(y)(v) | Capital Goods | 54,000 | — | — | |||||||||||||||||
Misys Ltd, Preferred Stock | (w)(v) | Software & Services | L+1,025 PIK (L+1,025 Max PIK) | 77,447,484 | 71.3 | 76.9 | ||||||||||||||||
NBG Home, Common Stock | (y)(v) | Consumer Durables & Apparel | 1,903 | 2.6 | 0.1 | |||||||||||||||||
Nine West Holdings Inc, Common Stock | (y)(v) | Consumer Durables & Apparel | 5,451 | 6.5 | — | |||||||||||||||||
One Call Care Management Inc, Common Stock | (ad)(y)(v) | Health Care Equipment & Services | 34,872 | 2.1 | 2.4 | |||||||||||||||||
One Call Care Management Inc, Preferred Stock A | (ad)(y)(v) | Health Care Equipment & Services | 371,992 | 22.8 | 25.4 | |||||||||||||||||
One Call Care Management Inc, Preferred Stock B | (ad)(v) | Health Care Equipment & Services | 9.0% PIK (9.0% Max PIK) | 10/25/29 | 7,672,347 | 8.0 | 9.0 | |||||||||||||||
Petroplex Acidizing Inc, Preferred Stock A | (ac)(v)(ac)(y)(v) | Energy | 25,012,540 | 4.9 | — | |||||||||||||||||
Petroplex Acidizing Inc, Warrant | (ac)(y)(v) | Energy | 12/15/26 | 8 | — | — | ||||||||||||||||
Polyconcept North America Inc, Class A—1 Units | (y)(v) | Household & Personal Products | 30,000 | 3.0 | 3.3 | |||||||||||||||||
Production Resource Group LLC, Preferred Stock, Series A PIK | (ad)(y)(v) | Media & Entertainment | 8/21/24 | 434,250 | 18.1 | 13.9 | ||||||||||||||||
Production Resource Group LLC, Preferred Stock, Series B PIK | (ad)(y)(v) | Media & Entertainment | 8/21/24 | 140 | — | — | ||||||||||||||||
Professional Plumbing Group Inc, Common Stock | (y)(j) | Materials | 3,000,000 | 2.6 | 2.7 | |||||||||||||||||
Proserv Acquisition LLC, Class A Common Units | (ac)(w)(y)(v) | Energy | 2,635,005 | 33.5 | 3.4 | |||||||||||||||||
Proserv Acquisition LLC, Class A Preferred Units | (ac)(w)(y)(v) | Energy | 837,780 | 5.4 | 9.5 | |||||||||||||||||
Quorum Health Corp, Trade Claim | (y)(v) | Health Care Equipment & Services | 8,301,000 | 0.7 | 0.9 | |||||||||||||||||
Quorum Health Corp, Trust Initial Funding Units | (y)(v) | Health Care Equipment & Services | 143,400 | 0.2 | 0.2 | |||||||||||||||||
Ridgeback Resources Inc, Common Stock | (w)(y)(j)(v)(u) | Energy | 1,969,418 | 9.1 | 10.0 | |||||||||||||||||
Sequential Brands Group Inc., Common Stock | (y)(j)(v) | Consumer Durables & Apparel | 18,519 | 2.8 | — | |||||||||||||||||
Sorenson Communications LLC, Common Stock | (ac)(y)(j)(v)(u) | Telecommunication Services | 89,959 | 42.5 | 74.5 |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor(b) | Maturity | Number of Shares | Amortized Cost | Fair Value(d) | ||||||||||||||||||||||
Sound United LLC, Common Stock | (ad)(v) | Consumer Durables & Apparel | 12,857,143 | $ | 17.3 | $ | 75.2 | |||||||||||||||||||||||
Stuart Weitzman Inc, Common Stock | (y)(v) | Consumer Durables & Apparel | 5,451 | — | — | |||||||||||||||||||||||||
Sungard Availability Services Capital Inc, Common Stock | (ac)(y)(v)(s)(u) | Software & Services | 262,516 | 6.9 | 5.1 | |||||||||||||||||||||||||
Swift Worldwide Resources Holdco Ltd, Common Stock | (y)(v) | Energy | 1,250,000 | 1.2 | 1.0 | |||||||||||||||||||||||||
ThermaSys Corp, Common Stock | (ac)(y)(v)(u) | Capital Goods | 17,383,026 | 10.2 | — | |||||||||||||||||||||||||
ThermaSys Corp, Preferred Stock | (ac)(y)(v) | Capital Goods | 1,529 | 1.7 | — | |||||||||||||||||||||||||
Trace3 Inc, Common Stock | (y)(v) | Software & Services | 61,798 | 3.9 | 10.2 | |||||||||||||||||||||||||
Versatile Processing Group Inc, Class A—2 Units | (y)(u) | Materials | 3,637,500 | 3.6 | — | |||||||||||||||||||||||||
Warren Resources Inc, Common Stock | (ad)(y)(v) | Energy | 3,483,788 | 12.8 | 21.1 | |||||||||||||||||||||||||
Zeta Interactive Holdings Corp, Common Stock | (aa)(y)(v) | Software & Services | 3,610,212 | 30.8 | 21.2 | |||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||
Total Equity/Other | 900.9 | 839.4 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||
TOTAL INVESTMENTS—204.6% | $ | 15,723.9 | 15,824.2 | |||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
LIABILITIES IN EXCESS OF OTHER ASSETS—(104.6%) | (8,088.2 | ) | ||||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
NET ASSETS—100% | $ | 7,736.0 | ||||||||||||||||||||||||||||
|
|
See notes to unaudited consolidated financial statements.
FS Investment CorporationKKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 20172021
(in thousands,millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||
JSS Holdings, Inc. | (g)(p) | Capital Goods | L+800, 0.0% PIK (2.5% Max PIK) | 1.0% | 3/31/23 | $ | 20,182 | $ | 20,182 | $ | 20,195 | |||||||||||
Latham Pool Products, Inc. | (e)(h) | Commercial & Professional Services | L+775 | 1.0% | 6/29/21 | 66,683 | 66,683 | 67,350 | ||||||||||||||
LEAS Acquisition Co Ltd. | (g)(i) | Capital Goods | L+750 | 1.0% | 6/30/20 | € | 26,576 | 36,151 | 31,669 | |||||||||||||
LEAS Acquisition Co Ltd. | (f)(i) | Capital Goods | L+750 | 1.0% | 6/30/20 | $ | 9,323 | 9,323 | 9,404 | |||||||||||||
MB Precision Holdings LLC | (g) | Capital Goods | L+725, 2.3% PIK (2.3% Max PIK) | 1.3% | 1/23/21 | 13,569 | 13,569 | 12,552 | ||||||||||||||
Micronics Filtration, LLC | (e)(g)(h) | Capital Goods | L+850 | 1.3% | 12/11/19 | 62,975 | 62,845 | 62,345 | ||||||||||||||
MORSCO, Inc. | (g) | Capital Goods | L+700 | 1.0% | 10/31/23 | 2,703 | 2,607 | 2,730 | ||||||||||||||
Nobel Learning Communities, Inc. | (g) | Consumer Services | L+450 | 1.0% | 5/5/21 | 24 | 24 | 24 | ||||||||||||||
Nobel Learning Communities, Inc. | (g)(p) | Consumer Services | L+450 | 1.0% | 5/5/21 | 115 | 115 | 115 | ||||||||||||||
Nobel Learning Communities, Inc. | (g) | Consumer Services | L+436 | 4.5% | 5/5/23 | 1,056 | 1,056 | 1,058 | ||||||||||||||
Nobel Learning Communities, Inc. | (g)(p) | Consumer Services | L+375 | 4.5% | 5/5/23 | 621 | 621 | 622 | ||||||||||||||
North Haven Cadence Buyer, Inc. | (g)(p) | Consumer Services | L+500 | 1.0% | 9/2/21 | 938 | 938 | 938 | ||||||||||||||
North Haven Cadence Buyer, Inc. | (e)(g) | Consumer Services | L+810 | 1.0% | 9/2/22 | 27,171 | 27,171 | 27,579 | ||||||||||||||
North Haven Cadence Buyer, Inc. | (g)(p) | Consumer Services | L+750 | 1.0% | 9/2/22 | 4,063 | 4,063 | 4,123 | ||||||||||||||
Nova Wildcat Amerock, LLC | (g) | Consumer Durables & Apparel | L+803 | 1.3% | 9/10/19 | 17,312 | 17,312 | 17,226 | ||||||||||||||
PHRC License, LLC | (f)(g) | Consumer Services | L+850 | 1.5% | 4/28/22 | 50,625 | 50,625 | 51,131 | ||||||||||||||
Polymer Additives, Inc. | (g) | Materials | L+888 | 1.0% | 12/19/22 | 10,511 | 10,511 | 10,774 | ||||||||||||||
Polymer Additives, Inc. | (g) | Materials | L+834 | 1.0% | 12/19/22 | 11,019 | 11,019 | 11,074 | ||||||||||||||
Polymer Additives, Inc. | (g) | Materials | L+875 | 1.0% | 12/19/22 | € | 15,000 | 16,982 | 18,074 | |||||||||||||
Power Distribution, Inc. | (e)(g) | Capital Goods | L+725 | 1.3% | 1/25/23 | $ | 30,004 | 30,004 | 30,304 | |||||||||||||
Roadrunner Intermediate Acquisition Co., LLC | (e)(g)(h) | Health Care Equipment & Services | L+725 | 1.0% | 3/15/23 | 35,150 | 35,150 | 35,312 | ||||||||||||||
Rogue Wave Software, Inc. | (e)(g)(h) | Software & Services | L+860 | 1.0% | 9/25/21 | 33,188 | 33,188 | 33,519 | ||||||||||||||
Safariland, LLC | (e)(g)(h) | Capital Goods | L+769 | 1.1% | 11/18/23 | 126,107 | 126,107 | 127,684 | ||||||||||||||
Safariland, LLC | (g)(p) | Capital Goods | L+725 | 1.1% | 11/18/23 | 33,282 | 33,282 | 33,698 | ||||||||||||||
Sequel Youth and Family Services, LLC | (e)(g)(h) | Health Care Equipment & Services | L+796 | 1.0% | 9/1/22 | 80,000 | 80,000 | 79,976 | ||||||||||||||
Sequel Youth and Family Services, LLC | (g)(p) | Health Care Equipment & Services | L+700 | 1.0% | 9/1/22 | 18,824 | 18,824 | 18,818 | ||||||||||||||
Sequential Brands Group, Inc. | (e)(g)(h) | Consumer Durables & Apparel | L+900 | 7/1/22 | 79,442 | 79,442 | 80,237 | |||||||||||||||
Sorenson Communications, Inc. | (e)(g)(h) | Telecommunication Services | L+575 | 2.3% | 4/30/20 | 90,916 | 90,690 | 91,541 | ||||||||||||||
Sports Authority, Inc. | (g)(k)(q) | Retailing | L+600 | 1.5% | 11/16/17 | 6,318 | 4,208 | 316 | ||||||||||||||
SSC (Lux) Limited S.à r.l. | (e)(g)(i) | Health Care Equipment & Services | L+750 | 1.0% | 9/10/24 | 45,455 | 45,455 | 46,023 | ||||||||||||||
Staples Canada ULC | (g)(i) | Retailing | L+700 | 1.0% | 9/12/23 | C$ | 20,987 | 17,333 | 16,860 | |||||||||||||
SunGard Availability Services Capital, Inc. | (g) | Software & Services | L+700 | 1.0% | 9/30/21 | $ | 4,382 | 4,340 | 4,141 | |||||||||||||
Trace3, LLC | (e)(h) | Software & Services | L+775 | 1.0% | 6/6/23 | 31,172 | 31,172 | 31,328 | ||||||||||||||
Transplace Texas, LP | (e)(g)(h) | Transportation | L+742 | 1.0% | 9/16/21 | 24,486 | 24,486 | 24,486 | ||||||||||||||
U.S. Xpress Enterprises, Inc. | (e)(f)(h) | Transportation | L+1050, 0.0% PIK (1.8% Max PIK) | 1.5% | 5/30/19 | 52,872 | 52,872 | 52,938 | ||||||||||||||
USI Senior Holdings, Inc. | (e)(g) | Capital Goods | L+780 | 1.0% | 1/5/22 | 56,582 | 56,582 | 56,749 | ||||||||||||||
USI Senior Holdings, Inc. | (g)(p) | Capital Goods | L+725 | 1.0% | 1/5/22 | 11,513 | 11,513 | 11,547 |
See notes to unaudited consolidated financial statements.
FS Investment Corporation
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2017
(in thousands, except share amounts)Foreign currency forward contracts
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||||||||||
VPG Metals Group LLC | (e)(g)(h) | Materials | L+1050 | 1.0% | 12/30/20 | $ | 115,680 | $ | 115,600 | $ | 115,970 | |||||||||||||||||||
Warren Resources, Inc. | (f)(g) | Energy | | L+900, 1.0% PIK (1.0% Max PIK) | | 1.0% | 5/22/20 | 2,032 | 2,032 | 1,991 | ||||||||||||||||||||
Warren Resources, Inc. | (g)(p) | Energy | | L+900, 1.0% PIK (1.0% Max PIK) | | 1.0% | 5/22/20 | 144 | 144 | 141 | ||||||||||||||||||||
Waste Pro USA, Inc. | (e)(g)(h) | Commercial & Professional Services | L+750 | 1.0% | 10/15/20 | 93,831 | 93,831 | 95,121 | ||||||||||||||||||||||
Zeta Interactive Holdings Corp. | (e)(g)(h) | Software & Services | L+750 | 1.0% | 7/29/22 | 9,766 | 9,787 | 9,928 | ||||||||||||||||||||||
Zeta Interactive Holdings Corp. | (g)(r) | Software & Services | L+750 | 1.0% | 7/29/22 | 2,857 | 2,835 | 2,884 | ||||||||||||||||||||||
Zeta Interactive Holdings Corp. | (g)(p) | Software & Services | L+750 | 1.0% | 7/29/22 | 1,777 | 1,777 | 1,804 | ||||||||||||||||||||||
Zeta Interactive Holdings Corp. | (g)(p)(r) | Software & Services | L+750 | 1.0% | 7/29/22 | 457 | 457 | 464 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||
Total Senior Secured Loans—First Lien | 2,516,400 | 2,522,155 | ||||||||||||||||||||||||||||
Unfunded Loan Commitments | (149,450 | ) | (149,450 | ) | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||
Net Senior Secured Loans—First Lien | 2,366,950 | 2,372,705 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||
Senior Secured Loans—Second Lien—8.2% | ||||||||||||||||||||||||||||||
American Bath Group, LLC | (g) | Capital Goods | L+975 | 1.0% | 9/30/24 | 18,000 | 17,565 | 18,045 | ||||||||||||||||||||||
Arena Energy, LP | (g) | Energy | | L+900, 4.0% PIK (4.0% Max PIK) | | 1.0% | 1/24/21 | 8,198 | 8,198 | 8,001 | ||||||||||||||||||||
Brock Holdings III, Inc. | (g)(q) | Energy | Prime+725 | 3/16/18 | 6,923 | 6,910 | 3,652 | |||||||||||||||||||||||
Byrider Finance, LLC | (f)(g) | Automobiles & Components | | L+1000, 0.5% PIK (4.0% Max PIK) | | 1.3% | 8/22/20 | 13,548 | 13,548 | 13,565 | ||||||||||||||||||||
Chisholm Oil and Gas Operating, LLC | (g) | Energy | L+800 | 1.0% | 3/21/24 | 1,000 | 1,000 | 1,003 | ||||||||||||||||||||||
Compuware Corp. | (g) | Software & Services | L+825 | 1.0% | 12/15/22 | 1,506 | 1,448 | 1,522 | ||||||||||||||||||||||
Gruden Acquisition, Inc. | (g) | Transportation | L+850 | 1.0% | 8/18/23 | 15,000 | 14,440 | 14,281 | ||||||||||||||||||||||
JW Aluminum Co. | (e)(f)(g)(h)(t) | Materials | | L+850 PIK (L+850 Max PIK) | | 0.8% | 11/17/20 | 37,531 | 37,516 | 38,094 | ||||||||||||||||||||
Logan’s Roadhouse, Inc. | (g)(s) | Consumer Services | | L+850 PIK (L+850 Max PIK) | | 1.0% | 11/23/20 | 21,393 | 21,252 | 14,475 | ||||||||||||||||||||
LTI Holdings, Inc. | (e) | Materials | L+875 | 1.0% | 5/16/25 | 6,482 | 6,358 | 6,506 | ||||||||||||||||||||||
Spencer Gifts LLC | (e)(h) | Retailing | L+825 | 1.0% | 6/29/22 | 30,000 | 29,898 | 16,800 | ||||||||||||||||||||||
Stadium Management Corp. | (e)(g)(h) | Consumer Services | L+825 | 1.0% | 2/27/21 | 55,689 | 55,689 | 55,550 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||
Total Senior Secured Loans—Second Lien | 213,822 | 191,494 | ||||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||||
Senior Secured Bonds—8.6% | ||||||||||||||||||||||||||||||
Advanced Lighting Technologies, Inc. | (f)(g)(s) | Materials | | 5.3%, 7.3% PIK (7.3% Max PIK) |
| 6/1/19 | 85,616 | 32,222 | 36,815 | |||||||||||||||||||||
Black Swan Energy Ltd. | (e)(i) | Energy | 9.0% | 1/20/24 | 6,000 | 6,000 | 5,925 | |||||||||||||||||||||||
Caesars Entertainment Resort Properties, LLC | (e)(g) | Consumer Services | 11.0% | 10/1/21 | 24,248 | 24,060 | 25,830 | |||||||||||||||||||||||
FourPoint Energy, LLC | (e)(f)(h) | Energy | 9.0% | 12/31/21 | 74,813 | 72,860 | 76,215 | |||||||||||||||||||||||
Global A&T Electronics Ltd. | (g)(i)(k)(q) | Semiconductors & Semiconductor Equipment | 10.0% | 2/1/19 | 7,000 | 6,967 | 6,288 |
See notes to unaudited consolidated financial statements.
FS Investment Corporation
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2017
(in thousands, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||
Mood Media Corp. | (f)(g)(i)(s) | Media | L+600, 8.0% PIK (8.0% Max PIK) | 1.0% | 6/28/24 | $ | 21,568 | $ | 21,568 | $ | 21,568 | |||||||||||
Ridgeback Resources Inc. | (f)(i) | Energy | 12.0% | 12/29/20 | 132 | 130 | 132 | |||||||||||||||
Sorenson Communications, Inc. | (f) | Telecommunication Services | 9.0%, 0.0% PIK (9.0% Max PIK) | 10/31/20 | 19,898 | 19,443 | 19,923 | |||||||||||||||
Sunnova Energy Corp. | (g) | Energy | 6.0%, 6.0% PIK (6.0% Max PIK) | 10/24/18 | 1,042 | 1,042 | 1,042 | |||||||||||||||
Velvet Energy Ltd. | (g)(i) | Energy | 9.0% | 10/5/23 | 5,000 | 5,000 | 4,964 | |||||||||||||||
|
|
|
| |||||||||||||||||||
Total Senior Secured Bonds | 189,292 | 198,702 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||
Subordinated Debt—24.0% | ||||||||||||||||||||||
Ascent Resources Utica Holdings, LLC | (g) | Energy | 10.0% | 4/1/22 | 40,000 | 40,000 | 43,150 | |||||||||||||||
Aurora Diagnostics, LLC | (e)(f)(h) | Health Care Equipment & Services | 10.8%, 1.5% PIK (1.5% Max PIK) | 1/15/20 | 14,966 | 13,578 | 13,831 | |||||||||||||||
Bellatrix Exploration Ltd. | (g)(i) | Energy | 8.5% | 5/15/20 | 5,000 | 4,941 | 4,680 | |||||||||||||||
Brooklyn Basketball Holdings, LLC | (f)(g) | Consumer Services | L+725 | 10/25/19 | 19,873 | 19,873 | 20,171 | |||||||||||||||
CEC Entertainment, Inc. | (f) | Consumer Services | 8.0% | 2/15/22 | 5,000 | 5,009 | 5,224 | |||||||||||||||
Ceridian HCM Holding, Inc. | (f)(g) | Commercial & Professional Services | 11.0% | 3/15/21 | 17,393 | 17,863 | 18,463 | |||||||||||||||
DEI Sales, Inc. | (e)(g) | Consumer Durables & Apparel | 9.0%, 4.0% PIK (4.0% Max PIK) | 2/28/23 | 66,348 | 65,554 | 65,352 | |||||||||||||||
EV Energy Partners, L.P. | (f) | Energy | 8.0% | 4/15/19 | 265 | 251 | 96 | |||||||||||||||
Global Jet Capital Inc. | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 1/30/25 | 818 | 818 | 832 | |||||||||||||||
Global Jet Capital Inc. | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 4/30/25 | 5,199 | 5,199 | 5,289 | |||||||||||||||
Global Jet Capital Inc. | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 9/3/25 | 1,074 | 1,074 | 1,093 | |||||||||||||||
Global Jet Capital Inc. | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 9/29/25 | 1,011 | 1,011 | 1,029 | |||||||||||||||
Global Jet Capital Inc. | (f)(g)(i) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 12/4/25 | 74,649 | 74,649 | 75,955 | |||||||||||||||
Global Jet Capital Inc. | (f)(g)(i) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 12/9/25 | 12,209 | 12,209 | 12,422 | |||||||||||||||
Global Jet Capital Inc. | (f)(i) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 1/29/26 | 6,393 | 6,393 | 6,505 | |||||||||||||||
Global Jet Capital Inc. | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 4/14/26 | 13,069 | 13,069 | 13,298 | |||||||||||||||
Global Jet Capital Inc. | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 12/2/26 | 12,828 | 12,828 | 13,052 | |||||||||||||||
Greystone Mezzanine Equity Member Corp. | (g)(i)(p) | Diversified Financials | L+650 | 4.5% | 9/15/25 | 27,000 | 27,000 | 27,000 |
See notes to unaudited consolidated financial statements.
FS Investment Corporation
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2017
(in thousands, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||||||||
Imagine Communications Corp. | (g) | Media | | 12.5% PIK (12.5% Max PIK) |
| 8/4/18 | $ | 622 | $ | 622 | $ | 622 | ||||||||||||||||
Jupiter Resources Inc. | (f)(g)(i) | Energy | 8.5% | 10/1/22 | 6,425 | 5,594 | 4,614 | |||||||||||||||||||||
NewStar Financial, Inc. | (g)(i) | Diversified Financials | | 8.3%, 0.0% PIK (8.8% Max PIK) | | 12/4/24 | 75,000 | 62,345 | 77,250 | |||||||||||||||||||
P.F. Chang’s China Bistro, Inc. | (f)(g) | Consumer Services | 10.3% | 6/30/20 | 11,433 | 11,681 | 10,983 | |||||||||||||||||||||
PriSo Acquisition Corp. | (g) | Capital Goods | 9.0% | 5/15/23 | 10,155 | 10,054 | 10,821 | |||||||||||||||||||||
S1 Blocker Buyer Inc. | (g) | Commercial & Professional Services | | 10.0% PIK (10.0% Max PIK) |
| 10/31/22 | 127 | 127 | 139 | |||||||||||||||||||
Sorenson Communications, Inc. | (f) | Telecommunication Services | | 13.9%, 0.0% PIK (13.9% Max PIK) | | 10/31/21 | 15,122 | 14,408 | 14,366 | |||||||||||||||||||
SunGard Availability Services Capital, Inc. | (f)(g) | Software & Services | 8.8% | 4/1/22 | 10,750 | 8,606 | 7,297 | |||||||||||||||||||||
ThermaSys Corp. | (e)(f)(g) | Capital Goods | | 6.5%, 5.0% PIK (5.0% Max PIK) | | 5/3/20 | 143,409 | 143,409 | 127,096 | |||||||||||||||||||
VPG Metals Group LLC | (e)(g) | Materials | | 11.0%, 2.0% PIK (2.0% Max PIK) | | 6/30/18 | 2,166 | 2,166 | 2,155 | |||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||
Total Subordinated Debt | 580,331 | 582,785 | ||||||||||||||||||||||||||
Unfunded Debt Commitments | (27,000 | ) | (27,000 | ) | ||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||
Net Subordinated Debt | 553,331 | 555,785 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||
Collateralized Securities—2.5% | ||||||||||||||||||||||||||||
MP42013-2A Class Subord. B | (f)(g)(i) | Diversified Financials | 15.2% | 10/25/25 | 21,000 | 11,176 | 12,751 | |||||||||||||||||||||
NewStar Clarendon2014-1A Class D | (g)(i) | Diversified Financials | L+435 | 1/25/27 | 1,560 | 1,483 | 1,554 | |||||||||||||||||||||
NewStar Clarendon2014-1A Class Subord. B | (g)(i) | Diversified Financials | 15.0% | 1/25/27 | 17,900 | 13,405 | 14,845 | |||||||||||||||||||||
Rampart CLO 2007 1A Class Subord. | (g)(i) | Diversified Financials | 8.5% | 10/25/21 | 10,000 | 775 | 771 | |||||||||||||||||||||
Wind River CLO Ltd. 2012 1A Class Subord. B | (g)(i) | Diversified Financials | 12.3% | 1/15/26 | 42,504 | 21,632 | 27,588 | |||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||
Total Collateralized Securities | 48,471 | 57,509 | ||||||||||||||||||||||||||
|
|
|
|
See notes to unaudited consolidated financial statements.
FS Investment Corporation
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2017
(in thousands, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Number of Shares | Amortized Cost | Fair Value(d) | |||||||||||||||||||||||||
Equity/Other—23.1%(j) | ||||||||||||||||||||||||||||||
5 Arches, LLC, Common Equity | (g)(i)(m) | Diversified Financials | 20,000 | $ | 500 | $ | 500 | |||||||||||||||||||||||
Advanced Lighting Technologies, Inc., Preferred Equity | (g)(k)(s) | Materials | 3,652 | — | 285 | |||||||||||||||||||||||||
Altus Power America Holdings, LLC, Common Equity | (g)(k) | Energy | 462,008 | 462 | 439 | |||||||||||||||||||||||||
Altus Power America Holdings, LLC, Preferred Equity | (g)(o) | Energy | 955,284 | 955 | 956 | |||||||||||||||||||||||||
AP Exhaust Holdings, LLC, Class A1 Common Units | (g)(k)(m) | Automobiles & Components | 8 | — | — | |||||||||||||||||||||||||
AP Exhaust Holdings, LLC, Class A1 Preferred Units | (g)(k)(m) | Automobiles & Components | 803 | 895 | 895 | |||||||||||||||||||||||||
APP Holdings, LP, Warrants, 5/25/2026 | (g)(i)(k) | Capital Goods | 698,482 | 2,545 | 3,178 | |||||||||||||||||||||||||
Aquilex Corp., Common Equity, Class A Shares | (g)(k)(m) | Commercial & Professional Services | 15,128 | 1,087 | 4,085 | |||||||||||||||||||||||||
Aquilex Corp., Common Equity, Class B Shares | (g)(k)(m) | Commercial & Professional Services | 32,637 | 1,690 | 8,812 | |||||||||||||||||||||||||
Ascent Resources Utica Holdings, LLC, Common Equity | (g)(k)(l) | Energy | 96,800,082 | 29,100 | 24,200 | |||||||||||||||||||||||||
ASG Everglades Holdings, Inc., Common Equity | (g)(k)(s) | Software & Services | 1,689,767 | 36,422 | 72,829 | |||||||||||||||||||||||||
ASG Everglades Holdings, Inc., Warrants, 6/27/2022 | (g)(k)(s) | Software & Services | 229,541 | 6,542 | 4,901 | |||||||||||||||||||||||||
Aspect Software Parent, Inc., Common Equity | (g)(k)(s) | Software & Services | 428,935 | 20,197 | 13,597 | |||||||||||||||||||||||||
Aurora Diagnostics Holdings, LLC, Warrants, 5/25/2027 | (e)(f)(g)(k) | Health Care Equipment & Services | 229,489 | 1,671 | 1,638 | |||||||||||||||||||||||||
Burleigh Point, Ltd., Warrants, 7/16/2020 | (g)(i)(k) | Retailing | 3,451,216 | 1,898 | — | |||||||||||||||||||||||||
Chisholm Oil and Gas, LLC, Series A Units | (g)(k)(m) | Energy | 58,533 | 59 | 57 | |||||||||||||||||||||||||
CSF Group Holdings, Inc., Common Equity | (g)(k) | Capital Goods | 391,300 | 391 | 333 | |||||||||||||||||||||||||
Eastman Kodak Co., Common Equity | (g)(k) | Consumer Durables & Apparel | 61,859 | 1,203 | 455 | |||||||||||||||||||||||||
Escape Velocity Holdings, Inc., Common Equity | (g)(k) | Software & Services | 19,312 | 193 | 207 | |||||||||||||||||||||||||
FourPoint Energy, LLC, Common Equity,Class C-II-A Units | (g)(k)(m) | Energy | 21,000 | 21,000 | 7,245 | |||||||||||||||||||||||||
FourPoint Energy, LLC, Common Equity, Class D Units | (g)(k)(m) | Energy | 3,937 | 2,601 | 1,368 | |||||||||||||||||||||||||
FourPoint Energy, LLC, Common Equity,Class E-II Units | (g)(k)(m) | Energy | 87,400 | 21,850 | 29,279 | |||||||||||||||||||||||||
FourPoint Energy, LLC, Common Equity,Class E-III Units | (g)(k)(m) | Energy | 70,875 | 17,719 | 24,275 | |||||||||||||||||||||||||
Fronton Investor Holdings, LLC, Class B Units | (g)(k)(m)(s) | Consumer Services | 14,943 | 15,011 | 26,747 | |||||||||||||||||||||||||
Global Jet Capital Holdings, LP, Preferred Equity | (f)(g)(i)(k) | Commercial & Professional Services | 42,281,308 | 42,281 | 48,624 | |||||||||||||||||||||||||
H.I.G. Empire Holdco, Inc., Common Equity | (g)(k) | Retailing | 375 | 1,118 | 1,296 | |||||||||||||||||||||||||
Harvey Holdings, LLC, Common Equity | (g)(k) | Capital Goods | 2,333,333 | 2,333 | 5,133 | |||||||||||||||||||||||||
Imagine Communications Corp., Common Equity, Class A Units | (g)(k) | Media | 33,034 | 3,783 | 3,072 | |||||||||||||||||||||||||
Industrial Group Intermediate Holdings, LLC, Common Equity | (g)(k)(m) | Materials | 441,238 | 441 | 684 | |||||||||||||||||||||||||
International Aerospace Coatings, Inc., Common Equity | (f)(k) | Capital Goods | 4,401 | 464 | 79 | |||||||||||||||||||||||||
International Aerospace Coatings, Inc., Preferred Equity | (f)(k) | Capital Goods | 1,303 | 1,303 | 1,303 | |||||||||||||||||||||||||
JMC Acquisition Holdings, LLC, Common Equity | (g)(k) | Capital Goods | 483 | 483 | 650 | |||||||||||||||||||||||||
JSS Holdco, LLC, Net Profits Interest | (g)(k) | Capital Goods | — | — | 493 | |||||||||||||||||||||||||
JW Aluminum Co., Common Equity | (f)(g)(k)(t) | Materials | 972 | — | 541 | |||||||||||||||||||||||||
JW Aluminum Co., Preferred Equity | (f)(g)(t) | Materials | 4,499 | 47,685 | 55,803 | |||||||||||||||||||||||||
MB Precision Investment Holdings LLC,Class A-2 Units | (g)(k)(m) | Capital Goods | 490,213 | 490 | — | |||||||||||||||||||||||||
Micronics Filtration Holdings, Inc., Common Equity | (g)(k) | Capital Goods | 53,073 | 553 | — | |||||||||||||||||||||||||
Micronics Filtration Holdings, Inc., Preferred Equity, Series A | (g)(k) | Capital Goods | 55 | 553 | 832 | |||||||||||||||||||||||||
Micronics Filtration Holdings, Inc., Preferred Equity, Series B | (g)(k) | Capital Goods | 23 | 229 | 246 |
See notes to unaudited consolidated financial statements.
FS Investment Corporation
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2017
(in thousands, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Number of Shares | Amortized Cost | Fair Value(d) | |||||||||||||||||||||||
Mood Media Corp., Common Equity | (g)(i)(k)(s) | Media | 16,243,967 | $ | 11,804 | $ | 29,385 | |||||||||||||||||||||
NewStar Financial, Inc., Warrants, 11/4/2024 | (g)(i)(k) | Diversified Financials | 3,000,000 | 15,058 | — | |||||||||||||||||||||||
North Haven Cadence TopCo, LLC, Common Equity | (g)(k) | Consumer Services | 1,041,667 | 1,042 | 1,406 | |||||||||||||||||||||||
PDI Parent LLC, Common Equity | (g)(k) | Capital Goods | 1,384,615 | 1,385 | 1,454 | |||||||||||||||||||||||
PSAV Holdings LLC, Common Equity | (f) | Technology Hardware & Equipment | 10,000 | 10,000 | 36,000 | |||||||||||||||||||||||
Ridgeback Resources Inc., Common Equity | (f)(i)(k) | Energy | 324,954 | 1,997 | 1,883 | |||||||||||||||||||||||
Roadhouse Holding Inc., Common Equity | (g)(k)(s) | Consumer Services | 6,672,036 | 6,932 | — | |||||||||||||||||||||||
S1 Blocker Buyer Inc., Common Equity | (g) | Commercial & Professional Services | 59 | 587 | 513 | |||||||||||||||||||||||
Safariland, LLC, Common Equity | (f)(k) | Capital Goods | 25,000 | 2,500 | 9,428 | |||||||||||||||||||||||
Safariland, LLC, Warrants, 7/27/2018 | (f)(k) | Capital Goods | 2,263 | 246 | 854 | |||||||||||||||||||||||
Safariland, LLC, Warrants, 9/20/2019 | (f)(k) | Capital Goods | 2,273 | 227 | 857 | |||||||||||||||||||||||
SandRidge Energy, Inc., Common Equity | (g)(i)(k) | Energy | 421,682 | 9,413 | 8,472 | |||||||||||||||||||||||
Sequel Industrial Products Holdings, LLC, Common Equity | (f)(g)(k) | Commercial & Professional Services | 33,306 | 3,400 | 12,546 | |||||||||||||||||||||||
Sequel Industrial Products Holdings, LLC, Preferred Equity | (f)(g) | Commercial & Professional Services | 8,000 | 13,065 | 13,068 | |||||||||||||||||||||||
Sequel Industrial Products Holdings, LLC, Warrants, 9/28/2022 | (g)(k) | Commercial & Professional Services | 1,293 | 1 | 331 | |||||||||||||||||||||||
Sequel Industrial Products Holdings, LLC, Warrants, 5/10/2022 | (f)(k) | Commercial & Professional Services | 19,388 | 12 | 5,365 | |||||||||||||||||||||||
Sequential Brands Group, Inc., Common Equity | (g)(k) | Consumer Durables & Apparel | 206,664 | 2,790 | 618 | |||||||||||||||||||||||
Sorenson Communications, Inc., Common Equity | (f)(k) | Telecommunication Services | 46,163 | — | 35,837 | |||||||||||||||||||||||
SSC Holdco Limited, Common Equity | (g)(i)(k) | Health Care Equipment & Services | 113,636 | 2,273 | 2,591 | |||||||||||||||||||||||
Sunnova Energy Corp., Common Equity | (g)(k) | Energy | 192,389 | 722 | 1,002 | |||||||||||||||||||||||
Sunnova Energy Corp., Preferred Equity | (g)(k) | Energy | 18,182 | 97 | 97 | |||||||||||||||||||||||
The Stars Group Inc., Warrants, 5/15/2024 | (g)(i)(k) | Consumer Services | 2,000,000 | 16,832 | 20,520 | |||||||||||||||||||||||
ThermaSys Corp., Common Equity | (f)(k) | Capital Goods | 51,813 | 1 | — | |||||||||||||||||||||||
ThermaSys Corp., Preferred Equity | (f)(k) | Capital Goods | 51,813 | 5,181 | — | |||||||||||||||||||||||
Viper Holdings, LLC, Series I Units | (g)(k) | Consumer Durables & Apparel | 308,948 | 509 | 479 | |||||||||||||||||||||||
Viper Holdings, LLC, Series II Units | (g)(k)(m) | Consumer Durables & Apparel | 316,770 | 522 | 491 | |||||||||||||||||||||||
Viper Parallel Holdings LLC, Class A Units | (g)(k) | Consumer Durables & Apparel | 649,538 | 1,070 | 1,007 | |||||||||||||||||||||||
VPG Metals Group LLC,Class A-2 Units | (f)(k) | Materials | 3,637,500 | 3,638 | 1,637 | |||||||||||||||||||||||
Warren Resources, Inc., Common Equity | (f)(g)(k) | Energy | 113,515 | 534 | 386 | |||||||||||||||||||||||
Zeta Interactive Holdings Corp., Preferred Equity, SeriesE-1 | (g)(k) | Software & Services | 215,662 | 1,714 | �� | 2,051 | ||||||||||||||||||||||
Zeta Interactive Holdings Corp., Preferred Equity, Series F | (g)(k) | Software & Services | 196,151 | 1,714 | 1,784 | |||||||||||||||||||||||
Zeta Interactive Holdings Corp., Warrants, 4/20/2027 | (g)(k) | Software & Services | 29,422 | — | 105 | |||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||
Total Equity/Other | 400,973 | 535,204 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||
TOTAL INVESTMENTS—168.8% | $ | 3,772,839 | 3,911,399 | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
LIABILITIES IN EXCESS OF OTHER ASSETS—(68.8%) | (1,594,706 | ) | ||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
NET ASSETS—100% | $ | 2,316,693 | ||||||||||||||||||||||||||
|
|
See notes to unaudited consolidated financial statements.
FS Investment Corporation
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2017
(in thousands, except share amounts)
Foreign Currency | Settlement Date | Counterparty | Amount and | US$ Value at Settlement Date | US$ Value at September 30, 2021 | Unrealized Appreciation (Depreciation) | ||||||||||||||||
AUD | 10/17/2022 | JP Morgan Chase Bank | A$ | 3.0 Sold | $ | 2.1 | $ | 2.2 | $ | (0.1 | ) | |||||||||||
CAD | 6/7/2022 | JP Morgan Chase Bank | $ | 1.4 Sold | 1.1 | 1.1 | 0.0 | |||||||||||||||
CAD | 6/7/2022 | JP Morgan Chase Bank | $ | 1.9 Sold | 1.5 | 1.5 | 0.0 | |||||||||||||||
CAD | 11/10/2022 | JP Morgan Chase Bank | $ | 1.5 Sold | 1.2 | 1.1 | 0.1 | |||||||||||||||
CAD | 11/15/2024 | JP Morgan Chase Bank | $ | 4.0 Sold | 3.2 | 3.1 | 0.1 | |||||||||||||||
EUR | 5/6/2022 | JP Morgan Chase Bank | € | 6.1 Sold | 7.5 | 7.1 | 0.4 | |||||||||||||||
EUR | 5/6/2022 | JP Morgan Chase Bank | € | 1.6 Sold | 2.0 | 1.9 | 0.1 | |||||||||||||||
EUR | 5/6/2022 | JP Morgan Chase Bank | € | 0.7 Sold | 0.9 | 0.9 | 0.0 | |||||||||||||||
EUR | 5/6/2022 | JP Morgan Chase Bank | € | 2.2 Sold | 2.7 | 2.6 | 0.1 | |||||||||||||||
EUR | 5/6/2022 | JP Morgan Chase Bank | € | 0.9 Sold | 1.2 | 1.1 | 0.1 | |||||||||||||||
EUR | 7/17/2023 | JP Morgan Chase Bank | € | 1.3 Sold | 1.7 | 1.5 | 0.2 | |||||||||||||||
EUR | 8/8/2025 | JP Morgan Chase Bank | € | 4.8 Sold | 5.7 | 5.8 | (0.1 | ) | ||||||||||||||
EUR | 8/8/2025 | JP Morgan Chase Bank | € | 1.9 Sold | 2.3 | 2.4 | (0.1 | ) | ||||||||||||||
GBP | 1/11/2023 | JP Morgan Chase Bank | £ | 1.9 Sold | 2.9 | 2.6 | 0.3 | |||||||||||||||
GBP | 1/11/2023 | JP Morgan Chase Bank | £ | 1.7 Sold | 2.6 | 2.3 | 0.3 | |||||||||||||||
GBP | 1/11/2023 | JP Morgan Chase Bank | £ | 3.4 Sold | 4.8 | 4.6 | 0.2 | |||||||||||||||
GBP | 1/11/2023 | JP Morgan Chase Bank | £ | 5.0 Sold | 6.6 | 6.7 | (0.1 | ) | ||||||||||||||
GBP | 1/11/2023 | JP Morgan Chase Bank | £ | 1.4 Sold | 1.9 | 1.9 | 0.0 | |||||||||||||||
GBP | 10/13/2023 | JP Morgan Chase Bank | £ | 6.2 Sold | 8.5 | 8.3 | 0.2 | |||||||||||||||
NOK | 8/8/2025 | JP Morgan Chase Bank | NOK | 49.1 Sold | 5.2 | 5.4 | (0.2 | ) | ||||||||||||||
NOK | 8/8/2025 | JP Morgan Chase Bank | NOK | 11.4 Sold | 1.2 | 1.3 | (0.1 | ) | ||||||||||||||
SEK | 3/15/2024 | JP Morgan Chase Bank | SEK | 72.8 Sold | 8.5 | 8.4 | 0.1 | |||||||||||||||
SEK | 5/10/2024 | JP Morgan Chase Bank | SEK | 430.3 Sold | 51.4 | 49.7 | 1.7 | |||||||||||||||
SEK | 5/10/2024 | JP Morgan Chase Bank | SEK | 503 Sold | 60.1 | 58.1 | 2.0 | |||||||||||||||
SEK | 5/10/2024 | JP Morgan Chase Bank | SEK | 34.5 Sold | 4.1 | 4.0 | 0.1 | |||||||||||||||
SEK | 8/8/2025 | JP Morgan Chase Bank | SEK | 119.3 Sold | 13.3 | 13.9 | (0.6 | ) | ||||||||||||||
SEK | 8/8/2025 | JP Morgan Chase Bank | SEK | 27.8 Sold | 3.1 | 3.2 | (0.1 | ) | ||||||||||||||
|
|
|
|
|
| |||||||||||||||||
Total | $ | 207.3 | $ | 202.7 | $ | 4.6 | ||||||||||||||||
|
|
|
|
|
|
(a) | Security may be an obligation of one or more entities affiliated with the named company. |
(b) | Certain variable rate securities in the Company’s portfolio bear interest at a rate determined by a publicly disclosed base rate plus a basis point spread. As of September 30, |
(c) | Denominated in |
(d) | Fair value determined by the Company’s board of directors (see Note |
(e) | Listed investments may be treated as debt for GAAP or tax purposes. |
(f) | Security or portion thereof held within |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
(g) | Security or portion thereof held within CCT Dublin Funding Limited. |
Security held within CCT Holdings II, LLC, a wholly-owned subsidiary of the Company. |
(i) | Security or portion thereof held within CCT Tokyo Funding LLC and pledged as collateral supporting the amounts outstanding under the revolving credit facility with Sumitomo Mitsui Banking Corporation (see Note 9). |
(j) | Security or portion thereof held within Cobbs Creek LLC and is pledged as collateral supporting the amounts outstanding under the senior secured revolving credit facility (see Note 9). |
(k) | Security or portion thereof held within Darby Creek LLC and is pledged as collateral supporting the amounts outstanding under a revolving credit facility with Deutsche Bank AG, New York Branch (see Note 9). |
(l) | Security or portion thereof held within Dunlap Funding LLC and is pledged as collateral supporting the amounts outstanding under a revolving credit facility with Deutsche Bank AG, New York Branch (see Note 9). |
(m) | Security or portion thereof held within FS KKR MM CLO 1 LLC (see Note 9). |
(n) | Security held within FSIC II Investments, Inc., a wholly-owned subsidiary of the Company. |
(o) | Security held within FSIC Investments, Inc., a wholly-owned subsidiary of the Company. |
(p) | Security held within IC American Energy Investments, Inc., a wholly-owned subsidiary of the Company. |
(q) | Security held within IC Arches Investments, LLC, a wholly-owned subsidiary of the Company. |
(r) | Security held within IC II Arches Investments, LLC, a wholly-owned subsidiary of the Company. |
(s) | Security or portion thereof held within Juniata River LLC and is pledged as collateral supporting the amounts outstanding under a term loan credit facility with JPMorgan Chase Bank, N.A. (see Note 9). |
(t) | Security or portion thereof held within Meadowbrook Run LLC and is pledged as collateral supporting the amounts outstanding under a revolving credit facility with Morgan Stanley Senior Funding, Inc. (see Note 9). |
(u) | Security or portion thereof held within Race Street Funding LLC. Security is available as collateral to support the amounts outstanding under the Senior Secured Revolving Credit Facility (see Note 9). |
(v) | Security or portion thereof is pledged as collateral supporting the amounts outstanding under the |
The investment, or portion |
Security is an unfunded commitment. |
Security is |
Asset is on non-accrual status. |
(aa) Security is classified as Level 1 or Level 2 in the Company’s fair value hierarchy (see Note 8).
(ab) Not used.
See notes to unaudited consolidated financial statements.
FS Investment CorporationKKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 20172021
(in thousands,millions, except share amounts)
Under the Investment Company Act of 1940, as amended, the Company generally is deemed to be an “affiliated person” of a portfolio company if it owns 5% or more of the portfolio company’s voting securities and generally is deemed to “control” a portfolio company if it owns more than 25% of the portfolio company’s voting securities or it has the power to exercise control over the management or policies of such portfolio company. As of September 30, |
Portfolio Company | Fair Value at December 31, 2020 | Gross Additions(1) | Gross Reductions(2) | Net Realized Gain (Loss) | Net Change in Unrealized Appreciation (Depreciation) | Fair Value at September 30, 2021 | Interest Income(3) | PIK Income(3) | Fee Income(3) | Dividend Income(3) | ||||||||||||||||||||||||||||||
Senior Secured Loans—First Lien |
| |||||||||||||||||||||||||||||||||||||||
Affordable Care Inc | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 0.3 | $ | — | ||||||||||||||||||||
Affordable Care Inc | — | 115.1 | — | — | 0.3 | 115.4 | 1.4 | — | 1.6 | — | ||||||||||||||||||||||||||||||
Belk Inc | — | 39.3 | (1.3 | ) | 0.1 | 12.8 | 50.9 | 0.9 | — | — | — | |||||||||||||||||||||||||||||
Belk Inc | — | 21.7 | — | — | 0.4 | 22.1 | 1.1 | — | — | — | ||||||||||||||||||||||||||||||
Borden (New Dairy Opco) | 7.6 | 10.5 | — | — | 0.9 | 19.0 | 0.4 | — | — | — | ||||||||||||||||||||||||||||||
Borden (New Dairy Opco) | 16.8 | 23.3 | — | — | 1.9 | 42.0 | 1.7 | — | — | — | ||||||||||||||||||||||||||||||
Borden Dairy Co | — | — | — | 1.3 | (1.3 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||
Constellis Holdings LLC | — | 13.9 | — | — | 1.1 | 15.0 | 0.5 | — | — | — | ||||||||||||||||||||||||||||||
Fairway Group Holdings Corp | — | 1.7 | (0.7 | ) | — | (0.4 | ) | 0.6 | 0.4 | — | — | — | ||||||||||||||||||||||||||||
Fairway Group Holdings Corp | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
HM Dunn Co Inc(5) | 0.3 | — | (0.6 | ) | — | 0.3 | — | — | — | — | — | |||||||||||||||||||||||||||||
HM Dunn Co Inc(5) | 0.2 | — | (0.3 | ) | — | 0.1 | — | — | — | — | — | |||||||||||||||||||||||||||||
Micronics Filtration Holdings LLC | 35.5 | — | — | — | 4.5 | 40.0 | — | — | — | — | ||||||||||||||||||||||||||||||
One Call Care Management Inc(5) | 4.7 | 0.1 | (4.9 | ) | 0.5 | (0.4 | ) | — | 0.2 | — | — | — | ||||||||||||||||||||||||||||
Petroplex Acidizing Inc | 4.5 | 0.7 | — | — | 1.7 | 6.9 | — | — | — | — | ||||||||||||||||||||||||||||||
Sorenson Communications LLC(4) | — | 61.7 | (3.3 | ) | 0.1 | 3.8 | 62.3 | 1.6 | — | — | — | |||||||||||||||||||||||||||||
Sungard Availability Services Capital Inc(4) | — | 5.6 | — | — | 0.4 | 6.0 | 0.1 | — | — | — | ||||||||||||||||||||||||||||||
ThermaSys Corp | 3.9 | 0.4 | — | — | (1.1 | ) | 3.2 | — | 0.5 | — | — | |||||||||||||||||||||||||||||
Senior Secured Loans—Second Lien |
| |||||||||||||||||||||||||||||||||||||||
Belk Inc | — | 4.2 | — | — | 0.4 | 4.6 | — | — | — | — | ||||||||||||||||||||||||||||||
Constellis Holdings LLC | — | 12.5 | — | — | 1.0 | 13.5 | 0.2 | 0.3 | — | — | ||||||||||||||||||||||||||||||
Fairway Holdings Group Corp | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Sorenson Communications LLC(4) | — | 21.3 | (15.0 | ) | 0.3 | 0.3 | 6.9 | 0.4 | 0.8 | — | — | |||||||||||||||||||||||||||||
Sungard Availability Services Capital Inc(4) | — | 13.4 | 0.1 | — | 1.0 | 14.5 | 0.5 | 0.1 | — | — | ||||||||||||||||||||||||||||||
Other Senior Secured Debt |
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JW Aluminum Co(5) | 41.8 | — | (39.4 | ) | — | (2.4 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||
Subordinated Debt |
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Home Partners of America Inc | — | 3.5 | (3.5 | ) | — | — | — | 0.1 | — | — | — | |||||||||||||||||||||||||||||
Asset Based Finance |
| |||||||||||||||||||||||||||||||||||||||
Home Partners JV, Structured Mezzanine | 38.5 | 81.8 | (37.3 | ) | — | 5.0 | 88.0 | 1.6 | 4.8 | — | — | |||||||||||||||||||||||||||||
Home Partners JV, Private Equity | — | 5.4 | — | — | 3.1 | 8.5 | — | — | — | — | ||||||||||||||||||||||||||||||
Home Partners JV, Private Equity | — | — | — | (0.6 | ) | 0.6 | — | — | — | — | — | |||||||||||||||||||||||||||||
Home Partners JV, Common Stock | 21.5 | 45.9 | (22.9 | ) | 7.7 | 21.4 | 73.6 | — | — | — | — | |||||||||||||||||||||||||||||
Home Partners JV 2, Structured Mezzanine | — | 2.1 | — | — | 0.1 | 2.2 | — | 0.1 | — | — | ||||||||||||||||||||||||||||||
Home Partners JV 2, Private Equity | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Home Partners JV 2, Private Equity | — | 1.0 | — | — | — | 1.0 | — | — | — | — |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company | Fair Value at December 31, 2020 | Gross Additions(1) | Gross Reductions(2) | Net Realized Gain (Loss) | Net Change in Unrealized Appreciation (Depreciation) | Fair Value at September 30, 2021 | Interest Income(3) | PIK Income(3) | Fee Income(3) | Dividend Income(3) | ||||||||||||||||||||||||||||||
Jet Edge International LLC, Preferred Stock | $ | — | $ | 20.9 | $ | — | $ | — | $ | (4.3 | ) | $ | 16.6 | $ | 0.1 | $ | — | $ | — | $ | — | |||||||||||||||||||
Jet Edge International, Warrant | — | — | — | — | 4.3 | 4.3 | — | — | — | — | ||||||||||||||||||||||||||||||
Jet Edge International, Term Loan | — | 39.4 | (0.7 | ) | — | 0.3 | 39.0 | 0.8 | 0.3 | — | — | |||||||||||||||||||||||||||||
Orchard Marine Limited, Class B Common Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Orchard Marine Limited, Series A Preferred Stock | 24.6 | — | — | — | 27.1 | 51.7 | — | — | — | — | ||||||||||||||||||||||||||||||
Equity/Other |
| |||||||||||||||||||||||||||||||||||||||
Affordable Care Inc, Preferred Stock | — | 48.1 | — | — | 1.2 | 49.3 | — | 0.9 | — | — | ||||||||||||||||||||||||||||||
ASG Technologies, Common Stock | 42.7 | — | (78.7 | ) | 55.3 | (19.3 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||
ASG Technologies, Warrant | 3.5 | — | (10.2 | ) | 3.7 | 3.0 | — | — | — | — | — | |||||||||||||||||||||||||||||
Belk Inc, Common Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Borden (New Dairy Opco), Common Stock | 3.2 | 5.2 | — | — | 1.7 | 10.1 | — | — | — | — | ||||||||||||||||||||||||||||||
Charlotte Russe Inc, Common Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Constellis Holdings LLC, Private Equity | — | 10.3 | — | — | (0.9 | ) | 9.4 | — | — | — | — | |||||||||||||||||||||||||||||
Fairway Group Holdings Corp, Common Stock | — | — | — | — | — | — | — | — | �� | — | ||||||||||||||||||||||||||||||
Fronton BV, Common Stock | 1.2 | — | — | — | 0.3 | 1.5 | — | — | — | — | ||||||||||||||||||||||||||||||
HM Dunn Co Inc, Preferred Stock, Series A(5) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
HM Dunn Co Inc, Preferred Stock, Series B(5) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Home Partners of America Inc, Common Stock | 130.5 | — | (214.3 | ) | 130.7 | (46.9 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||
Home Partners of America Inc, Warrant | 2.1 | — | (4.4 | ) | 4.1 | (1.8 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||
JW Aluminum Co, Common Stock(5) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
JW Aluminum Co, Preferred Stock(5) | 93.7 | — | (107.3 | ) | — | 13.6 | — | — | 4.2 | — | — | |||||||||||||||||||||||||||||
Micronics Filtration Holdings Inc, Common Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Micronics Filtration Holdings Inc, Preferred Stock, Series A | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Micronics Filtration Holdings Inc, Preferred Stock, Series B | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Micronics Filtration Holdings Inc, Preferred Stock, Series B PIK | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Micronics Filtration Holdings Inc, Preferred Stock, Series C PIK | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
One Call Care Management Inc, Common Stock(5) | 2.4 | — | (3.0 | ) | — | 0.6 | — | — | — | — | — | |||||||||||||||||||||||||||||
One Call Care Management Inc, Preferred Stock A(5) | 25.5 | — | (32.3 | ) | — | 6.8 | — | — | — | — | — | |||||||||||||||||||||||||||||
One Call Care Management Inc, Preferred Stock B(5) | 10.6 | — | (9.8 | ) | — | (0.8 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||
Petroplex Acidizing Inc, Preferred Stock A | — | 0.4 | — | — | (0.4 | ) | — | — | — | — | 0.4 | |||||||||||||||||||||||||||||
Petroplex Acidizing Inc, Warrant | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Proserv Acquisition LLC, Class A Common Units | 9.0 | — | — | — | (5.6 | ) | 3.4 | — | — | — | — | |||||||||||||||||||||||||||||
Proserv Acquisition LLC, Class A Preferred Units | 9.5 | — | — | — | — | 9.5 | — | — | — | — | ||||||||||||||||||||||||||||||
Sorenson Communications LLC, Common Stock(4) | — | 42.5 | — | — | 32.0 | 74.5 | — | — | — | — | ||||||||||||||||||||||||||||||
Sungard Availbaility Services Capital Inc, Common Stock(4) | — | 6.9 | — | — | (1.8 | ) | 5.1 | — | — | — | — | |||||||||||||||||||||||||||||
ThermaSys Corp, Common Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
ThermaSys Corp, Preferred Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
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Total | $ | 533.8 | $ | 658.8 | $ | (589.8 | ) | $ | 203.2 | $ | 64.6 | $ | 870.6 | $ | 12.0 | $ | 12.0 | $ | 1.9 | $ | 0.4 | |||||||||||||||||||
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(1) | Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest, the amortization of unearned income, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category. |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
(2) | Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category. |
(3) Interest, | PIK, fee and dividend income presented for the full nine months ended September 30, |
2021.
Portfolio Company | Fair Value at December 31, 2016 | Transfers In or Out | Purchases and Paid-in- kind Interest | Sales and Repayments | Accretion of Discount | Net Realized Gain (Loss) | Net Change in Unrealized Appreciation (Depreciation) | Fair Value at September 30, 2017 | Interest Income(4) | PIK Income(4) | Fee Income(4) | |||||||||||||||||||||||||||||||||
Senior Secured Loans—First Lien |
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ASG Technologies Group, Inc. | $ | 54,766 | $ | — | $ | 11,832 | $ | (65,789 | ) | $ | 49 | $ | 295 | $ | (1,153 | ) | $ | — | $ | 3,203 | $ | 356 | $ | — | ||||||||||||||||||||
Aspect Software, Inc.(1)(2) | — | 634 | 536 | (178 | ) | — | — | (3 | ) | 989 | 61 | — | 17 | |||||||||||||||||||||||||||||||
Aspect Software, Inc.(2) | — | 697 | — | (13 | ) | — | — | — | 684 | 59 | — | 3 | ||||||||||||||||||||||||||||||||
Aspect Software, Inc.(3) | — | — | — | — | — | — | — | — | — | — | 12 | |||||||||||||||||||||||||||||||||
Senior Secured Loans—Second Lien |
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ASG Technologies Group, Inc. | 23,872 | — | — | (24,611 | ) | 549 | 5,529 | (5,339 | ) | — | 2,286 | — | 1,231 | |||||||||||||||||||||||||||||||
Logan’s Roadhouse, Inc. | 15,415 | — | 5,115 | — | 23 | — | (6,078 | ) | 14,475 | (3 | ) | 1,499 | — | |||||||||||||||||||||||||||||||
Senior Secured Bonds |
| |||||||||||||||||||||||||||||||||||||||||||
Advanced Lighting Technologies, Inc. | — | 32,222 | — | — | — | — | 4,593 | 36,815 | 3,667 | — | — | |||||||||||||||||||||||||||||||||
Mood Media Corp. | — | 21,568 | — | — | — | — | — | 21,568 | 780 | — | — | |||||||||||||||||||||||||||||||||
Subordinated Debt |
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Mood Media Corp.(2) | — | 5,689 | — | (6,460 | ) | 44 | 727 | — | — | 432 | — | — | ||||||||||||||||||||||||||||||||
Equity/Other |
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Advanced Lighting Technologies, Inc., Preferred Equity | — | — | — | — | — | — | 285 | 285 | — | — | — | |||||||||||||||||||||||||||||||||
ASG Everglades Holdings, Inc., Common Equity | 79,673 | — | — | — | — | — | (6,844 | ) | 72,829 | — | — | — | ||||||||||||||||||||||||||||||||
ASG Everglades Holdings, Inc., Warrants, 6/27/2022 | 5,830 | — | — | — | — | — | (929 | ) | 4,901 | — | — | — | ||||||||||||||||||||||||||||||||
Aspect Software, Inc.(2) | — | 19,792 | 100 | — | — | 305 | (6,600 | ) | 13,597 | — | — | — | ||||||||||||||||||||||||||||||||
Fronton Investor Holdings, LLC, Class B Units | 15,092 | — | — | — | — | — | 11,655 | 26,747 | — | — | — | |||||||||||||||||||||||||||||||||
Mood Media Corp. | — | 6,662 | 5,142 | — | — | — | 17,581 | 29,385 | — | — | — | |||||||||||||||||||||||||||||||||
Roadhouse Holding Inc., Common Equity | 8,147 | — | — | — | — | — | (8,147 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||
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Total | $ | 202,795 | $ | 87,264 | $ | 22,725 | $ | (97,051 | ) | $ | 665 | $ | 6,856 | $ | (979 | ) | $ | 222,275 | $ | 10,485 | $ | 1,855 | $ | 1,263 | ||||||||||||||||||||
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The Company held this investment as of December 31, |
The Company held this investment as of |
See notes to unaudited consolidated financial statements.
