UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-23139
FS Global Credit Opportunities Fund—
T
(Exact name of registrant as specified in charter)
201 Rouse Boulevard Philadelphia, Pennsylvania (Address of principal executive offices | 19112 (Zip code) |
Michael C. Forman
FS Global Credit Opportunities Fund—T
201 Rouse Boulevard
Philadelphia, Pennsylvania 19112
(Name and address of agent for service)
Registrant’s telephone number, including area code: (215) 495-1150
Date of fiscal year end: December 31
Date of reporting period: December 31, 2018
Item 1. Reports to Stockholders.
The annual report (the “Annual Report”) of FS Global Credit Opportunities Fund—T (the “Feeder Fund”) for the year ended December 31, 2018 transmitted to shareholders pursuant to Rule 30e-1 promulgated under the Investment Company Act of 1940, as amended (the “1940 Act”), is as follows:
Annual report 2018 |
Finding value to generate income and growth
FS Global Credit Opportunities Fund–A
FS Global Credit Opportunities Fund–D
FS Global Credit Opportunities Fund–T
FS Global Credit Opportunities Fund–ADV
FS Global Credit Opportunities Fund–T2
Electronic Reports Disclosure —Beginning on January 1, 2021, as permitted by regulations adopted by the SEC, paper copies of FS Global Credit Opportunities Fund’s (the “Fund”), FS Global Credit Opportunities Fund–A’s (“Fund–A”), FS Global Credit Opportunities Fund–D’s (“Fund–D”), FS Global Credit Opportunities Fund–T’s (“Fund–T”), FS Global Credit Opportunities Fund–ADV’s (“Fund–ADV”) and FS Global Credit Opportunities Fund–T2’s (“Fund–T2” and, collectively with Fund–A, Fund–D, Fund–T and Fund–ADV, the “Feeder Funds” and, collectively with the Fund, the “Funds”), shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the Funds or from your financial intermediary (such as a broker-dealer or bank). Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. Shareholders who hold accounts directly may elect to receive shareholder reports and other communications from the Funds electronically by calling 877-628-8575 or emailing service@fsinvestments.com to make such arrangements. For shareholders who hold accounts through an investment advisor, bank or broker-dealer, please contact that financial intermediary directly for information on how to receive shareholder reports and other communications electronically.
You may elect to receive all future reports in paper free of charge. Shareholders who hold accounts directly may inform the Funds that you wish to continue receiving paper copies of your shareholder reports by calling 877-628-8575 or emailing service@fsinvestments.com. For shareholders who hold accounts through an investment advisor, bank or broker-dealer, please contact that financial intermediary directly to inform them that you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held through your financial intermediary or directly with the Funds.
Michael Forman President & Chief Executive Officer FS Global Credit Opportunities Fund |
Fellow Shareholder,
Last year marked an important milestone in our ongoing efforts to drive value for FS Global Credit Opportunities Fund’s (FSGCO, or the Fund) shareholders. During the second quarter, FS Global Advisor (the Adviser) assumed sole management of FSGCO with a focus on increasing the Fund’s allocation to high-conviction investments, growing net asset value (NAV), reducing portfolio volatility and improving distribution coverage over time.
Recognizing that there is still more work to be done, we believe our internal credit investment team made significant strides in accomplishing these goals in 2018. Since assuming all operational and investment management functions of FSGCO, the Adviser has focused on three key areas:
• | First, the Fund made significant progress toward its goal of rotating the portfolio out of investments that we believe have limited upside or are highly correlated to the broader high yield market and redeploying that capital into investments we believe offer the potential for strong returns and limited downside risk. We look for situations where yield premiums exist due to complexity, illiquidity or as a result of corporate events as opposed to elevated risk of loss. |
• | Second, FSGCO focused on stabilizing and improving its distribution coverage. We expect the continued rotation of the portfolio into high-conviction investments and the optimization of FSGCO’s borrowing facilities will help to improve distribution coverage over time. |
• | Finally, FSGCO made meaningful progress toward optimizing its capital structure. In 2018, the Fund closed on $200 million in term preferred shares. The financing provides the Fund with long-term capital and helps to better match the duration of the Fund’s assets and liabilities. |
Market review
U.S. equity and commodity price volatility negatively impacted the leveraged credit markets in the second half of 2018 as a mix of trade-related and global growth concerns had investors seeking safety in U.S. Treasuries. Higher-yielding areas of the market underperformed their higher-quality peers during the final quarter of the year. Both high yield bond mutual funds and bank loan mutual funds registered record outflows in the fourth quarter of 2018, helping to push high yield bond and senior secured loan prices to 2.5-year lows the last week of December.1,2
High yield bonds returned -2.3% for all of 2018 after registering a modestly positive return during the first half of the year.1 Senior secured loans posted a gain of 0.4% for all of 2018 after a decisively negative fourth quarter erased most of the gains achieved through the first nine months of the year.2
Against the backdrop of stable corporate fundamentals and evolving interest rate concerns, investor demand for higher-yielding corporate credit improved through the first three quarters of the year, only to reverse course during the fourth quarter as risk aversion sapped demand for lower-rated investments. In total, CCC rated high yield bonds and CCC rated senior secured loans returned -4.2% and 2.4%, respectively, during 2018.3,4
FSGCO’s feeder funds outperformed high yield bonds
and senior secured loans in 2018.1,2,5
Performance review
By focusing on select opportunities, such as event-driven opportunities, special situations and market-price inefficiencies, we aim to build a portfolio that offers the potential for higher total returns, comprised of both income and growth, compared to traditional investment strategies.
The feeder funds’ total returns outperformed high yield bonds, senior secured loans, CCC rated high yield bonds and CCC rated senior secured loans during 2018.1,2,3,4,5,6
2018 SHAREHOLDER RETURNS6
FSGCO-A | 7.9% |
FSGCO-D | 7.9% |
FSGCO-T | 6.9% |
FSGCO-ADV | 7.3% |
FSGCO-T2 | 6.3% |
High yield bonds1 | -2.3% |
Senior secured loans2 | 0.4% |
Investment activity during the year focused on reducing high-beta investments and redirecting the portfolio to investments whose returns are driven by idiosyncratic events in order to provide a differentiated way to deliver growth and income to our investors. Additionally, the team concentrated on reducing the number of portfolio holdings to create a higher-conviction portfolio.
During 2018, FSGCO continued to concentrate on investing at the top of the corporate capital structure. As of December 31, 2018, approximately 40% of the portfolio consisted of first-lien senior secured debt, up from 26% as of December 31, 2017. Concurrently, the allocation to unsecured bonds and equity/other declined to 20% and 7%, respectively, as of December 31, 2018, from 29% and 10%, respectively, as of December 31, 2017.
Amid tight and volatile high yield bond and senior secured loan markets, we believe our strategy of focusing on idiosyncratic, value-based opportunities across the capital structure offers the potential for stronger risk-adjusted returns. Our goal is to deliver higher total returns than traditional credit strategies with less market beta to generate value for our shareholders.
We will continue to seek out investments where yield premiums exist due to complexity, illiquidity or as a result of corporate events as opposed to elevated risk of loss. Meanwhile, we will continue to monetize the remaining investments in our portfolio that don’t meet our standards.
Thank you for your continued support and trust in us.
Sincerely,
Michael Forman
President & Chief Executive Officer
FS Global Credit Opportunities Fund–A
FS Global Credit Opportunities Fund–D
FS Global Credit Opportunities Fund–T
FS Global Credit Opportunities Fund–ADV
FS Global Credit Opportunities Fund–T2
1 | ICE BofAML U.S. High Yield Master II Index. |
2 | S&P/LSTA Leveraged Loan Index. |
3 | ICE BofAML U.S. High Yield CCC Rated or Below Index. |
4 | S&P/LSTA Leveraged Loan CCC Only Index. |
5 | FS Global Credit Opportunities Fund’s feeder funds described herein are FS Global Credit Opportunities Fund–A (FSGCO–A or Fund–A), FS Global Credit Opportunities Fund–D (FSGCO–D or Fund–D), FS Global Credit Opportunities Fund–T (FSGCO–T or Fund–T), FS Global Credit Opportunities Fund–ADV (FSGCO–ADV or Fund–ADV) and FS Global Credit Opportunities Fund–T2 (FSGCO–T2 or Fund–T2). |
6 | The total return for each period presented is historical and is calculated by determining the percentage change in net asset value, assuming the reinvestment of all distributions in additional common shares of the feeder fund at the feeder fund’s NAV per share as of the share closing date occurring on or immediately following the distribution payment date. The total return does not consider the effect of the sales load from the sale of the feeder fund’s common shares. The payment of future distributions on Fund–A’s, Fund–D’s, Fund–T’s, Fund–ADV’s and Fund–T2’s common shares is subject to the discretion of their boards of trustees and applicable legal restrictions and, therefore, there can be no assurance as to the amount or timing of any such future distributions. |
FSGCO portfolio highlights |
As of December 31, 2018 (unless otherwise noted) |
Senior secured debt represented 71% of the Fund’s portfolio.
Portfolio composition | |
Senior secured loans — 1st lien | 40% |
Senior secured loans — 2nd lien | 14% |
Senior secured bonds | 17% |
Subordinated debt | 20% |
Collateralized securities | 2% |
Equity/other | 7% |
Industry classification(by fair value) | |
Energy | 18% |
Software & Services | 16% |
Capital Goods | 9% |
Consumer Services | 8% |
Diversified Financials | 7% |
Materials | 7% |
Retailing | 7% |
Health Care Equipment & Services | 4% |
Insurance | 4% |
Media | 4% |
Technology Hardware & Equipment | 4% |
Transportation | 3% |
Consumer Durables & Apparel | 2% |
Household & Personal Products | 2% |
Real Estate | 2% |
Telecommunication Services | 2% |
Food & Staples Retailing | 1% |
FSGCO Officers + Trustees |
Officers | |
Michael Forman | Stephen S. Sypherd |
President & Chief Executive Officer | Vice President, Treasurer & Secretary |
Edward T. Gallivan, Jr. | James F. Volk |
Chief Financial Officer | Chief Compliance Officer |
Board of Trustees | |
Michael Forman | Philip E. Hughes, Jr. |
Chairman | Trustee |
Chairman & Chief Executive Officer | Vice-Chairman |
FS Investments | Keystone Industries |
Walter W. Buckley, III | Oliver C. Mitchell, Jr. |
Trustee | Trustee |
Chairman & Chief Executive Officer | Attorney & Consultant |
Actua Corporation | |
Charles P. Pizzi | |
David L. Cohen | Trustee |
Trustee | Retired President, Director |
Senior Executive Vice President | & Chief Executive Officer |
Comcast Corporation | Tasty Baking Company |
Barbara J. Fouss | |
Trustee | |
Former Director of Strategic Initiatives & Chief Credit Policy Officer Sun National Bank |
FS Global Credit Opportunities Fund—D (“Fund—D”)
FS Global Credit Opportunities Fund—T (“Fund—T”)
FS Global Credit Opportunities Fund—ADV (“Fund—ADV”)
FS Global Credit Opportunities Fund—T2 (“Fund—T2”)
(Collectively, the “FS Global Credit Opportunities Fund—Feeder Funds” or “Feeder Funds”)
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FS Global Credit Opportunities Fund—A
FS Global Credit Opportunities Fund—D
FS Global Credit Opportunities Fund—T
FS Global Credit Opportunities Fund—ADV
FS Global Credit Opportunities Fund—T2
| | Individual Funds | | | | Statements of Operations and Cash Flows | | | | Statements of Changes in Net Assets | | | | Financial Highlights | | |
| | FS Global Credit Opportunities Fund—A FS Global Credit Opportunities Fund—D | | | | For the year ended December 31, 2018 | | | | For each of the two years in the period ended December 31, 2018 | | | | For each of the five years in the period ended December 31, 2018 | | |
| | FS Global Credit Opportunities Fund—T | | | | For the year ended December 31, 2018 | | | | For each of the two years in the period ended December 31, 2018 | | | | For each of the two years in the period ended December 31, 2018 and the period from June 1, 2016 (Commencement of Operations) to December 31, 2016 | | |
| | FS Global Credit Opportunities Fund—ADV | | | | For the year ended December 31, 2018 | | | | For each of the two years in the period ended December 31, 2018 | | | | For each of the two years in the period ended December 31, 2018 and the period from July 6, 2016 (Commencement of Operations) to December 31, 2016 | | |
| | FS Global Credit Opportunities Fund—T2 | | | | For the year ended December 31, 2018 | | | | For the year ended December 31, 2018 and the period from August 2, 2017 (Commencement of Operations) to December 31, 2017 | | | | For the year ended December 31, 2018 and the period from August 2, 2017 (Commencement of Operations) to December 31, 2017 | | |
March 1, 2019
(in thousands, except share and per share amounts)
December 31, 2018
| | | Fund—A | | | Fund—D | | | Fund—T | | | Fund—ADV | | | Fund—T2 | | |||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Investment in FS Global Credit Opportunities Fund, at fair value(1) | | | | $ | 1,051,811 | | | | | $ | 203,096 | | | | | $ | 189,014 | | | | | $ | 55,574 | | | | | $ | 6,478 | | |
Cash | | | | | 7,153 | | | | | | 1,373 | | | | | | 1,341 | | | | | | 419 | | | | | | 57 | | |
Distributions receivable from FS Global Credit Opportunities Fund | | | | | 29 | | | | | | 6 | | | | | | 2 | | | | | | — | | | | | | — | | |
Expense reimbursement due from sponsor(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1 | | |
Total assets | | | | $ | 1,058,993 | | | | | $ | 204,475 | | | | | $ | 190,357 | | | | | $ | 55,993 | | | | | $ | 6,536 | | |
Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Shareholder distributions payable | | | | $ | 3,162 | | | | | $ | 576 | | | | | $ | 461 | | | | | $ | 129 | | | | | $ | 11 | | |
Distribution fees payable | | | | | — | | | | | | — | | | | | | 49 | | | | | | 10 | | | | | | 7 | | |
Administrative services expense payable | | | | | 34 | | | | | | 1 | | | | | | 16 | | | | | | 5 | | | | | | — | | |
Transfer agent fees payable | | | | | 128 | | | | | | 23 | | | | | | 21 | | | | | | 6 | | | | | | 2 | | |
Professional fees payable | | | | | 21 | | | | | | 20 | | | | | | 33 | | | | | | 34 | | | | | | 33 | | |
Accounting and administrative fees payable | | | | | 73 | | | | | | 14 | | | | | | 13 | | | | | | 4 | | | | | | — | | |
Printing fees payable | | | | | 46 | | | | | | 32 | | | | | | 37 | | | | | | 16 | | | | | | 2 | | |
Other accrued expenses and liabilities | | | | | 10 | | | | | | 2 | | | | | | 5 | | | | | | 4 | | | | | | 11 | | |
Total liabilities | | | | $ | 3,474 | | | | | $ | 668 | | | | | $ | 635 | | | | | $ | 208 | | | | | $ | 66 | | |
Net assets | | | | $ | 1,055,519 | | | | | $ | 203,807 | | | | | $ | 189,722 | | | | | $ | 55,785 | | | | | $ | 6,470 | | |
Commitments and contingencies(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Composition of net assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common shares, $0.001 par value, unlimited shares authorized(4) | | | | $ | 140 | | | | | $ | 27 | | | | | $ | 25 | | | | | $ | 7 | | | | | $ | 1 | | |
Capital in excess of par value | | | | | 1,207,002 | | | | | | 232,669 | | | | | | 196,670 | | | | | | 58,516 | | | | | | 6,741 | | |
Accumulated earnings (deficit) | | | | | (151,623) | | | | | | (28,889) | | | | | | (6,973) | | | | | | (2,738) | | | | | | (272) | | |
Net assets | | | | $ | 1,055,519 | | | | | $ | 203,807 | | | | | $ | 189,722 | | | | | $ | 55,785 | | | | | $ | 6,470 | | |
Net asset value per common share at period end | | | | $ | 7.54 | | | | | $ | 7.54 | | | | | $ | 7.63 | | | | | $ | 7.53 | | | | | $ | 7.50 | | |
| (1) Investment in FS Global Credit Opportunities Fund, at cost | | | | $ | 1,179,235 | | | | | $ | 226,647 | | | | | $ | 199,538 | | | | | $ | 58,844 | | | | | $ | 6,761 | | |
| (2) See Note 4 for a discussion of reimbursements and other amounts paid by the sponsor and affiliates | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (3) Commitments and contingencies. See Note 6 for a discussion of commitments and contingencies | | | | $ | 25,276 | | | | | $ | 5,080 | | | | | $ | 2 | | | | | | — | | | | | $ | 72 | | |
| (4) Common shares issued and outstanding are as follows | | | | | 139,954,541 | | | | | | 27,020,192 | | | | | | 24,870,141 | | | | | | 7,406,327 | | | | | | 862,481 | | |
(in thousands)
Year Ended December 31, 2018
| | | Fund—A | | | Fund—D | | | Fund—T | | | Fund—ADV | | | Fund—T2 | | |||||||||||||||
Investment income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions from FS Global Credit Opportunities Fund | | | | $ | 76,078 | | | | | $ | 14,686 | | | | | $ | 13,746 | | | | | $ | 4,052 | | | | | $ | 469 | | |
Interest income | | | | | 11 | | | | | | 2 | | | | | | 3 | | | | | | 1 | | | | | | — | | |
Total investment income | | | | | 76,089 | | | | | | 14,688 | | | | | | 13,749 | | | | | | 4,053 | | | | | | 469 | | |
Operating expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Administrative services expenses | | | | | 389 | | | | | | 88 | | | | | | 81 | | | | | | 24 | | | | | | 4 | | |
Distribution fees | | | | | — | | | | | | — | | | | | | 1,859 | | | | | | 272 | | | | | | 64 | | |
Transfer agent fees | | | | | 734 | | | | | | 118 | | | | | | 119 | | | | | | 33 | | | | | | 5 | | |
Accounting and administrative fees | | | | | 273 | | | | | | 55 | | | | | | 56 | | | | | | 17 | | | | | | 2 | | |
Professional fees | | | | | 61 | | | | | | 33 | | | | | | 48 | | | | | | 50 | | | | | | 40 | | |
Printing fees | | | | | 332 | | | | | | 75 | | | | | | 122 | | | | | | 66 | | | | | | 41 | | |
Other general and administrative expenses | | | | | 2 | | | | | | 2 | | | | | | 68 | | | | | | 13 | | | | | | 12 | | |
Total operating expenses | | | | | 1,791 | | | | | | 371 | | | | | | 2,353 | | | | | | 475 | | | | | | 168 | | |
Less: Expense reimbursement from sponsor(1) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (52) | | |
Net operating expenses | | | | | 1,791 | | | | | | 371 | | | | | | 2,353 | | | | | | 475 | | | | | | 116 | | |
Net investment income | | | | | 74,298 | | | | | | 14,317 | | | | | | 11,396 | | | | | | 3,578 | | | | | | 353 | | |
Realized and unrealized gain/loss from FS Global Credit Opportunities Fund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net realized gain (loss) on investment | | | | | (15,253) | | | | | | (3,505) | | | | | | 354 | | | | | | 33 | | | | | | (1) | | |
Net change in unrealized appreciation (depreciation) on investment | | | | | 24,411 | | | | | | 5,306 | | | | | �� | 1,327 | | | | | | 471 | | | | | | 53 | | |
Total net realized gain (loss) and unrealized appreciation (depreciation) on investment | | | | | 9,158 | | | | | | 1,801 | | | | | | 1,681 | | | | | | 504 | | | | | | 52 | | |
Net increase (decrease) in net assets resulting from operations | | | | $ | 83,456 | | | | | $ | 16,118 | | | | | $ | 13,077 | | | | | $ | 4,082 | | | | | $ | 405 | | |
|
(in thousands)
| | | Fund—A | | | Fund—D | | ||||||||||||||||||
| | | Year Ended December 31, | | | Year Ended December 31, | | ||||||||||||||||||
| | | 2018 | | | 2017(1) | | | 2018 | | | 2017(1) | | ||||||||||||
Operations | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | | $ | 74,298 | | | | | $ | 111,109 | | | | | $ | 14,317 | | | | | $ | 21,541 | | |
Net realized gain (loss) on investment | | | | | (15,253) | | | | | | (9,793) | | | | | | (3,505) | | | | | | (1,850) | | |
Net change in unrealized appreciation (depreciation) on investment | | | | | 24,411 | | | | | | (68,455) | | | | | | 5,306 | | | | | | (13,353) | | |
