10-Q
1
d245484d10q.htm
FORM 10-Q
Form 10-Q
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 814-00757
FS KKR Capital Corp.
(Exact name of registrant as specified in its charter)
Maryland
26-1630040
(State of Incorporation)
(I.R.S. Employer Identification Number)
201 Rouse Boulevard
Philadelphia, Pennsylvania
19112
(Address of principal executive offices)
(Zip Code)
Registrants telephone number, including area code:
(215) 495-1150
Indicate by
check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☐ No ☐.
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of large accelerated filer,
accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
(Do not check if a smaller reporting company)
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes ☐ No ☒.
Securities registered pursuant to Section 12(b)
of the Act.
Title of each class
Trading
Symbol(s)
Name of each exchange
on which registered
Common stock, par value $0.001
FSK
New York Stock Exchange
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the
latest practicable date.
There were 284,965,668 shares of the registrants common stock outstanding as of November 5, 2021.
Table of Contents
TABLE OF CONTENTS
Page
PART IFINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
3
Consolidated Balance Sheets as of September
30, 2021 (Unaudited) and December 31, 2020
3
Unaudited Consolidated Statements of Operations for the three and nine months ended
September 30, 2021 and 2020
4
Unaudited Consolidated Statements of Changes in Net Assets for the three and nine
months ended September 30, 2021 and 2020
5
Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30,
2021 and 2020
6
Consolidated Schedules of Investments as of September
30, 2021 (Unaudited) and December 31, 2020
8
Notes to Unaudited Consolidated Financial Statements
39
ITEM 2.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
85
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
100
ITEM 4.
CONTROLS AND PROCEDURES
102
PART IIOTHER INFORMATION
ITEM 1.
LEGAL PROCEEDINGS
103
ITEM 1A.
RISK FACTORS
103
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
103
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
104
ITEM 4.
MINE SAFETY DISCLOSURES
104
ITEM 5.
OTHER INFORMATION
104
ITEM 6.
EXHIBITS
104
SIGNATURES
114
Table of Contents
PART IFINANCIAL INFORMATION
Item 1. Financial Statements.
FS KKR Capital Corp.
Consolidated Balance
Sheets
(in millions, except share and per share amounts)
September 30, 2021
(Unaudited)
December 31, 2020
Assets
Investments, at fair value
Non-controlled/unaffiliated investments (amortized cost$12,092 and $5,314,
respectively)
$
12,279
$
4,986
Non-controlled/affiliated investments (amortized cost$901 and $629,
respectively)
871
534
Controlled/affiliated investments (amortized cost$2,731 and $1,510, respectively)
2,674
1,260
Total investments, at fair value (amortized cost$15,724 and $7,453, respectively)
15,824
6,780
Cash
229
182
Foreign currency, at fair value (cost$12 and $8, respectively)
12
9
Receivable for investments sold and repaid
365
173
Income receivable
163
72
Unrealized appreciation on foreign currency forward contracts
6
1
Deferred financing costs
15
15
Deferred merger costs
1
Prepaid expenses and other assets
6
4
Total assets
$
16,620
$
7,237
Liabilities
Payable for investments purchased
$
57
$
Debt (net of deferred financing costs of $24 and $23, respectively) (1)
8,492
3,997
Unrealized depreciation on foreign currency forward contracts
1
3
Stockholder distributions payable
186
74
Management fees payable
58
25
Subordinated income incentive fees payable (2)
20
Administrative services expense payable
6
2
Interest payable
55
25
Other accrued expenses and liabilities
9
15
Total liabilities
8,884
4,141
Commitments and contingencies (3)
Stockholders equity
Preferred stock, $0.001 par value, 50,000,000 shares authorized, none issued and outstanding
Common stock, $0.001 par value, 750,000,000 shares authorized, 285,076,619 and 123,755,965 shares issued and outstanding,
respectively
0
0
Capital in excess of par value
7,507
3,866
Retained earnings (accumulated deficit) (4)
229
(770
)
Total stockholders equity
7,736
3,096
Total liabilities and stockholders equity
$
16,620
$
7,237
Net asset value per share of common stock at period end
$
27.14
$
25.02
(1)
See Note 9 for a discussion of the Companys financing arrangements.
(2)
See Note 2 for a discussion of the methodology employed by the Company in calculating the subordinated income incentive fees.
(3)
See Note 10 for a discussion of the Companys commitments and contingencies.
(4)
See Note 5 for a discussion of the sources of distributions paid by the Company.
See notes to unaudited consolidated financial statements.
3
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Statements of Operations
(in millions, except share and per share amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021
2020
2021
2020
Investment income
Interest income
$
219
$
93
$
414
$
327
Paid-in-kind interest income
16
11
35
31
Fee income
29
3
62
21
Dividend and other income
8
7
20
10
From non-controlled/affiliated investments:
Interest income
8
3
12
8
Paid-in-kind interest income
4
5
12
14
Fee income
2
2
0
Dividend income
0
0
0
0
From controlled/affiliated investments:
Interest income
12
2
16
6
Paid-in-kind interest income
15
1
23
3
Fee income
0
1
Dividend and other income
47
22
120
56
Total investment income
360
147
717
476
Operating expenses
Management fees
58
24
113
80
Subordinated income incentive fees (1)
35
43
Administrative services expenses
5
1
9
6
Accounting and administrative fees
1
0
2
1
Interest expense (2)
70
40
158
128
Other general and administrative expenses
5
4
12
8
Total operating expenses
174
69
337
223
Incentive fee waiver (1)
(15
)
(15
)
Net expenses
159
69
322
223
Net investment income
201
78
395
253
Realized and unrealized gain/loss
Net realized gain (loss) on investments:
Non-controlled/unaffiliated investments
60
(99
)
(22
)
(239
)
Non-controlled/affiliated investments
139
(90
)
203
(129
)
Controlled/affiliated investments
(2
)
(18
)
(58
)
(35
)
Net realized gain (loss) on foreign currency forward contracts
0
0
0
0
Net realized gain (loss) on foreign currency
(1
)
(2
)
(4
)
(5
)
Net change in unrealized appreciation (depreciation) on investments:
Non-controlled/unaffiliated investments
(49
)
261
526
(114
)
Non-controlled/affiliated investments
(104
)
27
65
(138
)
Controlled/affiliated investments
11
68
193
(144
)
Net change in unrealized appreciation (depreciation) on foreign currency forward contracts
5
(1
)
8
1
Net change in unrealized gain (loss) on foreign currency
10
(14
)
28
2
Total net realized and unrealized gain (loss)
$
69
$
132
$
939
$
(801
)
Net increase (decrease) in net assets resulting from operations
$
270
$
210
$
1,334
$
(548
)
Per share informationbasic and diluted
Net increase (decrease) in net assets resulting from operations (Earnings (Losses) per Share)
$
0.95
$
1.70
$
7.13
$
(4.40
)
Weighted average shares outstanding
285,124,920
123,755,965
187,003,417
124,470,122
(1)
See Note 2 for a discussion of the methodology employed by the Company in calculating the subordinated income incentive fee.
(2)
See Note 9 for a discussion of the Companys financing arrangements.
See notes to unaudited consolidated financial statements.