FS Investment Corporation
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2017
(in thousands, except share amounts)
Under the Investment Company Act of 1940, as amended, the Company generally is deemed to “control” a portfolio company if it owns more than 25% of the portfolio company’s voting securities or it has the power to exercise control over the management or policies of such portfolio company. As of September 30, |
Portfolio Company | Fair Value at December 31, 2016 | Transfers In or Out | Purchases and Paid-in-kind Interest | Sales and Repayments | Accretion of Discount | Net Realized Gain (Loss) | Net Change in Unrealized Appreciation (Depreciation) | Fair Value at September 30, 2017 | Interest Income(2) | PIK Income(2) | ||||||||||||||||||||||||||||||
Senior Secured Loans—First Lien |
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Swiss Watch International, Inc.(1) | $ | — | $ | 12,185 | $ | — | $ | (1,615 | ) | $ | — | $ | (10,570 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Swiss Watch International, Inc.(1) | — | 42,301 | — | — | — | (42,301 | ) | — | — | (7 | ) | — | ||||||||||||||||||||||||||||
Senior Secured Loans—Second Lien |
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JW Aluminum Co. | 38,039 | — | 146 | — | 3 | — | (94 | ) | 38,094 | $ | 2,596 | 146 | ||||||||||||||||||||||||||||
Equity/Other |
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JW Aluminum Co., Common Equity | — | — | — | — | — | — | 541 | 541 | — | — | ||||||||||||||||||||||||||||||
JW Aluminum Co., Preferred Equity | 45,031 | — | 4,178 | — | — | — | 6,594 | 55,803 | 818 | 4,178 | ||||||||||||||||||||||||||||||
SWI Holdco LLC, Common Equity(1) | — | — | 8 | — | — | (8 | ) | — | — | — | — | |||||||||||||||||||||||||||||
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Total | $ | 83,070 | $ | 54,486 | $ | 4,332 | $ | (1,615 | ) | $ | 3 | $ | (52,879 | ) | $ | 7,041 | $ | 94,438 | $ | 3,407 | $ | 4,324 | ||||||||||||||||||
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Portfolio Company | Fair Value at December 31, 2020 | Gross Additions(1) | Gross Reductions(2) | Net Realized Gain (Loss) | Net Change in Unrealized Appreciation (Depreciation) | Fair Value at September 30, 2021 | Interest Income(3) | PIK Income(3) | Fee Income(3) | Dividend Income(3) | ||||||||||||||||||||||||||||||
Senior Secured Loans—First Lien |
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Advanced Lighting Technologies Inc | $ | 12.0 | $ | 4.1 | $ | (15.9 | ) | $ | (4.6 | ) | $ | 4.4 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||
Amtek Global Technology Pte Ltd | 59.7 | 2.4 | — | — | (6.7 | ) | 55.4 | 1.1 | 1.4 | — | — | |||||||||||||||||||||||||||||
ATX Networks Corp | — | 45.8 | — | — | — | 45.8 | 0.3 | — | — | — | ||||||||||||||||||||||||||||||
HM Dunn Co Inc(4) | — | 48.6 | (7.1 | ) | (8.5 | ) | — | 33.0 | — | — | — | — | ||||||||||||||||||||||||||||
HM Dunn Co Inc(4) | — | 14.0 | (19.0 | ) | 7.0 | — | 2.0 | 0.4 | 0.8 | — | — | |||||||||||||||||||||||||||||
One Call Care Management Inc | — | 9.7 | (5.1 | ) | 0.1 | 0.3 | 5.0 | 0.2 | — | 0.1 | — | |||||||||||||||||||||||||||||
Production Resource Group LLC | — | 121.0 | — | — | 9.1 | 130.1 | 3.1 | 1.9 | — | — | ||||||||||||||||||||||||||||||
Production Resource Group LLC | — | 3.3 | — | — | 0.1 | 3.4 | 0.1 | — | — | — | ||||||||||||||||||||||||||||||
Production Resource Group LLC | — | 0.1 | — | — | — | 0.1 | — | — | — | — | ||||||||||||||||||||||||||||||
Production Resource Group LLC | — | 56.3 | (0.3 | ) | — | 4.6 | 60.6 | 1.5 | — | 0.4 | — | |||||||||||||||||||||||||||||
Production Resource Group LLC | — | 10.0 | — | — | 0.1 | 10.1 | 0.1 | — | 0.1 | — | ||||||||||||||||||||||||||||||
Sound United LLC | 14.9 | — | (15.0 | ) | — | 0.1 | — | 0.4 | — | — | — | |||||||||||||||||||||||||||||
Warren Resources Inc(4) | — | 19.2 | (2.0 | ) | 0.1 | 1.3 | 18.6 | 0.7 | 0.1 | — | — | |||||||||||||||||||||||||||||
Senior Secured Loans—Second Lien |
| |||||||||||||||||||||||||||||||||||||||
Amtek Global Technology Pte Ltd | 0.1 | (1.9 | ) | — | (10.6 | ) | 12.4 | — | (1.9 | ) | — | — | — | |||||||||||||||||||||||||||
Sound United LLC | 20.9 | 0.8 | (22.6 | ) | 0.9 | — | — | — | 1.0 | — | — | |||||||||||||||||||||||||||||
Other Senior Secured Debt |
| |||||||||||||||||||||||||||||||||||||||
Advanced Lighting Technologies Inc | — | — | (0.7 | ) | (22.9 | ) | 23.6 | — | — | — | — | — | ||||||||||||||||||||||||||||
JW Aluminum Co(4) | — | 75.5 | — | — | 6.7 | 82.2 | 4.2 | — | — | — | ||||||||||||||||||||||||||||||
One Call Care Management Inc(4) | — | 42.5 | (21.9 | ) | — | 1.7 | 22.3 | 0.4 | 1.1 | — | — | |||||||||||||||||||||||||||||
Subordinated Debt |
| |||||||||||||||||||||||||||||||||||||||
ATX Networks Corp | — | 4.8 | — | — | — | 4.8 | — | — | — | — | ||||||||||||||||||||||||||||||
Hilding Anders | 32.4 | — | — | — | 18.7 | 51.1 | — | — | — | — | ||||||||||||||||||||||||||||||
Hilding Anders | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Hilding Anders | 30.3 | — | — | — | (30.3 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||
Asset Based Finance |
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801 5th Ave, Seattle, Structure Mezzanine | 29.4 | 24.0 | — | — | 2.1 | 55.5 | 2.4 | 0.9 | — | — | ||||||||||||||||||||||||||||||
801 5th Ave, Seattle, Private Equity | 10.3 | 9.6 | — | — | 2.6 | 22.5 | — | — | — | — | ||||||||||||||||||||||||||||||
Avida Holding AB, Common Stock | 38.3 | 8.4 | — | — | 5.7 | 52.4 | — | — | — | — | ||||||||||||||||||||||||||||||
Kilter Finance, Preferred Stock | 0.2 | 32.4 | — | — | 1.5 | 34.1 | 0.7 | 0.6 | — | — |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company | Fair Value at December 31, 2020 | Gross Additions(1) | Gross Reductions(2) | Net Realized Gain (Loss) | Net Change in Unrealized Appreciation (Depreciation) | Fair Value at September 30, 2021 | Interest Income(3) | PIK Income(3) | Fee Income(3) | Dividend Income(3) | ||||||||||||||||||||||||||||||
Kilter Finance, Private Equity | $ | 0.2 | $ | 0.3 | $ | — | $ | — | $ | — | $ | 0.5 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
KKR Rocket Loans Aggregtor LLC, Partnership Interest | — | 0.8 | — | — | — | 0.8 | — | — | — | — | ||||||||||||||||||||||||||||||
Prime St LLC, Private Equity | 3.9 | 5.2 | — | — | 1.7 | 10.8 | — | — | — | — | ||||||||||||||||||||||||||||||
Prime St LLC, Structured Mezzanine | 22.8 | 24.5 | — | — | 2.1 | 49.4 | 0.3 | 1.4 | — | — | ||||||||||||||||||||||||||||||
Toorak Capital Funding LLC, Membership Interest | 6.6 | 1.3 | (4.9 | ) | — | (1.3 | ) | 1.7 | — | — | — | — | ||||||||||||||||||||||||||||
Toorak Capital Partners LLC, Private Equity | 235.9 | 2.3 | — | — | 10.2 | 248.4 | — | — | — | 14.5 | ||||||||||||||||||||||||||||||
Toorak Capital Partners LLC, Structured Mezzanine | — | 18.0 | (18.0 | ) | — | — | — | 0.1 | — | — | — | |||||||||||||||||||||||||||||
Credit Opportunities Partners JV, LLC |
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Credit Opportunities Partners JV, LLC | 712.5 | 586.4 | — | — | 99.9 | 1,398.8 | — | — | — | 85.3 | ||||||||||||||||||||||||||||||
Equity/Other |
| |||||||||||||||||||||||||||||||||||||||
Advanced Lighting Technologies Inc, Common Stock | — | — | — | (16.5 | ) | 16.5 | — | — | — | — | — | |||||||||||||||||||||||||||||
Advanced Lighting Technologies Inc, Warrant | — | — | — | (0.1 | ) | 0.1 | — | — | — | — | — | |||||||||||||||||||||||||||||
Amtek Global Technology Pte Ltd, Common Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Amtek Global Technology Pte Ltd, Ordinary Shares | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Amtek Global Technology Pte Ltd, Trade Claim | — | — | (1.4 | ) | 0.4 | 1.0 | — | — | — | — | — | |||||||||||||||||||||||||||||
Amtek Global Technology Pte Ltd, Private Equity | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
ATX Networks Corp, Common Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Hilding Anders, Class A Common Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Hilding Anders, Class B Common Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Hilding Anders, Class C Common Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Hilding Anders, Equity Options | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
HM Dunn Preferred Stock, Series A(4) | — | 7.1 | — | — | 1.5 | 8.6 | — | — | — | — | ||||||||||||||||||||||||||||||
HM Dunn Preferred Stock, Series A(5) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
JW Aluminum Co, Common Stock(4) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
JW Aluminum Co, Preferred Stock(4) | — | 171.1 | — | — | (52.1 | ) | 119.0 | 1.7 | 12.8 | — | — | |||||||||||||||||||||||||||||
One Call Care Management Inc, Common Stock(4) | — | 4.5 | (2.2 | ) | (0.2 | ) | 0.3 | 2.4 | — | — | — | — | ||||||||||||||||||||||||||||
One Call Care Management Inc, Preferred Stock A(4) | — | 48.6 | (23.7 | ) | (2.1 | ) | 2.6 | 25.4 | — | — | — | — | ||||||||||||||||||||||||||||
One Call Care Management Inc, Preferred Stock B(4) | — | 15.7 | (8.8 | ) | 1.1 | 1.0 | 9.0 | — | 0.7 | — | — | |||||||||||||||||||||||||||||
Production Resource Group LLC, Preferred Stock, Series A PIK | — | 18.1 | — | — | (4.2 | ) | 13.9 | — | — | — | — | |||||||||||||||||||||||||||||
Production Resource Group LLC, Preferred Stock, Series B PIK | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Sound United LLC, Class A Units | — | — | — | (1.1 | ) | 1.1 | — | — | — | — | — | |||||||||||||||||||||||||||||
Sound United LLC, Common Stock | 29.3 | — | — | — | 45.9 | 75.2 | — | — | — | 20.0 | ||||||||||||||||||||||||||||||
Sound United LLC, Series I Units | — | — | — | (0.5 | ) | 0.5 | — | — | — | — | — | |||||||||||||||||||||||||||||
Sound United LLC, Series II Units | — | — | — | (0.5 | ) | 0.5 | — | — | — | — | — | |||||||||||||||||||||||||||||
Warren Resources Inc, Common Stock | — | 12.8 | — | — | 8.3 | 21.1 | — | — | — | — | ||||||||||||||||||||||||||||||
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Total | $ | 1,259.7 | $ | 1,447.3 | $ | (168.6 | ) | $ | (58.0 | ) | $ | 193.6 | $ | 2,674.0 | $ | 15.8 | $ | 22.7 | $ | 0.6 | $ | 119.8 | ||||||||||||||||||
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(1) | Gross additions include increases in the cost basis of |
(2) | Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category. |
(3) Interest, | PIK, fee and dividend income presented for the full nine months ended September 30, |
(4) The | Company held this investment as of December 31, 2020 but it was not deemed to “control” the portfolio company as of December 31, 2020. Transfers in or out have been presented at amortized cost. |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Consolidated Schedule of Investments
As of December 31, 2020
(in millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||
Senior Secured Loans—First Lien—111.4% | ||||||||||||||||||||||
5 Arch Income Fund 2 LLC | (l)(n)(q)(w) | Diversified Financials | 9.0% | 11/18/23 | $ | 28.8 | $ | 28.8 | $ | 25.5 | ||||||||||||
5 Arch Income Fund 2 LLC | (l)(n)(q)(v)(w) | Diversified Financials | 9.0% | 11/18/23 | 4.5 | 4.5 | 4.0 | |||||||||||||||
A10 Capital LLC | (g)(h) | Diversified Financials | L+650 | 1.0% | 5/1/23 | 12.8 | 12.7 | 12.6 | ||||||||||||||
A10 Capital LLC | (v) | Diversified Financials | L+650 | 1.0% | 5/1/23 | 14.1 | 14.1 | 14.0 | ||||||||||||||
Abaco Systems, Inc | (g)(h)(i) | Capital Goods | L+600 | 1.0% | 12/7/21 | 60.6 | 60.0 | 60.6 | ||||||||||||||
ABB CONCISE Optical Group LLC | (g)(x) | Retailing | L+500 | 1.0% | 6/15/23 | 0.7 | 0.7 | 0.7 | ||||||||||||||
Accuride Corp | (g)(h)(i)(x) | Capital Goods | L+525 | 1.0% | 11/17/23 | 17.7 | 17.6 | 16.1 | ||||||||||||||
Acproducts Inc | (g)(h)(x) | Consumer Durables & Apparel | L+650 | 1.0% | 8/18/25 | 41.8 | 39.7 | 43.1 | ||||||||||||||
Advanced Lighting Technologies Inc | (g)(n)(w)(z) | Materials | L+750 | 1.0% | 10/4/22 | 19.8 | 16.4 | 12.0 | ||||||||||||||
All Systems Holding LLC | (f)(g)(h) | Commercial & Professional Services | L+625 | 1.0% | 10/31/23 | 112.2 | 112.3 | 112.6 | ||||||||||||||
All Systems Holding LLC | (v) | Commercial & Professional Services | L+625 | 1.0% | 10/31/23 | 7.2 | 7.2 | 7.2 | ||||||||||||||
American Tire Distributors Inc | (g)(x) | Automobiles & Components | L+750, 0.0% PIK (1.5% Max PIK) | 1.0% | 9/2/24 | 23.0 | 21.7 | 22.0 | ||||||||||||||
Amtek Global Technology Pte Ltd | (j)(l)(z) | Automobiles & Components | E+500 | 0.0% | 4/4/24 | € | 54.4 | 66.3 | 59.7 | |||||||||||||
Apex Group Limited | (g)(l) | Diversified Financials | L+700 | 1.3% | 6/15/23 | $ | 0.6 | 0.6 | 0.6 | |||||||||||||
Apex Group Limited | (l)(v) | Diversified Financials | L+700 | 1.3% | 6/15/23 | 1.3 | 1.2 | 1.3 | ||||||||||||||
Apex Group Limited | (g)(h)(l) | Diversified Financials | L+700 | 1.3% | 6/16/25 | 18.6 | 18.3 | 18.7 | ||||||||||||||
Apex Group Limited | (g)(l) | Diversified Financials | L+700 | 1.5% | 6/16/25 | £ | 31.3 | 39.7 | 43.2 | |||||||||||||
Ardonagh Group Ltd | (g)(l) | Insurance | L+750, 0.0% PIK (2.3% Max PIK) | 0.8% | 7/14/26 | 0.1 | 0.2 | 0.2 | ||||||||||||||
Ardonagh Group Ltd | (l)(v) | Insurance | L+750, 0.0% PIK (2.3% Max PIK) | 0.8% | 7/14/26 | 0.7 | 0.8 | 0.9 | ||||||||||||||
Aspect Software Inc | (g) | Software & Services | 8.0% PIK (8.0% Max PIK) | 1/15/21 | 0.0 | 0.0 | 0.0 | |||||||||||||||
Aspect Software Inc | (v) | Software & Services | L+500 | 1.0% | 7/15/23 | 0.7 | 0.7 | 0.7 | ||||||||||||||
Berner Food & Beverage LLC | (g)(h)(i) | Food & Staples Retailing | L+875 | 1.0% | 3/16/22 | 87.6 | 87.3 | 91.6 | ||||||||||||||
Borden (New Dairy Opco) | (g)(y) | Food, Beverage & Tobacco | L+250 | 1.0% | 7/20/25 | 7.6 | 7.6 | 7.6 | ||||||||||||||
Borden (New Dairy Opco) | (g)(y) | Food, Beverage & Tobacco | L+700, 0.0% PIK (1.0% Max PIK) | 1.0% | 7/20/25 | 16.8 | 16.8 | 16.8 | ||||||||||||||
Borden Dairy Co | (g)(n)(w)(y) | Food, Beverage & Tobacco | L+825 | 1.0% | 7/6/23 | 26.0 | 24.1 | — | ||||||||||||||
Charles Taylor PLC | (g)(l) | Diversified Financials | L+575 | 0.0% | 1/24/27 | £ | 33.6 | 42.9 | 43.3 | |||||||||||||
CSafe Global | (g) | Capital Goods | L+625 | 1.0% | 12/23/27 | $ | 0.1 | 0.1 | 0.1 | |||||||||||||
CSafe Global | (v) | Capital Goods | L+625 | 1.0% | 12/23/27 | 1.5 | 1.5 | 1.5 | ||||||||||||||
CSafe Global | (g)(h) | Capital Goods | L+625 | 1.0% | 12/23/27 | 16.0 | 15.9 | 15.9 | ||||||||||||||
CSM Bakery Products | (g)(x) | Food, Beverage & Tobacco | L+625 | 1.0% | 1/4/22 | 1.1 | 1.1 | 1.1 | ||||||||||||||
CTI Foods Holding Co LLC | (g) | Food, Beverage & Tobacco | L+577, 3.0% PIK (3.0% Max PIK) | 1.0% | 5/3/24 | 3.0 | 3.0 | 2.5 | ||||||||||||||
Distribution International Inc | (g)(h)(x) | Retailing | L+575 | 1.0% | 12/15/23 | 27.6 | 25.2 | 25.3 | ||||||||||||||
Eagle Family Foods Inc | (v) | Food, Beverage & Tobacco | L+650 | 1.0% | 6/14/23 | 7.1 | 7.1 | 7.1 | ||||||||||||||
Eagle Family Foods Inc | (g)(h)(i) | Food, Beverage & Tobacco | L+650 | 1.0% | 6/14/24 | 45.6 | 45.3 | 45.6 | ||||||||||||||
Empire Today LLC | (g)(h) | Retailing | L+650 | 1.0% | 11/17/22 | 75.6 | 75.6 | 76.4 | ||||||||||||||
Entertainment Benefits Group LLC | (g) | Media & Entertainment | L+575, 2.5% PIK (2.5% Max PIK) | 1.0% | 9/30/24 | 4.3 | 4.3 | 3.6 | ||||||||||||||
Entertainment Benefits Group LLC | (v) | Media & Entertainment | L+575, 2.5% PIK (2.5% Max PIK) | 1.0% | 9/30/24 | 0.5 | 0.5 | 0.4 | ||||||||||||||
Entertainment Benefits Group LLC | (g)(h) | Media & Entertainment | L+575, 2.5% PIK (2.5% Max PIK) | 1.0% | 9/30/25 | 30.1 | 29.8 | 25.3 | ||||||||||||||
FloWorks International LLC | (g)(h) | Capital Goods | L+600 | 1.0% | 10/14/26 | 17.2 | 17.0 | 17.0 | ||||||||||||||
FloWorks International LLC | (g) | Capital Goods | L+600 | 1.0% | 10/14/26 | 6.4 | 6.4 | 6.4 | ||||||||||||||
FloWorks International LLC | (v) | Capital Goods | L+600 | 1.0% | 10/14/26 | 6.4 | 6.4 | 6.4 | ||||||||||||||
Frontline Technologies Group LLC | (g) | Software & Services | L+525 | 1.0% | 9/18/23 | 22.3 | 22.3 | 22.3 | ||||||||||||||
Frontline Technologies Group LLC | (g)(h)(i) | Software & Services | L+575 | 1.0% | 9/18/23 | 51.9 | 51.6 | 52.0 | ||||||||||||||
Greystone & Co Inc | (g)(h) | Diversified Financials | L+800 | 1.0% | 4/17/24 | 36.8 | 36.6 | 37.2 |
See notes to unaudited consolidated financial statements.
FS Investment CorporationKKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 20162020
(in thousands,millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||||
Senior Secured Loans—First Lien—84.2% | ||||||||||||||||||||||||
5 Arch Income Fund 2, LLC | (g)(j)(o) | Diversified Financials | 10.5% | 11/18/21 | $ | 19,561 | $ | 19,611 | $ | 19,561 | ||||||||||||||
5 Arch Income Fund 2, LLC | (g)(j)(o)(q) | Diversified Financials | 10.5% | 11/18/21 | 18,439 | 18,439 | 18,439 | |||||||||||||||||
A.P. Plasman Inc. | (e)(f)(g)(h)(j) | Capital Goods | L+850 | 1.0% | 12/29/19 | 202,235 | 200,358 | 199,707 | ||||||||||||||||
Aeneas Buyer Corp. | (g) | Health Care Equipment & Services | L+500 | 1.0% | 12/18/21 | 916 | 916 | 916 | ||||||||||||||||
Aeneas Buyer Corp. | (e)(g)(h) | Health Care Equipment & Services | L+815 | 1.0% | 12/18/21 | 77,220 | 77,220 | 78,378 | ||||||||||||||||
AG Group Merger Sub, Inc. | (e)(g) | Commercial & Professional Services | L+750 | 1.0% | 12/29/23 | 62,500 | 62,500 | 62,500 | ||||||||||||||||
AG Group Merger Sub, Inc. | (g)(q) | Commercial & Professional Services | L+750 | 1.0% | 12/29/23 | 27,500 | 27,500 | 27,500 | ||||||||||||||||
All Systems Holding LLC | (e)(f)(g)(h) | Commercial & Professional Services | L+770 | 1.0% | 10/31/23 | 44,000 | 44,000 | 44,370 | ||||||||||||||||
Altus Power America, Inc. | (g) | Energy | L+750 | 1.5% | 9/30/21 | 2,665 | 2,665 | 2,715 | ||||||||||||||||
Altus Power America, Inc. | (g)(q) | Energy | L+750 | 1.5% | 9/30/21 | 1,085 | 1,085 | 1,106 | ||||||||||||||||
AP Exhaust Acquisition, LLC | (f)(g) | Automobiles & Components | L+775 | 1.5% | 1/16/21 | 15,811 | 15,811 | 14,309 | ||||||||||||||||
ASG Technologies Group, Inc. | (e)(g)(h)(t) | Software & Services | L+786, 1.2% PIK (1.2% Max PIK) | 1.0% | 4/30/20 | 53,957 | 53,613 | 54,766 | ||||||||||||||||
Aspect Software, Inc. | (g) | Software & Services | L+1000 | 1.0% | 5/25/18 | 634 | 634 | 634 | ||||||||||||||||
Aspect Software, Inc. | (g)(q) | Software & Services | L+1000 | 1.0% | 5/25/18 | 22 | 22 | 22 | ||||||||||||||||
Aspect Software, Inc. | (g) | Software & Services | L+1000 | 1.0% | 5/25/20 | 697 | 697 | 705 | ||||||||||||||||
Atlas Aerospace LLC | (g) | Capital Goods | L+804 | 1.0% | 5/8/19 | 20,000 | 20,000 | 20,300 | ||||||||||||||||
BenefitMall Holdings, Inc. | (e)(h) | Commercial & Professional Services | L+725 | 1.0% | 11/24/20 | 14,700 | 14,700 | 14,847 | ||||||||||||||||
Cadence Aerospace Finance, Inc. | (g) | Capital Goods | L+575 | 1.3% | 5/9/18 | 73 | 73 | 71 | ||||||||||||||||
Caesars Entertainment Operating Co., Inc. | (e)(g)(j)(l) | Consumer Services | L+575 | 3/1/17 | 9,294 | 9,231 | 9,414 | |||||||||||||||||
Caesars Entertainment Operating Co., Inc. | (e)(j)(l) | Consumer Services | L+675 | 3/1/17 | 851 | 847 | 872 | |||||||||||||||||
Caesars Entertainment Operating Co., Inc. | (e)(g)(j)(l) | Consumer Services | L+875 | 1.0% | 3/1/17 | 11,852 | 11,839 | 12,334 | ||||||||||||||||
Corner Investment PropCo, LLC | (e)(g)(h) | Consumer Services | L+975 | 1.3% | 11/2/19 | 42,303 | 42,404 | 42,725 | ||||||||||||||||
Crestwood Holdings LLC | (g) | Energy | L+800 | 1.0% | 6/19/19 | 5,021 | 5,009 | 4,926 | ||||||||||||||||
CSafe Acquisition Co., Inc. | (g) | Capital Goods | L+725 | 11/1/21 | 783 | 783 | 783 | |||||||||||||||||
CSafe Acquisition Co., Inc. | (g)(q) | Capital Goods | L+725 | 11/1/21 | 5,087 | 5,087 | 5,087 | |||||||||||||||||
CSafe Acquisition Co., Inc. | (g)(h) | Capital Goods | L+725 | 10/31/23 | 45,000 | 45,000 | 45,000 | |||||||||||||||||
CSafe Acquisition Co., Inc. | (g)(q) | Capital Goods | L+725 | 10/31/23 | 27,391 | 27,391 | 27,391 | |||||||||||||||||
Eastman Kodak Co. | (g) | Consumer Durables & Apparel | L+625 | 1.0% | 9/3/19 | 10,438 | 10,331 | 10,503 | ||||||||||||||||
Empire Today, LLC | (e)(g) | Retailing | L+800 | 1.0% | 11/17/22 | 82,000 | 82,000 | 82,726 | ||||||||||||||||
Greystone Equity Member Corp. | (g)(j) | Diversified Financials | L+1050 | 3/31/21 | 3,308 | 3,321 | 3,337 | |||||||||||||||||
Greystone Equity Member Corp. | (g)(j) | Diversified Financials | L+1100 | 3/31/21 | 14,646 | 14,646 | 14,920 | |||||||||||||||||
Greystone Equity Member Corp. | (g)(j)(q) | �� | Diversified Financials | L+1100 | 3/31/21 | 36,047 | 36,047 | 36,716 | ||||||||||||||||
H.M. Dunn Co., Inc. | (g) | Capital Goods | L+955 | 1.0% | 3/26/21 | 1,071 | 1,071 | 1,083 | ||||||||||||||||
H.M. Dunn Co., Inc. | (g)(q) | Capital Goods | L+775 | 1.0% | 3/26/21 | 357 | 357 | 361 | ||||||||||||||||
Imagine Communications Corp. | (e)(g)(h) | Media | L+825 | 1.0% | 4/29/20 | 75,655 | 75,655 | 76,601 | ||||||||||||||||
Imagine Communications Corp. | (g)(q) | Media | L+825 | 1.0% | 4/29/20 | 28,600 | 28,600 | 28,958 | ||||||||||||||||
Industrial Group Intermediate Holdings, LLC | (g) | Materials | L+800 | 1.3% | 5/31/20 | 20,757 | 20,757 | 21,069 | ||||||||||||||||
Industry City TI Lessor, L.P. | (g) | Consumer Services | 10.8%, 1.0% PIK (1.0% Max PIK) | 6/30/26 | 32,613 | 32,613 | 33,102 |
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||
Greystone Equity Member Corp | (g)(l) | Diversified Financials | L+725 | 3.8% | 4/1/26 | $ | 60.8 | $ | 60.8 | $ | 60.3 | |||||||||||
Heniff Transportation Systems LLC | (g) | Transportation | L+575 | 1.0% | 12/3/24 | 3.4 | 3.4 | 3.4 | ||||||||||||||
Heniff Transportation Systems LLC | (v) | Transportation | L+575 | 1.0% | 12/3/24 | 4.8 | 4.8 | 4.7 | ||||||||||||||
Heniff Transportation Systems LLC | (g)(h)(i) | Transportation | L+575 | 1.0% | 12/3/26 | 64.4 | 64.1 | 64.0 | ||||||||||||||
HM Dunn Co Inc | (g)(n)(w)(y) | Capital Goods | L+875 PIK (L+875 Max PIK) | 1.0% | 12/31/21 | 0.9 | 0.6 | 0.3 | ||||||||||||||
HM Dunn Co Inc | (g)(y) | Capital Goods | 15.0% PIK (15.0% Max PIK) | 12/31/21 | 0.3 | 0.3 | 0.2 | |||||||||||||||
Hudson Technologies Co | (g)(l) | Commercial & Professional Services | L+1,025 | 1.0% | 10/10/23 | 32.4 | 32.2 | 26.8 | ||||||||||||||
ID Verde | (g)(l) | Commercial & Professional Services | E+500, 2.3% PIK (2.3% Max PIK) | 0.0% | 3/29/24 | € | 30.3 | 33.3 | 37.1 | |||||||||||||
ID Verde | (g)(l) | Commercial & Professional Services | L+525, 2.3% PIK (2.3% Max PIK) | 0.0% | 3/29/24 | £ | 4.3 | 5.1 | 5.9 | |||||||||||||
Individual FoodService | (g) | Capital Goods | L+625 | 1.0% | 11/22/24 | $ | 0.1 | 0.1 | 0.1 | |||||||||||||
Individual FoodService | (v) | Capital Goods | L+625 | 1.0% | 11/22/24 | 0.4 | 0.4 | 0.4 | ||||||||||||||
Individual FoodService | (g) | Capital Goods | L+625 | 1.0% | 11/22/25 | 6.8 | 6.8 | 6.8 | ||||||||||||||
Individual FoodService | (v) | Capital Goods | L+625 | 1.0% | 11/22/25 | 0.5 | 0.5 | 0.5 | ||||||||||||||
Industria Chimica Emiliana Srl | (g)(l) | Pharmaceuticals, Biotechnology & Life Sciences | E+725 | 0.0% | 6/30/26 | € | 19.3 | 20.7 | 23.9 | |||||||||||||
Industria Chimica Emiliana Srl | (g)(l) | Pharmaceuticals, Biotechnology & Life Sciences | E+725 | 0.0% | 9/27/26 | 8.1 | 9.3 | 10.1 | ||||||||||||||
Industry City TI Lessor LP | (g) | Consumer Services | 10.8%, 1.0% PIK (1.0% Max PIK) | 6/30/26 | $ | 24.1 | 24.1 | 26.4 | ||||||||||||||
J S Held LLC | (g)(h) | Insurance | L+600 | 1.0% | 7/1/25 | 65.5 | 65.1 | 66.1 | ||||||||||||||
J S Held LLC | (v) | Insurance | L+600 | 1.0% | 7/1/25 | 1.4 | 1.4 | 1.4 | ||||||||||||||
J S Held LLC | (g) | Insurance | L+600 | 1.0% | 7/1/25 | 1.1 | 1.1 | 1.1 | ||||||||||||||
J S Held LLC | (v) | Insurance | L+600 | 1.0% | 7/1/25 | 5.1 | 5.1 | 5.1 | ||||||||||||||
Jarrow Formulas Inc | (g)(i) | Household & Personal Products | L+625 | 1.0% | 11/30/26 | 57.3 | 56.6 | 56.6 | ||||||||||||||
Jo-Ann Stores Inc | (g)(h)(x) | Retailing | L+500 | 1.0% | 10/20/23 | 8.7 | 8.7 | 8.5 | ||||||||||||||
Kellermeyer Bergensons Services LLC | (g)(h)(i) | Commercial & Professional Services | L+650 | 1.0% | 11/7/26 | 117.7 | 117.0 | 118.9 | ||||||||||||||
Kellermeyer Bergensons Services LLC | (v) | Commercial & Professional Services | L+650 | 1.0% | 11/7/26 | 28.3 | 28.3 | 28.6 | ||||||||||||||
Kodiak BP LLC | (h) | Capital Goods | L+725 | 1.0% | 12/1/24 | 10.2 | 10.2 | 10.3 | ||||||||||||||
Kodiak BP LLC | (g)(h) | Capital Goods | L+725 | 1.0% | 12/1/24 | 125.0 | 124.8 | 126.2 | ||||||||||||||
Koosharem LLC | (g)(x) | Commercial & Professional Services | L+450 | 1.0% | 4/18/25 | 0.0 | 0.0 | 0.0 | ||||||||||||||
Lexitas Inc | (g)(h)(i) | Commercial & Professional Services | L+600 | 1.0% | 11/14/25 | 34.7 | 34.4 | 34.6 | ||||||||||||||
Lexitas Inc | (v) | Commercial & Professional Services | L+600 | 1.0% | 11/14/25 | 4.3 | 4.2 | 4.3 | ||||||||||||||
Lexitas Inc | (v) | Commercial & Professional Services | L+600 | 1.0% | 11/14/25 | 2.5 | 2.5 | 2.5 | ||||||||||||||
Lipari Foods LLC | (g)(h)(i) | Food & Staples Retailing | L+588 | 1.0% | 1/6/25 | 84.4 | 83.8 | 85.0 | ||||||||||||||
Lipari Foods LLC | (g) | Food & Staples Retailing | L+588 | 1.0% | 1/6/25 | 19.2 | 19.2 | 19.3 | ||||||||||||||
Matchesfashion Ltd | (g)(h)(l) | Consumer Durables & Apparel | L+463, 1.0% PIK (1.0% Max PIK) | 0.0% | 10/11/24 | 12.7 | 12.1 | 9.8 | ||||||||||||||
Miami Beach Medical Group LLC | (v) | Health Care Equipment & Services | L+650 | 1.0% | 12/14/26 | 1.4 | 1.4 | 1.4 | ||||||||||||||
Miami Beach Medical Group LLC | (g) | Health Care Equipment & Services | L+650 | 1.0% | 12/14/26 | 7.8 | 7.8 | 7.8 | ||||||||||||||
Micronics Filtration Holdings Inc | (g)(n)(w)(y) | Capital Goods | 7.5% PIK (7.5% Max PIK) | 3/29/24 | 47.6 | 45.0 | 35.5 | |||||||||||||||
Motion Recruitment Partners LLC | (g)(h) | Commercial & Professional Services | L+650 | 1.0% | 12/19/25 | 37.5 | 37.2 | 33.7 | ||||||||||||||
Motion Recruitment Partners LLC | (v) | Commercial & Professional Services | L+650 | 1.0% | 12/20/25 | 29.8 | 29.8 | 29.8 | ||||||||||||||
NBG Home | (g)(h)(i) | Consumer Durables & Apparel | L+550 | 1.0% | 4/26/24 | 69.3 | 69.0 | 55.4 | ||||||||||||||
NCI Inc | (g)(h)(i) | Software & Services | L+500, 2.5% PIK (2.5% Max PIK) | 1.0% | 8/15/24 | 83.5 | 82.9 | 59.0 | ||||||||||||||
Omnimax International Inc | (g)(h) | Capital Goods | L+725 | 1.0% | 10/8/26 | 44.7 | 44.0 | 44.0 | ||||||||||||||
Omnimax International Inc | (v) | Capital Goods | L+725 | 1.0% | 10/8/26 | 7.7 | 7.7 | 7.7 | ||||||||||||||
One Call Care Management Inc | (g)(x)(y) | Health Care Equipment & Services | L+525 | 1.0% | 11/27/22 | 4.9 | 4.3 | 4.7 | ||||||||||||||
P2 Energy Solutions Inc. | (g) | Software & Services | L+675 | 1.0% | 1/31/25 | 2.3 | 2.3 | 2.2 | ||||||||||||||
P2 Energy Solutions Inc. | (v) | Software & Services | L+675 | 1.0% | 1/31/25 | 4.7 | 4.7 | 4.5 | ||||||||||||||
P2 Energy Solutions Inc. | (g)(h)(i) | Software & Services | L+675 | 1.0% | 2/2/26 | 116.5 | 115.2 | 111.0 |
See notes to unaudited consolidated financial statements.
FS Investment CorporationKKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 20162020
(in thousands,millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||||
JMC Acquisition Merger Corp. | (g) | Capital Goods | L+857 | 1.0% | 11/6/21 | $ | 6,332 | $ | 6,332 | $ | 6,332 | |||||||||||||
Latham Pool Products, Inc. | (e)(h) | Commercial & Professional Services | L+775 | 1.0% | 6/29/21 | 70,000 | 70,000 | 70,700 | ||||||||||||||||
Leading Edge Aviation Services, Inc. | (e)(f)(h) | Capital Goods | L+875 | 1.5% | 6/30/19 | 30,254 | 30,119 | 30,254 | ||||||||||||||||
LEAS Acquisition Co Ltd. | (g)(j) | Capital Goods | L+875 | 1.5% | 6/30/19 | € | 27,188 | 36,988 | 28,692 | |||||||||||||||
LEAS Acquisition Co Ltd. | (f)(j) | Capital Goods | L+875 | 1.5% | 6/30/19 | $ | 9,538 | 9,538 | 9,538 | |||||||||||||||
MB Precision Holdings LLC | (g) | Capital Goods | L+725, 1.5% PIK (1.5% Max PIK) | 1.3% | 1/23/20 | 12,853 | 12,853 | 12,355 | ||||||||||||||||
Micronics, Inc. | (e)(g)(h) | Capital Goods | L+800 | 1.3% | 12/11/19 | 63,461 | 63,271 | 63,461 | ||||||||||||||||
MMM Holdings, Inc. | (g) | Health Care Equipment & Services | L+825 | 1.5% | 6/30/19 | 6,698 | 6,665 | 6,546 | ||||||||||||||||
MORSCO, Inc. | (g) | Capital Goods | L+700 | 1.0% | 10/31/23 | 15,000 | 14,413 | 15,150 | ||||||||||||||||
MSO of Puerto Rico, Inc. | (g) | Health Care Equipment & Services | L+825 | 1.5% | 6/30/19 | 4,869 | 4,846 | 4,759 | ||||||||||||||||
Nobel Learning Communities, Inc. | (g) | Consumer Services | L+450 | 1.0% | 4/27/20 | 52 | 52 | 52 | ||||||||||||||||
Nobel Learning Communities, Inc. | (g)(q) | Consumer Services | L+450 | 1.0% | 4/27/20 | 87 | 87 | 87 | ||||||||||||||||
Nobel Learning Communities, Inc. | (g) | Consumer Services | L+841 | 1.0% | 4/27/21 | 1,056 | 1,056 | 1,072 | ||||||||||||||||
North Haven Cadence Buyer, Inc. | (g)(q) | Consumer Services | L+500 | 1.0% | 9/2/21 | 938 | 938 | 938 | ||||||||||||||||
North Haven Cadence Buyer, Inc. | (e)(g) | Consumer Services | L+813 | 1.0% | 9/2/22 | 26,771 | 26,771 | 26,771 | ||||||||||||||||
North Haven Cadence Buyer, Inc. | (g)(q) | Consumer Services | L+750 | 1.0% | 9/2/22 | 4,479 | 4,479 | 4,479 | ||||||||||||||||
Nova Wildcat Amerock, LLC | (g) | Consumer Durables & Apparel | L+859 | 1.3% | 9/10/19 | 17,269 | 17,269 | 16,751 | ||||||||||||||||
PHRC License, LLC | (f)(g) | Consumer Services | L+900 | 1.5% | 8/14/20 | 43,879 | 43,879 | 44,318 | ||||||||||||||||
Polymer Additives, Inc. | (g) | Materials | L+888 | 1.0% | 12/20/21 | 10,511 | 10,511 | 10,564 | ||||||||||||||||
Polymer Additives, Inc. | (g) | Materials | L+875 | 1.0% | 12/20/21 | € | 15,000 | 16,982 | 15,830 | |||||||||||||||
PSKW, LLC | (e)(g)(h) | Health Care Equipment & Services | L+839 | 1.0% | 11/25/21 | $ | 30,000 | 30,000 | 29,189 | |||||||||||||||
Roadrunner Intermediate Acquisition Co., LLC | (e)(g)(h) | Health Care Equipment & Services | L+800 | 1.0% | 9/22/21 | 35,844 | 35,844 | 36,381 | ||||||||||||||||
Rogue Wave Software, Inc. | (e)(g)(h) | Software & Services | L+802 | 1.0% | 9/25/21 | 33,188 | 33,188 | 33,188 | ||||||||||||||||
Safariland, LLC | (e)(g)(h) | Capital Goods | L+769 | 1.0% | 11/18/23 | 126,107 | 126,107 | 125,792 | ||||||||||||||||
Safariland, LLC | (g)(q) | Capital Goods | L+725 | 1.0% | 11/18/23 | 33,282 | 33,282 | 33,199 | ||||||||||||||||
Sequential Brands Group, Inc. | (e)(g)(h)(j) | Consumer Durables & Apparel | L+900 | 7/1/22 | 80,652 | 80,652 | 81,459 | |||||||||||||||||
Sorenson Communications, Inc. | (e)(g)(h) | Telecommunication Services | L+575 | 2.3% | 4/30/20 | 91,621 | 91,339 | 90,933 | ||||||||||||||||
Sports Authority, Inc. | (g)(l)(r) | Retailing | L+600 | 1.5% | 11/16/17 | 6,318 | 5,108 | 1,287 | ||||||||||||||||
SunGard Availability Services Capital, Inc. | (g) | Software & Services | L+500 | 1.0% | 3/29/19 | 4,382 | 4,210 | 4,253 | ||||||||||||||||
Sunnova Asset Portfolio 5 Holdings, LLC | (g) | Energy | 12.0%, 0.0% PIK (12.0% Max PIK) | 11/14/21 | 4,703 | 4,633 | 4,750 | |||||||||||||||||
Swiss Watch International, Inc. | (g)(l)(r) | Consumer Durables & Apparel | L+825 | 1.3% | 11/8/18 | 12,185 | 12,185 | 4,875 | ||||||||||||||||
Swiss Watch International, Inc. | (e)(g)(l)(r) | Consumer Durables & Apparel | L+825 | 1.3% | 11/8/18 | 42,611 | 42,301 | — | ||||||||||||||||
Transplace Texas, LP | (e)(g)(h) | Transportation | L+744 | 1.0% | 9/16/21 | 24,486 | 24,486 | 24,486 | ||||||||||||||||
Transplace Texas, LP | (g)(q) | Transportation | L+700 | 1.0% | 9/16/21 | 541 | 541 | 541 | ||||||||||||||||
U.S. Xpress Enterprises, Inc. | (e)(f)(h) | Transportation | L+1000, 0.0% PIK (1.8% Max PIK) | 1.5% | 5/30/19 | 53,435 | 53,435 | 53,435 | ||||||||||||||||
Vertellus Performance Chemicals LLC | (f)(g) | Materials | L+950 | 1.0% | 1/30/20 | 38,000 | 38,000 | 35,693 | ||||||||||||||||
VPG Group Holdings LLC | (e)(g)(h) | Materials | L+900 | 1.0% | 6/30/18 | 61,795 | 61,629 | 61,331 | ||||||||||||||||
Warren Resources, Inc. | (f)(g) | Energy | L+900, 1.0% PIK (1.0% Max PIK) | 1.0% | 5/22/20 | 2,016 | 2,016 | 2,016 |
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||
Petroplex Acidizing Inc | (g)(n)(w)(y) | Energy | L+900 PIK (L+900 Max PIK) | 1.0% | 12/30/21 | $ | 24.6 | $ | 22.2 | $ | 4.5 | |||||||||||
Polyconcept North America Inc | (g)(x) | Household & Personal Products | L+450 PIK (L+450 Max PIK) | 1.0% | 8/16/23 | 21.5 | 21.2 | 20.4 | ||||||||||||||
Premium Credit Ltd | (g)(l) | Diversified Financials | L+650 | 0.0% | 1/16/26 | £ | 40.0 | 51.2 | 53.9 | |||||||||||||
Project Marron | (g)(l) | Consumer Services | B+575 | 0.0% | 7/3/25 | A$ | 1.5 | 1.0 | 1.0 | |||||||||||||
PSKW LLC | (g) | Health Care Equipment & Services | L+625 | 1.0% | 3/9/26 | $ | 137.3 | 135.7 | 137.6 | |||||||||||||
Qdoba Restaurant Corp | (g)(h)(x) | Consumer Services | L+700 | 1.0% | 3/21/25 | 11.1 | 10.9 | 10.4 | ||||||||||||||
Reliant Rehab Hospital Cincinnati LLC | (g)(h)(i) | Health Care Equipment & Services | L+675 | 0.0% | 9/2/24 | 64.8 | 64.5 | 62.4 | ||||||||||||||
Revere Superior Holdings Inc | (g)(h) | Software & Services | L+575 | 1.0% | 9/30/26 | 12.9 | 12.9 | 13.0 | ||||||||||||||
Revere Superior Holdings Inc | (v) | Software & Services | L+575 | 1.0% | 9/30/26 | 1.0 | 1.0 | 1.0 | ||||||||||||||
Roadrunner Intermediate Acquisition Co LLC | (h) | Health Care Equipment & Services | L+675 | 1.0% | 3/15/23 | 10.7 | 10.7 | 10.7 | ||||||||||||||
RSC Insurance Brokerage Inc | (v) | Insurance | L+550 | 1.0% | 9/30/26 | 3.2 | 3.1 | 3.2 | ||||||||||||||
RSC Insurance Brokerage Inc | (g)(h)(i) | Insurance | L+550 | 1.0% | 10/30/26 | 98.4 | 97.8 | 98.3 | ||||||||||||||
RSC Insurance Brokerage Inc | (v) | Insurance | L+550 | 1.0% | 10/30/26 | 6.3 | 6.3 | 6.3 | ||||||||||||||
Safe-Guard Products International LLC | (g)(i) | Diversified Financials | L+575 | 0.0% | 1/27/27 | 40.0 | 39.6 | 39.9 | ||||||||||||||
Savers Inc | (g)(h) | Retailing | L+800, 0.8% PIK (0.8% Max PIK) | 1.5% | 3/28/24 | 44.9 | 44.6 | 44.4 | ||||||||||||||
Savers Inc | (g)(l) | Retailing | C+850, 0.8% PIK (0.8% Max PIK) | 1.5% | 3/28/24 | $ | 62.4 | 46.1 | 49.2 | |||||||||||||
Sequa Corp | (h)(x) | Capital Goods | L+675, 0.0% PIK (1.0% Max PIK) | 1.0% | 11/28/23 | $ | 11.4 | 10.8 | 11.4 | |||||||||||||
Sequel Youth & Family Services LLC | (g) | Health Care Equipment & Services | L+700 | 1.0% | 9/1/23 | 13.7 | 13.7 | 9.2 | ||||||||||||||
Sequel Youth & Family Services LLC | (g)(h) | Health Care Equipment & Services | L+800 | 1.0% | 9/1/23 | 80.0 | 80.0 | 53.7 | ||||||||||||||
Sequential Brands Group Inc. | (g)(h) | Consumer Durables & Apparel | L+875 | 0.0% | 2/7/24 | 59.0 | 57.8 | 50.9 | ||||||||||||||
Sorenson Communications LLC | (h)(x) | Telecommunication Services | L+650 | 0.0% | 4/29/24 | 10.1 | 9.9 | 10.1 | ||||||||||||||
Sound United LLC | (g)(h)(z) | Consumer Durables & Apparel | L+700 | 1.0% | 12/31/23 | 15.0 | 15.0 | 14.9 | ||||||||||||||
Sungard Availability Services Capital Inc | (g) | Software & Services | L+375, 3.8% PIK (3.8% Max PIK) | 1.0% | 7/1/24 | 0.6 | 0.7 | 0.7 | ||||||||||||||
Sungard Availability Services Capital Inc | (v) | Software & Services | L+375, 3.8% PIK (3.8% Max PIK) | 1.0% | 7/1/24 | 0.3 | 0.4 | 0.4 | ||||||||||||||
Sweeping Corp of America Inc | (g) | Commercial & Professional Services | L+575 | 1.0% | 11/30/26 | 10.7 | 10.6 | 10.6 | ||||||||||||||
Sweeping Corp of America Inc | (v) | Commercial & Professional Services | L+575 | 1.0% | 11/30/26 | 3.4 | 3.4 | 3.4 | ||||||||||||||
Sweeping Corp of America Inc | (v) | Commercial & Professional Services | L+575 | 1.0% | 11/30/26 | 1.7 | 1.7 | 1.7 | ||||||||||||||
Sweet Harvest Foods Management Co | (g)(i) | Food & Staples Retailing | L+775, 1.0% PIK (1.0% Max PIK) | 1.0% | 6/23/23 | 24.4 | 24.3 | 24.4 | ||||||||||||||
Sweet Harvest Foods Management Co | (v) | Food & Staples Retailing | L+775, 1.0% PIK (1.0% Max PIK) | 1.0% | 6/23/23 | 0.8 | 0.8 | 0.8 | ||||||||||||||
Tangoe LLC | (g)(h)(i) | Software & Services | L+650 | 1.0% | 11/28/25 | 89.2 | 88.5 | 82.5 | ||||||||||||||
ThermaSys Corp | (g)(y) | Capital Goods | L+1,100 PIK (L+1,100 Max PIK) | 1.0% | 1/1/24 | 7.5 | 7.9 | 3.9 | ||||||||||||||
ThreeSixty Group | (g)(h)(i) | Retailing | L+375, 3.8% PIK (3.8% Max PIK) | 1.5% | 3/1/23 | 51.6 | 51.3 | 46.6 | ||||||||||||||
ThreeSixty Group | (g)(h)(i) | Retailing | L+375, 3.8% PIK (3.8% Max PIK) | 1.5% | 3/1/23 | 51.3 | 50.9 | 46.3 | ||||||||||||||
Torrid Inc | (g)(h) | Retailing | L+675 | 1.0% | 12/16/24 | 26.3 | 26.0 | 26.3 | ||||||||||||||
Trace3 Inc | (g)(h) | Software & Services | L+675 | 1.0% | 8/3/24 | 89.0 | 89.0 | 89.0 | ||||||||||||||
Transaction Services Group Ltd | (g)(l) | Software & Services | B+600 | 0.0% | 10/15/26 | A$ | 7.6 | 5.0 | 5.5 | |||||||||||||
Transaction Services Group Ltd | (g)(h)(l) | Software & Services | L+600 | 0.0% | 10/15/26 | $ | 15.9 | 15.9 | 14.8 | |||||||||||||
Transaction Services Group Ltd | (g)(l) | Software & Services | L+600 | 0.0% | 10/15/26 | £ | 6.1 | 7.8 | 7.8 | |||||||||||||
Truck-Lite Co LLC | (g) | Capital Goods | L+625 | 1.0% | 12/13/24 | $ | 9.3 | 9.2 | 9.0 | |||||||||||||
Truck-Lite Co LLC | (v) | Capital Goods | L+625 | 1.0% | 12/13/24 | 2.5 | 2.5 | 2.5 | ||||||||||||||
Truck-Lite Co LLC | (g)(h)(i) | Capital Goods | L+625 | 1.0% | 12/13/26 | 125.4 | 124.1 | 121.8 | ||||||||||||||
Utility One Source LP | (h)(x) | Capital Goods | L+425 | 0.0% | 4/18/25 | 0.0 | 0.0 | 0.0 | ||||||||||||||
Virgin Pulse Inc | (g)(h)(i) | Software & Services | L+650 | 1.0% | 5/22/25 | 115.6 | 114.9 | 115.6 | ||||||||||||||
Warren Resources Inc | (g)(h) | Energy | L+900, 1.0% PIK (1.0% Max PIK) | 1.0% | 5/21/21 | 0.7 | 0.7 | 0.7 | ||||||||||||||
Wheels Up Partners LLC | (g) | Transportation | L+855 | 1.0% | 10/15/21 | 4.3 | 4.3 | 4.3 | ||||||||||||||
Wheels Up Partners LLC | (g) | Transportation | L+855 | 1.0% | 7/15/22 | 4.6 | 4.6 | 4.6 |
See notes to unaudited consolidated financial statements.
FS Investment CorporationKKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 20162020
(in thousands,millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||||
Warren Resources, Inc. | (g)(q) | Energy | L+900, 1.0% PIK (1.0% Max PIK) | 1.0% | 5/22/20 | $ | 144 | $ | 144 | $ | 144 | |||||||||||||
Waste Pro USA, Inc. | (e)(g)(h) | Commercial & Professional Services | L+750 | 1.0% | 10/15/20 | 94,553 | 94,553 | 96,326 | ||||||||||||||||
Zeta Interactive Holdings Corp. | (e)(g)(h) | Software & Services | L+750 | 1.0% | 7/29/22 | 9,766 | 9,792 | 9,863 | ||||||||||||||||
Zeta Interactive Holdings Corp. | (g)(s) | Software & Services | L+750 | 1.0% | 7/29/22 | 2,857 | 2,831 | 2,876 | ||||||||||||||||
Zeta Interactive Holdings Corp. | (g)(q) | Software & Services | L+750 | 1.0% | 7/29/22 | 1,777 | 1,777 | 1,793 | ||||||||||||||||
Zeta Interactive Holdings Corp. | (g)(q)(s) | Software & Services | L+750 | 1.0% | 7/29/22 | 457 | 457 | 461 | ||||||||||||||||
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Total Senior Secured Loans—First Lien | 2,178,392 | 2,121,674 | ||||||||||||||||||||||
Unfunded Loan Commitments | (186,233 | ) | (186,233 | ) | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Net Senior Secured Loans—First Lien | 1,992,159 | 1,935,441 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Senior Secured Loans—Second Lien—26.1% | ||||||||||||||||||||||||
Alison US LLC | (g)(j) | Capital Goods | L+850 | 1.0% | 8/29/22 | 4,444 | 4,303 | 4,310 | ||||||||||||||||
AP Exhaust Acquisition, LLC | (f) | Automobiles & Components | 12.0% PIK (12.0% Max PIK) | 9/28/21 | 3,763 | 3,763 | 3,279 | |||||||||||||||||
Arena Energy, LP | (g) | Energy | L+900, 4.0% PIK (4.0% Max PIK) | 1.0% | 1/24/21 | 7,955 | 7,955 | 7,994 | ||||||||||||||||
Ascent Resources—Utica, LLC | (e)(f)(g)(h) | Energy | L+950 | 1.5% | 9/30/18 | 186,037 | 185,553 | 187,665 | ||||||||||||||||
ASG Technologies Group, Inc. | (g)(t) | Software & Services | L+1100, 0.0% PIK (6.0% Max PIK) | 1.0% | 6/27/22 | 24,611 | 18,533 | 23,872 | ||||||||||||||||
Brock Holdings III, Inc. | (g) | Energy | L+825 | 1.8% | 3/16/18 | 6,923 | 6,893 | 6,611 | ||||||||||||||||
Byrider Finance, LLC | (f)(g) | Automobiles & Components | L+1000, 0.5% PIK (0.5% Max PIK) | 1.3% | 8/22/20 | 10,047 | 10,047 | 9,896 | ||||||||||||||||
Compuware Corp. | (g) | Software & Services | L+825 | 1.0% | 12/15/22 | 6,550 | 5,982 | 6,582 | ||||||||||||||||
DEI Sales, Inc. | (e)(f)(g)(h) | Consumer Durables & Apparel | L+900 | 1.5% | 1/15/18 | 64,654 | 64,431 | 62,229 | ||||||||||||||||
EagleView Technology Corp. | (g) | Software & Services | L+825 | 1.0% | 7/14/23 | 11,538 | 11,394 | 11,520 | ||||||||||||||||
Gruden Acquisition, Inc. | (g) | Transportation | L+850 | 1.0% | 8/18/23 | 15,000 | 14,371 | 11,874 | ||||||||||||||||
JW Aluminum Co. | (e)(f)(g)(h)(u) | Materials | L+850 PIK (L+850 Max PIK) | 0.8% | 11/17/20 | 37,385 | 37,367 | 38,039 | ||||||||||||||||
Logan’s Roadhouse, Inc. | (g)(t) | Consumer Services | L+850 PIK (L+850 Max PIK) | 1.0% | 11/23/20 | 16,114 | 16,114 | 15,415 | ||||||||||||||||
National Surgical Hospitals, Inc. | (e)(h) | Health Care Equipment & Services | L+900 | 1.0% | 6/1/23 | 30,000 | 30,000 | 30,014 | ||||||||||||||||
Nielsen & Bainbridge, LLC | (g) | Consumer Durables & Apparel | L+925 | 1.0% | 8/15/21 | 16,675 | 16,481 | 16,341 | ||||||||||||||||
Paw Luxco II Sarl | (f)(j) | Consumer Durables & Apparel | EURIBOR+950 | 1/29/19 | € | 16,364 | 20,914 | 2,055 | ||||||||||||||||
PSAV Acquisition Corp. | (e)(g)(h) | Technology Hardware & Equipment | L+825 | 1.0% | 1/24/22 | $ | 80,000 | 79,130 | 80,000 | |||||||||||||||
Spencer Gifts LLC | (e)(h) | Retailing | L+825 | 1.0% | 6/29/22 | 30,000 | 29,885 | 24,825 | ||||||||||||||||
Stadium Management Corp. | (e)(g)(h) | Consumer Services | L+825 | 1.0% | 2/27/21 | 56,776 | 56,776 | 56,634 | ||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total Senior Secured Loans—Second Lien | 619,892 | 599,155 | ||||||||||||||||||||||
|
|
|
|
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||
Wheels Up Partners LLC | (g) | Transportation | L+710 | 1.0% | 6/30/24 | $ | 16.9 | $ | 16.9 | $ | 17.1 | |||||||||||
Wheels Up Partners LLC | (g) | Transportation | L+710 | 1.0% | 11/1/24 | 7.0 | 7.0 | 7.1 | ||||||||||||||
Wheels Up Partners LLC | (g) | Transportation | L+710 | 1.0% | 12/21/24 | 14.9 | 14.9 | 15.1 | ||||||||||||||
Wheels Up Partners LLC | (g) | Transportation | L+710 | 1.0% | 12/21/24 | 11.7 | 11.6 | 11.8 | ||||||||||||||
Zeta Interactive Holdings Corp | (g)(h) | Software & Services | L+750 | 1.0% | 7/29/22 | 15.8 | 15.8 | 15.8 | ||||||||||||||
|
|
|
| |||||||||||||||||||
Total Senior Secured Loans—First Lien | 3,750.9 | 3,603.5 | ||||||||||||||||||||
Unfunded Loan Commitments | (154.0 | ) | (154.0 | ) | ||||||||||||||||||
|
|
|
| |||||||||||||||||||
Net Senior Secured Loans—First Lien | 3,596.9 | 3,449.5 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||
Senior Secured Loans—Second Lien—28.4% | ||||||||||||||||||||||
Abaco Systems, Inc | (g) | Capital Goods | L+1,050 | 1.0% | 6/7/22 | 63.4 | 63.0 | 63.4 | ||||||||||||||
Amtek Global Technology Pte Ltd | (g)(j)(l)(n)(w)(z) | Automobiles & Components | E+500 PIK (E+500 Max PIK) | 0.0% | 4/4/24 | € | 44.9 | 51.3 | 0.1 | |||||||||||||
athenahealth Inc | (g) | Health Care Equipment & Services | L+850 | 0.0% | 2/11/27 | $ | 112.9 | 112.0 | 114.0 | |||||||||||||
Belk Inc | (g)(n)(w) | Retailing | 10.5% | 6/12/23 | 19.5 | 14.0 | 2.7 | |||||||||||||||
Belk Inc | (g)(n)(w) | Retailing | 10.5% | 10/29/25 | 99.6 | 90.5 | 13.9 | |||||||||||||||
Byrider Finance LLC | (f)(g) | Automobiles & Components | L+1,000, 0.5% PIK (0.5% Max PIK) | 1.3% | 6/7/22 | 18.0 | 18.0 | 17.9 | ||||||||||||||
Culligan International Co | (g)(h) | Household & Personal Products | L+850 | 1.0% | 12/13/24 | 85.0 | 84.4 | 85.0 | ||||||||||||||
Datatel Inc | (g) | Software & Services | L+800 | 1.0% | 10/9/28 | 53.7 | 53.0 | 53.0 | ||||||||||||||
Gruden Acquisition Inc | (g)(x) | Transportation | L+850 | 1.0% | 8/18/23 | 10.0 | 9.8 | 9.2 | ||||||||||||||
MedAssets Inc | (g) | Health Care Equipment & Services | L+975 | 1.0% | 4/20/23 | 63.0 | 62.2 | 62.6 | ||||||||||||||
NBG Home | (g)(n)(w) | Consumer Durables & Apparel | L+1,275 PIK (L+1,275 Max PIK) | 1.0% | 9/30/24 | 27.6 | 24.7 | 17.0 | ||||||||||||||
NEP Broadcasting LLC | (g)(x) | Media & Entertainment | L+700 | 0.0% | 10/19/26 | 1.0 | 1.0 | 0.9 | ||||||||||||||
OEConnection LLC | (g) | Software & Services | L+825 | 0.0% | 9/25/27 | 34.1 | 33.7 | 33.8 | ||||||||||||||
Paradigm Acquisition Corp | (g)(x) | Health Care Equipment & Services | L+750 | 0.0% | 10/26/26 | 1.9 | 1.9 | 1.7 | ||||||||||||||
Peak 10 Holding Corp | (g)(n)(w)(x) | Telecommunication Services | L+725 | 0.0% | 8/1/25 | 0.2 | 0.2 | 0.1 | ||||||||||||||
Petrochoice Holdings Inc | (g) | Capital Goods | L+875 | 1.0% | 8/21/23 | 65.0 | 64.1 | 54.9 | ||||||||||||||
Polyconcept North America Inc | (g) | Household & Personal Products | 11.0% PIK (11.0% Max PIK) | 2/16/24 | 8.7 | 8.6 | 7.5 | |||||||||||||||
Pretium Packaging LLC | (g) | Household & Personal Products | L+825 | 0.8% | 11/6/28 | 18.6 | 18.3 | 18.3 | ||||||||||||||
Pure Fishing Inc | (g) | Consumer Durables & Apparel | L+838 | 1.0% | 12/31/26 | 81.1 | 80.4 | 76.0 | ||||||||||||||
Rise Baking Company | (g)(h) | Food, Beverage & Tobacco | L+800 | 1.0% | 8/9/26 | 31.1 | 30.9 | 29.1 | ||||||||||||||
Sequa Corp | (h)(x) | Capital Goods | L+1,075, 0.0% PIK (6.8% Max PIK) | 1.0% | 4/28/24 | 3.6 | 3.5 | 3.1 | ||||||||||||||
Sorenson Communications LLC | (f)(h) | Telecommunication Services | L+1,150 PIK (L+1,150 Max PIK) | 4/30/25 | 18.4 | 18.0 | 18.4 | |||||||||||||||
Sound United LLC | (g)(z) | Consumer Durables & Apparel | 13.5% PIK (13.5% Max PIK) | 6/30/24 | 21.8 | 20.9 | 20.9 | |||||||||||||||
Sparta Systems Inc | (g) | Software & Services | L+825 | 1.0% | 8/21/25 | 35.1 | 34.7 | 34.9 | ||||||||||||||
Sungard Availability Services Capital Inc | (g) | Software & Services | L+400, 2.8% PIK (2.8 % Max PIK) | 1.0% | 8/1/24 | 1.9 | 1.9 | 1.9 | ||||||||||||||
Vestcom International Inc | (g)(h) | Consumer Services | L+825 | 1.0% | 12/19/24 | 70.5 | 70.1 | 70.5 | ||||||||||||||
WireCo WorldGroup Inc | (h)(x) | Capital Goods | L+900 | 1.0% | 9/30/24 | 3.4 | 3.4 | 2.8 | ||||||||||||||
Wittur Holding GmbH | (g)(l) | Capital Goods | E+850, 0.5% PIK (0.5% Max PIK) | 0.0% | 9/23/27 | € | 56.7 | 60.6 | 66.3 | |||||||||||||
|
|
|
| |||||||||||||||||||
Total Senior Secured Loans—Second Lien | 1,035.1 | 879.9 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||
Other Senior Secured Debt—2.8% | ||||||||||||||||||||||
Advanced Lighting Technologies Inc | (g)(n)(w)(z) | Materials | L+1,700 PIK (L+1,700 Max PIK) | 1.0% | 10/4/23 | $ | 38.3 | 23.6 | — | |||||||||||||
Angelica Corp | (n)(t)(w) | Health Care Equipment & Services | 10.0% PIK (10.0% Max PIK) | 12/30/22 | 48.4 | 42.3 | 23.9 | |||||||||||||||
Black Swan Energy Ltd | (g)(l) | Energy | 9.0% | 1/20/24 | 6.0 | 6.0 | 5.9 | |||||||||||||||
JW Aluminum Co | (g)(x)(y) | Materials | 10.3% | 6/1/26 | 39.3 | 39.4 | 41.8 |
See notes to unaudited consolidated financial statements.