Net increase from additional support payment from sponsor(2) | | | | | — | | | | | | 11,718 | | | | | | — | | | | | | 2,263 | | |
Net increase (decrease) in net assets resulting from operations | | | | | 83,456 | | | | | | 44,579 | | | | | | 16,118 | | | | | | 8,601 | | |
Shareholder distributions(3) | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions to shareholders | | | | | (71,050) | | | | | | (122,827) | | | | | | (13,710) | | | | | | (23,804) | | |
Net decrease in net assets resulting from shareholder distributions | | | | | (71,050) | | | | | | (122,827) | | | | | | (13,710) | | | | | | (23,804) | | |
Capital share transactions(4) | | | | | | | | | | | | | | | | | | | | | | | | | |
Reinvestment of shareholder distributions | | | | | 35,557 | | | | | | 68,377 | | | | | | 7,286 | | | | | | 15,177 | | |
Repurchases of common shares | | | | | (57,950) | | | | | | (44,802) | | | | | | (13,078) | | | | | | (8,418) | | |
Net increase (decrease) in net assets resulting from capital share transactions | | | | | (22,393) | | | | | | 23,575 | | | | | | (5,792) | | | | | | 6,759 | | |
Total increase (decrease) in net assets | | | | | (9,987) | | | | | | (54,673) | | | | | | (3,384) | | | | | | (8,444) | | |
Net assets at beginning of year | | | | | 1,065,506 | | | | | | 1,120,179 | | | | | | 207,191 | | | | | | 215,635 | | |
Net assets at end of year | | | | $ | 1,055,519 | | | | | $ | 1,065,506 | | | | | $ | 203,807 | | | | | $ | 207,191 | | |
|
(in thousands)
| | | Fund—T | | | Fund—ADV | | ||||||||||||||||||
| | | Year Ended December 31, | | | Year Ended December 31, | | ||||||||||||||||||
| | | 2018 | | | 2017(1) | | | 2018 | | | 2017(1) | | ||||||||||||
Operations | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | | $ | 11,396 | | | | | $ | 12,575 | | | | | $ | 3,578 | | | | | $ | 3,531 | | |
Net realized gain (loss) on investment | | | | | 354 | | | | | | 29 | | | | | | 33 | | | | | | 6 | | |
Net change in unrealized appreciation (depreciation) on investment | | | | | 1,327 | | | | | | (14,619) | | | | | | 471 | | | | | | (4,207) | | |
Net increase (decrease) in net assets resulting from operations | | | | | 13,077 | | | | | | (2,015) | | | | | | 4,082 | | | | | | (670) | | |
Shareholder distributions(2) | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions to shareholders | | | | | (10,214) | | | | | | (12,668) | | | | | | (3,415) | | | | | | (3,772) | | |
Net decrease in net assets resulting from shareholder distributions | | | | | (10,214) | | | | | | (12,668) | | | | | | (3,415) | | | | | | (3,772) | | |
Capital share transactions(3) | | | | | | | | | | | | | | | | | | | | | | | | | |
Issuance of common shares | | | | | — | | | | | | 130,209 | | | | | | — | | | | | | 46,131 | | |
Reinvestment of shareholder distributions | | | | | 4,774 | | | | | | 6,415 | | | | | | 1,780 | | | | | | 2,218 | | |
Repurchases of common shares | | | | | (8,949) | | | | | | (372) | | | | | | (3,234) | | | | | | (316) | | |
Net increase (decrease) in net assets resulting from capital share transactions | | | | | (4,175) | | | | | | 136,252 | | | | | | (1,454) | | | | | | 48,033 | | |
Total increase (decrease) in net assets | | | | | (1,312) | | | | | | 121,569 | | | | | | (787) | | | | | | 43,591 | | |
Net assets at beginning of year | | | | | 191,034 | | | | | | 69,465 | | | | | | 56,572 | | | | | | 12,981 | | |
Net assets at end of year | | | | $ | 189,722 | | | | | $ | 191,034 | | | | | $ | 55,785 | | | | | $ | 56,572 | | |
|
(in thousands)
| | | Fund—T2 | | |||||||||
| | | Year Ended December 31, 2018 | | | Period from August 2, 2017 (Commencement of Operations) to December 31, 2017(1) | | ||||||
Operations | | | | | | | | | | | | | |
Net investment income | | | | $ | 353 | | | | | $ | 112 | | |
Net realized gain (loss) on investment | | | | | (1) | | | | | | — | | |
Net change in unrealized appreciation (depreciation) on investment | | | | | 53 | | | | | | (336) | | |
Net increase (decrease) in net assets resulting from operations | | | | | 405 | | | | | | (224) | | |
Shareholder distributions(2) | | | | | | | | | | | | | |
Distributions to shareholders | | | | | (353) | | | | | | (177) | | |
Net decrease in net assets resulting from shareholder distributions | | | | | (353) | | | | | | (177) | | |
Capital share transactions(3) | | | | | | | | | | | | | |
Issuance of common shares | | | | | — | | | | | | 6,640 | | |
Reinvestment of shareholder distributions | | | | | 226 | | | | | | 114 | | |
Repurchases of common shares | | | | | (161) | | | | | | — | | |
Net increase (decrease) in net assets resulting from capital share transactions | | | | | 65 | | | | | | 6,754 | | |
Total increase (decrease) in net assets | | | | | 117 | | | | | | 6,353 | | |
Net assets at beginning of period | | | | | 6,353 | | | | | | — | | |
Net assets at end of period | | | | $ | 6,470 | | | | | $ | 6,353 | | |
|
(in thousands)
Year Ended December 31, 2018
| | | Fund—A | | | Fund—D | | | Fund—T | | | Fund—ADV | | | Fund—T2 | | |||||||||||||||
Cash flows from operating activities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | | $ | 83,456 | | | | | $ | 16,118 | | | | | $ | 13,077 | | | | | $ | 4,082 | | | | | $ | 405 | | |
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Purchases of common shares of FS Global Credit Opportunities Fund | | | | | (37,766) | | | | | | (7,669) | | | | | | (4,806) | | | | | | (1,681) | | | | | | (215) | | |
Sales of common shares of FS Global Credit Opportunities Fund | | | | | 57,950 | | | | | | 13,078 | | | | | | 8,949 | | | | | | 3,234 | | | | | | 161 | | |
Net realized (gain) loss on investment | | | | | 15,253 | | | | | | 3,505 | | | | | | (354) | | | | | | (33) | | | | | | 1 | | |
Net change in unrealized (appreciation) depreciation on investment | | | | | (24,411) | | | | | | (5,306) | | | | | | (1,327) | | | | | | (471) | | | | | | (53) | | |
(Increase) decrease in distributions receivable from FS Global Credit Opportunities Fund | | | | | 1 | | | | | | 1 | | | | | | — | | | | | | — | | | | | | — | | |
(Increase) decrease in expense reimbursement and additional support payment due from sponsor(1) | | | | | 2,765 | | | | | | 563 | | | | | | — | | | | | | — | | | | | | 6 | | |
Increase (decrease) in payable for investment purchased | | | | | (6,883) | | | | | | (1,504) | | | | | | (1,263) | | | | | | (415) | | | | | | (50) | | |
Increase (decrease) in expense recoupment payable to sponsor | | | | | — | | | | | | — | | | | | | — | | | | | | (3) | | | | | | — | | |
Increase (decrease) in distribution fees payable | | | | | — | | | | | | — | | | | | | (620) | | | | | | (94) | | | | | | (8) | | |
Increase (decrease) in administrative services expense payable | | | | | (43) | | | | | | (25) | | | | | | 12 | | | | | | 4 | | | | | | — | | |
Increase (decrease) in transfer agent fees payable | | | | | 54 | | | | | | — | | | | | | 7 | | | | | | 2 | | | | | | 1 | | |
Increase (decrease) in professional fees payable | | | | | (1) | | | | | | (1) | | | | | | 12 | | | | | | 14 | | | | | | 10 | | |
Increase (decrease) in accounting and administrative fees payable | | | | | 12 | | | | | | 5 | | | | | | 9 | | | | | | 3 | | | | | | — | | |
Increase (decrease) in printing fees payable | | | | | 16 | | | | | | (12) | | | | | | 36 | | | | | | 16 | | | | | | (3) | | |
Increase (decrease) in other accrued expenses and liabilities | | | | | (1) | | | | | | (5) | | | | | | — | | | | | | 1 | | | | | | 9 | | |
Net cash provided by (used in) operating activities | | | | | 90,402 | | | | | | 18,748 | | | | | | 13,732 | | | | | | 4,659 | | | | | | 264 | | |
Cash flows from financing activities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Reinvestment of shareholder distributions | | | | | 35,557 | | | | | | 7,286 | | | | | | 4,774 | | | | | | 1,780 | | | | | | 226 | | |
Repurchases of common shares | | | | | (57,950) | | | | | | (13,078) | | | | | | (8,949) | | | | | | (3,234) | | | | | | (161) | | |
Shareholder distributions | | | | | (72,661) | | | | | | (13,919) | | | | | | (10,407) | | | | | | (3,456) | | | | | | (358) | | |
Net cash provided by (used in) financing activities | | | | | (95,054) | | | | | | (19,711) | | | | | | (14,582) | | | | | | (4,910) | | | | | | (293) | | |
Total increase (decrease) in cash | | | | | (4,652) | | | | | | (963) | | | | | | (850) | | | | | | (251) | | | | | | (29) | | |
Cash at beginning of year | | | | | 11,805 | | | | | | 2,336 | | | | | | 2,191 | | | | | | 670 | | | | | | 86 | | |
Cash at end of year | | | | $ | 7,153 | | | | | $ | 1,373 | | | | | $ | 1,341 | | | | | $ | 419 | | | | | $ | 57 | | |
|
(in thousands, except share and per share amounts)
| | | FS Global Credit Opportunities Fund—A | | |||||||||||||||||||||||||||
| | | Year Ended December 31, | | |||||||||||||||||||||||||||
| | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | |||||||||||||||
Per Share Data:(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | | | $ | 7.46 | | | | | $ | 8.01 | | | | | $ | 7.08 | | | | | $ | 8.91 | | | | | $ | 10.02 | | |
Results of operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(2) | | | | | 0.53 | | | | | | 0.79 | | | | | | 0.78 | | | | | | 0.87 | | | | | | 0.87 | | |
Net realized and unrealized appreciation (depreciation) on investment | | | | | 0.06 | | | | | | (0.47) | | | | | | 1.02 | | | | | | (1.78) | | | | | | (1.11) | | |
Net increase (decrease) in net assets resulting from operations | | | | | 0.59 | | | | | | 0.32 | | | | | | 1.80 | | | | | | (0.91) | | | | | | (0.24) | | |
Shareholder distributions(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | | | (0.51) | | | | | | (0.87) | | | | | | (0.87) | | | | | | (0.87) | | | | | | (0.87) | | |
Net decrease in net assets resulting from shareholder distributions | | | | | (0.51) | | | | | | (0.87) | | | | | | (0.87) | | | | | | (0.87) | | | | | | (0.87) | | |
Capital share transactions | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Reimbursement of sponsor(4) | | | | | — | | | | | | — | | | | | | — | | | | | | (0.05) | | | | | | — | | |
Offering costs | | | | | — | | | | | | — | | | | | | — | | | | | | (0.04) | | | | | | (0.10) | | |
Capital contributions of sponsor(5) | | | | | — | | | | | | — | | | | | | — | | | | | | 0.04 | | | | | | 0.10 | | |
Net increase (decrease) in net assets resulting from capital share transactions | | | | | — | | | | | | — | | | | | | — | | | | | | (0.05) | | | | | | 0.00 | | |
Net asset value, end of year | | | | $ | 7.54 | | | | | $ | 7.46 | | | | | $ | 8.01 | | | | | $ | 7.08 | | | | | $ | 8.91 | | |
Shares outstanding, end of year | | | | | 139,954,541 | | | | | | 142,925,358 | | | | | | 139,931,140 | | | | | | 109,659,116 | | | | | | 54,670,071 | | |
Total return(6) | | | | | 7.93% | | | | | | 4.11% | | | | | | 27.39% | | | | | | (11.72)% | | | | | | (2.94)% | | |
Ratio/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of year | | | | $ | 1,055,519 | | | | | $ | 1,065,506 | | | | | $ | 1,120,179 | | | | | $ | 775,956 | | | | | $ | 486,908 | | |
Ratio of net investment income to average net assets(7)(8) | | | | | 6.86% | | | | | | 9.97% | | | | | | 10.68% | | | | | | 10.52% | | | | | | 9.01% | | |
Ratio of total operating expenses to average net assets(7) | | | | | 0.17% | | | | | | 0.16% | | | | | | 0.46% | | | | | | 0.25% | | | | | | 0.33% | | |
Ratio of expense recoupment to (reimbursement) from sponsor to average net assets(7) | | | | | — | | | | | | (0.16)% | | | | | | (0.21)% | | | | | | (0.25)% | | | | | | (0.33)% | | |
Ratio of net operating expenses to average net assets(7) | | | | | 0.17% | | | | | | 0.00% | | | | | | 0.25% | | | | | | 0.00% | | | | | | 0.00% | | |
Portfolio turnover of FS Global Credit Opportunities Fund | | | | | 72% | | | | | | 94% | | | | | | 92% | | | | | | 125% | | | | | | 165% | | |
|
(in thousands, except share and per share amounts)
| | | FS Global Credit Opportunities Fund—D | | |||||||||||||||||||||||||||
| | | Year Ended December 31, | | |||||||||||||||||||||||||||
| | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | |||||||||||||||
Per Share Data:(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, beginning of year | | | | $ | 7.46 | | | | | $ | 8.01 | | | | | $ | 7.08 | | | | | $ | 8.91 | | | | | $ | 10.02 | | |
Results of operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income(2) | | | | | 0.53 | | | | | | 0.79 | | | | | | 0.78 | | | | | | 0.87 | | | | | | 0.87 | | |
Net realized and unrealized appreciation (depreciation) on investment | | | | | 0.06 | | | | | | (0.47) | | | | | | 1.02 | | | | | | (1.78) | | | | | | (1.11) | | |
Net increase (decrease) in net assets resulting from operations | | | | | 0.59 | | | | | | 0.32 | | | | | | 1.80 | | | | | | (0.91) | | | | | | (0.24) | | |
Shareholder distributions(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | | | (0.51) | | | | | | (0.87) | | | | | | (0.87) | | | | | | (0.87) | | | | | | (0.87) | | |
Net decrease in net assets resulting from shareholder distributions | | | | | (0.51) | | | | | | (0.87) | | | | | | (0.87) | | | | | | (0.87) | | | | | | (0.87) | | |
Capital share transactions | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Reimbursement of sponsor(4) | | | | | — | | | | | | — | | | | | | — | | | | | | (0.05) | | | | | | — | | |
Offering costs | | | | | — | | | | | | — | | | | | | — | | | | | | (0.04) | | | | | | (0.11) | | |
Capital contributions of sponsor(5) | | | | | — | | | | | | — | | | | | | — | | | | | | 0.04 | | | | | | 0.11 | | |
Net increase (decrease) in net assets resulting from capital share transactions | | | | | — | | | | | | — | | | | | | — | | | | | | (0.05) | | | | | | 0.00 | | |
Net asset value, end of year | | | | $ | 7.54 | | | | | $ | 7.46 | | | | | $ | 8.01 | | | | | $ | 7.08 | | | | | $ | 8.91 | | |
Shares outstanding, end of year | | | | | 27,020,192 | | | | | | 27,788,843 | | | | | | 26,932,885 | | | | | | 21,201,113 | | | | | | 10,906,827 | | |
Total return(6) | | | | | 7.93% | | | | | | 4.11% | | | | | | 27.38% | | | | | | (11.72)% | | | | | | (2.94)% | | |
Ratio/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of year | | | | $ | 203,807 | | | | | $ | 207,191 | | | | | $ | 215,635 | | | | | $ | 150,024 | | | | | $ | 97,139 | | |
Ratio of net investment income to average net assets(7)(8) | | | | | 6.85% | | | | | | 9.97% | | | | | | 10.68% | | | | | | 10.51% | | | | | | 9.01% | | |
Ratio of total operating expenses to average net assets(7) | | | | | 0.18% | | | | | | 0.20% | | | | | | 0.53% | | | | | | 0.31% | | | | | | 0.45% | | |
Ratio of expense recoupment to (reimbursement) from sponsor to average net assets(7) | | | | | — | | | | | | (0.20)% | | | | | | (0.28)% | | | | | | (0.31)% | | | | | | (0.45)% | | |
Ratio of net operating expenses to average net assets(7) | | | | | 0.18% | | | | | | 0.00% | | | | | | 0.25% | | | | | | 0.00% | | | | | | 0.00% | | |
Portfolio turnover of FS Global Credit Opportunities Fund | | | | | 72% | | | | | | 94% | | | | | | 92% | | | | | | 125% | | | | | | 165% | | |
|
(in thousands, except share and per share amounts)
| | | FS Global Credit Opportunities Fund—T | | |||||||||||||||
| | | Year Ended December 31, | | | Period from June 1, 2016 (Commencement of Operations) to December 31, 2016 | | ||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||
Per Share Data:(1) | | | | | | | | | | | | | | | | | | | |
Net asset value, beginning of period | | | | $ | 7.52 | | | | | $ | 8.07 | | | | | $ | 7.38 | | |
Results of operations | | | | | | | | | | | | | | | | | | | |
Net investment income(2) | | | | | 0.46 | | | | | | 0.61 | | | | | | 0.38 | | |
Net realized and unrealized appreciation (depreciation) on investment | | | | | 0.06 | | | | | | (0.54) | | | | | | 0.67 | | |
Net increase (decrease) in net assets resulting from operations | | | | | 0.52 | | | | | | 0.07 | | | | | | 1.05 | | |
Shareholder distributions(3) | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | | | (0.41) | | | | | | (0.62) | | | | | | (0.36) | | |
Net decrease in net assets resulting from shareholder distributions | | | | | (0.41) | | | | | | (0.62) | | | | | | (0.36) | | |
Net asset value, end of period | | | | $ | 7.63 | | | | | $ | 7.52 | | | | | $ | 8.07 | | |
Shares outstanding, end of period | | | | | 24,870,141 | | | | | | 25,410,621 | | | | | | 8,605,273 | | |
Total return(6) | | | | | 6.91% | | | | | | 0.78% | | | | | | 14.51%(9) | | |
Ratio/Supplemental Data: | | | | | | | | | | | | | | | | | | | |
Net assets, end of period | | | | $ | 189,722 | | | | | $ | 191,034 | | | | | $ | 69,465 | | |
Ratio of net investment income to average net assets(7)(8) | | | | | 5.83% | | | | | | 7.73% | | | | | | 4.82% | | |
Ratio of total operating expenses to average net assets(7) | | | | | 1.20% | | | | | | 2.44% | | | | | | 1.00% | | |
Ratio of expense recoupment to (reimbursement) from sponsor to average net assets(7) | | | | | — | | | | | | — | | | | | | (0.01)% | | |
Ratio of net operating expenses to average net assets(7) | | | | | 1.20% | | | | | | 2.44% | | | | | | 0.99% | | |
Portfolio turnover of FS Global Credit Opportunities Fund | | | | | 72% | | | | | | 94% | | | | | | 92%(10) | | |
|
(in thousands, except share and per share amounts)
| | | FS Global Credit Opportunities Fund—ADV | | |||||||||||||||
| | | Year Ended December 31, | | | Period from July 6, 2016 (Commencement of Operations) to December 31, 2016 | | ||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||
Per Share Data:(1) | | | | | | | | | | | | | | | | | | | |
Net asset value, beginning of period | | | | $ | 7.45 | | | | | $ | 8.04 | | | | | $ | 7.32 | | |
Results of operations | | | | | | | | | | | | | | | | | | | |
Net investment income(2) | | | | | 0.48 | | | | | | 0.62 | | | | | | 0.29 | | |
Net realized gain (loss) and unrealized appreciation (depreciation) on investment | | | | | 0.06 | | | | | | (0.54) | | | | | | 0.76 | | |
Net increase (decrease) in net assets resulting from operations | | | | | 0.54 | | | | | | 0.08 | | | | | | 1.05 | | |
Shareholder distributions(3) | | | | | | | | | | | | | | | | | | | |
Distributions from net investment income | | | | | (0.46) | | | | | | (0.67) | | | | | | (0.33) | | |
Net decrease in net assets resulting from shareholder distributions | | | | | (0.46) | | | | | | (0.67) | | | | | | (0.33) | | |
Net asset value, end of period | | | | $ | 7.53 | | | | | $ | 7.45 | | | | | $ | 8.04 | | |
Shares outstanding, end of period | | | | | 7,406,327 | | | | | | 7,596,001 | | | | | | 1,615,221 | | |
Total return(6) | | | | | 7.25% | | | | | | 0.89% | | | | | | 14.44%(9) | | |
Ratio/Supplemental Data: | | | | | | | | | | | | | | | | | | | |
Net assets, end of period | | | | $ | 55,785 | | | | | $ | 56,572 | | | | | $ | 12,981 | | |
Ratio of net investment income to average net assets(7)(8) | | | | | 6.21% | | | | | | 7.93% | | | | | | 3.70% | | |
Ratio of total operating expenses to average net assets(7) | | | | | 0.82% | | | | | | 2.22% | | | | | | 1.48% | | |
Ratio of expense recoupment to (reimbursement from) sponsor to average net assets(7) | | | | | — | | | | | | 0.04% | | | | | | (0.43)% | | |
Ratio of net operating expenses to average net assets(7) | | | | | 0.82% | | | | | | 2.26% | | | | | | 1.05% | | |
Portfolio turnover of FS Global Credit Opportunities Fund | | | | | 72% | | | | | | 94% | | | | | | 92%(10) | | |
|
(in thousands, except share and per share amounts)
| | | FS Global Credit Opportunities Fund—T2 | | |||||||||
| | | Year Ended December 31, 2018 | | | Period from August 2, 2017 (Commencement of Operations) to December 31, 2017 | | ||||||
Per Share Data:(1) | | | | | | | | | | | | | |
Net asset value, beginning of period | | | | $ | 7.44 | | | | | $ | 7.97 | | |
Results of operations | | | | | | | | | | | | | |
Net investment income(2) | | | | | 0.41 | | | | | | 0.16 | | |
Net realized and unrealized appreciation (depreciation) on investment | | | | | 0.06 | | | | | | (0.43) | | |
Net increase (decrease) in net assets resulting from operations | | | | | 0.47 | | | | | | (0.27) | | |
Shareholder distributions(3) | | | | | | | | | | | | | |
Distributions from net investment income | | | | | (0.41) | | | | | | (0.26) | | |
Net decrease in net assets resulting from shareholder distributions | | | | | (0.41) | | | | | | (0.26) | | |
Net asset value, end of period | | | | $ | 7.50 | | | | | $ | 7.44 | | |
Shares outstanding, end of period | | | | | 862,481 | | | | | | 853,769 | | |
Total return(6) | | | | | 6.29% | | | | | | (3.50)%(9) | | |