4
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Statements of Changes in Net Assets
(in millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021
2020
2021
2020
Operations
Net investment income (loss)
$
201
$
78
$
395
$
253
Net realized gain (loss) on investments, foreign currency forward contracts and foreign
currency
196
(209
)
119
(408
)
Net change in unrealized appreciation (depreciation) on investments and foreign currency forward
contracts (1)
(137
)
355
792
(395
)
Net change in unrealized gain (loss) on foreign currency
10
(14
)
28
2
Net increase (decrease) in net assets resulting from operations
270
210
1,334
(548
)
Stockholder distributions (2)
Distributions to stockholders
(186
)
(74
)
(335
)
(244
)
Net decrease in net assets resulting from stockholder distributions
(186
)
(74
)
(335
)
(244
)
Capital share transactions (3)
Issuance of common stock
3,642
Repurchases of common stock
(1
)
(1
)
(47
)
Net increase (decrease) in net assets resulting from capital share transactions
(1
)
3,641
(47
)
Total increase (decrease) in net assets
83
136
4,640
(839
)
Net assets at beginning of period
7,653
2,891
3,096
3,866
Net assets at end of period
$
7,736
$
3,027
$
7,736
$
3,027
(1)
See Note 7 for a discussion of these financial instruments.
(2)
See Note 5 for a discussion of the sources of distributions paid by the Company.
(3)
See Note 3 for a discussion of the Companys capital share transactions.
See notes to unaudited consolidated financial statements.
5
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Statements of Cash Flows
(in millions)
Nine Months Ended
September 30,
2021
2020
Cash flows from operating activities
Net increase (decrease) in net assets resulting from operations
$
1,334
$
(548
)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in)
operating activities:
Purchases of investments (1)
(4,528
)
(1,723
)
Paid-in-kind interest
(67
)
(64
)
Proceeds from sales and repayments of investments
3,720
1,706
Net realized (gain) loss on investments
(123
)
403
Net change in unrealized (appreciation) depreciation on investments (2)
(773
)
396
Net change in unrealized (appreciation) depreciation on foreign currency forward contracts
(7
)
(1
)
Accretion of discount
(46
)
(10
)
Amortization of deferred financing costs and discount
7
8
Unrealized (gain)/loss on borrowings in foreign currency
(5
)
(10
)
(Increase) decrease in receivable for investments sold and repaid
(192
)
426
(Increase) decrease in income receivable
(91
)
(11
)
(Increase) decrease in deferred merger costs
1
(Increase) decrease in prepaid expenses and other assets
(2
)
Increase (decrease) in payable for investments purchased
57
(10
)
Increase (decrease) in management fees payable
33
(6
)
Increase (decrease) in subordinated income incentive fees payable
20
Increase (decrease) in administrative services expense
4
0
Increase (decrease) in interest payable
30
10
Increase (decrease) in other accrued expenses and liabilities
(6
)
(7
)
Cash acquired in merger
293
Other assets acquired from merger net of other assets, net of unrealized depreciation on derivatives
17
Merger costs capitalized into purchase price
(8
)
Mark-to-market of merged debt
26
Net cash provided by (used in) operating activities
(306
)
559
Cash flows from financing activities
Repurchases of common stock
(1
)
(47
)
Stockholder distributions
(316
)
(266
)
Borrowings under financing arrangements (3)
2,689
1,512
Repayments of financing arrangements (3)
(2,009
)
(1,717
)
Deferred financing costs paid
(7
)
(11
)
Net cash provided by (used in) financing activities
356
(529
)
Total increase (decrease) in cash
50
30
Cash, and foreign currency at beginning of period
191
106
Cash, and foreign currency at end of period
$
241
$
136
Supplemental disclosure
Non-cash purchases of investments
$
(198
)
$
(212
)
Non-cash sales of investments
$
198
$
212
Local and excise taxes paid
$
9
$
7
(1)
Excludes $7,227 of cost of investments acquired from the 2021 Merger.
(2)
Excludes $11 of unrealized depreciation on unfunded commitments acquired from the 2021 Merger.
(3)
Excludes $3,794 of debt assumed from the 2021 Merger. See Note 9 for a discussion of the Companys financing arrangements. During the
nine months ended September 30, 2021 and 2020, the Company paid $138 and $110, respectively, in interest expense on the financing arrangements.
See notes to unaudited consolidated financial statements.
6
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Statements of Cash Flows
(in millions)
Supplemental disclosure
of non-cash operating and financing activities:
In connection with the 2021 Merger, the Company issued common stock of $3,650 and acquired investments
at cost of $7,227 and other assets of $221 and assumed debt of $3,794 and other liabilities of $297.
See notes to unaudited
consolidated financial statements.
7
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company (a)
Footnotes
Industry
Rate (b)
Floor (b)
Maturity
Principal
Amount (c)
Amortized
Cost
Fair
Value (d)
Senior Secured LoansFirst Lien125.2%
5 Arch Income Fund 2 LLC
(w)(y)(z)(q)(r)
Diversified Financials
9.0%
11/18/23
$
111.1
$
81.3
$
78.1
ABB CONCISE Optical Group LLC
(aa)(v)
Retailing
L+500
1.0%
6/15/23
0.7
0.7
0.7
Accuride Corp
(aa)(l)(v)
Capital Goods
L+525
1.0%
11/17/23
30.0
28.6
29.1
Advanced Dermatology & Cosmetic Surgery
(v)(m)(t)
Health Care Equipment & Services
L+625
1.0%
5/7/27
40.5
38.5
40.6
Advanced Dermatology & Cosmetic Surgery
(x)
Health Care Equipment & Services
L+625
1.0%
5/7/26
3.6
3.6
3.6
Advanced Dermatology & Cosmetic Surgery
(x)
Health Care Equipment & Services
L+625
1.0%
5/7/27
8.7
8.7
8.7
Advania Sverige AB
(w)(v)
Software & Services
R+610, 0.0% PIK (2.0% Max PIK)
0.0%
3/30/28
ISK
1,345.8
9.9
10.3
Advania Sverige AB