FS Investment CorporationKKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 20162020
(in thousands,millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||||
Senior Secured Bonds—6.9% | ||||||||||||||||||||||||
Advanced Lighting Technologies, Inc. | (f)(g) | Materials | 10.5% | 6/1/19 | $ | 78,500 | $ | 77,670 | $ | 28,103 | ||||||||||||||
Caesars Entertainment Resort Properties, LLC | (e)(g)(h) | Consumer Services | 11.0% | 10/1/21 | 24,248 | 24,026 | 26,497 | |||||||||||||||||
FourPoint Energy, LLC | (e)(f)(h) | Energy | 9.0% | 12/31/21 | 74,813 | 72,520 | 76,589 | |||||||||||||||||
Global A&T Electronics Ltd. | (g)(j) | Semiconductors & Semiconductor Equipment | 10.0% | 2/1/19 | 7,000 | 6,955 | 5,328 | |||||||||||||||||
Ridgeback Resources Inc. | (f)(j) | Energy | 12.0% | 12/29/20 | 132 | 129 | 132 | |||||||||||||||||
Sorenson Communications, Inc. | (f) | Telecommunication Services | 9.0%, 0.0% PIK (9.0% Max PIK) | 10/31/20 | 19,898 | 19,357 | 17,709 | |||||||||||||||||
Velvet Energy Ltd. | (g)(j) | Energy | 9.0% | 10/5/23 | 5,000 | 5,000 | 5,112 | |||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total Senior Secured Bonds | 205,657 | 159,470 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Subordinated Debt—19.8% | ||||||||||||||||||||||||
Aurora Diagnostics, LLC | (e)(f)(h) | Health Care Equipment & Services | 10.8% | 1/15/18 | 14,935 | 14,944 | 12,881 | |||||||||||||||||
Bellatrix Exploration Ltd. | (g)(j) | Energy | 8.5% | 5/15/20 | 5,000 | 4,928 | 4,922 | |||||||||||||||||
Brooklyn Basketball Holdings, LLC | (f)(g) | Consumer Services | L+725 | 10/25/19 | 19,873 | 19,873 | 19,972 | |||||||||||||||||
CEC Entertainment, Inc. | (f) | Consumer Services | 8.0% | 2/15/22 | 5,000 | 5,010 | 5,117 | |||||||||||||||||
Ceridian HCM Holding, Inc. | (f)(g) | Commercial & Professional Services | 11.0% | 3/15/21 | 21,800 | 22,555 | 22,509 | |||||||||||||||||
EV Energy Partners, L.P. | (f) | Energy | 8.0% | 4/15/19 | 265 | 245 | 188 | |||||||||||||||||
Global Jet Capital Inc. | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 1/30/25 | 732 | 732 | 727 | |||||||||||||||||
Global Jet Capital Inc. | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 4/30/25 | 4,649 | 4,649 | 4,620 | |||||||||||||||||
Global Jet Capital Inc. | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 9/3/25 | 961 | 961 | 955 | |||||||||||||||||
Global Jet Capital Inc. | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 9/29/25 | 904 | 904 | 899 | |||||||||||||||||
Global Jet Capital Inc. | (f)(g)(j) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 12/4/25 | 66,763 | 66,763 | 66,346 | |||||||||||||||||
Global Jet Capital Inc. | (f)(g)(j) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 12/9/25 | 10,919 | 10,919 | 10,851 | |||||||||||||||||
Global Jet Capital Inc. | (f)(j) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 1/29/26 | 5,718 | 5,718 | 5,682 | |||||||||||||||||
Global Jet Capital Inc. | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 4/14/26 | 11,688 | 11,688 | 11,615 | |||||||||||||||||
Global Jet Capital Inc. | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 12/2/26 | 11,473 | 11,473 | 11,473 | |||||||||||||||||
Imagine Communications Corp. | (g) | Media | 12.5% PIK (12.5% Max PIK) | 8/4/18 | 585 | 585 | 585 | |||||||||||||||||
Jupiter Resources Inc. | (f)(g)(j) | Energy | 8.5% | 10/1/22 | 6,425 | 5,505 | 5,579 | |||||||||||||||||
Mood Media Corp. | (g)(i)(j) | Media | 10.0% | 8/6/23 | 6,460 | 5,689 | 5,976 | |||||||||||||||||
Mood Media Corp. | (f)(g)(j) | Media | 9.3% | 10/15/20 | 43,135 | 42,402 | 26,744 |
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||
Lycra | (g)(l)(x) | Consumer Durables & Apparel | 7.5% | 5/1/25 | $ | 5.4 | $ | 5.4 | $ | 4.8 | ||||||||||||
TruckPro LLC | (g)(x) | Capital Goods | 11.0% | 10/15/24 | 2.8 | 2.6 | 3.0 | |||||||||||||||
Velvet Energy Ltd | (g)(l) | Energy | 9.0% | 10/5/23 | 7.5 | 7.5 | 6.2 | |||||||||||||||
|
|
|
| |||||||||||||||||||
Total Other Senior Secured Debt | 126.8 | 85.6 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||
Subordinated Debt—5.5% | ||||||||||||||||||||||
All Systems Holding LLC | (g) | Commercial & Professional Services | 10.0% PIK (10.0% Max PIK) | 10/31/22 | 0.0 | 0.0 | 0.0 | |||||||||||||||
Ardonagh Group Ltd | (g)(l)(x) | Insurance | 11.5% | 1/15/27 | 0.8 | 0.8 | 0.8 | |||||||||||||||
athenahealth Inc | (g) | Health Care Equipment & Services | L+1,113 PIK (L+1,113 Max PIK) | 2/11/27 | 71.2 | 71.2 | 71.5 | |||||||||||||||
ClubCorp Club Operations Inc | (g)(x) | Consumer Services | 8.5% | 9/15/25 | 19.0 | 18.8 | 17.8 | |||||||||||||||
Cornerstone (Ply Gem Holdings Inc) | (g)(x) | Capital Goods | 8.0% | 4/15/26 | 0.2 | 0.2 | 0.2 | |||||||||||||||
Craftworks Rest & Breweries Group Inc | (g)(n)(w) | Consumer Services | 14.0% PIK (14.0% Max PIK) | 11/1/24 | 7.3 | 7.2 | — | |||||||||||||||
Hilding Anders | (g)(l)(n)(z) | Consumer Durables & Apparel | € | 110.5 | — | — | ||||||||||||||||
Hilding Anders | (g)(l)(n)(z) | Consumer Durables & Apparel | 24.8 | 26.9 | 30.3 | |||||||||||||||||
Hilding Anders | (g)(l)(n)(w)(z) | Consumer Durables & Apparel | 13.0% PIK (13.0% Max PIK) | 6/30/21 | 118.2 | 99.4 | 32.4 | |||||||||||||||
Legends Hospitality LLC | (g) | Consumer Services | L+1,000 PIK (L+1,000 Max PIK) | 1.0% | 5/6/26 | 18.2 | 17.9 | 17.9 | ||||||||||||||
|
|
|
| |||||||||||||||||||
Total Subordinated Debt | 242.4 | 170.9 | ||||||||||||||||||||
|
|
|
|
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c)/ Shares | Amortized Cost | Fair Value(d) | ||||||||||||||
Asset Based Finance—30.8% | ||||||||||||||||||||||
801 5th Ave, Seattle, Private Equity | (g)(l)(n)(z) | Real Estate | 4,529,676 | $ | 4.5 | $ | 10.3 | |||||||||||||||
801 5th Ave, Seattle, Structure Mezzanine | (g)(l)(z) | Real Estate | 8.0%, 3.0% PIK (3.0% Max PIK) | 12/19/29 | $ | 29.4 | 29.4 | 29.4 | ||||||||||||||
Abacus JV, Private Equity | (g)(l) | Insurance | 29,115,242 | 29.1 | 31.0 | |||||||||||||||||
Accelerator Investments Aggregator LP, Private Equity | (g)(l)(n) | Diversified Financials | 4,285,347 | 5.0 | 3.8 | |||||||||||||||||
Altavair AirFinance, Private Equity | (g)(l) | Capital Goods | 46,599,209 | 46.6 | 46.6 | |||||||||||||||||
AMPLIT JV LP, Limited Partnership Interest | (g)(l)(n) | Diversified Financials | N/A | 3.8 | — | |||||||||||||||||
Australis Maritime, Common Stock | (g)(l) | Transportation | 19,792,141 | 19.8 | 19.6 | |||||||||||||||||
Avida Holding AB, Common Stock | (g)(l)(n)(z) | Diversified Financials | 328,271,754 | 35.5 | 38.3 | |||||||||||||||||
Bank of Ireland, Class B Credit Linked Floating Rate Note | (j)(l) | Banks | L+1,185 | 12/4/27 | $ | 14.7 | 14.7 | 14.5 | ||||||||||||||
Byrider Finance LLC, Structured Mezzanine | (g) | Automobiles & Components | L+1,050 | 0.3% | 6/3/28 | $ | 2.1 | 2.1 | 2.1 | |||||||||||||
Byrider Finance LLC, Structured Mezzanine | (v) | Automobiles & Components | L+1,050 | 0.3% | 6/3/28 | $ | 5.5 | 5.5 | 5.5 | |||||||||||||
Byrider Finance LLC, Sub Note | (g)(l) | Automobiles & Components | 8.7% | 2/17/25 | $ | 2.1 | 2.0 | 2.2 | ||||||||||||||
Callodine Commercial Finance LLC, 2L Term Loan A | (g) | Diversified Financials | L+900 | 1.0% | 11/3/25 | $ | 37.5 | 37.5 | 37.5 | |||||||||||||
Callodine Commercial Finance LLC, 2L Term Loan B | (v) | Diversified Financials | L+900 | 1.0% | 11/3/25 | $ | 12.1 | 12.1 | 12.1 | |||||||||||||
Capital Automotive LP, Private Equity | (g)(l)(n) | Real Estate | 10,001,344 | 10.0 | 10.0 | |||||||||||||||||
Capital Automotive LP, Structured Mezzanine | (g)(l) | Real Estate | 11.0% PIK (11.0% MAX PIK) | 12/22/28 | $ | 20.0 | 20.0 | 20.0 | ||||||||||||||
Global Jet Capital LLC, Preferred Stock | (f)(g)(n) | Commercial & Professional Services | 69,429,554 | 69.4 | — | |||||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 1/30/25 | $ | 1.3 | 1.2 | 1.2 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 4/30/25 | $ | 8.5 | 7.5 | 7.4 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 9/3/25 | $ | 1.7 | 1.5 | 1.5 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 9/29/25 | $ | 1.6 | 1.5 | 1.4 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (f)(g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 12/4/25 | $ | 99.2 | 87.9 | 87.5 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (f)(g)(l) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 12/4/25 | $ | 22.1 | 19.6 | 19.5 |
See notes to unaudited consolidated financial statements.
FS Investment CorporationKKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 20162020
(in thousands,millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c) | Amortized Cost | Fair Value(d) | ||||||||||||||||
NewStar Financial, Inc. | (g)(j) | Diversified Financials | 8.3%, 0.0% PIK (8.8% Max PIK) | 12/4/24 | $ | 75,000 | $ | 61,615 | $ | 65,250 | ||||||||||||||
P.F. Chang’s China Bistro, Inc. | (f)(g) | Consumer Services | 10.3% | 6/30/20 | 11,433 | 11,743 | 11,223 | |||||||||||||||||
PriSo Acquisition Corp. | (g) | Capital Goods | 9.0% | 5/15/23 | 10,155 | 10,044 | 10,206 | |||||||||||||||||
S1 Blocker Buyer Inc. | (g) | Commercial & Professional Services | 10.0% PIK (10.0% Max PIK) | 10/31/22 | 127 | 127 | 129 | |||||||||||||||||
SandRidge Energy, Inc. | (g)(j)(l) | Energy | —% | 10/4/20 | 4,405 | 5,871 | 5,530 | |||||||||||||||||
Sequel Industrial Products Holdings, LLC | (f) | Commercial & Professional Services | 14.5%, 2.5% PIK (2.5% Max PIK) | 9/30/19 | 7,044 | 6,999 | 7,203 | |||||||||||||||||
Sorenson Communications, Inc. | (f) | Telecommunication Services | 13.9%, 0.0% PIK (13.9% Max PIK) | 10/31/21 | 15,122 | 14,314 | 13,913 | |||||||||||||||||
SunGard Availability Services Capital, Inc. | (f)(g) | Software & Services | 8.8% | 4/1/22 | 10,750 | 8,363 | 7,404 | |||||||||||||||||
ThermaSys Corp. | (e)(f)(g) | Capital Goods | 9.0%, 1.8% PIK (5.0% Max PIK) | 5/3/20 | 138,106 | 138,106 | 110,312 | |||||||||||||||||
VPG Group Holdings LLC | (e)(g) | Materials | 11.0%, 2.0% PIK (2.0% Max PIK) | 6/30/18 | 5,355 | 5,355 | 5,234 | |||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total Subordinated Debt | 498,080 | 454,045 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Collateralized Securities—3.1% | ||||||||||||||||||||||||
ACASC2013-2A Class Subord. B | (f)(g)(j) | Diversified Financials | 12.5% | 10/25/25 | 30,500 | 17,799 | 20,270 | |||||||||||||||||
NewStar Clarendon2014-1A Class D | (g)(j) | Diversified Financials | L+435 | 1/25/27 | 1,560 | 1,477 | 1,472 | |||||||||||||||||
NewStar Clarendon2014-1A Class Subord. B | (g)(j) | Diversified Financials | 16.4% | 1/25/27 | 17,900 | 14,272 | 14,300 | |||||||||||||||||
Rampart CLO 2007 1A Class Subord. | (g)(j) | Diversified Financials | 17.6% | 10/25/21 | 10,000 | 741 | 1,105 | |||||||||||||||||
Stone Tower CLO VI Class Subord. | (f)(j) | Diversified Financials | 23.6% | 4/17/21 | 5,000 | 1,636 | 2,434 | |||||||||||||||||
Wind River CLO Ltd. 2012 1A Class Subord. B | (g)(j) | Diversified Financials | 19.9% | 1/15/26 | 42,504 | 23,300 | 32,477 | |||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total Collateralized Securities | 59,225 | 72,058 | ||||||||||||||||||||||
|
|
|
|
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Principal Amount(c)/ Shares | Amortized Cost | Fair Value(d) | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (f)(g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 12/9/25 | $ | 2.3 | $ | 2.0 | $ | 2.0 | ||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (f)(g)(l) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 12/9/25 | $ | 17.6 | 15.6 | 15.5 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (f) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 1/29/26 | $ | 8.5 | 7.5 | 7.5 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (f)(l) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 1/29/26 | $ | 1.9 | 1.7 | 1.7 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 4/14/26 | $ | 21.2 | 18.8 | 18.7 | ||||||||||||||
Global Jet Capital LLC, Structured Mezzanine | (g) | Commercial & Professional Services | 15.0% PIK (15.0% Max PIK) | 12/2/26 | $ | 20.9 | 18.5 | 18.4 | ||||||||||||||
Global Lending Services LLC, Private Equity | (g)(l) | Diversified Financials | 5,092,915 | 5.1 | 5.7 | |||||||||||||||||
Global Lending Services LLC, Private Equity | (g)(l) | Diversified Financials | 1,836,896 | 1.8 | 1.9 | |||||||||||||||||
Home Partners JV, Common Stock | (g)(l)(n)(y) | Real Estate | 16,886,437 | 16.9 | 21.5 | |||||||||||||||||
Home Partners JV, Private Equity | (g)(l)(n)(x)(y) | Real Estate | 585,960 | 0.6 | 0.0 | |||||||||||||||||
Home Partners JV, Structured Mezzanine | (g)(l)(y) | Real Estate | 11.0% PIK (11.0% Max PIK) | 3/25/29 | $ | 38.5 | 38.5 | 38.5 | ||||||||||||||
Home Partners JV, Structured Mezzanine | (l)(v)(y) | Real Estate | 11.0% PIK (11.0% Max PIK) | 3/25/29 | $ | 9.7 | 9.7 | 9.7 | ||||||||||||||
Kilter Finance, Preferred Stock | (g)(l)(z) | Insurance | 6.0%, 6.0% PIK (6.0% Max PIK) | 228,173 | 0.2 | 0.2 | ||||||||||||||||
Kilter Finance, Private Equity | (g)(l)(n)(z) | Insurance | 247,441 | 0.2 | 0.2 | |||||||||||||||||
KKR Central Park Leasing Aggregator L.P., Partnership Interest | (g)(l) | Capital Goods | 16.0% | 5/31/23 | N/A | 39.1 | 38.8 | |||||||||||||||
KKR Zeno Aggregator LP (K2 Aviation), Partnership Interest | (g)(l) | Capital Goods | 18,232,157 | 18.2 | 20.2 | |||||||||||||||||
Lenovo Group Ltd, Structured Mezzanine | (g)(l) | Technology Hardware & Equipment | 8.0% | 6/22/22 | € | 7.4 | 8.4 | 9.0 | ||||||||||||||
Lenovo Group Ltd, Structured Mezzanine | (g)(l) | Technology Hardware & Equipment | 12.0% | 6/22/22 | $ | 4.7 | 5.3 | 5.7 | ||||||||||||||
Opendoor Labs Inc, 2L Term Loan | (g)(l) | Real Estate | 10.0% | 1/23/26 | $ | 23.6 | 23.6 | 23.6 | ||||||||||||||
Opendoor Labs Inc, 2L Term Loan | (l)(v) | Real Estate | 10.0% | 1/23/26 | $ | 47.1 | 47.1 | 47.1 | ||||||||||||||
Orchard Marine Limited, Class B Common Stock | (g)(l)(n)(y) | Transportation | 1,964 | 3.1 | — | |||||||||||||||||
Orchard Marine Limited, Series A Preferred Stock | (g)(l)(n)(y) | Transportation | 62,976 | 62.0 | 24.6 | |||||||||||||||||
Prime ST LLC, Private Equity | (g)(l)(n)(z) | Real Estate | 3,058,733 | 3.1 | 3.9 | |||||||||||||||||
Prime ST LLC, Structured Mezzanine | (g)(l)(z) | Real Estate | 5.0%, 6.0% PIK (6.0% Max PIK) | 3/12/30 | $ | 22.8 | 22.8 | 22.8 | ||||||||||||||
Rampart CLO 2007 1A Class Subord. | (g)(l)(n) | Diversified Financials | 10/25/21 | $ | 10.0 | — | — | |||||||||||||||
Sofi Lending Corp, Purchase Facility | (g)(l) | Diversified Financials | 32,231,687 | 32.2 | 32.6 | |||||||||||||||||
Star Mountain Diversified Credit Income Fund III, LP, Private Equity | (l)(p) | Diversified Financials | 12,500,000 | 12.5 | 12.1 | |||||||||||||||||
Toorak Capital Funding LLC, Membership Interest | (g)(l)(z) | Real Estate | N/A | 5.5 | 6.6 | |||||||||||||||||
Toorak Capital Partners LLC, Private Equity | (g)(z) | Real Estate | N/A | 195.8 | 235.9 | |||||||||||||||||
Wind River CLO Ltd. 2012 1A Class Subord. B | (g)(l)(n) | Diversified Financials | 1/15/26 | 42.5 | 17.5 | — | ||||||||||||||||
|
|
|
| |||||||||||||||||||
Total Asset Based Finance | 1,099.5 | 1,025.8 | ||||||||||||||||||||
Unfunded Asset Based Finance Commitments | (74.4 | ) | (74.4 | ) | ||||||||||||||||||
|
|
|
| |||||||||||||||||||
Net Asset Based Finance | 1,025.1 | 951.4 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||
Strategic Credit Opportunities, LLC—23.0% | ||||||||||||||||||||||
Strategic Credit Opportunities Partners, LLC | (g)(l)(z) | Diversified Financials | $ | 810.3 | 810.3 | 712.5 | ||||||||||||||||
|
|
|
| |||||||||||||||||||
Total Strategic Credit Opportunities Partners | 810.3 | 712.5 | ||||||||||||||||||||
|
|
|
|
See notes to unaudited consolidated financial statements.
FS Investment CorporationKKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 20162020
(in thousands,millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Number of Shares | Amortized Cost | Fair Value(d) | |||||||||||||||||||||||
Equity/Other—22.1%(k) | ||||||||||||||||||||||||||||
5 Arches, LLC, Common Equity | (g)(j)(l)(n) | Diversified Financials | 9,475 | $ | 250 | $ | 250 | |||||||||||||||||||||
A.P. Plasman Inc., Warrants, 5/25/2026 | (g)(j)(l) | Capital Goods | 698,482 | 2,545 | 3,073 | |||||||||||||||||||||||
Altus Power America Holdings, LLC, Common Equity | (g)(l) | Energy | 462,008 | 462 | 462 | |||||||||||||||||||||||
Altus Power America Holdings, LLC, Preferred Equity | (g) | Energy | 888,211 | 888 | 888 | |||||||||||||||||||||||
Amaya Inc., Warrants, 5/15/2024 | (g)(j)(l) | Consumer Services | 2,000,000 | 16,832 | 13,360 | |||||||||||||||||||||||
AP Exhaust Holdings, LLC, Common Equity | (g)(l)(n) | Automobiles & Components | 811 | 811 | 41 | |||||||||||||||||||||||
Aquilex Corp., Common Equity, Class A Shares | (g)(l)(n) | Commercial & Professional Services | 15,128 | 1,087 | 4,529 | |||||||||||||||||||||||
Aquilex Corp., Common Equity, Class B Shares | (g)(l)(n) | Commercial & Professional Services | 32,637 | 1,690 | 9,772 | |||||||||||||||||||||||
Ascent Resources Utica Holdings, LLC, Common Equity | (g)(l)(m) | Energy | 96,800,082 | 29,100 | 21,683 | |||||||||||||||||||||||
ASG Technologies Group, Inc., Common Equity | (g)(l)(t) | Software & Services | 1,689,767 | 36,422 | 79,673 | |||||||||||||||||||||||
ASG Technologies Group, Inc., Warrants, 6/27/2022 | (g)(l)(t) | Software & Services | 229,541 | 6,542 | 5,830 | |||||||||||||||||||||||
Aspect Software, Inc., Common Equity | (g)(l) | Software & Services | 409,967 | 19,792 | 22,384 | |||||||||||||||||||||||
Burleigh Point, Ltd., Warrants, 7/16/2020 | (g)(j)(l) | Retailing | 3,451,216 | 1,898 | 276 | |||||||||||||||||||||||
CSF Group Holdings, Inc., Common Equity | (g)(l) | Capital Goods | 391,300 | 391 | 391 | |||||||||||||||||||||||
Eastman Kodak Co., Common Equity | (g)(l) | Consumer Durables & Apparel | 61,859 | 1,203 | 959 | |||||||||||||||||||||||
FourPoint Energy, LLC, Common Equity,Class C-II-A Units | (g)(l)(n) | Energy | 21,000 | 21,000 | 10,133 | |||||||||||||||||||||||
FourPoint Energy, LLC, Common Equity, Class D Units | (g)(l)(n) | Energy | 3,937 | 2,601 | 1,919 | |||||||||||||||||||||||
FourPoint Energy, LLC, Common Equity,Class E-II Units | (g)(l)(n) | Energy | 87,400 | 21,850 | 39,986 | |||||||||||||||||||||||
FourPoint Energy, LLC, Common Equity,Class E-III Units | (g)(l)(n) | Energy | 70,875 | 17,719 | 34,197 | |||||||||||||||||||||||
Fronton Investor Holdings, LLC, Class B Units | (g)(n)(t) | Consumer Services | 14,943 | 15,011 | 15,092 | |||||||||||||||||||||||
Global Jet Capital Holdings, LP, Preferred Equity | (f)(g)(j)(l) | Commercial & Professional Services | 42,281,308 | 42,281 | 42,281 | |||||||||||||||||||||||
H.I.G. Empire Holdco, Inc., Common Equity | (g)(l) | Retailing | 375 | 1,118 | 1,148 | |||||||||||||||||||||||
Harvey Holdings, LLC, Common Equity | (g)(l) | Capital Goods | 2,333,333 | 2,333 | 5,367 | |||||||||||||||||||||||
Imagine Communications Corp., Common Equity, Class A Units | (g)(l) | Media | 33,034 | 3,783 | 3,191 | |||||||||||||||||||||||
Industrial Group Intermediate Holdings, LLC, Common Equity | (g)(l)(n) | Materials | 441,238 | 441 | 772 | |||||||||||||||||||||||
JMC Acquisition Holdings, LLC, Common Equity | (g)(l) | Capital Goods | 483 | 483 | 539 | |||||||||||||||||||||||
JW Aluminum Co., Common Equity | (f)(g)(l)(u) | Materials | 972 | — | — | |||||||||||||||||||||||
JW Aluminum Co., Preferred Equity | (f)(g)(u) | Materials | 4,499 | 43,507 | 45,031 | |||||||||||||||||||||||
Leading Edge Aviation Services, Inc., Common Equity | (f)(l) | Capital Goods | 4,401 | 464 | 137 | |||||||||||||||||||||||
Leading Edge Aviation Services, Inc., Preferred Equity | (f)(l) | Capital Goods | 1,303 | 1,303 | 1,303 | |||||||||||||||||||||||
MB Precision Investment Holdings LLC,Class A-2 Units | (g)(l)(n) | Capital Goods | 490,213 | 490 | 98 | |||||||||||||||||||||||
Micronics, Inc., Common Equity | (g)(l) | Capital Goods | 53,073 | 553 | 403 | |||||||||||||||||||||||
Micronics, Inc., Preferred Equity | (g)(l) | Capital Goods | 55 | 553 | 740 | |||||||||||||||||||||||
NewStar Financial, Inc., Warrants, 11/4/2024 | (g)(j)(l) | Diversified Financials | 3,000,000 | 15,058 | 8,310 | |||||||||||||||||||||||
North Haven Cadence Buyer, Inc., Common Equity | (g)(l) | Consumer Services | 1,041,667 | 1,042 | 1,094 | |||||||||||||||||||||||
PSAV Holdings LLC, Common Equity | (f) | Technology Hardware & Equipment | 10,000 | 10,000 | 28,500 | |||||||||||||||||||||||
Ridgeback Resources Inc., Common Equity | (f)(j)(l) | Energy | 324,954 | 1,997 | 1,997 | |||||||||||||||||||||||
Roadhouse Holding Inc., Common Equity | (g)(l)(t) | Consumer Services | 6,672,036 | 6,932 | 8,147 | |||||||||||||||||||||||
S1 Blocker Buyer Inc., Common Equity | (g) | Commercial & Professional Services | 59 | 587 | 571 |
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Number of Shares | Amortized Cost | Fair Value(d) | ||||||||||||||
Equity/Other—17.1%(m) | ||||||||||||||||||||||
Advanced Lighting Technologies Inc, Common Stock | (g)(n)(z) | Materials | 587,637 | $ | 16.5 | $ | — | |||||||||||||||
Advanced Lighting Technologies Inc, Warrant | (g)(n)(z) | Materials | 10/4/27 | 9,262 | 0.1 | — | ||||||||||||||||
Alion Science & Technology Corp, Class A Membership Interest | (g)(n) | Capital Goods | 7,350,267 | 7.3 | 12.4 | |||||||||||||||||
All Systems Holding LLC, Common Stock | (g)(n) | Commercial & Professional Services | 586,763 | 0.6 | 0.9 | |||||||||||||||||
Amtek Global Technology Pte Ltd, Ordinary Shares | (j)(l)(n)(z) | Automobiles & Components | 5,735,804,056 | 30.7 | — | |||||||||||||||||
Amtek Global Technology Pte Ltd, Private Equity | (j)(l)(n)(z) | Automobiles & Components | 4,097 | — | — | |||||||||||||||||
Amtek Global Technology Pte Ltd, Trade Claim | (j)(l)(n)(z) | Automobiles & Components | 1,190,759 | 1.0 | — | |||||||||||||||||
Angelica Corp, Limited Partnership Interest | (n)(t) | Health Care Equipment & Services | 877,044 | 47.6 | — | |||||||||||||||||
Ap Plasman Inc, Warrant | (g)(l)(n) | Capital Goods | 5/25/26 | 6,985 | 2.5 | — | ||||||||||||||||
Ardonagh Ltd, Ordinary Shares | (g)(l)(n) | Insurance | 16,450 | — | — | |||||||||||||||||
Ardonagh Ltd, Ordinary Shares | (g)(l)(n) | Insurance | 116,814 | 0.2 | 0.2 | |||||||||||||||||
Ardonagh Ltd, Preferred Stock | (g)(l)(n) | Insurance | 6,113,719 | 9.1 | 9.7 | |||||||||||||||||
Arena Energy LP, Warrants | (g)(n) | Energy | 9,740,932 | 0.0 | 0.0 | |||||||||||||||||
Ascent Resources Utica Holdings LLC / ARU Finance Corp, Common Stock | (n)(o) | Energy | 10,193 | 9.7 | 2.3 | |||||||||||||||||
Ascent Resources Utica Holdings LLC / ARU Finance Corp, Trade Claim | (o) | Energy | 86,607,143 | 19.4 | 19.3 | |||||||||||||||||
ASG Technologies, Common Stock | (g)(n)(y) | Software & Services | 1,149,421 | 23.4 | 42.7 | |||||||||||||||||
ASG Technologies, Warrant | (g)(n)(y) | Software & Services | 6/27/22 | 229,541 | 6.5 | 3.5 | ||||||||||||||||
Aspect Software Inc, Common Stock | (g)(n) | Software & Services | 161,261 | 0.3 | 0.3 | |||||||||||||||||
Aspect Software Inc, Warrant | (g)(n) | Software & Services | 1/15/24 | 161,008 | — | 0.2 | ||||||||||||||||
AVF Parent LLC, Trade Claim | (g)(n) | Retailing | 56,969 | — | — | |||||||||||||||||
Belk Inc, Units | (g)(n) | Retailing | 1,642 | 7.8 | — | |||||||||||||||||
Borden (New Dairy Opco), Common Stock | (n)(t)(y) | Food, Beverage & Tobacco | 4,466,800 | 3.9 | 3.2 | |||||||||||||||||
Cengage Learning, Inc, Common Stock | (g)(n) | Media & Entertainment | 227,802 | 7.5 | 3.3 | |||||||||||||||||
Charlotte Russe Inc, Common Stock | (g)(n)(y) | Retailing | 22,575 | 12.5 | — | |||||||||||||||||
Chisholm Oil & Gas Operating LLC, Series A Units | (n)(p) | Energy | 75,000 | 0.1 | — | |||||||||||||||||
CTI Foods Holding Co LLC, Common Stock | (g)(n) | Food, Beverage & Tobacco | 5,836 | 0.7 | 0.0 | |||||||||||||||||
Directed LLC, Warrant | (g)(n) | Consumer Durables & Apparel | 12/31/25 | 649,538 | — | — | ||||||||||||||||
Empire Today LLC, Common Stock | (g)(n) | Retailing | 375 | 1.1 | 3.3 | |||||||||||||||||
Fronton BV, Common Stock | (n)(p)(y) | Consumer Services | 14,943 | — | 1.2 | |||||||||||||||||
Genesys Telecommunications Laboratories Inc, Class A Shares | (g)(n) | Technology Hardware & Equipment | 40,529 | — | — | |||||||||||||||||
Genesys Telecommunications Laboratories Inc, Ordinary Shares | (g)(n) | Technology Hardware & Equipment | 41,339 | — | — | |||||||||||||||||
Genesys Telecommunications Laboratories Inc, Preferred Stock | (g)(n) | Technology Hardware & Equipment | 1,050,465 | — | — | |||||||||||||||||
Harvey Industries Inc, Common Stock | (g)(n) | Capital Goods | 2,333,333 | — | 1.9 | |||||||||||||||||
Hilding Anders, Class A Common Stock | (g)(l)(n)(z) | Consumer Durables & Apparel | 4,503,411 | 0.1 | — | |||||||||||||||||
Hilding Anders, Class B Common Stock | (g)(l)(n)(z) | Consumer Durables & Apparel | 574,791 | — | — | |||||||||||||||||
Hilding Anders, Class C Common Stock | (g)(l)(n)(z) | Consumer Durables & Apparel | 213,201 | — | — | |||||||||||||||||
Hilding Anders, Equity Options | (g)(l)(n)(z) | Consumer Durables & Apparel | 11/30/25 | 236,160,807 | 15.0 | — | ||||||||||||||||
HM Dunn Co Inc, Preferred Stock, Series A | (g)(n)(y) | Capital Goods | 214 | 0.0 | — | |||||||||||||||||
HM Dunn Co Inc, Preferred Stock, Series B | (g)(n)(y) | Capital Goods | 214 | — | — | |||||||||||||||||
Home Partners of America Inc, Common Stock | (g)(n)(y) | Real Estate | 81,625 | 83.6 | 130.5 | |||||||||||||||||
Home Partners of America Inc, Warrant | (g)(n)(y) | Real Estate | 8/7/24 | 2,675 | 0.3 | 2.1 |
See notes to unaudited consolidated financial statements.
FS Investment CorporationKKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 20162020
(in thousands,millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Number of Shares | Amortized Cost | Fair Value(d) | |||||||||||||||||||||||
Safariland, LLC, Common Equity | (f)(l) | Capital Goods | 25,000 | $ | 2,500 | $ | 11,535 | |||||||||||||||||||||
Safariland, LLC, Warrants, 7/27/2018 | (f)(l) | Capital Goods | 2,263 | 246 | 1,044 | |||||||||||||||||||||||
Safariland, LLC, Warrants, 9/20/2019 | (f)(l) | Capital Goods | 2,273 | 227 | 1,049 | |||||||||||||||||||||||
SandRidge Energy, Inc., Common Equity | (g)(j)(l) | Energy | 186,853 | 4,671 | 4,400 | |||||||||||||||||||||||
Sequel Industrial Products Holdings, LLC, Common Equity | (f)(g)(l) | Commercial & Professional Services | 33,306 | 3,400 | 9,682 | |||||||||||||||||||||||
Sequel Industrial Products Holdings, LLC, Preferred Equity | (f)(g) | Commercial & Professional Services | 8,000 | 12,174 | 12,179 | |||||||||||||||||||||||
Sequel Industrial Products Holdings, LLC, Warrants, 9/28/2022 | (g)(l) | Commercial & Professional Services | 1,293 | 1 | 219 | |||||||||||||||||||||||
Sequel Industrial Products Holdings, LLC, Warrants, 5/10/2022 | (f)(l) | Commercial & Professional Services | 19,388 | 12 | 3,697 | |||||||||||||||||||||||
Sequential Brands Group, Inc., Common Equity | (g)(j)(l) | Consumer Durables & Apparel | 206,664 | 2,790 | 967 | |||||||||||||||||||||||
Sorenson Communications, Inc., Common Equity | (f)(l) | Telecommunication Services | 46,163 | — | 38,989 | |||||||||||||||||||||||
Sunnova Energy Corp., Common Equity | (g)(l) | Energy | 192,389 | 722 | 1,045 | |||||||||||||||||||||||
Sunnova Energy Corp., Preferred Equity | (g)(l) | Energy | 18,182 | 97 | 99 | |||||||||||||||||||||||
SWI Holdco LLC, Common Equity | (g)(l) | Consumer Durables & Apparel | 950 | — | 2,613 | |||||||||||||||||||||||
ThermaSys Corp., Common Equity | (f)(l) | Capital Goods | 51,813 | 1 | — | |||||||||||||||||||||||
ThermaSys Corp., Preferred Equity | (f)(l) | Capital Goods | 51,813 | 5,181 | — | |||||||||||||||||||||||
VPG Group Holdings LLC,Class A-2 Units | (f)(l) | Materials | 3,637,500 | 3,638 | 2,183 | |||||||||||||||||||||||
Warren Resources, Inc., Common Equity | (f)(g)(l) | Energy | 113,515 | 534 | 488 | |||||||||||||||||||||||
Zeta Interactive Holdings Corp., Preferred Equity | (g)(l) | Software & Services | 215,662 | 1,714 | 1,931 | |||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||
Total Equity/Other | 368,927 | 506,647 | ||||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||||
TOTAL INVESTMENTS—162.2% | $ | 3,743,940 | 3,726,816 | |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
LIABILITIES IN EXCESS OF OTHER ASSETS—(62.2%) | (1,429,439 | ) | ||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||
NET ASSETS—100% | $ | 2,297,377 | ||||||||||||||||||||||||||
|
|
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Number of Shares | Amortized Cost | Fair Value(d) | ||||||||||||||
Imagine Communications Corp, Common Stock | (g)(n) | Media & Entertainment | 33,034 | $ | 3.8 | $ | 2.9 | |||||||||||||||
Jones Apparel Holdings, Inc., Common Stock | (g)(n) | Consumer Durables & Apparel | 5,451 | 0.9 | — | |||||||||||||||||
JW Aluminum Co, Common Stock | (f)(g)(n)(y) | Materials | 1,474 | — | — | |||||||||||||||||
JW Aluminum Co, Preferred Stock | (f)(g)(y) | Materials | 12.5% PIK (12.5% Max PIK) | 2/15/28 | 8,404 | 107.3 | 93.7 | |||||||||||||||
Maverick Natural Resources, Common Stock | (n) | Energy | 160,101 | 44.0 | 48.6 | |||||||||||||||||
MB Precision Holdings LLC, Class A—2 Units | (n)(p) | Capital Goods | 1,426,110 | 0.5 | — | |||||||||||||||||
Miami Beach Medical Group LLC, Common Stock | (g)(n) | Health Care Equipment & Services | 269,107 | 0.3 | 0.3 | |||||||||||||||||
Micronics Filtration Holdings Inc, Common Stock | (g)(n)(y) | Capital Goods | 53,073 | 0.6 | — | |||||||||||||||||
Micronics Filtration Holdings Inc, Preferred Stock, Series A | (g)(n)(y) | Capital Goods | 55 | 0.6 | — | |||||||||||||||||
Micronics Filtration Holdings Inc, Preferred Stock, Series B | (g)(n)(y) | Capital Goods | 23 | 0.2 | — | |||||||||||||||||
Micronics Filtration Holdings Inc, Preferred Stock, Series B PIK | (g)(y) | Capital Goods | 3.0% PIK (3.0% Max PIK) | 3/31/24 | 112,780 | — | — | |||||||||||||||
Micronics Filtration Holdings Inc, Preferred Stock, Series C PIK | (g)(y) | Capital Goods | 7.5% PIK (7.5% Max PIK) | 3/31/24 | 54,000 | — | — | |||||||||||||||
NBG Home, Common Stock | (g)(n) | Consumer Durables & Apparel | 1,903 | 2.6 | — | |||||||||||||||||
Nine West Holdings Inc, Common Stock | (g)(n) | Consumer Durables & Apparel | 5,451 | 6.5 | — | |||||||||||||||||
One Call Care Management Inc, Common Stock | (g)(n)(y) | Health Care Equipment & Services | 4,370,566,806 | 3.0 | 2.4 | |||||||||||||||||
One Call Care Management Inc, Preferred Stock A | (g)(n)(y) | Health Care Equipment & Services | 466,194 | 32.3 | 25.5 | |||||||||||||||||
One Call Care Management Inc, Preferred Stock B | (g)(y) | Health Care Equipment & Services | 9.0% PIK (9.0% Max PIK) | 10/25/29 | 9,615,247 | 9.8 | 10.6 | |||||||||||||||
Petroplex Acidizing Inc, Preferred Stock A | (g)(y) | Energy | 2.0% PIK (2.0% Max PIK) | 24,642,082 | 4.5 | — | ||||||||||||||||
Petroplex Acidizing Inc, Warrant | (g)(n)(y) | Energy | 12/15/26 | 8 | — | — | ||||||||||||||||
Polyconcept North America Inc, Class A—1 Units | (g)(n) | Household & Personal Products | 29,376 | 2.9 | 2.1 | |||||||||||||||||
Proserv Acquisition LLC, Class A Common Units | (g)(l)(n)(y) | Energy | 2,635,005 | 33.5 | 9.0 | |||||||||||||||||
Proserv Acquisition LLC, Class A Preferred Units | (g)(l)(n)(y) | Energy | 837,780 | 5.4 | 9.5 | |||||||||||||||||
Quorum Health Corp, Common Stock | (g)(n) | Health Care Equipment & Services | 32,622 | 0.3 | 0.3 | |||||||||||||||||
Quorum Health Corp, Trade Claim | (g)(n) | Health Care Equipment & Services | 3,334,000 | 0.3 | 0.3 | |||||||||||||||||
Quorum Health Corp, Trust Initial Funding Units | (g)(n) | Health Care Equipment & Services | 57,595 | 0.1 | 0.1 | |||||||||||||||||
Ridgeback Resources Inc, Common Stock | (f)(l)(n) | Energy | 324,954 | 2.0 | 1.3 | |||||||||||||||||
Sequential Brands Group Inc., Common Stock | (g)(x) | Consumer Durables & Apparel | 5,167 | 2.8 | 0.1 | |||||||||||||||||
Sorenson Communications LLC, Common Stock | (f)(n) | Telecommunication Services | 46,163 | — | 42.3 | |||||||||||||||||
Sound United LLC, Class A Units | (g)(n)(z) | Consumer Durables & Apparel | 649,538 | 1.1 | — | |||||||||||||||||
Sound United LLC, Common Stock | (g)(n)(z) | Consumer Durables & Apparel | 12,857,143 | 17.3 | 29.3 | |||||||||||||||||
Sound United LLC, Series I Units | (g)(n)(z) | Consumer Durables & Apparel | 308,948 | 0.5 | — | |||||||||||||||||
Sound United LLC, Series II Units | (n)(p)(z) | Consumer Durables & Apparel | 316,770 | 0.5 | — | |||||||||||||||||
SSC (Lux) Limited S.a r.l., Common Stock | (g)(l)(n) | Health Care Equipment & Services | 113,636 | 2.3 | 4.9 | |||||||||||||||||
Stuart Weitzman Inc, Common Stock | (g)(n) | Consumer Durables & Apparel | 5,451 | — | — | |||||||||||||||||
Sungard Availability Services Capital Inc, Common Stock | (f)(g)(n) | Software & Services | 44,857 | 3.1 | 1.5 | |||||||||||||||||
Sweet Harvest Foods Management Co, Warrant | (g)(i)(n) | Food & Staples Retailing | 6/30 /30 | 2,883,007 | — | 1.1 | ||||||||||||||||
ThermaSys Corp, Common Stock | (f)(g)(n)(y) | Capital Goods | 17,383,026 | 10.2 | — | |||||||||||||||||
ThermaSys Corp, Preferred Stock | (g)(n)(y) | Capital Goods | 1,529 | 1.7 | — | |||||||||||||||||
Trace3 Inc, Common Stock | (g)(n) | Software & Services | 19,312 | 0.2 | 1.4 | |||||||||||||||||
Versatile Processing Group Inc, Class A—2 Units | (f)(n) | Materials | 3,637,500 | 3.6 | — | |||||||||||||||||
Warren Resources Inc, Common Stock | (g)(n) | Energy | 113,515 | 0.5 | 0.1 | |||||||||||||||||
Zeta Interactive Holdings Corp, Preferred Stock, Series E—1 | (g)(n) | Software & Services | 215,662 | 1.7 | 2.2 |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
Portfolio Company(a) | Footnotes | Industry | Rate(b) | Floor | Maturity | Number of Shares | Amortized Cost | Fair Value(d) | ||||||||||||||||||||||
Zeta Interactive Holdings Corp, Preferred Stock, Series F | (g)(n) | Software & Services | 196,151 | $ | 1.7 | $ | 3.4 | |||||||||||||||||||||||
Zeta Interactive Holdings Corp, Warrant | (g)(n) | Software & Services | 4/20/27 | 29,422 | — | 0.1 | ||||||||||||||||||||||||
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Total Equity/Other | 616.1 | 530.0 | ||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||
TOTAL INVESTMENTS—219.0% | $ | 7,452.7 | 6,779.8 | |||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
LIABILITIES IN EXCESS OF OTHER ASSETS—(119.0%) | (3,683.8 | ) | ||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||
NET ASSETS—100% | $ | 3,096.0 | ||||||||||||||||||||||||||||
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|
Foreign currency forward contracts
Foreign Currency | Settlement Date | Counterparty | Amount and | US$ Value at Settlement Date | US$ Value at December 31, 2020 | Unrealized Appreciation (Depreciation) | ||||||||||||||||
AUD | 10/17/2022 | JP Morgan Chase Bank | A$ | 3.0 Sold | $ | 2.1 | $ | 2.3 | $ | (0.2 | ) | |||||||||||
EUR | 5/6/2022 | JP Morgan Chase Bank | € | 6.1 Sold | 7.5 | 7.5 | — | |||||||||||||||
EUR | 7/17/2023 | JP Morgan Chase Bank | € | 1.3 Sold | 1.7 | 1.6 | 0.1 | |||||||||||||||
EUR | 8/8/2025 | JP Morgan Chase Bank | € | 4.8 Sold | 5.7 | 6.1 | (0.4 | ) | ||||||||||||||
GBP | 10/13/2021 | JP Morgan Chase Bank | £ | 0.6 Sold | 0.9 | 0.8 | 0.1 | |||||||||||||||
GBP | 10/13/2021 | JP Morgan Chase Bank | £ | 0.6 Bought | (0.8 | ) | (0.8 | ) | — | |||||||||||||
GBP | 1/11/2023 | JP Morgan Chase Bank | £ | 2.0 Bought | (2.7 | ) | (2.7 | ) | — | |||||||||||||
GBP | 1/11/2023 | JP Morgan Chase Bank | £ | 7.0 Sold | 9.4 | 9.6 | (0.2 | ) | ||||||||||||||
GBP | 1/11/2023 | JP Morgan Chase Bank | £ | 1.9 Sold | 2.9 | 2.7 | 0.2 | |||||||||||||||
GBP | 1/11/2023 | JP Morgan Chase Bank | £ | 1.7 Sold | 2.6 | 2.4 | 0.2 | |||||||||||||||
GBP | 1/11/2023 | JP Morgan Chase Bank | £ | 3.4 Sold | 4.8 | 4.7 | 0.1 | |||||||||||||||
GBP | 1/11/2023 | JP Morgan Chase Bank | £ | 1.4 Sold | 1.9 | 1.9 | — | |||||||||||||||
NOK | 8/8/2025 | JP Morgan Chase Bank | NOK | 49.1 Sold | 5.2 | 5.6 | (0.4 | ) | ||||||||||||||
SEK | 8/8/2025 | JP Morgan Chase Bank | SEK | 119.3 Sold | 13.3 | 14.8 | (1.5 | ) | ||||||||||||||
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Total | $ | 54.5 | $ | 56.5 | $ | (2.0 | ) | |||||||||||||||
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(a) | Security may be an obligation of one or more entities affiliated with the named company. |
(b) | Certain variable rate securities in the Company’s portfolio bear interest at a rate determined by a publicly disclosed base rate plus a basis point spread. As of December 31, |
(c) | Denominated in U.S. dollars unless otherwise noted. |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
(d) | Fair value determined by the Company’s board of directors (see Note |
(e) | Not used. |
(f) | Security or portion thereof held within Race Street Funding LLC and is pledged as collateral supporting the amounts outstanding under the revolving credit facility with ING Capital LLC (see Note |
(g) | Security or portion thereof is pledged as collateral supporting the amounts outstanding under the |
(h) | Security or portion thereof held within |
(i) | Security or portion thereof was held within CCT Tokyo Funding LLC and |
Security or portion thereof |
See notes to unaudited consolidated financial statements.
FS Investment Corporation
Consolidated Schedule of Investments (continued)
As of December 31, 2016
(in thousands, except share amounts)
(k) | Not used. |
The investment is not a qualifying asset under the Investment Company Act of 1940, as amended. A business development company may not acquire any asset other than qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the company’s total assets. As of December 31, |
Listed investments may be treated as debt for GAAP or tax purposes. |
Security isnon-income producing. |
Security held within IC American Energy Investments, Inc., a wholly-owned subsidiary of the Company. |
Security held within FSIC Investments, Inc., a wholly-owned subsidiary of the Company. |
Security held within IC Arches Investments LLC, a wholly-owned subsidiary of the Company. |
Not used. |
(s) | Not used. |
(t) | Security held within |
Not used. |
(v) | Security is an unfunded commitment. Reflects the stated spread at the time of commitment, but may not be the actual rate received upon funding. |
Asset is onnon-accrual status. |
Security is classified as Level 1 or 2 in the |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
Under the Investment Company Act of 1940, as amended, the Company generally is deemed to be an “affiliated person” of a portfolio company if it owns 5% or more of the portfolio company’s voting securities and generally is deemed to “control” a portfolio company if it owns more than 25% of the portfolio company’s voting securities or it has the power to exercise control over the management or policies of such portfolio company. As of December 31, |
Portfolio Company | Fair Value at December 31, 2015 | Purchases and Paid-in-kind Interest | Sales and Repayments | Accretion of Discount | Net Realized Gain (Loss) | Net Change in Unrealized Appreciation (Depreciation) | Fair Value at December 31, 2016 | Interest Income | Fee Income | Dividend Income | ||||||||||||||||||||||||||||||
Senior Secured Loans—First Lien |
| |||||||||||||||||||||||||||||||||||||||
ASG Technologies Group, Inc. | $ | 38,321 | $ | 15,628 | — | $ | 44 | — | $ | 773 | $ | 54,766 | $ | 4,841 | — | — | ||||||||||||||||||||||||
Senior Secured Loans—Second Lien |
| |||||||||||||||||||||||||||||||||||||||
ASG Technologies Group, Inc. | — | $ | 18,069 | — | $ | 464 | — | $ | 5,339 | $ | 23,872 | $ | 1,818 | $ | 738 | — | ||||||||||||||||||||||||
Logan’s Roadhouse, Inc. | — | $ | 16,114 | — | — | — | $ | (699 | ) | $ | 15,415 | $ | 165 | $ | 14 | — | ||||||||||||||||||||||||
Equity/Other | ||||||||||||||||||||||||||||||||||||||||
ASG Technologies Group, Inc., Common Equity | $ | 77,898 | — | — | — | — | $ | 1,775 | $ | 79,673 | — | — | — | |||||||||||||||||||||||||||
ASG Technologies Group, Inc., Warrants, 6/27/2022 | — | $ | 6,542 | — | — | — | $ | (712 | ) | $ | 5,830 | — | — | — | ||||||||||||||||||||||||||
Fronton Investor Holdings, LLC, Class B Units | $ | 16,138 | — | $ | (1,874 | ) | — | — | $ | 828 | $ | 15,092 | — | — | $ | 224 | ||||||||||||||||||||||||
Roadhouse Holding Inc., Common Equity | — | $ | 6,932 | — | — | — | $ | 1,215 | $ | 8,147 | — | — | — |
Portfolio Company | Fair Value at December 31, 2019 | Gross Additions(1) | Gross Reductions(2) | Net Realized Gain (Loss) | Net Change in Unrealized Appreciation (Depreciation) | Fair Value at December 31, 2020 | Interest Income(3) | PIK Income(3) | Fee Income(3) | Dividend Income(3) | ||||||||||||||||||||||||||||||
Senior Secured Loans—First Lien |
| |||||||||||||||||||||||||||||||||||||||
AltEn, LLC | $ | 1.5 | $ | — | $ | — | $ | (2.7 | ) | $ | 1.2 | $ | — | $ | — | $ | — | — | — | |||||||||||||||||||||
Borden (New Dairy Opco) | — | 7.6 | — | — | — | 7.6 | 0.1 | — | — | — | ||||||||||||||||||||||||||||||
Borden (New Dairy Opco) | — | 16.8 | — | — | — | 16.8 | 0.6 | — | — | — | ||||||||||||||||||||||||||||||
Borden Dairy Co(4) | — | 70.7 | (11.6 | ) | (35.0 | ) | (24.1 | ) | — | — | — | — | — | |||||||||||||||||||||||||||
HM Dunn Co Inc | 0.4 | — | — | — | (0.1 | ) | 0.3 | — | — | — | — | |||||||||||||||||||||||||||||
HM Dunn Co Inc | 0.1 | 0.2 | — | — | (0.1 | ) | 0.2 | — | — | — | — | |||||||||||||||||||||||||||||
MB Precision Holdings LLC | 4.6 | 0.2 | (3.9 | ) | (0.8 | ) | (0.1 | ) | — | 0.3 | — | — | — | |||||||||||||||||||||||||||
Micronics Filtration Holdings Inc(4) | — | 61.6 | — | (16.6 | ) | (9.5 | ) | 35.5 | — | — | — | — | ||||||||||||||||||||||||||||
One Call Care Management Inc | 4.6 | 0.1 | — | — | — | 4.7 | 0.5 | — | — | — | ||||||||||||||||||||||||||||||
Petroplex Acidizing Inc | 22.2 | — | — | — | (17.7 | ) | 4.5 | — | — | — | — | |||||||||||||||||||||||||||||
Safariland LLC | 2.6 | — | (2.5 | ) | (0.3 | ) | 0.2 | — | — | — | — | — | ||||||||||||||||||||||||||||
Safariland LLC | 116.2 | 8.8 | (117.4 | ) | (14.7 | ) | 7.1 | — | 1.3 | — | — | — | ||||||||||||||||||||||||||||
ThermaSys Corp | 6.4 | 0.8 | — | — | (3.3 | ) | 3.9 | 0.2 | 0.6 | — | — | |||||||||||||||||||||||||||||
Z Gallerie LLC | — | 0.9 | (1.5 | ) | 0.6 | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Senior Secured Loans—Second Lien |
| |||||||||||||||||||||||||||||||||||||||
Z Gallerie LLC | 2.8 | — | (2.0 | ) | (0.9 | ) | 0.1 | — | 0.1 | — | 0.1 | — | ||||||||||||||||||||||||||||
Other Senior Secured Debt |
| |||||||||||||||||||||||||||||||||||||||
JW Aluminum Co | 38.3 | 2.9 | — | — | 0.6 | 41.8 | 3.9 | — | — | — | ||||||||||||||||||||||||||||||
Mood Media Corp | 36.4 | 3.6 | — | (40.5 | ) | 0.5 | — | 0.4 | — | — | — | |||||||||||||||||||||||||||||
Z Gallerie LLC | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Z Gallerie LLC | 1.4 | — | — | (1.5 | ) | 0.1 | — | — | — | 0.1 | — | |||||||||||||||||||||||||||||
Asset Based Finance |
| |||||||||||||||||||||||||||||||||||||||
Home Partners JV, Common Stock | 13.2 | 4.4 | — | — | 3.9 | 21.5 | — | — | — | — | ||||||||||||||||||||||||||||||
Home Partners JV, Private Equity | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Home Partners JV, Structured Mezzanine | 25.0 | 14.0 | (0.5 | ) | — | — | 38.5 | — | 3.3 | — | — | |||||||||||||||||||||||||||||
Orchard Marine Limited, Class B Common Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Orchard Marine Limited, Series A Preferred Stock | 22.7 | — | — | — | 1.9 | 24.6 | — | — | — | — | ||||||||||||||||||||||||||||||
Equity/Other |
| |||||||||||||||||||||||||||||||||||||||
AltEn, LLC, Membership Units | — | — | — | (3.0 | ) | 3.0 | — | — | — | — | — | |||||||||||||||||||||||||||||
ASG Technologies, Common Stock | 56.5 | — | — | — | (13.8 | ) | 42.7 | — | — | — | — | |||||||||||||||||||||||||||||
ASG Technologies, Warrants | 6.3 | — | — | — | (2.8 | ) | 3.5 | — | — | — | — | |||||||||||||||||||||||||||||
Borden (New Dairy Opco), Common Stock | — | 3.9 | — | — | (0.7 | ) | 3.2 | — | — | — | ||||||||||||||||||||||||||||||
Charlotte Russe Inc, Common Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Fronton BV, Common Stock | 1.4 | — | — | — | (0.2 | ) | 1.2 | — | — | — | — | |||||||||||||||||||||||||||||
HM Dunn Co Inc, Preferred Stock, Series A | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
HM Dunn Co Inc, Preferred Stock, Series B | — | — | — | — | — | — | — | — | — | — |
See notes to unaudited consolidated financial statements.