Ratio/Supplemental Data: | | | | | | | | | | | | | |
Net assets, end of period | | | | $ | 6,470 | | | | | $ | 6,353 | | |
Ratio of net investment income to average net assets(7)(8) | | | | | 5.30% | | | | | | 2.11% | | |
Ratio of total operating expenses to average net assets(7) | | | | | 2.52% | | | | | | 2.62% | | |
Ratio of expense recoupment to (reimbursement) from sponsor to average net assets(7) | | | | | (0.78)% | | | | | | (0.38)% | | |
Ratio of net operating expenses to average net assets(7) | | | | | 1.74% | | | | | | 2.24% | | |
Portfolio turnover of FS Global Credit Opportunities Fund | | | | | 72% | | | | | | 94%(10) | | |
|
(in thousands, except share and per share amounts)
| | | Period Ended December 31, | | |||||||||||||||||||||||||||
| | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | |||||||||||||||
Fund—A | | | | | 6.86% | | | | | | 9.81% | | | | | | 10.47% | | | | | | 10.27% | | | | | | 8.68% | | |
Fund—D | | | | | 6.85% | | | | | | 9.77% | | | | | | 10.40% | | | | | | 10.20% | | | | | | 8.56% | | |
Fund—T | | | | | 5.83% | | | | | | 7.73% | | | | | | 4.81% | | | | | | — | | | | | | — | | |
Fund—ADV | | | | | 6.21% | | | | | | 7.93% | | | | | | 3.27% | | | | | | — | | | | | | — | | |
Fund—T2 | | | | | 4.52% | | | | | | 1.73% | | | | | | — | | | | | | — | | | | | | — | | |
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
| | | FS Global Credit Opportunities Fund—A | | |||||||||||||||||||||
| | | Year Ended December 31, | | |||||||||||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||||||||
| | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Reinvestment of Distributions | | | | | 4,592,072 | | | | | $ | 35,557 | | | | | | 8,677,676 | | | | | $ | 68,377 | | |
Repurchases of Common Shares | | | | | (7,562,889) | | | | | | (57,950) | | | | | | (5,683,458) | | | | | | (44,802) | | |
Net Proceeds from Share Transactions | | | | | (2,970,817) | | | | | $ | (22,393) | | | | | | 2,994,218 | | | | | $ | 23,575 | | |
|
| | | FS Global Credit Opportunities Fund—D | | |||||||||||||||||||||
| | | Year Ended December 31, | | |||||||||||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||||||||
| | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Reinvestment of Distributions | | | | | 940,904 | | | | | $ | 7,286 | | | | | | 1,926,285 | | | | | $ | 15,177 | | |
Repurchases of Common Shares | | | | | (1,709,555) | | | | | | (13,078) | | | | | | (1,070,327) | | | | �� | | (8,418) | | |
Net Proceeds from Share Transactions | | | | | (768,651) | | | | | $ | (5,792) | | | | | | 855,958 | | | | | $ | 6,759 | | |
|
(in thousands, except share and per share amounts)
| | | FS Global Credit Opportunities Fund—T | | |||||||||||||||||||||
| | | Year Ended December 31, | | |||||||||||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||||||||
| | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Gross Proceeds from Offering | | | | | — | | | | | $ | — | | | | | | 16,039,289 | | | | | $ | 135,525 | | |
Reinvestment of Distributions | | | | | 610,520 | | | | | | 4,774 | | | | | | 813,201 | | | | | | 6,415 | | |
Total Gross Proceeds | | | | | 610,520 | | | | | | 4,774 | | | | | | 16,852,490 | | | | | | 141,940 | | |
Commissions and Dealer Manager Fees | | | | | — | | | | | | — | | | | | | — | | | | | | (5,316) | | |
Net Proceeds | | | | | 610,520 | | | | | | 4,774 | | | | | | 16,852,490 | | | | | | 136,624 | | |
Repurchases of Common Shares | | | | | (1,151,000) | | | | | | (8,949) | | | | | | (47,142) | | | | | | (372) | | |
Net Proceeds from Share Transactions | | | | | (540,480) | | | | | $ | (4,175) | | | | | | 16,805,348 | | | | | $ | 136,252 | | |
|
| | | FS Global Credit Opportunities Fund—ADV | | |||||||||||||||||||||
| | | Year Ended December 31, | | |||||||||||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||||||||
| | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Gross Proceeds from Offering | | | | | — | | | | | $ | — | | | | | | 5,738,111 | | | | | $ | 46,131 | | |
Reinvestment of Distributions | | | | | 230,070 | | | | | | 1,780 | | | | | | 282,427 | | | | | | 2,218 | | |
Total Gross Proceeds | | | | | 230,070 | | | | | | 1,780 | | | | | | 6,020,538 | | | | | | 48,349 | | |
Repurchases of Common Shares | | | | | (419,744) | | | | | | (3,234) | | | | | | (39,758) | | | | | | (316) | | |
Net Proceeds from Share Transactions | | | | | (189,674) | | | | | $ | (1,454) | | | | | | 5,980,780 | | | | | $ | 48,033 | | |
|
| | | FS Global Credit Opportunities Fund—T2 | | |||||||||||||||||||||
| | | Year Ended December 31, | | |||||||||||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||||||||
| | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Gross Proceeds from Offering | | | | | — | | | | | $ | — | | | | | | 838,965 | | | | | $ | 6,907 | | |
Reinvestment of Distributions | | | | | 29,190 | | | | | | 226 | | | | | | 14,804 | | | | | | 114 | | |
Total Gross Proceeds | | | | | 29,190 | | | | | | 226 | | | | | | 853,769 | | | | | | 7,021 | | |
Commissions and Dealer Manager Fees | | | | | — | | | | | | — | | | | | | — | | | | | | (267) | | |
Net Proceeds | | | | | 29,190 | | | | | | 226 | | | | | | 853,769 | | | | | | 6,754 | | |
Repurchases of Common Shares | | | | | (20,478) | | | | | | (161) | | | | | | — | | | | | | — | | |
Net Proceeds from Share Transactions | | | | | 8,712 | | | | | $ | 65 | | | | | | 853,769 | | | | | $ | 6,754 | | |
|
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
FS Global Credit Opportunities Fund—A | | |||||||||||||||||||||||||||||||||
For the Three Months Ended | | | Repurchase Date | | | Shares Repurchased | | | Percentage of Shares Tendered That Were Repurchased | | | Percentage of Outstanding Shares Repurchased | | | Repurchase Price Per Share | | | Aggregate Consideration for Repurchased Shares | | |||||||||||||||
Fiscal 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2016 | | | January 4, 2017 | | | | | 766,131 | | | | | | 100% | | | | | | 0.55% | | | | | $ | 8.008 | | | | | $ | 6,135 | | |
March 31, 2017 | | | April 5, 2017 | | | | | 1,079,306 | | | | | | 100% | | | | | | 0.76% | | | | | $ | 8.016 | | | | | | 8,652 | | |
June 30, 2017 | | | July 5, 2017 | | | | | 1,687,104 | | | | | | 100% | | | | | | 1.19% | | | | | $ | 7.815 | | | | | | 13,184 | | |
September 30, 2017 | | | October 4, 2017 | | | | | 2,150,917 | | | | | | 100% | | | | | | 1.51% | | | | | $ | 7.825 | | | | | | 16,831 | | |
Total | | | | | | | | 5,683,458 | | | | | | | | | | | | | | | | | | | | | | | $ | 44,802 | | |
Fiscal 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2017 | | | January 17, 2018 | | | | | 3,939,916 | | | | | | 60% | | | | | | 2.76% | | | | | $ | 7.547 | | | | | $ | 29,734 | | |
March 31, 2018 | | | April 9, 2018 | | | | | 1,227,758 | | | | | | 17% | | | | | | 0.88% | | | | | $ | 7.678 | | | | | | 9,426 | | |
June 30, 2018 | | | July 2, 2018 | | | | | 1,159,127 | | | | | | 16% | | | | | | 0.83% | | | | | $ | 7.788 | | | | | | 9,027 | | |
September 30, 2018 | | | October 1, 2018 | | | | | 1,100,469 | | | | | | 13% | | | | | | 0.79% | | | | | $ | 7.907 | | | | | | 8,702 | | |
Total | | | | | | | | 7,427,270 | | | | | | | | | | | | | | | | | | | | | | | $ | 56,889 | | |
|
(in thousands, except share and per share amounts)
FS Global Credit Opportunities Fund—D | | |||||||||||||||||||||||||||||||||
For the Three Months Ended | | | Repurchase Date | | | Shares Repurchased | | | Percentage of Shares Tendered That Were Repurchased | | | Percentage of Outstanding Shares Repurchased | | | Repurchase Price Per Share | | | Aggregate Consideration for Repurchased Shares | | |||||||||||||||
Fiscal 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2016 | | | January 4, 2017 | | | | | 80,288 | | | | | | 100% | | | | | | 0.30% | | | | | $ | 8.009 | | | | | $ | 643 | | |
March 31, 2017 | | | April 5, 2017 | | | | | 158,437 | | | | | | 100% | | | | | | 0.58% | | | | | $ | 8.017 | | | | | | 1,270 | | |
June 30, 2017 | | | July 5, 2017 | | | | | 349,373 | | | | | | 100% | | | | | | 1.26% | | | | | $ | 7.816 | | | | | | 2,731 | | |
September 30, 2017 | | | October 4, 2017 | | | | | 482,229 | | | | | | 100% | | | | | | 1.74% | | | | | $ | 7.826 | | | | | | 3,774 | | |
Total | | | | | | | | 1,070,327 | | | | | | | | | | | | | | | | | | | | | | | $ | 8,418 | | |
Fiscal 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2017 | | | January 17, 2018 | | | | | 980,629 | | | | | | 40% | | | | | | 3.53% | | | | | $ | 7.548 | | | | | $ | 7,402 | | |
March 31, 2018 | | | April 9, 2018 | | | | | 257,613 | | | | | | 10% | | | | | | 0.95% | | | | | $ | 7.679 | | | | | | 1,978 | | |
June 30, 2018 | | | July 2, 2018 | | | | | 235,060 | | | | | | 9% | | | | | | 0.87% | | | | | $ | 7.788 | | | | | | 1,831 | | |
September 30, 2018 | | | October 1, 2018 | | | | | 222,970 | | | | | | 8% | | | | | �� | 0.83% | | | | | $ | 7.906 | | | | | | 1,763 | | |
Total | | | | | | | | 1,696,272 | | | | | | | | | | | | | | | | | | | | | | | $ | 12,974 | | |
|
FS Global Credit Opportunities Fund—T | | |||||||||||||||||||||||||||||||||
For the Three Months Ended | | | Repurchase Date | | | Shares Repurchased | | | Percentage of Shares Tendered That Were Repurchased | | | Percentage of Outstanding Shares Repurchased | | | Repurchase Price Per Share | | | Aggregate Consideration for Repurchased Shares | | |||||||||||||||
Fiscal 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2016 | | | January 4, 2017 | | | | | 2,590 | | | | | | 100% | | | | | | 0.03% | | | | | $ | 8.075 | | | | | $ | 21 | | |
March 31, 2017(1) | | | April 5, 2017 | | | | | — | | | | | | — | | | | | | — | | | | | $ | 8.100 | | | | | | — | | |
June 30, 2017 | | | July 5, 2017 | | | | | 11,646 | | | | | | 100% | | | | | | 0.05% | | | | | $ | 7.927 | | | | | | 92 | | |
September 30, 2017 | | | October 4, 2017 | | | | | 32,906 | | | | | | 100% | | | | | | 0.13% | | | | | $ | 7.865 | | | | | | 259 | | |
Total | | | | | | | | 47,142 | | | | | | | | | | | | | | | | | | | | | | | $ | 372 | | |
Fiscal 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2017 | | | January 17, 2018 | | | | | 153,370 | | | | | | 46% | | | | | | 0.60% | | | | | $ | 7.586 | | | | | $ | 1,164 | | |
March 31, 2018 | | | April 9, 2018 | | | | | 675,384 | | | | | | 85% | | | | | | 2.66% | | | | | $ | 7.748 | | | | | | 5,233 | | |
June 30, 2018 | | | July 2, 2018 | | | | | 151,900 | | | | | | 10% | | | | | | 0.61% | | | | | $ | 7.862 | | | | | | 1,194 | | |
September 30, 2018 | | | October 1, 2018 | | | | | 148,371 | | | | | | 8% | | | | | | 0.60% | | | | | $ | 7.988 | | | | | | 1,185 | | |
Total | | | | | | | | 1,129,025 | | | | | | | | | | | | | | | | | | | | | | | $ | 8,776 | | |
|
(in thousands, except share and per share amounts)
FS Global Credit Opportunities Fund—ADV | | |||||||||||||||||||||||||||||||||
For the Three Months Ended | | | Repurchase Date | | | Shares Repurchased | | | Percentage of Shares Tendered That Were Repurchased | | | Percentage of Outstanding Shares Repurchased | | | Repurchase Price Per Share | | | Aggregate Consideration for Repurchased Shares | | |||||||||||||||
Fiscal 2017 | | | | | | | | |||||||||||||||||||||||||||
December 31, 2016 | | | January 4, 2017 | | | | | 13,006 | | | | | | 100% | | | | | | 0.81% | | | | | $ | 8.038 | | | | | $ | 105 | | |
March 31, 2017 | | | April 5, 2017 | | | | | 8,488 | | | | | | 100% | | | | | | 0.23% | | | | | $ | 8.046 | | | | | | 68 | | |
June 30, 2017 | | | July 5, 2017 | | | | | 12,244 | | | | | | 100% | | | | | | 0.17% | | | | | $ | 7.854 | | | | | | 96 | | |
September 30, 2017 | | | October 4, 2017 | | | | | 6,020 | | | | | | 100% | | | | | | 0.08% | | | | | $ | 7.798 | | | | | | 47 | | |
Total | | | | | | | | 39,758 | | | | | | | | | | | | | | | | | | | | | | | $ | 316 | | |
Fiscal 2018 | | | | | | | | |||||||||||||||||||||||||||
December 31, 2017 | | | January 17, 2018 | | | | | 31,370 | | | | | | 10% | | | | | | 0.41% | | | | | $ | 7.519 | | | | | $ | 236 | | |
March 31, 2018 | | | April 9, 2018 | | | | | 272,830 | | | | | | 32% | | | | | | 3.58% | | | | | $ | 7.669 | | | | | | 2,092 | | |
June 30, 2018 | | | July 2, 2018 | | | | | 56,496 | | | | | | 10% | | | | | | 0.76% | | | | | $ | 7.779 | | | | | | 439 | | |
September 30, 2018 | | | October 1, 2018 | | | | | 55,067 | | | | | | 11% | | | | | | 0.74% | | | | | $ | 7.898 | | | | | | 436 | | |
Total | | | | | | | | 415,763 | | | | | | | | | | | | | | | | | | | | | | | $ | 3,203 | | |
|
FS Global Credit Opportunities Fund—T2 | | |||||||||||||||||||||||||||||||||
For the Three Months Ended | | | Repurchase Date | | | Shares Repurchased | | | Percentage of Shares Tendered That Were Repurchased | | | Percentage of Outstanding Shares Repurchased | | | Repurchase Price Per Share | | | Aggregate Consideration for Repurchased Shares | | |||||||||||||||
Fiscal 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2017 | | | January 17, 2018 | | | | | 1,686 | | | | | | 100% | | | | | | 0.20% | | | | | $ | 7.532 | | | | | $ | 13 | | |
March 31, 2018(1) | | | April 9, 2018 | | | | | — | | | | | | — | | | | | | — | | | | | $ | 7.656 | | | | | | — | | |
June 30, 2018(1) | | | July 2, 2018 | | | | | — | | | | | | — | | | | | | — | | | | | $ | 7.766 | | | | | | — | | |
September 30, 2018 | | | October 1, 2018 | | | | | 18,792 | | | | | | 100% | | | | | | 2.15% | | | | | $ | 7.879 | | | | | | 148 | | |
Total | | | | | | | | 20,478 | | | | | | | | | | | | | | | | | | | | | | | $ | 161 | | |
|
(in thousands, except share and per share amounts)
| | | Shares Repurchased | | | Percentage of Outstanding Shares Repurchased | | | Repurchase Price Per Share | | | Aggregate Consideration for Repurchased Shares | | ||||||||||||
Fund—A | | | | | 109,682 | | | | | | 0.08% | | | | | $ | 7.798 | | | | | $ | 855 | | |
Fund—D | | | | | 7,256 | | | | | | 0.03% | | | | | $ | 7.797 | | | | | $ | 57 | | |
Fund—T | | | | | 18,587 | | | | | | 0.08% | | | | | $ | 7.877 | | | | | $ | 146 | | |
Fund—ADV | | | | | 2,830 | | | | | | 0.04% | | | | | $ | 7.790 | | | | | $ | 22 | | |
Fund—T2(1) | | | | | — | | | | | | — | | | | | $ | 7.770 | | | | | | — | | |
| | | Shares Repurchased | | | Percentage of Outstanding Shares Repurchased | | | Repurchase Price Per Share | | | Aggregate Consideration for Repurchased Shares | | ||||||||||||
Fund—A | | | | | 25,937 | | | | | | 0.02% | | | | | $ | 7.921 | | | | | $ | 206 | | |
Fund—D | | | | | 6,027 | | | | | | 0.02% | | | | | $ | 7.919 | | | | | $ | 47 | | |
Fund—T | | | | | 3,388 | | | | | | 0.01% | | | | | $ | 8.006 | | | | | $ | 27 | | |
Fund—ADV | | | | | 1,151 | | | | | | 0.02% | | | | | $ | 7.909 | | | | | $ | 9 | | |
Fund—T2(1) | | | | | — | | | | | | — | | | | | $ | 7.886 | | | | | | — | | |
(in thousands, except share and per share amounts)
| | | Shares Repurchased | | | Percentage of Outstanding Shares Repurchased | | | Repurchase Price Per Share | | | Aggregate Consideration for Repurchased Shares | | ||||||||||||
Fund—A | | | | | 45,198 | | | | | | 0.03% | | | | | $ | 7.618 | | | | | $ | 344 | | |
Fund—D | | | | | 6,045 | | | | | | 0.02% | | | | | $ | 7.619 | | | | | $ | 46 | | |
Fund—T | | | | | 3,139 | | | | | | 0.01% | | | | | $ | 7.705 | | | | | $ | 24 | | |
Fund—ADV | | | | | 1,879 | | | | | | 0.03% | | | | | $ | 7.608 | | | | | $ | 14 | | |
Fund—T2(1) | | | | | — | | | | | | — | | | | | $ | 7.577 | | | | | | — | | |
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
Related Party | | | Source Agreement | | | Description | | | Fund—A | | | Fund—D | | | Fund—T | | | Fund—ADV | | | Fund—T2 | | |||||||||||||||
FS Global Advisor | | | Administration Agreement | | | Administrative Services Expenses | | | | $ | 389 | | | | | $ | 88 | | | ��� | | $ | 81 | | | | | $ | 24 | | | | | $ | 4 | | |
FS Investment Solutions | | | Distribution Plan | | | Distribution Fees(1) | | | | | — | | | | | | — | | | | | $ | 656 | | | | | $ | 272 | | | | | $ | 22 | | |
FS Investment Solutions | | | Share Repurchase Program | | | Contingent Deferred Sales Charges(2) | | | | | — | | | | | | — | | | | | $ | 75 | | | | | | — | | | | | $ | 2 | | |
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
For the Three Months Ended | | | Amount of Expense Reimbursement and Additional Support Payment | | | Annualized “Other Operating Expenses” Ratio as of the Date of Support Payment | | | Annualized Rate of Distributions Per Common Share(1) | | | Reimbursement Eligibility Expiration | | |||||||||
FS Global Credit Opportunities Fund—A | | |||||||||||||||||||||
Fiscal 2016 | | | | | | | | | | | | | | | | | | | | | | |
March 31, 2016 | | | | $ | 738 | | | | | | 0.30% | | | | | | 12.79% | | | | March 31, 2019 | |
June 30, 2016 | | | | | 2,409 | | | | | | 0.18% | | | | | | 12.01% | | | | June 30, 2019 | |
September 30, 2016 | | | | | 3,361 | | | | | | 0.21% | | | | | | 11.36% | | | | September 30, 2019 | |
December 31, 2016 | | | | | 5,280 | | | | | | 0.17% | | | | | | 10.86% | | | | December 31, 2019 | |
Total | | | | $ | 11,788 | | | | | | | | | | | | | | | | | |
Fiscal 2017 | | | | | | | | | | | | | | | | | | | | | | |
March 31, 2017 | | | | $ | 3,754 | | | | | | 0.14% | | | | | | 10.85% | | | | March 31, 2020 | |
June 30, 2017 | | | | | 1,963 | | | | | | 0.18% | | | | | | 11.11% | | | | June 30, 2020 | |
September 30, 2017 | | | | | 5,006 | | | | | | 0.14% | | | | | | 11.11% | | | | September 30, 2020 | |
December 31, 2017 | | | | | 2,765 | | | | | | 0.17% | | | | | | 11.41% | | | | December 31, 2020 | |
Total | | | | $ | 13,488 | | | | | | | | | | | | | | | | | |
FS Global Credit Opportunities Fund—D | | |||||||||||||||||||||
Fiscal 2016 | | | | | | | | | | | | | | | | | | | | | | |
March 31, 2016 | | | | $ | 175 | | | | | | 0.40% | | | | | | 12.77% | | | | March 31, 2019 | |
June 30, 2016 | | | | | 492 | | | | | | 0.25% | | | | | | 12.01% | | | | June 30, 2019 | |
September 30, 2016 | | | | | 661 | | | | | | 0.25% | | | | | | 11.35% | | | | September 30, 2019 | |
December 31, 2016 | | | | | 1,052 | | | | | | 0.25% | | | | | | 10.86% | | | | December 31, 2019 | |
Total | | | | $ | 2,380 | | | | | | | | | | | | | | | | | |
Fiscal 2017 | | | | | | | | | | | | | | | | | | | | | | |
March 31, 2017 | | | | $ | 750 | | | | | | 0.25% | | | | | | 10.84% | | | | March 31, 2020 | |
June 30, 2017 | | | | | 386 | | | | | | 0.19% | | | | | | 11.11% | | | | June 30, 2020 | |
September 30, 2017 | | | | | 1,001 | | | | | | 0.20% | | | | | | 11.11% | | | | September 30, 2020 | |
December 31, 2017 | | | | | 563 | | | | | | 0.22% | | | | | | 11.41% | | | | December 31, 2020 | |
Total | | | | $ | 2,700 | | | | | | | | | | | | | | | | | |
FS Global Credit Opportunities Fund—T | | |||||||||||||||||||||
Fiscal 2016 | | | | | | |||||||||||||||||
March 31, 2016 | | | | $ | 2 | | | | | | 3.02% | | | | | | 8.19% | | | | June 30, 2019 | |
Total | | | | $ | 2 | | | | | | ||||||||||||
|
(in thousands, except share and per share amounts)
For the Three Months Ended | | | Amount of Expense Reimbursement and Additional Support Payment | | | Annualized “Other Operating Expenses” Ratio as of the Date of Support Payment | | | Annualized Rate of Distributions Per Common Share(1) | | | Reimbursement Eligibility Expiration | | | | | | |||||||||||||||||
FS Global Credit Opportunities Fund—T2 | | | | | | | | | | | | | | |||||||||||||||||||||
Fiscal 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||
September 30, 2017 | | | | $ | 13 | | | | | | 3.63% | | | | | | 7.49% | | | | September 30, 2020 | | | | | | ||||||||
December 31, 2017 | | | | | 7 | | | | | | 1.88% | | | | | | 8.09% | | | | December 31, 2020 | | | | | | ||||||||
Total | | | | $ | 20 | | | | | | | | | | | | | | | | | | | | | | ||||||||
Fiscal 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||
March 31, 2018 | | | | $ | 19 | | | | | | 2.01% | | | | | | 5.37% | | | | March 31, 2021 | | | | | | ||||||||
June 30, 2018 | | | | | 18 | | | | | | 1.83% | | | | | | 5.27% | | | | June 30, 2021 | | | | | | ||||||||
September 30, 2018 | | | | | 14 | | | | | | 1.58% | | | | | | 5.21% | | | | September 30, 2021 | | | | | | ||||||||
December 31, 2018 | | | | | 1 | | | | | | 0.85% | | | | | | 5.46% | | | | December 31, 2021 | | | | | | ||||||||
Total | | | | $ | 52 | | | | | | | | | | | | | | | | | | | | | | ||||||||
|
| | | Year Ended December 31, 2018 | | | Year Ended December 31, 2017 | | ||||||||||||||||||
| | | Shares Repurchased | | | Aggregate Consideration for Repurchased Shares | | | Shares Repurchased | | | Aggregate Consideration for Repurchased Shares | | ||||||||||||
Fund—A | | | | | 7,475,556 | | | | | $ | 57,950 | | | | | | 5,635,126 | | | | | $ | 44,774 | | |