(w)(v)
Software & Services
SR+610
0.0%
4/1/28
SEK
629.4
67.7
72.0
Advania Sverige AB
(w)(x)
Software & Services
SR+610
0.0%
4/1/28
304.1
37.5
37.6
Affordable Care Inc
(v)(ac)
Health Care Equipment & Services
L+550, 0.0% PIK (1.3% Max PIK)
0.8%
8/2/28
$
116.3
115.2
115.7
Affordable Care Inc
(x)(ac)
Health Care Equipment & Services
L+550, 0.0% PIK (1.3% Max PIK)
0.8%
8/2/27
12.8
12.8
12.8
Affordable Care Inc
(x)(ac)
Health Care Equipment & Services
L+550, 0.0% PIK (1.3% Max PIK)
0.8%
8/2/28
43.5
43.5
43.2
Alera Group Intermediate Holdings Inc
(v)
Insurance
L+550
0.8%
10/2/28
32.7
32.3
32.3
Alera Group Intermediate Holdings Inc
(x)
Insurance
L+550
0.8%
10/2/28
9.3
9.2
9.2
American Tire Distributors Inc
(aa)(v)
Automobiles & Components
L+600, 0.0% PIK (1.0% Max PIK)
1.0%
9/1/23
2.6
2.4
2.6
American Tire Distributors Inc
(aa)(v)
Automobiles & Components
L+750, 0.0% PIK (1.5% Max PIK)
1.0%
9/2/24
43.2
40.3
43.3
American Vision Partners
(i)(v)
Health Care Equipment & Services
L+575
0.8%
9/30/27
95.0
94.0
94.0
American Vision Partners
(x)
Health Care Equipment & Services
L+575
0.8%
9/30/26
7.8
7.8
7.8
American Vision Partners
(x)
Health Care Equipment & Services
L+575
0.8%
9/30/27
38.9
38.9
38.5
Amtek Global Technology Pte Ltd
(ad)(w)(g)
Automobiles & Components
E+500 PIK (E+500 Max PIK)
0.0%
4/4/24
56.5
68.7
55.4
Apex Group Limited
(aa)(w)(v)
Diversified Financials
L+375
0.5%
7/27/28
$
4.2
4.2
4.2
Apex Group Limited
(aa)(w)(v)
Diversified Financials
E+400
0.0%
7/27/28
1.6
1.9
1.9
Arcos LLC/VA
(v)(m)
Software & Services
L+575
1.0%
3/31/28
$
35.0
33.0
34.7
Arcos LLC/VA
(x)
Software & Services
L+575
1.0%
4/20/27
4.5
4.5
4.5
Ardonagh Group Ltd
(w)(v)
Insurance
L+725
0.8%
7/14/26
£
0.8
1.0
1.1
Ardonagh Group Ltd
(w)(x)
Insurance
L+600
1.0%
7/14/26
16.7
22.8
22.4
Ardonagh Group Ltd
(w)(x)
Insurance
L+600
0.8%
7/14/26
$
54.8
54.8
53.8
Arrotex Australia Group Pty Ltd
(w)(v)
Pharmaceuticals, Biotechnology & Life Sciences
B+525
1.0%
7/10/24
A$
42.6
30.3
30.8
Arrotex Australia Group Pty Ltd
(w)(x)
Pharmaceuticals, Biotechnology & Life Sciences
B+525
1.0%
7/10/24
3.1
2.2
2.3
Aspect Software Inc
(v)
Software & Services
8.0% PIK (8.0% Max PIK)
10/15/21
$
0.3
0.2
0.3
ATX Networks Corp
(w)(v)(s)(ad)
Capital Goods
L+750
1.0%
8/9/26
45.8
45.8
45.8
AxiomSL Ltd
(f)(v)(m)(t)
Software & Services
L+600
1.0%
12/3/27
35.2
34.5
34.5
AxiomSL Ltd
(x)
Software & Services
L+600
1.0%
12/3/25
2.5
2.4
2.4
AxiomSL Ltd
(x)
Software & Services
L+600
1.0%
12/3/27
2.3
2.3
2.2
Barbri Inc
(f)(k)(l)(v)(m)(t)
Consumer Services
L+575
0.8%
4/28/28
110.1
104.5
110.1
Barbri Inc
(x)
Consumer Services
L+575
0.8%
4/28/28
30.2
30.2
30.3
Belk Inc
(ac)(aa)(v)
Retailing
L+750
1.0%
7/31/25
21.9
21.7
22.1
Belk Inc
(ac)(aa)(y)(z)(v)
Retailing
10.0%, 0.0% PIK (8.0% Max PIK)
7/31/25
65.6
38.1
50.9
BGB Group LLC
(f)(i)(k)(l)(v)(t)
Media & Entertainment
L+575
1.0%
8/16/27
167.6
165.9
166.2
BGB Group LLC
(x)
Media & Entertainment
L+575
1.0%
8/16/27
19.9
19.9
19.8
Borden (New Dairy Opco)
(ac)(v)
Food, Beverage & Tobacco
L+700, 0.0% PIK (1.0% Max PIK)
1.0%
7/20/25
42.0
40.1
42.0
Borden (New Dairy Opco)
(ac)(v)
Food, Beverage & Tobacco
L+250
1.0%
7/20/25
19.0
18.1
19.0
Borden Dairy Co
(ac)(y)(z)(v)
Food, Beverage & Tobacco
L+825
1.0%
7/6/23
65.0
25.4
See notes to
unaudited consolidated financial statements.
8
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio
Company (a)
Footnotes
Industry
Rate (b)
Floor (b)
Maturity
Principal
Amount (c)
Amortized
Cost
Fair
Value (d)
Bowery Farming Inc
(v)
Food, Beverage & Tobacco
L+1,000
1.0%
4/30/26
$
75.0
$
74.3
$
74.3
Cimarron Energy Inc
(v)
Energy
L+900
1.0%
12/31/22
7.5
5.7
3.7
Constellis Holdings LLC
(ac)(v)
Capital Goods
L+750
1.0%
3/27/24
15.0
13.9
15.0
Corsearch Intermediate Inc
(v)(m)
Software & Services
L+550
1.0%
4/19/28
30.1
28.3
30.0
Corsearch Intermediate Inc
(x)
Software & Services
L+550
1.0%
4/19/28
4.4
4.4
4.4
CSafe Global
(f)(k)(l)(v)(m)(s)(t)
Capital Goods
L+625
1.0%
12/23/27
139.7
131.2
140.7
CSafe Global
(v)
Capital Goods
L+625
1.0%
8/13/28
29.5
29.5
29.7
CSafe Global
(x)
Capital Goods
L+625
1.0%
12/23/26
30.7
30.7
30.7
Dental Care Alliance Inc
(f)(k)(v)(m)(t)
Health Care Equipment & Services
L+625
0.8%
3/12/27
94.9
90.5
94.2
Dental Care Alliance Inc
(x)
Health Care Equipment & Services
L+625
0.8%
3/12/27
18.0
18.0
17.9
Distribution International Inc
(aa)(v)
Retailing
L+575
1.0%
12/15/23
27.4
25.5
27.4
Entertainment Benefits Group LLC
(v)
Media & Entertainment
L+575, 2.5% PIK (2.5% Max PIK)
1.0%
9/30/24
9.1
8.3
8.6
Entertainment Benefits Group LLC
(v)
Media & Entertainment
L+575, 2.5% PIK (2.5% Max PIK)
1.0%
9/30/24
0.3
0.3
0.3
Entertainment Benefits Group LLC
(f)(k)(l)(v)(m)
Media & Entertainment
L+575, 2.5% PIK (2.5% Max PIK)
1.0%
9/30/25
63.6
58.4
60.4
Entertainment Benefits Group LLC
(x)
Media & Entertainment
L+575, 2.5% PIK (2.5% Max PIK)
1.0%
9/30/24
1.2
1.2
1.1
Fairway Group Holdings Corp
(ac)(y)(z)(v)
Food & Staples Retailing
12.0% PIK (12.0% Max PIK)
11/27/23
11.7
1.0
0.6
Fairway Group Holdings Corp
(ac)(y)(z)(v)
Food & Staples Retailing
10.0% PIK (10.0% Max PIK)
11/28/23
7.6
FloWorks International LLC
(i)(v)(m)
Capital Goods
L+700
1.0%
10/14/26
53.4
50.3
52.6
FloWorks International LLC
(x)
Capital Goods
L+700
1.0%
10/14/26
21.5
21.5
21.2
Follett Software Co
(v)
Software & Services
L+575
0.8%
8/31/27
4.2
4.2
4.2
Follett Software Co
(f)(k)(l)(v)(t)
Software & Services
L+575
0.8%
8/31/28
112.6
111.5
111.5
Follett Software Co
(x)
Software & Services
L+575
0.8%
8/31/27
5.6
5.6
5.6
Foundation Consumer Brands LLC
(v)(m)
Pharmaceuticals, Biotechnology & Life Sciences
L+638
1.0%
2/12/27
102.3
98.2
104.3
Foundation Consumer Brands LLC
(x)
Pharmaceuticals, Biotechnology & Life Sciences
L+638
1.0%
2/12/27
6.6
6.6
6.6
Frontline Technologies Group LLC