FS Investment CorporationKKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 20162020
(in thousands,millions, except share amounts)
Portfolio Company | Fair Value at December 31, 2019 | Gross Additions(1) | Gross Reductions(2) | Net Realized Gain (Loss) | Net Change in Unrealized Appreciation (Depreciation) | Fair Value at December 31, 2020 | Interest Income(3) | PIK Income(3) | Fee Income(3) | Dividend Income(3) | ||||||||||||||||||||||||||||||
Home Partners of America Inc, Common Stock | $ | 134.1 | $ | — | $ | — | $ | — | $ | (3.6 | ) | $ | 130.5 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
Home Partners of America Inc, Warrant | 2.0 | — | — | — | 0.1 | 2.1 | — | — | — | — | ||||||||||||||||||||||||||||||
JW Aluminum Co, Common Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
JW Aluminum Co, Preferred Stock | 127.2 | 16.9 | — | — | (50.4 | ) | 93.7 | 2.4 | 14.6 | — | — | |||||||||||||||||||||||||||||
MB Precision Holdings LLC, Class A—2 Units | — | — | (0.5 | ) | — | 0.5 | — | — | — | — | — | |||||||||||||||||||||||||||||
MB Precision Holdings LLC, Preferred Stock | 1.2 | — | — | (1.9 | ) | 0.7 | — | — | — | — | — | |||||||||||||||||||||||||||||
Micronics Filtration Holdings Inc, Common Stock(4) | — | 0.6 | — | — | (0.6 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||
Micronics Filtration Holdings Inc, Preferred Stock, Series A(4) | — | 0.6 | — | — | (0.6 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||
Micronics Filtration Holdings Inc, Preferred Stock, Series B(4) | — | 0.2 | — | — | (0.2 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||
Micronics Filtration Holdings Inc, Preferred Stock, Series B PIK(4) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Micronics Filtration Holdings Inc, Preferred Stock, Series C PIK(4) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Mood Media Corp, Common Stock | 0.9 | — | — | (11.8 | ) | 10.9 | — | — | — | — | — | |||||||||||||||||||||||||||||
Mood Media LLC, Class A Warrants | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Mood Media LLC, Class B Warrants | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Mood Media LLC, Class C Warrants | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
One Call Care Management Inc, Common Stock | 3.0 | — | — | — | (0.6 | ) | 2.4 | — | — | — | — | |||||||||||||||||||||||||||||
One Call Care Management Inc, Preferred Stock A | 32.3 | — | — | — | (6.8 | ) | 25.5 | — | — | — | — | |||||||||||||||||||||||||||||
One Call Care Management Inc, Preferred Stock B | 9.8 | — | — | — | 0.8 | 10.6 | — | 0.9 | — | — | ||||||||||||||||||||||||||||||
Petroplex Acidizing Inc, Preferred Stock A | 4.2 | 0.3 | — | — | (4.5 | ) | — | — | — | — | 0.4 | |||||||||||||||||||||||||||||
Petroplex Acidizing Inc, Warrant | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Proserv Acquisition LLC, Class A Common Units | 14.4 | — | — | — | (5.4 | ) | 9.0 | — | — | — | — | |||||||||||||||||||||||||||||
Proserv Acquisition LLC, Class A Preferred Units | 9.5 | — | — | — | — | 9.5 | — | — | — | — | ||||||||||||||||||||||||||||||
Safariland LLC, Common Equity | 6.4 | — | (1.0 | ) | (2.0 | ) | (3.4 | ) | — | — | — | — | — | |||||||||||||||||||||||||||
ThermaSys Corp, Common Stock | 6.9 | — | — | — | (6.9 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||
ThermaSys Corp, Preferred Stock | 1.5 | — | — | — | (1.5 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||
Z Gallerie LLC, Common Stock | 0.7 | — | — | (0.7 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||
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Total | $ | 716.7 | $ | 215.1 | $ | (140.9 | ) | $ | (131.8 | ) | $ | (125.3 | ) | $ | 533.8 | $ | 9.8 | $ | 19.4 | $ | 0.2 | $ | 0.4 | |||||||||||||||||
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(1) | Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest, the amortization of unearned income, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category. |
(2) | Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category. |
(3) | Interest, PIK, fee and dividend income presented for the full year ended December 31, 2020. |
(4) | The Company held this investment as of December 31, 2019 but it was not deemed to be an “affiliated person” of the portfolio company as of December 31, 2019. Transfers in or out have been presented at amortized cost. |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
Under the Investment Company Act of 1940, as amended, the Company generally is deemed to “control” a portfolio company if it owns more than 25% of the portfolio company’s voting securities or it has the power to exercise control over the management or policies of such portfolio company. As of December 31, |
Portfolio Company | Fair Value at December 31, 2015 | Purchases and Paid-in-kind Interest | Sales and Repayments | Accretion of Discount | Net Realized Gain (Loss) | Net Change in Unrealized Appreciation (Depreciation) | Fair Value at December 31, 2016 | Interest Income | Fee Income | Dividend Income | ||||||||||||||||||||||||||||||
Senior Secured Loans—Second Lien | ||||||||||||||||||||||||||||||||||||||||
JW Aluminum Co. | $ | 32,887 | $ | 4,478 | — | $ | 2 | — | $ | 672 | $ | 38,039 | $ | 3,338 | — | — | ||||||||||||||||||||||||
Senior Secured Bonds | ||||||||||||||||||||||||||||||||||||||||
JW Aluminum Co. | — | $ | 8,060 | $ | (8,141) | $ | 107 | $ | (26) | — | — | $ | 210 | — | — | |||||||||||||||||||||||||
Equity/Other | ||||||||||||||||||||||||||||||||||||||||
JW Aluminum Co., Common Equity | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
JW Aluminum Co., Preferred Equity | $ | 43,844 | $ | 406 | — | — | — | $ | 781 | $ | 45,031 | $ | 35 | — | — |
Portfolio Company | Fair Value at December 31, 2019 | Gross Additions(1) | Gross Reductions(2) | Net Realized Gain (Loss) | Net Change in Unrealized Appreciation (Depreciation) | Fair Value at December 31, 2020 | Interest Income(3) | PIK Income(3) | Fee Income(3) | Dividend Income(3) | ||||||||||||||||||||||||||||||
Senior Secured Loans—First Lien |
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Advanced Lighting Technologies Inc | $ | 13.1 | $ | — | $ | (1.5 | ) | $ | — | $ | 0.4 | $ | 12.0 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
Amtek Global Technology Pte Ltd | 55.3 | 5.8 | — | — | (1.4 | ) | 59.7 | 3.0 | — | — | — | |||||||||||||||||||||||||||||
Sound United LLC | — | 27.4 | (12.5 | ) | — | — | 14.9 | 0.3 | — | — | — | |||||||||||||||||||||||||||||
Senior Secured Loans—Second Lien |
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Amtek Global Technology Pte Ltd | 36.3 | 6.5 | (0.1 | ) | — | (42.6 | ) | 0.1 | — | — | — | — | ||||||||||||||||||||||||||||
Sound United LLC | — | 22.8 | (1.9 | ) | — | — | 20.9 | — | 0.7 | — | — | |||||||||||||||||||||||||||||
Other Senior Secured Debt |
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Advanced Lighting Technologies Inc | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Subordinated Debt |
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Hilding Anders | 76.8 | — | (26.9 | ) | (3.0 | ) | (14.5 | ) | 32.4 | — | — | — | — | |||||||||||||||||||||||||||
Hilding Anders | 0.2 | — | — | (0.5 | ) | 0.3 | — | — | — | — | — | |||||||||||||||||||||||||||||
Hilding Anders | — | — | — | (0.9 | ) | 0.9 | — | — | — | — | — | |||||||||||||||||||||||||||||
Hilding Anders | 3.6 | — | — | (12.9 | ) | 9.3 | — | — | — | — | — | |||||||||||||||||||||||||||||
Hilding Anders | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Hilding Anders | — | 26.9 | — | — | 3.4 | 30.3 | — | — | — | — | ||||||||||||||||||||||||||||||
Asset Based Finance |
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801 5th Ave, Seattle, Structure Mezzanine | 52.9 | 0.9 | (24.4 | ) | — | — | 29.4 | 3.2 | 1.4 | — | — | |||||||||||||||||||||||||||||
801 5th Ave, Seattle, Private Equity | 8.8 | — | (6.3 | ) | 2.0 | 5.8 | 10.3 | — | — | — | — | |||||||||||||||||||||||||||||
Avida Holding AB, Common Stock | — | 35.5 | — | — | 2.8 | 38.3 | — | — | — | — | ||||||||||||||||||||||||||||||
Kilter Finance, Preferred Stock | — | 0.2 | — | — | — | 0.2 | — | — | — | — | ||||||||||||||||||||||||||||||
Kilter Finance, Private Equity | — | 0.2 | — | — | — | 0.2 | — | — | — | — | ||||||||||||||||||||||||||||||
Prime ST LLC, Private Equity | — | 5.7 | (0.3 | ) | (2.3 | ) | 0.8 | 3.9 | — | — | — | — | ||||||||||||||||||||||||||||
Prime ST LLC, Structured Mezzanine | — | 41.4 | (18.6 | ) | — | — | 22.8 | 0.6 | 1.7 | — | — | |||||||||||||||||||||||||||||
Toorak Capital Funding LLC, Membership Interest | 5.3 | 3.8 | (2.5 | ) | — | — | 6.6 | — | — | — | — | |||||||||||||||||||||||||||||
Toorak Capital Partners LLC, Private Equity | 240.5 | 11.5 | (4.4 | ) | — | (11.7 | ) | 235.9 | — | — | — | 9.6 | ||||||||||||||||||||||||||||
Strategic Credit Opportunities Partners, LLC |
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Strategic Credit Opportunities Partners, LLC | 479.0 | 319.4 | — | — | (85.9 | ) | 712.5 | — | — | — | 70.4 | |||||||||||||||||||||||||||||
Equity/Other |
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Advanced Lighting Technologies Inc, Common Stock(4) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Advanced Lighting Technologies Inc, Warrant(4) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Amtek Global Technology Pte Ltd, Ordinary Shares | 5.2 | — | — | — | (5.2 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||
Amtek Global Technology Pte Ltd, Trade Claim | 0.6 | — | — | — | (0.6 | ) | — | — | — | — | — |
See notes to unaudited consolidated financial statements.
FS Investment CorporationKKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
Portfolio Company | Fair Value at December 31, 2019 | Gross Additions(1) | Gross Reductions(2) | Net Realized Gain (Loss) | Net Change in Unrealized Appreciation (Depreciation) | Fair Value at December 31, 2020 | Interest Income(3) | PIK Income(3) | Fee Income(3) | Dividend Income(3) | ||||||||||||||||||||||||||||||
Amtek Global Technology Pte Ltd, Private Equity | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||
Hilding Anders, ARLE PIK Interest | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Hilding Anders, Class A Common Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Hilding Anders, Class B Common Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Hilding Anders, Class C Common Stock | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Hilding Anders, Equity Options | 1.3 | — | — | — | (1.3 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||
KKR BPT Holdings Aggregator LLC, Membership Interest | — | — | (0.4 | ) | (17.2 | ) | 17.6 | — | — | — | — | — | ||||||||||||||||||||||||||||
Sound United LLC, Class A Units | — | 1.1 | — | — | (1.1 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||
Sound United LLC, Common Stock | — | 17.3 | — | — | 12.0 | 29.3 | — | — | — | — | ||||||||||||||||||||||||||||||
Sound United LLC, Series I Units | — | 0.5 | — | — | (0.5 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||
Sound United LLC, Series II Units | — | 0.5 | — | — | (0.5 | ) | — | — | — | — | — | |||||||||||||||||||||||||||||
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Total | $ | 978.9 | $ | 527.4 | $ | (99.8 | ) | $ | (34.8 | ) | $ | (112.0 | ) | $ | 1,259.7 | $ | 7.1 | $ | 3.8 | $ | — | $ | 80.0 | |||||||||||||||||
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(1) | Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest, the amortization of unearned income, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category. |
(2) | Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category. |
(3) | Interest, PIK and dividend income presented for the full year ended December 31, 2020. |
See notes to unaudited consolidated financial statements.
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements
(in thousands,millions, except share and per share amounts)
Note 1. Principal Business and Organization
FS Investment CorporationKKR Capital Corp. (NYSE: FSIC)FSK), or the Company, was incorporated under the general corporation laws of the State of Maryland on December 21, 2007 and formally commenced investment operations on January 2, 2009. The Company is an externally managed,non-diversified,closed-end management investment company that has elected to be regulated as a business development company, or BDC, under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, the Company has elected to be treated for U.S. federal income tax purposes, and intends to qualify annually, as a regulated investment company, or RIC, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. As of September 30, 2017,2021, the Company had twovarious wholly-owned subsidiaries, including special-purpose financing subsidiaries and five wholly-owned subsidiaries through which it holds interests in portfolio companies. The unaudited consolidated financial statements include both the Company’s accounts and the accounts of its wholly-owned subsidiaries as of September 30, 2017.2021. All significant intercompany transactions have been eliminated in consolidation. Certain of the Company’s consolidated subsidiaries are subject to U.S. federal and state income taxes.
The Company’s investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation by investingappreciation. The Company’s portfolio is comprised primarily of investments in senior secured loans and second lien secured loans of private middle-market U.S. companies. The Company seekscompanies and, to generate superior risk-adjusted returns by focusing on debt investments in a broad arraylesser extent, subordinated loans and certain asset-based financing loans of private U.S. companies, including middle market companies, which the Company defines as companies with annual revenues of $50 million to $2.5 billion at the time of investment. The Company may purchase interests in loans or make other debt investments, including investments in senior secured bonds, through secondary market transactions in the“over-the-counter” market or directly from the Company’s target companies as primary market or directly originated investments. In connection with the Company’s debt investments, the Company may on occasion receive equity interests such as warrants or options as additional consideration. The Company may also purchase or otherwise acquire interests in the form of common or preferred equity or equity-related securities, such as rights and warrants that may be converted into or exchanged for common stock or other equity or the cash value of common stock or other equity, in the Company’s target companies, generally in conjunction with one of the Company’s debt investments, including through the restructuring of such investments, or through aco-investment with a financial sponsor, such as an institutional investor or private equity firm.companies. In addition, a portion of the Company’s portfolio may be comprised of equity and equity-related securities, corporate bonds, collateralized loan obligations, or CLOs,structured products, other debt securities and derivatives, including total return swaps and credit default swaps.
The Company’s investment adviser, FB IncomeCompany is externally managed by FS/KKR Advisor, LLC, or FBthe Advisor, will seekpursuant to tailoran investment advisory agreement, dated as of June 16, 2021, or the investment advisory agreement. Prior to entering into the investment advisory agreement, the Company was a party to an investment advisory agreement, dated as of December 20, 2018, with the Advisor, or the prior investment advisory agreement, which remained in effect until June 16, 2021.
On June 15, 2020, the Company filed Articles of Amendment to its Articles of Incorporation, or the Reverse Stock Split Amendment, with the State Department of Assessments and Taxation of the State of Maryland to effect a 4 to 1 reverse split of the Company’s investment focusshares of common stock, or the Reverse Stock Split. The Reverse Stock Split became effective in accordance with the terms of the Reverse Stock Split Amendment on June 15, 2020.
The Reverse Stock Split affected all shareholders uniformly and did not alter any shareholder’s percentage interest in the Company’s equity, except to the extent that the Reverse Stock Split resulted in some shareholders owning a fractional share. In that regard, no fractional shares were issued in connection with the Reverse Stock Split. Shareholders of record who would have otherwise been entitled to receive a fractional share instead received a cash payment based on the closing price of the Company’s common stock as market conditions evolve. Dependingreported on market conditions,the NYSE as of June 15, 2020.
On June 16, 2021, the Company may increasecompleted its acquisition, or decrease its exposurethe 2021 Merger, of FS KKR Capital Corp. II, or FSKR, pursuant to less senior portionsthat certain Agreement and Plan of Merger, or the 2020 Merger Agreement, dated as of November 23, 2020, by and among the Company, FSKR, Rocky Merger Sub, Inc., a former wholly-owned subsidiary of the capital structureCompany, or otherwise make opportunistic investments.Merger Sub, and the Advisor. See Note 12 for a discussion of the 2021 Merger.
Note 2. Summary of Significant Accounting Policies
Basis of Presentation: The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S.accounting principles generally accepted accounting principles,in the United States of America, or GAAP, for interim financial information and with the instructions for Form10-Q and Article 10 of RegulationS-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For a more complete discussion of significant accounting policies and certain other information, the Company’s interim unaudited consolidated financial statements should be read in conjunction with its audited consolidated financial statements as of and for the year ended December 31, 20162020 included in the Company’s annual report on Form10-K for the year ended December 31, 2016.2020. Operating results for the three and nine months ended September 30, 20172021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.2021. The December 31, 20162020 consolidated balance sheet and consolidated schedule of investments
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 2. Summary of Significant Accounting Policies (continued)
are derived from the Company’s audited consolidated financial statements as of and for the year ended December 31, 2016.2020. The Company is considered an investment company under GAAP and follows the accounting and reporting guidance applicable to investment companies under Accounting Standards Codification Topic 946,Financial Services—Investment Companies. The Company has evaluated the impact of subsequent events through the date the consolidated financial statements were issued and filed with the U.S. Securities and Exchange Commission, or the SEC.
Use of Estimates: The preparation of the unaudited consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of
FS Investment Corporation
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands, except share and per share amounts)
Note 2. Summary of Significant Accounting Policies (continued)
contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Many of the amounts have been rounded, and all amounts are in thousands, except share and per share amounts.
Capital Gains Incentive Fee:Pursuant to the terms of the amended and restated investment advisory agreement, dated July 17, 2014, or the investment advisory agreement, by and between the Company and FB Advisor, the incentive fee on capital gains is determined and payable in arrears as of the end of each calendar year (or upon termination of the investment advisory agreement). This fee equals 20.0% of the Company’s incentive fee capital gains, (i.e.,which shall equal the Company’s realized capital gains of Corporate Capital Trust, Inc., or CCT, (as predecessor-by-merger to the Company), FSKR (as predecessor-by-merger to the Company) and the Company (without duplication) on a cumulative basis from inception, calculated as of the end of the applicable period,each calendar year, computed net of all realized capital losses and unrealized capital depreciation (without duplication) on a cumulative basis),basis, less the aggregate amount of any capital gain incentive fees previously paid capital gains incentive fees.by CCT, FSKR and the Company. On a quarterly basis, the Company accrues for the capital gains incentive fee by calculating such fee as if it were due and payable as of the end of such period.
The Company includes unrealized gains in the calculation of the capital gains incentive fee expense and related accrued capital gains incentive fee. This accrual reflects the incentive fees that would be payable to FBthe Advisor if the Company’s entire portfolio was liquidated at its fair value as of the balance sheet date even though FBthe Advisor is not entitled to an incentive fee with respect to unrealized gains unless and until such gains are actually realized.
Subordinated Income Incentive Fee: Pursuant to the terms of the investment advisory agreement, FBthe Advisor may also be entitled to receive a subordinated incentive fee on income. The subordinated incentive fee on income under the investment advisory agreement, which is calculated and payable quarterly in arrears, equals 20.0%17.5% of the Company’s“pre-incentive “pre-incentive fee fee net investment income” for the immediately preceding quarter and is subject to a hurdle rate, expressed as a rate of return on the value of the Company’s net assets, equal to 1.875%1.75% per quarter, or an annualized hurdle rate of 7.5%7.0%. As a result, FBthe Advisor will not earn this incentive fee for any quarter until the Company’spre-incentive fee fee net investment income for such quarter exceeds the hurdle rate of 1.875%1.75%. Once the Company’spre-incentive fee fee net investment income in any quarter exceeds the hurdle rate, FBthe Advisor will be entitled to a“catch-up” “catch-up” fee fee equal to the amount of thepre-incentive fee fee net investment income in excess of the hurdle rate, until the Company’spre-incentive fee fee net investment income for such quarter equals 2.34375%2.12%, or 9.375%8.48% annually, of net assets. Thereafter, FBthe Advisor will be entitled to receive 20.0% 17.5% ofpre-incentive fee fee net investment income.
The See Note 4 for a discussion of subordinated incentive fee on income is subject to a total return requirement, which provides that no incentive fee in respect ofunder the Company’spre-incentive fee netprior investment income will be payable except to the extent that 20.0% of the cumulative net increase in net assets resulting from operations over the then-current and eleven preceding calendar quarters exceeds the cumulative incentive fees accrued and/or paid for the eleven preceding calendar quarters. Accordingly, any subordinated incentive fee on income that is payable in a calendar quarter will be limited to the lesser of (i) 20.0% of the amount by which the Company’spre-incentive fee net investment income for such calendar quarter exceeds the applicable quarterly hurdle rate, subject to the“catch-up” provision, and (ii) (x) 20.0% of the cumulative net increase in net assets resulting from operations for the then-current and eleven preceding calendar quartersminus (y) the cumulative incentive fees accrued and/or paid for the eleven preceding calendar quarters. For the foregoing purpose, the “cumulative net increase in net assets resulting from operations” is the sum ofpre-incentive fee net investment income, base management fees, realized gains and losses and unrealized appreciation and depreciation of the Company for the then-current and eleven preceding calendar quarters. There will be no accumulation of amounts on the hurdle rate from quarter to quarter and, accordingly, there will be no clawback of amounts previously paid if subsequent quarters are below the applicable quarterly hurdle rate and there will be no delay of payment if prior quarters are below the applicable quarterly hurdle rate.
Partial Loan Sales:The Company follows the guidance in Accounting Standards Codification Topic 860,Transfers andServicing, or ASC Topic 860, when accounting for loan participations and other partial loan sales. This guidance requires a participation or other partial loan sale to meet the definition of a participating interest, as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating interest remain on the Company’s consolidated balance sheets and the proceeds are recorded as a secured borrowing until the
FS Investment Corporation
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands, except share and per share amounts)
Note 2. Summary of Significant Accounting Policies (continued)
participation or other partial loan sale meets the definition. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value. See Note 8 for additional information regarding the Company’s secured borrowing.advisory agreement.
Reclassifications:Certain amounts in the unaudited consolidated financial statements as of and for the three and nine months ended September 30, 20162020 and the audited consolidated financial statements as of and for the year ended December 31, 20162020 may have been reclassified to conform to the classifications used to prepare the unaudited consolidated financial statements as of and for the three and nine months ended September 30, 2017. These reclassifications had no material impact2021.
Revenue Recognition: Security transactions are accounted for on the trade date. The Company records interest income on an accrual basis to the extent that it expects to collect such amounts. The Company records dividend income on the ex-dividend date. Distributions received from limited liability company (“LLC”) and limited partnership (“LP”) investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. The Company does not accrue as a receivable interest or dividends on loans and securities if it has reason to doubt its ability to collect such income. The Company’s policy is to place investments on non-accrual status when there is reasonable doubt that interest income will be collected. The Company considers many factors relevant to an investment when placing it on or removing it from non-accrual status including, but not limited to, the delinquency status of the investment, economic and business conditions, the overall financial condition of the underlying investment, the value of the underlying collateral, bankruptcy status, if any, and any other facts or circumstances relevant to the investment. If there is reasonable doubt that the Company will receive any previously accrued interest, then the
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 2. Summary of Significant Accounting Policies (continued)
accrued interest will be written-off. Payments received on non-accrual investments may be recognized as income or applied to principal depending upon the collectability of the remaining principal and interest. Non-accrual investments may be restored to accrual status when principal and interest become current and are likely to remain current based on the Company’s judgment.
Loan origination fees, original issue discount and market discount are capitalized and the Company amortizes such amounts as interest income over the respective term of the loan or security. Upon the prepayment of a loan or security, any unamortized loan origination fees and original issue discount are recorded as interest income. Structuring and other non-recurring upfront fees are recorded as fee income when earned. For the nine months ended September 30, 2021 and 2020, the Company recognized $34 and $10, respectively, in structuring fee revenue. The Company records prepayment premiums on loans and securities as fee income when it receives such amounts.
Derivative Instruments: The Company’s derivative instruments include foreign currency forward contracts and cross currency swaps. The Company recognizes all derivative instruments as assets or liabilities at fair value in its consolidated financial position, resultsstatements. Derivative contracts entered into by the Company are not designated as hedging instruments, and as a result, the Company presents changes in fair value through net change in unrealized appreciation (depreciation) on derivative instruments in the consolidated statements of operations or cash flows as previously reported.operations. Realized gains and losses of the derivative instruments are included in net realized gains (losses) on derivative instruments in the consolidated statements of operations.
Revenue Recognition:Recent Accounting Pronouncements:In May 2014,March 2020, the FASB issued ASUNo. 2014-09,2020-04, “Revenue from Contracts with CustomersReference Rate Reform (Topic 848),” which provides optional expedients and exceptions for revenue recognition based on the considerationapplying GAAP to which an entity expectscontracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be entitled in exchange for transferring goods or services to a customer. When it becomes effective, the new revenue recognition guidance in ASUNo. 2014-09 will replace most revenue recognition guidance under existing GAAP.discontinued because of reference rate reform. In 2016,January 2021, the FASB issued additional guidance that clarified, amendedASU No. 2021-01,Reference Rate Reform (Topic 848), which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition. ASU 2020-04 and technically corrected prior revenue recognition guidance. The new revenue recognition guidance applies toASU 2021-01 are effective for all entities through December 31, 2022. The expedients and all contracts with customersexceptions provided by the amendments do not apply to provide goodscontract modifications and hedging relationships entered into or services in the ordinary course of business, excluding, among other things, financial instruments as well as certain other contractual rights and obligations. For public entities, the new standards are effective during the interim and annual periods beginningevaluated after December 15, 2017, with early adoption permitted. The standards permit31, 2022, except for hedging transactions as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the useend of either the retrospective or cumulative effect transition method.hedging relationship. The Company is currently evaluating the applicabilityimpact of the new revenue recognition guidance to the Company’s revenue recognition policiesadoption of ASU 2020-04 and assessing the impact of this guidance2021-01 on the Company’sits consolidated financial statements.
Note 3. Share Transactions
Below is a summary of transactions with respect to shares of the Company’s common stock during the nine months ended September 30, 20172021 and 2016:2020:
Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2017 | 2016 | 2021 | 2020 | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares(1) | Amount | |||||||||||||||||||||||||
Reinvestment of Distributions | 1,662,059 | $ | 15,908 | 641,574 | $ | 5,665 | ||||||||||||||||||||||||||
Share Repurchase Program | (53,374 | ) | $ | (1 | ) | (2,823,750 | ) | $ | (47 | ) | ||||||||||||||||||||||
Fractional Share Repurchase | — | — | (2,051 | ) | (0 | ) | ||||||||||||||||||||||||||
Issuance of Common Stock(2) | 161,374,028 | 3,642 | — | — | ||||||||||||||||||||||||||||
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Net Proceeds from Share Transactions | 1,662,059 | $ | 15,908 | 641,574 | $ | 5,665 | 161,320,654 | $ | 3,641 | (2,825,801 | ) | $ | (47 | ) | ||||||||||||||||||
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(1) | The number of shares repurchased has been retroactively adjusted to reflect the Reverse Stock Split as discussed below. |
(2) | Issuance of common stock for the 2021 Merger. Shares were issued at fair value of FSK common stock at the merger date. |
During the nine months ended September 30, 2016,2021, the administrator for the Company’s distribution reinvestment plan, or DRP, purchased 1,232,012707,727 shares of common stock in the open market at an average price per share of $9.10$19.69 (totaling $11,216)$14) pursuant to the Company’s DRP, and distributed such shares to participants in the Company’s DRP. During the period from October 1, 2017 to November 8, 2017,nine months ended September 30, 2020, the administrator for the Company’s DRP purchased 611,1411,196,874 shares of common stock in the open market at an average price per share of $8.65
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 3. Share Transactions (continued)
$15.70 (totaling $5,284)$19) pursuant to the Company’s DRP, and distributed such shares to participants in the Company’sDRP. During the period from October 1, 2021 to November 5, 2021, the administrator for the DRP purchased 613,887 shares of common stock in the open market at an average price per share of $22.68 (totaling $14) pursuant to the DRP, and distributed such shares to participants in the DRP. For additional information regarding the terms of the DRP, see Note 5.
September 2021 Share Repurchase Program
In November 2020, the Company’s board of directors authorized a stock repurchase program, which went into effect in September 2021 following the consummation of the 2021 Merger. Under the program, the Company may repurchase up to $100 in the aggregate of its outstanding common stock in the open market at prices below the then-current net asset value per share. The timing, manner, price and amount of any share repurchases was determined by the Company based upon the evaluation of economic and market conditions, the Company’s stock price, applicable legal and regulatory requirements and other factors. The program is expected to be in effect for one year from the effective date, unless extended, or until the aggregate repurchase amount that has been approved by the Company’s board of directors has been expended, or the plan otherwise terminates pursuant to its terms. The program does not require the Company to repurchase any specific number of shares and the Company cannot assure stockholders that any shares will be repurchased under the program. The program may be suspended, extended, modified or discontinued at any time.
During the nine months ended September 30, 2021, the Company repurchased 53,374 shares of common stock pursuant to the share repurchase program at an average price per share (inclusive of commissions paid) of $22.32 (totaling $1).
During the period from October 1, 2021 to October 31, 2021, the Company repurchased 92,410 shares of common stock pursuant to the share repurchase program at an average price per share (inclusive of commissions paid) of $22.65 (totaling $2).
December 2018 Share Repurchase Program
In December 2018, the Company’s board of directors authorized a stock repurchase program. Under the program, the Company was permitted to repurchase up to $200 in the aggregate of its outstanding common stock in the open market at prices below the then- current net asset value per share. The program has terminated since the aggregate repurchase amount that was approved by the Company’s board of directors has been expended.
During the nine months ended September 30, 2020, the Company repurchased 2,823,750 shares of common stock pursuant to the share repurchase program at an average price per share (inclusive of commissions paid) of $16.71 (totaling $47).
The number of shares repurchased and the average price per share amounts have been retroactively adjusted to reflect the Reverse Stock Split as discussed below.
Reverse Stock Split and Fractional Shares
As a result of the Reverse Stock Split, which was effective on June 15, 2020, every four shares of the Company’s common stock issued and outstanding were automatically combined into one share of the Company’s common stock, and the number of outstanding shares of the Company’s common stock was reduced from approximately 495.0 million to approximately 123.75 million as of June 15, 2020. The Reverse Stock Split did not modify the rights or preferences of the Company’s common stock. The Company also filed a separate Articles of Amendment to Articles of Incorporation with the State Department of Assessments and Taxation of the State of Maryland to provide that there would be no change in the par value of $0.001 per share as a result of the Reverse Stock Split.
The Reverse Stock Split affected all shareholders uniformly and did not alter any shareholder’s percentage interest in the Company’s equity, except to the extent that the Reverse Stock Split resulted in some shareholders owning a fractional share. In that regard, no fractional shares were issued in connection with the Reverse Stock Split. Shareholders of record who would have otherwise been entitled to receive a fractional share instead received a cash payment based on the closing price of the Company’s common stock as reported on the NYSE as of June 15, 2020.
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 3. Share Transactions (continued)
Acquisition of FSKR
In accordance with the terms of the 2020 Merger Agreement, at the time of the transactions contemplated by the 2020 Merger Agreement, each outstanding share of FSKR common stock was converted into the right to receive 0.9498 shares of the Company’s common stock. As a result, the Company issued an aggregate of approximately 161,374,028 shares of its common stock to former FSKR stockholders.
Note 4. Related Party Transactions
Compensation of the Investment Adviser
Pursuant to the investment advisory agreement, FBthe Advisor is entitled to an annuala base management fee equal to 1.75%calculated at an annual rate of 1.50% of the average weekly value of the Company’s gross assets excluding cash and cash equivalents (gross assets equal the total assets of the Company as set forth on the Company’s consolidated balance sheets) and an incentive fee based on the Company’s performance. BaseEffective June 15, 2019, in connection with stockholder approval of the modification of the asset coverage requirement applicable to senior securities from 200% to 150%, the Advisor reduced (by permanent waiver) the annual base management fees are paidfee payable under the investment advisory agreement from 1.5% to 1.0% on aall assets financed using leverage over 1.0x debt-to-equity. The base management fee is payable quarterly basis in arrears. FB Advisor has agreed, effective October 1, 2017 and through September 30, 2018, to (a) waive a portionAll or any part of the base management fee not taken as to any quarter will be deferred without interest and may be taken in such other quarter as the Advisor determines. The prior investment advisory agreement had substantially similar terms as the investment advisory agreement, except that the investment advisory agreement amended the prior investment advisory agreement to (i) reduce the Company’s income incentive fee rate from 20% to 17.5%; and (ii) remove the total return lookback provision applicable to the subordinated incentive fee on income from the prior investment advisory agreement. Under the prior investment advisory agreement, the subordinated incentive fee on income was subject to a cap equal to (i) 20.0% of the “per share pre-incentive fee return” for the then-current and eleven preceding calendar quarters minus the cumulative “per share incentive fees” accrued and/or payable for the eleven preceding calendar quarters multiplied by (ii) the weighted average number of shares outstanding during the calendar quarter (or any portion thereof) for which it isthe subordinated incentive fee on income was being calculated. The definitions of “per share pre-incentive fee return” and “per share incentive fees” under the prior investment advisory agreement took into account the historic per share pre-incentive fee return of both the Company and CCT, together with the historic per share incentive fees paid by both the Company and CCT. For the purpose of calculating the “per share pre-incentive fee return,” any unrealized appreciation or depreciation recognized as a result of the purchase accounting for the Company’s acquisition of CCT was excluded. See Note 2 for a discussion of the capital gains and subordinated income incentive fees that the Advisor may be entitled to under the investment advisory agreement.
In connection with the entry into the investment advisory agreement, sothe Advisor has agreed to waive income incentive fees in the amount of $15 per quarter for the first six full fiscal quarters of operations following the closing of the 2021 Merger, commencing on July 1, 2021, for a total waiver of $90. In addition, the Advisor has agreed to exclude from the calculation of the subordinated incentive fee on income and the incentive fee on capital gains any changes to the fair value recorded for the assets and liabilities of FSKR resulting solely from the new cost basis of the acquired FSKR investments determined in accordance with Accounting Standards Codification Topic 805-50, Business Combinations—Related Issues as a result of the 2021 Merger.
On April 9, 2018, the Company entered into an administration agreement with the Advisor, or the administration agreement. Pursuant to the administration agreement, the Advisor oversees the Company’s day-to-day operations, including the provision of general ledger accounting, fund accounting, legal services, investor relations, certain government and regulatory affairs activities, and other administrative services. The Advisor also performs, or oversees the performance of, the Company’s corporate operations and required administrative services, which includes being responsible for the financial records that the fee received equalsCompany is required to maintain and preparing reports for the Company’s stockholders and reports filed with the U.S. Securities and Exchange Commission, or the SEC. In addition, the Advisor assists the Company in calculating its net asset value, overseeing the preparation and filing of tax returns and the printing and dissemination of reports to the Company’s stockholders, and generally overseeing the payment of the Company’s expenses and the performance of administrative and professional services rendered to the Company by others.
FS Investment CorporationKKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands,millions, except share and per share amounts)
Note 4. Related Party Transactions (continued)
1.50% of the average value of the Company’s gross assets and (b) continue to calculate the subordinated incentive fee on income to which it is entitled under the investment advisory agreement as if the base management fee was 1.75% of the average value of the Company’s gross assets. See Note 2 for a discussion of the capital gains and subordinated income incentive fees that FB Advisor may be entitled to under the investment advisory agreement.
Pursuant to an investmentsub-advisory agreement, or the investmentsub-advisory agreement, between FB Advisor and GSO / Blackstone Debt Funds Management LLC, or GDFM, GDFM will receive 50% of all management and incentive fees payable to FB Advisor under the investment advisory agreement with respect to each year.
On April 16, 2014, the Company entered into an administration agreement with FB Advisor, or the administration agreement, which governs the administrative services provided to the Company by FB Advisor. Pursuant to the administration agreement, the Company reimburses FBthe Advisor for expenses necessary to perform services related to the Company’sits administration and operations, including FBthe Advisor’s allocable portion of the compensation and related expenses of certain personnel of Franklin Square Holdings, L.P. (which, which does business as FS Investments),Investments, or FS Investments, and KKR Credit Advisors (US), LLC, or KKR Credit, providing administrative services to the Company on behalf of FBthe Advisor. The Company reimburses FBthe Advisor no less than quarterly for all costs and expenses incurred by FBthe Advisor in performing its obligations and providing personnel and facilities under the administration agreement. FBThe Advisor allocates the cost of such services to the Company based on factors such as total assets, revenues, time allocations and/or other reasonable metrics. The Company’s board of directors reviews the methodology employed in determining how the expenses are allocated to the Company and the proposed allocation of administrative expenses among the Company and certain affiliates of FBthe Advisor. The Company’s board of directors then assesses the reasonableness of such reimbursements for expenses allocated to the Companyit based on the breadth, depth and quality of such services as compared to the estimated cost to the Company of obtaining similar services from third-party service providers known to be available. In addition, the Company’s board of directors considers whether any single third-party service provider would be capable of providing all such services at comparable cost and quality. Finally, the Company’s board of directors compares the total amount paid to FBthe Advisor for such services as a percentage of the Company’s net assets to the same ratio as reported by other comparable BDCs.
The following table describes the fees and expenses accrued under the investment advisory agreement, the prior investment advisory agreement and the administration agreement, as applicable, during the three and nine months ended September 30, 20172021 and 2016:2020:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
Related Party | Source Agreement | Description | 2017 | 2016 | 2017 | 2016 | ||||||||||||||
FB Advisor | Investment Advisory Agreement | Base Management Fee(1) | $ | 18,038 | $ | 17,872 | $ | 54,772 | $ | 53,258 | ||||||||||
FB Advisor | Investment Advisory Agreement | Subordinated Incentive Fee on Income(2) | $ | 12,662 | $ | 12,250 | $ | 37,426 | $ | 38,945 | ||||||||||
FB Advisor | Administration Agreement | Administrative Services Expenses(3) | $ | 750 | $ | 750 | $ | 2,226 | $ | 2,846 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
Related Party | Source Agreement | Description | 2021 | 2020 | 2021 | 2020 | ||||||||||||||
The Advisor | Investment advisory agreement and prior investment advisory agreement | Base Management Fee(1) | $ | 58 | $ | 24 | $ | 113 | $ | 80 | ||||||||||
The Advisor | Investment advisory agreement and prior investment advisory agreement | Subordinated Incentive Fee on Income(2) | $ | 20 | $ | — | $ | 28 | $ | — | ||||||||||
The Advisor | Administration agreement | Administrative Services Expenses(3) | $ | 5 | $ | 1 | $ | 9 | $ | 6 |
(1) | During the nine months ended September 30, |
(2) | The Advisor agreed, effective July 1, 2021, to waive up to $15 per quarter of the subordinated incentive fee on income to which it is entitled to under the investment advisory agreement. During the three and nine months ended September 30, 2021, the amount shown is net of waivers of $15 and $15, respectively. During the nine months ended September 30, |
(3) | During the nine months ended September 30, |
Potential Conflicts of Interest
FB Advisor’s senior management team is comprisedThe members of substantially the same personnel as the senior management and investment teams of the investment advisers to certain other BDCs, open- andclosed-end management investment companies and a real estate investment trust sponsored by FS Investments,Advisor serve or the Fund Complex. As a result, such personnel providemay serve as officers, directors or expect to provide
FS Investment Corporation
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands, except share and per share amounts)
Note 4. Related Party Transactions (continued)
investment advisory services to certain other fundsprincipals of entities that operate in the Fund Complexsame or a related line of business as the Company does, or of investment vehicles managed by the same personnel. The officers, managers and suchother personnel of the Advisor may serve in similar or other capacities for the investment advisers to future investment vehicles affiliated with FS Investments or KKR Credit. In serving in the Fund Complex. While none of the investment advisers are currently providing investment advisory services to clientsthese multiple and other than the funds in the Fund Complex, any, or all,capacities, they may do so in the future. In the event that FB Advisor or its management team undertakes to provide investment advisory serviceshave obligations to other clients or investors in those entities, the fulfillment of which may not be in the future, it intends to allocate investment opportunitiesCompany’s best interests or in a fair and equitable manner consistent with the best interest of the Company’s stockholders. The Company’s investment objectives may overlap with the investment objectives of such investment funds, accounts or other investment
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and strategies, if necessary, so that the Company will not be disadvantaged in relation to any other client of FB Advisor or its management team.per share amounts)
Note 4. Related Party Transactions (continued)
vehicles. For additional information regarding potential conflicts of interest, see the Company’s annual report on Form10-K for the year ended December 31, 2016.2020.
Exemptive Relief
As a BDC, the Company is subject to certain regulatory restrictions in making its investments. For example, BDCs generally are not permitted toco-invest with with certain affiliated entities in transactions originated by the BDC or its affiliates in the absence of an exemptive order from the SEC. However, BDCs are permitted to, and may, simultaneouslyco-invest in in transactions where price is the only negotiated term.
In an order dated June 4, 2013, or the FS Order, the SEC granted exemptive relief permitting the Company, subject to the satisfaction of certain conditions, toco-invest in in certain privately negotiated investment transactions with certain affiliates of FB Advisor,its former investment adviser, including FS Energy and Power Fund FS Investment Corporation II, FS Investment Corporation III, FS Investment Corporation IV and any future BDCs that are advised by FB Advisorits former investment adviser or its affiliated investment advisers, or collectively the Company’sco-investment affiliates. The Company believes this relief has and may continue to enhance its ability to further its investment objectives and strategy. The Company believes this relief may also increase favorable investment opportunities for it, in part, by allowing the Company to participate in larger investments, together with itsco-investment affiliates, than would be available to the Company if such relief had not been obtained. Because the Company did not seek exemptive relief to engage inco-investment transactions with GDFM and its affiliates, the Company is permitted toco-invest with GDFM and its affiliates only in accordance with existing regulatory guidance (e.g., where price is the only negotiated term).
Trademark License Agreement
On April 16, 2014,advisers. However, in connection with the listinginvestment advisory relationship with the Advisor, and in an effort to mitigate potential future conflicts of its common stockinterest, the Company’s board of directors authorized and directed that the Company (i) withdraw from the FS Order, except with respect to any transaction in which the Company participated in reliance on the NYSE,FS Order prior to April 9, 2018, and (ii) rely on an exemptive relief order, dated January 5, 2021, that permits the Company, subject to the satisfaction of certain conditions, to co-invest in certain privately negotiated investment transactions, including investments originated and directly negotiated by the Advisor or KKR Credit, with certain affiliates of the Advisor.
Affiliated Purchaser Program
As previously disclosed, certain affiliates of the owners of the Advisor committed $100 to a $350 investment vehicle that may invest from time to time in shares of the Company’s common stock. In September 2021, that investment vehicle entered into a trademark license agreement, orwritten trading plan with a third party broker in accordance with Rule 10b5-1 and Rule 10b-18 promulgated under the trademark license agreement, with FS Investments. PursuantExchange Act to facilitate the trademark license agreement, FS Investments granted the Company anon-exclusive, nontransferable, royalty-free right and license to use the name “FS Investment Corporation” and certain other trademarks, or the licensed marks, as a componentpurchase of shares of the Company’s name (and in connectioncommon stock pursuant to the terms and conditions of such plan. The Company is not a party to any transaction with marketing the investment advisory and other services that FB Advisor may provide to the Company). Other than with respect to this limited license, the Company has no other rights to the licensed marks. The trademark license agreement may be terminated by FS Investments or the Company on sixty days’ prior written notice and expires if FB Advisor or one of FS Investments’ affiliates ceases to serve as investment adviser to the Company. Furthermore, FS Investments may terminate the trademark license agreement at any time and in its sole discretion in the event that FS Investments or the Company receives notice of any third-party claim arising out of the Company’s use of the licensed marks or if the Company attempts to assign or sublicense the trademark license agreement or any of the Company’s rights or duties under the trademark license agreement without the prior written consent of FS Investments. FB Advisor is a third-party beneficiary of the trademark license agreement.
FS Investment Corporation
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands, except share and per share amounts)
Note 5. Distributions
The following table reflects the cash distributions per share that the Company has declared on its common stock during the nine months ended September 30, 20172021 and 2016:2020:
Distribution | ||||||||
For the Three Months Ended | Per Share | Amount | ||||||
Fiscal 2016 | ||||||||
March 31, 2016 | $ | 0.22275 | $ | 54,093 | ||||
June 30, 2016 | 0.22275 | 54,238 | ||||||
September 30, 2016 | 0.22275 | 54,236 | ||||||
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Total | $ | 0.66825 | $ | 162,567 | ||||
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Fiscal 2017 | ||||||||
March 31, 2017 | $ | 0.22275 | $ | 54,485 | ||||
June 30, 2017 | 0.22275 | 54,607 | ||||||
September 30, 2017 | 0.22275 | 54,733 | ||||||
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Total | $ | 0.66825 | $ | 163,825 | ||||
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Distribution | ||||||||
For the Three Months Ended | Per Share(1) | Amount | ||||||
Fiscal 2020 | ||||||||
March 31, 2020 | $ | 0.76000 | $ | 95 | ||||
June 30, 2020 | 0.60000 | 75 | ||||||
September 30, 2020 | 0.60000 | 74 | ||||||
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Total | $ | 1.96000 | $ | 244 | ||||
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Fiscal 2021 | ||||||||
March 31, 2021 | $ | 0.60000 | $ | 74 | ||||
June 30, 2021 | 0.60000 | 75 | ||||||
September 30, 2021 | 0.65000 | 186 | ||||||
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Total | $ | 1.85000 | $ | 335 | ||||
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(1) | The amount of each per share distribution has been retroactively adjusted to reflect the Reverse Stock Split as discussed above in Note 3. |
On November 1, 2017,5, 2021, the Company’s board of directors declared a regular quarterly cash distribution of $0.19$0.62 per share, which will be paid on or about January 3, 20184, 2022 to stockholders of record as of the close of business on December 20, 2017.15, 2021. The
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 5. Distributions (continued)
timing and amount of any future distributions to stockholders are subject to applicable legal restrictions and the sole discretion of the Company’s board of directors.
Pursuant to the Company’s DRP, the Company will reinvest all cash dividends or distributions declared by the Company’s board of directors on behalf of stockholders who do not elect to receive their distributions in cash. As a result, if the Company’s board of directors declares a distribution, then stockholders who have not elected to “opt out” of the DRP will have their distributions automatically reinvested in additional shares of the Company’s common stock.
With respect to each distribution pursuant to the DRP, the Company reserves the right to either issue new shares of common stock or purchase shares of common stock in the open market in connection with implementation of the DRP. Unless the Company, in its sole discretion, otherwise directs the plan administrator, (A) if the per share market price (as defined in the DRP) is equal to or greater than the estimated net asset value per share (rounded up to the nearest whole cent) of the Company’s common stock on the payment date for the distribution, then the Company will issue shares of common stock at the greater of (i) net asset value per share of common stock or (ii) 95% of the market price; or (B) if the market price is less than the net asset value per share, then, in the sole discretion of the Company, (i) shares of common stock will be purchased in open market transactions for the accounts of participants to the extent practicable, or (ii) the Company will issue shares of common stock at net asset value per share. Pursuant to the terms of the DRP, the number of shares of common stock to be issued to a participant will be determined by dividing the total dollar amount of the distribution payable to a participant by the price per share at which the Company issues such shares; provided, however, that shares purchased in open market transactions by the plan administrator will be allocated to a participant based on the average purchase price, excluding any brokerage charges or other charges, of all shares of common stock purchased in the open market.
If a stockholder receives distributions in the form of common stock pursuant to the DRP, such stockholder generally will be subject to the same federal, state and local tax consequences as if it elected to receive distributions in cash. If the Company’s common stock is trading at or below net asset value, a stockholder receiving distributions in the form of additional common stock will be treated as receiving a distribution in the amount of cash that they would have received if they had elected to receive the distribution in cash. If the Company’s common stock is trading above net asset value, a stockholder receiving distributions in the form of additional common stock will be treated as receiving a distribution in the amount of the fair market value of the Company’s common stock. The stockholder’s basis for determining gain or loss upon the sale of common stock received in a distribution will be equal to the total dollar amount of the distribution payable to the stockholder. Any stock received in a distribution will have a holding period for tax purposes commencing on the day following the day on which the shares of common stock are credited to the stockholder’s account.
FS Investment Corporation
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands, except share and per share amounts)
Note 5. Distributions (continued)
The Company may fund its cash distributions to stockholders from any sources of funds legally available to it, including proceeds from the sale of shares of the Company’s common stock, borrowings, net investment income from operations, capital gains proceeds from the sale of assets,non-capital gains proceeds from the sale of assets, and dividends or other distributions paid to the Company on account of preferred and common equity investments in portfolio companies. The Company has not established limits on the amount of funds it may use from available sources to make distributions. During certain periods, the Company’s distributions may exceed its earnings. As a result, it is possible that a portion of the distributions the Company makes may represent a return of capital. A return of capital generally is a return of a stockholder’s investment rather than a return of earnings or gains derived from the Company’s investment activities. Each year a statement on Form1099-DIV identifying the sources of the distributions (i.e., paid from ordinary income, paid from net capital gains on the sale of securities, and/or a return of capital, which is a nontaxable distribution) will be mailed to the Company’s stockholders. There can be no assurance that the Company will be able to pay distributions at a specific rate or at all.
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 5. Distributions (continued)
The following table reflects the sources of the cash distributions on a tax basis that the Company has paid on its common stock during the nine months ended September 30, 20172021 and 2016:2020:
Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2017 | 2016 | 2021 | 2020 | |||||||||||||||||||||||||||||
Source of Distribution | Distribution Amount | Percentage | Distribution Amount | Percentage | Distribution Amount | Percentage | Distribution Amount | Percentage | ||||||||||||||||||||||||
Offering proceeds | $ | — | — | $ | — | — | ||||||||||||||||||||||||||
Borrowings | — | — | — | — | ||||||||||||||||||||||||||||
Return of capital | $ | — | — | $ | — | — | ||||||||||||||||||||||||||
Net investment income(1) | 163,825 | 100 | % | 162,567 | 100 | % | 335 | 100 | % | 244 | 100 | % | ||||||||||||||||||||
Short-term capital gains proceeds from the sale of assets | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Long-term capital gains proceeds from the sale of assets | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Non-capital gains proceeds from the sale of assets | — | — | — | — | ||||||||||||||||||||||||||||
Distributions on account of preferred and common equity | — | — | — | — | ||||||||||||||||||||||||||||
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Total | $ | 163,825 | 100 | % | $ | 162,567 | 100 | % | $ | 335 | 100 | % | $ | 244 | 100 | % | ||||||||||||||||
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(1) | During the nine months ended September 30, |
The Company’s net investment income on a tax basis for the nine months ended September 30, 2017 and 2016 was $146,571 and $156,642, respectively. As of September 30, 2017 and December 31, 2016, the Company had $133,656 and $150,910 of undistributed net investment income, respectively, and $180,020 and $73,555, respectively, of accumulated capital losses on a tax basis.
The difference between the Company’s GAAP-basis net investment income and itstax-basis net investment income is primarily due to the reclassification of unamortized original issue discount and prepayment fees recognized upon prepayment of loans from income for GAAP purposes to realized gains or deferred to future periods for tax purposes, the impact of consolidating certain subsidiaries for purposes of computing GAAP-basis net investment income but not for purposes of computingtax-basis net investment income and income recognized for tax purposes on certain transactions but not recognized for GAAP purposes.
FS Investment Corporation
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands, except share and per share amounts)
Note 5. Distributions (continued)
The following table sets forth a reconciliation between GAAP-basis net investment income andtax-basis net investment income during the nine months ended September 30, 2017 and 2016:
Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
GAAP-basis net investment income | $ | 149,698 | $ | 155,781 | ||||
Income subject to tax not recorded for GAAP | (305 | ) | — | |||||
GAAP versustax-basis impact of consolidation of certain subsidiaries | 9,041 | — | ||||||
Reclassification or deferral of unamortized original issue discount and prepayment fees | (11,996 | ) | (9,434 | ) | ||||
Other miscellaneous differences | 133 | 10,295 | ||||||
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Tax-basis net investment income | $ | 146,571 | $ | 156,642 | ||||
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The determination of the tax attributes of the Company’s distributions is made annually as of the end of the Company’s fiscal year based upon the Company’s taxable income for the full year and distributions paid for the full year. Therefore, a determination made on a quarterly basis may not be representative of the actual tax attributes of the Company’s distributions for a full year. The actual tax characteristics of distributions to stockholders are reported to stockholders annually on Form1099-DIV.
Net capital losses may be carried forward indefinitely, and their character is retained as short-term or long-term losses. As of September 30, 2021, the Company had short-term and long-term capital loss carryforwards available to offset future realized capital gains of $69 and $1,732, respectively. $85 of such losses were carried over from CCT due to the Company’s acquisition of CCT, or the 2018 Merger, $1,212 were carried over from FSKR due to the 2021 Merger, and $177 of such losses were carried over from losses generated by the Company prior to the 2018 Merger. Because of the loss limitation rules of the Code, some of the tax basis losses may be limited in their use. Any unused balances resulting from such limitations may be carried forward into future years indefinitely.
As of September 30, 20172021 and December 31, 2016,2020, the components of accumulated earningsCompany’s gross unrealized appreciation on a tax basis were as follows:was $1,671 and $1,121, respectively. As of September 30, 2021 and December 31, 2020, the Company’s gross unrealized depreciation on a tax basis was $1,927 and $1,280, respectively.
September 30, 2017 (Unaudited) | December 31, 2016 | |||||||
Distributable ordinary income | $ | 133,656 | $ | 150,910 | ||||
Distributable realized gains (accumulated capital losses)(1) | (180,020 | ) | (73,555 | ) | ||||
Other temporary differences | 3,614 | 3,580 | ||||||
Net unrealized appreciation (depreciation) on investments and secured borrowing and gain/loss on foreign currency(2) | 91,208 | (44,842 | ) | |||||
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Total | $ | 48,458 | $ | 36,093 | ||||
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The aggregate cost of the Company’s investments for U.S. federal income tax purposes totaled $3,824,726$16,807 and $3,780,294$7,622 as of September 30, 20172021 and December 31, 2016,2020, respectively. The aggregate net unrealized appreciation (depreciation) on investments on a tax basis was $86,673$(983) and $(53,478)$(842) as of September 30, 20172021 and December 31, 2016,2020, respectively. The aggregate net unrealized appreciation (depreciation) on investments on a tax basis excludes net unrealized appreciation (depreciation) from merger accounting, foreign currency forward contracts and foreign currency transactions.
As of September 30, 2017,2021, the Company had a deferred tax liability of $17,434$7 resulting from unrealized appreciation on investments held by the Company’s wholly-owned taxable subsidiaries and a deferred tax asset of $23,698$50 resulting from net operating losses, capital losses, and interest expense limitation carryforwards of the Company’s wholly-owned taxable subsidiaries and unrealized depreciation on investments held by the Company’s wholly-owned taxable subsidiaries. As of September 30, 2017,2021, certain wholly-owned taxable subsidiaries anticipated that they would be unable to fully utilize their generated net operating losses and capital losses, therefore the deferred tax asset was offset by a valuation allowance of $6,264.$43. For the nine months ended September 30, 2017,2021, the Company did not record a provision for taxes related to wholly-owned taxable subsidiaries.
FS Investment CorporationKKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands,millions, except share and per share amounts)
Note 6. Investment Portfolio
The following table summarizes the composition of the Company’s investment portfolio at cost and fair value as of September 30, 20172021 and December 31, 2016:2020:
September 30, 2017 (Unaudited) | December 31, 2016 | September 30, 2021 (Unaudited) | December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost(1) | Fair Value | Percentage of Portfolio | Amortized Cost(1) | Fair Value | Percentage of Portfolio | Amortized Cost(1) | Fair Value | Percentage of Portfolio | Amortized Cost(1) | Fair Value | Percentage of Portfolio | |||||||||||||||||||||||||||||||||||||
Senior Secured Loans—First Lien | $ | 2,366,950 | $ | 2,372,705 | 61% | $ | 1,992,159 | $ | 1,935,441 | 52% | $ | 9,531 | $ | 9,689 | 61.2 | % | $ | 3,597 | $ | 3,449 | 50.9 | % | ||||||||||||||||||||||||||
Senior Secured Loans—Second Lien | 213,822 | 191,494 | 5% | 619,892 | 599,155 | 16% | 1,635 | 1,669 | 10.6 | % | 1,035 | 880 | 13.0 | % | ||||||||||||||||||||||||||||||||||
Senior Secured Bonds | 189,292 | 198,702 | 5% | 205,657 | 159,470 | 4% | ||||||||||||||||||||||||||||||||||||||||||
Other Senior Secured Debt | 147 | 136 | 0.9 | % | 127 | 86 | 1.3 | % | ||||||||||||||||||||||||||||||||||||||||
Subordinated Debt | 553,331 | 555,785 | 14% | 498,080 | 454,045 | 12% | 167 | 93 | 0.6 | % | 243 | 171 | 2.5 | % | ||||||||||||||||||||||||||||||||||
Collateralized Securities | 48,471 | 57,509 | 1% | 59,225 | 72,058 | 2% | ||||||||||||||||||||||||||||||||||||||||||
Asset Based Finance | 1,946 | 1,999 | 12.6 | % | 1,025 | 951 | 14.0 | % | ||||||||||||||||||||||||||||||||||||||||
Credit Opportunities Partners JV, LLC | 1,397 | 1,399 | 8.8 | % | 810 | 713 | 10.5 | % | ||||||||||||||||||||||||||||||||||||||||
Equity/Other | 400,973 | 535,204 | 14% | 368,927 | 506,647 | 14% | 901 | 839 | 5.3 | % | 616 | 530 | 7.8 | % | ||||||||||||||||||||||||||||||||||
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Total | $ | 3,772,839 | $ | 3,911,399 | 100% | $ | 3,743,940 | $ | 3,726,816 | 100% | $ | 15,724 | $ | 15,824 | 100.0 | % | $ | 7,453 | $ | 6,780 | 100.0 | % | ||||||||||||||||||||||||||
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(1) | Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on investments. |
In general, under the 1940 Act, the Company would be presumed to “control” a portfolio company if it owned more than 25% of its voting securities or it had the power to exercise control over the management or policies of such portfolio company, and would be an “affiliated person” of a portfolio company if it owned 5% or more of its voting securities.
As of September 30, 2017,2021, the Company held investments in onesixteen portfolio companycompanies of which it is deemed to “control.” As of September 30, 2017,2021, the Company held investments in sixseventeen portfolio companies of which it is deemed to be an “affiliated person” but is not deemed to “control.” For additional information with respect to such portfolio companies, see footnotes (s)(ac) and (t)(ad) to the unaudited consolidated schedule of investments as of September 30, 20172021 in this quarterly report on Form10-Q.
As of December 31, 2016,2020, the Company held investments in oneten portfolio companycompanies of which it is deemed to “control.” As of December 31, 2016,2020, the Company held investments in threethirteen portfolio companies of which it is deemed to be an “affiliated person” but is not deemed to “control.” For additional information with respect to such portfolio companies, see footnotes (t)(y) and (u)(z) to the consolidated schedule of investments as of December 31, 20162020 in this quarterly report on Form10-Q.
The Company’s investment portfolio may contain loans and other unfunded arrangements that are in the form of lines of credit, revolving credit facilities, delayed draw credit facilities or other investments, which require the Company to provide funding when requested by portfolio companies in accordance with the terms of the underlying agreements. As of September 30, 2017,2021, the Company had twenty unfunded debt investments with aggregate unfunded commitments of $176,450, one$(1,313.7), unfunded commitmentequity/other commitments of $511.3 and unfunded commitments of $350.2 to purchase up to $295 in shares of preferred stock of Altus Power America Holdings, LLC and one unfunded commitment to purchase up to $16 in shares of common stock of Chisholm Oil and Gas,Credit Opportunities Partners JV, LLC. As of December 31, 2016,2020, the Company had seventeen unfunded debt investments with aggregate unfunded commitments of $186,233$228.4, unfunded equity commitments of $142.9 and one unfunded commitmentcommitments of $65.8 to purchase up to $362 in shares of preferred stock of Altus Power America Holdings,Credit Opportunities Partners JV, LLC. The Company maintains sufficient cash on hand and available borrowings to fund such unfunded commitments should the need arise. For additional details regarding the Company’s unfunded debt investments, see the Company’s unaudited consolidated schedule of investments as of September 30, 20172021 and the Company’s audited consolidated schedule of investments as of December 31, 2016.2020.