Fund—D | | | | | 1,689,131 | | | | | $ | 13,078 | | | | | | 1,062,160 | | | | | $ | 8,418 | | |
Fund—T | | | | | 1,152,452 | | | | | $ | 8,949 | | | | | | 72,438 | | | | | $ | 571 | | |
Fund—ADV | | | | | 416,287 | | | | | $ | 3,234 | | | | | | 31,665 | | | | | $ | 251 | | |
Fund—T2 | | | | | 20,262 | | | | | $ | 161 | | | | | | — | | | | | | — | | |
| | | Shares Repurchased | | | Aggregate Consideration for Repurchased Shares | | ||||||
Fund—A | | | | | 1,154,119 | | | | | $ | 8,749 | | |
Fund—D | | | | | 232,195 | | | | | $ | 1,760 | | |
Fund—T | | | | | 156,413 | | | | | $ | 1,186 | | |
Fund—ADV | | | | | 58,966 | | | | | $ | 447 | | |
Fund—T2 | | | | | 2,101 | | | | | $ | 16 | | |
(in thousands, except share and per share amounts)
| | | Year Ended December 31, 2018 | | | Year Ended December 31, 2017 | | ||||||||||||||||||
| | | Per Share | | | Amount | | | Per Share | | | Amount | | ||||||||||||
Fund—A | | | | $ | 0.5100 | | | | | $ | 71,050 | | | | | $ | 0.8711 | | | | | $ | 122,827 | | |
Fund—D | | | | $ | 0.5100 | | | | | $ | 13,710 | | | | | $ | 0.8711 | | | | | $ | 23,804 | | |
Fund—T | | | | $ | 0.4100 | | | | | $ | 10,214 | | | | | $ | 0.6164 | | | | | $ | 12,668 | | |
Fund—ADV | | | | $ | 0.4600 | | | | | $ | 3,415 | | | | | $ | 0.6653 | | | | | $ | 3,772 | | |
Fund—T2 | | | | $ | 0.4100 | | | | | $ | 353 | | | | | $ | 0.2564 | | | | | $ | 177 | | |
| | | January 2019 | | | February 2019 | | ||||||
Fund—A | | | | $ | 0.042500 | | | | | $ | 0.042500 | | |
Fund—D | | | | $ | 0.042500 | | | | | $ | 0.042500 | | |
Fund—T | | | | $ | 0.034167 | | | | | $ | 0.034167 | | |
Fund—ADV | | | | $ | 0.038334 | | | | | $ | 0.038334 | | |
Fund—T2 | | | | $ | 0.034167 | | | | | $ | 0.034167 | | |
(in thousands, except share and per share amounts)
| | | FS Global Credit Opportunities Fund—A | | |||||||||||||||||||||
| | | Year Ended December 31, | | |||||||||||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||||||||
Source of Distribution | | | Distribution Amount | | | Percentage | | | Distribution Amount | | | Percentage | | ||||||||||||
Net investment income (prior to expense reimbursement from sponsor) | | | | $ | 71,050 | | | | | | 100% | | | | | $ | 109,339 | | | | | | 89% | | |
Expense reimbursement and additional support payment from sponsor | | | | | — | | | | | | — | | | | | | 13,488 | | | | | | 11% | | |
Total | | | | $ | 71,050 | | | | | | 100% | | | | | $ | 122,827 | | | | | | 100% | | |
|
| | | FS Global Credit Opportunities Fund—D | | |||||||||||||||||||||
| | | Year Ended December 31, | | |||||||||||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||||||||
Source of Distribution | | | Distribution Amount | | | Percentage | | | Distribution Amount | | | Percentage | | ||||||||||||
Net investment income (prior to expense reimbursement from sponsor) | | | | $ | 13,710 | | | | | | 100% | | | | | $ | 21,104 | | | | | | 89% | | |
Expense reimbursement and additional support payment from sponsor | | | | | — | | | | | | — | | | | | | 2,700 | | | | | | 11% | | |
Total | | | | $ | 13,710 | | | | | | 100% | | | | | $ | 23,804 | | | | | | 100% | | |
|
(in thousands, except share and per share amounts)
| | | FS Global Credit Opportunities Fund—T | | |||||||||||||||||||||
| | | Year Ended December 31, | | |||||||||||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||||||||
Source of Distribution | | | Distribution Amount | | | Percentage | | | Distribution Amount | | | Percentage | | ||||||||||||
Net investment income | | | | $ | 10,214 | | | | | | 100% | | | | | $ | 12,668 | | | | | | 100% | | |
Total | | | | $ | 10,214 | | | | | | 100% | | | | | $ | 12,668 | | | | | | 100% | | |
|
| | | FS Global Credit Opportunities Fund—ADV | | |||||||||||||||||||||
| | | Year Ended December 31, | | |||||||||||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||||||||
Source of Distribution | | | Distribution Amount | | | Percentage | | | Distribution Amount | | | Percentage | | ||||||||||||
Net investment income | | | | $ | 3,415 | | | | | | 100% | | | | | $ | 3,772 | | | | | | 100% | | |
Total | | | | $ | 3,415 | | | | | | 100% | | | | | $ | 3,772 | | | | | | 100% | | |
|
| | | FS Global Credit Opportunities Fund—T2 | | |||||||||||||||||||||
| | | Year Ended December 31, 2018 | | | Period from August 2, 2017 (Commencement of Operations) to December 31, 2017 | | ||||||||||||||||||
Source of Distribution | | | Distribution Amount | | | Percentage | | | Distribution Amount | | | Percentage | | ||||||||||||
Net investment income (prior to expense reimbursement from sponsor) | | | | $ | 301 | | | | | | 85% | | | | | $ | 157 | | | | | | 89% | | |
Expense reimbursement and additional support payment from sponsor | | | | | 52 | | | | | | 15% | | | | | | 20 | | | | | | 11% | | |
Total | | | | $ | 353 | | | | | | 100% | | | | | $ | 177 | | | | | | 100% | | |
|
(in thousands, except share and per share amounts)
| | | Fund—A | | | Fund—D | | | Fund—T | | |||||||||
Distributable ordinary income | | | | $ | 3,248 | | | | | $ | 607 | | | | | $ | 3,197 | | |
Distributable realized gains (capital loss carryover) (1) | | | | | (11,971) | | | | | | (2,753) | | | | | | 354 | | |
Net unrealized appreciation (depreciation) on investment(2) | | | | | (142,900) | | | | | | (26,743) | | | | | | (10,524) | | |
| | | | $ | (151,623) | | | | | $ | (28,889) | | | | | $ | (6,973) | | |
|
| | | Fund—ADV | | | Fund—T2 | | ||||||
Distributable ordinary income | | | | $ | 499 | | | | | $ | 12 | | |
Distributable realized gains (capital loss carryover) (1) | | | | | 33 | | | | | | (1) | | |
Net unrealized appreciation (depreciation) on investment(2) | | | | | (3,270) | | | | | | (283) | | |
| | | | $ | (2,738) | | | | | $ | (272) | | |
|
| | | Year Ended December 31, 2018 | | |||||||||
| | | Aggregate Cost of the Investment for US Federal Income Tax | | | Aggregate Net Unrealized Appreciation (Depreciation) on a Tax Basis | | ||||||
Fund—A | | | | $ | 1,194,711 | | | | | $ | (142,900) | | |
Fund—D | | | | $ | 229,839 | | | | | $ | (26,743) | | |
Fund—T | | | | $ | 199,538 | | | | | $ | (10,524) | | |
Fund—ADV | | | | $ | 58,844 | | | | | $ | (3,270) | | |
Fund—T2 | | | | $ | 6,761 | | | | | $ | (283) | | |
(in thousands, except share and per share amounts)
Name | | | Age | | | Trustee Since | | | Title | | | Principal Occupations During the Past Five Years | | | Number of Registered Investment Companies in Fund Complex* Overseen by Trustee | | | Other Directorships Held by Trustee | |
Interested Trustees | | | | | | | | | | | | | | | | | | | |
Michael C. Forman(1) | | | 57 | | | January 2013 | | | Chairman, President and Chief Executive Officer | | | Chairman and Chief Executive Officer of FS Investments | | | 10 | | | FS Multi-Alternative Income Fund (since 2018); FS Series Trust (since 2016); FS Energy Total Return Fund (since 2016); FS Credit Income Fund (since 2016); FS Credit Real Estate Income Trust, Inc. (since 2016); FS Investment Corporation IV (since 2015); FS Investment Corporation III (since 2013); FS Investment Corporation II (since 2011); FS Energy and Power Fund (since 2010); and FS KKR Capital Corp. (formerly FS Investment Corporation) (since 2007) | |
Independent Trustees | | | | | | | | | | | | | | | | | | | |
Walter W. Buckley, III | | | 58 | | | June 2013 | | | Trustee | | | Chief Executive Officer of Actua Corporation (since 1996); and President of Actua Corporation (1996 – 2001; 2002 – 2009) | | | 6 | | | Actua Corporation (since 1996) | |
David L. Cohen | | | 63 | | | June 2013 | | | Trustee | | | Senior Executive Vice President of Comcast Corporation (since 2015); and Executive Vice President of Comcast Corporation (2002 – 2015) | | | 6 | | | NBCUniversal Media, LLC (since 2013) | |
Barbara J. Fouss | | | 49 | | | November 2013 | | | Trustee | | | Director of Strategic Initiatives of Sun National Bank (2012 – 2013); Chief Credit Policy Officer of Sun National Bank (2011 – 2012); and Deputy Chief Credit Policy Officer of Sun National Bank (2008 – 2011) | | | 6 | | | FS Investment Corporation IV (since 2015) | |
Name | | | Age | | | Trustee Since | | | Title | | | Principal Occupations During the Past Five Years | | | Number of Registered Investment Companies in Fund Complex* Overseen by Trustee | | | Other Directorships Held by Trustee | |
Philip E. Hughes, Jr. | | | 69 | | | June 2013 | | | Trustee | | | Vice-Chairman of Keystone Industries (since 2011); Principal of Philip E. Hughes, Jr., CPA, Esq. Accounting, Tax and Business Services (since 2011); President of Fox Park Corporation (since 2005) and Sovereign Developers, LP (since 1999); and Partner of LarsonAllen LLP (2000 – 2011) | | | 7 | | | FS Series Trust (since 2017) | |
Oliver C. Mitchell, Jr. | | | 64 | | | June 2013 | | | Trustee | | | Attorney and Consultant—Litigation Avoidance, Corporate Governance and Internal Investigations (since 2014); Senior Vice President, General Counsel and Secretary of American Cybersystems, Inc. (2013 – 2014); and Vice President, General Counsel and Secretary of Carpenter Technology Corporation (2007 – 2009) | | | 6 | | | National Commercial Bank Jamaica Limited (since 2015) | |
Charles P. Pizzi | | | 68 | | | June 2013 | | | Trustee | | | President and Chief Executive Officer of Tasty Baking Company (2002 – 2011) | | | 6 | | | Pennsylvania Real Estate Investment Trust (since 2013); PHH Corporation (since 2012); FS Energy and Power Fund (since 2012); and Brandywine Realty Trust (since 1996) | |
Name | | | Age | | | Position Held with Registrant | | | Length of Time Served | | | Principal Occupations During the Past Five Years | |
Michael C. Forman | | | 57 | | | Chairman, President and Chief Executive Officer | | | Since 2013 | | | Chairman and Chief Executive Officer, FS Investments | |
Edward T. Gallivan, Jr. | | | 56 | | | Chief Financial Officer | | | Since 2018 | | | Chief Financial Officer of Fund—A (since 2018), Fund—D (since 2018), Fund—T (since 2018), Fund—ADV (since 2018), Fund—T2 (since 2018), FS Energy and Power Fund (since 2012), FS Energy Total Return Fund, FS Credit Income Fund and FS Credit Real Estate Income Trust, inc. | |
Stephen S. Sypherd | | | 41 | | | Vice President, Treasurer and Secretary | | | Since 2013 | | | General Counsel, FS Investments; and Associate of Skadden, Arps, Slate, Meagher & Flom LLP (2002 – 2010) | |
James F. Volk | | | 56 | | | Chief Compliance Officer | | | Since 2015 | | | Senior Vice President of Fund Compliance, FS Investments (since 2014); and Chief Compliance Officer, Chief Accounting Officer and Head of Traditional Fund Operations at SEI’s Investment Manager Services market unit (1996 – 2014) | |
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Interests in FS Global Credit Opportunities Fund are not registered under the Securities Act of 1933, as amended (the “Securities Act”), and are issued only to FS Global Credit Opportunities Fund–A, FS Global Credit Opportunities Fund–D, FS Global Credit Opportunities Fund–T, FS Global Credit Opportunities Fund–ADV and FS Global Credit Opportunities Fund–T2 in private placement transactions that do not involve any “public offering” within the meaning of Section 4(a)(2) of, and/or Regulation D under, the Securities Act. This annual report does not constitute an offer to sell, or the solicitation of an offer to buy, any interest in FS Global Credit Opportunities Fund. Past performance is not indicative of future results.
www.fsinvestments.com | AN18-GCO-FEED | |
© 2019 FS Investments | DFS FE19 |
Annual report 2018 |
Finding value to generate income and growth
FS Global Credit
Opportunities Fund
Electronic Reports Disclosure —Beginning on January 1, 2021, as permitted by regulations adopted by the SEC, paper copies of FS Global Credit Opportunities Fund’s (the “Fund”), FS Global Credit Opportunities Fund–A’s (“Fund–A”), FS Global Credit Opportunities Fund–D’s (“Fund–D”), FS Global Credit Opportunities Fund–T’s (“Fund–T”), FS Global Credit Opportunities Fund–ADV’s (“Fund–ADV”) and FS Global Credit Opportunities Fund–T2’s (“Fund–T2” and, collectively with Fund–A, Fund–D, Fund–T and Fund–ADV, the “Feeder Funds” and, collectively with the Fund, the “Funds”), shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the Funds or from your financial intermediary (such as a broker-dealer or bank). Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. Shareholders who hold accounts directly may elect to receive shareholder reports and other communications from the Funds electronically by calling 877-628-8575 or emailing service@fsinvestments.com to make such arrangements. For shareholders who hold accounts through an investment advisor, bank or broker-dealer, please contact that financial intermediary directly for information on how to receive shareholder reports and other communications electronically.
You may elect to receive all future reports in paper free of charge. Shareholders who hold accounts directly may inform the Funds that you wish to continue receiving paper copies of your shareholder reports by calling 877-628-8575 or emailing service@fsinvestments.com. For shareholders who hold accounts through an investment advisor, bank or broker-dealer, please contact that financial intermediary directly to inform them that you wish to continue receiving paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held through your financial intermediary or directly with the Funds.
Michael Forman President & Chief Executive Officer FS Global Credit Opportunities Fund |
Fellow Shareholder,
Last year marked an important milestone in our ongoing efforts to drive value for FS Global Credit Opportunities Fund’s (FSGCO, or the Fund) shareholders. During the second quarter, FS Global Advisor (the Adviser) assumed sole management of FSGCO with a focus on increasing the Fund’s allocation to high-conviction investments, growing net asset value (NAV), reducing portfolio volatility and improving distribution coverage over time.
Recognizing that there is still more work to be done, we believe our internal credit investment team made significant strides in accomplishing these goals in 2018. Since assuming all operational and investment management functions of FSGCO, the Adviser has focused on three key areas:
• | First, the Fund made significant progress toward its goal of rotating the portfolio out of investments that we believe have limited upside or are highly correlated to the broader high yield market and redeploying that capital into investments we believe offer the potential for strong returns and limited downside risk. We look for situations where yield premiums exist due to complexity, illiquidity or as a result of corporate events as opposed to elevated risk of loss. |
• | Second, FSGCO focused on stabilizing and improving its distribution coverage. We expect the continued rotation of the portfolio into high-conviction investments and the optimization of FSGCO’s borrowing facilities will help to improve distribution coverage over time. |
• | Finally, FSGCO made meaningful progress toward optimizing its capital structure. In 2018, the Fund closed on $200 million in term preferred shares. The financing provides the Fund with long-term capital and helps to better match the duration of the Fund’s assets and liabilities. |
Market review
U.S. equity and commodity price volatility negatively impacted the leveraged credit markets in the second half of 2018 as a mix of trade-related and global growth concerns had investors seeking safety in U.S. Treasuries. Higher-yielding areas of the market underperformed their higher-quality peers during the final quarter of the year. Both high yield bond mutual funds and bank loan mutual funds registered record outflows in the fourth quarter of 2018, helping to push high yield bond and senior secured loan prices to 2.5-year lows the last week of December.1,2
High yield bonds returned -2.3% for all of 2018 after registering a modestly positive return during the first half of the year.1 Senior secured loans posted a gain of 0.4% for all of 2018 after a decisively negative fourth quarter erased most of the gains achieved through the first nine months of the year.2
Against the backdrop of stable corporate fundamentals and evolving interest rate concerns, investor demand for higher-yielding corporate credit improved through the first three quarters of the year, only to reverse course during the fourth quarter as risk aversion sapped demand for lower-rated investments. In total, CCC rated high yield bonds and CCC rated senior secured loans returned -4.2% and 2.4%, respectively, during 2018.3,4
FSGCO’s feeder funds outperformed high yield bonds
and senior secured loans in 2018.1,2,5
Performance review
By focusing on select opportunities, such as event-driven opportunities, special situations and market-price inefficiencies, we aim to build a portfolio that offers the potential for higher total returns, comprised of both income and growth, compared to traditional investment strategies.
The feeder funds’ total returns outperformed high yield bonds, senior secured loans, CCC rated high yield bonds and CCC rated senior secured loans during 2018.1,2,3,4,5,6
2018 SHAREHOLDER RETURNS6
FSGCO-A | 7.9% |
FSGCO-D | 7.9% |
FSGCO-T | 6.9% |
FSGCO-ADV | 7.3% |
FSGCO-T2 | 6.3% |
High yield bonds1 | -2.3% |
Senior secured loans2 | 0.4% |
Investment activity during the year focused on reducing high-beta investments and redirecting the portfolio to investments whose returns are driven by idiosyncratic events in order to provide a differentiated way to deliver growth and income to our investors. Additionally, the team concentrated on reducing the number of portfolio holdings to create a higher-conviction portfolio.
During 2018, FSGCO continued to concentrate on investing at the top of the corporate capital structure. As of December 31, 2018, approximately 40% of the portfolio consisted of first-lien senior secured debt, up from 26% as of December 31, 2017. Concurrently, the allocation to unsecured bonds and equity/other declined to 20% and 7%, respectively, as of December 31, 2018, from 29% and 10%, respectively, as of December 31, 2017.
Amid tight and volatile high yield bond and senior secured loan markets, we believe our strategy of focusing on idiosyncratic, value-based opportunities across the capital structure offers the potential for stronger risk-adjusted returns. Our goal is to deliver higher total returns than traditional credit strategies with less market beta to generate value for our shareholders.
We will continue to seek out investments where yield premiums exist due to complexity, illiquidity or as a result of corporate events as opposed to elevated risk of loss. Meanwhile, we will continue to monetize the remaining investments in our portfolio that don’t meet our standards.
Thank you for your continued support and trust in us.
Sincerely,
Michael Forman
President & Chief Executive Officer
FS Global Credit Opportunities Fund
1 | ICE BofAML U.S. High Yield Master II Index. |
2 | S&P/LSTA Leveraged Loan Index. |
3 | ICE BofAML U.S. High Yield CCC Rated or Below Index. |
4 | S&P/LSTA Leveraged Loan CCC Only Index. |
5 | FS Global Credit Opportunities Fund’s feeder funds described herein are FS Global Credit Opportunities Fund–A (FSGCO–A or Fund–A), FS Global Credit Opportunities Fund–D (FSGCO–D or Fund–D), FS Global Credit Opportunities Fund–T (FSGCO–T or Fund–T), FS Global Credit Opportunities Fund–ADV (FSGCO–ADV or Fund–ADV) and FS Global Credit Opportunities Fund–T2 (FSGCO–T2 or Fund–T2). |
6 | The total return for each period presented is historical and is calculated by determining the percentage change in net asset value, assuming the reinvestment of all distributions in additional common shares of the feeder fund at the feeder fund’s NAV per share as of the share closing date occurring on or immediately following the distribution payment date. The total return does not consider the effect of the sales load from the sale of the feeder fund’s common shares. The payment of future distributions on Fund–A’s, Fund–D’s, Fund–T’s, Fund–ADV’s and Fund–T2’s common shares is subject to the discretion of their boards of trustees and applicable legal restrictions and, therefore, there can be no assurance as to the amount or timing of any such future distributions. |
FSGCO portfolio highlights |
As of December 31, 2018 (unless otherwise noted) |
Senior secured debt represented 71% of the Fund’s portfolio.