(i)(v)(m)
Software & Services
L+575
1.0%
9/18/23
78.9
78.3
78.9
Frontline Technologies Group LLC
(s)
Software & Services
L+575
1.0%
9/18/23
53.7
50.4
54.2
Frontline Technologies Group LLC
(v)
Software & Services
L+575
1.0%
9/18/23
22.0
20.9
22.2
Galway Partners Holdings LLC
(k)(l)(v)(t)
Insurance
L+525, 0.0% PIK (1.3% Max PIK)
0.8%
9/29/28
139.2
136.4
136.4
Galway Partners Holdings LLC
(x)
Insurance
L+525, 0.0% PIK (1.3% Max PIK)
0.8%
9/30/27
12.0
11.7
11.7
Galway Partners Holdings LLC
(x)
Insurance
L+525, 0.0% PIK (1.3% Max PIK)
0.8%
9/29/28
32.0
31.7
31.4
General Datatech LP
(f)(k)(l)(v)(m)(t)
Software & Services
L+625
1.0%
6/18/27
180.4
178.6
179.2
Greystone Equity Member Corp
(w)(v)
Diversified Financials
L+725
3.8%
4/1/26
194.8
182.3
193.8
Heniff Transportation Systems LLC
(v)
Transportation
L+575
1.0%
12/3/24
6.5
6.2
6.1
Heniff Transportation Systems LLC
(f)(i)(k)(l)(v)(m)
Transportation
L+575
1.0%
12/3/26
138.0
130.5
128.0
Heniff Transportation Systems LLC
(v)
Transportation
L+625
1.0%
12/3/26
19.4
18.6
18.4
Heniff Transportation Systems LLC
(x)
Transportation
L+575
1.0%
12/3/24
11.3
11.3
10.5
Hermes UK Ltd
(w)(v)
Transportation
SA+650
0.0%
11/30/27
£
14.7
19.7
19.2
hibu Inc
(f)(k)(l)(v)(m)(t)
Commercial & Professional Services
L+625
1.0%
5/4/27
$
102.2
97.0
102.6
Higginbotham Insurance Agency Inc
(v)
Insurance
L+550
0.8%
11/25/26
60.8
57.3
61.4
Higginbotham Insurance Agency Inc
(x)
Insurance
L+550
0.8%
11/25/26
2.6
2.6
2.6
HM Dunn Co Inc
(ad)(v)
Capital Goods
L+600
1.0%
6/30/26
33.0
33.0
33.0
HM Dunn Co Inc
(ad)(v)
Capital Goods
L+600
1.0%
6/30/26
2.0
2.0
2.0
Hudson Technologies Co
(w)(v)
Commercial & Professional Services
L+1,025
1.0%
10/10/23
81.2
72.9
81.5
See
notes to unaudited consolidated financial statements.
9
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company (a)
Footnotes
Industry
Rate (b)
Floor (b)
Maturity
Principal
Amount (c)
Amortized
Cost
Fair
Value (d)
Individual FoodService
(v)
Capital Goods
L+625
1.0%
11/22/24
$
0.2
$
0.2
$
0.2
Individual FoodService
(v)(m)(s)
Capital Goods
L+625
1.0%
11/22/25
72.3
67.7
72.6
Individual FoodService
(x)
Capital Goods
L+625
1.0%
11/22/24
4.5
4.5
4.5
Individual FoodService
(x)
Capital Goods
L+625
1.0%
11/22/25
3.3
3.3
3.3
Industria Chimica Emiliana Srl
(w)(v)
Pharmaceuticals, Biotechnology & Life Sciences
E+725
0.0%
9/27/26
88.8
101.1
107.4
Industry City TI Lessor LP
(v)(s)
Consumer Services
10.8%, 1.0% PIK (1.0% Max PIK)
6/30/26
$
30.9
31.0
33.6
Insight Global LLC
(i)(v)
Commercial & Professional Services
L+600
0.8%
9/22/28
268.6
265.9
265.9
Insight Global LLC
(x)
Commercial & Professional Services
L+600
0.8%
9/22/27
21.1
21.1
21.1
J S Held LLC
(f)(i)(v)(m)(s)
Insurance
L+550
1.0%
7/1/25
150.2
144.3
151.7
J S Held LLC
(v)
Insurance
L+550
1.0%
7/1/25
8.2
8.2
8.4
J S Held LLC
(x)
Insurance
L+550
1.0%
7/1/25
14.1
13.9
14.1
J S Held LLC
(x)
Insurance
L+550
1.0%
7/1/25
24.1
24.1
24.6
Jarrow Formulas Inc
(f)(i)(k)(l)(v)(m)(s)(t)
Household & Personal Products
L+625
1.0%
11/30/26
187.8
177.9
191.6
Karman Space Inc
(v)(m)
Capital Goods
L+675
1.0%
12/21/25
92.9
89.2
94.0
Karman Space Inc
(v)
Capital Goods
L+675
1.0%
12/21/25
1.9
1.7
1.9
Karman Space Inc
(x)
Capital Goods
L+675
1.0%
12/21/25
3.6
3.6
3.6
KBP Investments LLC
(x)
Food & Staples Retailing
L+500
0.8%
5/26/27
27.4
26.7
27.2
Kellermeyer Bergensons Services LLC
(f)(i)(k)(l)(v)(m)(s)(t)
Commercial & Professional Services
L+575
1.0%
11/7/26
326.2
313.6
327.6
Kellermeyer Bergensons Services LLC
(x)
Commercial & Professional Services
L+575
1.0%
11/7/26
47.4
47.4
47.6
Lakeview Farms Inc
(l)(v)(m)
Food, Beverage & Tobacco
L+625
1.0%
6/10/27
92.9
90.9
92.4
Lakeview Farms Inc
(v)
Food, Beverage & Tobacco
L+625
1.0%
6/10/27
0.8
0.8
0.8
Lakeview Farms Inc
(x)
Food, Beverage & Tobacco
L+625
1.0%
6/10/27
10.8
10.8
10.8
Lakeview Farms Inc
(x)
Food, Beverage & Tobacco
L+625
1.0%
6/10/27
6.0
6.0
5.9
Lexitas Inc
(i)(k)(l)(v)(m)
Commercial & Professional Services
L+600
1.0%
11/14/25
102.4
98.8
104.4
Lexitas Inc
(x)
Commercial & Professional Services
L+600
1.0%
11/14/25
15.0
15.0
15.3
Lexitas Inc
(x)
Commercial & Professional Services
L+600
1.0%
11/14/25
5.4
5.4
5.4
Lionbridge Technologies Inc
(f)(k)(s)(t)
Consumer Services
L+700
1.0%
12/29/25
69.9
64.6
70.8
Lipari Foods LLC
(f)(v)(m)(s)
Food & Staples Retailing
L+575
1.0%
1/6/25
273.4
261.9
276.2
Matchesfashion Ltd
(w)(v)
Consumer Durables & Apparel
L+463, 3.0% PIK (3.0% Max PIK)
0.0%
10/11/24
12.7
12.2
8.4
MB2 Dental Solutions LLC
(k)(l)(v)(m)(t)
Health Care Equipment & Services
L+600
1.0%
1/29/27
198.3
187.2
198.9
MB2 Dental Solutions LLC
(x)
Health Care Equipment & Services
L+600
1.0%
1/29/27
90.0
90.0
90.3
Med-Metrix
(v)
Software & Services
L+600
1.0%
9/15/27
62.6
61.9
61.9
Med-Metrix
(x)
Software & Services
L+600
1.0%
9/15/27
31.3
31.3
31.0
Med-Metrix
(x)
Software & Services
L+600
1.0%
9/15/27
7.8
7.8
7.8
Miami Beach Medical Group LLC
(k)(l)(v)(m)(t)
Health Care Equipment & Services
L+650
1.0%
12/14/26
181.0
171.4
179.6
Micronics Filtration Holdings Inc
(ac)(y)(z)(v)
Capital Goods
7.5% PIK (7.5% Max PIK)
3/29/24
50.4
45.0
40.0
Monitronics International Inc
(aa)(f)(v)
Commercial & Professional Services
L+650
1.3%
3/29/24
18.9
17.1
18.5
Monitronics International Inc
(v)
Commercial & Professional Services
L+500
1.5%
7/3/24
36.2
33.5
34.5
Monitronics International Inc
(x)
Commercial & Professional Services
L+500
1.5%
7/3/24
33.8
33.8
32.2
Motion Recruitment Partners LLC
(v)(m)(t)
Commercial & Professional Services
L+650
1.0%
12/19/25
85.2
80.2
83.8
Motion Recruitment Partners LLC
(x)
Commercial & Professional Services
L+650
1.0%
12/19/25
59.6
59.6
58.6
NBG Home
(v)
Consumer Durables & Apparel
L+550
1.0%
4/26/24
68.1
67.9
57.8
See notes to
unaudited consolidated financial statements.