FS Investment CorporationKKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands,millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
The table below describes investments by industry classification and enumerates the percentage, by fair value, of the total portfolio assets in such industries as of September 30, 20172021 and December 31, 2016:2020:
September 30, 2017 (Unaudited) | December 31, 2016 | September 30, 2021 (Unaudited) | December 31, 2020 | |||||||||||||||||||||||||||||
Industry Classification | Fair Value | Percentage of Portfolio | Fair Value | Percentage of Portfolio | Fair Value | Percentage of Portfolio | Fair Value | Percentage of Portfolio | ||||||||||||||||||||||||
Automobiles & Components | $ | 14,460 | 0 | % | $ | 27,525 | 1 | % | $ | 168 | 1.1 | % | $ | 104 | 1.5 | % | ||||||||||||||||
Banks | 14 | 0.1 | % | 14 | 0.2 | % | ||||||||||||||||||||||||||
Capital Goods | 1,026,676 | 26 | % | 708,946 | 19 | % | 2,244 | 14.2 | % | 799 | 11.8 | % | ||||||||||||||||||||
Commercial & Professional Services | 553,163 | 14 | % | 514,682 | 14 | % | 1,569 | 9.9 | % | 564 | 8.3 | % | ||||||||||||||||||||
Consumer Durables & Apparel | 176,156 | 5 | % | 198,752 | 5 | % | 756 | 4.8 | % | 385 | 5.7 | % | ||||||||||||||||||||
Consumer Services | 292,506 | 8 | % | 343,211 | 9 | % | 263 | 1.7 | % | 145 | 2.1 | % | ||||||||||||||||||||
Credit Opportunities Partners JV, LLC | 1,399 | 8.8 | % | 713 | 10.5 | % | ||||||||||||||||||||||||||
Diversified Financials | 210,229 | 6 | % | 184,355 | 5 | % | 691 | 4.4 | % | 467 | 6.9 | % | ||||||||||||||||||||
Energy | 262,235 | 7 | % | 432,047 | 12 | % | 234 | 1.5 | % | 107 | 1.6 | % | ||||||||||||||||||||
Food & Staples Retailing | 277 | 1.7 | % | 221 | 3.3 | % | ||||||||||||||||||||||||||
Food, Beverage & Tobacco | 69,682 | 2 | % | — | — | 282 | 1.8 | % | 106 | 1.6 | % | |||||||||||||||||||||
Health Care Equipment & Services | 209,352 | 5 | % | 199,064 | 5 | % | 1,663 | 10.5 | % | 604 | 8.9 | % | ||||||||||||||||||||
Household & Personal Products | 283 | 1.8 | % | 190 | 2.8 | % | ||||||||||||||||||||||||||
Insurance | 724 | 4.6 | % | 208 | 3.1 | % | ||||||||||||||||||||||||||
Materials | 320,023 | 8 | % | 263,849 | 7 | % | 215 | 1.3 | % | 147 | 2.2 | % | ||||||||||||||||||||
Media | 131,319 | 3 | % | 113,455 | 3 | % | ||||||||||||||||||||||||||
Media & Entertainment | 533 | 3.4 | % | 36 | 0.5 | % | ||||||||||||||||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 243 | 1.5 | % | 34 | 0.5 | % | ||||||||||||||||||||||||||
Real Estate | 790 | 5.0 | % | 555 | 8.2 | % | ||||||||||||||||||||||||||
Retailing | 150,624 | 4 | % | 110,262 | 3 | % | 211 | 1.3 | % | 344 | 5.1 | % | ||||||||||||||||||||
Semiconductors & Semiconductor Equipment | 6,288 | 0 | % | 5,328 | 0 | % | ||||||||||||||||||||||||||
Software & Services | 199,314 | 5 | % | 265,501 | 7 | % | 2,728 | 17.2 | % | 770 | 11.3 | % | ||||||||||||||||||||
Technology Hardware & Equipment | 36,000 | 1 | % | 108,500 | 3 | % | 49 | 0.3 | % | 15 | 0.2 | % | ||||||||||||||||||||
Telecommunication Services | 161,667 | 4 | % | 161,544 | 4 | % | 162 | 1.0 | % | 71 | 1.0 | % | ||||||||||||||||||||
Transportation | 91,705 | 2 | % | 89,795 | 3 | % | 326 | 2.1 | % | 181 | 2.7 | % | ||||||||||||||||||||
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Total | $ | 3,911,399 | 100 | % | $ | 3,726,816 | 100 | % | $ | 15,824 | 100.0 | % | $ | 6,780 | 100.0 | % | ||||||||||||||||
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Credit Opportunities Partners JV, LLC
Credit Opportunities Partners JV, LLC (formerly known as Strategic Credit Opportunities Partners, LLC), or COPJV, is a joint venture between the Company and South Carolina Retirement Systems Group Trust, or SCRS. SCRS purchased its interests in COPJV from Conway Capital, LLC, an affiliate of Guggenheim Life and Annuity Company and Delaware Life Insurance Company, in June 2019, which had no impact on the significant terms governing COPJV other than an increase in the aggregate capital commitment (but not the percentage of the aggregate capital committed by each member) to COPJV. Effective as of June 18, 2021, Credit Opportunities Partners, LLC, or COP, merged with and into COPJV, with COPJV surviving the merger, or the COPJV Merger. As of June 18, 2021, COPJV assumed all of COP’s obligations under its credit facilities, and COP’s wholly-owned special purpose financing subsidiaries became wholly-owned special purpose financing subsidiaries of COPJV, in each case, as a result of the consummation of the COPJV Merger. COPJV’s second amended and restated limited liability company agreement, or the COPJV Agreement, requires the Company and SCRS to provide capital to COPJV of up to $2,000 in the aggregate where the Company and SCRS would provide 87.5% and 12.5%, respectively, of the committed capital. Pursuant to the terms of the COPJV Agreement, the Company and SCRS each have 50% voting control of COPJV and are required to agree on all investment decisions as well as certain other significant actions for COPJV. COPJV invests its capital in a range of investments, including senior secured loans (both first lien and second lien) to middle market companies, broadly syndicated loans, equity, warrants and other investments. As administrative agent of COPJV, the Company performs certain day-to-day management responsibilities on behalf of COPJV and is entitled to a fee of 0.25% of COPJV’s assets under administration,
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
calculated and payable quarterly in arrears. As of September 30, 2021, the Company and SCRS have funded approximately $1,599.8 to COPJV, of which $1,399.8 was from the Company.
On September 2, 2021, Jersey City Funding LLC, or Jersey City Funding, a wholly-owned subsidiary of COPJV, prepaid all outstanding borrowings under, and terminated, its revolving credit facility with Goldman Sachs Bank.
Chestnut Street Funding LLC, or Chestnut Street Funding, a wholly-owned subsidiary of COPJV, has a revolving credit facility with Citibank, N.A., or as amended, the Chestnut Street Funding Credit Facility, which provides for up to $400 of borrowings as of September 30, 2021. The Chestnut Street Funding Credit Facility provides loans in U.S. dollars, Australian dollars, Canadian dollars, Euros and pounds sterling. U.S. dollar loans bear interest at the rate of three-month LIBOR (subject to a 0% floor) plus 2.25%. Foreign currency loans bear interest at the applicable floating rate (subject to a 0% floor) plus 2.25%. Chestnut Street Funding also pays a commitment fee of up to 0.50% on undrawn commitments. The Chestnut Street Funding Credit Facility matures on September 18, 2024. As of September 30, 2021, total outstanding borrowings under the Chestnut Street Funding Credit Facility were $177.6. Borrowings under the Chestnut Street Funding Credit Facility are secured by substantially all of the assets of Chestnut Street Funding.
Boxwood Drive Funding LLC, or Boxwood Drive Funding, a wholly-owned subsidiary of COPJV, has a revolving credit facility with BNP Paribas, or as amended, the Boxwood Drive Funding Credit Facility, which provides for up to $300 of borrowings as of September 30, 2021. The Boxwood Drive Funding Credit Facility provides for loans in U.S. dollars, Australian dollars, Canadian dollars, New Zealand dollars, Euros and pounds sterling. U.S. dollar loans bear interest at the rate of LIBOR (subject to a 0% floor) plus a spread of 2.05% to 3.15% during the reinvestment period and 2.50% to 3.25% thereafter. Foreign currency loans bear interest at the applicable floating rate (subject to a 0% floor) plus the spread applicable to the specified currency. Boxwood Drive Funding also pays a commitment fee of up to 1.00% on undrawn commitments. The Boxwood Drive Funding Credit Facility matures on April 15, 2025. As of September 30, 2021, total outstanding borrowings under the Boxwood Drive Funding Credit Facility were $49.7. Borrowings under the Boxwood Drive Funding Credit Facility are secured by substantially all of the assets of Boxwood Drive Funding.
Big Cedar Creek LLC, or Big Cedar Creek Funding, a wholly-owned subsidiary of COPJV, has a revolving credit facility with BNP Paribas, or as amended, the Big Cedar Creek Funding Credit Facility, which provides for up to $300 of borrowings as of September 30, 2021. The Big Cedar Creek Funding Credit Facility provides loans in U.S. dollars, Australian dollars, Canadian dollars, New Zealand dollars, Euros and pounds sterling. U.S. dollar loans bear interest at the rate of LIBOR (subject to a 0% floor) plus a spread of 1.85% to 2.55% during the reinvestment period and 2.00% to 2.65% thereafter. Foreign currency loans bear interest at the applicable floating rate (subject to a 0% floor) plus a spread of 1.85% to 2.55% during the reinvestment period and 2.00% to 2.65% thereafter. Big Cedar Creek Funding also pays a commitment fee of up to 1.00% on undrawn commitments. The Big Cedar Creek Funding Credit Facility matures on March 11, 2025. As of September 30, 2021, total outstanding borrowings under the Big Cedar Creek Funding Credit Facility were $87.6. Borrowings under the Big Cedar Creek Funding Credit Facility are secured by substantially all of the assets of Big Cedar Creek.
Green Creek LLC, or Green Creek Funding, a wholly-owned subsidiary of COPJV, has a revolving credit facility with Goldman Sachs Bank, or as amended, the Green Creek Funding Credit Facility, which provides for up to $500 of borrowings as of September 30, 2021. The Green Creek Credit Facility provides for loans in U.S. dollars, Canadian dollars, Euros and pounds sterling. U.S. dollar loans bear interest at the rate of three-month LIBOR (subject to a 0% floor) plus 3.30%. Foreign currency loans bear interest at the rate of the applicable floating rate (subject to a 0% floor) plus the spread applicable to the specified currency. Green Creek Funding also pays a commitment fee of up to 3.30% on undrawn commitments. The Green Creek Funding Credit Facility matures on January 30, 2022. As of September 30, 2021, total outstanding borrowings under the Green Creek Funding Credit Facility were $348.9. Borrowings under the Green Creek Funding Credit Facility are secured by substantially all of the assets of Green Creek Funding.
On August 17, 2021, COPJV sold in a private placement $225 of aggregate principal amount of Series B senior unsecured notes, or the COPJV Notes, to qualified institutional buyers in reliance on Section 4(a)(2) of the Securities Act. Interest of the COPJV Notes is payable semi-annually on the 17th of each of February and August, at a fixed annual rate of 3.62%, commencing
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
February 17, 2022. This interest rate is subject to increase up to 4.12% in the event that the COPJV Notes cease to be rated investment grade, and the COPJV Notes will be subject to an additional 2.0% of default interest during the continuance of an event of default. The COPJV Notes mature on August 17, 2026, unless redeemed, purchased or prepaid prior to such date by COPJV in accordance with their terms. The COPJV Notes are general unsecured obligations that rank pari passu with all outstanding and future unsecured and unsubordinated indebtedness that COPJV may issue. COPJV used the net proceeds from the private placement for general corporate purposes, including to make investments, repay existing debt and make permitted distributions.
COPJV was in compliance with all covenants required by its financing arrangements as of September 30, 2021 and December 31, 2020.
During the nine months ended September 30, 2021, the Company sold investments with a cost of $596.1 for proceeds of $615.5 to COPJV and recognized a net realized gain (loss) of $19.4 in connection with the transactions. As of September 30, 2021, $351.9 of these sales to COPJV are included in receivable for investments sold in the consolidated statements of assets and liabilities.
As of September 30, 2021 and December 31, 2020, COPJV had total investments with a fair value of $2,481.7 and $1,544.3, respectively. As of September 30, 2021 and December 31, 2020, COPJV had two and two investments on non-accrual status, respectively.
Below is a summary of COPJV’s portfolio, followed by a listing of the individual loans in COPJV’s portfolio as of September 30, 2021 and December 31, 2020:
As of | ||||||||
September 30, 2021 | December 31, 2020 | |||||||
Total debt investments(1) | $ | 2,276.5 | $ | 1,436.3 | ||||
Weighted average annual yield on accruing debt investments(2) | 8.5 | % | 8.6 | % | ||||
Number of portfolio companies in COPJV | 78 | 66 | ||||||
Largest investment in a single portfolio company(1) | $ | 131.0 | $ | 72.6 | ||||
Unfunded commitments(1) | $ | 27.7 | $ | 21.6 |
(1) | “Debt Investments” means investments that pay or are expected to pay a stated interest rate, stated dividend rate or other similar stated return. |
(2) | The Weighted Average Annual Yield on Accruing Debt Investments is computed as (i) the sum of (a) the stated annual interest rate, dividend rate or other similar stated return of each accruing Debt Investment, multiplied by its par amount, adjusted to U.S. dollars and for any partial income accrual when necessary, as of the end of the applicable reporting period, plus (b) the annual amortization of the purchase or original issue discount or premium of each accruing Debt Investment; divided by (ii) the total amortized cost of Debt Investments included in the calculated group as of the end of the applicable reporting period. |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Credit Opportunities Partners JV, LLC Portfolio
As of September 30, 2021 (in millions)
(Unaudited)
Company(a) | Footnotes | Industry | Interest Rate(b) | Base Rate Floor | Maturity Date | No. Shares/ Principal Amount(c) | Cost | Fair Value(d) | ||||||||||||||
Senior Secured Loans—First Lien—99.6% | ||||||||||||||||||||||
ABB CONCISE Optical Group LLC | (j)(k) | Retailing | L+500 | 1.0% | 6/15/23 | $ | 15.5 | $ | 13.5 | $ | 15.0 | |||||||||||
Advania Sverige AB | (e) | Software & Services | R+610, 0.0% PIK (2.0% Max PIK) | 0.0% | 3/30/28 | ISK | 1,644.9 | 12.8 | 12.6 | |||||||||||||
Advania Sverige AB | (e) | Software & Services | SR+610 | 0.0% | 4/1/28 | SEK | 588.0 | 66.4 | 67.3 | |||||||||||||
Alstom SA | (k) | Transportation | L+550, 2.5% PIK (2.5% Max PIK) | 1.0% | 8/29/23 | $ | 6.1 | 5.1 | 4.6 | |||||||||||||
Ammeraal Beltech Holding BV | (h)(k) | Capital Goods | E+375 | 0.0% | 7/30/25 | € | 4.8 | 4.6 | 5.5 | |||||||||||||
Ardonagh Group Ltd | (e)(i) | Insurance | E+725 | 1.0% | 7/14/26 | 0.5 | 0.5 | 0.6 | ||||||||||||||
Ardonagh Group Ltd | (e)(i) | Insurance | L+725 | 0.8% | 7/14/26 | £ | 3.8 | 4.7 | 5.2 | |||||||||||||
Arrotex Australia Group Pty Ltd | (e)(j)(k)(n) | Pharmaceuticals, Biotechnology & Life Sciences | B+525 | 1.0% | 7/10/24 | A$ | 109.4 | 73.8 | 79.1 | |||||||||||||
Arrotex Australia Group Pty Ltd | (e)(f) | Pharmaceuticals, Biotechnology & Life Sciences | B+525 | 1.0% | 7/10/24 | 8.0 | 5.7 | 5.7 | ||||||||||||||
BearCom Acquisition Corp | (e)(j) | Technology Hardware & Equipment | L+600 | 1.0% | 7/5/24 | $ | 2.2 | 2.2 | 2.2 | |||||||||||||
BearCom Acquisition Corp | (e)(j) | Technology Hardware & Equipment | C+550 | 1.0% | 7/5/24 | C$ | 14.4 | 10.5 | 11.0 | |||||||||||||
BearCom Acquisition Corp | (e)(f) | Technology Hardware & Equipment | C+550 | 1.0% | 1/5/24 | 1.3 | 1.0 | 1.0 | ||||||||||||||
Belk Inc | (o)(p)(g) | Retailing | 10.0%, 0.0% PIK (8.0% Max PIK) | 7/31/25 | $ | 2.8 | 1.3 | 2.2 | ||||||||||||||
Belk Inc | Retailing | L+750 | 1.0% | 7/31/25 | 0.6 | 0.6 | 0.6 | |||||||||||||||
Big Bus Tours Ltd | (e)(j) | Consumer Services | E+850 PIK (E+850 Max PIK) | 1.0% | 3/15/24 | € | 11.3 | 12.6 | 8.1 |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company(a) | Footnotes | Industry | Interest Rate(b) | Base Rate Floor | Maturity Date | No. Shares/ Principal Amount(c) | Cost | Fair Value(d) | ||||||||||||||
Big Bus Tours Ltd | (e)(j) | Consumer Services | L+850 PIK (L+850 Max PIK) | 1.0% | 3/15/24 | $ | 16.0 | $ | 16.0 | $ | 9.9 | |||||||||||
Bugaboo International BV | (e)(h)(n) | Consumer Durables & Apparel | E+700, 0.0% PIK (7.8% Max PIK) | 0.0% | 3/20/25 | € | 35.0 | 40.8 | 40.5 | |||||||||||||
Caprock Midstream LLC | (i) | Energy | L+475 | 0.0% | 11/3/25 | $ | 13.3 | 13.1 | 13.2 | |||||||||||||
Catapult Learning LLC | (e)(j)(n) | Consumer Services | L+850 | 1.0% | 4/24/23 | 14.8 | 14.7 | 14.8 | ||||||||||||||
Catapult Learning LLC | (e)(i)(j) | Consumer Services | L+453 | 1.0% | 4/24/23 | 38.9 | 38.6 | 38.9 | ||||||||||||||
Catapult Learning LLC | (e)(f) | Consumer Services | L+850 | 1.0% | 4/24/23 | 0.4 | 0.4 | 0.4 | ||||||||||||||
Catapult Learning LLC | (e)(f) | Consumer Services | L+475 | 1.0% | 4/24/23 | 4.4 | 4.4 | 4.4 | ||||||||||||||
Catapult Learning LLC | (e)(f) | Consumer Services | L+453 | 1.0% | 4/24/23 | 1.2 | 1.2 | 1.2 | ||||||||||||||
Child Development Schools Inc | (e)(j) | Consumer Services | L+425 | 1.0% | 5/21/23 | 8.4 | 8.4 | 8.4 | ||||||||||||||
Child Development Schools Inc | (e)(f) | Consumer Services | L+425 | 1.0% | 5/21/23 | 2.5 | 2.5 | 2.5 | ||||||||||||||
CSafe Global | (e)(k) | Capital Goods | L+625 | 1.0% | 12/23/27 | 24.9 | 24.8 | 25.1 | ||||||||||||||
Cubic Corp | (i) | Software & Services | L+425 | 0.8% | 5/25/28 | 9.2 | 9.2 | 9.2 | ||||||||||||||
Datatel Inc | (h) | Software & Services | L+375 | 0.8% | 10/7/27 | 2.4 | 2.4 | 2.4 | ||||||||||||||
Distribution International Inc | (k) | Retailing | L+575 | 1.0% | 12/15/23 | 13.8 | 12.2 | 13.9 | ||||||||||||||
Eagleclaw Midstream Ventures LLC | (k) | Energy | L+425 | 1.0% | 6/24/24 | 11.1 | 10.6 | 11.1 | ||||||||||||||
EIF Van Hook Holdings LLC | (i)(k) | Energy | L+525 | 0.0% | 9/5/24 | 8.4 | 8.0 | 7.8 | ||||||||||||||
Entertainment Benefits Group LLC | (e)(k) | Media & Entertainment | L+575, 2.5% PIK (2.5% Max PIK) | 1.0% | 9/30/25 | 2.6 | 2.6 | 2.5 | ||||||||||||||
FloWorks International LLC | (e)(h)(k) | Capital Goods | L+700 | 1.0% | 10/14/26 | 24.8 | 24.5 | 24.5 | ||||||||||||||
Frontline Technologies Group LLC | (e)(i) | Software & Services | L+575 | 1.0% | 9/18/23 | 19.8 | 19.8 | 19.8 | ||||||||||||||
Greystone Equity Member Corp | (e) | Diversified Financials | L+725 | 3.8% | 4/1/26 | 30.2 | 30.0 | 30.1 | ||||||||||||||
HealthChannels LLC | (j) | Health Care Equipment & Services | L+450 | 0.0% | 4/3/25 | 15.8 | 15.7 | 15.1 |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company(a) | Footnotes | Industry | Interest Rate(b) | Base Rate Floor | Maturity Date | No. Shares/ Principal Amount(c) | Cost | Fair Value(d) | ||||||||||||||
Industria Chimica Emiliana Srl | (e)(j)(k)(n) | Pharmaceuticals, Biotechnology & Life Sciences | E+725 | 0.0% | 9/27/26 | € | 113.9 | $ | 125.0 | $ | 137.7 | |||||||||||
KBP Investments LLC | (e)(h)(i) | Food & Staples Retailing | L+500 | 0.8% | 5/26/27 | $ | 23.8 | 23.6 | 23.5 | |||||||||||||
Kellermeyer Bergensons Services LLC | (e)(i)(j) | Commercial & Professional Services | L+575 | 1.0% | 11/7/26 | 29.5 | 28.1 | 29.7 | ||||||||||||||
Kettle Cuisine LLC | (j) | Food, Beverage & Tobacco | L+375 | 1.0% | 8/25/25 | 16.5 | 16.4 | 15.7 | ||||||||||||||
Lexitas Inc | (e)(h) | Commercial & Professional Services | L+600 | 1.0% | 11/14/25 | 18.7 | 18.6 | 19.1 | ||||||||||||||
Lionbridge Technologies Inc | (e)(i)(j) | Consumer Services | L+700 | 1.0% | 12/29/25 | 28.7 | 28.0 | 29.0 | ||||||||||||||
Lipari Foods LLC | (e)(k) | Food & Staples Retailing | L+575 | 1.0% | 1/6/25 | 65.6 | 65.6 | 66.3 | ||||||||||||||
Monitronics International Inc | (h)(i)(k) | Commercial & Professional Services | L+500 | 1.5% | 7/3/24 | 35.5 | 32.7 | 35.8 | ||||||||||||||
One Call Care Management Inc | (h) | Health Care Equipment & Services | L+550 | 0.8% | 4/22/27 | 5.0 | 5.0 | 5.0 | ||||||||||||||
Ontic Engineering & Manufacturing Inc | (h) | Capital Goods | L+400 | 0.0% | 10/30/26 | 2.1 | 1.9 | 2.2 | ||||||||||||||
Parts Town LLC | (e)(k)(n) | Retailing | L+550 | 1.0% | 10/15/25 | 52.3 | 52.1 | 51.5 | ||||||||||||||
Parts Town LLC | (e)(f) | Retailing | L+550 | 1.0% | 10/15/25 | 3.2 | 3.2 | 3.1 | ||||||||||||||
Precision Global Corp | (e)(j) | Materials | L+475 | 1.0% | 8/3/24 | 9.0 | 8.7 | 8.6 | ||||||||||||||
Premium Credit Ltd | (e)(h)(i) | Diversified Financials | L+650 | 0.0% | 1/16/26 | £ | 51.2 | 66.3 | 69.0 | |||||||||||||
Project Marron | (e)(h)(j) | Consumer Services | B+575 | 0.0% | 7/2/25 | A$ | 66.8 | 46.0 | 44.9 | |||||||||||||
Project Marron | (e)(i)(j) | Consumer Services | C+575 | 0.0% | 7/2/25 | C$ | 52.5 | 39.8 | 38.7 | |||||||||||||
Pure Fishing Inc | (i) | Consumer Durables & Apparel | L+450 | 0.0% | 12/22/25 | $ | 9.9 | 9.8 | 9.8 | |||||||||||||
Qdoba Restaurant Corp | (k)(n) | Consumer Services | L+700 | 1.0% | 3/21/25 | 3.5 | 3.2 | 3.4 | ||||||||||||||
Reliant Rehab Hospital Cincinnati LLC | (e)(j) | Health Care Equipment & Services | L+675 | 0.0% | 9/2/24 | 19.8 | 19.2 | 19.1 | ||||||||||||||
Revere Superior Holdings Inc | (e)(k) | Software & Services | L+575 | 1.0% | 9/30/26 | 19.8 | 19.8 | 20.0 | ||||||||||||||
Rise Baking Company | (e)(k) | Food, Beverage & Tobacco | L+625 | 1.0% | 8/13/27 | 16.0 | 15.7 | 15.7 |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company(a) | Footnotes | Industry | Interest Rate(b) | Base Rate Floor | Maturity Date | No. Shares/ Principal Amount(c) | Cost | Fair Value(d) | ||||||||||||||
Rise Baking Company | (e)(k) | Food, Beverage & Tobacco | L+625 | 1.0% | 8/13/27 | $ | 0.3 | $ | 0.3 | $ | 0.3 | |||||||||||
Rise Baking Company | (e)(f) | Food, Beverage & Tobacco | L+625 | 1.0% | 8/13/27 | 1.6 | 1.6 | 1.6 | ||||||||||||||
RSC Insurance Brokerage Inc | (e)(k) | Insurance | L+550 | 1.0% | 10/30/26 | 19.0 | 19.0 | 19.2 | ||||||||||||||
Safe-Guard Products International LLC | (e)(i)(j)(k) | Diversified Financials | L+500 | 0.5% | 1/27/27 | 75.5 | 76.1 | 75.5 | ||||||||||||||
Sequa Corp | (h)(j)(k) | Capital Goods | L+675, 0.0% PIK (1.0% Max PIK) | 1.0% | 11/28/23 | 45.4 | 43.7 | 46.2 | ||||||||||||||
SIRVA Worldwide Inc | (i) | Commercial & Professional Services | L+550 | 0.0% | 8/4/25 | 7.1 | 6.7 | 6.7 | ||||||||||||||
Staples Canada | (e)(h)(i)(k)(n) | Retailing | C+700 | 1.0% | 9/12/24 | C$ | 90.5 | 69.0 | 71.4 | |||||||||||||
Total Safety US Inc | (h)(i) | Capital Goods | L+600 | 1.0% | 8/16/25 | $ | 11.1 | 9.5 | 11.0 | |||||||||||||
Trace3 Inc | (e)(k) | Software & Services | L+675 | 1.0% | 8/3/24 | 32.6 | 32.4 | 32.6 | ||||||||||||||
Transaction Services Group Ltd | (e)(j)(k)(n) | Software & Services | B+650 | 0.0% | 10/15/26 | A$ | 162.0 | 111.0 | 114.9 | |||||||||||||
West Corp | (i) | Software & Services | L+350 | 1.0% | 10/10/24 | $ | 2.6 | $ | 2.5 | $ | 2.5 | |||||||||||
West Corp | (i) | Software & Services | L+400 | 1.0% | 10/10/24 | 12.4 | 12.1 | 12.2 | ||||||||||||||
WireCo WorldGroup Inc | (k) | Capital Goods | L+500 | 1.0% | 9/29/23 | 0.1 | 0.1 | 0.1 | ||||||||||||||
Woolpert Inc | (e)(h)(i)(j) | Capital Goods | L+600 | 1.0% | 4/5/28 | 53.7 | 53.1 | 53.9 | ||||||||||||||
Yak Access LLC | (n) | Capital Goods | L+500 | 0.0% | 7/11/25 | 0.8 | 0.6 | 0.6 | ||||||||||||||
|
| �� |
|
| ||||||||||||||||||
Total Senior Secured Loans—First Lien | 1,581.6 | 1,612.9 | ||||||||||||||||||||
Unfunded Loan Commitments | (20.0 | ) | (20.0 | ) | ||||||||||||||||||
|
|
|
| |||||||||||||||||||
Net Senior Secured Loans—First Lien | 1,561.6 | 1,592.9 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||
Senior Secured Loans—Second Lien—24.7% | ||||||||||||||||||||||
Access CIG LLC | (h)(i) | Commercial & Professional Services | L+775 | 0.0% | 2/27/26 | 2.5 | 2.2 | 2.5 | ||||||||||||||
Ammeraal Beltech Holding BV | (e)(k)(n) | Capital Goods | L+775 | 0.0% | 9/12/26 | 93.0 | 91.0 | 92.1 | ||||||||||||||
EaglePicher Technologies LLC | (h) | Capital Goods | L+725 | 0.0% | 3/8/26 | 0.4 | 0.4 | 0.4 |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company(a) | Footnotes | Industry | Interest Rate(b) | Base Rate Floor | Maturity Date | No. Shares/ Principal Amount(c) | Cost | Fair Value(d) | ||||||||||||||
Excelitas Technologies Corp | (h)(i) | Technology Hardware & Equipment | L+750 | 1.0% | 12/1/25 | $ | 16.0 | $ | 12.9 | $ | 16.0 | |||||||||||
Misys Ltd | (h)(i)(k) | Software & Services | L+725 | 1.0% | 6/13/25 | 41.2 | 38.6 | 41.5 | ||||||||||||||
Paradigm Acquisition Corp | (k) | Health Care Equipment & Services | L+750 | 0.0% | 10/26/26 | 0.2 | 0.2 | 0.2 | ||||||||||||||
Pure Fishing Inc | (e)(k) | Consumer Durables & Apparel | L+838 | 1.0% | 12/31/26 | 46.8 | 42.0 | 46.8 | ||||||||||||||
Sequa Corp | (k)(n) | Capital Goods | L+1,075, 0.0% PIK (6.8% Max PIK) | 1.0% | 4/28/24 | 39.1 | 33.4 | 38.6 | ||||||||||||||
SIRVA Worldwide Inc | (j) | Commercial & Professional Services | L+950 | 0.0% | 8/3/26 | 3.8 | 3.0 | 3.4 | ||||||||||||||
Transplace | (k) | Transportation | L+875 | 1.0% | 10/6/25 | 3.3 | 2.6 | 3.3 | ||||||||||||||
Watchfire Enterprises Inc | (e)(j) | Technology Hardware & Equipment | L+825 | 1.0% | 10/2/24 | 9.3 | 8.8 | 9.3 | ||||||||||||||
WireCo WorldGroup Inc | (n) | Capital Goods | L+900 | 1.0% | 9/30/24 | 8.8 | 7.4 | 8.8 | ||||||||||||||
Wittur Holding GmbH | (e)(j)(k)(n) | Capital Goods | E+850, 0.5% PIK (0.5% Max PIK) | 0.0% | 9/23/27 | € | 120.2 | 131.0 | 132.0 | |||||||||||||
|
|
|
| |||||||||||||||||||
Total Senior Secured Loans—Second Lien | 373.5 | 394.9 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||
Other Senior Secured Debt—1.4% | ||||||||||||||||||||||
One Call Care Management Inc | (e) | Health Care Equipment & Services | 8.5% PIK (8.5% Max PIK) | 11/1/28 | $ | 22.5 | 21.9 | 22.3 | ||||||||||||||
|
|
|
| |||||||||||||||||||
Total Other Senior Secured Debt | 21.9 | 22.3 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||
Asset Based Finance—24.6% | ||||||||||||||||||||||
Abacus JV, Private Equity | (e) | Insurance | 31,916,927 | 32.8 | 34.1 | |||||||||||||||||
Comet Aircraft S.a.r.l., Common Stock | (e)(o)(p)(g)(n) | Capital Goods | 12.4% | 2/28/22 | $ | 21.5 | 21.5 | 2.7 | ||||||||||||||
GA Capital Specialty Lending Fund, Limited Partnership Interest | (e)(n) | Diversified Financials | $ | 1.0 | 0.0 | 4.9 |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company(a) | Footnotes | Industry | Interest Rate(b) | Base Rate Floor | Maturity Date | No. Shares/ Principal Amount(c) | Cost | Fair Value(d) | ||||||||||||||
Global Lending Services LLC, Private Equity | (e)(n) | Diversified Financials | 4,102,288 | $ | 4.1 | $ | 5.4 | |||||||||||||||
Home Partners JV, Common Stock | (e)(o) | Real Estate | 15,249,687 | 22.9 | 34.5 | |||||||||||||||||
Home Partners JV, Structured Mezzanine | (e) | Real Estate | 11.0% PIK (11.0% Max PIK) | 3/25/29 | $ | 37.3 | 37.3 | 37.3 | ||||||||||||||
KKR Zeno Aggregator LP (K2 Aviation), Partnership Interest | (e)(o)(n) | Capital Goods | 19,642,734 | 24.4 | 18.6 | |||||||||||||||||
Lenovo Group Ltd, Structured Mezzanine | (e)(n) | Technology Hardware & Equipment | 11.8% | 9/22/24 | £ | 1.3 | 1.8 | 1.7 | ||||||||||||||
Lenovo Group Ltd, Structured Mezzanine | (e)(n) | Technology Hardware & Equipment | 11.8% | 9/22/24 | € | 4.8 | 5.6 | 5.5 | ||||||||||||||
Lenovo Group Ltd, Structured Mezzanine | (e)(n) | Technology Hardware & Equipment | 11.8% | 9/22/24 | $ | 7.4 | 7.4 | 7.4 | ||||||||||||||
Lenovo Group Ltd, Structured Mezzanine | (e)(n) | Technology Hardware & Equipment | 7.8% | 9/22/24 | € | 6.9 | 8.1 | 8.0 | ||||||||||||||
Lenovo Group Ltd, Structured Mezzanine | (e)(n) | Technology Hardware & Equipment | 7.8% | 9/22/24 | $ | 10.7 | 10.7 | 10.7 | ||||||||||||||
Lenovo Group Ltd, Structured Mezzanine | (e)(n) | Technology Hardware & Equipment | 7.8% | 9/22/24 | £ | 1.9 | 2.6 | 2.5 | ||||||||||||||
Luxembourg Life Fund—Absolute Return Fund I, 1L Term Loan | (e)(h)(n) | Insurance | L+750 | 1.5% | 2/27/25 | $ | 28.1 | 28.1 | 28.6 | |||||||||||||
Luxembourg Life Fund—Absolute Return Fund III, Term Loan | (e)(h)(k)(n) | Insurance | L+925 | 0.0% | 5/27/26 | $ | 49.8 | 49.4 | 49.4 | |||||||||||||
Luxembourg Life Fund—Absolute Return Fund III, Term Loan | (e)(f) | Insurance | L+925 | 0.0% | 5/27/26 | $ | 7.7 | 7.7 | 7.6 |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company(a) | Footnotes | Industry | Interest Rate(b) | Base Rate Floor | Maturity Date | No. Shares/ Principal Amount(c) | Cost | Fair Value(d) | ||||||||||||||
Luxembourg Life Fund—Long Term Growth Fund, Term Loan | (e)(h)(i)(k)(n) | Insurance | L+925 | 0.0% | 4/1/23 | $ | 94.6 | $ | 94.1 | $ | 94.3 | |||||||||||
NewStar Clarendon 2014-1A Class D | (e)(k)(n) | Diversified Financials | 17.2% | 1/25/27 | $ | 30.0 | 9.3 | 12.5 | ||||||||||||||
Pretium Partners LLC P1, Structured Mezzanine | (e)(h)(i) | Real Estate | 2.8%, 5.3% PIK (5.3% Max PIK) | 10/22/26 | $ | 18.9 | 18.6 | 18.9 | ||||||||||||||
Sealane Trade Finance | (e)(m) | Banks | L+963 | 0.0% | 5/8/23 | $ | 11.2 | 11.2 | 10.8 | |||||||||||||
Sealane Trade Finance | (e)(m) | Banks | L+375 | 0.0% | 5/8/23 | $ | 5.0 | 5.0 | 5.0 | |||||||||||||
|
|
|
| |||||||||||||||||||
Total Asset Based Finance | 402.6 | 400.4 | ||||||||||||||||||||
Unfunded Commitments | (7.7 | ) | (7.7 | ) | ||||||||||||||||||
|
|
|
| |||||||||||||||||||
Net Asset Based Finance | 394.9 | 392.7 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||
Equity/Other—4.9% | ||||||||||||||||||||||
Ascent Resources Utica Holdings LLC / ARU Finance Corp, Common Stock | (e)(l)(o) | Energy | 13,556 | 3.6 | 3.3 | |||||||||||||||||
Ascent Resources Utica Holdings LLC / ARU Finance Corp, Trade Claim | (e)(l)(o) | Energy | 115,178,571 | 30.5 | 28.3 | |||||||||||||||||
Belk Inc, Common Stock | (e)(o) | Retailing | 381 | — | — | |||||||||||||||||
One Call Care Management Inc, Common Stock | (e)(o) | Health Care Equipment & Services | 34,873 | 2.2 | 2.4 | |||||||||||||||||
One Call Care Management Inc, Preferred Stock A | (e)(o) | Health Care Equipment & Services | 371,993 | 23.7 | 25.5 | |||||||||||||||||
One Call Care Management Inc, Preferred Stock B | (e) | Health Care Equipment & Services | 9.0% PIK (9.0% Max PIK) | 10/25/29 | 7,672,346 | 8.8 | 9.0 |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company(a) | Footnotes | Industry | Interest Rate(b) | Base Rate Floor | Maturity Date | No. Shares/ Principal Amount(c) | Cost | Fair Value(d) | ||||||||||||||||
Zeta Interactive Holdings Corp, Common Stock | (o)(k) | Software & Services | 1,766,696 | $ | 15.1 | $ | 10.4 | |||||||||||||||||
|
|
|
| |||||||||||||||||||||
Total Equity/Other | 83.9 | 78.9 | ||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
TOTAL INVESTMENTS—155.2% | $ | 2,435.8 | $ | 2,481.7 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||||
Derivative Instruments—(0.7)% | ||||||||||||||||||||||||
|
| |||||||||||||||||||||||
Foreign currency forward contracts | $ | (12.0 | ) | |||||||||||||||||||||
|
|
(a) | Security may be an obligation of one or more entities affiliated with the named company. |
(b) | Certain variable rate securities in the Company’s portfolio bear interest at a rate determined by a publicly disclosed base rate plus a basis point spread. As of September 30, 2021, the three-month London Interbank Offered Rate, or LIBOR or “L”, was 0.13%, the Euro Interbank Offered Rate, or EURIBOR, was (0.55)%, Candian Dollar Offer Rate, or CDOR was 0.45%, the Australian Bank Bill Swap Bid Rate, or BBSY, or “B”, was 0.07%, the Reykjavik Interbank Offered Rate, or REIBOR, was 1.89%, the Stockholm Interbank Offered Rate, or STIBOR or “SR”, was (0.08)%, and the U.S. Prime Lending Rate, or Prime, was 3.25%. PIK means paid-in-kind. PIK income accruals may be adjusted based on the fair value of the underlying investment. |
(c) | Denominated in U.S. dollars unless otherwise noted. |
(d) | Fair value determined by the Company’s board of directors. |
(e) | Investments classified as Level 3. |
(f) | Security is an unfunded commitment. The stated rate reflects the spread disclosed at the time of commitment and may not indicate the actual rate received upon funding. |
(g) | Asset is on non-accrual status. |
(h) | Security or portion thereof held within Big Cedar Creek LLC and is pledged as collateral supporting the amounts outstanding under the revolving credit facility with BNP Paribas. |
(i) | Security or portion thereof held within Boxwood Drive Funding and is pledged as collateral supporting the amounts outstanding under the revolving credit facility with BNP Paribas. |
(j) | Security or portion thereof held within Chestnut Street Funding LLC and is pledged as collateral supporting the amounts outstanding under the revolving credit facility with Citibank. |
(k) | Security or portion thereof held within Green Creek LLC and is pledged as collateral supporting the amounts outstanding under the revolving credit facility with Goldman Sachs Bank. |
(l) | Security or portion thereof held within IC II American Energy Investment, Inc., a wholly-owned subsidiary of the company. |
(m) | Security or portion thereof held within JCF Cayman Ltd and is pledged as collateral supporting the amounts outstanding under the revolving credit facility with Goldman Sachs Bank. |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
(n) | Security or portion thereof held within Jersey City Funding LLC and is pledged as collateral supporting the amounts outstanding under the revolving credit facility with Goldman Sachs Bank. |
(o) | Security is non-income producing. |
(p) | Asset is on non-accrual status. |
Credit Opportunities Partners JV, LLC Portfolio
As of December 31, 2020 (in millions)
Company(a) | Footnotes | Industry | Interest Rate(b) | Base Rate Floor | Maturity Date | No. Shares/ Principal Amount(c) | Cost | Fair Value(d) | ||||||||||||||
Senior Secured Loans—First Lien—124.6% | ||||||||||||||||||||||
A10 Capital LLC | (e)(h)(i) | Diversified Financials | L+650 | 1.0% | 5/1/23 | $ | 17.5 | $ | 17.3 | $ | 17.3 | |||||||||||
ABB CONCISE Optical Group LLC | (i) | Retailing | L+500 | 1.0% | 6/15/23 | 12.1 | 10.0 | 11.0 | ||||||||||||||
Apex Group Limited | (e)(h) | Diversified Financials | L+700 | 1.3% | 6/15/23 | 0.7 | 0.6 | 0.7 | ||||||||||||||
Apex Group Limited | (e)(f) | Diversified Financials | L+700 | 1.3% | 6/15/23 | 1.4 | 1.3 | 1.4 | ||||||||||||||
Apex Group Limited | (e)(h)(i) | Diversified Financials | L+700 | 1.3% | 6/16/25 | 67.4 | 67.2 | 68.1 | ||||||||||||||
Ardonagh Group Ltd | (e)(k) | Insurance | E+750, 0.0% PIK (2.3% Max PIK) | 1.0% | 7/14/26 | € | 0.5 | 0.5 | 0.6 | |||||||||||||
Ardonagh Group Ltd | (e)(k) | Insurance | L+750, 0.0% PIK (2.3% Max PIK) | 0.8% | 7/14/26 | £ | 3.7 | 4.6 | 5.2 | |||||||||||||
Arrotex Australia Group Pty Ltd | (e)(h)(i) | Pharmaceuticals, Biotechnology & Life Sciences | B+525 | 1.0% | 7/10/24 | A$ | 68.9 | 46.0 | 53.6 | |||||||||||||
Arrotex Australia Group Pty Ltd | (e)(f) | Pharmaceuticals, Biotechnology & Life Sciences | B+525 | 1.0% | 7/10/24 | 4.9 | 3.8 | 3.8 | ||||||||||||||
BearCom Acquisition Corp | (e)(f) | Technology Hardware & Equipment | C+550 | 1.0% | 1/5/24 | C$ | 1.3 | 1.0 | 1.0 | |||||||||||||
BearCom Acquisition Corp | (e)(i) | Technology Hardware & Equipment | L+550 | 1.0% | 7/5/24 | $ | 2.2 | 2.2 | 2.2 | |||||||||||||
BearCom Acquisition Corp | (e)(i) | Technology Hardware & Equipment | C+550 | 1.0% | 7/5/24 | C$ | 14.5 | 10.5 | 11.1 | |||||||||||||
Belk Inc | (g)(l) | Retailing | L+675 | 1.0% | 7/31/25 | $ | 3.8 | 3.4 | 1.4 |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company(a) | Footnotes | Industry | Interest Rate(b) | Base Rate Floor | Maturity Date | No. Shares/ Principal Amount(c) | Cost | Fair Value(d) | ||||||||||||||
Big Bus Tours Ltd | (e)(i) | Consumer Services | E+850 PIK (E+850 Max PIK) | 1.0% | 3/18/24 | € | 10.5 | $ | 11.7 | $ | 8.7 | |||||||||||
Big Bus Tours Ltd | (e)(i) | Consumer Services | L+850 PIK (L+850 Max PIK) | 1.0% | 3/18/24 | $ | 14.9 | 14.9 | 10.1 | |||||||||||||
Bugaboo International BV | (e)(h) | Consumer Durables & Apparel | E+775 PIK (E+775 Max PIK) | 0.0% | 3/20/25 | € | 35.0 | 40.6 | 42.7 | |||||||||||||
Cambium Learning Group Inc | (i)(k) | Consumer Services | L+450 | 0.0% | 12/18/25 | $ | 45.1 | 43.4 | 44.9 | |||||||||||||
Catapult Learning LLC | (e)(i) | Consumer Services | L+475 | 1.0% | 4/24/23 | 2.1 | 2.1 | 2.1 | ||||||||||||||
Catapult Learning LLC | (e)(f) | Consumer Services | L+475 | 1.0% | 4/24/23 | 2.3 | 2.4 | 2.3 | ||||||||||||||
Catapult Learning LLC | (e)(i)(k) | Consumer Services | L+635 | 1.0% | 4/24/23 | 39.1 | 38.7 | 38.7 | ||||||||||||||
Catapult Learning LLC | (e)(f) | Consumer Services | L+635 | 1.0% | 4/24/23 | 1.2 | 1.2 | 1.1 | ||||||||||||||
Catapult Learning LLC | (e)(h)(i) | Consumer Services | L+635 | 1.0% | 4/24/23 | 14.9 | 14.7 | 14.7 | ||||||||||||||
Catapult Learning LLC | (e)(f) | Consumer Services | L+635 | 1.0% | 4/24/23 | 0.4 | 0.4 | 0.4 | ||||||||||||||
Child Development Schools Inc | (e)(i) | Consumer Services | L+425 | 1.0% | 5/21/23 | 9.3 | 9.3 | 9.2 | ||||||||||||||
Child Development Schools Inc | (e)(f) | Consumer Services | L+425 | 5/21/23 | 2.5 | 2.5 | 2.5 | |||||||||||||||
CSM Bakery Products | (h) | Food, Beverage & Tobacco | L+625 | 1.0% | 1/4/22 | 1.3 | 1.2 | 1.3 | ||||||||||||||
Diamond Resorts International Inc | (h) | Consumer Services | L+375 | 1.0% | 9/2/23 | 5.7 | 5.6 | 5.5 | ||||||||||||||
Eacom Timber Corp | (e)(h)(i)(k) | Materials | L+650 | 1.0% | 11/20/23 | 59.2 | 59.2 | 59.2 | ||||||||||||||
Frontline Technologies Group LLC | (e) | Software & Services | L+575 | 1.0% | 9/18/23 | 19.9 | 20.0 | 20.0 |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company(a) | Footnotes | Industry | Interest Rate(b) | Base Rate Floor | Maturity Date | No. Shares/ Principal Amount(c) | Cost | Fair Value(d) | ||||||||||||||
HealthChannels LLC | (i) | Health Care Equipment & Services | L+450 | 0.0% | 4/3/25 | $ | 24.3 | $ | 24.1 | $ | 23.3 | |||||||||||
Huws Gray Ltd | (e)(h) | Materials | L+525 | 0.5% | 4/11/25 | £ | 21.7 | 28.7 | 29.3 | |||||||||||||
Huws Gray Ltd | (e)(f) | Materials | L+525 | 0.5% | 4/11/25 | 6.7 | 8.9 | 8.9 | ||||||||||||||
ID Verde | (e)(h) | Commercial & Professional Services | E+500, 2.3% PIK (2.3% Max PIK) | 0.0% | 3/29/24 | € | 3.1 | 3.7 | 3.8 | |||||||||||||
ID Verde | (e)(h) | Commercial & Professional Services | L+525, 2.3% PIK (2.3% Max PIK) | 0.0% | 3/29/24 | £ | 1.3 | 1.7 | 1.8 | |||||||||||||
ID Verde | (e)(h) | Commercial & Professional Services | E+500, 2.3% PIK (2.3% Max PIK) | 0.0% | 3/29/25 | € | 16.3 | $ | 19.1 | $ | 19.9 | |||||||||||
ID Verde | (e)(h) | Commercial & Professional Services | L+525, 2.3% PIK (2.3% Max PIK) | 0.0% | 3/29/25 | £ | 6.0 | 7.9 | 8.1 | |||||||||||||
Industria Chimica Emiliana Srl | (e)(h)(i) | Pharmaceuticals, Biotechnology & Life Sciences | E+725 | 0.0% | 6/30/26 | € | 62.5 | 68.6 | 77.3 | |||||||||||||
Kellermeyer Bergensons Services LLC | (e)(i)(k) | Commercial & Professional Services | L+650 | 1.0% | 11/7/26 | $ | 29.8 | 28.2 | 30.1 | |||||||||||||
Kettle Cuisine LLC | (i) | Food, Beverage & Tobacco | L+375 | 1.0% | 8/25/25 | 16.6 | 16.5 | 14.2 | ||||||||||||||
Koosharem LLC | (k) | Commercial & Professional Services | L+450 | 1.0% | 4/18/25 | 17.1 | 17.0 | 16.8 | ||||||||||||||
Lionbridge Technologies Inc | (e)(i)(k) | Consumer Services | L+625 | 1.0% | 12/29/25 | 29.8 | 29.0 | 29.8 | ||||||||||||||
MedAssets Inc | (h) | Health Care Equipment & Services | L+450 | 1.0% | 10/20/22 | 6.8 | 6.8 | 6.8 | ||||||||||||||
Parts Town LLC | (e)(h) | Retailing | L+550 | 1.0% | 10/15/25 | 24.8 | 24.6 | 23.8 | ||||||||||||||
Precision Global Corp | (e)(i) | Materials | L+475 | 1.0% | 8/3/24 | 9.1 | 8.7 | 8.3 | ||||||||||||||
Premium Credit Ltd | (e)(k) | Diversified Financials | L+650 | 0.0% | 1/16/26 | £ | 10.6 | 13.0 | 14.3 | |||||||||||||
Project Marron | (e)(i) | Consumer Services | C+575 | 0.0% | 7/2/25 | C$ | 23.8 | 18.0 | 17.5 | |||||||||||||
Project Marron | (e)(i) | Consumer Services | B+575 | 0.0% | 7/3/25 | A$ | 28.8 | 19.5 | 20.5 |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company(a) | Footnotes | Industry | Interest Rate(b) | Base Rate Floor | Maturity Date | No. Shares/ Principal Amount(c) | Cost | Fair Value(d) | ||||||||||||||
Qdoba Restaurant Corp | (h) | Consumer Services | L+700 | 1.0% | 3/21/25 | $ | 1.6 | $ | 1.4 | $ | 1.5 | |||||||||||
Reliant Rehab Hospital Cincinnati LLC | (e) | Health Care Equipment & Services | L+675 | 0.0% | 9/2/24 | 19.9 | 19.2 | 19.2 | ||||||||||||||
Roadrunner Intermediate Acquisition Co LLC | (e)(i)(k) | Health Care Equipment & Services | L+675 | 1.0% | 3/15/23 | 19.9 | 19.7 | 19.9 | ||||||||||||||
Safe-Guard Products International LLC | (e)(i) | Diversified Financials | L+575 | 0.0% | 1/27/27 | 20.5 | 20.4 | 20.4 | ||||||||||||||
Sequa Corp | (i) | Capital Goods | L+675, 0.0% PIK (1.0% Max PIK) | 1.0% | 11/28/23 | 12.2 | 11.6 | 12.3 | ||||||||||||||
Smart & Final Stores LLC | (k) | Food & Staples Retailing | L+675 | 0.0% | 6/20/25 | 18.5 | 17.1 | 18.7 | ||||||||||||||
Staples Canada | (e)(h) | Retailing | C+700 | 1.0% | 9/12/24 | C$ | 43.6 | 32.9 | 34.6 | |||||||||||||
Technimark LLC | (i) | Materials | L+375 | 0.0% | 8/8/25 | $ | 18.4 | 18.3 | 18.2 | |||||||||||||
Total Safety US Inc | (k) | Capital Goods | L+600 | 1.0% | 8/16/25 | 3.9 | 3.2 | 3.7 | ||||||||||||||
Transaction Services Group Ltd | (e)(h)(i) | Software & Services | B+600 | 0.0% | 10/15/26 | A$ | 99.5 | 68.6 | 71.2 | |||||||||||||
Virgin Pulse Inc | (e) | Software & Services | L+650 | 1.0% | 5/22/25 | $ | 19.9 | 19.9 | 19.9 | |||||||||||||
Yak Access LLC | (h) | Capital Goods | L+500 | 0.0% | 7/11/25 | 0.8 | 0.6 | 0.7 | ||||||||||||||
|
|
|
| |||||||||||||||||||
Total Senior Secured Loans—First Lien | 1,013.2 | 1,035.6 | ||||||||||||||||||||
Unfunded Loan Commitments | (21.6 | ) | (21.6) | |||||||||||||||||||
|
|
|
| |||||||||||||||||||
Net Senior Secured Loans—First Lien | 991.6 | 1,014.0 | ||||||||||||||||||||
|
|
|
|
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company(a) | Footnotes | Industry | Interest Rate(b) | Base Rate Floor | Maturity Date | No. Shares/ Principal Amount(c) | Cost | Fair Value(d) | ||||||||||||||
Senior Secured Loans—Second Lien—28.9% | ||||||||||||||||||||||
Access CIG LLC | (k) | Commercial & Professional Services | L+775 | 0.0% | 2/27/26 | $ | 0.6 | $ | 0.5 | $ | 0.6 | |||||||||||
Ammeraal Beltech Holding BV | (e)(h) | Capital Goods | L+800 | 1.0% | 9/12/26 | 40.7 | 40.0 | 39.2 | ||||||||||||||
BCA Marketplace PLC | (e)(h) | Retailing | L+825 | 0.0% | 11/22/27 | £ | 47.7 | 62.4 | 64.0 | |||||||||||||
Excelitas Technologies Corp | (k) | Technology Hardware & Equipment | L+750 | 1.0% | 12/1/25 | $ | 8.4 | 6.6 | 8.5 | |||||||||||||
Misys Ltd | (k) | Software & Services | L+725 | 1.0% | 6/13/25 | 6.2 | 4.9 | 6.2 | ||||||||||||||
Resource Label Group LLC | (e)(i) | Materials | L+850 | 1.0% | 11/26/23 | 15.0 | 13.4 | 14.9 | ||||||||||||||
Sequa Corp | (h) | Capital Goods | L+1,075, 0.0% PIK (6.8% Max PIK) | 1.0% | 4/28/24 | 19.4 | 15.3 | 16.9 | ||||||||||||||
SIRVA Worldwide Inc | (i) | Commercial & Professional Services | L+950 | 0.0% | 8/3/26 | 3.8 | 3.0 | 3.2 | ||||||||||||||
Watchfire Enterprises Inc | (e)(i) | Technology Hardware & Equipment | L+800 | 1.0% | 10/2/21 | 9.3 | 7.6 | 9.1 | ||||||||||||||
WireCo WorldGroup Inc | (h) | Capital Goods | L+900 | 1.0% | 9/30/24 | 10.3 | 8.4 | 8.4 | ||||||||||||||
Wittur Holding GmbH | (e)(h)(i) | Capital Goods | E+850, 0.5% PIK (0.5% Max PIK) | 0.0% | 9/23/27 | € | 55.3 | 60.3 | 64.6 | |||||||||||||
|
|
|
| |||||||||||||||||||
Total Senior Secured Loans—Second Lien | 222.4 | 235.6 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||
Other Senior Secured Debt—1.0% | ||||||||||||||||||||||
Cleaver-Brooks Inc | (h) | Capital Goods | 7.9% | 3/1/23 | $ | 8.4 | 7.1 | 8.3 | ||||||||||||||
|
|
|
| |||||||||||||||||||
Total Other Senior Secured Debt | 7.1 | 8.3 | ||||||||||||||||||||
|
|
|
|
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company(a) | Footnotes | Industry | Interest Rate(b) | Base Rate Floor | Maturity Date | No. Shares/ Principal Amount(c) | Cost | Fair Value(d) | ||||||||||||||
Subordinated Debt—5.3% | ||||||||||||||||||||||
Home Partners of America Inc | (e)(h) | Real Estate | L+625 | 1.0% | 10/8/22 | $ | 42.9 | $ | 42.6 | $ | 42.8 | |||||||||||
|
|
|
| |||||||||||||||||||
Total Subordinated Debt | 42.6 | 42.8 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||
Asset Based Finance—23.8% | ||||||||||||||||||||||
Comet Aircraft S.a.r.l., Common Stock | (e)(g)(h)(l) | Capital Goods | 12.4% | 2/28/22 | $ | 21.5 | 21.5 | 4.8 | ||||||||||||||
GA Capital Specialty Lending Fund, Limited Partnership Interest | (e)(h) | Diversified Financials | N/A | — | 8.9 | |||||||||||||||||
Global Lending Services LLC, Private Equity | (e)(h)(l) | Diversified Financials | 6,981,478 | 7.0 | 7.8 | |||||||||||||||||
KKR Zeno Aggregator LP (K2 Aviation), Partnership Interest | (e)(h) | Capital Goods | 19,642,734 | 24.4 | 21.8 | |||||||||||||||||
Lenovo Group Ltd, Structured Mezzanine | (e)(h) | Technology Hardware & Equipment | 8.0% | 6/22/22 | $ | 15.5 | 15.5 | 15.5 | ||||||||||||||
Lenovo Group Ltd, Structured Mezzanine | (e)(h) | Technology Hardware & Equipment | 12.0% | 6/22/22 | $ | 9.8 | 9.8 | 9.8 | ||||||||||||||
Luxembourg Life Fund—Absolute Return Fund I, 1L Term Loan | (e)(h) | Insurance | L+750 | 1.5% | 2/27/25 | $ | 30.6 | 30.7 | 30.7 | |||||||||||||
Luxembourg Life Fund—Long Term Growth Fund, 1L Term Loan | (e)(h) | Insurance | 9.0% | 7/23/21 | $ | 32.5 | 32.0 | 32.5 |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company(a) | Footnotes | Industry | Interest Rate(b) | Base Rate Floor | Maturity Date | No. Shares/ Principal Amount(c) | Cost | Fair Value(d) | ||||||||||||||||
MP4 2013-2A Class Subord. B | (e)(h)(l) | Diversified Financials | 7/25/29 | $ | 21.0 | $ | 4.2 | $ | 3.1 | |||||||||||||||
NewStar Clarendon 2014-1A Class D | (e)(h)(l) | Diversified Financials | 1/25/27 | $ | 17.9 | 6.5 | 5.6 | |||||||||||||||||
Pretium Partners LLC P1, Structured Mezzanine | (e)(k) | Real Estate | 2.8%, 5.3% PIK (5.3% Max PIK) | 10/22/26 | $ | 12.0 | 11.7 | 12.0 | ||||||||||||||||
Pretium Partners LLC P2, Structured Mezzanine | (e)(k) | Real Estate | 2.0%, 7.5% PIK (7.5% Max PIK) | 5/29/25 | $ | 25.3 | 23.8 | 25.5 | ||||||||||||||||
Sealane Trade Finance | (e)(j) | Banks | L+375 | 0.0% | 5/8/23 | $ | 5.0 | 5.0 | 5.0 | |||||||||||||||
Sealane Trade Finance | (e)(j) | Banks | L+963 | 0.0% | 5/8/23 | $ | 12.0 | 12.0 | 11.1 | |||||||||||||||
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| |||||||||||||||||||||
Total Asset Based Finance | 204.1 | 194.1 | ||||||||||||||||||||||
Equity/Other—6.1% | ||||||||||||||||||||||||
ASG Technologies, Common Stock | (e)(i)(l) | Software & Services | 540,346 | 30.0 | 20.1 | |||||||||||||||||||
Home Partners of America Inc, Common Stock | (e)(i)(l) | Real Estate | 18,419 | 30.0 | 29.4 | |||||||||||||||||||
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| |||||||||||||||||||||
Total Equity/Other | 60.0 | 49.5 | ||||||||||||||||||||||
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| |||||||||||||||||||||
TOTAL INVESTMENTS—189.7% | $ | 1,527.8 | $ | 1,544.3 | ||||||||||||||||||||
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Derivative Instruments—(1.4)% | ||||||||||||||||||||||||
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| |||||||||||||||||||||||
Foreign currency forward contracts | $ | (11.4 | ) | |||||||||||||||||||||
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(a) | Security may be an obligation of one or more entities affiliated with the named company. |
(b) | Certain variable rate securities in the Company’s portfolio bear interest at a rate determined by a publicly disclosed base rate plus a basis point spread. As of December 31, 2020, the three-month London Interbank Offered Rate, or LIBOR or “L”, was 0.24% and the Euro Interbank Offered Rate, or EURIBOR, was (0.55)%, Canadian Dollar Offer Rate, or CDOR, was 0.48% and the Australian Interbank Rate, |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
or BBSY or “B”, was 0.06%. PIK means paid-in-kind. PIK income accruals may be adjusted based on the fair value of the underlying investment. |
(c) | Denominated in U.S. dollars unless otherwise noted. |
(d) | Fair value determined by the Company’s board of directors. |
(e) | Investments classified as Level 3. |
(f) | Security is an unfunded commitment. The stated rate reflects the spread disclosed at the time of commitment and may not indicate the actual rate received upon funding. |
(g) | Asset is on non-accrual status. |
(h) | Security or portion thereof held within Jersey City Funding LLC and is pledged as collateral supporting the amounts outstanding under the revolving credit facility with Goldman Sachs. |
(i) | Security or portion thereof held within Chestnut Street Funding LLC and is pledged as collateral supporting the amounts outstanding under the revolving credit facility with Citibank, N.A. |
(j) | Security or portion thereof held within JCF Cayman Ltd and is pledged as collateral supporting the amounts outstanding under the revolving credit facility with Goldman Sachs. |
(k) | Security or portion thereof held within Boxwood Drive Funding LLC and is pledged as collateral supporting the amounts outstanding under the revolving credit facility with BNP Paribas. |
(l) | Security is non-income producing. |
Below is selected balance sheet information for COPJV as of September 30, 2021 and December 31, 2020:
As of | ||||||||
September 30, 2021 | December 31, 2020 | |||||||
Selected Balance Sheet Information | ||||||||
Total investments, at fair value | $ | 2,481.7 | $ | 1,544.3 | ||||
Cash and other assets | 728.5 | 188.6 | ||||||
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Total assets | 3,210.2 | 1,732.9 | ||||||
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| |||||
Debt | 1,183.5 | 722.0 | ||||||
Other liabilities | 428.1 | 196.8 | ||||||
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Total liabilities | 1,611.6 | 918.8 | ||||||
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Member’s equity | $ | 1,598.6 | $ | 814.1 | ||||
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FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Below is selected statement of operations information for COPJV for the three and nine months ended September 30, 2021 and 2020:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Selected Statement of Operations Information | ||||||||||||||||
Total investment income | $ | 56.6 | $ | 32.8 | $ | 128.8 | $ | 81.3 | ||||||||
Expenses | ||||||||||||||||
Interest expense | 12.7 | 5.3 | 27.0 | 16.4 | ||||||||||||
Custodian and accounting fees | 0.5 | 0.2 | 0.7 | 0.4 | ||||||||||||
Administrative services | 2.7 | 0.9 | 4.5 | 2.9 | ||||||||||||
Professional services | 0.2 | 0.1 | 0.5 | 0.5 | ||||||||||||
Other | 0.2 | 0.0 | 0.3 | 0.0 | ||||||||||||
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Total expenses | 16.3 | 6.5 | 33.0 | 20.2 | ||||||||||||
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Net investment income | 40.3 | 26.3 | 95.8 | 61.1 | ||||||||||||
Net realized and unrealized gain (loss) | (10.1 | ) | 31.7 | 56.6 | (117.8 | ) | ||||||||||
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Net increase in net assets resulting from operations | $ | 30.2 | $ | 58.0 | $ | 152.4 | $ | (56.7 | ) | |||||||
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Note 7. Financial Instruments
The following is a summary of the fair value and location of the Company’s derivative instruments in the consolidated balance sheets held as of September 30, 2021 and December 31, 2020:
Fair Value | ||||||||||
Derivative Instrument | Statement Location | September 30, 2021 | December 31, 2020 | |||||||
Foreign currency forward contracts | Unrealized appreciation on foreign currency forward contracts | $ | 6 | $ | 1 | |||||
Foreign currency forward contracts | Unrealized depreciation on foreign currency forward contracts | (1) | (3) | |||||||
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Total | $ | 5 | $ | (2) | ||||||
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Net realized and unrealized gains and losses on derivative instruments recorded by the Company for the nine months ended September 30, 2021 and 2020 are in the following locations in the consolidated statements of operations:
Net Realized Gains (Losses) | ||||||||||
Nine Months Ended September 30, | ||||||||||
Derivative Instrument | Statement Location | 2021 | 2020 | |||||||
Foreign currency forward contracts | Net realized gain (loss) on foreign currency forward contracts | $ | 0 | $ | 0 | |||||
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Total | $ | 0 | $ | 0 | ||||||
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FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 7. Financial Instruments (continued)
Net Unrealized Gains (Losses) | ||||||||||
Nine Months Ended September 30, | ||||||||||
Derivative Instrument | Statement Location | 2021 | 2020 | |||||||
Foreign currency forward contracts | Net change in unrealized appreciation (depreciation) on foreign currency forward contracts | $ | 8 | $ | 1 | |||||
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Total | $ | 8 | $ | 1 | ||||||
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Offsetting of Derivative Instruments
The Company has derivative instruments that are subject to master netting agreements. These agreements include provisions to offset positions with the same counterparty in the event of default by one of the parties. The Company’s unrealized appreciation and depreciation on derivative instruments are reported as gross assets and liabilities, respectively, in the consolidated balance sheets. The following tables present the Company’s assets and liabilities related to derivatives by counterparty, net of amounts available for offset under a master netting arrangement and net of any collateral received or pledged by the Company for such assets and liabilities as of September 30, 2021 and December 31, 2020:
As of September 30, 2021 | ||||||||||||||||||||
Counterparty | Derivative Assets Subject to Master Netting Agreement | Derivatives Available for Offset | Non-cash Collateral Received(1) | Cash Collateral Received(1) | Net Amount of Derivative Assets(2) | |||||||||||||||
JP Morgan Chase Bank | $ | 6 | $ | (1) | $ | — | $ | — | $ | 5 | ||||||||||
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Total | $ | 6 | $ | (1) | $ | — | $ | — | $ | 5 | ||||||||||
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Counterparty | Derivative Liabilities Subject to Master Netting Agreement | Derivatives Available for Offset | Non-cash Collateral Pledged(1) | Cash Collateral Pledged(1) | Net Amount of Derivative Liabilities(3) | |||||||||||||||
JP Morgan Chase Bank | $ | (1) | $ | 1 | $ | — | $ | — | $ | — | ||||||||||
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Total | $ | (1) | $ | 1 | $ | — | $ | — | $ | — | ||||||||||
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As of December 31, 2020 | ||||||||||||||||||||
Counterparty | Derivative Assets Subject to Master Netting Agreement | Derivatives Available for Offset | Non-cash Collateral Received(1) | Cash Collateral Received(1) | Net Amount of Derivative Assets(2) | |||||||||||||||
JP Morgan Chase Bank | $ | 1 | $ | (1) | $ | — | $ | — | $ | — | ||||||||||
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Total | $ | 1 | $ | (1) | $ | — | $ | — | $ | — | ||||||||||
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Counterparty | Derivative Liabilities Subject to Master Netting Agreement | Derivatives Available for Offset | Non-cash Collateral Pledged(1) | Cash Collateral Pledged(1) | Net Amount of Derivative Liabilities(3) | |||||||||||||||
JP Morgan Chase Bank | $ | (3) | $ | 1 | $ | — | $ | — | $ | (2 | ) | |||||||||
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Total | $ | (3) | $ | 1 | $ | — | $ | — | $ | (2 | ) | |||||||||
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(1) | In some instances, the actual amount of the collateral received and/or pledged may be more than the amount shown due to overcollateralization. |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 7. Financial Instruments (continued)
(2) | Net amount of derivative assets represents the net amount due from the counterparty to the Company. |
(3) | Net amount of derivative liabilities represents the net amount due from the Company to the counterparty. |
Foreign Currency Forward Contracts and Cross Currency Swaps:
The Company may enter into foreign currency forward contracts and cross currency swaps from time to time to facilitate settlement of purchases and sales of investments denominated in foreign currencies and to economically hedge the impact that an adverse change in foreign exchange rates would have on the value of the Company’s investments denominated in foreign currencies. A foreign currency forward contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. These contracts are marked-to-market by recognizing the difference between the contract forward exchange rate and the forward market exchange rate on the last day of the period presented as unrealized appreciation or depreciation. Realized gains or losses are recognized when forward contracts are settled. Risks arise as a result of the potential inability of the counterparties to meet the terms of their contracts. The Company attempts to limit counterparty risk by only dealing with well-known counterparties.