Portfolio composition | |
Senior secured loans — 1st lien | 40% |
Senior secured loans — 2nd lien | 14% |
Senior secured bonds | 17% |
Subordinated debt | 20% |
Collateralized securities | 2% |
Equity/other | 7% |
Industry classification(by fair value) | |
Energy | 18% |
Software & Services | 16% |
Capital Goods | 9% |
Consumer Services | 8% |
Diversified Financials | 7% |
Materials | 7% |
Retailing | 7% |
Health Care Equipment & Services | 4% |
Insurance | 4% |
Media | 4% |
Technology Hardware & Equipment | 4% |
Transportation | 3% |
Consumer Durables & Apparel | 2% |
Household & Personal Products | 2% |
Real Estate | 2% |
Telecommunication Services | 2% |
Food & Staples Retailing | 1% |
FSGCO Officers + Trustees |
Officers | |
Michael Forman | Stephen S. Sypherd |
President & Chief Executive Officer | Vice President, Treasurer & Secretary |
Edward T. Gallivan, Jr. | James F. Volk |
Chief Financial Officer | Chief Compliance Officer |
Board of Trustees | |
Michael Forman | Philip E. Hughes, Jr. |
Chairman | Trustee |
Chairman & Chief Executive Officer | Vice-Chairman |
FS Investments | Keystone Industries |
Walter W. Buckley, III | Oliver C. Mitchell, Jr. |
Trustee | Trustee |
Chairman & Chief Executive Officer | Attorney & Consultant |
Actua Corporation | |
Charles P. Pizzi | |
David L. Cohen | Trustee |
Trustee | Retired President, Director |
Senior Executive Vice President | & Chief Executive Officer |
Comcast Corporation | Tasty Baking Company |
Barbara J. Fouss | |
Trustee | |
Former Director of Strategic Initiatives & Chief Credit Policy Officer Sun National Bank |
Annual Report for the Year Ended December 31, 2018
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March 1, 2019
As of December 31, 2018
(in thousands, 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—49.9% | | | | | | | | | | ||||||||||||||||||||||||||||
Acosta, Inc. | | | (p) | | | Media | | | L+325 | | | | | 1.0% | | | | 9/26/21 | | | | $ | 10,972 | | | | | $ | 8,558 | | | | | $ | 6,740 | | |
Aspect Software, Inc. | | | (t)(u) | | | Software & Services | | | L+1050 | | | | | 1.0% | | | | 5/25/20 | | | | | 6,870 | | | | | | 6,791 | | | | | | 5,118 | | |
Aspect Software, Inc. | | | (t)(u) | | | Software & Services | | | L+400, 650 PIK (650 Max PIK) | | | | | 1.0% | | | | 5/25/20 | | | | | 9,407 | | | | | | 9,380 | | | | | | 7,008 | | |
BCP Raptor II, LLC | | | (f) | | | Energy | | | L+475 | | | | | | | | | 11/3/25 | | | | | 25,000 | | | | | | 24,577 | | | | | | 23,313 | | |
Brazos Delaware II, LLC | | | (e) | | | Energy | | | L+400 | | | | | | | | | 5/21/25 | | | | | 13,795 | | | | | | 13,730 | | | | | | 12,703 | | |
Casablanca US Holdings Inc. | | | (e) | | | Consumer Services | | | L+400 | | | | | | | | | 3/29/24 | | | | | 45,618 | | | | | | 45,193 | | | | | | 43,337 | | |
CCS-CMGC Holdings, Inc. | | | | | | Health Care Equipment & Services | | | L+550 | | | | | | | | | 10/1/25 | | | | | 20,000 | | | | | | 19,805 | | | | | | 19,500 | | |
CLP Issuer, LLC | | | (t) | | | Diversified Financials | | | L+1000 | | | | | 1.0% | | | | 4/28/21 | | | | | 18,000 | | | | | | 18,000 | | | | | | 18,180 | | |
CLP Issuer, LLC | | | (g)(t) | | | Diversified Financials | | | L+1000 | | | | | 1.0% | | | | 4/28/21 | | | | | 18,000 | | | | | | 18,000 | | | | | | 18,180 | | |
Commercial Barge Line Co. | | | (e) | | | Transportation | | | L+875 | | | | | 1.0% | | | | 11/12/20 | | | | | 24,988 | | | | | | 23,888 | | | | | | 18,141 | | |
Communications Sales & Leasing, Inc. | | | (f) | | | Real Estate | | | L+300 | | | | | 1.0% | | | | 10/24/22 | | | | | 17,954 | | | | | | 16,459 | | | | | | 16,308 | | |
Diamond Resorts International, Inc. | | | (e) | | | Consumer Services | | | L+375 | | | | | 1.0% | | | | 9/2/23 | | | | | 12,762 | | | | | | 12,415 | | | | | | 11,932 | | |
Diebold Nixdorf, Inc. | | | (e) | | | Technology Hardware & Equipment | | | L+275 | | | | | | | | | 11/6/23 | | | | | 12,317 | | | | | | 10,752 | | | | | | 10,469 | | |
Diebold Nixdorf, Inc. | | | | | | Technology Hardware & Equipment | | | L+925 | | | | | | | | | 8/30/22 | | | | | 9,875 | | | | | | 9,875 | | | | | | 10,196 | | |
Fairway Group Acquisition Co. | | | (i)(p)(t)(u) | | | Food & Staples Retailing | | | 10.0% PIK (10.0% Max PIK) | | | | | | | | | 11/27/23 | | | | | 4,751 | | | | | | 4,193 | | | | | | 624 | | |
Fairway Group Acquisition Co. | | | (t)(u) | | | Food & Staples Retailing | | | 12.0% PIK (12.0% Max PIK) | | | | | | | | | 11/27/23 | | | | | 7,433 | | | | | | 7,433 | | | | | | 7,219 | | |
Fairway Group Acquisition Co. | | | (t)(u) | | | Food & Staples Retailing | | | L+400, 1,100 PIK (1,100 Max PIK) | | | | | | | | | 8/28/23 | | | | | 514 | | | | | | 507 | | | | | | 514 | | |
Fairway Group Acquisition Co. | | | (g)(t)(u) | | | Food & Staples Retailing | | | L+400, 1,100 PIK (1,100 Max PIK) | | | | | | | | | 8/28/23 | | | | | 1,101 | | | | | | 1,101 | | | | | | 1,101 | | |
Fairway Group Acquisition Co. | | | (t)(u) | | | Food & Staples Retailing | | | L+400, 1,100 PIK (1,100 Max PIK) | | | | | | | | | 8/28/23 | | | | | 2,588 | | | | | | 2,433 | | | | | | 2,588 | | |
Getty Images, Inc. | | | (e)(f) | | | Media | | | L+350 | | | | | 1.3% | | | | 10/18/19 | | | | | 44,530 | | | | | | 41,654 | | | | | | 43,458 | | |
ION Trading Finance Ltd. | | | (e) | | | Diversified Financials | | | L+400 | | | | | 1.0% | | | | 11/21/24 | | | | | 17,761 | | | | | | 17,719 | | | | | | 16,828 | | |
J. Crew Group, Inc. | | | | | | Retailing | | | L+322 | | | | | 1.0% | | | | 3/5/21 | | | | | 29,503 | | | | | | 19,939 | | | | | | 23,389 | | |
JC Penney Corp., Inc. | | | (e) | | | Retailing | | | L+425 | | | | | 1.0% | | | | 6/23/23 | | | | | 43,809 | | | | | | 40,643 | | | | | | 37,610 | | |
Kronos Acquisition Holdings Inc. | | | (f) | | | Household & Personal Products | | | L+400 | | | | | | | | | 5/15/23 | | | | | 2,479 | | | | | | 2,342 | | | | | | 2,346 | | |
LD Intermediate Holdings, Inc. | | | (e) | | | Software & Services | | | L+588 | | | | | 1.0% | | | | 12/9/22 | | | | | 28,500 | | | | | | 26,573 | | | | | | 25,864 | | |
LifeScan Global Corp. | | | (e)(f) | | | Health Care Equipment & Services | | | L+600 | | | | | | | | | 10/1/24 | | | | | 34,000 | | | | | | 32,517 | | | | | | 32,215 | | |
Mavenir Systems, Inc. | | | (e) | | | Software & Services | | | L+600 | | | | | 1.0% | | | | 5/8/25 | | | | | 26,865 | | | | | | 26,362 | | | | | | 26,781 | | |
McDermott Technology Americas Inc. | | | (f) | | | Capital Goods | | | L+500 | | | | | 1.0% | | | | 5/10/25 | | | | | 3,000 | | | | | | 2,888 | | | | | | 2,809 | | |
Monitronics International, Inc. | | | (e)(f) | | | Consumer Services | | | L+550 | | | | | 1.0% | | | | 9/30/22 | | | | | 50,130 | | | | | | 49,073 | | | | | | 44,961 | | |
As of December 31, 2018
(in thousands, except share amounts)
Portfolio Company(a) | | | Footnotes | | | Industry | | | Rate(b) | | | Floor | | | Maturity | | | Principal Amount(c) | | | Amortized Cost | | | Fair Value(d) | | ||||||||||||
Origami Owl, LLC | | | (i)(p)(t) | | | Consumer Durables & Apparel | | | L+700, 50 PIK (50 Max PIK) | | | | | 2.5% | | | | 12/5/19 | | | | $ | 26,699 | | | | | $ | 21,167 | | | | | $ | 2,371 | | |
Origami Owl, LLC | | | (i)(p)(t) | | | Consumer Durables & Apparel | | | L+700, 50 PIK (50 Max PIK) | | | | | 2.5% | | | | 12/5/19 | | | | | 2,811 | | | | | | 2,243 | | | | | | 250 | | |
O&M Halyard, Inc. | | | (f) | | | Health Care Equipment & Services | | | L+450 | | | | | | | | | 4/30/25 | | | | | 10,921 | | | | | | 8,309 | | | | | | 8,491 | | |
P.F. Chang’s China Bistro, Inc. | | | | | | Consumer Services | | | L+500 | | | | | 1.0% | | | | 9/1/22 | | | | | 14,813 | | | | | | 14,465 | | | | | | 14,416 | | |
Peninsula Pacific Entertainment, LLC | | | | | | Consumer Services | | | L+725 | | | | | | | | | 11/13/24 | | | | | 9,000 | | | | | | 8,956 | | | | | | 8,955 | | |
Peninsula Pacific Entertainment, LLC | | | (g) | | | Consumer Services | | | L+725 | | | | | | | | | 11/13/24 | | | | | 1,000 | | | | | | 995 | | | | | | 995 | | |
Pioneer Energy Services Corp. | | | (f) | | | Energy | | | L+775 | | | | | | | | | 11/8/22 | | | | | 17,000 | | | | | | 16,915 | | | | | | 16,915 | | |
Propulsion Acquisition, LLC | | | | | | Capital Goods | | | L+600 | | | | | 1.0% | | | | 7/13/21 | | | | | 17,521 | | | | | | 16,902 | | | | | | 17,346 | | |
Quest Software US Holdings Inc. | | | (e) | | | Software & Services | | | L+425 | | | | | | | | | 5/16/25 | | | ��� | | 36,500 | | | | | | 36,330 | | | | | | 35,405 | | |
RentPath, LLC | | | | | | Media | | | L+475 | | | | | 1.0% | | | | 12/17/21 | | | | | 997 | | | | | | 831 | | | | | | 805 | | |
Salt Creek Aggregator HoldCo, LLC | | | (t) | | | Energy | | | L+550 | | | | | | | | | 10/31/22 | | | | | 30,000 | | | | | | 29,710 | | | | | | 29,063 | | |
Sheridan Investment Partners I, LLC | | | (e) | | | Energy | | | L+350 | | | | | 0.8% | | | | 10/1/19 | | | | | 23,326 | | | | | | 21,645 | | | | | | 20,760 | | |
Sheridan Production Partners I-A, L.P. | | | (e) | | | Energy | | | L+350 | | | | | 0.8% | | | | 10/1/19 | | | | | 3,092 | | | | | | 2,869 | | | | | | 2,752 | | |
Sheridan Production Partners I-M, L.P. | | | (e) | | | Energy | | | L+350 | | | | | 0.8% | | | | 10/1/19 | | | | | 1,888 | | | | | | 1,751 | | | | | | 1,680 | | |
Staples Canada, ULC | | | (t) | | | Retailing | | | L+700 | | | | | 1.0% | | | | 9/12/24 | | | | C$ | 25,274 | | | | | | 20,234 | | | | | | 18,522 | | |
STL Parent Corp. | | | | | | Capital Goods | | | L+700 | | | | | | | | | 12/5/22 | | | | $ | 20,000 | | | | | | 19,309 | | | | | | 19,400 | | |
SunGard Availability Services Capital, Inc. | | | | | | Software & Services | | | L+1000 | | | | | 1.0% | | | | 10/1/22 | | | | | 5,769 | | | | | | 5,526 | | | | | | 5,599 | | |
SunGard Availability Services Capital, Inc. | | | (e) | | | Software & Services | | | L+700 | | | | | 1.0% | | | | 9/30/21 | | | | | 24,319 | | | | | | 24,153 | | | | | | 20,768 | | |
Westbridge Technologies, Inc. | | | (e) | | | Technology Hardware & Equipment | | | L+850 | | | | | 1.0% | | | | 4/28/23 | | | | | 40,059 | | | | | | 39,557 | | | | | | 40,159 | | |
Windstream Services, LLC | | | (e) | | | Telecommunication Services | | | L+400 | | | | | 0.8% | | | | 3/29/21 | | | | | 20,015 | | | | | | 19,393 | | | | | | 17,963 | | |
Total Senior Secured Loans—First Lien | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 824,060 | | | | | | 772,047 | | |
Unfunded Loan Commitments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (20,096) | | | | | | (20,096) | | |
Net Senior Secured Loans—First Lien | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 803,964 | | | | | | 751,951 | | |
Senior Secured Loans—Second Lien—17.2% | | | | | | | | | | ||||||||||||||||||||||||||||
American Bath Group, LLC | | | | | | Capital Goods | | | L+975 | | | | | 1.0% | | | | 9/30/24 | | | | | 60,000 | | | | | | 57,971 | | | | | | 59,700 | | |
Fairway Group Acquisition Co. | | | (i)(p)(t)(u) | | | Food & Staples Retailing | | | 11.0% PIK (11.0% Max PIK) | | | | | | | | | 2/24/24 | | | | | 4,220 | | | | | | 3,679 | | | | | | — | | |
Gigamon, Inc. | | | (e) | | | Software & Services | | | L+850 | | | | | 1.0% | | | | 12/26/25 | | | | | 50,000 | | | | | | 49,179 | | | | | | 50,500 | | |
Ivanti Software, Inc. | | | (e) | | | Software & Services | | | L+900 | | | | | 1.0% | | | | 1/20/25 | | | | | 20,000 | | | | | | 19,759 | | | | | | 19,200 | | |
LBM Borrower, LLC | | | | | | Capital Goods | | | L+925 | | | | | 1.0% | | | | 8/20/23 | | | | | 27,300 | | | | | | 27,174 | | | | | | 26,754 | | |
LifeScan Global Corp. | | | (e) | | | Health Care Equipment & Services | | | L+950 | | | | | | | | | 10/1/25 | | | | | 5,000 | | | | | | 4,704 | | | | | | 4,650 | | |
MLN US Holdco LLC | | | (e) | | | Telecommunication Services | | | L+875 | | | | | | | | | 11/30/26 | | | | | 22,500 | | | | | | 21,665 | | | | | | 22,031 | | |
NGS US Finco, LLC | | | | | | Energy | | | L+850 | | | | | 1.0% | | | | 4/1/26 | | | | | 30,000 | | | | | | 29,559 | | | | | | 30,375 | | |
UFC Holdings, LLC | | | (e) | | | Media | | | L+750 | | | | | 1.0% | | | | 8/18/24 | | | | | 25,000 | | | | | | 24,817 | | | | | | 24,844 | | |
As of December 31, 2018
(in thousands, except share amounts)
Portfolio Company(a) | | | Footnotes | | | Industry | | | Rate(b) | | | Floor | | | Maturity | | | Principal Amount(c) | | | Amortized Cost | | | Fair Value(d) | | |||||||||
Virtus Partners Holdings, LLC | | | (t) | | | Software & Services | | | 4.0%, 8.0% PIK (8.0% Max PIK) | | | | | | 11/17/22 | | | | $ | 20,156 | | | | | $ | 19,770 | | | | | $ | 20,231 | | |
Total Senior Secured Loans—Second Lien | | | | | | | | | | | | | | | | | | | | | | | | | | 258,277 | | | | | | 258,285 | | |
Senior Secured Bonds—20.8% | | | | | | | | | | |||||||||||||||||||||||||
Ardonagh Midco 3 PLC | | | (n)(o) | | | Diversified Financials | | | 8.6% | | | | | | 7/15/23 | | | | $ | 20,010 | | | | | | 17,898 | | | | | | 17,058 | | |
CITGO Petroleum Corp. | | | (n)(o) | | | Energy | | | 10.8% | | | | | | 2/15/20 | | | | | 43,960 | | | | | | 44,221 | | | | | | 44,867 | | |
CSVC Acquisition Corp. | | | (m)(n)(o) | | | Diversified Financials | | | 7.8% | | | | | | 6/15/25 | | | | | 40,272 | | | | | | 36,082 | | | | | | 30,456 | | |
Diamond Resorts International, Inc. | | | (n)(o) | | | Consumer Services | | | 7.8% | | | | | | 9/1/23 | | | | | 1,630 | | | | | | 1,600 | | | | | | 1,573 | | |
Gogo Intermediate Holdings LLC | | | (n)(o) | | | Software & Services | | | 12.5% | | | | | | 7/1/22 | | | | | 73,400 | | | | | | 75,538 | | | | | | 78,935 | | |
J. Crew Brand, LLC | | | (n)(o) | | | Retailing | | | 13.0% | | | | | | 9/15/21 | | | | | 33,259 | | | | | | 33,054 | | | | | | 37,749 | | |
JW Aluminum Co. | | | (n)(o) | | | Materials | | | 10.3% | | | | | | 6/1/26 | | | | | 30,000 | | | | | | 30,000 | | | | | | 29,925 | | |
K. Hovnanian Enterprises, Inc. | | | (n)(o) | | | Consumer Durables & Apparel | | | 10.0% | | | | | | 7/15/22 | | | | | 20,173 | | | | | | 20,317 | | | | | | 17,601 | | |
K. Hovnanian Enterprises, Inc. | | | (n)(o) | | | Consumer Durables & Apparel | | | 10.5% | | | | | | 7/15/24 | | | | | 29,853 | | | | | | 31,359 | | | | | | 24,927 | | |
Navios Logistics Finance, Inc. | | | (n)(o) | | | Transportation | | | 7.3% | | | | | | 5/1/22 | | | | | 33,000 | | | | | | 31,050 | | | | | | 30,121 | | |
Total Senior Secured Bonds | | | | | | | | | | | | | | | | | | | | | | | | | | 321,119 | | | | | | 313,212 | | |
Subordinated Debt—25.3% | | | | | | | | | | |||||||||||||||||||||||||
Ascent Resources Utica Holdings, LLC | | | (n)(o) | | | Energy | | | 10.0% | | | | | | 4/1/22 | | | | | 9,538 | | | | | | 9,538 | | | | | | 9,762 | | |
Avantor, Inc. | | | (f)(n)(o) | | | Materials | | | 9.0% | | | | | | 10/1/25 | | | | | 42,671 | | | | | | 42,745 | | | | | | 42,698 | | |
CIS General Insurance Ltd. | | | (o) | | | Insurance | | | 12.0% | | | | | | 5/8/25 | | | | £ | 55,200 | | | | | | 81,601 | | | | | | 78,538 | | |
Diamond Resorts International, Inc. | | | (n)(o) | | | Consumer Services | | | 10.8% | | | | | | 9/1/24 | | | | $ | 31,219 | | | | | | 30,309 | | | | | | 28,178 | | |
Eclipse Resources Corp. | | | (f)(m)(o) | | | Energy | | | 8.9% | | | | | | 7/15/23 | | | | | 28,105 | | | | | | 26,875 | | | | | | 24,135 | | |
Enviva Partners, LP | | | (m)(o) | | | Energy | | | 8.5% | | | | | | 11/1/21 | | | | | 73,300 | | | | | | 75,758 | | | | | | 75,516 | | |
Extraction Oil & Gas, Inc. | | | (n)(o) | | | Energy | | | 7.4% | | | | | | 5/15/24 | | | | | 14,636 | | | | | | 14,020 | | | | | | 12,368 | | |
iHeartCommunications, Inc. | | | (i)(o)(p) | | | Media | | | 7.3% | | | | | | 10/15/27 | | | | | 3,467 | | | | | | 1,474 | | | | | | 721 | | |
Kronos Acquisition Holdings Inc. | | | (n)(o) | | | Household & Personal Products | | | 9.0% | | | | | | 8/15/23 | | | | | 48,550 | | | | | | 45,205 | | | | | | 37,942 | | |
PriSo Acquisition Corp. | | | (n)(o) | | | Capital Goods | | | 9.0% | | | | | | 5/15/23 | | | | | 36,867 | | | | | | 36,639 | | | | | | 37,673 | | |
SunGard Availability Services Capital, Inc. | | | (n)(o) | | | Software & Services | | | 8.8% | | | | | | 4/1/22 | | | | | 37,860 | | | | | | 28,844 | | | | | | 8,485 | | |
Uniti Group LP | | | (n)(o) | | | Real Estate | | | 7.1% | | | | | | 12/15/24 | | | | | 16,000 | | | | | | 14,776 | | | | | | 13,270 | | |
Uniti Group LP | | | (o) | | | Real Estate | | | 8.3% | | | | | | 10/15/23 | | | | | 14,000 | | | | | | 13,399 | | | | | | 12,241 | | |
Total Subordinated Debt | | | | | | | | | | | | | | | | | | | | | | | | | | 421,183 | | | | | | 381,527 | | |
Collateralized Securities—2.8% | | | | | | | | | | |||||||||||||||||||||||||
Deutsche Bank AG Frankfurt (CRAFT 2016-1) | | | (m)(n)(t) | | | Diversified Financials | | | 8.8% | | | | | | 1/28/24 | | | | | 7,101 | | | | | | 6,899 | | | | | | 7,083 | | |
Deutsche Bank AG Frankfurt (CRAFT 2017-1) | | | (m)(n)(t) | | | Diversified Financials | | | 14.4% | | | | | | 10/20/26 | | | | | 35,000 | | | | | | 34,795 | | | | | | 34,913 | | |
Total Collateralized Securities | | | | | | | | | | | | | | | | | | | | | | | | | | 41,694 | | | | | | 41,996 | | |
|
As of December 31, 2018
(in thousands, except share amounts)
Portfolio Company(a) | | | Footnotes | | | Industry | | | Rate(b) | | | Number of Shares/ Contracts | | | Cost | | | Fair Value(d) | | |||||||||
Equity/Other—8.6% | | | | | | | | |||||||||||||||||||||
Aspect Software Parent, Inc., Common Equity | | | (i)(t)(u) | | | Software & Services | | | | | | | | 79,006 | | | | | $ | 39,206 | | | | | $ | — | | |
Avantor, Inc., Warrants, 11/21/2024 | | | (i)(t) | | | Materials | | | | | | | | 39,135 | | | | | | 2,752 | | | | | | 3,095 | | |
Avantor, Inc., Preferred Equity | | | (m)(n)(t) | | | Materials | | | 12.5% PIK (12.5% Max PIK) | | | | | 62,353 | | | | | | 57,886 | | | | | | 61,231 | | |
Avaya Inc., Common Equity | | | (i)(o) | | | Technology Hardware & Equipment | | | | | | | | 1,007,112 | | | | | | 19,562 | | | | | | 14,663 | | |
Chinos Holdings, Inc., Series A Preferred Equity | | | (m)(n)(t) | | | Retailing | | | 5.0%, 2.0% PIK (2.0% Max PIK) | | | | | 18,103 | | | | | | 5,684 | | | | | | 11,280 | | |
Chinos Holdings, Inc., Common Equity | | | (i)(t) | | | Retailing | | | | | | | | 1,568,652 | | | | | | 172 | | | | | | 1,961 | | |
Enviva Partners, LP, Common Equity | | | (f)(m) | | | Energy | | | | | | | | 518,942 | | | | | | 8,510 | | | | | | 14,401 | | |
Fairway Group Holdings Corp., Common Equity | | | (i)(t)(u) | | | Food & Staples Retailing | | | | | | | | 76,517 | | | | | | 2,458 | | | | | | — | | |
Northern Oil and Gas, Inc., Put Option, Strike: $1.50 | | | (i)(m)(s) | | | Energy | | | | | | | | 15,000 | | | | | | 276 | | | | | | 274 | | |
Northern Oil and Gas, Inc., Put Option, Strike: $2.00 | | | (i)(m)(r) | | | Energy | | �� | | | | | | 15,000 | | | | | | 180 | | | | | | 351 | | |
Northern Oil and Gas, Inc., Common Equity | | | (i)(m)(n) | | | Energy | | | | | | | | 3,057,559 | | | | | | 10,549 | | | | | | 6,910 | | |
Northern Oil and Gas, Inc., Warrants, 4/30/2019 | | | (i)(t) | | | Energy | | | | | | | | 1 | | | | | | 1,930 | | | | | | 3,241 | | |
Ridgeback Resources Inc., Common Equity | | | (i)(t) | | | Energy | | | | | | | | 1,960,162 | | | | | | 12,044 | | | | | | 9,696 | | |
Selecta Group B.V., Contingent Value Notes | | | (h)(i) | | | Retailing | | | | | | | | 7 | | | | | | 3 | | | | | | 2 | | |
Selecta Group B.V., Warrants, 6/20/2020 | | | (h)(i) | | | Retailing | | | | | | | | 98 | | | | | | 2 | | | | | | 2 | | |
TE Holdings, LLC, Preferred Equity | | | | | | Energy | | | 8.0% PIK (8.0% Max PIK) | | | | | 216,711 | | | | | | 2,164 | | | | | | 650 | | |
TE Holdings, LLC, Common Equity | | | (i)(q) | | | Energy | | | | | | | | 326,925 | | | | | | 2,779 | | | | | | 204 | | |
White Star Petroleum Holdings, LLC, Common Equity | | | (i)(q)(t) | | | Energy | | | | | | | | 2,969,914 | | | | | | 2,524 | | | | | | 965 | | |
Total Equity/Other | | | | | | | | | | | | | | | | | | | | 168,681 | | | | | | 128,926 | | |
TOTAL INVESTMENTS—124.6% | | | | | | | | | | | | | | | | | | | $ | 2,014,918 | | | | | | 1,875,897 | | |
Credit Facilities Payable—(20.7)% | | | | | | | | | | | | | | | | | | | | | | | | | | (312,133) | | |
Term Preferred Shares, at Liquidation Value, Net—(13.2)% | | | | | | | | | | | | | | | | | | | | | | | | | | (198,502) | | |
Other Assets in Excess of Liabilities—9.3% | | | (j) | | | | | | | | | | | | | | | | | | | | | | | 140,711 | | |
NET ASSETS—100.0% | | | | | | | | | | | | | | | | | | | | | | | | | $ | 1,505,973 | | |
|
As of December 31, 2018
(in thousands, except share amounts)
Portfolio Company(a) | | | Footnotes | | | Industry | | | Number of Shares | | | Proceeds | | | Fair Value(d) | | ||||||
Investments Sold Short—(4.8)% | | | | | | | ||||||||||||||||
iShares iBoxx $ High Yield Corporate Bond ETF | | | (i)(m) | | | Diversified Financials | | | (391,491) | | | | $ | (32,424) | | | | | $ | (31,750) | | |
SPDR S&P 500 ETF | | | (i)(m) | | | Diversified Financials | | | (160,000) | | | | | (39,133) | | | | | | (39,987) | | |
Total Investments Sold Short | | | | | | | | | | | | | $ | (71,557) | | | | | $ | (71,737) | | |
|
Counterparty | | | Contract Settlement Date | | | Currency to be Received | | | Value | | | Currency to be Delivered | | | Value | | | Unrealized Appreciation (Depreciation) | | ||||||||||||
JPMorgan Chase Bank, N.A. | | | 1/22/19 | | | USD | | | | | 31,201 | | | | | | CAD | | | | | | 42,000 | | | | | $ | 406 | | |