10
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio
Company (a)
Footnotes
Industry
Rate (b)
Floor (b)
Maturity
Principal
Amount (c)
Amortized
Cost
Fair
Value (d)
NCI Inc
(v)
Software & Services
L+750, 0.0% PIK (2.5% Max PIK)
1.0%
8/15/24
$
78.8
$
77.6
$
69.7
Net Documents
(v)
Software & Services
L+675
1.0%
6/30/27
24.6
24.4
24.2
Net Documents
(x)
Software & Services
L+675
1.0%
6/30/27
7.4
7.3
7.3
Net Documents
(x)
Software & Services
L+675
1.0%
6/30/27
3.0
2.9
2.9
New Era Technology Inc
(i)(l)(v)(m)(t)
Software & Services
L+625
1.0%
10/31/26
88.0
83.7
87.3
New Era Technology Inc
(x)
Software & Services
L+625
1.0%
10/31/26
18.5
18.5
18.4
New Era Technology Inc
(x)
Software & Services
L+625
1.0%
10/31/26
4.7
4.6
4.6
Omnimax International Inc
(f)(i)(k)(l)(v)(m)
Capital Goods
L+725
1.0%
10/8/26
219.9
210.3
221.2
One Call Care Management Inc
(ad)(aa)(v)
Health Care Equipment & Services
L+550
0.8%
4/22/27
5.0
4.7
5.0
Oxford Global Resources LLC
(f)(k)(l)(v)(t)
Commercial & Professional Services
L+600
0.0%
8/17/27
88.6
87.8
87.9
Oxford Global Resources LLC
(v)
Commercial & Professional Services
L+600
0.0%
8/17/27
1.2
1.2
1.2
Oxford Global Resources LLC
(x)
Commercial & Professional Services
L+600
0.0%
8/17/27
15.3
15.3
15.2
Oxford Global Resources LLC
(x)
Commercial & Professional Services
L+600
0.0%
8/17/27
6.4
6.4
6.4
P2 Energy Solutions Inc.
(v)
Software & Services
L+675
1.0%
1/31/25
4.6
4.2
4.2
P2 Energy Solutions Inc.
(f)(i)(k)(v)(m)(s)(t)
Software & Services
L+675
1.0%
2/2/26
249.7
232.5
232.5
P2 Energy Solutions Inc.
(x)
Software & Services
L+675
1.0%
1/31/25
10.6
10.6
9.9
Parata Systems
(f)(v)(m)
Health Care Equipment & Services
L+575
1.0%
6/30/27
132.1
131.1
131.7
Parata Systems
(x)
Health Care Equipment & Services
L+575
1.0%
6/30/27
22.0
22.0
21.9
Parata Systems
(x)
Health Care Equipment & Services
L+575
1.0%
6/30/27
5.5
5.5
5.5
Peak 10 Holding Corp
(aa)(v)
Telecommunication Services
L+350
0.0%
8/1/24
20.1
17.3
18.7
Peraton Corp
(aa)(v)
Capital Goods
L+375
0.8%
2/1/28
9.0
8.7
9.1
Performance Health Holdings Inc
(f)(i)(v)
Health Care Equipment & Services
L+600
1.0%
7/12/27
121.0
119.8
120.3
Petroplex Acidizing Inc
(ac)(y)(z)(v)
Energy
L+900 PIK (L+900 Max PIK)
1.0%
12/30/21
26.5
22.9
6.9
Polyconcept North America Inc
(aa)(v)
Household & Personal Products
L+450 PIK (L+450 Max PIK)
1.0%
8/16/23
22.5
22.2
22.4
Premium Credit Ltd
(w)(v)
Diversified Financials
L+650
0.0%
1/16/26
£
58.0
75.1
78.2
Pretium Packaging LLC
(aa)(v)
Household & Personal Products
L+400
0.5%
9/22/28
$
1.6
1.6
1.6
Production Resource Group LLC
(ad)(v)
Media & Entertainment
L+750, 0.0% PIK (3.1% Max PIK)
1.0%
8/21/24
60.6
56.0
60.6
Production Resource Group LLC
(ad)(v)
Media & Entertainment
L+300, 5.5% PIK (5.5% Max PIK)
0.3%
8/21/24
130.1
121.0
130.1
Production Resource Group LLC
(ad)(v)
Media & Entertainment
L+550 PIK (L+550 Max PIK)
1.0%
8/21/24
0.1
0.1
0.1
Production Resource Group LLC
(ad)(v)
Media & Entertainment
L+500
1.0%
8/21/24
3.4
3.3
3.4
Production Resource Group LLC
(ad)(v)
Media & Entertainment
L+750, 0.0% PIK (3.1% Max PIK)
1.0%
8/21/24
10.1
10.0
10.1
Production Resource Group LLC
(ad)(x)
Media & Entertainment
L+750, 0.0% PIK (3.1% Max PIK)
1.0%
8/21/24
20.2
20.2
20.2
Propulsion Acquisition LLC
(f)(l)(v)(s)(t)
Capital Goods
L+700
1.0%
7/13/24
60.7
56.7
61.3
PSKW LLC
(i)(l)(v)(s)(t)
Health Care Equipment & Services
L+625
1.0%
3/9/26
295.5
283.7
298.5
Qdoba Restaurant Corp
(aa)(v)(m)
Consumer Services
L+700
1.0%
3/21/25
11.0
10.8
10.8
Reliant Rehab Hospital Cincinnati LLC
(f)(i)(l)(v)(m)(s)
Health Care Equipment & Services
L+675
0.0%
9/2/24
160.5
152.2
155.3
Revere Superior Holdings Inc
(v)(m)
Software & Services
L+575
1.0%
9/30/26
23.1
22.4
23.3
Revere Superior Holdings Inc
(x)
Software & Services
L+575
1.0%
9/30/26
3.2
3.2
3.2
Rise Baking Company
(v)
Food, Beverage & Tobacco
L+625
1.0%
8/13/27
0.9
0.7
0.8
Rise Baking Company
(l)(v)(m)
Food, Beverage & Tobacco
L+625
1.0%
8/13/27
43.5
42.4
42.6
Rise Baking Company
(x)
Food, Beverage & Tobacco
L+625
1.0%
8/13/27
4.4
4.4
4.3
RSC Insurance Brokerage Inc
(f)(i)(k)(l)(v)(m)(s)
Insurance
L+550
1.0%
10/30/26
240.3
230.5
242.7
RSC Insurance Brokerage Inc
(x)
Insurance
L+550
1.0%
9/30/26
7.7
7.6
7.7
RSC Insurance Brokerage Inc
(x)
Insurance
L+550
1.0%
10/30/26
23.2
23.2
23.5
See
notes to unaudited consolidated financial statements.