Cross currency swaps are interest rate swaps in which interest cash flows are exchanged between two parties based on the notional amounts of two different currencies. These swaps are marked-to-market by recognizing the difference between the present value of cash flows of each leg of the swaps as unrealized appreciation or depreciation. Realized gain or loss is recognized when periodic payments are received or paid and the swaps are terminated. The entire notional value of a cross currency swap is subject to the risk that the counterparty to the swap will default on its contractual delivery obligations. The Company attempts to limit counterparty risk by only dealing with well-known counterparties. The Company utilizes cross currency swaps from time to time in order to hedge a portion of its investments in foreign currency.
The average notional balance for foreign currency forward contracts during the nine months ended September 30, 2021 and 2020 was $129.0 and $36.1, respectively.
Note 8. Fair Value of Financial Instruments
Under existing accounting guidance, fair value is defined as the price that the Company would receive upon selling an investment or pay to transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment. This accounting guidance emphasizes valuation techniques that maximize the use of observable market inputs and minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances. The Company classifies the inputs used to measure these fair values into the following hierarchy as defined by current accounting guidance:
Level 1: Inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs that are quoted prices for similar assets or liabilities in active markets.
Level 3: Inputs that are unobservable for an asset or liability.
A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
FS Investment CorporationKKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands,millions, except share and per share amounts)
Note 7.8. Fair Value of Financial Instruments (continued)
As of September 30, 20172021 and December 31, 2016,2020, the Company’s investments and secured borrowing were categorized as follows in the fair value hierarchy:
September 30, 2017 (Unaudited) | December 31, 2016 | September 30, 2021 | ||||||||||||||||||||||
Valuation Inputs | Investments | Secured Borrowing | Investments | Secured Borrowing | (Unaudited) | December 31, 2020 | ||||||||||||||||||
Level 1—Price quotations in active markets | $ | 9,545 | $ | — | $ | 6,326 | $ | — | $ | 21 | $ | — | ||||||||||||
Level 2—Significant other observable inputs | — | — | — | — | 861 | 260 | ||||||||||||||||||
Level 3—Significant unobservable inputs | 3,901,854 | (2,891 | ) | 3,720,490 | (2,880 | ) | 13,543 | 5,807 | ||||||||||||||||
Investments measured at net asset value(1) | 1,399 | 713 | ||||||||||||||||||||||
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$ | 3,911,399 | $ | (2,891 | ) | $ | 3,726,816 | $ | (2,880 | ) | $ | 15,824 | $ | 6,780 | |||||||||||
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(1) | Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. |
In addition, the Company has elected the fair value option under ASC Topic 825,Financial Instruments, relating to accounting for debt obligations at their fair value for its secured borrowingshad foreign currency forward contracts, as described in Note 7, which arose due to partial loan sales which did not meet the criteria for sale treatment under ASC Topic 860. The Company reports changeswere categorized as Level 2 in the fair value of its secured borrowing as a component of the net change in unrealized appreciation (depreciation) on secured borrowing in the consolidated statements of operations. The net gain or loss reflects the difference between the fair value and the principal amount due on maturity.
The secured borrowinghierarchy as of September 30, 2017 was valued using Level 3 inputs under the fair value hierarchy. The Company’s approach to determining fair value of the Level 3 secured borrowing is consistent with its approach to determining fair value of the Level 3 investments that are associated with the secured borrowing. See Note 22021 and Note 8 for additional information regarding the Company’s secured borrowing.December 31, 2020.
The Company’s investments consist primarily of debt investments that arewere acquired directly from the issuer. Debt investments, for which broker quotes are not available, are valued by independent valuation firms, which determine the fair value of such investments by considering, among other factors, the borrower’s ability to adequately service its debt, prevailing interest rates for like investments, expected cash flows, call features, anticipated repayments and other relevant terms of the debt.investments. Except as described below, all of the Company’s equity/other investments are also valued by independent valuation firms, which determine the fair value of such investments by considering, among other factors, contractual rights ascribed to such investments, as well as various income scenarios and multiples of earnings before interest, taxes, depreciation and amortization, or EBITDA, cash flows, net income, revenues or, in limited instances, book value or liquidation value. An investment that is newly issued and purchased near the date of the financial statements is valued at cost if the Company’s board of directors determines that the cost of such investment is the best indication of its fair value. Such investments described above are typically classified as Level 3 within the fair value hierarchy. Investments that are traded on an active public market are valued at their closing price as of the date of the financial statements.statements and are classified as Level 1 within the fair value hierarchy. Except as described above, the Company typically values its other investments by using the midpoint of the prevailing bid and ask prices from dealers on the date of the relevant period end, which are provided by independent third-party pricing services and screened for validity by such services.services and are typically classified as Level 2 within the fair value hierarchy.
The Company periodically benchmarks the bid and ask prices it receives from the third-party pricing services and/or dealers and independent valuation firms as applicable, against the actual prices at which the Company purchases and sells its investments. Based on the results of the benchmark analysis and the experience of the Company’s management in purchasing and selling these investments, the Company believes that these prices are reliable indicators of fair value. However, because of the private nature of this marketplace (meaning actual transactions are not publicly reported), the Company believes that these valuation inputs are classified as Level 3 within the fair value hierarchy. The Company may also use other methods, including the use of an independent valuation firm, to determine fair value for securities for which it cannot obtain prevailing bid and ask prices through third-party pricing services or independent dealers, or where the Company’s board of directors otherwise determines that the use of such other methods is appropriate. The Company periodically benchmarks the valuations provided by the independent valuation firms against the actual prices at which the Company purchases and sells its investments. The valuation committee of the Company’s board of directors, or the valuation committee, and the board of directors reviewed and approved the valuation determinations made with respect to these investments in a manner consistent with the Company’s valuation policy.
FS Investment CorporationKKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands,millions, except share and per share amounts)
Note 7.8. Fair Value of Financial Instruments (continued)
The following is a reconciliation for the nine months ended September 30, 20172021 and 20162020 of investments for which significant unobservable inputs (Level 3) were used in determining fair value:
For the Nine Months Ended September 30, 2017 | For the Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Secured Loans—First Lien | Senior Secured Loans—Second Lien | Senior Secured Bonds | Subordinated Debt | Collateralized Securities | Equity/Other | Total | Senior Secured Loans—First Lien | Senior Secured Loans—Second Lien | Other Senior Secured Debt | Subordinated Debt | Asset Based Finance | Equity/ Other | Total | |||||||||||||||||||||||||||||||||||||||||||
Fair value at beginning of period | $ | 1,935,441 | $ | 599,155 | $ | 159,470 | $ | 454,045 | $ | 72,058 | $ | 500,321 | $ | 3,720,490 | $ | 3,276 | $ | 862 | $ | 36 | $ | 152 | $ | 951 | $ | 530 | $ | 5,807 | ||||||||||||||||||||||||||||
Accretion of discount (amortization of premium) | 1,280 | 8,697 | 475 | 1,350 | 6 | 2 | 11,810 | 28 | 8 | — | — | 2 | 1 | 39 | ||||||||||||||||||||||||||||||||||||||||||
Net realized gain (loss) | (52,473) | (20,437) | (47,057) | (14,397) | (379) | 1,359 | (133,384) | 35 | (93 | ) | (21 | ) | (7 | ) | 9 | 191 | 114 | |||||||||||||||||||||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 62,473 | (1,591) | 55,597 | 46,489 | (3,795) | (1,966) | 157,207 | 280 | 158 | 25 | (4 | ) | 126 | 31 | 616 | |||||||||||||||||||||||||||||||||||||||||
Purchases | 754,203 | 62,269 | 60,819 | 117,572 | 279 | 21,871 | 1,017,013 | 7,907 | 974 | 52 | 8 | 1,217 | 451 | 10,609 | ||||||||||||||||||||||||||||||||||||||||||
Paid-in-kind interest | 1,419 | 2,309 | 11 | 20,272 | — | 5,067 | 29,078 | 12 | 4 | — | — | 29 | 21 | 66 | ||||||||||||||||||||||||||||||||||||||||||
Sales and repayments | (329,638) | (458,908) | (30,613) | (69,546) | (10,660) | (995) | (900,360) | (2,197 | ) | (628 | ) | (48 | ) | (93 | ) | (335 | ) | (410 | ) | (3,711 | ) | |||||||||||||||||||||||||||||||||||
Net transfers in or out of Level 3 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Transfers into Level 3 | — | — | — | — | — | 3 | 3 | |||||||||||||||||||||||||||||||||||||||||||||||||
Transfers out of Level 3 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
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Fair value at end of period | $ | 2,372,705 | $ | 191,494 | $ | 198,702 | $ | 555,785 | $ | 57,509 | $ | 525,659 | $ | 3,901,854 | $ | 9,341 | $ | 1,285 | $ | 44 | $ | 56 | $ | 1,999 | $ | 818 | $ | 13,543 | ||||||||||||||||||||||||||||
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The amount of total gains or losses for the period included in changes in net assets attributable to the change in unrealized gains or losses relating to investments still held at the reporting date | $ | 12,699 | $ | (14,811) | $ | 6,028 | $ | 28,921 | $ | (526) | $ | (124) | $ | 32,187 | $ | 290 | $ | 84 | $ | (1 | ) | $ | 19 | $ | 125 | $ | 84 | $ | 601 | |||||||||||||||||||||||||||
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For the Nine Months Ended September 30, 2016 | ||||||||||||||||||||||||||||
Senior Secured Loans—First Lien | Senior Secured Loans—Second Lien | Senior Secured Bonds | Subordinated Debt | Collateralized Securities | Equity/Other | Total | ||||||||||||||||||||||
Fair value at beginning of period | $ | 2,173,829 | $ | 624,814 | $ | 240,754 | $ | 438,414 | $ | 85,007 | $ | 465,769 | $ | 4,028,587 | ||||||||||||||
Accretion of discount (amortization of premium) | 2,195 | 1,388 | 2,407 | 1,263 | 34 | 84 | 7,371 | |||||||||||||||||||||
Net realized gain (loss) | 13,593 | 219 | (41,205) | (1,676) | 194 | 9,785 | (19,090) | |||||||||||||||||||||
Net change in unrealized appreciation (depreciation) | 45,774 | 14,206 | 1,363 | 14,365 | 16,536 | 14,144 | 106,388 | |||||||||||||||||||||
Purchases | 482,831 | 25,816 | 8,060 | 44,550 | 4,551 | 96,948 | 662,756 | |||||||||||||||||||||
Paid-in-kind interest | 1,539 | 5,730 | — | 14,075 | — | 1,932 | 23,276 | |||||||||||||||||||||
Sales and repayments | (660,862) | (52,105) | (42,909) | (66,677) | (27,643) | (22,735) | (872,931) | |||||||||||||||||||||
Net transfers in or out of Level 3(1) | — | — | — | — | — | (1,412) | (1,412) | |||||||||||||||||||||
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Fair value at end of period | $ | 2,058,899 | $ | 620,068 | $ | 168,470 | $ | 444,314 | $ | 78,679 | $ | 564,515 | $ | 3,934,945 | ||||||||||||||
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The amount of total gains or losses for the period included in changes in net assets attributable to the change in unrealized gains or losses relating to investments still held at the reporting date | $ | 40,875 | $ | 14,252 | $ | (27,987) | $ | 16,071 | $ | 15,799 | $ | 27,576 | $ | 86,586 | ||||||||||||||
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For the Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||
Senior Secured Loans—First Lien | Senior Secured Loans—Second Lien | Other Senior Secured Debt | Subordinated Debt | Asset Based Finance | Equity/ Other | Total | ||||||||||||||||||||||
Fair value at beginning of period | $ | 3,358 | $ | 1,015 | $ | 152 | $ | 313 | $ | 737 | $ | 572 | $ | 6,147 | ||||||||||||||
Accretion of discount (amortization of premium) | 5 | 2 | — | 1 | — | 1 | 9 | |||||||||||||||||||||
Net realized gain (loss) | (131 | ) | (16 | ) | (93 | ) | (17 | ) | (4 | ) | (89 | ) | (350 | ) | ||||||||||||||
Net change in unrealized appreciation (depreciation) | (42 | ) | (114 | ) | 13 | (67 | ) | (53 | ) | (42 | ) | (305 | ) | |||||||||||||||
Purchases | 1,061 | 5 | — | 27 | 335 | 48 | 1,476 | |||||||||||||||||||||
Paid-in-kind interest | 15 | 3 | 3 | 11 | 19 | 12 | 63 | |||||||||||||||||||||
Sales and repayments | (960 | ) | (59 | ) | (42 | ) | (120 | ) | (177 | ) | (13 | ) | (1,371 | ) | ||||||||||||||
Transfers into Level 3 | 58 | — | — | — | — | — | 58 | |||||||||||||||||||||
Transfers out of Level 3 | — | — | — | — | — | — | — | |||||||||||||||||||||
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Fair value at end of period | $ | 3,364 | $ | 836 | $ | 33 | $ | 148 | $ | 857 | $ | 489 | $ | 5,727 | ||||||||||||||
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The amount of total gains or losses for the period included in changes in net assets attributable to the change in unrealized gains or losses relating to investments still held at the reporting date | $ | (71 | ) | $ | (118 | ) | $ | (11 | ) | $ | (76 | ) | $ | (6 | ) | $ | (103 | ) | $ | (385 | ) | |||||||
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FS Investment CorporationKKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands,millions, except share and per share amounts)
Note 7. Fair Value of Financial Instruments (continued)
The following is a reconciliation for the nine months ended September 30, 2017 and 2016 of a secured borrowing for which significant unobservable inputs (Level 3) were used in determining market value:
For the Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
Fair value at beginning of period | $ | (2,880) | $ | — | ||||
Amortization of premium (accretion of discount) | (4) | (1) | ||||||
Net realized gain (loss) | — | — | ||||||
Net change in unrealized appreciation (depreciation) | (7) | (33) | ||||||
Repayments on secured borrowing | — | — | ||||||
Paid-in-kind interest | — | — | ||||||
Proceeds from secured borrowing | — | (2,829) | ||||||
Net transfers in or out of Level 3 | — | — | ||||||
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Fair value at end of period | $ | (2,891) | $ | (2,863) | ||||
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The amount of total gains or losses for the period included in changes in net assets attributable to the change in unrealized gains or losses relating to investments still held at the reporting date | $ | (7) | $ | (33) | ||||
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FS Investment Corporation
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands, except share and per share amounts)
Note 7.8. Fair Value of Financial Instruments (continued)
The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements as of September 30, 20172021 and December 31, 20162020 were as follows:
Type of Investment | Fair Value at September 30, 2017 (Unaudited) | Valuation Technique(1) | Unobservable Input | Range | Weighted Average | |||||||
Senior Secured Loans—First Lien | $ | 2,213,659 | Market Comparables | Market Yield (%) | 5.8% - 13.8% | 9.6% | ||||||
EBITDA Multiples (x) | 7.5x - 8.0x | 7.8x | ||||||||||
45,760 | Other(2) | Other(2) | N/A | N/A | ||||||||
113,286 | Market Quotes | Indicative Dealer Quotes | 4.0% - 101.5% | 100.0% | ||||||||
Senior Secured Loans—Second Lien | 78,790 | Market Comparables | Market Yield (%) | 7.8% - 16.9% | 10.4% | |||||||
EBITDA Multiples (x) | 5.8x - 6.8x | 6.3x | ||||||||||
112,704 | Market Quotes | Indicative Dealer Quotes | 51.3% - 101.5% | 92.8% | ||||||||
Senior Secured Bonds | 145,619 | Market Comparables | Market Yield (%) | 8.3% - 10.0% | 8.6% | |||||||
EBITDA Multiples (x) | 4.8x - 9.5x | 8.8x | ||||||||||
Production Multiples (Mboe/d) | $42,250.0 - $44,750.0 | $43,500.0 | ||||||||||
Proved Reserves Multiples (Mmboe) | $10.0 - $11.0 | $10.5 | ||||||||||
PV-10 Multiples (x) | 0.7x - 0.8x | 0.8x | ||||||||||
7,330 | Other(2) | Other(2) | N/A | N/A | ||||||||
45,753 | Market Quotes | Indicative Dealer Quotes | 100.0% - 106.7% | 103.7% | ||||||||
Subordinated Debt | 345,010 | Market Comparables | Market Yield (%) | 7.8% - 18.8% | 15.2% | |||||||
EBITDA Multiples (x) | 8.8x - 11.3x | 9.5x | ||||||||||
77,250 | Other(2) | Other(2) | N/A | N/A | ||||||||
133,525 | Market Quotes | Indicative Dealer Quotes | 36.3% - 108.0% | 99.5% | ||||||||
Collateralized Securities | 57,509 | Market Quotes | Indicative Dealer Quotes | 7.7% - 99.6% | 68.8% | |||||||
Equity/Other | 488,936 | Market Comparables | Market Yield (%) | 13.8% - 14.3% | 14.0% | |||||||
Capacity Multiple ($/kW) | $2,500.0 - $2,750.0 | $2,625.0 | ||||||||||
EBITDA Multiples (x) | 1.9x - 16.0x | 8.7x | ||||||||||
Production Multiples (Mboe/d) | $42,250.0 - $46,250.0 | $44,955.9 | ||||||||||
Production Multiples (MMcfe/d) | $5,750.0 - $6,750.0 | $6,250.0 | ||||||||||
Proved Reserves Multiples (Bcfe) | $1.7 - $1.9 | $ 1.8 | ||||||||||
Proved Reserves Multiples (Mmboe) | $10.0 - $11.3 | $ 11.0 | ||||||||||
PV-10 Multiples (x) | 0.7x - 3.3x | 2.9x | ||||||||||
Discounted Cash Flow | Discount Rate (%) | 19.8% - 21.8% | 20.8% | |||||||||
Option Valuation Model | Volatility (%) | 30.0% - 37.0% | 36.3% | |||||||||
36,723 | Other(2) | Other(2) | N/A | N/A | ||||||||
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Total | $ | 3,901,854 | ||||||||||
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Secured Borrowing | $ | (2,891) | Market Comparables | Market Yield (%) | (6.0)% - (7.1)% | (6.6)% |
Type of Investment | Fair Value at September 30, 2021 (Unaudited) | Valuation Technique(1) | Unobservable Input | Range (Weighted Average) | Impact to Valuation from an Increase in Input(2) | |||||||||||||||
Senior Debt | $ | 7,852 | Discounted Cash Flow | Discount Rate | 4.7% - 25.7% (8.2%) | Decrease | ||||||||||||||
1,543 | Cost | |||||||||||||||||||
1,251 | Waterfall | EBITDA Multiple | 0.1x - 11.0x (6.5x) | Increase | ||||||||||||||||
24 | Other(3) | |||||||||||||||||||
Subordinated Debt | 56 | Waterfall | EBITDA Multiple | 7.0x - 8.0x (7.9x) | Increase | |||||||||||||||
Asset Based Finance | 967 | Waterfall | EBITDA Multiple | 1.0x - 18.8x (3.8x) | Increase | |||||||||||||||
893 | Discounted Cash Flow | Discount Rate | 4.2% - 15.9% (10.0%) | Decrease | ||||||||||||||||
99 | Other(3) | |||||||||||||||||||
35 | Cost | |||||||||||||||||||
5 | | Indicative Dealer Quotes | | 2.8% - 41.8% (29.9%) | Increase | |||||||||||||||
Equity/Other | 691 | Waterfall | EBITDA Multiple | 0.1x - 15.3x (7.5x) | Increase | |||||||||||||||
59 | Discounted Cash Flow | Discount Rate | 10.0% - 25.0% (11.9%) | Decrease | ||||||||||||||||
55 | Cost | |||||||||||||||||||
13 | Other(3) | |||||||||||||||||||
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Total | $ | 13,543 | ||||||||||||||||||
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Type of Investment | Fair Value at December 31, 2020 | Valuation Technique(1) | Unobservable Input | Range | Impact to Valuation from an Increase in Input(2) | |||||||||||||
Senior Debt | $ | 3,519 | Discounted Cash Flow | Discount Rate | 5.7% - 18.6% (9.0%) | Decrease | ||||||||||||
418 | Waterfall | EBITDA Multiple | 0.1x - 12.7x (7.2x) | Increase | ||||||||||||||
237 | Cost | |||||||||||||||||
Subordinated Debt | 71 | Discounted Cash Flow | Discount Rate | 12.3% - 12.3% (12.3%) | Decrease | |||||||||||||
63 | Waterfall | EBITDA Multiple | 7.8x - 11.5x (7.8x) | Increase | ||||||||||||||
18 | Cost | |||||||||||||||||
Asset Based Finance | 535 | Waterfall | EBITDA Multiple | 1.0x - 12.0x (3.6x) | Increase | |||||||||||||
287 | Discounted Cash Flow | Discount Rate | 4.2% - 15.2% (9.9%) | Decrease | ||||||||||||||
59 | Other(3) | |||||||||||||||||
70 | Cost | |||||||||||||||||
Equity/Other | 346 | Waterfall | EBITDA Multiple | 0.1x - 12.5x (7.4x) | Increase | |||||||||||||
135 | Option Pricing Model | Equity Illiquidity Discount | 11.0% - 50.0% (11.9%) | Decrease | ||||||||||||||
49 | Other(3) | |||||||||||||||||
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Total | $ | 5,807 | ||||||||||||||||
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(1) | Investments using a market quotes valuation technique were primarily valued by using the midpoint of the prevailing bid and ask prices from dealers on the date of the relevant period end, which were provided by independent third-party pricing services and screened for validity by such services. |
(2) | Represents the directional change in the fair value of the Level 3 investments that would result from an increase to the corresponding unobservable input. A decrease to the input would have the opposite effect. Significant changes in these inputs in isolation could result in significantly higher or lower fair value measurements. |
(3) | Fair value based on expected outcome of proposed corporate transactions and/or other factors. |
Note 9. Financing Arrangements
Prior to June 14, 2019, in accordance with the 1940 Act, the Company was allowed to borrow amounts such that its asset coverage, calculated pursuant to the 1940 Act, was at least 200% after such borrowing. Effective June 15, 2019, the Company’s asset coverage requirement applicable to senior securities was reduced from 200% to 150%. As of September 30, 2021, the aggregate amount outstanding of the senior securities issued by the Company was $8,511. As of September 30, 2021, the Company’s asset coverage was 191%.
FS Investment CorporationKKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands,millions, except share and per share amounts)
Note 7. Fair Value of Financial Instruments9. Financing Arrangements (continued)
Type of Investment | Fair Value at December 31, 2016 | Valuation Technique(1) | Unobservable Input | Range | Weighted Average | |||||||
Senior Secured Loans—First Lien | $ | 1,575,465 | Market Comparables | Market Yield (%) | 5.5% - 17.3% | 10.0% | ||||||
93,703 | Other(2) | Other(2) | N/A | N/A | ||||||||
203,773 | Market Quotes | Indicative Dealer Quotes | 18.2% - 104.1% | 99.6% | ||||||||
62,500 | Cost | Cost | 100.0% - 100.0% | 100.0% | ||||||||
Senior Secured Loans—Second Lien | 458,403 | Market Comparables | Market Yield (%) | 8.8% - 26.0% | 12.4% | |||||||
140,752 | Market Quotes | Indicative Dealer Quotes | 8.8% - 101.0% | 93.3% | ||||||||
Senior Secured Bonds | 109,936 | Market Comparables | Market Yield (%) | 7.5% - 9.0% | 7.8% | |||||||
EBITDA Multiples (x) | 6.3x - 7.3x | 6.5x | ||||||||||
Production Multiples (Mboe/d) | $45,000.0 - $50,000.0 | $47,500.0 | ||||||||||
Proved Reserves Multiples (Mmboe) | $14.5 - $15.0 | $14.8 | ||||||||||
PV-10 Multiples (x) | 0.8x - 0.9x | 0.9x | ||||||||||
49,534 | Market Quotes | Indicative Dealer Quotes | 76.0% - 109.6% | 98.5% | ||||||||
Subordinated Debt | 321,853 | Market Comparables | Market Yield (%) | 8.0% - 15.3% | 13.0% | |||||||
EBITDA Multiples (x) | 7.3x - 10.3x | 8.7x | ||||||||||
132,192 | Market Quotes | Indicative Dealer Quotes | 60.8% - 125.5% | 89.0% | ||||||||
Collateralized Securities | 72,058 | Market Quotes | Indicative Dealer Quotes | 11.1% - 94.3% | 72.7% | |||||||
Equity/Other | 453,246 | Market Comparables | EBITDA Multiples (x) | 4.5x - 16.3x | 8.8x | |||||||
Production Multiples (Mboe/d) | $2,225.0 - $50,000.0 | $42,391.6 | ||||||||||
Proved Reserves Multiples (Mmboe) | $0.7 - $15.0 | $8.8 | ||||||||||
Undeveloped Acreage Multiples ($/Acre) | $8,000.0 - $10,000.0 | $9,000.0 | ||||||||||
Capacity Multiple ($/kW) | $2,375.0 - $2,875.0 | $2,625.0 | ||||||||||
Discounted Cash Flow | Discount Rate (%) | 11.0% - 24.8% | 19.9% | |||||||||
Option Valuation Model | Volatility (%) | 34.5% - 41.0% | 39.5% | |||||||||
47,075 | Other(2) | Other(2) | N/A | N/A | ||||||||
|
| |||||||||||
Total | $ | 3,720,490 | ||||||||||
|
| |||||||||||
Secured Borrowing | $ | (2,880) | Market Comparables | Market Yield (%) | (6.0)% - (7.1)% | (6.6)% |
FS Investment Corporation
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands, except share and per share amounts)
Note 8. Financing Arrangements
The following tables present summary information with respect to the Company’s outstanding financing arrangements as of September 30, 20172021 and December 31, 2016.2020. For additional information regarding these financing arrangements, see the notes to the Company’s audited consolidated financial statements contained in its annual report on Form10-K for the year ended December 31, 2016 and2020. Any significant changes to the additional disclosure set forth in this Note 8.Company’s financing arrangements during the nine months ended September 30, 2021 are discussed below.
As of September 30, 2017 (Unaudited) | ||||||||||||||||
Arrangement | Type of Arrangement | Rate | Amount Outstanding | Amount Available | Maturity Date | |||||||||||
Hamilton Street Credit Facility(1) | Revolving Credit Facility | L+2.50% | $ | 150,000 | $ | — | December 15, 2021 | |||||||||
ING Credit Facility(1) | Revolving Credit Facility | L+2.25% | 66,131 | (2) | 261,369 | March 16, 2021 | ||||||||||
Locust Street Credit Facility(1) | Term Loan Credit Facility | L+2.68% | 425,000 | — | November 1, 2020 | |||||||||||
4.000% Notes due 2019 | Unsecured Notes | 4.00% | 400,000 | — | July 15, 2019 | |||||||||||
4.250% Notes due 2020 | Unsecured Notes | 4.25% | 405,000 | — | January 15, 2020 | |||||||||||
4.750% Notes due 2022 | Unsecured Notes | 4.75% | 275,000 | — | May 15, 2022 | |||||||||||
Partial Loan Sale | Secured Borrowing | | L+4.50% (1% floor) | | 2,857 | — | July 29, 2022 | |||||||||
|
|
|
| |||||||||||||
Total | $ | 1,723,988 | $ | 261,369 |
As of September 30, 2021 (Unaudited) | ||||||||||||||||
Arrangement | Type of Arrangement | Rate | Amount Outstanding | Amount Available | Maturity Date | |||||||||||
Ambler Credit Facility(2)(8) | Revolving Credit Facility | L+2.25%(1) | $ | 140 | $ | 60 | November 22, 2024 | |||||||||
Burholme Prime Brokerage Facility(2)(8) | Prime Brokerage Facility | L+1.25%(1) | — | — | March 28, 2022 | |||||||||||
CCT Tokyo Funding Credit Facility(2) | Revolving Credit Facility | L+1.75% - 2.00%(1)(3) | 240 | 60 | June 2, 2024 | |||||||||||
Darby Creek Credit Facility(2)(8) | Revolving Credit Facility | L+1.95%(1) | 250 | — | February 26, 2024 | |||||||||||
Dunlap Credit Facility(2)(8) | Revolving Credit Facility | L+2.00%(1) | 470 | 30 | February 26, 2024 | |||||||||||
Juniata River Credit Facility(2)(8) | Revolving Credit Facility | L+2.50% - L+2.75%(1) | 640 | — | July 15, 2022 - April 11, 2023 | |||||||||||
Meadowbrook Run Credit Facility(2)(8) | Revolving Credit Facility | L+2.25%(1) | 300 | — | November 22, 2024 | |||||||||||
Senior Secured Revolving Credit Facility(2) | Revolving Credit Facility | L+1.75% - 2.00%(1)(4) | 2,429 | (5) | 1,771 | December 23, 2025 | ||||||||||
4.750% Notes due 2022(6) | Unsecured Notes | 4.75% | 450 | — | May 15, 2022 | |||||||||||
5.000% Notes due 2022(6) | Unsecured Notes | 5.00% | 245 | — | June 28, 2022 | |||||||||||
4.625% Notes due 2024(6) | Unsecured Notes | 4.63% | 400 | — | July 15, 2024 | |||||||||||
4.125% Notes due 2025(6) | Unsecured Notes | 4.13% | 470 | — | February 1, 2025 | |||||||||||
4.250% Notes due 2025(6)(8) | Unsecured Notes | 4.25% | 475 | — | February 14, 2025 | |||||||||||
8.625% Notes due 2025(6) | Unsecured Notes | 8.63% | 250 | — | May 15, 2025 | |||||||||||
3.400% Notes due 2026(6) | Unsecured Notes | 3.40% | 1,000 | — | January 15, 2026 | |||||||||||
2.625% Notes due 2027(6) | Unsecured Notes | 2.63% | 400 | — | January 15, 2027 | |||||||||||
CLO-1 Notes(2)(7) | Collateralized Loan Obligation | L+1.85% - 3.01%(1) | 352 | — | January 15, 2031 | |||||||||||
|
|
|
| |||||||||||||
Total | $ | 8,511 | $ | 1,921 |
(1) | LIBOR is subject to a 0% floor. |
(2) | The carrying amount outstanding under the facility approximates its fair value. |
The spread over LIBOR is determined by reference to the amount outstanding under the facility. |
(4) | The spread over LIBOR is determined by reference to the ratio of the value of the borrowing base to the aggregate amount of certain outstanding indebtedness of the Company. |
(5) | Amount includes borrowing in Euros, Canadian dollars, pounds sterling and |
As of December 31, 2016 | ||||||||||||||||
Arrangement | Type of Arrangement | Rate | Amount Outstanding | Amount Available | Maturity Date | |||||||||||
Hamilton Street Credit Facility | Revolving Credit Facility | L+2.50% | $ | 150,000 | $ | — | December 15, 2021 | |||||||||
ING Credit Facility | Revolving Credit Facility | L+2.50% | 44,932 | (1) | 255,068 | April 3, 2018 | ||||||||||
Locust Street Credit Facility | Term Loan Credit Facility | L+2.68% | 425,000 | — | November 1, 2020 | |||||||||||
4.000% Notes due 2019 | Unsecured Notes | 4.00% | 400,000 | — | July 15, 2019 | |||||||||||
4.250% Notes due 2020 | Unsecured Notes | 4.25% | 405,000 | — | January 15, 2020 | |||||||||||
4.750% Notes due 2022 | Unsecured Notes | 4.75% | 275,000 | — | May 15, 2022 | |||||||||||
Partial Loan Sale | Secured Borrowing | | L+4.50% (1% floor) | | 2,857 | — | July 29, 2022 | |||||||||
|
|
|
| |||||||||||||
Total | $ | 1,702,789 | $ | 255,068 |
(6) | As of September 30, 2021, the fair value of the 4.750% notes, the 5.000% notes, the 4.625% notes, the 4.125% notes, the 4.250% notes, the 8.625% notes, the 3.400% notes and the 2.625% notes was approximately $460, $245, $432, $502, $502, $280, $1,045 and $401, respectively. These valuations are considered Level 2 valuations within the fair value hierarchy. |
(7) | As of September 30, 2021, there were $281.4 of Class A-1R notes outstanding at L+1.85%, $20.5 of Class A-2R notes outstanding at L+2.25%, $32.4 of Class B-1R notes outstanding at L+2.60% and $17.4 of Class B-2R notes outstanding at 3.011%. |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 9. Financing Arrangements (continued)
(8) | As of June 16, 2021, the Company assumed all of FSKR’s obligations under its notes, credit facilities, and FSKR’s wholly-owned special purpose financing subsidiaries became wholly-owned special purpose financing subsidiaries of the Company, in each case, as a result of the consummation of the 2021 Merger. |
As of December 31, 2020 | ||||||||||||||||
Arrangement | Type of Arrangement | Rate | Amount Outstanding | Amount Available | Maturity Date | |||||||||||
CCT Tokyo Funding Credit Facility(2) | Revolving Credit Facility | L+1.75% - 2.00%(1)(3) | $ | 260 | $ | 40 | December 2, 2023 | |||||||||
Senior Secured Revolving Credit Facility(2) | Revolving Credit Facility | L+1.75% - 2.00%(1)(4) | 615 | (5) | 1,000 | December 23, 2025 | ||||||||||
4.750% Notes due 2022(6) | Unsecured Notes | 4.75% | 450 | — | May 15, 2022 | |||||||||||
5.000% Notes due 2022(6) | Unsecured Notes | 5.00% | 245 | — | June 28, 2022 | |||||||||||
4.625% Notes due 2024(6) | Unsecured Notes | 4.63% | 400 | — | July 15, 2024 | |||||||||||
4.125% Notes due 2025(6) | Unsecured Notes | 4.13% | 470 | — | February 1, 2025 | |||||||||||
8.625% Notes due 2025(6) | Unsecured Notes | 8.63% | 250 | — | May 15, 2025 | |||||||||||
3.400% Notes due 2026(6) | Unsecured Notes | 3.40% | 1,000 | — | January 15, 2026 | |||||||||||
CLO-1 Notes(2)(7) | Collateralized Loan Obligation | L+1.85%–3.01%(1) | 352 | — | January 15, 2031 | |||||||||||
|
|
|
| |||||||||||||
Total | $ | 4,042 | $ | 1,040 |
(1) | LIBOR is subject to a 0% floor. |
(2) | The carrying amount outstanding under the facility approximates its fair value. |
(3) | The spread over LIBOR is determined by reference to the amount outstanding under the facility. |
(4) | The spread over LIBOR is determined by reference to the ratio of the value of the borrowing base to the aggregate amount of certain outstanding indebtedness of the Company. |
(5) | Amount includes borrowing in |
(6) | As of December 31, 2020, the fair value of the 4.750% notes, the 5.000% notes, the 4.625% notes, the 4.125% notes, the 8.625% notes and the 3.400% notes was approximately $468, $245, $422, $490, $285 and $994 respectively. These valuations are considered Level 2 valuations within the fair value hierarchy. |
(7) | As of December 31, 2020, there were $281.4 of Class A-1R notes outstanding at L+1.85%, $20.5 of Class A-2R notes outstanding at L+2.25%, $32.4 of Class B-1R notes outstanding at L+2.60% and $17.4 of Class B-2R notes outstanding at 3.011%. |
FS Investment CorporationKKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands,millions, except share and per share amounts)
Note 8.9. Financing Arrangements (continued)
For the three and nine months ended September 30, 20172021 and 2016,2020, the components of total interest expense for the Company’s financing arrangements were as follows:
Three Months Ended September 30, | ||||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||
Arrangement(1) | Direct Interest Expense | Amortization of Deferred Financing Costs and Discount | Total Interest Expense | Direct Interest Expense | Amortization of Deferred Financing Costs and Discount | Total Interest Expense | ||||||||||||||||||
Hamilton Street Credit Facility(2) | $ | 1,411 | $ | 83 | $ | 1,494 | $ | — | $ | — | $ | — | ||||||||||||
ING Credit Facility(2) | 1,278 | 169 | 1,447 | 1,164 | 284 | 1,448 | ||||||||||||||||||
JPM Facility | — | — | — | 5,399 | — | 5,399 | ||||||||||||||||||
Locust Street Credit Facility | 4,318 | 283 | 4,601 | — | — | — | ||||||||||||||||||
4.000% Notes due 2019 | 4,000 | 310 | 4,310 | 3,998 | 311 | 4,309 | ||||||||||||||||||
4.250% Notes due 2020 | 4,303 | 283 | 4,586 | 3,453 | 244 | 3,697 | ||||||||||||||||||
4.750% Notes due 2022 | 3,266 | 138 | 3,404 | 3,266 | 136 | 3,402 | ||||||||||||||||||
Partial Loan Sale(3) | 42 | 1 | 43 | 27 | 1 | 28 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 18,618 | $ | 1,267 | $ | 19,885 | $ | 17,307 | $ | 976 | $ | 18,283 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, | ||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
Arrangement(1) | Direct Interest Expense | Amortization of Deferred Financing Costs and Discount / Premium | Total Interest Expense | Direct Interest Expense | Amortization of Deferred Financing Costs and Discount | Total Interest Expense | ||||||||||||||||||
Ambler Credit Facility(2) | $ | 1 | $ | — | $ | 1 | $ | — | $ | — | $ | — | ||||||||||||
Burholme Prime Brokerage Facility(2) | — | — | — | — | — | — | ||||||||||||||||||
CCT Tokyo Funding Credit Facility(2) | 1 | 0 | 1 | 1 | 1 | 2 | ||||||||||||||||||
Darby Creek Credit Facility(2) | 2 | — | 2 | — | — | — | ||||||||||||||||||
Dunlap Credit Facility(2) | 2 | — | 2 | — | — | — | ||||||||||||||||||
Juniata River Credit Facility(2) | 5 | — | 5 | — | — | — | ||||||||||||||||||
Locust Street Credit Facility(2) | — | — | — | 2 | 1 | 3 | ||||||||||||||||||
Meadowbrook Run Credit Facility(2) | 3 | — | 3 | — | — | — | ||||||||||||||||||
Senior Secured Revolving Credit Facility(2) | 13 | 1 | 14 | 7 | 1 | 8 | ||||||||||||||||||
4.750% Notes due 2022 | 5 | 0 | 5 | 5 | 0 | 5 | ||||||||||||||||||
5.000% Notes due 2022 | 3 | — | 3 | 3 | — | 3 | ||||||||||||||||||
4.625% Notes due 2024 | 5 | 1 | 6 | 5 | 0 | 5 | ||||||||||||||||||
4.125% Notes due 2025 | 5 | 1 | 6 | 5 | 1 | 6 | ||||||||||||||||||
4.250% Notes due 2025 | 5 | (2 | ) | 3 | — | — | — | |||||||||||||||||
8.625% Notes due 2025 | 5 | 0 | 5 | 5 | 1 | 6 | ||||||||||||||||||
3.400% Notes due 2026 | 8 | 1 | 9 | — | — | — | ||||||||||||||||||
2.625% Notes due 2027 | 3 | 0 | 3 | — | — | — | ||||||||||||||||||
CLO-1 Notes | 2 | 0 | 2 | 2 | 0 | 2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 68 | $ | 2 | $ | 70 | $ | 35 | $ | 5 | $ | 40 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, | ||||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||
Arrangement(1) | Direct Interest Expense | Amortization of Deferred Financing Costs and Discount | Total Interest Expense | Direct Interest Expense | Amortization of Deferred Financing Costs and Discount | Total Interest Expense | ||||||||||||||||||
Hamilton Street Credit Facility(2) | $ | 4,190 | $ | 245 | $ | 4,435 | $ | — | $ | — | $ | — | ||||||||||||
ING Credit Facility(2) | 3,831 | 655 | 4,486 | 3,236 | 847 | 4,083 | ||||||||||||||||||
JPM Facility | — | — | — | 17,284 | — | 17,284 | ||||||||||||||||||
Locust Street Credit Facility | 12,181 | 838 | 13,019 | — | — | — | ||||||||||||||||||
4.000% Notes due 2019 | 12,000 | 921 | 12,921 | 11,631 | 926 | 12,557 | ||||||||||||||||||
4.250% Notes due 2020 | 12,909 | 842 | 13,751 | 10,359 | 726 | 11,085 | ||||||||||||||||||
4.750% Notes due 2022 | 9,797 | 406 | 10,203 | 9,797 | 407 | 10,204 | ||||||||||||||||||
Partial Loan Sale(3) | 122 | 4 | 126 | 27 | 1 | 28 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 55,030 | $ | 3,911 | $ | 58,941 | $ | 52,334 | $ | 2,907 | $ | 55,241 | ||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, | ||||||||||||||||||||||||
2021 | 2020 | |||||||||||||||||||||||
Arrangement(1) | Direct Interest Expense | Amortization of Deferred Financing Costs and Discount / Premium | Total Interest Expense | Direct Interest Expense | Amortization of Deferred Financing Costs and Discount | Total Interest Expense | ||||||||||||||||||
Ambler Credit Facility(2) | $ | 1 | $ | — | $ | 1 | $ | — | $ | — | $ | — | ||||||||||||
Burholme Prime Brokerage Facility(2) | — | — | — | — | — | — | ||||||||||||||||||
CCT Tokyo Funding Credit Facility(2) | 3 | 0 | 3 | 5 | 1 | 6 | ||||||||||||||||||
Darby Creek Credit Facility(2) | 2 | — | 2 | — | — | — | ||||||||||||||||||
Dunlap Credit Facility(2) | 3 | — | 3 | — | — | — | ||||||||||||||||||
Juniata River Credit Facility(2) | 6 | — | 6 | — | — | — | ||||||||||||||||||
Locust Street Funding Credit Facility(2) | — | — | — | 11 | 1 | 12 | ||||||||||||||||||
Meadowbrook Run Credit Facility(2) | 3 | — | 3 | — | — | — | ||||||||||||||||||
Senior Secured Revolving Credit Facility(2) | 23 | 2 | 25 | 33 | 2 | 35 | ||||||||||||||||||
4.750% Notes due 2022 | 16 | 0 | 16 | 16 | 0 | 16 | ||||||||||||||||||
5.000% Notes due 2022 | 9 | — | 9 | 9 | — | 9 | ||||||||||||||||||
4.625% Notes due 2024 | 14 | 1 | 15 | 14 | 1 | 15 | ||||||||||||||||||
4.125% Notes due 2025 | 15 | 1 | 16 | 15 | 2 | 17 | ||||||||||||||||||
4.250% Notes due 2025 | 6 | (2 | ) | 4 | — | — | — | |||||||||||||||||
8.625% Notes due 2025 | 16 | 1 | 17 | 9 | 1 | 10 | ||||||||||||||||||
3.400% Notes due 2026 | 25 | 4 | 29 | — | — | — | ||||||||||||||||||
2.625% Notes due 2027 | 3 | 0 | 3 | — | — | — | ||||||||||||||||||
CLO-1 Notes | 6 | 0 | 6 | 8 | 0 | 8 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total | $ | 151 | $ | 7 | $ | 158 | $ | 120 | $ | 8 | $ | 128 | ||||||||||||
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|
|
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 9. Financing Arrangements (continued)
(1) | Borrowings of each of the Company’s wholly-owned, special-purpose financing subsidiaries are considered borrowings of the Company for purposes of complying with the asset coverage requirements applicable to BDCs under the 1940 Act. |
(2) | Direct interest expense includes the effect ofnon-usage fees. |
The Company’s average borrowings and weighted average interest rate, including the effect of non-usage fees, for |
FS Investment Corporation
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands, except share and per share amounts)
Note 8. Financing Arrangements (continued)
For the nine months ended September 30, 20172021 were $5,502 and 2016,3.59%, respectively. As of September 30, 2021, the cash paid for interest expense,Company’s weighted average borrowings, effective interest rate on borrowings, including the effect of non-usage fees, was 3.22%.
The Company’s average borrowings and weighted average interest rate, including the effect of non-usage fees,for the Company’s financing arrangementsnine months ended September 30, 2020 were as follows:
Nine Months Ended September 30, | ||||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||||
Arrangement | Cash Paid for Interest Expense | Average Borrowings | Effective Interest Rate | Weighted Average Interest Rate(1) | Cash Paid for Interest Expense | Average Borrowings | Effective Interest Rate | Weighted Average Interest Rate(1) | ||||||||||||||||
Hamilton Street Credit Facility(2)(3) | $ | 3,730 | $ | 150,000 | 3.68% | 3.68% | $ | — | $ | — | — | — | ||||||||||||
ING Credit Facility(2)(4) | 3,347 | 112,422 | 6.55% | 4.49% | 3,599 | 102,464 | 5.42% | 4.15% | ||||||||||||||||
JPM Facility(3) | — | — | — | — | 18,340 | 698,723 | 3.25% | 3.25% | ||||||||||||||||
Locust Street Credit Facility(3) | 10,769 | 425,000 | 3.83% | 3.78% | — | — | — | — | ||||||||||||||||
4.000% Notes due 2019(5) | 16,000 | 400,000 | 4.00% | 4.00% | 16,000 | 400,000 | 4.00% | 4.00% | ||||||||||||||||
4.250% Notes due 2020(5) | 17,213 | 405,000 | 4.25% | 4.25% | 13,812 | 325,000 | 4.25% | 4.25% | ||||||||||||||||
4.750% Notes due 2022(5) | 6,531 | 275,000 | 4.75% | 4.75% | 6,531 | 275,000 | 4.75% | 4.75% | ||||||||||||||||
Partial Loan Sale(3) | 121 | 2,857 | 5.81% | 5.64% | — | 635 | 5.50% | 5.50% | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
$ | 57,711 | $ | 1,770,279 | 4.21% | 4.10% | $ | 58,282 | $ | 1,801,822 | 3.95% | 3.82% | |||||||||||||
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|
Hamilton Street Credit Facility
On December 15, 2016, Hamilton Street Funding LLC, or Hamilton Street, a wholly-owned, special-purpose financing subsidiary of the Company, entered into a revolving credit facility, or the Hamilton Street credit facility, pursuant to (a) a Loan$4,269 and Security Agreement, dated as of December 15, 2016, by and among Hamilton Street, as borrower, each of the lenders from time to time party thereto, each of the lender agents from time to time party thereto, HSBC Bank USA, National Association, as administrative agent, and U.S. Bank National Association, as collateral agent, account bank and custodian, and (b) certain other related transaction documents.
The Hamilton Street credit facility provides for a five-year credit facility with a four-year revolving period, during which Hamilton Street is permitted to borrow, repay and reborrow advances in U.S. dollars and certain agreed foreign currencies in an initial aggregate amount of up to $150,000, subject to its compliance with the terms of the Hamilton Street credit facility (including maintenance of the required borrowing base). The Hamilton Street credit facility has an accordion option that would permit the parties to increase the commitments by an additional $50,000 to $200,000. After the revolving period, outstanding advances under the Hamilton Street credit facility must be repaid by 5% each month until the maturity date at which time all remaining outstanding advances must be repaid.
The Company incurred costs in connection with obtaining the Hamilton Street credit facility, which the Company has recorded as deferred financing costs on its consolidated balance sheets and amortizes to interest expense over the life of the facility.3.72%, respectively. As of September 30, 2017, $1,379 2020, the Company’s weighted average effective interest rate on borrowings, including the effect of such deferrednon-usage fees, was 3.65%.
Under its financing costs had yet to be amortized to interest expense.
ING Credit Facility
On April 3, 2014,arrangements, the Company entered into a senior secured revolving credit facilityhas made certain representations and warranties and is required to comply with ING Capital LLC, or ING, as administrative agent, and the lenders party thereto, or the ING credit facility. The ING credit facility originally provided for borrowings in U.S. dollars and certain agreed upon foreign currencies in an initial aggregate amount of up to $300,000, with an
FS Investment Corporation
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands, except share and per share amounts)
Note 8. Financing Arrangements (continued)
option for the Company to request, at one or more times after closing, that existing or new lenders, at their election, provide up to $100,000 of additional commitments. The ING credit facility provides for the issuance of letters of credit in an aggregate face amount not to exceed $25,000. The Company’s obligations under the ING credit facility are guaranteed by all of the Company’s subsidiaries, other than its special-purpose financing subsidiaries. The Company’s obligations under the ING credit facility are secured by a first priority security interest in substantially all of the assets of the Company and the subsidiary guarantors thereunder other than the equity interests of its special-purpose financing subsidiaries.
On March 16, 2017, the Company, certain subsidiary guarantors of the Company, the several banksvarious covenants, reporting requirements and other financial institutions or entities from time to time party thereto and ING entered into a second amendment, or the Amendment, to the ING credit facility.customary requirements for similar financing arrangements. The Amendment, among other things, (i) increased the lenders’ aggregate commitments under the ING credit facility to $327,500, (ii) extended the term of the revolving period to March 16, 2020 and the final maturity date to March 16, 2021, (iii) increased the size of the accordion provision to permit increases to the lenders’ aggregate commitments under the ING credit facility up to $600,000 and (iv) decreased the Applicable Margin (as defined therein) to 1.25%Company was in compliance with respect to any ABR Loan (as defined therein) and 2.25% with respect to any Eurocurrency Loan (as defined therein).
Asall covenants required by its financing arrangements as of September 30, 20172021 and December 31, 2016, $66,131 and $44,932, respectively, was outstanding under the ING credit facility, which includes borrowings in Euro in an aggregate amount of €41,780 and €42,575, respectively, and borrowings in Canadian dollars in an aggregate amount of CAD $20,987 and CAD $0, respectively. The Company incurred costs in connection with obtaining and amending the ING credit facility, which the Company has recorded as deferred financing costs on its consolidated balance sheets and amortizes to interest expense over the life of the facility. As of September 30, 2017, $2,333 of such deferred financing costs had yet to be amortized to interest expense.2020.
JPM Financing2.625% Notes due 2027
On July 21, 2011, through its two wholly-owned, special-purpose financing subsidiaries, Locust Street Funding LLC, or Locust Street, and Race Street Funding LLC, or Race Street, the Company entered into a debt financing arrangement with JPMorgan Chase Bank, N.A., London Branch, or JPM, which was subsequently amended several times, or the JPM Facility. Prior to its termination, the Company and JPM had most recently amended the financing arrangement on April 28, 2016 to, among other things, reduce the amount of outstanding available debt financing from $725,000 to $650,000. On November 1, 2016, in connection with the entrance into the Locust Street credit facility (as defined below), (i) the Class A Notes issued by Locust Street to Race Street were redeemed, (ii) the amended and restated global master repurchase agreement between Locust Street and JPM was terminated and (iii) the JPM Facility was prepaid and terminated.
JPM Term Loan Facility
On November 1, 2016, Locust Street entered into a loan agreement, or the Locust Street loan agreement and, together with the related transaction documents, the Locust Street term loan facility, with JPM, as lender and administrative agent, Citibank, N.A., as collateral agent and securities intermediary, and Virtus Group, LP, as collateral administrator, pursuant to which JPM advanced $625,000 to Locust Street. Advances outstanding under the Locust Street term loan facility bear interest at a rate equal to LIBOR for a three-month interest period plus a spread of 2.6833% per annum. Interest is payable in arrears beginning on January 15, 2017 and each quarter thereafter. Under the Locust Street loan agreement, Locust Street agreed to repay $200,000 of the aggregate principal amount of the advances on or before January 31, 2017, which repayment was satisfied in full in December 2016. All remaining outstanding advances under the Locust Street loan agreement will mature, and all accrued and unpaid interest thereunder, will be due and payable, on November 1, 2020.
The Company incurred costs in connection with obtaining the Locust Street term loan, which the Company has recorded as deferred financing costs on its consolidated balance sheets and amortizes to interest expense over the life of the facility. As of September 30, 2017, $3,461 of such deferred financing costs had yet to be amortized to interest expense.
FS Investment Corporation
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands, except share and per share amounts)
Note 8. Financing Arrangements (continued)
4.000% Notes due 2019
On July 14, 2014,June 17, 2021, the Company and U.S. Bank National Association, or U.S. Bank,the Trustee entered into an indenture,Eighth Supplemental Indenture, or the base indenture,Eighth Supplemental Indenture, to the Indenture, dated July 14, 2014, between the Company and a first supplemental indenture thereto,the Trustee, or the Base Indenture, and together with the base indenture and any supplemental indentures thereto,Eighth Supplemental Indenture, the indenture, relatingIndenture. The Eighth Supplemental Indenture relates to the Company’s issuance of $400,000$400 aggregate principal amount of its 4.000%2.625% notes due 2019,2027, or the 4.000%2.625% notes.
The 4.000% notesNotes will mature on JulyJanuary 15, 20192027 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the applicable redemption priceprices set forth in the indenture.Indenture. The 4.000% notesNotes bear interest at a rate of 4.000%2.625% per year payable semi-annually on January 1515th and July 1515th of each year, commencing on January 15, 2015.2022. The 4.000% notesNotes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 4.000% notes andNotes, rankpari passu with all outstandingexisting and future unsecured unsubordinated indebtedness issued by the Company.
In addition, onCompany, rank effectively junior to any of the occurrence of a “change of control repurchase event,” as defined in the indenture,Company’s secured indebtedness (including unsecured indebtedness that the Company will generally be requiredlater secures) to make an offer to purchase the outstanding 4.000% notes at a price equal to 100%extent of the principal amountvalue of the assets securing such notes plus accruedindebtedness, and unpaid interestrank structurally junior to all existing and future indebtedness (including trade payables) incurred by the repurchase date.Company’s subsidiaries, financing vehicles or similar facilities.