JPMorgan Chase Bank, N.A. | | | 1/22/19 | | | USD | | | | | 78,605 | | | | | | GBP | | | | | | 62,000 | | | | | | (584) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (178) | | |
|
As of December 31, 2018
(in thousands, except share amounts)
Reference Entity | | | Counterparty | | | Implied Credit Spread at December 31, 2018(k) | | | Industry | | | Fixed Deal Pay Rate | | | Maturity | | | Notional(l) | | | Fair Value(d) | | | Unamortized Premiums Paid (Received) | | | Unrealized Appreciation (Depreciation) | | ||||||||||||||||||
High Yield ETF CDS | | | JPMorgan Chase Bank, N.A. | | | | | 4.5% | | | | Diversified Financials | | | | | 5.0% | | | | 12/20/23 | | | | $ | (40,000) | | | | | $ | (808) | | | | | $ | (223) | | | | | $ | (585) | | |
Frontier Communications Corp. | | | JPMorgan Chase Bank, N.A. | | | | | 16.6% | | | | Telecommunication Services | | | | | 5.0% | | | | 3/20/19 | | | | $ | (5,000) | | | | | | 121 | | | | | | 172 | | | | | | (51) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (687) | | | | | $ | (51) | | | | | $ | (636) | | |
|
Reference Entity | | | Counterparty | | | Implied Credit Spread at December 31, 2018(k) | | | Industry | | | Fixed Deal Receive Rate | | | Maturity | | | Notional(l) | | | Fair Value(d) | | | Unamortized Premiums Paid (Received) | | | Unrealized Appreciation (Depreciation) | | ||||||||||||||||||
Frontier Communications Corp. | | | JPMorgan Chase Bank, N.A. | | | | | 19.8% | | | | Telecommunication Services | | | | | 5.0% | | | | 6/20/20 | | | | $ | 8,000 | | | | | $ | (1,376) | | | | | $ | (882) | | | | | $ | (494) | | |
Frontier Communications Corp. | | | JPMorgan Chase Bank, N.A. | | | | | 19.6% | | | | Telecommunication Services | | | | | 5.0% | | | | 12/20/20 | | | | $ | 43,000 | | | | | | (9,312) | | | | | | (5,157) | | | | | | (4,155) | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | (10,688) | | | | | $ | (6,039) | | | | | $ | (4,649) | | |
|
As of December 31, 2018
(in thousands, except share amounts)
As of December 31, 2018
(in thousands, except share amounts)
Portfolio Company | | | Fair Value at December 31, 2017 | | | Gross Additions(1) | | | Gross Reductions(2) | | | Net Realized Gain (Loss) | | | Net Change in Unrealized Appreciation (Depreciation) | | | Fair Value at December 31, 2018 | | | Interest Income(3) | | | PIK Income(3) | | | Fee Income(3) | | |||||||||||||||||||||||||||
Senior Secured Loans—First Lien | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
Aspect Software, Inc. | | | | $ | 3,559 | | | | | $ | — | | | | | $ | (3,559) | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 208 | | | | | $ | — | | | | | $ | — | | |
Aspect Software, Inc. | | | | | 6,395 | | | | | | 136 | | | | | | (259) | | | | | | — | | | | | | (1,154) | | | | | | 5,118 | | | | | | 664 | | | | | | 136 | | | | | | 205 | | |
Aspect Software, Inc. | | | | | (1,296) | | | | | | 1,296 | | | | | | (1,296) | | | | | | — | | | | | | 1,296 | | | | | | — | | | | | | 18 | | | | | | — | | | | | | — | | |
Aspect Software, Inc. | | | | | — | | | | | | 9,543 | | | | | | (163) | | | | | | — | | | | | | (2,372) | | | | | | 7,008 | | | | | | 306 | | | | | | 212 | | | | | | — | | |
Aspect Software, Inc. | | | | | — | | | | | | 391 | | | | | | (394) | | | | | | 3 | | | | | | — | | | | | | — | | | | | | 5 | | | | | | — | | | | | | — | | |
Fairway Group Acquisition Co. | | | | | — | | | | | | 8,386 | | | | | | (4,193) | | | | | | — | | | | | | (3,569) | | | | | | 624 | | | | | | — | | | | | | — | | | | | | — | | |
Fairway Group Acquisition Co. | | | | | — | | | | | | 14,573 | | | | | | (7,140) | | | | | | — | | | | | | (214) | | | | | | 7,219 | | | | | | 3 | | | | | | 839 | | | | | | — | | |
Fairway Group Acquisition Co.(4) | | | | | — | | | | | | 507 | | | | | | — | | | | | | — | | | | | | 7 | | | | | | 514 | | | | | | (74) | | | | | | 112 | | | | | | 96 | | |
Fairway Group Acquisition Co. | | | | | — | | | | | | 2,547 | | | | | | (114) | | | | | | — | | | | | | 155 | | | | | | 2,588 | | | | | | 132 | | | | | | — | | | | | | — | | |
Senior Secured Loans—Second Lien | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
Fairway Group Acquisition Co. | | | | | — | | | | | | 7,358 | | | | | | (3,679) | | | | | | — | | | | | | (3,679) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Equity/Other | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
Aspect Software Parent, Inc., Common Equity | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Fairway Group Holdings Corp., Common Equity | | | | | — | | | | | | 2,458 | | | | | | — | | | | | | — | | | | | | (2,458) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total | | | | $ | 8,658 | | | | | $ | 47,195 | | | | | $ | (20,797) | | | | | $ | 3 | | | | | $ | (11,988) | | | | | $ | 23,071 | | | | | $ | 1,262 | | | | | $ | 1,299 | | | | | $ | 301 | | |
|
(in thousands, except share and per share amounts)
| | | December 31, 2018 | | |||
Assets | | | |||||
Investments, at fair value—unaffiliated (amortized cost—$1,938,838) | | | | $ | 1,852,826 | | |
Investments, at fair value—affiliated (amortized cost—$76,080) | | | | | 23,071 | | |
Cash | | | | | 267,444 | | |
Foreign currency (cost—$2,945) | | | | | 2,876 | | |
Interest receivable | | | | | 26,618 | | |
Collateral held at broker | | | | | 64,153 | | |
Receivable for investments sold and repaid | | | | | 45,291 | | |
Receivable on credit default swaps | | | | | 85 | | |
Unamortized swap premiums paid | | | | | 172 | | |
Unrealized appreciation on forward foreign currency exchange contracts | | | | | 406 | | |
Deferred financing costs | | | | | 51 | | |
Total assets | | | | $ | 2,282,993 | | |
Liabilities | | | |||||
Payable for investments purchased | | | | $ | 169,128 | | |
Credit facilities payable(1) | | | | | 312,133 | | |
Term preferred shares, at liquidation value of $1,000 per share (net of discount and deferred financing costs of $956 and $542, respectively)(1) | | | | | 198,502 | | |
Investments sold short, at fair value (proceeds—$71,557) | | | | | 71,737 | | |
Interest expense payable | | | | | 2,237 | | |
Shareholder distributions payable | | | | | 43 | | |
Management fees payable | | | | | 8,581 | | |
Unamortized swap premiums received | | | | | 6,262 | | |
Administrative services expense payable | | | | | 283 | | |
Accounting and administrative fees payable | | | | | 316 | | |
Professional fees payable | | | | | 230 | | |
Trustees’ fees payable | | | | | 226 | | |
Unrealized depreciation on credit default swaps | | | | | 5,285 | | |
Unrealized depreciation on forward foreign currency exchange contracts | | | | | 584 | | |
Other accrued expenses and liabilities | | | | | 1,473 | | |
Total liabilities | | | | $ | 777,020 | | |
Net assets | | | | $ | 1,505,973 | | |
Commitments and contingencies ($10,108)(2) | | | |||||
Composition of net assets | | | |||||
Common shares, $0.001 par value, unlimited shares authorized, 198,727,405 shares issued and outstanding | | | | $ | 199 | | |
Capital in excess of par value | | | | | 1,688,399 | | |
Accumulated earnings (deficit) | | | | | (182,625) | | |
Net assets | | | | $ | 1,505,973 | | |
Net asset value per common share at year end | | | | $ | 7.58 | | |
(in thousands)
| | | Year Ended December 31, 2018 | | |||
Investment income | | | |||||
Interest income—unaffiliated | | | | $ | 178,801 | | |
Interest income—affiliated | | | | | 1,262 | | |
Paid-in-kind interest income—unaffiliated | | | | | 8,043 | | |
Paid-in-kind interest income—affiliated | | | | | 1,299 | | |
Dividend income—unaffiliated | | | | | 7,050 | | |
Fee income—unaffiliated | | | | | 5,270 | | |
Fee income—affiliated | | | | | 301 | | |
Total investment income | | | | | 202,026 | | |
Operating expenses | | | |||||
Management fees(1) | | | | | 44,640 | | |
Administrative services expenses | | | | | 2,153 | | |
Accounting and administrative fees | | | | | 1,514 | | |
Interest expense | | | | | 20,557 | | |
Dividend expense on investments sold short | | | | | 2,963 | | |
Professional fees | | | | | 1,217 | | |
Trustees’ fees | | | | | 993 | | |
Other general and administrative expenses | | | | | 1,868 | | |
Total operating expenses | | | | | 75,905 | | |
Less: Management fee waiver(1) | | | | | (11,160) | | |
Net operating expenses | | | | | 64,745 | | |
Net investment income before taxes | | | | | 137,281 | | |
Excise taxes | | | | | 1,000 | | |
Net investment income | | | | | 136,281 | | |
Realized and unrealized gain/loss | | | |||||
Net realized gain (loss) on investments—unaffiliated | | | | | 24,106 | | |
Net realized gain (loss) on investments—affiliated | | | | | 3 | | |
Net realized gain (loss) on credit default swaps | | | | | 4,428 | | |
Net realized gain (loss) on options written | | | | | 9 | | |
Net realized gain (loss) on investments sold short | | | | | 365 | | |
Net realized gain (loss) on forward foreign currency exchange contracts | | | | | 8,555 | | |
Net realized gain (loss) on foreign currency | | | | | 2,530 | | |
Net change in unrealized appreciation (depreciation) on investments—unaffiliated | | | | | (55,318) | | |
Net change in unrealized appreciation (depreciation) on investments—affiliated | | | | | (11,988) | | |
Net change in unrealized appreciation (depreciation) on credit default swaps | | | | | (7,273) | | |
Net change in unrealized appreciation (depreciation) on investments sold short | | | | | 22,573 | | |
Net change in unrealized appreciation (depreciation) on forward foreign currency exchange contracts | | | | | 2,505 | | |
Net change in unrealized gain (loss) on foreign currency | | | | | (4,543) | | |
Total net realized gain (loss) and unrealized appreciation (depreciation) | | | | | (14,048) | | |
Net increase (decrease) in net assets resulting from operations | | | | $ | 122,233 | | |
|
(in thousands)
| | | Year Ended December 31, | | | ||||||||||||||
| | | 2018 | | | 2017(1) | | | |||||||||||
Operations | | | | | |||||||||||||||
Net investment income | | | | $ | 136,281 | | | | | $ | 150,320 | | | | |||||
Net realized gain (loss) | | | | | 39,996 | | | | | | 30,253 | | | | |||||
Net change in unrealized appreciation (depreciation) on investments | | | | | (67,306) | | | | | | (114,693 | | | | | | ) | | |
Net change in unrealized appreciation (depreciation) on credit default swaps | | | | | (7,273) | | | | | | 1,908 | | | | |||||
Net change in unrealized appreciation (depreciation) on investments sold short | | | | | 22,573 | | | | | | (22,753 | | | | | | ) | | |
Net change in unrealized appreciation (depreciation) on forward foreign currency exchange contracts | | | | | 2,505 | | | | | | (4,123 | | | | | | ) | | |
Net change in unrealized gain (loss) on foreign currency | | | | | (4,543) | | | | | | 480 | | | | |||||
Net increase (decrease) in net assets resulting from operations | | | | | 122,233 | | | | | | 41,392 | | | | |||||
Shareholder distributions(2) | | | | | |||||||||||||||
Distributions to shareholders | | | | | (109,031) | | | | | | (153,970 | | | | | | ) | | |
Net decrease in net assets resulting from shareholder distributions | | | | | (109,031) | | | | | | (153,970 | | | | | | ) | | |
Capital share transactions(3) | | | | | |||||||||||||||
Issuance of common shares | | | | | 52,131 | | | | | | 279,931 | | | | |||||
Repurchases of common shares | | | | | (83,372) | | | | | | (54,014 | | | | | | ) | | |
Net increase (decrease) in net assets resulting from capital share transactions | | | | | (31,241) | | | | | | 225,917 | | | | |||||
Total increase (decrease) in net assets | | | | | (18,039) | | | | | | 113,339 | | | | |||||
Net assets at beginning of year | | | | | 1,524,012 | | | | | | 1,410,673 | | | | |||||
Net assets at end of year | | | | $ | 1,505,973 | | | | | $ | 1,524,012 | | | | |||||
|
(in thousands)
| | | Year Ended December 31, 2018 | | |||
Cash flows from operating activities | | | |||||
Net increase (decrease) in net assets resulting from operations | | | | $ | 122,233 | | |
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities: | | | |||||
Purchases of investments | | | | | (1,372,109) | | |
Paid-in-kind interest | | | | | (9,342) | | |
Proceeds from sales and repayments of investments | | | | | 1,460,004 | | |
Purchases to cover investments sold short | | | | | (177,724) | | |
Proceeds from investments sold short | | | | | 211,901 | | |
Premiums paid on credit default swaps—buy, net | | | | | 577 | | |
Premiums received on credit default swaps—sell, net | | | | | 6,262 | | |
Repurchase agreement repaid | | | | | (11,086) | | |
Premiums received on options written | | | | | 8,209 | | |
Premiums received on exit of options written | | | | | (8,200) | | |
Net realized (gain) loss on investments | | | | | (24,109) | | |
Net realized (gain) loss on options written | | | | | (9) | | |
Net realized (gain) loss on investments sold short | | | | | (365) | | |
Net change in unrealized (appreciation) depreciation on investments | | | | | 67,306 | | |
Net change in unrealized (appreciation) depreciation on credit default swaps | | | | | 7,273 | | |
Net change in unrealized (appreciation) depreciation on investments sold short | | | | | (22,573) | | |
Net change in unrealized (appreciation) depreciation on forward foreign currency exchange contracts | | | | | (2,505) | | |
Accretion of discount | | | | | (18,301) | | |
Amortization of deferred financing costs | | | | | 586 | | |
(Gain) loss on borrowings in foreign currency | | | | | (881) | | |
(Increase) decrease in collateral held at broker | | | | | (60,909) | | |
(Increase) decrease in expense reimbursement due from sponsor(1) | | | | | 1,647 | | |
(Increase) decrease in receivable for investments sold and repaid | | | | | 43,699 | | |
(Increase) decrease in interest receivable | | | | | 9,772 | | |
(Increase) decrease in receivable on credit default swaps | | | | | (85) | | |
(Increase) decrease in prepaid expenses and other assets | | | | | 580 | | |
Increase (decrease) in payable for investments purchased | | | | | 98,155 | | |
Increase (decrease) in interest expense payable | | | | | (11,655) | | |
Increase (decrease) in management fees payable | | | | | (3,131) | | |
Increase (decrease) in incentive fees payable | | | | | (9,717) | | |
Increase (decrease) in administrative services expense payable | | | | | 178 | | |
Increase (decrease) in accounting and administrative fees payable | | | | | 261 | | |
Increase (decrease) in professional fees payable | | | | | (93) | | |
Increase (decrease) in trustees’ fees payable | | | | | (7) | | |
Increase (decrease) in other accrued expenses and liabilities | | | | | (52) | | |
Net cash provided by (used in) operating activities | | | | | 305,790 | | |
Cash flows from financing activities | | | |||||
Issuance of common shares | | | | | 62,246 | | |
Repurchases of common shares | | | | | (83,372) | | |
Issuance of term preferred shares, net of discount(2) | | | | | 199,044 | | |
Shareholder distributions | | | | | (109,027) | | |
Borrowings under credit facilities(2) | | | | | 214,539 | | |
Repayments under credit facilities(2) | | | | | (522,737) | | |
Deferred financing costs paid | | | | | (763) | | |
Net cash provided by (used in) financing activities | | | | | (240,070) | | |
Total increase (decrease) in cash and foreign currency(3) | | | | | 65,720 | | |
Cash and foreign currency at beginning of year | | | | | 204,600 | | |
Cash and foreign currency at end of year | | | | $ | 270,320 | | |
|
(in thousands, except share and per share amounts)
| | | Year Ended December 31, | | |||||||||||||||||||||||||||
| | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | | |||||||||||||||
Per Share Data:(1) | | | | | | | |||||||||||||||||||||||||
Net asset value, beginning of year | | | | $ | 7.51 | | | | | $ | 8.07 | | | | | $ | 7.11 | | | | | $ | 8.91 | | | | | $ | 10.02 | | |
Results of operations | | | | | | | |||||||||||||||||||||||||
Net investment income(2) | | | | | 0.69 | | | | | | 0.78 | | | | | | 0.80 | | | | | | 0.87 | | | | | | 0.87 | | |
Net realized gain (loss) and unrealized appreciation (depreciation) | | | | | (0.07) | | | | | | (0.54) | | | | | | 0.97 | | | | | | (1.80) | | | | | | (1.11) | | |
Net increase (decrease) in net assets resulting from operations | | | | | 0.62 | | | | | | 0.24 | | | | | | 1.77 | | | | | | (0.93) | | | | | | (0.24) | | |
Shareholder distributions(3) | | | | | | | |||||||||||||||||||||||||
Distributions from net investment income | | | | | (0.55) | | | | | | (0.80) | | | | | | (0.81) | | | | | | (0.87) | | | | | | (0.87) | | |
Net decrease in net assets resulting from shareholder distributions | | | | | (0.55) | | | | | | (0.80) | | | | | | (0.81) | | | | | | (0.87) | | | | | | (0.87) | | |
Net asset value, end of year | | | | $ | 7.58 | | | | | $ | 7.51 | | | | | $ | 8.07 | | | | | $ | 7.11 | | | | | $ | 8.91 | | |
Shares outstanding, end of year | | | | | 198,727,405 | | | | | | 202,807,462 | | | | | | 174,763,703 | | | | | | 130,181,842 | | | | | | 65,529,194 | | |
Total return(4) | | | | | 8.29% | | | | | | 2.96% | | | | | | 26.66% | | | | | | (11.37)% | | | | | | (2.94)% | | |
Ratio/Supplemental Data: | | | | | | | |||||||||||||||||||||||||
Net assets, end of year | | | | $ | 1,505,973 | | | | | $ | 1,524,012 | | | | | $ | 1,410,673 | | | | | $ | 925,770 | | | | | $ | 583,619 | | |
Ratio of net investment income to average net assets(5)(6) | | | | | 8.79% | | | | | | 9.80% | | | | | | 10.84% | | | | | | 10.53% | | | | | | 9.01% | | |
Ratio of total operating expenses to average net assets(5) | | | | | 4.90% | | | | | | 5.51% | | | | | | 4.61% | | | | | | 4.69% | | | | | | 3.72% | | |
Ratio of expense reimbursement from sponsor to average net assets(5) | | | | | — | | | | | | (0.11)% | | | | | | (0.74)% | | | | | | (1.51)% | | | | | | (3.10)% | | |
Ratio of expense recoupment to sponsor to average net assets(5) | | | | | — | | | | | | 0.01% | | | | | | — | | | | | | — | | | | | | — | | |
Ratio of management fee waiver to average net assets(5) | | | | | (0.72)% | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Ratio of net operating expenses to average net assets(5) | | | | | 4.24% | | | | | | 5.41% | | | | | | 3.87% | | | | | | 3.18% | | | | | | 0.62% | | |
Portfolio turnover | | | | | 72% | | | | | | 94% | | | | | | 92% | | | | | | 125% | | | | | | 165% | | |
Total amount of senior securities outstanding exclusive of treasury securities | | | | $ | 312,133 | | | | | $ | 621,212 | | | | | $ | 507,230 | | | | | $ | 346,525 | | | | | $ | 157,721 | | |
Asset coverage per unit of total debt(7) | | | | | 6.07 | | | | | | 3.33 | | | | | | 3.78 | | | | | | 3.63 | | | | | | 4.45 | | |
Total amount of term preferred shares outstanding | | | | $ | 198,502 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Asset coverage per unit of total leverage (debt and term preferred shares)(8) | | | | | 3.71 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
| | | Year Ended December 31, | | |||||||||||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||||||||
| | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Gross Proceeds from Issuance of Common Shares | | | | | 6,673,631 | | | | | $ | 52,131 | | | | | | 34,845,148 | | | | | $ | 279,931 | | |
Aggregate Consideration for Repurchased Shares | | | | | (10,753,688) | | | | | | (83,372) | | | | | | (6,801,389) | | | | | | (54,014) | | |
Net Proceeds from Share Transactions | | | | | (4,080,057) | | | | | $ | (31,241) | | | | | | 28,043,759 | | | | | $ | 225,917 | | |
|
| | | Year Ended December 31, | | |||||||||||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||||||||
| | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
FS Global Credit Opportunities Fund—A | | | | | 4,835,228 | | | | | $ | 37,759 | | | | | | 9,015,370 | | | | | $ | 71,487 | | |
FS Global Credit Opportunities Fund—D | | | | | 982,214 | | | | | | 7,669 | | | | | | 1,994,772 | | | | | | 15,816 | | |
FS Global Credit Opportunities Fund—T | | | | | 613,896 | | | | | | 4,807 | | | | | | 17,015,952 | | | | | | 137,723 | | |
FS Global Credit Opportunities Fund—ADV | | | | | 214,879 | | | | | | 1,681 | | | | | | 5,971,321 | | | | | | 48,197 | | |
FS Global Credit Opportunities Fund—T2 | | | | | 27,414 | | | | | | 215 | | | | | | 847,733 | | | | | | 6,708 | | |
Total Gross Proceeds from Issuance of Common Shares | | | | | 6,673,631 | | | | | $ | 52,131 | | | | | | 34,845,148 | | | | | $ | 279,931 | | |
|
| | | Year Ended December 31, | | |||||||||||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||||||||
| | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
FS Global Credit Opportunities Fund—A | | | | | 7,340,773 | | | | | $ | 56,890 | | | | | | 5,635,126 | | | | | $ | 44,774 | | |
FS Global Credit Opportunities Fund—D | | | | | 1,675,929 | | | | | | 12,973 | | | | | | 1,062,160 | | | | | | 8,418 | | |
FS Global Credit Opportunities Fund—T | | | | | 1,130,391 | | | | | | 8,776 | | | | | | 72,438 | | | | | | 571 | | |
FS Global Credit Opportunities Fund—ADV | | | | | 412,336 | | | | | | 3,203 | | | | | | 31,665 | | | | | | 251 | | |
FS Global Credit Opportunities Fund—T2 | | | | | 20,262 | | | | | | 161 | | | | | | — | | | | | | — | | |
Total Aggregate Consideration for Repurchased Shares | | | | | 10,579,691 | | | | | $ | 82,003 | | | | | | 6,801,389 | | | | | $ | 54,014 | | |
|
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
Related Party | | | Source Agreement | | | Description | | | Amount | | |||
FS Global Advisor | | | Investment Advisory Agreement | | | Management Fee(1) | | | | $ | 33,480 | | |