11
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company (a)
Footnotes
Industry
Rate (b)
Floor (b)
Maturity
Principal
Amount (c)
Amortized
Cost
Fair
Value (d)
Safe-Guard Products International LLC
(f)(m)(t)
Diversified Financials
L+500
0.5%
1/27/27
$
45.1
$
42.4
$
45.1
SAMBA Safety Inc
(v)
Software & Services
L+575
1.0%
9/1/27
27.4
27.1
27.1
SAMBA Safety Inc
(x)
Software & Services
L+575
1.0%
9/1/27
6.1
6.1
6.0
SAMBA Safety Inc
(x)
Software & Services
L+575
1.0%
9/1/27
2.4
2.4
2.4
Sequa Corp
(aa)(v)(m)
Capital Goods
L+675, 0.0% PIK (1.0% Max PIK)
1.0%
11/28/23
16.0
15.3
16.3
Sequa Corp
(v)
Capital Goods
L+900, 0.0% PIK (9.5% Max PIK)
1.0%
7/31/25
16.4
15.9
17.1
Sequel Youth & Family Services LLC
(y)(z)(v)
Health Care Equipment & Services
L+800
1.0%
9/1/23
170.0
112.4
53.3
Sequel Youth & Family Services LLC
(y)(z)(v)
Health Care Equipment & Services
L+700
1.0%
9/1/23
29.2
19.3
9.2
Sequel Youth & Family Services LLC
(v)
Health Care Equipment & Services
L+700
1.0%
9/1/23
27.5
27.5
27.5
Sequel Youth & Family Services LLC
(x)
Health Care Equipment & Services
L+700
1.0%
9/1/23
14.5
14.5
14.5
Sequential Brands Group Inc.
(v)
Consumer Durables & Apparel
5.0%
11/24/21
126.4
125.8
126.4
Sequential Brands Group Inc.
(y)(z)(k)(l)(v)
Consumer Durables & Apparel
L+875
0.0%
2/7/24
266.8
216.8
230.5
Sequential Brands Group Inc.
(x)
Consumer Durables & Apparel
5.0%
11/24/21
7.7
7.7
7.7
Sorenson Communications LLC
(ac)(aa)(f)(k)(v)(t)
Telecommunication Services
L+550
0.8%
3/17/26
61.8
58.5
62.3
Source Code LLC
(k)(l)(t)
Software & Services
L+650
1.0%
6/30/27
53.4
52.4
52.5
Source Code LLC
(x)
Software & Services
L+650
1.0%
6/30/27
15.3
15.0
15.0
Spins LLC
(v)(m)(s)(t)
Software & Services
L+550
1.0%
1/20/27
60.8
57.3
61.7
Spins LLC
(x)
Software & Services
L+550
1.0%
1/20/27
7.9
7.9
7.9
Summit Interconnect Inc
(f)(k)(l)(v)(t)
Capital Goods
L+600
1.0%
9/22/28
118.3
117.1
117.1
Summit Interconnect Inc
(x)
Capital Goods
L+600
1.0%
9/22/28
48.7
48.7
48.2
Sungard Availability Services Capital Inc
(ac)(v)
Software & Services
L+375, 3.8% PIK (3.8% Max PIK)
1.0%
7/1/24
5.7
5.6
6.0
Sweeping Corp of America Inc
(v)(m)
Commercial & Professional Services
L+575
1.0%
11/30/26
54.6
52.0
55.1
Sweeping Corp of America Inc
(v)
Commercial & Professional Services
L+575
1.0%
11/30/26
1.8
1.8
1.8
Sweeping Corp of America Inc
(x)
Commercial & Professional Services
L+575
1.0%
11/30/26
1.3
1.3
1.4
Sweeping Corp of America Inc
(x)
Commercial & Professional Services
L+575
1.0%
11/30/26
3.9
3.9
3.9
Tangoe LLC
(f)(i)(v)(m)(s)
Software & Services
L+650
1.0%
11/28/25
190.5
170.9
155.0
ThermaSys Corp
(ac)(y)(z)(v)
Capital Goods
L+1,100 PIK (L+1,100 Max PIK)
1.0%
1/1/24
8.2
8.3
3.2
ThreeSixty Group
(v)(m)
Retailing
L+500, 2.5% PIK (2.5% Max PIK)
1.5%
3/1/23
48.4
48.2
47.8
ThreeSixty Group
(v)(m)
Retailing
L+500, 2.5% PIK (2.5% Max PIK)
1.5%
3/1/23
48.1
47.8
47.5
Total Safety US Inc
(aa)(f)
Capital Goods
L+600
1.0%
8/16/25
0.9
0.9
0.9
Trace3 Inc
(f)(i)(k)(l)(v)(m)(s)
Software & Services
L+675
1.0%
8/3/24
249.3
237.7
249.3
Transaction Services Group Ltd
(w)(v)
Software & Services
B+650
0.0%
10/15/26
A$
80.3
55.5
56.9
Transaction Services Group Ltd
(w)(v)
Software & Services
L+650
0.0%
10/15/26
$
126.2
122.1
123.5
Transaction Services Group Ltd
(w)(v)
Software & Services
L+650
0.0%
10/15/26
£
13.9
17.6
18.3
Truck-Lite Co LLC
(f)(i)(k)(v)(m)(s)
Capital Goods
L+625
1.0%
12/14/26
$
268.7
257.5
268.7
Truck-Lite Co LLC
(x)
Capital Goods
L+625
1.0%
12/13/24
25.4
25.2
25.4
Warren Resources Inc
(ad)(v)
Energy
L+900, 1.0% PIK (1.0% Max PIK)
1.0%
5/22/24
18.6
17.3
18.6
Wealth Enhancement Group LLC
(w)(v)
Diversified Financials
L+625
1.0%
10/31/25
1.3
1.3
1.3
Wealth Enhancement Group LLC
(w)(x)
Diversified Financials
L+625
1.0%
10/31/25
28.3
28.2
28.3
Wealth Enhancement Group LLC
(w)(x)
Diversified Financials
L+625
1.0%
10/31/25
0.4
0.4
0.4
Woolpert Inc
(f)(k)(l)(v)(m)(t)
Capital Goods
L+600
1.0%
4/5/28
139.6
132.6
140.2
Woolpert Inc
(x)
Capital Goods
L+600
1.0%
4/5/28
25.6
25.6
25.7
Total Senior Secured LoansFirst Lien
10,722.8
10,880.8
Unfunded Loan Commitments
(1,192.1
)
(1,192.1
)
Net Senior Secured LoansFirst Lien
9,530.7
9,688.7
See notes to
unaudited consolidated financial statements.