The indentureIndenture contains certain covenants, including covenants requiring the Company to comply with the asset coverage requirements of Section 18(a)(1)(A) of the 1940 Act, as modified by Section 61(a)(1) and (2) of the Investment Company Act of 1940, Act,as amended, whether or not it is subject to those requirements, and to provide financial information to the holders of the 4.000% notesNotes and U.S. Bankthe Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended, or the Exchange Act.amended. These covenants are subject to important limitations and exceptions that are described in the indenture.
As of September 30, 2017, the fair value of the 4.000% notes was approximately $407,440. The Company incurred costs in connection with issuing the 4.000% notes, which the Company has recorded as deferred financing costs on its consolidated balance sheets and amortizes to interest expense over the life of the 4.000% notes. As of September 30, 2017, $200 of such deferred financing costs had yet to be amortized to interest expense. In connection with issuing the 4.000% notes, the Company has charged discount costs against the carrying amount of such notes. As of September 30, 2017, $2,003 of such discount had yet to be amortized to interest expense.
4.250% Notes due 2020
On December 3, 2014, the Company and U.S. Bank entered into a second supplemental indenture to the base indenture relating to the Company’s issuance of $325,000 aggregate principal amount of its 4.250% notes due 2020, or the 4.250% notes. On December 8, 2016, the Company issued an additional $80,000 aggregate principal amount of the 4.250% notes as additional notes under the second supplemental indenture.
The 4.250% notes will mature on January 15, 2020 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the applicable redemption price set forth in the indenture. The 4.250% notes bear interest at a rate of 4.250% per year, payable semi-annually on January 15 and July 15 of each year, commencing on July 15, 2015. The 4.250% notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 4.250% notes and rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.Indenture.
In addition, on the occurrence of a “change of control repurchase event,” as defined in the indenture,Indenture, the Company will generally be required to make an offer to purchase the outstanding 4.250% notesNotes at a price equal to 100% of the principal amount of such notesNotes plus accrued and unpaid interest to the repurchase date.
The indenture contains certain covenants, including covenants requiringSenior Secured Revolving Credit Facility
On July 30, 2021, the Company entered into Commitment Increase Agreements in connection with its senior secured revolving credit facility originally entered into on August 9, 2018, or as subsequently amended and restated, the Senior Secured Revolving Credit Facility, with JPMorgan Chase Bank, N.A., as administrative agent, ING Capital LLC, as collateral agent, and the lenders party thereto, which, among other things, increased the total facility amount from $4,025 to comply with the asset coverage requirements of Section 18(a)(1)(A) of the 1940 Act, as modified by Section 61(a)(1) of the 1940 Act, whether or not it is subject$4,200.
FS Investment CorporationKKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands,millions, except share and per share amounts)
Note 8.9. Financing Arrangements (continued)
to those requirements, and to provide financial information to the holdersFSKR Credit Facilities
On June 16, 2021, as a result of the 4.250% notes and U.S. Bank ifconsummation of the 2021 Merger, the Company is no longer subject toassumed all of FSKR’s obligations under its Senior Secured Revolving Credit Facility, resulting in FSK remaining the reporting requirementssole borrower thereunder, and the various wholly-owned special purpose financing subsidiaries of FSKR became wholly-owned special purpose financing subsidiaries of the Company. Such special purpose financing subsidiaries and their outstanding credit facilities are (a) Darby Creek LLC and the Darby Creek Credit Facility, (b) Dunlap Funding LLC and the Dunlap Credit Facility, (c) Juniata River LLC and the Juniata River Credit Facility, (d) Burholme Funding LLC and the Burholme Prime Brokerage Facility, (e) Ambler Funding LLC and the Ambler Credit Facility and (f) Meadowbrook Run LLC and the Meadowbrook Run Credit Facility (such credit facilities, together with the prior obligations of FSKR under the Exchange Act. These covenants are subject to limitations and exceptions that are described inSenior Secured Revolving Credit Facility, collectively, the indenture.
As of September 30, 2017,“FSKR Credit Facilities”). Information regarding the fair value of the 4.250% notes was approximately $414,572. The Company incurred costs in connection with issuing the 4.250% notes, which the Company has recorded as deferred financing costs on its consolidated balance sheets and amortizes to interest expense over the life of the 4.250% notes. As of September 30, 2017, $1,051 of such deferred financing costs had yet to be amortized to interest expense. In connection with issuing the 4.250% notes, the Company has charged discount costs against the carrying amount of such notes. As of September 30, 2017, $1,527 of such discount had yet to be amortized to interest expense.
4.750% Notes due 2022
On April 30, 2015, the Company and U.S. Bank entered into a third supplemental indenture to the base indenture relating to the Company’s issuance of $275,000 aggregate principal amount of its 4.750% notes due 2022, or the 4.750% notes.
The 4.750% notes will mature on May 15, 2022 and may be redeemed in whole or in part at the Company’s option at any time or from time to time at the applicable redemption priceFSKR Credit Facilities is set forth in the indenture. The 4.750% notes bear interest at a rate of 4.750% per year payable semi-annually on May 15 and November 15 of each year, commencing on November 15, 2015. The 4.750% notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 4.750% notes and rank pari passu with all outstanding and future unsecured unsubordinated indebtedness issued by the Company.
In addition, on the occurrence of a “change of control repurchase event,” as defined in the indenture, the Company will generally be required to make an offer to purchase the outstanding 4.750% notes at a price equal to 100% of the principal amount of such notes plus accrued and unpaid interest to the repurchase date.
The indenture contains certain covenants, including covenants requiring the Company to comply with the asset coverage requirements of Section 18(a)(1)(A) of the 1940 Act, as modified by Section 61(a)(1) of the 1940 Act, whether or not it is subject to those requirements, and to provide financial information to the holders of the 4.750% notes and U.S. Bank if the Company is no longer subject to the reporting requirements under the Exchange Act. These covenants are subject to limitations and exceptions that are described in the indenture.
As of September 30, 2017, the fair value of the 4.750% notes was approximately $286,271. The Company incurred costs in connection with issuing the 4.750% notes, which the Company has recorded as deferred financing costs on its consolidated balance sheets and amortizes to interest expense over the life of the 4.750% notes. As of September 30, 2017, $312 of such deferred financing costs had yet to be amortized to interest expense. In connection with issuing the 4.750% notes, the Company has charged discount costs against the carrying amount of such notes. As of September 30, 2017, $2,193 of such discount had yet to be amortized to interest expense.
Partial Loan Sale
Certain partial loan sales do not qualify for sale accounting under ASC Topic 860 because these sales do not meet the definition of a participating interest, as defined in the guidance, in order for sale treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating interest remain as an investment on the consolidated balance sheets and the portion sold is recorded as a secured borrowing in the liabilities section of the consolidated balance sheets. For these partial loan sales, the interest earned on the entire loan balance is recorded within interest income and the interest earned by the buyer in the partial loan sale is recorded within interest expense in the consolidated statements of operations.
As of September 30, 2017 and December 31, 2016, the Company recognized a secured borrowing at fair value of $2,891 and $2,880, respectively, and the fair value of the loan that is associated with the secured borrowing was $15,080 and $14,993,
FS Investment Corporation
“Part I—Item 1. Financial Statements—Notes to Unaudited Consolidated Financial Statements (continued)
(Statements—Note 9. Financing Arrangements” in thousands, except share and per share amounts)
FSKR’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, filed with the SEC on May 10, 2021.
Note 8. Financing Arrangements (continued)
respectively. The secured borrowing was the result of the Company’s completion of a partial sale of a senior secured loan associated with one portfolio company that did not meet the definition of a participating interest. As a result, sale treatment was not allowed and the partial loan sale was treated as a secured borrowing.
During the nine months ended September 30, 2017, there were no new partial loan sales, fundings on revolving and delayed draw secured borrowings or repayments on secured borrowings.
Note 9.10. Commitments and Contingencies
The Company enters into contracts that contain a variety of indemnification provisions. The Company’s maximum exposure under these arrangements is unknown; however, the Company has not had prior claims or losses pursuant to these contracts. Management of FBThe Advisor has reviewed the Company’s existing contracts and expects the risk of loss to the Company to be remote.
The Company is not currently subject to any material legal proceedings and, to the Company’s knowledge, no material legal proceedings are threatened against the Company. From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Company’s rights under contracts with its portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, the Company does not expect that any such proceedings will have a material effect upon its financial condition or results of operations.
See Note 6 for a discussionUnfunded commitments to provide funds to portfolio companies are not recorded in the Company’s consolidated balance sheets. Since these commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The Company has sufficient liquidity to fund these commitments. As of September 30, 2021, the Company’s unfunded commitments.commitments consisted of the following:
Category / Company(1) | Commitment Amount | |||
Senior Secured Loans—First Lien | ||||
Advanced Dermatology & Cosmetic Surgery | $ | 3.6 | ||
Advanced Dermatology & Cosmetic Surgery | 8.7 | |||
Advania Sverige AB | 37.5 | |||
Affordable Care Inc | 12.8 | |||
Affordable Care Inc | 43.5 | |||
Alera Group Intermediate Holdings Inc | 9.2 | |||
American Vision Partners | 7.8 | |||
American Vision Partners | 38.9 | |||
Arcos LLC/VA | 4.5 | |||
Ardonagh Group Ltd | 22.8 | |||
Ardonagh Group Ltd | 54.8 | |||
Arrotex Australia Group Pty Ltd | 2.2 | |||
AxiomSL Ltd | 2.4 | |||
AxiomSL Ltd | 2.3 | |||
Barbri Inc | 30.2 | |||
BGB Group LLC | 19.9 | |||
Corsearch Intermediate Inc | 4.4 |
FS Investment CorporationKKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands,millions, except share and per share amounts)
Note 10. Commitments and Contingencies (continued)
Category / Company(1) | Commitment Amount | |||
CSafe Global | 30.7 | |||
Dental Care Alliance Inc | 18.0 | |||
Entertainment Benefits Group LLC | 1.2 | |||
FloWorks International LLC | 21.5 | |||
Follett Software Co | 5.6 | |||
Foundation Consumer Brands LLC | 6.6 | |||
Galway Partners Holdings LLC | 11.7 | |||
Galway Partners Holdings LLC | 31.7 | |||
Heniff Transportation Systems LLC | 11.3 | |||
Higginbotham Insurance Agency Inc | 2.6 | |||
Individual FoodService | 4.5 | |||
Individual FoodService | 3.3 | |||
Insight Global LLC | 21.1 | |||
J S Held LLC | 13.9 | |||
J S Held LLC | 24.1 | |||
Karman Space Inc | 3.6 | |||
KBP Investments LLC | 26.7 | |||
Kellermeyer Bergensons Services LLC | 47.4 | |||
Lakeview Farms Inc | 10.8 | |||
Lakeview Farms Inc | 6.0 | |||
Lexitas Inc | 15.0 | |||
Lexitas Inc | 5.4 | |||
MB2 Dental Solutions LLC | 90.0 | |||
Med-Metrix | 31.3 | |||
Med-Metrix | 7.8 | |||
Monitronics International Inc | 33.8 | |||
Motion Recruitment Partners LLC | 59.6 | |||
Net Documents | 7.3 | |||
Net Documents | 2.9 | |||
New Era Technology Inc | 18.5 | |||
New Era Technology Inc | 4.6 | |||
Oxford Global Resources LLC | 15.3 | |||
Oxford Global Resources LLC | 6.4 | |||
P2 Energy Solutions Inc. | 10.6 | |||
Parata Systems | 22.0 | |||
Parata Systems | 5.5 | |||
Production Resource Group LLC | 20.2 | |||
Revere Superior Holdings Inc | 3.2 | |||
Rise Baking Company | 4.4 | |||
RSC Insurance Brokerage Inc | 7.6 | |||
RSC Insurance Brokerage Inc | 23.2 | |||
SAMBA Safety Inc | 6.1 | |||
SAMBA Safety Inc | 2.4 | |||
Sequel Youth & Family Services LLC | 14.5 | |||
Sequential Brands Group Inc. | 7.7 | |||
Source Code LLC | 15.0 | |||
Spins LLC | 7.9 |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 10. Commitments and Contingencies (continued)
Category / Company(1) | Commitment Amount | |||
Summit Interconnect Inc | 48.7 | |||
Sweeping Corp of America Inc | 1.3 | |||
Sweeping Corp of America Inc | 3.9 | |||
Truck-Lite Co LLC | 25.2 | |||
Wealth Enhancement Group LLC | 28.2 | |||
Wealth Enhancement Group LLC | 0.4 | |||
Woolpert Inc | 25.6 | |||
Asset Based Finance | ||||
Byrider Finance LLC, Structured Mezzanine | 11.0 | |||
Callodine Commercial Finance LLC, 2L Term Loan B | 40.3 | |||
Home Partners JV 2, Structured Mezzanine | 14.8 | |||
Jet Edge International LLC, Term Loan | 38.3 | |||
Toorak Capital Partners LLC, Structured Mezzanine | 20.0 | |||
|
| |||
Total | $ | 1,313.7 | ||
|
| |||
Unfunded Asset Based Finance/Other commitments | $ | 511.3 |
(1) | May be commitments to one or more entities affiliated with the named company. |
As of September 30, 2021, the Company’s debt commitments are comprised of $332.4 revolving credit facilities and $981.3 delayed draw term loans, which generally are used for acquisitions or capital expenditures and are subject to certain performance tests. Such unfunded debt commitments have a fair value representing unrealized appreciation (depreciation) of $(5.6). The Company’s unfunded Asset Based Finance/Other commitments generally require certain conditions to be met or actual approval from the Advisor prior to funding.
As of September 30, 2021, the Company also has an unfunded commitment to provide $350.2 of capital to COPJV. The capital commitment can be satisfied with contributions of cash and/or investments. The capital commitments cannot be drawn without an affirmative vote by both the Company’s and SCRS’s representatives on COPJV’s board of managers.
While the Company does not expect to fund all of its unfunded commitments, there can be no assurance that it will not be required to do so.
In the normal course of business, the Company may enter into guarantees on behalf of portfolio companies. Under such arrangements, the Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. The Company has no such guarantees outstanding at September 30, 2021 and December 31, 2020.
Note 11. Financial Highlights
The following is a schedule of financial highlights of the Company for the nine months ended September 30, 20172021 and the year ended December 31, 2016:2020:
Nine Months Ended September 30, 2017 (Unaudited) | Year Ended December 31, 2016 | |||||||
Per Share Data:(1) | ||||||||
Net asset value, beginning of period | $ | 9.41 | $ | 9.10 | ||||
Results of operations(2) | ||||||||
Net investment income (loss) | 0.61 | 0.85 | ||||||
Net realized and unrealized appreciation (depreciation) on investments and secured borrowing and gain/loss on foreign currency | 0.08 | 0.35 | ||||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 0.69 | 1.20 | ||||||
|
|
|
| |||||
Stockholder distributions(3) | ||||||||
Distributions from net investment income | (0.67) | (0.89) | ||||||
Distributions from net realized gain on investments | — | — | ||||||
|
|
|
| |||||
Net decrease in net assets resulting from stockholder distributions | (0.67) | (0.89) | ||||||
|
|
|
| |||||
Capital share transactions | ||||||||
Issuance of common stock(4) | 0.00 | 0.00 | ||||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from capital share transactions | — | — | ||||||
|
|
|
| |||||
Net asset value, end of period | $ | 9.43 | $ | 9.41 | ||||
|
|
|
| |||||
Per share market value, end of period | $ | 8.45 | $ | 10.30 | ||||
|
|
|
| |||||
Shares outstanding, end of period | 245,725,416 | 244,063,357 | ||||||
|
|
|
| |||||
Total return based on net asset value(5) | 7.33% | 13.19% | ||||||
|
|
|
| |||||
Total return based on market value(6) | (11.80)% | 25.91% | ||||||
|
|
|
| |||||
Ratio/Supplemental Data: | ||||||||
Net assets, end of period | $ | 2,316,693 | $ | 2,297,377 | ||||
Ratio of net investment income to average net assets(7) | 8.69% | 9.32% | ||||||
Ratio of total operating expenses to average net assets(7) | 9.22% | 9.69% | ||||||
Portfolio turnover(8) | 23.27% | 29.65% | ||||||
Total amount of senior securities outstanding, exclusive of treasury securities | $ | 1,723,988 | $ | 1,702,789 | ||||
Asset coverage per unit(9) | 2.34 | 2.35 |
Nine Months Ended September 30, 2021 (Unaudited) | Year Ended December 31, 2020 | |||||||
Per Share Data:(1) | ||||||||
Net asset value, beginning of period | $ | 25.02 | $ | 30.54 | ||||
Results of operations(2) | ||||||||
Net investment income (loss) | 2.11 | 2.66 | ||||||
Net realized and unrealized appreciation (depreciation) on investments and secured borrowing and gain/loss on foreign currency | 4.29 | (5.85 | ) | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 6.40 | (3.19 | ) | |||||
|
|
|
|
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 11. Financial Highlights (continued)
Nine Months Ended September 30, 2021 (Unaudited) | Year Ended December 31, 2020 | |||||||
Stockholder distributions(3) | ||||||||
Distributions from net investment income | (1.85 | ) | (2.56 | ) | ||||
Distributions from net realized gain on investments | — | — | ||||||
|
|
|
| |||||
Net decrease in net assets resulting from stockholder distributions | (1.85 | ) | (2.56 | ) | ||||
|
|
|
| |||||
Capital share transactions | ||||||||
Issuance of common stock(4) | (2.20 | ) | — | |||||
Repurchases of common stock(5) | 0.00 | 0.23 | ||||||
Deduction of deferred costs(6) | (0.23 | ) | — | |||||
|
|
|
| |||||
Net increase (decrease) in net assets resulting from capital share transactions | (2.43 | ) | 0.23 | |||||
|
|
|
| |||||
Net asset value, end of period | $ | 27.14 | $ | 25.02 | ||||
|
|
|
| |||||
Per share market value, end of period | $ | 22.04 | $ | 16.56 | ||||
|
|
|
| |||||
Shares outstanding, end of period | 285,076,619 | 123,755,965 | ||||||
|
|
|
| |||||
Total return based on net asset value(7) | 15.87 | % | (9.69 | )% | ||||
|
|
|
| |||||
Total return based on market value(8) | 44.74 | % | (19.73 | )% | ||||
|
|
|
| |||||
Ratio/Supplemental Data: | ||||||||
Net assets, end of period | $ | 7,736 | $ | 3,096 | ||||
Ratio of net investment income to average net assets(9) | 10.71 | % | 10.44 | % | ||||
Ratio of total operating expenses to average net assets(9) | 9.14 | % | 9.71 | % | ||||
Ratio of net operating expenses to average net assets(9) | 8.73 | % | 9.71 | % | ||||
Portfolio turnover(10) | 37.81 | % | 32.95 | % | ||||
Total amount of senior securities outstanding, exclusive of treasury securities | $ | 8,511 | $ | 4,042 | ||||
Asset coverage per unit(11) | 1.91 | 1.77 |
(1) | Per share data may be rounded in order to recompute the ending net asset value per share. |
(2) | The per share data was derived by using the weighted average shares outstanding during the applicable period. |
(3) | The per share data for distributions reflect the actual amount of distributions paid per share during the applicable period. |
(4) | The issuance of common stock on a per share basis reflects the incremental net asset value changes as a result of the issuance of shares of common stock pursuant to the |
(5) | Represents the incremental impact of the Company’s share repurchase program by buying shares in the open market at a price |
(6) | Represents the impact on NAV of merger accounting by the permanent write-off of the Company’s |
The total return based on net asset value for each period presented was calculated by taking the net asset value per share as of the end of the applicable period, adding the cash distributions per share that were declared during the period and dividing the total by the net asset value per share at the beginning of the period. Total return based on net asset value does not consider the effect of any sales commissions or charges that may be incurred in connection with the sale of shares of the Company’s common stock. The historical calculation of total return based on net asset value in the table should not be considered a representation of the Company’s future total return based on net asset value, which may be greater or less than |
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 11. Financial Highlights (continued)
the return shown in the table due to a number of factors, including the Company’s ability or inability to make investments in companies that meet its investment criteria, the interest rates payable on the debt securities the Company acquires, the level of the Company’s expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which the Company encounters competition in its markets and general economic conditions. As a result of |
FS Investment Corporation
Notes to Unaudited Consolidated Financial Statements (continued)
(in thousands, except share and per share amounts)
Note 10. Financial Highlights (continued)
these factors, results for any previous period should not be relied upon as being indicative of performance in future periods. The total return calculations set forth above represent the total return on the Company’s investment portfolio during the applicable period and do not represent an actual return to stockholders. |
The total return based on market value for each period presented was calculated based on the change in market price during the applicable period, including the impact of distributions reinvested in accordance with the Company’s DRP. Total return based on market value does not consider the effect of any sales commissions or charges that may be incurred in connection with the sale of shares of the Company’s common stock. The historical calculation of total return based on market value in the table should not be considered a representation of the Company’s future total return based on market value, which may be greater or less than the return shown in the table due to a number of factors, including the Company’s ability or inability to make investments in companies that meet its investment criteria, the interest rates payable on the debt securities the Company acquires, the level of the Company’s expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which the Company encounters competition in its markets, general economic conditions and fluctuations in per share market value. As a result of these factors, results for any previous period should not be relied upon as being indicative of performance in future periods. |
Weighted average net assets during the applicable period are used for this calculation. Ratios for the nine months ended September 30, |
Nine Months Ended September 30, 2017
(Unaudited) | Year Ended December 31, 2016 | Nine Months Ended September 30, 2021 (Unaudited) | Year Ended December 31, 2020 | |||||||||||||
Ratio of subordinated income incentive fees to average net assets | 2.17% | 2.33% | ||||||||||||||
Ratio of net subordinated income incentive fees to average net assets | 0.76 | % | — | |||||||||||||
Ratio of interest expense to average net assets | 3.42% | 3.33% | 4.28 | % | 5.36 | % | ||||||||||
Ratio of excise taxes to average net assets | — | 0.25% | — | 0.32 | % |
Portfolio turnover for the nine months ended September 30, |
Asset coverage per unit is the ratio of the carrying value of the Company’s total consolidated assets, less liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. |
Note 12. Acquisition of FSKR
On June 16, 2021, the Company completed its acquisition of FSKR, pursuant the 2020 Merger Agreement. Pursuant to the 2020 Merger Agreement, Merger Sub merged with and into FSKR, with FSKR continuing as the surviving company and as a wholly-owned subsidiary of the Company, or the First Merger, and, immediately thereafter, FSKR merged with and into the Company, with the Company continuing as the surviving company, or together with the First Merger, the 2021 Merger.
In accordance with the terms of the 2020 Merger Agreement, each outstanding share of FSKR common stock was converted into the right to receive 0.9498 shares of the Company’s common stock. This exchange ratio was determined based on the closing net asset value, or NAV, per share of $26.77 and $25.42 for the Company and FSKR, respectively, as of June 14, 2021, to ensure that the NAV of shares investors would in FSK was equal to the NAV of the shares they held in FSKR. As a result, the Company issued an aggregate of approximately 161,374,028 shares of its common stock to former FSKR stockholders.
The 2021 Merger was considered a tax-free reorganization. The 2021 Merger was accounted for in accordance with the asset acquisition method of accounting as detailed in Accounting Standards Codification 805-50, Business Combinations—
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 12. Acquisition of FSKR (continued)
Related Issues. The fair value of the consideration paid by the Company in the 2021 Merger was allocated to the assets acquired and liabilities assumed based on their relative fair values as of the date of acquisition and did not give rise to goodwill.
The following table summarized the allocation of the purchase price to the assets acquired and liabilities assumed as a result of the 2021 Merger:
Common stock purchased | $ | 3,650 | ||
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Total purchase price | $ | 3,650 | ||
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Assets acquired, at fair value: | ||||
Investments | $ | 7,227 | ||
Cash and cash equivalents | 293 | |||
Other assets | 221 | |||
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Total assets acquired | $ | 7,741 | ||
Debt | 3,794 | |||
Distributions payable | 93 | |||
Other liabilities assumed | 204 | |||
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Total purchase price | $ | 3,650 | ||
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The company incurred $8 of professional fees and other costs associated with the 2021 Merger. Such costs were capitalized by the Company and included in the purchase price of the 2021 Merger. Deferred costs and prepaid assets of $19 were permanently written off. Additionally, the Company marked-to-market the fair value of FSKR’s 4.25% Notes, which was $26 greater than it’s carrying amount.
Note 13. Subsequent Events
1.650% Notes due 2024 Notes and 3.125% Notes due 2028
On October 12, 2021, the Company and U.S. Bank National Association, or the Trustee, entered into a Ninth Supplemental Indenture, or the Ninth Supplemental Indenture, and a Tenth Supplemental Indenture, or the Tenth Supplemental Indenture, to the Indenture, dated July 14, 2014, between the Company and the Trustee, or the Base Indenture, and together with the Ninth Supplemental Indenture and the Tenth Supplemental Indenture, the Indenture. The Ninth Supplemental Indenture relates to the Company’s issuance of $500 aggregate principal amount of its 1.650% notes due 2024, or the 2024 Notes. The Tenth Supplemental Indenture relates to the Company’s issuance of $750 aggregate principal amount of its 3.125% notes due 2028, or the 2028 Notes, and together with the 2024 Notes, the Notes.
The 2024 Notes will mature on October 12, 2024 and the 2028 Notes will mature on October 12, 2028. The Notes may be redeemed in whole or in part at the Company’s option at any time or from time to time at the redemption prices set forth in the Indenture. The 2024 Notes bear interest at a rate of 1.650% per year, and the 2028 Notes bear interest at a rate of 3.125% per year, payable semi-annually on April 12th and October 12th of each year, commencing on April 12, 2022. The Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Company’s secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Company’s subsidiaries, financing vehicles or similar facilities.
The Indenture contains certain covenants, including covenants requiring the Company to comply with the asset coverage requirements of Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the Investment Company Act of 1940, as amended, whether or not it is subject to those requirements, and to provide financial information to the holders of the Notes and
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 13. Subsequent Events (continued)
the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the Indenture.
In addition, on the occurrence of a “change of control repurchase event,” as defined in the Indenture, the Company will generally be required to make an offer to purchase the outstanding Notes at a price equal to 100% of the principal amount of such Notes plus accrued and unpaid interest to the repurchase date.
5.000% Notes due 2022
On October 12, 2021, the Company issued a notice of redemption providing for the redemption of its 5.00% senior notes due 2022, or the 2022 Notes, in full on November 11, 2021 for 100% of the aggregate principal amount of the 2022 Notes, plus the accrued and unpaid interest through, but excluding, November 11, 2021. All of the 2022 Notes will be redeemed in connection with the redemption.
Juniata River Credit Facility
On October 12, 2021, Juniata River LLC prepaid all outstanding borrowings under, and terminated, its revolving credit facility with JPMorgan Chase Bank, N.A.
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
(in thousands,millions, except share and per share amounts)
The information contained in this section should be read in conjunction with our unaudited consolidated financial statements and related notes thereto appearing elsewhere in this quarterly report on Form10-Q. In this report, “we,” “us,” “our” and the “Company” refer to FS Investment Corporation.KKR Capital Corp. and the “Advisor” refers to FS/KKR Advisor, LLC.
Forward-Looking Statements
Some of the statements in this quarterly report on Form10-Q constitute forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this quarterly report on Form10-Q may include statements as to:
our future operating results;
our business prospects and the prospects of the companies in which we may invest;invest, including our and their ability to achieve our respective objectives as a result of the current COVID-19 pandemic;
the impact of the investments that we expect to make;
the ability of our portfolio companies to achieve their objectives;
our current and expected financings and investments;
receiving and maintaining corporate credit ratings and changes in the general interest rate environment;
the adequacy of our cash resources, financing sources and working capital;
the timing and amount of cash flows, distributions and dividends, if any, from our portfolio companies;
our contractual arrangements and relationships with third parties;
actual and potential conflicts of interest with the Fund Complexother funds in the Advisor, FS Investments, KKR Credit or any affiliate thereof;of their respective affiliates;
the dependence of our future success on the general economy and its effect on the industries in which we may invest;
general economic and political trends and other external factors, including the current COVID-19 pandemic and related disruptions caused thereby;
our use of financial leverage;
the ability of FBthe Advisor to locate suitable investments for us and to monitor and administer our investments;
the ability of FBthe Advisor or its affiliates to attract and retain highly talented professionals;
our ability to maintain our qualification as a RIC and as a BDC;
the impact on our business of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, and the rules and regulations issued thereunder;
the effect of changes to tax legislation on us and the portfolio companies in which we may invest and our and their tax position; and
the tax status of the enterprises in which we may invest.
In addition, words such as “anticipate,” “believe,” “expect” and “intend” indicate a forward-looking statement, although not all forward-looking statements include these words. The forward-looking statements contained in this quarterly report on Form10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in the forward-looking statements for any reason. Factors that could cause actual results to differ materially include:
changes in the economy;
risks associated with possible disruption in our operations or the economy generally due to terrorism, natural disasters or natural disasters;pandemics;
future changes in laws or regulations and conditions in our operating areas; and
the price at which shares of our common stock may trade on the New York Stock Exchange, or NYSE.
We have based the forward-looking statements included in this quarterly report on Form10-Q on information available to us on the date of this quarterly report on Form10-Q. Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise. Stockholders are advised to consult any additional disclosures that we may make directly to stockholders or through reports that we may file in the future with the SEC, including annual reports onForm 10-K, quarterly reports onForm 10-Q and current reports onForm 8-K. The forward-looking statements and projections contained in this quarterly report on Form10-Q are excluded from the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Exchange Act.
Overview
We were incorporated under the general corporation laws of the State of Maryland on December 21, 2007 and formally commenced investment operations on January 2, 2009. We are an externally managed,non-diversified,closed-end management investment company that has elected to be regulated as a BDC under the 1940 Act and has elected to be treated for U.S. federal income tax purposes, and intends to qualify annually, as a RIC under Subchapter M of the Code.
On April 16, 2014, shares of our common stock began trading on the NYSE under the ticker symbol “FSIC”. This listing accomplished our goal of providing our stockholders with greatly enhanced liquidity.
Our investment activitiesWe are externally managed by FBthe Advisor pursuant to an investment advisory agreement, or the investment advisory agreement, and supervised by our board of directors, a majority of whom are independent. Under the investment advisory agreement, we have agreed to pay FB Advisor an annual base management fee based on the average value of our gross assets and an incentive fee based on our performance. FB Advisor has engaged GDFM to act as our investmentsub-adviser. GDFM assists FB Advisor in identifying investment opportunities and makes investment recommendations for approval by FB Advisor according to guidelines set by FB Advisor.
Our investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation. We have identifiedseek to meet our investment objectives by:
utilizing the experience and intendexpertise of the management team of the Advisor;
employing a defensive investment approach focused on long-term credit performance and principal protection;
focusing primarily on debt investments in a broad array of private U.S. companies, including middle-market companies, which we define as companies with annual EBITDA of $25 million to $100 million at the time of investment;
investing primarily in established, stable enterprises with positive cash flows; and
maintaining rigorous portfolio monitoring in an attempt to anticipate and pre-empt negative credit events within our portfolio, such as an event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company.
We pursue our investment objective by investing primarily in the debt of middle market U.S. companies with a focus on originated transactions sourced through the following investment categories, which we believe will allow us to generate an attractive total return with an acceptable levelnetwork of risk.
Direct Originations:We intend to leverage our relationships and our relationship with GDFMthe Advisor and its global sourcing and origination platform, including its industry relationships, to directly sourceaffiliates. We define direct originations as any investment opportunities. Such investments are originatedwhere the Company’s investment adviser, sub-adviser or structuredtheir affiliates had negotiated the terms of the transaction beyond just the price, which, for us or made by us and are not generally available to the broader market. These investmentsexample, may include both debt and equity components, although we do not generally make equity investments independent of having an existing credit relationship. We believe directly originated investments may offer higher returns and more favorable protections than broadly syndicated transactions.
Opportunistic: We intend to seek to capitalize on market price inefficiencies by investing in loans, bonds and other securities where the market price of such investment reflects a lower value than deemed warranted by our fundamental analysis. We believe that market price inefficiencies may occur due to, among other things, general dislocations in the markets, a misunderstanding by the market of a particular companynegotiating financial covenants, maturity dates or an industry being out of favor with the broader investment community. We seek to allocate capital to these securities that have been misunderstood or mispriced by the market and where we believe there is an opportunity to earn an attractive return on our investment. Such opportunities may include event driven investments, anchor orders (i.e., opportunities that are originated and then syndicated by a commercial or investment bank but where we provide a capital commitment significantly above the average syndicate participant) and CLOs.
In the case of event driven investments, we intend to take advantage of dislocations that arise in the markets due to an impending event and where the market’s apparent expectation of value differs substantially from our fundamental analysis. Such events may include a looming debt maturity or default, a merger,spin-off or other corporate reorganization, an adverse regulatory or legal ruling, or a material contract expiration, any of which may significantly improve or impair a company’s financial position. Compared to other investment strategies, event driven investing depends more heavily on our ability to successfully predict the outcome of an individual event rather than on underlying macroeconomic fundamentals. As a result, successful event driven strategies may offer both substantial diversification benefits and the ability to generate performance in uncertain market environments.
We may also invest in anchor orders. In these types of investments, we may receive fees, preferential pricing or other benefits not available to other lenders in return for our significant capital commitment. Our decision to provide an anchor order to a syndicated transaction is predicated on a rigorous credit analysis, our familiarity with a particular company, industry or financial sponsor, and the broader investment experiences of FB Advisor and GDFM.
In addition, we opportunistically invest in CLOs. CLOs are a form of securitization where the cash flow from a pooled basket of syndicated loans is used to support distribution payments made to different tranches of securities. While collectively CLOs represent nearly fifty percent of the broadly syndicated loan universe, investing in individual CLO tranches requires a high degree of investor sophistication due to their structural complexity and the illiquid nature of their securities.
Broadly Syndicated/Other:Although our primary focus is to invest ininterest rate terms. These directly originated transactions and opportunisticinclude participation in other originated transactions where there may be third parties involved, or a bank acting as an intermediary, for a closely held club, or similar transactions. These direct originations include investments in certain circumstances we will also invest in the broadly syndicated loan and high yield markets. Broadly syndicated loans and bonds are generally more liquid thanoriginated by our directly originated investments and provide a complement toformer investment adviser, our less liquid strategies. In addition, and because we typically receive more attractive financing terms on these positions than we do on our less liquid assets, we are able to leverage the broadly syndicated portion of our portfolio in such a way that maximizes the levered return potential of our portfolio.former investment sub-adviser or their affiliates.
Our portfolio is comprised primarily of investments in senior secured loans and second lien secured loans of private middle market U.S. companies and, to a lesser extent, subordinated loans and certain asset-based financing loans of private U.S. companies. Although we do not expect a significant portion of our portfolio to be comprised of subordinated loans, there is no limit on the amount of such loans in which we may invest. We may purchase interests in loans or make other debt investments, including investments in senior secured bonds, through secondary market transactions in the“over-the-counter” market or directly from our target companies as primary market or directly originated investments. In connection with our debt investments, we may on occasion receive equity interests such as warrants or options as additional consideration. We may also purchase or otherwise acquire interests in the form of common or preferred equity or equity-related securities, such as rights and warrants that may be converted into or exchanged for common stock or other equity or the cash value of common stock or other equity, in our target companies, generally in conjunction with one of our debt investments, including through the restructuring of such investments, or through aco-investment with a financial sponsor such asor possibly the restructuring of an institutional investor or private equity firm.investment. In addition, a portion of our portfolio may be comprised of corporate bonds, CLOs,structured products, other debt securities and derivatives, including total
return swaps and credit default swaps. FBThe Advisor will seek to tailor our investment focus as market conditions evolve. Depending on market conditions, we may increase or decrease our exposure to less senior portions of the capital structurestructures of our portfolio companies or otherwise make opportunistic investments.investments, such as where the market price of loans, bonds or other securities reflects a lower value than deemed warranted by the Advisor’s fundamental analysis. Such investment opportunities may occur due to general dislocations in the markets, a misunderstanding by the market of a particular company or an industry being out of favor with the broader investment community and may include event driven investments, anchor orders and structured products.
The senior secured loans, second lien secured loans and senior secured bonds in which we invest generally have stated terms of three to seven years and subordinated debt investments that we make generally have stated terms of up to ten years, but the expected average life of such securities is generally between three and sevento four years. However, there is no limit on thewe may invest in loans and securities with any maturity or duration of any security in our portfolio.duration. Our debt investments may be rated by a nationally recognized statistical rating organizationNRSRO and, in such case, generally will carry a rating below investment grade (rated lower than “Baa3” by Moody’s Investors Service, Inc. or lower than“BBB-” by Standard & Poor’s Ratings Services)S&P). We alsomay invest without limit innon-rated debt securities.or other securities of any rating, as well as debt or other securities that have not been rated by a NRSRO.
Acquisition of FSKR
On June 16, 2021, we completed the 2021 Merger. Pursuant to the 2020 Merger Agreement, Merger Sub merged with and into FSKR, with FSKR continuing as the surviving company and as a wholly-owned subsidiary of the Company, or the First Merger, and, immediately thereafter, FSKR merged with and into the Company, with the Company continuing as the surviving company. In accordance with the terms of the 2020 Merger Agreement, (i) each outstanding share of FSKR common stock was converted into the right to receive 0.9498 shares of the Company’s common stock. This exchange ratio was determined based on the closing net asset value, or NAV, per share of $26.77 and $25.42 for the Company and FSKR, respectively, as of June 14, 2021, to ensure that the NAV of shares investors will own in FSK is equal to the NAV of the shares they held in FSKR. As a result, the Company issued an aggregate of approximately 161,374,028 shares of its common stock to former FSKR stockholders. Following the consummation of the 2021 Merger, we entered into the investment advisory agreement, which replaced the prior investment advisory agreement.
Revenues
The principal measure of our financial performance is net increase in net assets resulting from operations, which includes net investment income, net realized gain or loss on investments, net realized gain or loss on foreign currency, net unrealized appreciation or depreciation on investments and net unrealized gain or loss on foreign currency. Net investment income is the difference between our income from interest, dividends, fees and other investment income and our operating and other expenses. Net realized gain or loss on investments is the difference between the proceeds received from dispositions of portfolio investments and their amortized cost, including the respective realized gain or loss on foreign currency for those foreign denominated investment transactions. Net realized gain or loss on foreign currency is the portion of realized gain or loss attributable to foreign currency fluctuations. Net unrealized appreciation or depreciation on investments is the net change in the fair value of our investment portfolio, including the respective unrealized gain or loss on foreign currency for those foreign denominated investments. Net unrealized gain or loss on foreign currency is the net change in the value of receivables or accruals due to the impact of foreign currency fluctuations.
We principally generate revenues in the form of interest income on the debt investments we hold. In addition, we generate revenues in the form ofnon-recurring commitment, closing, origination, structuring or diligence fees, monitoring fees, fees for providing managerial assistance, consulting fees, prepayment fees and performance-based fees. Any such fees generated in connection with our investments will be recognized as earned. We may also generate revenues in the form of dividends and other distributions on the equity or other securities we hold.
Expenses
Our primary operating expenses include the payment of management and incentive fees and other expenses under the investment advisory agreement and the administration agreement, interest expense from financing facilitiesarrangements and other
indebtedness, and other expenses necessary for our operations. The management and incentive fees compensate FBthe Advisor for its work in identifying, evaluating, negotiating, executing, monitoring and servicing our investments. FB Advisor is responsible for compensating our investmentsub-adviser.
FBThe Advisor oversees ourday-to-day operations, including the provision of general ledger accounting, fund accounting, legal services, investor relations, certain government and regulatory affairs activities, and other administrative services. FBThe Advisor also performs, or oversees the performance of, our corporate operations and required administrative services, which includes being responsible for the financial records that we are required to maintain and preparing reports for our stockholders and reports filed with the SEC. In addition, FBthe Advisor assists us in calculating our net asset value, overseeing the preparation
and filing of tax returns and the printing and dissemination of reports to our stockholders, and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others.
Pursuant to the administration agreement, we reimburse FBthe Advisor for expenses necessary to perform services related to our administration and operations, including FBthe Advisor’s allocable portion of the compensation and related expenses of certain personnel of FS Investments and KKR Credit providing administrative services to us on behalf of FBthe Advisor. We reimburse FBthe Advisor no less than quarterly for all costs and expenses incurred by FBthe Advisor in performing its obligations and providing personnel and facilities under the administration agreement. FBThe Advisor allocates the cost of such services to us based on factors such as total assets, revenues, time allocations and/or other reasonable metrics. Our board of directors reviews the methodology employed in determining how the expenses are allocated to us and the proposed allocation of administrative expenses among us and certain affiliates of FBthe Advisor. Our board of directors then assesses the reasonableness of such reimbursements for expenses allocated to us based on the breadth, depth and quality of such services as compared to the estimated cost to us of obtaining similar services from third-party service providers known to be available. In addition, our board of directors considers whether any single third-party service provider would be capable of providing all such services at comparable cost and quality. Finally, our board of directors compares the total amount paid to FBthe Advisor for such services as a percentage of our net assets to the same ratio as reported by other comparable BDCs.
We bear all other expenses of our operations and transactions, including all other expenses incurred by FBthe Advisor GDFM or us in connection with administering our business, including expenses incurred by FB Advisor or GDFM in performing administrative services for us and administrative personnel paid by FBthe Advisor, to the extent they are not controlling persons of the Advisor or GDFM. For additional information regarding these expenses, see our annual report on Form10-K forany of its affiliates, subject to the year ended December 31, 2016.limitations included in the investment advisory agreement and the administration agreement.
In addition, we have contracted with State Street Bank and Trust Company to provide various accounting and administrative services, including, but not limited to, preparing preliminary financial information for review by FBthe Advisor, preparing and monitoring expense budgets, maintaining accounting and corporate books and records, processing trade information provided by us and performing testing with respect to RIC compliance.
COVID-19 Developments
The rapid spread of the COVID-19 pandemic, and associated impacts on the U.S. and global economies, has negatively impacted, and is likely to continue to negatively impact, the business operations of some of our portfolio companies. We cannot at this time fully predict the continued impact of COVID-19 on our business or the business of our portfolio companies, its duration or magnitude or the extent to which it will negatively impact our portfolio companies’ operating results or our own results of operations or financial condition. We expect that certain of our portfolio companies may continue to experience economic distress for the foreseeable future and may significantly limit business operations if subjected to prolonged economic distress. These developments could result in a decrease in the value of our investments.
COVID-19 has already had adverse effects on our investment income and we expect that such adverse effects may continue for some time. These adverse effects may require us to restructure certain of our investments, which could result in further reductions to our investment income or in impairments on our investments. In addition, disruptions in the capital markets have resulted in illiquidity in certain market areas. These market disruptions and illiquidity are likely to have an adverse effect on our business, financial condition, results of operations and cash flows. Unfavorable economic conditions caused by COVID-19 can also be expected to increase our funding costs and limit our access to the capital markets. These events have limited our investment originations, which is likely to continue for the immediate future, and have also had a material negative impact on our operating results.
We will continue to carefully monitor the impact of the COVID-19 pandemic on our business and the business of our portfolio companies. Because the full effects of the COVID-19 pandemic are not capable of being known at this time, we cannot estimate the impacts of COVID-19 on our future financial condition, results of operations or cash flows. We do, however, expect that it may continue to have a negative impact on our business and the financial condition of certain of our portfolio companies.
Portfolio Investment Activity for the Three and Nine Months Ended September 30, 20172021 and for the Year Ended December 31, 20162020
Total Portfolio Activity
The following tables present certain selected information regarding our portfolio investment activity for the three and nine months ended September 30, 2017:2021:
Net Investment Activity | For the Three Months Ended September 30, 2017 | For the Nine Months Ended September 30, 2017 | ||||||
Purchases | $ | 183,384 | $ | 1,021,755 | ||||
Sales and Repayments | (225,483 | ) | (900,360 | ) | ||||
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Net Portfolio Activity | $ | (42,099 | ) | $ | 121,395 | |||
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Net Investment Activity(1) | For the Three Months Ended September 30, 2021 | For the Nine Months Ended September 30, 2021 | ||||||
Purchases | $ | 2,781 | $ | 11,755 | ||||
Sales and Repayments | (1,806 | ) | (3,720 | ) | ||||
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Net Portfolio Activity | $ | 975 | $ | 8,035 | ||||
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For the Three Months Ended September 30, 2021 | For the Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||
New Investment Activity by Asset Class(1) | Purchases | Percentage | Sales and Repayments | Percentage | Purchases | Percentage | Sales and Repayments | Percentage | ||||||||||||||||||||||||
Senior Secured Loans—First Lien | $ | 2,495 | 90 | % | $ | 1,102 | 61 | % | $ | 8,091 | 69 | % | $ | 2,244 | 60 | % | ||||||||||||||||
Senior Secured Loans—Second Lien | 129 | 5 | % | 306 | 17 | % | 1,339 | 11 | % | 653 | 18 | % | ||||||||||||||||||||
Other Senior Secured Debt | — | — | 47 | 3 | % | 95 | 1 | % | 52 | 1 | % | |||||||||||||||||||||
Subordinated Debt | — | — | 5 | 0 | % | 25 | 0 | % | 98 | 3 | % | |||||||||||||||||||||
Asset Based Finance | 92 | 3 | % | 69 | 4 | % | 1,174 | 10 | % | 293 | 8 | % | ||||||||||||||||||||
Credit Opportunities Partners JV, LLC | — | — | — | — | 587 | 5 | % | — | — | |||||||||||||||||||||||
Equity/Other | 65 | 2 | % | 277 | 15 | % | 444 | 4 | % | 380 | 10 | % | ||||||||||||||||||||
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Total | $ | 2,781 | 100 | % | $ | 1,806 | 100 | % | $ | 11,755 | 100 | % | $ | 3,720 | 100 | % | ||||||||||||||||
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For the Three Months Ended September 30, 2017 | For the Nine Months Ended September 30, 2017 | |||||||||||||||
New Investment Activity by Asset Class | Purchases | Percentage | Purchases | Percentage | ||||||||||||
Senior Secured Loans—First Lien | $ | 179,637 | 98% | $ | 754,203 | 74% | ||||||||||
Senior Secured Loans—Second Lien | 3,483 | 2% | 62,269 | 6% | ||||||||||||
Senior Secured Bonds | — | — | 60,819 | 6% | ||||||||||||
Subordinated Debt | — | — | 117,572 | 11% | ||||||||||||
Collateralized Securities | 264 | 0% | 279 | 0% | ||||||||||||
Equity/Other | — | — | 26,613 | 3% | ||||||||||||
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Total | $ | 183,384 | 100% | $ | 1,021,755 | 100% | ||||||||||
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(1) | Purchases and new investments for the nine months ended September 30, 2021 include investments acquired at a cost of $7,227 in connection with the 2021 Merger. |
The following table summarizes the composition of our investment portfolio at cost and fair value as of September 30, 20172021 and December 31, 2016:2020:
September 30, 2017 (Unaudited) | December 31, 2016 | September 30, 2021 (Unaudited) | December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||
Amortized Cost(1) | Fair Value | Percentage of Portfolio | Amortized Cost(1) | Fair Value | Percentage of Portfolio | Amortized Cost(1) | Fair Value | Percentage of Portfolio | Amortized Cost(1) | Fair Value | Percentage of Portfolio | |||||||||||||||||||||||||||||||||||||
Senior Secured Loans—First Lien | $ | 2,366,950 | $ | 2,372,705 | 61% | $ | 1,992,159 | $ | 1,935,441 | 52% | $ | 9,531 | $ | 9,689 | 61.2 | % | $ | 3,597 | $ | 3,449 | 50.9 | % | ||||||||||||||||||||||||||
Senior Secured Loans—Second Lien | 213,822 | 191,494 | 5% | 619,892 | 599,155 | 16% | 1,635 | 1,669 | 10.6 | % | 1,035 | 880 | 13.0 | % | ||||||||||||||||||||||||||||||||||
Senior Secured Bonds | 189,292 | 198,702 | 5% | 205,657 | 159,470 | 4% | ||||||||||||||||||||||||||||||||||||||||||
Other Senior Secured Debt | 147 | 136 | 0.9 | % | 127 | 86 | 1.3 | % | ||||||||||||||||||||||||||||||||||||||||
Subordinated Debt | 553,331 | 555,785 | 14% | 498,080 | 454,045 | 12% | 167 | 93 | 0.6 | % | 243 | 171 | 2.5 | % | ||||||||||||||||||||||||||||||||||
Collateralized Securities | 48,471 | 57,509 | 1% | 59,225 | 72,058 | 2% | ||||||||||||||||||||||||||||||||||||||||||
Asset Based Finance | 1,946 | 1,999 | 12.6 | % | 1,025 | 951 | 14.0 | % | ||||||||||||||||||||||||||||||||||||||||
Credit Opportunities Partners JV, LLC | 1,397 | 1,399 | 8.8 | % | 810 | 713 | 10.5 | % | ||||||||||||||||||||||||||||||||||||||||
Equity/Other | 400,973 | 535,204 | 14% | 368,927 | 506,647 | 14% | 901 | 839 | 5.3 | % | 616 | 530 | 7.8 | % | ||||||||||||||||||||||||||||||||||
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Total | $ | 3,772,839 | $ | 3,911,399 | 100% | $ | 3,743,940 | $ | 3,726,816 | 100% | $ | 15,724 | $ | 15,824 | 100.0 | % | $ | 7,453 | $ | 6,780 | 100.0 | % | ||||||||||||||||||||||||||
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(1) | Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on investments. |
The following table presents certain selected information regarding the composition of our investment portfolio as of September 30, 20172021 and December 31, 2016:2020:
September 30, 2017 | December 31, 2016 | |||
Number of Portfolio Companies | 104 | 102 | ||
% Variable Rate (based on fair value) | 65.3% | 67.0% | ||
% Fixed Rate (based on fair value) | 21.0% | 19.4% | ||
% Income Producing Equity/Other Investments (based on fair value) | 2.7% | 2.7% | ||
%Non-Income Producing Equity/Other Investments (based on fair value) | 11.0% | 10.9% | ||
Average Annual EBITDA of Portfolio Companies | $91,700 | $100,000 | ||
Weighted Average Purchase Price of Debt Investments (as a % of par) | 97.5% | 98.6% | ||
% of Investments onNon-Accrual (based on fair value) | 0.3% | 0.2% | ||
Gross Portfolio Yield Prior to Leverage (based on amortized cost) | 9.4% | 9.1% | ||
Gross Portfolio Yield Prior to Leverage (based on amortized | 10.3% | 10.1% |
September 30, 2021 | December 31, 2020 | |||
Number of Portfolio Companies | 190 | 164 | ||
% Variable Rate Debt Investments (based on fair value)(1)(2) | 69.2% | 63.5% | ||
% Fixed Rate Debt Investments (based on fair value)(1)(2) | 9.3% | 9.0% | ||
% Other Income Producing Investments (based on fair value)(3) | 13.4% | 16.9% | ||
% Non-Income Producing Investments (based on fair value)(2) | 4.4% | 8.1% | ||
% of Investments on Non-Accrual (based on fair value) | 3.7% | 2.5% | ||
Weighted Average Annual Yield on Accruing Debt Investments(2)(4) | 9.1% | 8.8% | ||
Weighted Average Annual Yield on All Debt Investments(5) | 8.5% | 7.9% |
(1) | “Debt Investments” means investments that pay or are expected to pay a stated interest rate, stated dividend rate or other similar stated return. |
(2) | Does not include investments on non-accrual status. |
(3) | “Other Income Producing Investments” means investments that pay or are expected to pay interest, dividends or other income to the Company on an ongoing basis but do not have a stated interest rate, stated dividend rate or other similar stated return. |
(4) | The Weighted Average Annual Yield on Accruing Debt Investments is computed as (i) the sum of (a) the stated annual interest rate, dividend rate or other similar stated return of each accruing Debt Investment, multiplied by its par amount, adjusted to U.S. dollars and for any partial income accrual when necessary, as of the end of the applicable reporting period, plus (b) the annual amortization of the purchase or original issue discount or premium of each accruing Debt Investment; divided by (ii) the total amortized cost of Debt Investments included in the calculated group as of the end of the applicable reporting period. |
(5) | The Weighted Average Annual Yield on All Debt Investments is computed as (i) the sum of (a) the stated annual interest rate, dividend rate or other similar stated return of each Debt Investment, multiplied by its par amount, adjusted to U.S. dollars and for any partial income accrual when necessary, as of the end of the applicable reporting period, plus (b) the annual amortization of the purchase or original issue discount or premium of each Debt Investment; divided by (ii) the total amortized cost of Debt Investments included in the calculated group as of the end of the applicable reporting period. |
For the nine months ended September 30, 2017,2021, our total return based on net asset value was 7.33%15.87% and our total return based on market value was (11.80)%44.74%. For the year ended December 31, 2016,2020, our total return based on net asset value was 13.19%(9.69)% and our total return based on market value was 25.91%(19.73)%.
Our estimated gross portfolio yield may be higher than an investor’s yield on an investment in shares of our common stock. Our estimated gross portfolio yield does not reflect operating expenses that may be incurred by us. In addition, our estimated gross portfolio yield and total return figures disclosed above do not consider the effect of any sales commissions or charges that may be incurred in connection with the sale of shares of our common stock. Our estimated gross portfolio yield and total return based on net asset value do not represent actual investment returns to stockholders. Our estimated gross portfolio yield and total return figures are subject to change and, in the future, may be greater or less than the rates set forth above. See the section entitled “Item 1A. Risk Factors” in our annual report on Form10-K for the year ended December 31, 2016 for a discussion of the
uncertainties, risks and assumptions associated with these statements. See footnotes 57 and 68 to the table included in Note 1011 to our unaudited consolidated financial statements included herein for information regarding the calculation of our total return based on net asset value and total return based on market value, respectively.
Direct Originations
The following tables present certain selected information regarding our direct originations for the three and nine months ended September 30, 2017:
New Direct Originations | For the Three Months Ended September 30, 2017 | For the Nine Months Ended September 30, 2017 | ||||||
Total Commitments (including unfunded commitments) | $ | 199,157 | $ | 825,648 | ||||
Exited Investments (including partial paydowns) | (169,035 | ) | (709,383 | ) | ||||
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Net Direct Originations | $ | 30,122 | $ | 116,265 | ||||
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For the Three Months Ended September 30, 2017 | For the Nine Months Ended September 30, 2017 | |||||||||||||||
New Direct Originations by Asset Class (including unfunded commitments) | Commitment Amount | Percentage | Commitment Amount | Percentage | ||||||||||||
Senior Secured Loans—First Lien | $ | 168,824 | 85% | $ | 709,389 | 86% | ||||||||||
Senior Secured Loans—Second Lien | 3,333 | 2% | 8,113 | 1% | ||||||||||||
Senior Secured Bonds | — | — | 7,031 | 1% | ||||||||||||
Subordinated Debt | 27,000 | 13% | 92,000 | 11% | ||||||||||||
Collateralized Securities | — | — | — | — | ||||||||||||
Equity/Other | — | — | 9,115 | 1% | ||||||||||||
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Total | $ | 199,157 | 100% | $ | 825,648 | 100% | ||||||||||
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For the Three Months Ended September 30, 2017 | For the Nine Months Ended September 30, 2017 | |||
Average New Direct Origination Commitment Amount | $49,789 | $28,471 | ||
Weighted Average Maturity for New Direct Originations | 5/5/23 | 2/27/23 | ||
Gross Portfolio Yield Prior to Leverage (based on amortized cost) of New Direct Originations Funded during Period | 9.6% | 9.7% | ||
Gross Portfolio Yield Prior to Leverage (based on amortized cost) of New Direct Originations Funded during Period—ExcludingNon-Income Producing Assets | 9.6% | 9.8% | ||
Gross Portfolio Yield Prior to Leverage (based on amortized cost) of Direct Originations Exited during Period | 12.0% | 9.9% |
The following table presents certain selected information regarding our direct originationsDirect Originations as of September 30, 20172021 and December 31, 2016:2020:
Characteristics of All Direct Originations held in Portfolio | September 30, 2017 | December 31, 2016 | ||
Number of Portfolio Companies | 74 | 67 | ||
Average Annual EBITDA of Portfolio Companies | $70,700 | $64,600 | ||
Average Leverage Through Tranche of Portfolio Companies—Excluding Equity/Other and Collateralized Securities | 4.8x | 4.8x | ||
% of Investments onNon-Accrual | — | 0.1% | ||
Gross Portfolio Yield Prior to Leverage (based on amortized cost) of Funded Direct Originations | 9.3% | 9.1% | ||
Gross Portfolio Yield Prior to Leverage (based on amortized cost) of Funded Direct Originations—ExcludingNon-Income Producing Assets | 10.2% | 10.1% |
Characteristics of All Direct Originations held in Portfolio | September 30, 2021 | December 31, 2020 | ||
Number of Portfolio Companies | 158 | 135 | ||
% of Investments on Non-Accrual (based on fair value) | 3.5% | 2.6% | ||
Total Cost of Direct Originations | $14,858.6 | $7,048.4 | ||
Total Fair Value of Direct Originations | $15,019.1 | $6,447.3 | ||
% of Total Investments, at Fair Value | 94.9% | 95.1% | ||
Weighted Average Annual Yield on Accruing Debt Investments(1) | 9.0% | 8.7% | ||
Weighted Average Annual Yield on All Debt Investments(2) | 8.4% | 7.8% |
(1) | The Weighted Average Annual Yield on Accruing Debt Investments is computed as (i) the sum of (a) the stated annual interest rate, dividend rate or other similar stated return of each accruing Debt Investment, multiplied by its par amount, adjusted to U.S. dollars and for any partial income accrual when necessary, as of the end of the applicable reporting period, plus (b) the annual amortization of the purchase or original issue discount or premium of each accruing Debt Investment; divided by (ii) the total amortized cost of Debt Investments included in the calculated group as of the end of the applicable reporting period. Does not include Debt Investments on non-accrual status. |
(2) | The Weighted Average Annual Yield on All Debt Investments is computed as (i) the sum of (a) the stated annual interest rate, dividend rate or other similar stated return of each Debt Investment, multiplied by its par amount, adjusted to U.S. dollars and for any partial income accrual when necessary, as of the end of the applicable reporting period, plus (b) the annual amortization of the purchase or original issue discount or premium of each Debt Investment; divided by (ii) the total amortized cost of Debt Investments included in the calculated group as of the end of the applicable reporting period. |
Portfolio Composition by StrategyIndustry Classification
The table below summarizes the composition of our investment portfoliodescribes investments by strategyindustry classification and enumerates the percentage, by fair value, of the total portfolio assets in such strategiesindustries as of September 30, 20172021 and December 31, 2016:2020:
September 30, 2017 | December 31, 2016 | |||||||||||||||
Portfolio Composition by Strategy | Fair Value | Percentage of Portfolio | Fair Value | Percentage of Portfolio | ||||||||||||
Direct Originations | $ | 3,507,097 | 90% | $ | 3,264,395 | 88% | ||||||||||
Opportunistic | 360,516 | 9% | 352,937 | 9% | ||||||||||||
Broadly Syndicated/Other | 43,786 | 1% | 109,484 | 3% | ||||||||||||
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Total | $ | 3,911,399 | 100% | $ | 3,726,816 | 100% | ||||||||||
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September 30, 2021 (Unaudited) | December 31, 2020 | |||||||||||||||
Industry Classification | Fair Value | Percentage of Portfolio | Fair Value | Percentage of Portfolio | ||||||||||||
Automobiles & Components | $ | 168 | 1.1 | % | $ | 104 | 1.5 | % | ||||||||
Banks | 14 | 0.1 | % | 14 | 0.2 | % | ||||||||||
Capital Goods | 2,244 | 14.2 | % | 799 | 11.8 | % | ||||||||||
Commercial & Professional Services | 1,569 | 9.9 | % | 564 | 8.3 | % | ||||||||||
Consumer Durables & Apparel | 756 | 4.8 | % | 385 | 5.7 | % | ||||||||||
Consumer Services | 263 | 1.7 | % | 145 | 2.1 | % | ||||||||||
Credit Opportunities Partners JV, LLC | 1,399 | 8.8 | % | 713 | 10.5 | % | ||||||||||
Diversified Financials | 691 | 4.4 | % | 467 | 6.9 | % | ||||||||||
Energy | 234 | 1.5 | % | 107 | 1.6 | % | ||||||||||
Food & Staples Retailing | 277 | 1.7 | % | 221 | 3.3 | % | ||||||||||
Food, Beverage & Tobacco | 282 | 1.8 | % | 106 | 1.6 | % | ||||||||||
Health Care Equipment & Services | 1,663 | 10.5 | % | 604 | 8.9 | % | ||||||||||
Household & Personal Products | 283 | 1.8 | % | 190 | 2.8 | % | ||||||||||
Insurance | 724 | 4.6 | % | 208 | 3.1 | % | ||||||||||
Materials | 215 | 1.3 | % | 147 | 2.2 | % | ||||||||||
Media & Entertainment | 533 | 3.4 | % | 36 | 0.5 | % | ||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 243 | 1.5 | % | 34 | 0.5 | % | ||||||||||
Real Estate | 790 | 5.0 | % | 555 | 8.2 | % | ||||||||||
Retailing | 211 | 1.3 | % | 344 | 5.1 | % | ||||||||||
Software & Services | 2,728 | 17.2 | % | 770 | 11.3 | % | ||||||||||
Technology Hardware & Equipment | 49 | 0.3 | % | 15 | 0.2 | % | ||||||||||
Telecommunication Services | 162 | 1.0 | % | 71 | 1.0 | % | ||||||||||
Transportation | 326 | 2.1 | % | 181 | 2.7 | % | ||||||||||
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Total | $ | 15,824 | 100.0 | % | $ | 6,780 | 100.0 | % | ||||||||
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See Note 6 to our unaudited consolidated financial statements included herein for additional information regarding the composition of our investment portfolio by industry classification.