FS Global Advisor | | | Investment Advisory Agreement | | | Incentive Fee(2) | | | | | — | | |
FS Global Advisor | | | Administration Agreement | | | Administrative Services Expenses(3) | | | | $ | 2,153 | | |
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
Quarter Ended(1) | | | Amount of Expense Reimbursements | | | Annualized “Other Operating Expenses” Ratio as of the Date of Support Payment | | | Annualized Rate of Distributions Per Common Share(2) | | | Reimbursement Eligibility Expiration | | |||||||||
Fiscal 2016 | | | | | | |||||||||||||||||
March 31, 2016 | | | | $ | 6,071 | | | | | | 0.47% | | | | | | 12.69% | | | | March 31, 2019 | |
June 30, 2016 | | | | | 2,123 | | | | | | 0.42% | | | | | | 9.77% | | | | June 30, 2019 | |
September 30, 2016 | | | | | 267 | | | | | | 0.42% | | | | | | 9.24% | | | | September 30, 2019 | |
Total | | | | $ | 8,461 | | | | | | ||||||||||||
Fiscal 2017 | | | | | | |||||||||||||||||
December 31, 2017 | | | | $ | 1,647 | | | | | | 0.39% | | | | | | 9.49% | | | | December 31, 2020 | |
Total | | | | $ | 1,647 | | | | | | ||||||||||||
|
| | | Distribution | | |||||||||
Year Ended December 31, | | | Per Share | | | Amount | | ||||||
2017 | | | | $ | 0.7969 | | | | | $ | 153,970 | | |
2018 | | | | $ | 0.5500 | | | | | $ | 109,031 | | |
(in thousands, except share and per share amounts)
| | | Year Ended December 31, | | |||||||||||||||||||||
| | | 2018 | | | 2017 | | ||||||||||||||||||
Source of Distribution | | | Distribution Amount | | | Percentage | | | Distribution Amount | | | Percentage | | ||||||||||||
Net investment income (prior to expense reimbursement from sponsor)(1) | | | | $ | 109,031 | | | | | | 100% | | | | | $ | 148,673 | | | | | | 97% | | |
Distributions on account of common equity | | | | | — | | | | | | — | | | | | | 3,650 | | | | | | 2% | | |
Expense reimbursement from sponsor | | | | | — | | | | | | — | | | | | | 1,647 | | | | | | 1% | | |
Total | | | | $ | 109,031 | | | | | | 100% | | | | | $ | 153,970 | | | | | | 100% | | |
|
(in thousands, except share and per share amounts)
| GAAP-basis net investment income | | | | $ | 136,281 | | |
| Reclassification of unamortized original issue discount and prepayment fees | | | | | (7,670) | | |
| Reclassification of mark-to-market unrealized appreciation (depreciation) on certain investments | | | | | (2,780) | | |
| Foreign currency gains (losses) | | | | | 11,085 | | |
| Reversal of late-year ordinary specified losses | | | | | (652) | | |
| Excise tax | | | | | 1,000 | | |
| Term Preferred Shares interest expense non-deductible for tax | | | | | 2,705 | | |
| Other miscellaneous differences | | | | | 1,239 | | |
| Tax-basis net investment income | | | | $ | 141,208 | | |
|
| Distributable ordinary income | | | | $ | 31,421 | | |
| Capital loss carryover(1) | | | | | (77,374) | | |
| Net unrealized appreciation (depreciation) | | | | | (136,672) | | |
| | | | | $ | (182,625) | | |
|
(in thousands, except share and per share amounts)
| | | Fair Value | | |||||||||
Derivative | | | Asset Derivative | | | Liability Derivative | | ||||||
Foreign Currency Risk | | | | ||||||||||
Forward foreign currency exchange contracts | | | | $ | 406(1) | | | | | $ | 584(2) | | |
Credit Risk | | | | ||||||||||
Credit default swap contracts | | | | $ | 172(3) | | | | | $ | 11,547(4) | | |
Market Risk | | | | ||||||||||
Options purchased | | | | $ | 625(5) | | | | | $ | — | | |
(in thousands, except share and per share amounts)
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) | | |||||||||||||||
JPMorgan Chase Bank, N.A. | | | | $ | 578 | | | | | $ | 578 | | | | | | — | | | | | | — | | | | | | — | | |
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) | | |||||||||||||||
JPMorgan Chase Bank, N.A. | | | | $ | 12,131 | | | | | $ | 578 | | | | | | — | | | | | $ | 11,553 | | | | | | — | | |
Derivative | | | Realized Gain (Loss) on Derivatives Recognized in Income | | | Net Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income | | ||||||
Foreign Currency Risk | | | | ||||||||||
Forward foreign currency exchange contracts | | | | $ | 8,555(1) | | | | | $ | 2,505(2) | | |
Credit Risk | | | | ||||||||||
Credit default swap contracts | | | | $ | 4,428(3) | | | | | $ | (7,273)(4) | | |
Market Risk | | | | ||||||||||
Options purchased | | | | $ | 18,042(5) | | | | | $ | 169(6) | | |
Options written | | | | $ | 9(7) | | | | | $ | — | | |
(in thousands, except share and per share amounts)
| | | Options Written | | |||
Fair value at beginning of period | | | | $ | — | | |
Net realized gain (loss) | | | | | 9 | | |
Net change in unrealized appreciation (depreciation) | | | | | — | | |
Premiums received on options written | | | | | (8,209) | | |
Premiums paid on exit | | | | | 8,200 | | |
Fair value at end of period | | | | $ | — | | |
|
(in thousands, except share and per share amounts)
| | | Amortized Cost(1) | | | Fair Value | | | Percentage of Portfolio | | |||||||||
Senior Secured Loans—First Lien | | | | $ | 803,964 | | | | | $ | 751,951 | | | | | | 40% | | |
Senior Secured Loans—Second Lien | | | | | 258,277 | | | | | | 258,285 | | | | | | 14% | | |
Senior Secured Bonds | | | | | 321,119 | | | | | | 313,212 | | | | | | 17% | | |
Subordinated Debt | | | | | 421,183 | | | | | | 381,527 | | | | | | 20% | | |
Collateralized Securities | | | | | 41,694 | | | | | | 41,996 | | | | | | 2% | | |
Equity/Other | | | | | 168,681 | | | | | | 128,926 | | | | | | 7% | | |
Total | | | | $ | 2,014,918 | | | | | $ | 1,875,897 | | | | | | 100% | | |
Investments Sold Short | | | | $ | (71,557) | | | | | $ | (71,737) | | | | |||||
|
(in thousands, except share and per share amounts)
Industry Classification | | | Fair Value | | | Percentage of Portfolio | | ||||||
Capital Goods | | | | $ | 163,682 | | | | | | 9% | | |
Consumer Durables & Apparel | | | | | 45,149 | | | | | | 2% | | |
Consumer Services | | | | | 153,352 | | | | | | 8% | | |
Diversified Financials | | | | | 124,698 | | | | | | 7% | | |
Energy | | | | | 340,901 | | | | | | 18% | | |
Food & Staples Retailing | | | | | 10,945 | | | | | | 1% | | |
Health Care Equipment & Services | | | | | 64,856 | | | | | | 4% | | |
Household & Personal Products | | | | | 40,288 | | | | | | 2% | | |
Insurance | | | | | 78,538 | | | | | | 4% | | |
Materials | | | | | 136,949 | | | | | | 7% | | |
Media | | | | | 76,568 | | | | | | 4% | | |
Real Estate | | | | | 41,819 | | | | | | 2% | | |
Retailing | | | | | 130,515 | | | | | | 7% | | |
Software & Services | | | | | 303,894 | | | | | | 16% | | |
Technology Hardware & Equipment | | | | | 75,487 | | | | | | 4% | | |
Telecommunication Services | | | | | 39,994 | | | | | | 2% | | |
Transportation | | | | | 48,262 | | | | | | 3% | | |
Total | | | | $ | 1,875,897 | | | | | | 100% | | |
|
Geographic Locations(1) | | | Fair Value | | | Percentage of Portfolio | | ||||||
United States | | | | $ | 1,693,255 | | | | | | 90% | | |
Europe | | | | | 154,424 | | | | | | 8% | | |
Other | | | | | 28,218 | | | | | | 2% | | |
Total | | | | $ | 1,875,897 | | | | | | 100% | | |
|
(in thousands, except share and per share amounts)
Asset Description | | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
Senior Secured Loans—First Lien | | | | $ | — | | | | | $ | 660,314 | | | | | $ | 91,637 | | | | | $ | 751,951 | | |
Senior Secured Loans—Second Lien | | | | | — | | | | | | 238,054 | | | | | | 20,231 | | | | | | 258,285 | | |
Senior Secured Bonds | | | | | — | | | | | | 313,212 | | | | | | — | | | | | | 313,212 | | |
Subordinated Debt | | | | | — | | | | | | 381,527 | | | | | | — | | | | | | 381,527 | | |
Collateralized Securities | | | | | — | | | | | | — | | | | | | 41,996 | | | | | | 41,996 | | |
Equity/Other | | | | | 36,599 | | | | | | 858 | | | | | | 91,469 | | | | | | 128,926 | | |
Total Investments | | | | | 36,599 | | | | | | 1,593,965 | | | | | | 245,333 | | | | | | 1,875,897 | | |
Forward Foreign Currency Exchange Contracts | | | | | — | | | | | | 406 | | | | | | — | | | | | | 406 | | |
Credit Default Swaps—Buy Protection | | | | | — | | | | | | — | | | | | | 172 | | | | | | 172 | | |
Total | | | | $ | 36,599 | | | | | $ | 1,594,371 | | | | | $ | 245,505 | | | | | $ | 1,876,475 | | |
|
Liability Description | | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
Investments Sold Short | | | | $ | (71,737) | | | | | $ | — | | | | | $ | — | | | | | $ | (71,737) | | |
Forward Foreign Currency Exchange Contracts | | | | | — | | | | | | (584) | | | | | | — | | | | | | (584) | | |
Credit Default Swaps—Buy Protection | | | | | — | | | | | | — | | | | | | (859) | | | | | | (859) | | |
Credit Default Swaps—Sell Protection | | | | | — | | | | | | — | | | | | | (10,688) | | | | | | (10,688) | | |
Total | | | | $ | (71,737) | | | | | $ | (584) | | | | | $ | (11,547) | | | | | $ | (83,868) | | |
|
(in thousands, except share and per share amounts)
| | | For the Year Ended December 31, 2018 | | |||||||||||||||||||||||||||||||||||||||
| | | 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 | | | | $ | 505,379 | | | | | $ | 256,162 | | | | | $ | 385,119 | | | | | $ | 573,156 | | | | | $ | 68,587 | | | | | $ | 104,368 | | | | | $ | 1,892,771 | | |
Accretion of discount (amortization of premium) | | | | | 44 | | | | | | 14 | | | | | | — | | | | | | — | | | | | | — | | | | | | 441 | | | | | | 499 | | |
Net realized gain (loss) | | | | | (336) | | | | | | — | | | | | | 13 | | | | | | — | | | | | | 1,559 | | | | | | 120 | | | | | | 1,356 | | |
Net change in unrealized appreciation (depreciation) | | | | | (5,800) | | | | | | (390) | | | | | | (13) | | | | | | — | | | | | | (608) | | | | | | 12,853 | | | | | | 6,042 | | |
Purchases | | | | | 44,830 | | | | | | 19,600 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,930 | | | | | | 66,360 | | |
Paid-in-kind interest | | | | | 1,299 | | | | | | 156 | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,669 | | | | | | 9,124 | | |
Sales and repayments | | | | | (4,416) | | | | | | — | | | | | | (794) | | | | | | — | | | | | | (18,556) | | | | | | (125) | | | | | | (23,891) | | |
Net transfers in or out of Level 3(1) | | | | | (449,363) | | | | | | (255,311) | | | | | | (384,325) | | | | | | (573,156) | | | | | | (8,986) | | | | | | (35,787) | | | | | | (1,706,928) | | |
Fair value at end of period | | | | $ | 91,637 | | | | | $ | 20,231 | | | | | $ | — | | | | | $ | — | | | | | $ | 41,996 | | | | | $ | 91,469 | | | | | $ | 245,333 | | |
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 | | | | $ | (10,321) | | | | | $ | 461 | | | | | $ | — | | | | | $ | — | | | | | $ | (607) | | | | | $ | 12,852 | | | | | $ | 2,385 | | |
(in thousands, except share and per share amounts)
| Fair value at beginning of period | | | | $ | 2,737 | | |
| Net realized gain (loss) | | | | | (939) | | |
| Net change in unrealized appreciation (depreciation) | | | | | (2,624) | | |
| Swap premiums paid | | | | | 172 | | |
| Coupon payments paid | | | | | 301 | | |
| Premiums received on exit | | | | | (334) | | |
| Net transfers in or out of Level 3 | | | | | — | | |
| Fair value at end of period | | | | $ | (687) | | |
| 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 centrally cleared credit default swaps—buy protection still held at the reporting date | | | | $ | (636) | | |
|
| Fair value at beginning of period | | | | $ | — | | |
| Net realized gain (loss) | | | | | 5,367 | | |
| Net change in unrealized appreciation (depreciation) | | | | | (4,649) | | |
| Swap premiums received | | | | | (9,060) | | |
| Coupon payments received | | | | | (2,346) | | |
| Premiums paid on exit | | | | | — | | |
| Net transfers in or out of Level 3 | | | | | — | | |
| Fair value at end of period | | | | $ | (10,688) | | |
| 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 centrally cleared credit default swaps—sell protection still held at the reporting date | | | | $ | (4,649) | | |
|
(in thousands, except share and per share amounts)
Type of Investment | | | Fair Value | | | Valuation Technique(1) | | | Unobservable Input | | | Range | | | Weighted Average | | |||
Senior Secured Loans—First Lien | | | | $ | 65,945 | | | | Market Comparables | | | Market Yield (%) | | | 8.6% – 12.3% | | | 9.9% | |
| | | | | 12,126 | | | | | | | EBITDA Multiples (x) | | | 7.0x – 7.5x | | | 7.3x | |
| | | | | 10,945 | | | | | | | Revenue Multiples (x) | | | 0.1x – 0.1x | | | 0.1x | |
| | | | | 2,621 | | | | | | | Liquidation Coverage (%) | | | 8.3% – 9.5% | | | 8.9% | |
Senior Secured Loans—Second Lien | | | | | 20,231 | | | | Market Comparables | | | Market Yield (%) | | | 12.4% – 12.9% | | | 12.6% | |
| | | | | | | | | | | | Revenue Multiples (x) | | | 0.1x – 0.1x | | | 0.1x | |
Collateralized Securities | | | | | 41,996 | | | | Market Comparables | | | Market Yield (%) | | | 13.4% – 14.7% | | | 13.6% | |
Equity/Other | | | | | 91,469 | | | | Market Comparables | | | EBITDA Multiples (x) | | | 4.0x – 15.8x | | | 8.0x | |
| | | | | | | | | | | | Production Multiples (Mboe/d) | | | $31,250.0 – $38,750.0 | | | $35,910.5 | |
| | | | | | | | | | | | Proved Reserves Multiples (Mmboe) | | | $7.0 – $13.8 | | | $12.5 | |
| | | | | | | | | | | | PV-10 Multiples (x) | | | 0.8x – 1.3x | | | 0.9x | |
| | | | | | | | | | | | Revenue Multiples (x) | | | 0.1x – 0.1x | | | 0.1x | |
| | | | | | | | | | | | Implied Volatility (%) | | | 80.0% – 90.0% | | | 85.0% | |
Total | | | | $ | 245,333 | | | | | | | ||||||||
Centrally Cleared Credit Default Swaps—Buy Protection | | | | $ | (687) | | | | Market Quotes | | | Indicative Dealer Quotes | | | (2.0)% – 2.4% | | | 1.4% | |
Centrally Cleared Credit Default Swaps—Sell Protection | | | | $ | (10,688) | | | | Market Quotes | | | Indicative Dealer Quotes | | | (21.7)% – (17.2)% | | | (21.1)% | |
|
(in thousands, except share and per share amounts)
Arrangement(1) | | | Type of Arrangement | | | Rate | | | Amount Outstanding(2) | | | Amount Available | | | Maturity Date | | ||||||
Dauphin Funding Facility | | | Revolving Credit Facility | | | L+1.80% | | | | $ | 15,000 | | | | | $ | 135,000 | | | | February 21, 2019(3) | |
Bucks Funding Facility | | | Prime Brokerage Facility | | | L+1.10% | | | | | 297,133 | | | | | | 2,867 | | | | September 27, 2019(4) | |
Series 2023 Term Preferred—Floating(5) | | | Floating Rate Shares | | | L+1.85% | | | | | 45,000 | | | | | | — | | | | August 1, 2023 | |
Series 2023 Term Preferred—Fixed(5) | | | Fixed Rate Shares | | | 4.818% | | | | | 55,000 | | | | | | — | | | | August 1, 2023 | |
Series 2026 Term Preferred Shares(5) | | | Fixed Rate Shares | | | 5.426% | | | | | 100,000 | | | | | | — | | | | February 1, 2026 | |
Total | | | | | | | | | | $ | 512,133 | | | | | $ | 137,867 | | | | ||
|
| | | Interest Expense(1) | | | Amortization of Deferred Financing Costs and Discount | | | Total | | |||||||||
Dauphin Funding Facility | | | | $ | 4,216 | | | | | $ | 541 | | | | | $ | 4,757 | | |
Bucks Funding Facility | | | | | 12,161 | | | | | | 11 | | | | | | 12,172 | | |
Series 2023 Term Preferred Shares—Floating Rate | | | | | 755 | | | | | | 31 | | | | | | 786 | | |
Series 2023 Term Preferred Shares—Fixed Rate | | | | | 1,045 | | | | | | 33 | | | | | | 1,078 | | |
Series 2026 Term Preferred Shares | | | | | 905 | | | | | | 14 | | | | | | 919 | | |
Total | | | | $ | 19,082 | | | | | $ | 630 | | | | | $ | 19,712 | | |
|
(in thousands, except share and per share amounts)
| | | Cash Paid for Interest Expense(1) | | | Average Borrowings | | | Effective Interest Rate(2) | | | Weighted Average Interest Rate(2) | | ||||||||||||
Dauphin Funding Facility | | | | $ | 5,018 | | | | | $ | 98,280 | | | | | | 4.61% | | | | | | 4.29% | | |
Bucks Funding Facility | | | | | 12,261 | | | | | $ | 346,478 | | | | | | 3.91% | | | | | | 3.51% | | |
Series 2023 Term Preferred Shares—Floating Rate | | | | | 755 | | | | | $ | 45,000 | | | | | | 4.29% | | | | | | 4.22% | | |
Series 2023 Term Preferred Shares—Fixed Rate | | | | | — | | | | | $ | 55,000 | | | | | | 4.88% | | | | | | 4.82% | | |
Series 2026 Term Preferred Shares | | | | | — | | | | | $ | 100,000 | | | | | | 5.50% | | | | | | 5.43% | | |
Total | | | | $ | 18,034 | | | | | | |||||||||||||||
|
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
Name | | | Age | | | Trustee Since | | | Title | | | Principal Occupations During the Past Five Years | | | Number of Registered Investment Companies in Fund Complex* Overseen by Trustee | | | Other Directorships Held by Trustee | |
Interested Trustees | | | | | | | | | | | | | | | | | | | |
Michael C. Forman(1) | | | 57 | | | January 2013 | | | Chairman, President and Chief Executive Officer | | | Chairman and Chief Executive Officer of FS Investments | | | 10 | | | FS Multi-Alternative Income Fund (since 2018); FS Series Trust (since 2016); FS Energy Total Return Fund (since 2016); FS Credit Income Fund (since 2016); FS Credit Real Estate Income Trust, Inc. (since 2016); FS Investment Corporation IV (since 2015); FS Investment Corporation III (since 2013); FS Investment Corporation II (since 2011); FS Energy and Power Fund (since 2010); and FS KKR Capital Corp. (formerly FS Investment Corporation) (since 2007) | |
Independent Trustees | | | | | | | | ||||||||||||
Walter W. Buckley, III | | | 58 | | | June 2013 | | | Trustee | | | Chief Executive Officer of Actua Corporation (since 1996); and President of Actua Corporation (1996 – 2001; 2002 – 2009) | | | 6 | | | Actua Corporation (since 1996) | |
David L. Cohen | | | 63 | | | June 2013 | | | Trustee | | | Senior Executive Vice President of Comcast Corporation (since 2015); and Executive Vice President of Comcast Corporation (2002 – 2015) | | | 6 | | | NBCUniversal Media, LLC (since 2013) | |
Barbara J. Fouss | | | 49 | | | November 2013 | | | Trustee | | | Director of Strategic Initiatives of Sun National Bank (2012 – 2013); Chief Credit Policy Officer of Sun National Bank (2011 – 2012); and Deputy Chief Credit Policy Officer of Sun National Bank (2008 – 2011) | | | 6 | | | FS Investment Corporation IV (since 2015) | |
Name | | | Age | | | Trustee Since | | | Title | | | Principal Occupations During the Past Five Years | | | Number of Registered Investment Companies in Fund Complex* Overseen by Trustee | | | Other Directorships Held by Trustee | |
Philip E. Hughes, Jr. | | | 69 | | | June 2013 | | | Trustee | | | Vice-Chairman of Keystone Industries (since 2011); Principal of Philip E. Hughes, Jr., CPA, Esq. Accounting, Tax and Business Services (since 2011); President of Fox Park Corporation (since 2005) and Sovereign Developers, LP (since 1999); and Partner of LarsonAllen LLP (2000 – 2011) | | | 7 | | | FS Series Trust (since 2017) | |
Oliver C. Mitchell, Jr. | | | 64 | | | June 2013 | | | Trustee | | | Attorney and Consultant—Litigation Avoidance, Corporate Governance and Internal Investigations (since 2014); Senior Vice President, General Counsel and Secretary of American Cybersystems, Inc. (2013 – 2014); and Vice President, General Counsel and Secretary of Carpenter Technology Corporation (2007 – 2009) | | | 6 | | | National Commercial Bank Jamaica Limited (since 2015) | |
Charles P. Pizzi | | | 68 | | | June 2013 | | | Trustee | | | President and Chief Executive Officer of Tasty Baking Company (2002 – 2011) | | | 6 | | | Pennsylvania Real Estate Investment Trust (since 2013); PHH Corporation (since 2012); FS Energy and Power Fund (since 2012); and Brandywine Realty Trust (since 1996) | |
Name | | | Age | | | Position Held with Registrant | | | Length of Time Served | | | Principal Occupations During the Past Five Years | |
Michael C. Forman | | | 57 | | | Chairman, President and Chief Executive Officer | | | Since 2013 | | | Chairman and Chief Executive Officer, FS Investments | |
Edward T. Gallivan, Jr. | | | 56 | | | Chief Financial Officer | | | Since 2018 | | | Chief Financial Officer of Fund—A (since 2018), Fund—D (since 2018), Fund—T (since 2018), Fund—ADV (since 2018), Fund—T2 (since 2018), FS Energy and Power Fund (since 2012), FS Energy Total Return Fund, FS Credit Income Fund, FS Multi-Alternative Income Fund and FS Credit Real Estate Income Trust | |
Name | | | Age | | | Position Held with Registrant | | | Length of Time Served | | | Principal Occupations During the Past Five Years | |
Stephen S. Sypherd | | | 41 | | | Vice President, Treasurer and Secretary | | | Since 2013 | | | General Counsel, FS Investments; and Associate of Skadden, Arps, Slate, Meagher & Flom LLP (2002 – 2010) | |
James F. Volk | | | 56 | | | Chief Compliance Officer | | | Since 2015 | | | Senior Vice President of Fund Compliance, FS Investments (since 2014); and Chief Compliance Officer, Chief Accounting Officer and Head of Traditional Fund Operations at SEI’s Investment Manager Services market unit (1996 – 2014) | |
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Interests in FS Global Credit Opportunities Fund are not registered under the Securities Act of 1933, as amended (the “Securities Act”), and are issued only to FS Global Credit Opportunities Fund–A, FS Global Credit Opportunities Fund–D, FS Global Credit Opportunities Fund–T, FS Global Credit Opportunities Fund–ADV and FS Global Credit Opportunities Fund–T2 in private placement transactions that do not involve any “public offering” within the meaning of Section 4(a)(2) of, and/or Regulation D under, the Securities Act. This annual report does not constitute an offer to sell, or the solicitation of an offer to buy, any interest in FS Global Credit Opportunities Fund. Past performance is not indicative of future results.