12
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company (a)
Footnotes
Industry
Rate (b)
Floor (b)
Maturity
Principal
Amount (c)
Amortized
Cost
Fair
Value (d)
Senior Secured LoansSecond Lien21.6%
Advanced Lighting Technologies Inc
(v)
Materials
L+600
1.0%
3/16/27
$
10.8
$
10.5
$
10.6
Ammeraal Beltech Holding BV
(w)(f)(v)(s)
Capital Goods
L+775
0.0%
9/12/26
51.3
46.4
50.8
Amtek Global Technology Pte Ltd
(ad)(w)(z)(g)(v)
Automobiles & Components
E+500 PIK (E+500 Max PIK)
0.0%
4/4/24
34.3
38.8
Apex Group Limited
(w)(v)
Diversified Financials
L+675
0.5%
7/12/29
$
40.0
39.6
39.6
Belk Inc
(ac)(y)(z)(v)
Retailing
10.0% PIK (10.0% Max PIK)
7/31/25
24.9
4.2
4.6
Byrider Finance LLC
(v)(u)
Automobiles & Components
L+1,000, 0.5% PIK (0.5% Max PIK)
1.3%
6/7/22
54.2
51.9
54.3
Constellis Holdings LLC
(ac)(f)(v)
Capital Goods
L+100, 10.0% PIK (10.0% Max PIK)
1.0%
3/27/25
13.5
12.5
13.5
Cubic Corp
(v)
Software & Services
L+763
0.8%
5/25/29
54.8
51.7
54.7
Datatel Inc
(v)
Software & Services
L+800
1.0%
10/9/28
179.2
169.9
180.2
Excelitas Technologies Corp
(aa)(l)
Technology Hardware & Equipment
L+750
1.0%
12/1/25
6.6
6.1
6.7
Fairway Group Holdings Corp
(ac)(y)(z)(v)
Food & Staples Retailing
11.0% PIK (11.0% Max PIK)
2/24/24
6.9
Misys Ltd
(aa)(w)(v)
Software & Services
L+725
1.0%
6/13/25
21.8
20.4
22.0
NBG Home
(v)
Consumer Durables & Apparel
L+1,275 PIK (L+1,275 Max PIK)
1.0%
9/30/24
30.4
27.2
18.7
NEP Broadcasting LLC
(aa)(v)
Media & Entertainment
L+700
0.0%
10/19/26
6.8
6.1
6.6
OEConnection LLC
(f)(v)(s)
Software & Services
L+825
0.0%
9/25/27
77.0
73.4
77.0
Paradigm Acquisition Corp
(aa)(l)(v)
Health Care Equipment & Services
L+750
0.0%
10/26/26
2.3
2.2
2.3
Peraton Corp
(v)(s)
Capital Goods
L+800
1.0%
2/1/29
175.0
165.1
179.3
Peraton Corp
(v)
Capital Goods
L+775
0.8%
2/1/29
156.4
149.8
157.4
Petrochoice Holdings Inc
(v)
Capital Goods
L+875
1.0%
8/21/23
65.0
64.3
57.8
Polyconcept North America Inc
(v)
Household & Personal Products
11.0% PIK (11.0% Max PIK)
2/16/24
9.8
9.6
9.4
Pretium Packaging LLC
(v)(m)(s)
Household & Personal Products
L+825
0.8%
11/6/28
15.1
14.4
15.4
Pretium Packaging LLC
(v)
Household & Personal Products
L+675
0.5%
9/22/29
39.9
39.5
39.5
Pure Fishing Inc
(f)(v)(m)
Consumer Durables & Apparel
L+838
1.0%
12/31/26
177.0
170.4
177.0
Sequa Corp
(aa)(v)(m)
Capital Goods
L+1,075, 0.0% PIK (6.8% Max PIK)
1.0%
4/28/24
5.9
5.7
5.9
SIRVA Worldwide Inc
(aa)(v)
Commercial & Professional Services
L+950
0.0%
8/3/26
6.5
5.3
5.8
Solera LLC
(aa)(v)
Software & Services
L+800
1.0%
6/4/29
312.4
295.4
319.4
Sorenson Communications LLC
(ac)(v)(m)(s)(u)
Telecommunication Services
L+1,150 PIK (L+1,150 Max PIK)
3/17/26
6.9
6.6
6.9
Sungard Availability Services Capital Inc
(ac)(v)
Software & Services
L+400, 2.8% PIK (2.8% Max PIK)
1.0%
8/1/24
14.5
13.5
14.5
Vantage Specialty Chemicals Inc
(aa)(v)
Materials
L+825
1.0%
10/27/25
0.8
0.7
0.7
WireCo WorldGroup Inc
(aa)(v)(m)
Capital Goods
L+900
1.0%
9/30/24
14.9
13.6
14.8
Wittur Holding GmbH
(w)(v)
Capital Goods
E+850, 0.5% PIK (0.5% Max PIK)
0.0%
9/23/27
112.50
120.3
123.5
Total Senior Secured LoansSecond Lien
1,635.1
1,668.9
Other Senior Secured Debt1.8%
Angelica Corp
(y)(z)(h)
Health Care Equipment & Services
10.0% PIK (10.0% Max PIK)
12/30/22
$
50.8
42.3
21.2
JW Aluminum Co
(ad)(aa)(v)(s)
Materials
10.3%
6/1/26
76.5
75.4
82.2
One Call Care Management Inc
(ad)(v)
Health Care Equipment & Services
8.5% PIK (8.5% Max PIK)
11/1/28
22.5
20.6
22.3
TruckPro LLC
(aa)(v)
Capital Goods
11.0%
10/15/24
9.2
9.2
10.0
Total Other Senior Secured Debt
147.5
135.7
Subordinated Debt1.2%
Ardonagh Group Ltd
(aa)(w)(v)
Insurance
12.8% PIK (12.8% Max PIK)
1/15/27
0.9
0.9
0.9
ATX Networks Corp
(w)(y)(z)(v)(s)(ad)
Capital Goods
10.0% PIK (10.0% Max PIK)
8/9/28
18.3
4.8
4.8
ClubCorp Club Operations Inc
(aa)(v)
Consumer Services
8.5%
9/15/25
37.3
35.3
36.3
Hilding Anders
(ad)(w)(y)(v)
Consumer Durables & Apparel
24.8
26.9
Hilding Anders
(ad)(w)(y)(v)
Consumer Durables & Apparel
110.5
Hilding Anders
(ad)(w)(y)(z)(v)
Consumer Durables & Apparel
13.0% PIK (13.0% Max PIK)
11/30/25
126.0
99.4
51.1
Total Subordinated Debt
167.3
93.1
See notes to
unaudited consolidated financial statements.