Portfolio Asset Quality
In addition to various risk management and monitoring tools, FBthe Advisor uses an investment rating system to characterize and monitor the expected level of returns on each investment in our portfolio. FBThe Advisor uses an investment rating scale of 1 to 5.4. The following is a description of the conditions associated with each investment rating:
Investment Rating | Summary Description | |
1 | ||
2 | Performing | |
Underperforming investment—some loss of interest or dividend possible, but still expecting a positive return on investment. | ||
Underperforming |
The following table shows the distribution of our investments on the 1 to 54 investment rating scale at fair value as of September 30, 20172021 and December 31, 2016:2020:
September 30, 2017 | December 31, 2016 | September 30, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||
Investment Rating | Fair Value | Percentage of Portfolio | Fair Value | Percentage of Portfolio | Fair Value | Percentage of Portfolio | Fair Value | Percentage of Portfolio | ||||||||||||||||||||||||
1 | $ | 444,424 | 11% | $ | 383,790 | 10% | $ | 12,172 | 77 | % | $ | 4,538 | 67 | % | ||||||||||||||||||
2 | 3,204,381 | 82% | 3,049,433 | 82% | 2,304 | 14 | % | 1,537 | 23 | % | ||||||||||||||||||||||
3 | 212,817 | 6% | 242,608 | 7% | 1,078 | 7 | % | 349 | 5 | % | ||||||||||||||||||||||
4 | — | — | — | — | 270 | 2 | % | 356 | 5 | % | ||||||||||||||||||||||
5 | 49,777 | 1% | 50,985 | 1% | ||||||||||||||||||||||||||||
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Total | $ | 3,911,399 | 100% | $ | 3,726,816 | 100% | $ | 15,824 | 100 | % | $ | 6,780 | 100 | % | ||||||||||||||||||
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The amount of the portfolio in each grading category may vary substantially from period to period resulting primarily from changes in the composition of the portfolio as a result of new investment, repayment and exit activities. In addition, changes in the grade of investments may be made to reflect our expectation of performance and changes in investment values.
Results of Operations
Comparison of the Three and Nine Months Ended September 30, 20172021 and September 30, 20162020
Revenues
Our investment income for the three and nine months ended September 30, 20172021 and 20162020 was as follows:
Three Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2017 | 2016 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||||||||||
Amount | Percentage of Total Income | Amount | Percentage of Total Income | Amount | Percentage of Total Income | Amount | Percentage of Total Income | Amount | Percentage of Total Income | Amount | Percentage of Total Income | |||||||||||||||||||||||||||||||||||||
Interest income | $ | 86,763 | 84 | % | $ | 88,520 | 88 | % | $ | 239 | 66.4 | % | $ | 98 | 66.7 | % | $ | 442 | 61.6 | % | $ | 341 | 71.6 | % | ||||||||||||||||||||||||
Paid-in-kind interest income | 10,670 | 10 | % | 7,823 | 8 | % | 35 | 9.7 | % | 17 | 11.6 | % | 70 | 9.8 | % | 48 | 10.1 | % | ||||||||||||||||||||||||||||||
Fee income | 6,237 | 6 | % | 4,214 | 4 | % | 31 | 8.6 | % | 3 | 2.0 | % | 65 | 9.1 | % | 21 | 4.4 | % | ||||||||||||||||||||||||||||||
Dividend income | 21 | 0 | % | — | — | 55 | 15.3 | % | 29 | 19.7 | % | 140 | 19.5 | % | 66 | 13.9 | % | |||||||||||||||||||||||||||||||
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Total investment income(1) | $ | 103,691 | 100 | % | $ | 100,557 | 100 | % | $ | 360 | 100.0 | % | $ | 147 | 100.0 | % | $ | 717 | 100.0 | % | $ | 476 | 100.0 | % | ||||||||||||||||||||||||
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(1) | Such revenues represent |
The decrease in interest income during the three months ended September 30, 2017 compared to the three months ended September 30, 2016 was primarily due to recent prepayments of higher-yielding assets during the three months ended September 30, 2017. The level of interest income we receive is generally related to the balance of income-producing investments, multiplied by the weighted average yield of our investments.
The increase in PIK interest income during the three months ended September 30, 2017 compared to the three months ended September 30, 2016 was due primarily to the restructuring of several investments with PIK interest during the nine months ended September 30, 2017.
Fee income is transaction based, and typically consists of amendment and consent fees, prepayment fees, structuring fees and othernon-recurring fees. As such, fee income is generally dependent on new direct origination investments and the occurrence of events at existing portfolio companies resulting in such fees.
The increase in interest and fee income during the three and nine months ended September 30, 2021 compared to the three and nine months ended September 30, 2020 can primarily be attributed to the increase in assets resulting from the 2021 Merger.
The increase in fee income for the three and nine months ended September 30, 2021 compared to the three and nine months ended September 30, 2020 can be primarily attributed to structuring fees and prepayment fees received in connection with increased investment and repayment activity during the current period.
The increase in dividend income during the three months ended September 30, 20172021 compared to the three months ended September 30, 2016 was2020 can be primarily dueattributed to prepayments of certain assets during the threeincrease in dividends paid in respect to our investment in Credit Opportunities Partners JV, LLC. The increase in dividend income for the nine months ended September 30, 2017.2021 compared to the nine months ended September 30, 2020 can be primarily attributed to the increase in dividends paid in respect to our investment in Credit Opportunities Partners JV, LLC, and a one-time dividend of $20 from one of our equity investments during the nine months ended September 30, 2021.
Expenses
Our operating expenses for the three and nine months ended September 30, 20172021 and 20162020 were as follows:
Three Months Ended September 30, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2017 | 2016 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Management fees | $ | 18,038 | $ | 17,872 | $ | 58 | $ | 24 | $ | 113 | $ | 80 | ||||||||||||
Subordinated income incentive fees | 12,662 | 12,250 | 35 | — | 43 | — | ||||||||||||||||||
Administrative services expenses | 750 | 750 | 5 | 1 | 9 | 6 | ||||||||||||||||||
Accounting and administrative fees | 254 | 243 | 1 | 0 | 2 | 1 | ||||||||||||||||||
Interest expense | 19,885 | 18,283 | 70 | 40 | 158 | 128 | ||||||||||||||||||
Directors’ fees | 277 | 277 | ||||||||||||||||||||||
Expenses associated with our independent audit and related fees | 114 | 123 | ||||||||||||||||||||||
Legal fees | 147 | 205 | ||||||||||||||||||||||
Printing fees | 300 | 553 | ||||||||||||||||||||||
Stock transfer agent fees | 45 | 30 | ||||||||||||||||||||||
Other | 571 | 968 | 5 | 4 | 12 | 8 | ||||||||||||||||||
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Total operating expenses | $ | 53,043 | $ | 51,554 | $ | 174 | $ | 69 | $ | 337 | $ | 223 | ||||||||||||
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Incentive fee waiver | (15 | ) | — | (15 | ) | — | ||||||||||||||||||
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Total net expenses | $ | 159 | $ | 69 | $ | 322 | $ | 223 | ||||||||||||||||
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The following table reflects selected expense ratios as a percent of average net assets for the three and nine months ended September 30, 2021 and 2020:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Ratio of operating expenses to average net assets | 2.26 | % | 2.38 | % | 6.85 | % | 6.93 | % | ||||||||
Ratio of incentive fee waiver to average net assets(1) | (0.19 | )% | — | % | (0.30 | )% | — | % | ||||||||
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Ratio of net operating expenses to average net assets | 2.07 | % | 2.38 | % | 6.55 | % | 6.93 | % | ||||||||
Ratio of net incentive fees and interest expense to average net assets(1) | 1.17 | % | 1.38 | % | 3.78 | % | 3.98 | % | ||||||||
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Ratio of net operating expenses, excluding certain expenses, to average net assets | 0.90 | % | 1.00 | % | 2.77 | % | 2.95 | % | ||||||||
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(1) | Ratio data may be rounded in order to |
During the three months ended September 30, 2017 and 2016, the ratio of our expenses to our average net assets was 2.32% and 2.29%, respectively. Our ratio of expenses to our average net assets during the three months ended September 30, 2017 and 2016 includes $19,885 and $18,283, respectively, related to interest expense and $12,662 and $12,250, respectively, related to accruals for incentive fees. Without such expenses, our ratio of expenses to average net assets would have been 0.90% and 0.93% for the three months ended September 30, 2017 and 2016, respectively. Incentive fees and interest expense, among other things, may increase or decrease our expense ratios relative to comparative periods depending on portfolio performance and changes in amounts outstanding under our financing arrangements and benchmark interest rates such as LIBOR, among other factors.
Net Investment Income
Our net investment income totaled $50,648$201 ($0.210.71 per share) and $49,003$78 ($0.200.63 per share) for the three months ended September 30, 20172021 and 2016,2020, respectively. The increase in net investment income can be attributed primarily to higher fee income on account of increased origination and prepayment activity during the three months ended September 30, 2017.2021 compared to the three months ended September 30, 2020 can primarily be attributed to higher investment income during the three months ended September 30, 2021 as discussed above.
Our net investment income totaled $395 ($2.11 per share) and $253 ($2.03 per share) for the nine months ended September 30, 2021 and 2020, respectively. The increase in net investment income during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 can primarily be attributed to higher investment income during the nine months ended September 30, 2021 as discussed above.
Net Realized Gains or Losses
We soldOur net realized gains (losses) on investments and received principal repayments of $41,655foreign currency for the three and $183,828, respectively, during the threenine months ended September 30, 2017, from which we realized a net loss of $18,2162021 and 2020 were as a result of the disposition of certain portfolio investments. We also realized a net loss of $19 from settlements on foreign currency during the three months ended September 30, 2017. We sold investments and received principal repayments of $99,282 and $191,482, respectively, during the three months ended September 30, 2016, from which we realized a net gain of $2,337. We also realized a net gain of $86 from settlements on foreign currency during the three months ended September 30, 2016.follows:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net realized gain (loss) on investments(1) | $ | 197 | $ | (207 | ) | $ | 123 | $ | (403 | ) | ||||||
Net realized gain (loss) on foreign currency forward contracts | 0 | 0 | 0 | 0 | ||||||||||||
Net realized gain (loss) on foreign currency | (1 | ) | (2 | ) | (4 | ) | (5 | ) | ||||||||
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Total net realized gain (loss) | $ | 196 | $ | (209 | ) | $ | 119 | $ | (408 | ) | ||||||
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(1) | We sold investments and received principal repayments, respectively, of $867 and $939 during the three months ended September 30, 2021 and $189 and $133 during the three months ended September 30, 2020. We sold investments and received principal repayments, respectively, of $1,300 and $2,420 during the nine months ended September 30, 2021 and $1,032 and $674 during the nine months ended September 30, 2020. |
Net Change in Unrealized Appreciation (Depreciation) on Investments and Secured Borrowing and Unrealized Gain (Loss) on Foreign Currency
For the three months ended September 30, 2017, theOur net change in unrealized appreciation (depreciation) on investments and secured borrowing totaled $54,182 and the net change in unrealized gain (loss) on foreign currency totaled $(1,197). Forfor the three and nine months ended September 30, 2021 and 2020 were as follows:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net change in unrealized appreciation (depreciation) on investments | $ | (142 | ) | $ | 356 | $ | 784 | $ | (396 | ) | ||||||
Net change in unrealized appreciation (depreciation) on foreign currency forward contracts | 5 | (1 | ) | 8 | 1 | |||||||||||
Net change in unrealized gain (loss) on foreign currency | 10 | (14 | ) | 28 | 2 | |||||||||||
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Total net change in unrealized appreciation (depreciation) | $ | (127 | ) | $ | 341 | $ | 820 | $ | (393 | ) | ||||||
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The net change in unrealized appreciation (depreciation) during the three months ended September 30, 2016,2021 was driven primarily by the sale of one of our equity positions. The net change in unrealized appreciation (depreciation) on investments and secured borrowing totaled $63,897 andduring the net change in unrealized gain (loss) on foreign currency totaled $(954).nine months ended September 30, 2021 was driven primarily by $628 of appreciation resulting from the merger accounting associated with the 2021 Merger, as well as strong performance of one portfolio company during the quarter.
Net Increase (Decrease) in Net Assets Resulting from Operations
For the three months ended September 30, 2017,2021, the net increase in net assets resulting from operations was $85,398$270 ($0.350.95 per share) compared to a net increase in net assets resulting from operations of $114,369$210 ($0.471.70 per share) during the three months ended September 30, 2016.
Comparison of the Nine Months Ended September 30, 2017 and 2016
Revenues
Our investment income for the nine months ended September 30, 2017 and 2016 was as follows:
Nine Months Ended September 30, | ||||||||||||||||
2017 | 2016 | |||||||||||||||
Amount | Percentage of Total Income | Amount | Percentage of Total Income | |||||||||||||
Interest income | $ | 244,007 | 79% | $ | 268,507 | 86% | ||||||||||
Paid-in-kind interest income | 29,078 | 9% | 23,276 | 7% | ||||||||||||
Fee income | 35,344 | 12% | 21,824 | 7% | ||||||||||||
Dividend income | 21 | 0% | 224 | 0% | ||||||||||||
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Total investment income(1) | $ | 308,450 | 100% | $ | 313,831 | 100% | ||||||||||
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The decrease in interest income during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016 was primarily due to recent prepayments of higher-yielding assets during the nine months ended September 30, 2017. The level of interest income we receive is generally related to the balance of income-producing investments, multiplied by the weighted average yield of our investments.
The increase in PIK interest income during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016 was due primarily to the restructuring of several investments with PIK interest during the nine months ended September 30, 2017.
Fee income is transaction-based, and typically consists of prepayment fees, structuring fees, amendment and consent fees and othernon-recurring fees. As such, fee income is generally dependent on new direct origination investments and the occurrence of prepayments and other events at existing portfolio companies resulting in such fees. The increase in fee income during the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016 was primarily due to prepayments of certain assets and the restructuring of several portfolio companies during the three months ended September 30, 2017.
Expenses
Our operating expenses for the nine months ended September 30, 2017 and 2016 were as follows:
Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
Management fees | $ | 54,772 | $ | 53,258 | ||||
Subordinated income incentive fees(1) | 37,426 | 38,945 | ||||||
Administrative services expenses | 2,226 | 2,846 | ||||||
Accounting and administrative fees | 774 | 706 | ||||||
Interest expense | 58,941 | 55,241 | ||||||
Directors’ fees | 822 | 780 | ||||||
Expenses associated with our independent audit and related fees | 337 | 367 | ||||||
Legal fees | 411 | 900 | ||||||
Printing fees | 698 | 1,249 | ||||||
Stock transfer agent fees | 104 | 149 | ||||||
Other | 2,241 | 3,609 | ||||||
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Total | $ | 158,752 | $ | 158,050 | ||||
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Other expenses during the nine months ended September 30, 2016 include $938 of breakage fees associated with the partial paydown of the JPM Facility.
During the nine months ended September 30, 2017 and 2016, the ratio of our expenses to our average net assets was 6.91% and 7.17%, respectively. Our ratio of expenses to our average net assets during the nine months ended September 30, 2017 and 2016 includes $58,941 and $55,241, respectively, related to interest expense and $37,426 and $38,945, respectively, related to accruals for incentive fees. Without such expenses, our ratio of expenses to average net assets would have been 2.72% and 2.89% for the nine months ended September 30, 2017 and 2016, respectively. Incentive fees and interest expense, among other things, may increase or decrease our expense ratios relative to comparative periods depending on portfolio performance and changes in amounts outstanding under our financing arrangements and benchmark interest rates such as LIBOR, among other factors. The lower ratio of expenses to average net assets, excluding incentive fees and interest expense, during the nine months ended September 30, 2017, compared to the nine months ended September 30, 2016, can primarily be attributed to a decrease in legal fees, printing fees and administrative services fees during the nine months ended September 30, 2017 and loan breakage fees associated with the partial paydown of the JPM Facility during the nine months ended September 30, 2016.
Net Investment Income
Our net investment income totaled $149,698 ($0.61 per share) and $155,781 ($0.64 per share) for the nine months ended September 30, 2017 and 2016, respectively. The decrease in net investment income can be attributed to the reduction in investment income during the nine months ended September 30, 2017.
Net Realized Gains or Losses
We sold investments and received principal repayments of $259,525 and $640,835, respectively, during the nine months ended September 30, 2017, from which we realized a net loss of $133,384. We also realized a net gain of $165 from settlements on foreign currency during the nine months ended September 30, 2017. We sold investments and received principal repayments of $369,844 and $503,087, respectively, during the nine months ended September 30, 2016, from which we realized a net loss of $19,090. We also realized a net gain of $264 from settlements on foreign currency during the nine months ended September 30, 2016.
Net Change in Unrealized Appreciation (Depreciation) on Investments and Secured Borrowing and Unrealized Gain (Loss) on Foreign Currency2020.
For the nine months ended September 30, 2017, the net change in unrealized appreciation (depreciation) on investments and secured borrowing totaled $155,677 and the net change in unrealized gain (loss) on foreign currency totaled $(4,923). For the nine months ended September 30, 2016, the net change in unrealized appreciation (depreciation) on investments and secured borrowing totaled $106,740 and the net change in unrealized gain (loss) on foreign currency totaled $(1,266).
Net Increase (Decrease) in Net Assets Resulting from Operations
For the nine months ended September 30, 2017,2021, the net increase in net assets resulting from operations was $167,233$1,334 ($0.687.13 per share), compared to a net increasedecrease in net assets resulting from operations of $242,429$(548) ($1.00(4.40) per share) during the nine months ended September 30, 2016.2020.
This “Results of Operations” section should be read in conjunction with “COVID-19 Developments” above.
Financial Condition, Liquidity and Capital Resources
Overview
As of September 30, 2017,2021, we had $178,991$241 in cash and foreign currency, which we or our wholly-owned financing subsidiaries held in custodial accounts, and $261,369$1,921 in borrowings available under our financing arrangements, subject to borrowing base and other limitations. As of September 30, 2017,2021, we also hadheld broadly syndicated investments and opportunistic investments that we believe could be sold to create additional liquidity. As of September 30, 2017,2021, we had twenty unfunded debt investments with aggregate unfunded commitments of $176,450, one$1,313.7, unfunded commitment to purchase up to $295 in sharesequity/other commitments of preferred stock$511.3 and one unfunded commitment to purchase up to $16 in sharescommitments of common stock.$350.2 of Credit Opportunities Partners JV, LLC. We maintain sufficient cash on hand, available borrowings and liquid securities to fund such unfunded commitments should the need arise.
We currently generate cash primarily from cash flows from fees, interest and dividends earned from our investments, as well as principal repayments and proceeds from sales of our investments. To seek to enhance our returns, we also employ leverage as market conditions permit and at the discretion of FBthe Advisor, but in no event will leverage employed exceed 50% of the value of our assets, as requiredmaximum amount permitted by the 1940 Act. Prior to June 14, 2019, in accordance with the 1940 Act, we were allowed to borrow amounts such that our asset coverage, calculated pursuant to the 1940 Act, was at least 200% after such borrowing. Effective June 15, 2019, our asset coverage requirement applicable to senior securities was reduced from 200% to 150%. As of September 30, 2021, the aggregate amount outstanding of the senior securities issued by us was $8.5 billion. As of September 30, 2021, our asset coverage was 191%. See “—Financing Arrangements.”
Prior to investing in securities of portfolio companies, we invest the cash received from fees, interest and dividends earned from our investments and principal repayments and proceeds from sales of our investments primarily in cash, cash equivalents, including money market funds, U.S. government securities, repurchase agreements and high-quality debt instruments maturing in one year or less from the time of investment, consistent with our BDC election and our election to be taxed as a RIC.
This “Financial Condition, Liquidity and Capital Resources” section should be read in conjunction with “COVID-19 Developments” above.
Financing Arrangements
The following table presents summary information with respect to our outstanding financing arrangements as of September 30, 2017:2021:
Arrangement | Type of Arrangement | Rate | Amount Outstanding | Amount Available | Maturity Date | |||||||||||
Hamilton Street Credit Facility(1) | Revolving Credit Facility | L+2.50% | $ | 150,000 | $ | — | December 15, 2021 | |||||||||
ING Credit Facility(1) | Revolving Credit Facility | L+2.25% | 66,131 | (2) | 261,369 | March 16, 2021 | ||||||||||
Locust Street Credit Facility(1) | Term Loan Credit Facility | L+2.68% | 425,000 | — | November 1, 2020 | |||||||||||
4.000% Notes due 2019 | Unsecured Notes | 4.00% | 400,000 | — | July 15, 2019 | |||||||||||
4.250% Notes due 2020 | Unsecured Notes | 4.25% | 405,000 | — | January 15, 2020 | |||||||||||
4.750% Notes due 2022 | Unsecured Notes | 4.75% | 275,000 | — | May 15, 2022 | |||||||||||
Partial Loan Sale | Secured Borrowing | | L+4.50% (1% floor) | | 2,857 | — | July 29, 2022 | |||||||||
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Total | $ | 1,723,988 | $ | 261,369 |
As of September 30, 2021 (Unaudited) | ||||||||||||||||
Arrangement | Type of Arrangement | Rate | Amount Outstanding | Amount Available | Maturity Date | |||||||||||
Ambler Credit Facility(2)(8) | Revolving Credit Facility | L+2.25%(1) | $ | 140 | $ | 60 | November 22, 2024 | |||||||||
Burholme Prime Brokerage Facility(2)(8) | Prime Brokerage Facility | L+1.25%(1) | — | — | March 28, 2022 | |||||||||||
CCT Tokyo Funding Credit Facility(2) | Revolving Credit Facility | L+1.75% – 2.00%(1)(3) | 240 | 60 | June 2, 2024 | |||||||||||
Darby Creek Credit Facility(2)(8) | Revolving Credit Facility | L+1.95%(1) | 250 | — | February 26, 2024 | |||||||||||
Dunlap Credit Facility(2)(8) | Revolving Credit Facility | L+2.00%(1) | 470 | 30 | February 26, 2024 | |||||||||||
Juniata River Credit Facility(2)(8) | Revolving Credit Facility | L+2.50%–2.75%(1) | 640 | — | | July 15, 2022 — April 11, 2023 | ||||||||||
Meadowbrook Run Credit Facility(2)(8) | Revolving Credit Facility | L+2.25%(1) | 300 | — | November 22, 2024 | |||||||||||
Senior Secured Revolving Credit Facility(2) | Revolving Credit Facility | L+1.75%–2.00%(1)(4) | 2,429 | (5) | 1,771 | December 23, 2025 | ||||||||||
4.750% Notes due 2022(6) | Unsecured Notes | 4.75% | 450 | — | May 15, 2022 | |||||||||||
5.000% Notes due 2022(6) | Unsecured Notes | 5.00% | 245 | — | June 28, 2022 | |||||||||||
4.625% Notes due 2024(6) | Unsecured Notes | 4.63% | 400 | — | July 15, 2024 | |||||||||||
4.125% Notes due 2025(6) | Unsecured Notes | 4.13% | 470 | — | February 1, 2025 | |||||||||||
4.250% Notes due 2025(6)(8) | Unsecured Notes | 4.25% | 475 | — | February 14, 2025 | |||||||||||
8.625% Notes due 2025(6) | Unsecured Notes | 8.63% | 250 | — | May 15, 2025 | |||||||||||
3.400% Notes due 2026(6) | Unsecured Notes | 3.40% | 1,000 | — | January 15, 2026 | |||||||||||
2.625% Notes due 2027(6) | Unsecured Notes | 2.63% | 400 | — | January 15, 2027 | |||||||||||
CLO-1 Notes(2)(7) | Collateralized Loan Obligation | L+1.85%– 3.01%(1) | 352 | — | January 15, 2031 | |||||||||||
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Total | $ | 8,511 | $ | 1,921 |
(1) | LIBOR is subject to a 0% floor. |
(2) | The carrying amount outstanding under the facility approximates its fair value. |
The spread over LIBOR is determined by reference to the amount outstanding under the facility. |
(4) | The spread over LIBOR is determined by reference to the ratio of the value of the borrowing base to the aggregate amount of certain outstanding indebtedness of the Company. |
(5) | Amount includes borrowing in Euros, Canadian dollars, pound sterling and |
amount outstanding in U.S. dollars. Canadian dollar balance outstanding of |
(6) | As of September 30, 2021, the fair value of the 4.750% notes, the 5.000% notes, the 4.625% notes, the 4.125% notes, the 4.250% notes, the 8.625% notes, the 3.400% notes and the 2.625% was approximately $460, $245, $432, $502, $502, $280, $1,045 and $401, respectively. These valuations are considered Level 2 valuations within the fair value hierarchy. |
(7) | As of September 30, 2021, there were $281.4 of Class A-1R notes outstanding at L+1.85%, $20.5 of Class A-2R notes outstanding at L+2.25%, $32.4 of Class B-1R notes outstanding at L+2.60% and $17.4 of Class B-2R notes outstanding at 3.011%. |
(8) | As of June 16, 2021, the Company assumed all of FSKR’s obligations under its notes, credit facilities, and FSKR’s wholly-owned special purpose financing subsidiaries became wholly-owned special purpose financing subsidiaries of the Company, in each case, as a result of the consummation of the 2021 Merger. |
See Note 89 to our unaudited consolidated financial statements included herein for additional information regarding our financing arrangements.
RIC Status and Distributions
We have elected to be subject to tax as a RIC under Subchapter M of the Code. In order to qualify for RIC tax treatment, we must, among other things, make distributions of an amount at least equal to 90% of our investment company taxable income, determined without regard to any deduction for distributions paid, each tax year. As long as the distributions are declared by the later of the fifteenth day of the ninthtenth month following the close of a tax year or the due date of the tax return for such tax year, including extensions, distributions paid up to twelve months after the current tax year can be carried back to the prior tax year for determining the distributions paid in such tax year. We intend to make sufficient distributions to our stockholders to qualify for and maintain our RIC tax status each tax year. We are also subject to a 4% nondeductible federal excise taxestax on certain undistributed income unless we make distributions in a timely manner to our stockholders generally of an amount at least equal to the sum of (1) 98% of our net ordinary income (taking into account certain deferrals and elections) for the calendar year, (2) 98.2% of our capital gain net income, which is the excess of capital gains in excess of capital losses, or “capital gain net income” (adjusted for certain ordinary losses), for theone-year period ending October 31 of that calendar year and (3) any net ordinary income and capital gain net income for the preceding years that were not distributed during such years and on which we paid no U.S. federal income tax. Any distribution declared by us during October, November or December of any calendar year, payable to stockholders of record on a specified date in such a month and actually paid during January of the following calendar year, will be treated as if it had been paid by us, as well as received by our U.S. stockholders, on December 31 of the calendar year in which the distribution was declared. We can offer no assurance that we will achieve results that will permit us to pay any cash distributions. If we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if distributions are limited by the terms of any of our borrowings.
Subject to applicable legal restrictions and the sole discretion of our board of directors, we intend to authorize, declare and pay regular cash distributions on a quarterly basis. We will calculate each stockholder’s specific distribution amount for the period using record and declaration dates and each stockholder’s distributions will begin to accrue on the date that shares of our common stock are issued to such stockholder. From time to time, we may also pay special interim distributions in the form of cash or shares of our common stock at the discretion of our board of directors. The timing and amount of any future distributions to stockholders are subject to applicable legal restrictions and the sole discretion of our board of directors.
During certain periods, our distributions may exceed our earnings. As a result, it is possible that a portion of the distributions we make may represent a return of capital. A return of capital generally is a return of a stockholder’s investment rather than a return of earnings or gains derived from our investment activities. Each year a statement on Form1099-DIV identifying the sources of the distributions will be mailed to our stockholders. No portion of the distributions paid during the nine months ended September 30, 20172021 or 20162020 represented a return of capital.
We intend to continue to make our regular distributions in the form of cash, out of assets legally available for distribution, except for those stockholders who receive their distributions in the form of shares of our common stock under the DRP. Any distributions reinvested under the plan will nevertheless remain taxable to a U.S. stockholder.
The following table reflects the cash distributions per share that we have declared on our common stock during the nine months ended September 30, 20172021 and 2016:2020:
Distribution | ||||||||
For the Three Months Ended | Per Share | Amount | ||||||
Fiscal 2016 | ||||||||
March 31, 2016 | $ | 0.22275 | $ | 54,093 | ||||
June 30, 2016 | 0.22275 | 54,238 | ||||||
September 30, 2016 | 0.22275 | 54,236 | ||||||
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Total | $ | 0.66825 | $ | 162,567 | ||||
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Fiscal 2017 | ||||||||
March 31, 2017 | $ | 0.22275 | $ | 54,485 | ||||
June 30, 2017 | 0.22275 | 54,607 | ||||||
September 30, 2017 | 0.22275 | 54,733 | ||||||
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Total | $ | 0.66825 | $ | 163,825 | ||||
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Distribution | ||||||||
For the Three Months Ended | Per Share(1) | Amount | ||||||
Fiscal 2020 | ||||||||
March 31, 2020 | $ | 0.76000 | $ | 95 | ||||
June 30, 2020 | 0.60000 | 75 | ||||||
September 30, 2020 | 0.60000 | 74 | ||||||
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Total | $ | 1.96000 | $ | 244 | ||||
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Fiscal 2021 | ||||||||
March 31, 2021 | $ | 0.60000 | $ | 74 | ||||
June 30, 2021 | 0.60000 | 75 | ||||||
September 30, 2021 | 0.65000 | 186 | ||||||
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Total | $ | 1.85000 | $ | 335 | ||||
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(1) | The amount of each per share distribution has been retroactively adjusted to reflect the Reverse Stock Split as discussed in Note 3 to our unaudited consolidated financial statements included herein. |
See Note 5 to our unaudited consolidated financial statements included herein for additional information regarding our distributions, including a reconciliationdistributions.
Recent Developments
On October 12, 2021, the Company entered into the Ninth Supplemental Indenture and Tenth Supplemental Indenture in connection with the Notes. For additional discussion of our GAAP-basis net investment incomethe Notes, see Note 13 to ourtax-basis net investment income for the nine months ended September 30, 2017 and 2016. unaudited consolidated financial statements included herein.
Critical Accounting Policies
Our financial statements are prepared in conformity with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management has utilized available information, including our past history, industry standards and the current economic environment, among other factors, in forming the estimates and judgments, giving due consideration to materiality. Actual results may differ from these estimates. In addition, other companies may utilize different estimates, which may impact the comparability of our results of operations to those of companies in similar businesses. Understanding our accounting policies and the extent to which we use management judgment and estimates in applying these policies is integral to understanding our financial statements. We describe our most significant accounting policies in “Note 2. Summary of Significant Accounting Policies” in our consolidated financial statements. Critical accounting policies are those that require the application of management’s most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. In preparingWe evaluate our critical accounting estimates and judgments required by our policies on an ongoing basis and update them as necessary based on changing conditions. We have identified one of our accounting policies, valuation of portfolio investments, specifically the financial statements, management has madevaluation of Level 3 investments, as critical because it involves significant judgments and assumptions about highly complex and inherently uncertain matters, and the use of reasonably different estimates and assumptions that affect thecould have a material impact on our reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. In preparing the financial statements, management has utilized available information, including our past history, industry standards and the current economic environment, among other factors, in forming its estimates and judgments, giving due consideration to materiality. Actual results may differ from these estimates. In addition, other companies may utilize different estimates, which may impact the comparability of our results of operations to those of companies in similar businesses.or financial condition. As we execute our operating plans, we will describe additional critical accounting policies in the notes to our future financial statements in addition to those discussed below.
Valuation of Portfolio Investments
We determine the net asset value of our investment portfolio each quarter. Securities are valued at fair value as determined in good faith by our board of directors. In connection with that determination, FBthe Advisor provides our board of directors with portfolio company valuations which are based on relevant inputs, including, but not limited to, indicative dealer quotes, values of like securities, recent portfolio company financial statements and forecasts, and valuations prepared by independent third-party valuation services.
Accounting Standards Codification Topic 820,Fair Value Measurements and Disclosure, or ASC Topic 820, issued by the FASB clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to
measure assets and liabilities in interim and annual periods subsequent to initial recognition. ASC Topic 820 defines fair value as
the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, which includes inputs such as quoted prices for similar securities in active markets and quoted prices for identical securities where there is little or no activity in the market; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.
With respect to investments for which market quotations are not readily available, we undertake a multi-step valuation process each quarter, as described below:
our quarterly fair valuation process begins by the Advisor providing financial and operating information with FB Advisor’s management team reviewing and documenting valuations ofrespect to each portfolio company or investment which valuations may be obtained from anto our independent third-party valuation service if applicable;providers;
our independent third-party valuation service providers review this information, along with other public and private information, and provide the Advisor with a valuation committee with the preliminary valuationsrange for each portfolio company or investment;
the Advisor then discusses the independent third-party valuation service providers’ valuation ranges and provides the valuation committee of the board of directors, or the valuation committee, with a valuation recommendation for each investment, along with supporting materials;
preliminary valuations are then discussed with the valuation committee;
our valuation committee reviews the preliminary valuations and FB Advisor’s management team,the Advisor, together with our independent third-party valuation services,service providers and, if applicable, supplementsupplements the preliminary valuations to reflect any comments provided by the valuation committee;
following the completion of its review, theour valuation committee will recommendrecommends that our board of directors approve ourapproves the fair valuations;valuations determined by the valuation committee; and
our board of directors discusses the valuations and determines the fair value of each such investment in our portfolio in good faith based on various statistical and other factors, including the input and recommendation of FBthe Advisor, the valuation committee and anyour independent third-party valuation services, if applicable.service providers.
Determination of fair value involves subjective judgments and estimates. Accordingly, the notes to our consolidated financial statements refer to the uncertainty with respect to the possible effect of such valuations and any change in such valuations on our consolidated financial statements. In making its determination of fair value, our board of directors may use any approved independent third-party pricing or valuation services. However, our board of directors is not required to determine fair value in accordance with the valuation provided by any single source, and may use any relevant data, including information obtained from FBthe Advisor or any approved independent third-party valuation or pricing service that our board of directors deems to be reliable in determining fair value under the circumstances. Below is a description of factors that FB Advisor’s management team,the Advisor, any approved independent third-party valuation services and our board of directors may consider when determining the fair value of our investments.
Valuation of fixed income investments, such as loans and debt securities, depends upon a number of factors, including prevailing interest rates for like securities, expected volatility in future interest rates, call features, put features and other relevant terms of the debt. For investments without readily available market prices, we may incorporate these factors into discounted cash flow models to arrive at fair value. Other factors that may be considered include the borrower’s ability to adequately service its debt, the fair market value of the borrower in relation to the face amount of its outstanding debt and the quality of collateral securing our debt investments.
For convertible debt securities, fair value generally approximates the fair value of the debt plus the fair value of an option to purchase the underlying security (i.e., the security into which the debt may convert) at the conversion price. To value such an option, a standard option pricing model may be used.
Our equity interests in portfolio companies for which there is no liquid public market are valued at fair value. Our board of directors, in its determination of fair value, may consider various factors, such as multiples of EBITDA, cash flows, net income, revenues or, in limited instances, book value or liquidation value. All of these factors may be subject to adjustments based upon the particular circumstances of a portfolio company or our actual investment position. For example, adjustments to EBITDA may take into account compensation to previous owners or acquisition, recapitalization, restructuring or other related items.
FB Advisor’s management team,
The Advisor, any approved independent third-party valuation services and our board of directors may also consider private merger and acquisition statistics, public trading multiples discounted for illiquidity and other factors,
valuations implied by third-party investments in the portfolio companies or industry practices in determining fair value. FB Advisor’s management team,The Advisor, any approved independent third-party valuation services and our board of directors may also consider the size and scope of a portfolio company and its specific strengths and weaknesses, and may apply discounts or premiums, where and as appropriate, due to the higher (or lower) financial risk and/or the smaller size of portfolio companies relative to comparable firms, as well as such other factors as our board of directors, in consultation with FB Advisor’s management teamthe Advisor and any approved independent third-party valuation services, if applicable, may consider relevant in assessing fair value. Generally, the value of our equity interests in public companies for which market quotations are readily available is based upon the most recent closing public market price. Portfolio securities that carry certain restrictions on sale are typically valued at a discount from the public market value of the security.
When we receive warrants or other equity securities at nominal or no additional cost in connection with an investment in a debt security, the cost basis in the investment will be allocated between the debt securities and any such warrants or other equity securities received at the time of origination. Our board of directors subsequently values these warrants or other equity securities received at their fair value.
The fair values of our investments are determined in good faith by our board of directors. Our board of directors is solely responsible for the valuation of our portfolio investments at fair value as determined in good faith pursuant to our valuation policy and consistently applied valuation process. Our board of directors has delegatedday-to-day responsibility for implementing our valuation policy to FB Advisor’s management team,the Advisor, and has authorized FB Advisor’s management teamthe Advisor to utilize independent third-party valuation and pricing services that have been approved by our board of directors. The valuation committee is responsible for overseeing FBthe Advisor’s implementation of the valuation process.
See Note 78 to our unaudited consolidated financial statements included herein for additional information regarding the fair value of our financial instruments.
Revenue RecognitionMerger Accounting
Security transactions areOn June 16, 2021, we completed the 2021 Merger. Pursuant to the 2020 Merger Agreement, Merger Sub merged with and into FSKR, with FSKR continuing as the surviving company and as a wholly-owned subsidiary of the Company, or the First Merger, and, immediately thereafter, FSKR merged with and into the Company, with the Company continuing as the surviving company. The 2021 Merger was considered a tax-free reorganization.
The 2021 Merger was accounted for onin accordance with the trade date. We record interest income on an accrual basis to the extent that we expect to collect such amounts. We record dividend income on theasset acquisition method of accounting as detailed in Accounting Standards Codification ex-dividend805-50, date. We do not accrue as a receivable interest or dividends on loans and securities if we have reason to doubt our ability to collect such income. Our policy is to place investments onnon-accrual status when there is reasonable doubt that interest income will be collected. We consider many factors relevant to an investment when placing it on or removing it fromnon-accrual status including, but not limited to, the delinquency status of the investment, economic and business conditions, the overall financial condition of the underlying investment, theBusiness Combinations—Related Issues. The fair value of the underlying collateral, bankruptcy status, if any, and any other facts or circumstances relevantconsideration paid by the Company in the 2021 Merger was allocated to the investment. If there is reasonable doubt that we will receive any previously accrued interest, then the interest income will bewritten-off. Payments receivedassets acquired and liabilities assumed based onnon-accrual investments may be recognized their relative fair values as income or applied to principal depending upon the collectability of the remaining principaldate of acquisition and interest.Non-accrual investments may be restored to accrual status when principal and interest become current and are likely to remain current based on our judgment.
Loan origination fees, original issue discount and market discount are capitalized and we amortize such amounts as interest income over the respective term of the loan or security. Upon the prepayment of a loan or security, any unamortized loan origination fees and original issue discount are recorded as interest income. Structuring and othernon-recurring upfront fees are recorded as fee income when earned. We record prepayment premiums on loans and securities as fee income when we earn such amounts.
Net Realized Gains or Losses, Net Change in Unrealized Appreciation or Depreciation and Net Change in Unrealized Gains or Losses on Foreign Currency
Gains or losses on the sale of investments are calculated by using the specific identification method. We measure realized gains or losses by the difference between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized fees. Net change in unrealized appreciation or depreciation reflects the change in portfolio investment values during the reporting period, including any reversal of previously recorded unrealized gains or losses when gains or losses are realized. Net change in unrealized gains or losses on foreign currency reflects the change in the value of receivables or accruals during the reporting period due to the impact of foreign currency fluctuations.
We follow the guidance in ASC Topic 860 when accounting for loan participations and other partial loan sales. This guidance requires a participation or other partial loan sale to meet the definition of a participating interest, as defined in the
guidance, in order for sale treatment to be allowed. Participations or other partial loan sales which do not meet the definition of a participating interest remain on our consolidated balance sheets and the proceeds are recorded as a secured borrowing until the participation or other partial loan sale meets the definition. Secured borrowings are carried at fair value to correspond with the related investments, which are carried at fair value.
Uncertainty in Income Taxes
We evaluate our tax positions to determine if the tax positions taken meet the minimum recognition threshold in connection with accounting for uncertainties in income tax positions taken or expected to be taken for the purposes of measuring and recognizing tax benefits or liabilities in our consolidated financial statements. Recognition of a tax benefit or liability with respect to an uncertain tax position is required only when the position is “more likely than not” to be sustained assuming examination by taxing authorities. We recognize interest and penalties, if any, related to unrecognized tax liabilities as income tax expense in our consolidated statements of operations. During the nine months ended September 30, 2017 and 2016, we did not incur any interest or penalties.give rise to goodwill.
See Note 212 to our unaudited consolidated financial statements included herein for additional information regarding our significant accounting policies.the 2021 Merger.
Contractual Obligations
We have entered into agreements with FBthe Advisor to provide us with investment advisory and administrative services. Payments for investment advisory services under the investment advisory agreement are equal to (a) an annual base management fee based on the average weekly value of our gross assets (excluding cash and cash equivalents) and (b) an incentive fee based on our performance. FBThe Advisor and to the extent it is required to provide such services, GDFM, are reimbursed for administrative expenses incurred on our behalf. See Note 4 to our unaudited consolidated financial statements included herein and “—Related Party Transactions—Compensation of the Investment Adviser” for a discussion of these agreements and for the amount of fees and expenses accrued under these agreements during the nine months ended September 30, 20172021 and 2016.2020.
A summary of our significant contractual payment obligations for the repayment of outstanding indebtedness at September 30, 20172021 is as follows:
Payments Due By Period | ||||||||||||||||||||
Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | ||||||||||||||||
Hamilton Street Credit Facility(1) | $ | 150,000 | — | — | $ | 150,000 | — | |||||||||||||
ING Credit Facility(2) | $ | 66,131 | — | — | $ | 66,131 | — | |||||||||||||
Locust Street Credit Facility(3) | $ | 425,000 | — | — | $ | 425,000 | — | |||||||||||||
4.000% Notes due 2019(4) | $ | 400,000 | — | $ | 400,000 | — | — | |||||||||||||
4.250% Notes due 2020(5) | $ | 405,000 | — | $ | 405,000 | — | — | |||||||||||||
4.750% Notes due 2022(6) | $ | 275,000 | — | — | $ | 275,000 | — | |||||||||||||
Partial Loan Sale(7) | $ | 2,857 | — | — | $ | 2,857 | — |
Payments Due By Period | ||||||||||||||||||||||
Maturity Date(1) | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||||
Ambler Credit Facility(2) | November 22, 2024 | $ | 140 | — | — | $ | 140 | — | ||||||||||||||
Burholme Prime Brokerage Facility(3) | March 28, 2022 | — | — | — | — | — | ||||||||||||||||
CCT Tokyo Funding Credit Facility(4) | June 2, 2024 | $ | 240 | — | $ | 240 | — | — | ||||||||||||||
Darby Creek Credit Facility(5) | February 26, 2024 | $ | 250 | — | $ | 250 | — | — | ||||||||||||||
Dunlap Credit Facility(6) | February 26, 2024 | $ | 470 | — | $ | 470 | — | — | ||||||||||||||
Juniata River Credit Facility(7) | July 15, 2022 — April 11, 2023 | $ | 640 | $ | 640 | — | — | — | ||||||||||||||
Meadowbrook Run Credit Facility(8) | November 22, 2024 | $ | 300 | — | — | $ | 300 | — | ||||||||||||||
Senior Secured Revolving Credit Facility(9) | December 23, 2025 | $ | 2,429 | — | — | $ | 2,429 | — | ||||||||||||||
4.750% Notes due 2022 | May 15, 2022 | $ | 450 | $ | 450 | — | — | — | ||||||||||||||
5.000% Notes due 2022 | June 28, 2022 | $ | 245 | $ | 245 | — | — | — | ||||||||||||||
4.625% Notes due 2024 | July 15, 2024 | $ | 400 | — | $ | 400 | — | — | ||||||||||||||
4.125% Notes due 2025 | February 1, 2025 | $ | 470 | — | — | $ | 470 | — | ||||||||||||||
4.250% Notes due 2025 | February 14, 2025 | $ | 475 | — | — | $ | 475 | — | ||||||||||||||
8.625% Notes due 2025 | May 15, 2025 | $ | 250 | — | — | $ | 250 | — | ||||||||||||||
3.400% Notes due 2026 | January 15, 2026 | $ | 1,000 | — | — | $ | 1,000 | — | ||||||||||||||
2.625% Notes due 2027 | January 15, 2027 | $ | 400 | — | — | — | $ | 400 | ||||||||||||||
CLO-1 Notes | January 15, 2031 | $ | 352 | — | — | — | $ | 352 |
(1) |
(2) | At September 30, 2021, $60 remained unused under the Ambler Credit Facility. |
(3) | At September 30, 2021, $0 remained unused under the Burholme Prime Brokerage Facility. |
(4) | At September 30, 2021, $60 remained unused under the CCT Tokyo Funding Credit Facility. |
(5) | At September 30, 2021, $0 remained unused under the Darby Creek Credit Facility. |
(6) | At September 30, 2021, $30 remained unused under the Dunlap Credit Credit Facility. |
(7) | At September 30, 2021, $0 remained unused under the Juniata River Credit Facility. |
(8) | At September 30, 2021, $0 remained unused under the Meadowbrook Run Credit Facility. |
(9) | At September 30, 2021, $1,771 remained unused under the Senior Secured Revolving Credit Facility. Amount includes borrowing in Euros, Canadian dollars, pound sterling and |
2021 to reflect total amount outstanding in U.S. dollars. Australian dollar balance outstanding of AUD118 has been converted to U.S dollars at an exchange rate of AUD1.00 to $0.72 as of September 30, 2021 to reflect total amount outstanding in U.S. dollars.
Off-Balance Sheet Arrangements
We currently have nooff-balance sheet arrangements, including any risk management of commodity pricing or other hedging practices.
Related Party Transactions
Compensation of the Investment Adviser
Pursuant to the investment advisory agreement, FB Advisor is entitled to an annual base management fee equal to 1.75% of the average value of our gross assets and an incentive fee based on our performance. The investmentsub-advisory agreement provides that GDFM will receive 50% of all management and incentive fees payable to FB Advisor under the investment advisory agreement with respect to each year. Pursuant to the administration agreement, we also reimburse FB Advisor and GDFM for expenses necessary to perform services related to our administration and operations, including FB Advisor’s allocable portion of the compensation and related expenses of certain personnel of FS Investments providing administrative services to us on behalf of FB Advisor.
See Note 4 to our unaudited consolidated financial statements included herein for additional information regarding our agreements with FB Advisor and our other related party transactions and relationships, including our potential conflicts of interest, exemptive relief order and our trademark license agreement with FS Investments.
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. |
Interest Rate Risk
We are subject to financial market risks, including changes in interest rates. As of September 30, 2017, 65.3%2021, 69.2% of our portfolio investments (based on fair value) paidwere debt investments paying variable interest rates 21.0% paidand 9.3% were debt investments paying fixed interest rates 2.7%while 13.4% were other income producing equity or otherinvestments, 4.4% consisted of non-income producing investments, and the remaining 11.0%3.7% consisted of investments on non-incomenon-accrual producing equity or other investments.status. A rise in the general level of interest rates can be expected to lead to higher interest rates applicable to any variable rate investments we hold and to declines in the value of any fixed rate investments we hold. However, many of our variable rate investments provide for an interest rate floor, which may
prevent our interest income from increasing until benchmark interest rates increase beyond a threshold amount. To the extent that a substantial portion of our investments may be in variable rate investments, an increase in interest rates beyond this threshold would make it easier for us to meet or exceed the hurdle rate applicable to the subordinated incentive fee on income, and may result in a substantial increase in our net investment income and to the amount of incentive fees payable to FBthe Advisor with respect to our increasedpre-incentive fee net investment income. In 2020, the U.S. Federal Reserve and other central banks have reduced certain interest rates in response to the COVID-19 pandemic and market conditions. A prolonged reduction in interest rates may reduce our net investment income.
Pursuant to the terms of the Hamilton Street credit facility, ING credit facility, Locust Street credit facilityAmbler Credit Facility, CCT Tokyo Funding Credit Facility, Darby Creek Credit Facility, Dunlap Credit Facility, Juniata River Credit Facility, Meadowbrook Run Credit Facility, Senior Secured Revolving Credit Facility and secured borrowing arrangement,the CLO-1 Notes, we borrow at a floating rate based on a benchmark interest rate. Under the indentureindentures governing the 4.000%4.750% notes, the 5.000% notes, the 4.625% notes, the 4.125% notes, the 4.250% notes, the 8.625% notes, the 3.400% notes and the 4.750%2.625% notes, we pay interest to the holders of such notes at a fixed rate. To the extent that any present or future credit facilities or other financing arrangements that we or any of our subsidiaries enter into are based on a floating interest rate, we will be subject to risks relating to changes in market interest rates. In periods of rising interest rates when we or our subsidiaries have such debt outstanding, or financing arrangements in effect, our interest expense would increase, which could reduce our net investment income, especially to the extent we hold fixed rate investments.
The following table shows the effect over a twelve month period of changes in interest rates on our interest income, interest expense and net interest income, assuming no changes in the composition of our investment portfolio, including the accrual status of our investments, and our financing arrangements in effect as of September 30, 20172021 (dollar amounts are presented in thousands)millions):
Basis Point Change in Interest Rates | Increase (Decrease) in Interest Income(1) | Increase (Decrease) in Interest Expense | Increase (Decrease) in Net Interest Income | Percentage Change in Net Interest Income | Increase (Decrease) in Interest Income(1) | Increase (Decrease) in Interest Expense | Increase (Decrease) in Net Interest Income | Percentage Change in Net Interest Income | ||||||||||||||||||||||||
Down 100 basis points | $ | (8,436 | ) | $ | (5,808 | ) | $ | (2,628 | ) | (0.9 | )% | |||||||||||||||||||||
Down 13 basis points | $ | (1 | ) | $ | (6 | ) | $ | 5 | 0.5 | % | ||||||||||||||||||||||
No change | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Up 100 basis points | $ | 24,613 | $ | 5,808 | $ | 18,805 | 6.7 | % | 30 | 48 | (18 | ) | (1.8 | )% | ||||||||||||||||||
Up 300 basis points | $ | 75,794 | $ | 17,424 | $ | 58,370 | 20.8 | % | 251 | 145 | 106 | 10.5 | % | |||||||||||||||||||
Up 500 basis points | $ | 126,994 | $ | 29,039 | $ | 97,955 | 34.9 | % | 472 | 242 | 230 | 22.7 | % |
(1) | Assumes no defaults or prepayments by portfolio companies over the next twelve months. |
We expect that our long-term investments will be financed primarily with equity and debt. If deemed prudent, we may use interest rate risk management techniques in an effort to minimize our exposure to interest rate fluctuations. These techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act. Adverse developments resulting from changes in interest rates or hedging transactions could have a material adverse effect on our business, financial condition and results of operations. During the nine months ended September 30, 20172021 and 2016,2020, we did not engage in interest rate hedging activities.
Foreign Currency Risk
From time to time, we may make investments that are denominated in a foreign currency that are subject to the effects of exchange rate movements between the foreign currency of each such investment and the U.S. dollar, which may affect future fair values and cash flows, as well as amounts translated into U.S. dollars for inclusion in our consolidated financial statements.
The table below presents the effect that a 10% immediate, unfavorable change in the foreign currency exchange rates (i.e. strengthening of the U.S. dollar) would have on the fair value of our investments denominated in foreign currencies as of September 30, 2021, by foreign currency, all other valuation assumptions remaining constant. In addition, the table below presents the par value of our investments denominated in foreign currencies and the notional amount of foreign currency forward contracts in local currency in place as of September 30, 2021 to hedge against foreign currency risks.
Investments Denominated in Foreign Currencies As of September 30, 2021 | Economic Hedging As of September 30, 2021 | |||||||||||||||||||||||
Cost in Local Currency | Cost in US$ | Fair Value | Reduction in Fair Value as of September 30, 2021 if 10% Adverse Change in Exchange Rate(1) | Net Foreign Currency Hedge Amount in Local Currency | Net Foreign Currency Hedge Amount in U.S. Dollars | |||||||||||||||||||
Australian Dollars | A$ | 118.7 | $ | 85.8 | $ | 87.8 | $ | 8.8 | A$ | 3.0 | $ | 2.2 | ||||||||||||
British Pound Sterling | £ | 94.9 | 127.8 | 135.0 | 13.5 | £ | 19.6 | 26.4 | ||||||||||||||||
Canadian Dollars | $ | 11.5 | 9.1 | 10.0 | 1.0 | $ | 8.7 | 6.8 | ||||||||||||||||
Euros | € | 440.7 | 510.2 | 359.9 | 36.0 | € | 19.9 | 23.3 | ||||||||||||||||
Icelandic Krona | ISK | 1,292.1 | 9.9 | 10.3 | 1.0 | ISK | — | — | ||||||||||||||||
Norwegian Krone | NOK | 383.8 | 43.9 | 52.4 | 5.2 | NOK | 59.1 | 6.7 | ||||||||||||||||
Swedish Krona | SEK | 725.3 | 82.8 | 72.1 | 7.2 | SEK | 1,203.4 | 137.3 | ||||||||||||||||
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Total | $ | 869.5 | $ | 727.5 | $ | 72.7 | $ | 202.7 | ||||||||||||||||
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(1) | Excludes effect, if any, of any foreign currency hedges. |
As illustrated in the table above, we use derivative instruments from time to time, including foreign currency forward contracts and cross currency swaps, to manage the impact of fluctuations in foreign currency exchange rates. In addition, we have the ability to borrow in foreign currencies under our Senior Secured Revolving Credit Facility, which provides a natural hedge with regard to changes in exchange rates between the foreign currencies and U.S. dollar and reduces our exposure to foreign exchange rate differences. We are typically a net receiver of these foreign currencies as related for our international investment positions, and, as a result, our investments denominated in foreign currencies, to the extent not hedged, benefit from a weaker U.S. dollar and are adversely affected by a stronger U.S. dollar.
As of September 30, 2021, the net contractual amount of our foreign currency forward contracts totaled $202.7, all of which related to hedging of our foreign currency denominated debt investments. As of September 30, 2021, we had outstanding borrowings denominated in foreign currencies of €236, CAD4, £98 and AUD118 under our Senior Secured Revolving Credit Facility.
In addition, we may have risk regarding portfolio valuation. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies—Valuation of Portfolio Investments.”
Item 4. | Controls and Procedures. |
Evaluation of Disclosure Controls and Procedures
As required by Rule13a-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including the chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2017.2021.
Based on the foregoing, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that we would meet our disclosure obligations.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rules13a-15(f)or 15d-15(f) of the Exchange Act) that occurred during the three month period ended September 30, 20172021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 1. | Legal Proceedings. |
We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. From time to time, we may be party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of any legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material adverse effect upon our financial condition or results of operations.
Item 1A. | Risk Factors. |
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors that appeared under Item 1A. “Risk Factors” in our most recent Annual Report on Form 10-K.There have beenare no material changes from the risk factors set forth inincluded within our annual reportmost recent Annual Report on Form10-K, as supplemented by our quarterly reports on Form 10-Q for the yearquarters ended DecemberMarch 31, 2016.2021 and June 30, 2021.
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
In November 2020, the Company’s board of directors authorized a stock repurchase program, which went into effect in September 2021 following the consummation of the 2021 Merger, or the September 2021 Share Repurchase Program. Under the September 2021 Share Repurchase Program, the Company is permitted to repurchase up to $100 in the aggregate of its outstanding common stock in the open market at prices below the then-current net asset value per share. The timing, manner, price and amount of any share repurchases was determined by the Company based upon the evaluation of economic and market conditions, the Company’s stock price, applicable legal and regulatory requirements and other factors. The September 2021 Share Repurchase Program is expected to be in effect for one year from the effective date, unless extended, or until the aggregate repurchase amount that has been approved by the Company’s board of directors has been expended, or the plan otherwise terminates pursuant to its terms. The September 2021 Share Repurchase Program does not require the Company to repurchase any specific number of shares and the Company cannot assure stockholders that any shares will be repurchased under the program. The September 2021 Share Repurchase Program may be suspended, extended, modified or discontinued at any time.
During the nine months ended September 30, 2021, the Company repurchased 53,374 shares of common stock pursuant to the September 2021 Share Repurchase Program at an average price per share (inclusive of commissions paid) of $22.32 (totaling $1). During the period from October 1, 2021 to October 31, 2021, the Company repurchased 92,410 shares of common stock pursuant to the September 2021 Share Repurchase Program at an average price per share (inclusive of commissions paid) of $22.65 (totaling $2).
As previously disclosed, certain affiliates of the owners of the Advisor committed $100 to a $350 investment vehicle, or the Affiliated Purchaser, that may invest from time to time in shares of the Company. In September 2021, that investment vehicle entered into a written trading plan with a third party broker in accordance with Rule 10b5-1 and Rule 10b-18 promulgated under the Exchange Act, or the Affiliated Purchaser Program, to facilitate the purchase of shares of our common stock pursuant to the terms and conditions of such plan. The Affiliated Purchaser Program provides for the purchase of up to $100 worth of shares of our common stock, subject to the limitations provided therein.
During the nine months ended September 30, 2021, the Affiliated Purchaser Program purchased 535,700 shares of common stock at an average price per share (inclusive of commissions paid) of $22.32 (totaling $12). During the period from October 1, 2021 to October 31, 2021, the Affiliated Purchaser Program purchased 680,819 shares of common stock at an average price per share (inclusive of commissions paid) of $22.47 (totaling $15).
The table below provides information concerning purchases of our shares of common stock by or on behalf of the Company or any “affiliated purchaser,” as defined by Rule10b-18(a)(3) promulgated under the Exchange Act during the quarterly period ended September 30, 2017.2021. Dollar amounts in the table below and the related notes are presented in thousands,millions, except for share and per share amounts.
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs(2) | ||||||||||||
July 1 to July 31, 2017 | — | — | — | $ | 635 | |||||||||||
August 1 to August 31, 2017 | 10,047 | $ | 8.3963 | 10,047 | $ | 550 | ||||||||||
September 1 to September 30, 2017 | — | — | — | $ | 550 | |||||||||||
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10,047 | $ | 8.3963 | 10,047 | |||||||||||||
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Period | Total Number of Shares Purchased | Average Price Paid per Share(1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2) | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||||
July 1, 2021 through July 31, 2021 | — | $ | — | — | $ | — | ||||||||||
August 1, 2021 through August 31, 2021 | — | — | — | — | ||||||||||||
September 1, 2021 through September 30, 2021 | 589,074 | 22.32 | 589,074 | $ | 187 | |||||||||||
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589,074 | $ | 22.32 | 589,074 | |||||||||||||
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(1) | Amount includes commissions paid. |
(2) | Includes amounts pursuant to the |
Item 3. | Defaults upon Senior Securities. |
Not applicable.
Item 4. | Mine Safety Disclosures. |
Not applicable.
Item 5. | Other Information. |
Not applicable.
Item 6. | Exhibits |
* | Filed herewith. |
† | Pursuant to Item 601(a)(5) of Regulation S-K, certain exhibits and schedules have been omitted. The registrant hereby agrees to furnish supplementally a copy of any omitted attachment to the SEC upon request. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report to be signed on its behalf by the undersigned, thereunto duly authorized on November 9, 2017.8, 2021.
FS | ||
By: | /s/ Michael C. Forman | |
Michael C. Forman Chief Executive Officer (Principal Executive Officer) | ||
By: | /s/ Steven Lilly | |
Steven Lilly Chief Financial Officer (Principal Financial Officer) | ||
By: | /s/ William Goebel | |
William Goebel Chief |
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