www.fsinvestments.com | AN18-GCO-M | |
© 2019 FS Investments | DFS FE19 |
Item 2. Code of Ethics.
(a) | On August 9, 2018 the Feeder Fund’s board of trustees (the “Board”) adopted an amended Code of Business Conduct and Ethics (the “Code of Ethics”) that applies to all officers, trustees, directors and other personnel of the Feeder Fund and FS Global Advisor, LLC (“FS Global Advisor”), the investment adviser to FS Global Credit Opportunities Fund (the “Fund”), including the Feeder Fund’s principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar functions. |
(b) | Not applicable. |
(c) | On August 9, 2018, the Board approved the amended Code of Ethics, which was amended to make non-substantive clean up changes. A copy of the Code of Ethics is included herein as Exhibit (a)(1) and also is available on the Feeder Fund’s “Corporate Governance” page on FS Investments’ website atwww.fsinvestments.com. |
(d) | During the period covered by the Annual Report included in Item 1 of this Form N-CSR, the Feeder Fund did not grant any waiver from a provision of the Code of Ethics to its principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The amendments reflected in the Code of Ethics and discussed above did not relate to or result in any waiver, explicit or implicit, of any provision of the Feeder Fund’s previous Code of Business Conduct and Ethics. |
(e) | Not applicable. |
(f) | A copy of the Code of Ethics is included herein as Exhibit (a)(1) and also is available on the Feeder Fund’s “Corporate Governance” page on FS Investments’ website atwww.fsinvestments.com. |
Item 3. Audit Committee Financial Expert.
(a)(1) | The Board has determined that the Feeder Fund has at least one “audit committee financial expert” serving on the audit committee of the Board (the “Audit Committee”), as such term is defined for purposes of Item 3 of Form N-CSR. |
(a)(2) | The Board has determined that Philip E. Hughes, Jr. is an “audit committee financial expert” and “independent,” as such terms are defined for purposes of Item 3 of Form N-CSR. (a)(3) Not applicable. |
Item 4. Principal Accountant Fees and Services.
(a) | Audit Fees. The aggregate fees billed to the Feeder Fund for the fiscal years ended December 31, 2018 and 2017 for professional services rendered by Ernst & Young LLP, the Feeder Fund’s independent registered public accounting firm (“Ernst & Young”), for the audit of the Feeder Fund’s annual financial statements and services that are normally provided by Ernst & Young in connection with statutory and regulatory filings or engagements were $20,000 and $20,000, respectively. |
(b) | Audit-Related Fees. No audit-related fees were billed to the Feeder Fund for the fiscal years ended December 31, 2018 and 2017 for assurance and related services by Ernst & Young that were reasonably related to the performance of the audit of the Feeder Fund’s financial statements and not reported in Item 4(a)above. |
(c) | Tax Fees. The aggregate fees billed to the Feeder Fund for the fiscal years ended December 31, 2018 and 2017 for professional services rendered by Ernst & Young for tax compliance, tax advice and tax planning were $8,464 and $8,464, respectively. Tax fees for the years ended December 31, 2018 and 2017 represent fees billed for tax compliance services provided in connection with the review of the Feeder Fund’s tax returns. |
(d) | All Other Fees. No fees were billed to the Feeder Fund for the fiscal years ended December 31, 2018 and 2017 for products and services provided by Ernst & Young, other than the services reported in Items 4(a) through (c) above. |
(e) | Audit Committee Pre-Approval Policies and Procedures. |
(1) | The Audit Committee has adopted, and the Board has approved, a Policy on Pre-Approval of Audit and Non-Audit Services (the “Policy”), which is intended to comply with Rule 2-01 of Regulation S-X and sets forth guidelines and procedures to be followed by the Feeder Fund when retaining an auditor to perform audit, audit-related, tax and other services for the Feeder Fund. The Policy permits such services to be pre-approved by the Audit Committee pursuant to either a general pre-approval or specific pre-approval. Unless a type of service provided by the auditor has received general pre-approval, it requires specific pre-approval by the Audit Committee. Any proposed services exceeding pre-approved cost levels require specific pre-approval by the Audit Committee. |
(2) | All services described in paragraphs (b) and (c) of this Item 4 were pre-approved before the engagement by the Audit Committee pursuant to paragraph (c)(7)(i)(A) of Rule 2-01 of Regulation S-X. Consequently, none of such services were required to be approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. |
(f) | Not applicable. |
(g) | The aggregate non-audit fees billed by Ernst & Young for services rendered to the Feeder Fund, FS Global Advisor and any entity controlling, controlled by or under common control with FS Global Advisor that provides ongoing services to the Feeder Fund for the fiscal years ended December 31, 2018 and 2017 were $128,445 and $92,171, respectively. |
(h) | Not applicable. |
Item 5. Audit Committee of Listed Registrants.
(a) | Not applicable. The Feeder Fund is not a listed issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). |
(b) | Not applicable. The Feeder Fund is not a listed issuer as defined in Rule 10A-3 under the Exchange Act. |
Item 6. Investments.
(a) | The Feeder Fund invests substantially all of its assets in FS Global Credit Opportunities Fund (the “Fund”), a separate closed-end management investment company with the same investment objectives and strategies as the Feeder Fund. All investments in portfolio companies are made at the Fund level. The Fund’s consolidated schedule of investments as of December 31, 2018 is included as part of the Annual Report included in Item 1 of this Form N-CSR. |
(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
The Feeder Fund invests substantially all of its assets in the Fund, a separate closed-end management investment company with the same investment objectives and strategies as the Feeder Fund. All investments in portfolio companies are made at the Fund level. The Fund has delegated the responsibility for voting proxies relating to its voting securities to FS Global Advisor, pursuant to the proxy voting policies and procedures of FS Global Advisor. FS Global Advisor’s proxy voting policies and procedures are included herein as Exhibit (a)(4).
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
(a)(1) | Information regarding the portfolio managers primarily responsible for the day-to-day management of the Fund’s portfolio as of the date hereof is set forth below. |
Andrew Beckman serves as Managing Director, Head of Liquid Credit, of FS Investments. Prior to joining FS Investments, he served as a Partner and the Head of Corporate Credit and Special Situations at DW Partners, a $3 billion corporate credit manager. Mr. Beckman also serves as the portfolio manager of the Fund. Prior to joining DW Partners, he built and managed Magnetar Capital’s event-driven credit business and was the head of its Event Credit and Credit Opportunities Fund, managing over $2 billion. Earlier in his career, Mr. Beckman was co-head of Goldman Sachs’ special situations multi-strategy investing group.
Nicholas Heilbut serves as Director of Research and Portfolio Manager for the Fund. Prior to joining FS Investments, Mr. Heilbut was a Managing Director at DW Partners. Prior to joining DW Partners, he was Senior Analyst/Head of Research for Magnetar Capital’s event-driven and special situations business. Earlier in his career Mr. Heilbut served as a Senior Analyst at Serengeti Asset Management and before that, he was a Vice President in Goldman Sachs’ Special Situations Multi-Strategy Investing Group.
Robert Hoffman has served as Executive Director of FS Global Advisor since July 2013. Mr. Hoffman also serves as Executive Director and Head of Investment Research of FS Investments and has presided in such role since January 1, 2019. Mr. Hoffman previously served as Executive Director of FB Income Advisor, LLC, FS Investment Advisor, LLC, FSIC II Advisor, LLC, FSIC III Advisor, LLC and FSIC IV Advisor, LLC and presided in such roles since the later of July 2013 or such entity’s inception date. Prior to joining FS Investments, Mr. Hoffman served at Nomura Corporate Research and Asset Management Inc. (“Nomura”) for over eleven years, most recently holding the position of Executive Director. At Nomura, Mr. Hoffman was responsible for loan portfolio management and trading and he and his team managed nearly $3 billion in loan assets for retail and institutional clients. Mr. Hoffman is a graduate of Columbia University and holds the CFA Institute’s Chartered Financial Analyst designation.
(a)(2) | The portfolio managers primarily responsible for the day-to-day management of the Feeder Fund and the Fund also manage other registered investment companies, other pooled investment vehicles and other accounts, as indicated below. The following table identifies, as of December 31, 2018: (i) the number of other registered investment companies, other pooled investment vehicles and other accounts managed by each portfolio manager; (ii) the total assets of such companies, vehicles and accounts; and (iii) the number and total assets of such companies, vehicles and accounts that are subject to an advisory fee based on performance: Not applicable. |
(a)(3) | FS Global Advisor’s investment personnel are not employed by the Feeder Fund or the Fund and receive no direct compensation from the Feeder Fund or the Fund in connection with their investment management activities. |
Consistent with FS Investments’ integrated culture, FS Investments has one firm-wide compensation and incentive structure, which covers investment personnel who render services to the Feeder Fund and the Fund on behalf of FS Global Advisor. FS Investments’ compensation structure is designed to align the interests of the investment personnel serving the Feeder Fund and the Fund with those of shareholders and to give everyone a direct financial incentive to ensure that all of FS Investments’ resources, knowledge and relationships are utilized to maximize risk-adjusted returns for each strategy.
Each of FS Investments’ senior executives, including each of the investment personnel who render services to the Feeder Fund and the Fund on behalf of FS Global Advisor (other than Michael C. Forman, who is compensated through his ownership interests in FS Global Advisor and FS Investments’ other investment adviser entities), receives a base salary and is eligible for a discretionary bonus. In addition to discretionary bonuses, investment professionals of FS Global Advisor are eligible to receive incentive compensation from FS Global Advisor based on the gross return of the Fund, taking into account, among other things, total net advisory fees received by and overhead and other expenses of FS Global Advisor.
All final compensation decisions are made by the management committee of FS Investments based on input from managers. Base compensation and discretionary bonuses are not formulaic, but rather are judgment and merit driven, and are determined based on a combination of overall firm performance, individual contribution and performance and relevant market and competitive compensation practices for other businesses.
(a)(4) | The following table shows the dollar range of equity securities in the Feeder Fund beneficially owned by each member of FS Global Advisor’s investment committee as of December 31, 2018, based on the net asset value per share of the Feeder Fund ‘s common shares as of December 31, 2018. |
Name of Investment Committee Member | Dollar Range of Equity Securities in the Feeder Fund(1) | |
Andrew Beckman | None | |
Nicholas Heilbut | None | |
Robert Hoffman | None |
(1) | Dollar ranges are as follows: None, $1—$10,000, $10,001—$50,000, $50,001—$100,000, $100,001—$500,000, $500,001—$1,000,000 or Over $1,000,000. |
(b) | Not applicable. |
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
The following table provides information concerning the Feeder Fund’s repurchases of its common shares of beneficial interest, par value $0.001 per share (“common shares”), during the year ended December 31, 2018 pursuant to its share repurchase program and de minimis account liquidations. All amounts are in thousands, except share and per share amounts.
REGISTRANT PURCHASES OF EQUITY SECURITIES
Period | (a) Total Number of | (b) Average Price Paid per Share | (c) Total Number of Shares Purchased as | (d) of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||
January 1 to January 31, 2018 | 153,370 | $ | 7.586 | 153,370 | (3) | |||||||||
February 1 to February 28, 2018 | — | — | — | — | ||||||||||
March 1 to March 31, 2018 | — | — | — | — | ||||||||||
April 1 to April 30, 2018 | 675,384 | $ | 7.748 | 675,384 | (3) | |||||||||
May 1 to May 31, 2018 | — | — | — | — | ||||||||||
June 1 to June 30, 2018 | — | — | — | — | ||||||||||
July 1 to July 31, 2018 | 170,487 | $ | 7.863 | 170,487 | (3) | |||||||||
August 1 to August 31, 2018 | — | — | — | — | ||||||||||
September 1 to September 30, 2018 | — | — | — | — | ||||||||||
October 1 to October 31, 2018 | 151,759 | $ | 7.988 | 151,759 | (3) | |||||||||
November 1 to November 30, 2018 | — | — | — | — | ||||||||||
December 1 to December 31, 2018 | — | — | — | — | ||||||||||
Total | 1,151,000 | $ | 7.775 | 151,000 | (3) |
(1) | All common shares were purchased as a result of tender offers conducted pursuant to the Feeder Fund’s previously announced share repurchase program. |
(2) | In order to minimize the expense of supporting small accounts and provide additional liquidity to shareholders of the Feeder Fund holding small accounts after completion of the regular quarterly share repurchase offer, the Feeder Fund reserves the right to repurchase the shares of and liquidate any investor’s account if the balance of such account is less than the Feeder Fund’s $5,000 minimum initial investment, unless the account balance has fallen below the minimum solely as a result of a decline in the Feeder Fund’s net asset value per share. The Feeder Fund will provide or will cause to be provided 30 days’ prior written notice to potentially affected investors, which notice may be included in the regular quarterly repurchase offer materials, of any such repurchase. Any such repurchases will be made at the Feeder Fund’s most recent price at which the Feeder Fund’s shares were issued pursuant to its distribution reinvestment plan. |
(3) | The Feeder Fund will limit the maximum number of common shares to be repurchased for any repurchase offer to the lesser of (i) the greater of (x) the number of common shares that the Feeder Fund can repurchase with the proceeds it receives from the sale of common shares under the Feeder Fund’s distribution reinvestment plan during the twelve-month period ending on the expiration date of such repurchase offer (less the amount of any such proceeds used to repurchase common shares on each previous repurchase date for tender offers conducted during such period) (this limitation is referred to as the twelve-month repurchase limitation) and (y) the number of common shares that the Feeder Fund can repurchase with the proceeds it receives from the sale of common shares under the Feeder Fund’s distribution reinvestment plan during the three-month period ending on the expiration date of such repurchase offer (this limitation is referred to as the three-month repurchase limitation) and (ii) 20.0% of the weighted average number of common shares outstanding in the prior calendar year, or 5.0% in each calendar quarter. As a result, the maximum number of common shares to be repurchased for any repurchase offer will not exceed the lesser of (i) 20.0% of the weighted average number of common shares outstanding in the prior calendar year, or 5.0% in each calendar quarter, and (ii) the greater of the twelve-month repurchase limitation described in clause (i)(x) above and the three-month repurchase limitation described in clause (i)(y) above. The Feeder Fund will offer to repurchase such common shares at a price equal to the NAV per common share in effect on each date of repurchase. The Feeder Fund’s board of trustees (the “Board”) may amend, suspend or terminate the Feeder Fund’s share repurchase program at any time. |
Item 10. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedures by which the Feeder Fund’s shareholders may recommend nominees to the Board during the period covered by the Annual Report included in Item 1 of this Form N-CSR.
Item 11. Controls and Procedures.
(a) | The Feeder Fund’s principal executive officer and principal financial officer have evaluated the Feeder Fund’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act) as of a date within 90 days of the filing of this Form N-CSR and have concluded that the Feeder Fund’s disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the Feeder Fund in this Form N-CSR was recorded, processed, summarized and reported timely. |
(b) | There was no change in the Feeder Fund’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the last fiscal quarter of the period covered by this Form N-CSR that has materially affected, or is reasonably likely to materially affect, the Feeder Fund’s internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
None.
Item 13. Exhibits.
(a)(1) | The Feeder Fund’s Code of Business Conduct and Ethics is included herein in response to Item 2(f). |
(a)(2) | The certifications of the Feeder Fund’s Chief Executive Officer and Chief Financial Officer required by Rule 30a-2(a) under the 1940 Act are included herein. |
(a)(3) | Not applicable. |
(a)(4) | The Proxy Voting Policies and Procedures of FS Global Advisor are included herein in response to Item 7. |
(b) | The certifications of the Feeder Fund’s Chief Executive Officer and Chief Financial Officer required by Rule 30a-2(b) under the 1940 Act are included herein. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FS Global Credit Opportunities Fund—T | ||
By: | /s/MICHAEL C. FORMAN | |
Michael C. Forman | ||
President and Chief Executive Officer | ||
Date: March 11, 2019 | ||
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ MICHAEL C. FORMAN | |
Michael C. Forman | ||
President and Chief Executive Officer | ||
(Principal Executive Officer) | ||
Date: March 11, 2019 | ||
By: | /s/ EDWARD T. GALLIVAN, JR. | |
Edward T. Gallivan, Jr. | ||
Chief Financial Officer | ||
(Principal Financial Officer) | ||
Date: March 11, 2019 |