13
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio
Company (a)
Footnotes
Industry
Rate (b)
Floor (b)
Maturity
Principal
Amount (c) /
Shares
Amortized
Cost
Fair
Value (d)
Asset Based Finance25.8%
801 5th Ave, Seattle, Private Equity
(ad)(w)(y)(v)
Real Estate
8,554,983
$
14.1
$
22.5
801 5th Ave, Seattle, Structure Mezzanine
(ad)(w)(v)
Real Estate
8.0%, 3.0% PIK (3.0% Max PIK)
12/19/29
$
55.5
53.4
55.5
Abacus JV, Private Equity
(w)(v)
Insurance
40,241,018
39.2
42.9
Accelerator Investments Aggregator LP, Private Equity
(w)(y)(v)
Diversified Financials
5,397,365
6.3
4.7
Altavair AirFinance, Private Equity
(w)(v)
Capital Goods
121,889,043
122.9
143.5
Australis Maritime, Common Stock
(w)(v)
Transportation
43,889,942
42.2
43.4
Avida Holding AB, Common Stock
(ad)(w)(y)(v)
Diversified Financials
405,023,756
43.9
52.4
Bank of Ireland, Class B Credit Linked Floating Rate Note
(w)(g)
Banks
L+1,185
12/4/27
$
14.7
14.7
14.2
Byrider Finance LLC, Structured Mezzanine
(v)
Automobiles & Components
L+1,050
0.3%
6/3/28
$
12.0
12.0
12.0
Byrider Finance LLC, Structured Mezzanine
(x)
Automobiles & Components
L+1,050
0.3%
6/3/28
$
11.0
11.0
11.0
Callodine Commercial Finance LLC, 2L Term Loan A
(v)
Diversified Financials
L+900
1.0%
11/3/25
$
125.0
117.7
125.3
Callodine Commercial Finance LLC, 2L Term Loan B
(x)
Diversified Financials
L+900
1.0%
11/3/25
$
40.3
40.3
40.4
Capital Automotive LP, Private Equity
(w)(v)
Real Estate
21,640,936
23.7
27.5
Capital Automotive LP, Structured Mezzanine
(w)(v)
Real Estate
11.0%
12/22/28
$
42.7
40.9
42.7
Global Jet Capital LLC, Preferred Stock
(y)(j)(v)(u)
Commercial & Professional Services
149,494,590
69.4
Global Jet Capital LLC, Structured Mezzanine
(v)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
1/30/25
$
4.5
3.5
3.6
Global Jet Capital LLC, Structured Mezzanine
(v)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
4/30/25
$
28.3
22.3
22.7
Global Jet Capital LLC, Structured Mezzanine
(v)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
9/3/25
$
5.9
4.6
4.7
Global Jet Capital LLC, Structured Mezzanine
(v)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
9/29/25
$
5.5
4.3
4.4
Global Jet Capital LLC, Structured Mezzanine
(j)(v)(u)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
12/4/25
$
271.3
218.2
217.8
Global Jet Capital LLC, Structured Mezzanine
(j)(v)(u)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
12/9/25
$
44.4
35.7
35.6
Global Jet Capital LLC, Structured Mezzanine
(j)(v)(u)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
1/29/26
$
23.2
18.7
18.6
Global Jet Capital LLC, Structured Mezzanine
(v)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
2/17/26
$
25.6
19.3
20.5
Global Jet Capital LLC, Structured Mezzanine
(v)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
4/14/26
$
39.6
32.2
31.8
Global Jet Capital LLC, Structured Mezzanine
(v)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
12/2/26
$
50.2
40.2
40.3
Global Lending Services LLC, Private Equity
(w)(v)
Diversified Financials
13,725,159
15.7
18.1
Global Lending Services LLC, Private Equity
(w)(v)
Diversified Financials
18,291,830
20.2
22.1
Home Partners JV 2, Private Equity
(ac)(w)(y)(v)
Real Estate
1,016,252
1.0
1.0
Home Partners JV 2, Private Equity
(ac)(w)(y)(v)
Real Estate
38,343
0.0
0.0
Home Partners JV 2, Structured Mezzanine
(ac)(w)(v)
Real Estate
11.0% PIK (11.0% Max PIK)
3/20/30
$
2.2
2.1
2.2
Home Partners JV 2, Structured Mezzanine
(ac)(w)(x)
Real Estate
11.0% PIK (11.0% Max PIK)
3/20/30
$
14.8
14.8
14.8
Home Partners JV, Common Stock
(ac)(w)(y)(v)
Real Estate
32,659,547
47.6
73.6
Home Partners JV, Private Equity
(ac)(w)(y)(v)
Real Estate
4,127,355
5.4
8.5
Home Partners JV, Structured Mezzanine
(ac)(w)(v)
Real Estate
11.0% PIK (11.0% Max PIK)
3/25/29
$
88.0
83.0
88.0
Jet Edge International LLC, Preferred Stock
(v)(ac)
Transportation
8.0%, 0.0% PIK (8.0% Max PIK)
20,878,236
20.9
16.6
Jet Edge International LLC, Term Loan
(v)(ac)
Transportation
10.0%, 2.0% PIK (2.0% Max PIK)
4/2/26
$
39.5
38.7
39.3
Jet Edge International LLC, Term Loan
(x)(ac)
Transportation
10.0%, 2.0% PIK (2.0% Max PIK)
4/2/26
$
38.3
38.3
38.0
Jet Edge International LLC, Warrant
(y)(h)(ac)
Transportation
3,963
4.3
Kilter Finance, Preferred Stock
(ad)(w)(v)
Insurance
6.0%, 6.0% PIK (6.0% Max PIK)
34,060,490
32.6
34.1
Kilter Finance, Private Equity
(ad)(w)(y)(v)
Insurance
536,709
0.5
0.5
See
notes to unaudited consolidated financial statements.
14
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio
Company (a)
Footnotes
Industry
Rate (b)
Floor (b)
Maturity
Principal
Amount (c) /
Shares
Amortized
Cost
Fair
Value (d)
KKR Central Park Leasing Aggregator L.P., Partnership Interest
(w)(y)(z)(v)
Capital Goods
5/31/23
$
39.1
$
39.1
$
27.6
KKR Chord IP Aggregator LP, Partnership Interest
(w)(v)
Media & Entertainment
61,994,246
60.5
66.4
KKR Rocket Loans Aggregator LLC, Partnership Interest
(w)(v)(ad)
Diversified Financials
764,880
0.8
0.8
KKR Zeno Aggregator LP (K2 Aviation), Partnership Interest
(w)(y)(v)
Capital Goods
23,664,954
23.0
22.5
Lenovo Group Ltd, Structured Mezzanine
(w)(v)
Technology Hardware & Equipment
7.8%
9/22/24
7.8
9.2
9.1
Lenovo Group Ltd, Structured Mezzanine
(w)(v)
Technology Hardware & Equipment
7.8%
9/22/24
$
12.1
12.1
12.1
Lenovo Group Ltd, Structured Mezzanine
(w)(v)
Technology Hardware & Equipment
11.8%
9/22/24
5.9
6.9
6.8
Lenovo Group Ltd, Structured Mezzanine
(w)(v)
Technology Hardware & Equipment
11.8%
9/22/24
£
1.6
2.2
2.1
Lenovo Group Ltd, Structured Mezzanine
(w)(v)
Technology Hardware & Equipment
7.8%
9/22/24
£
2.1
2.9
2.9
Lenovo Group Ltd, Structured Mezzanine
(w)(v)
Technology Hardware & Equipment
11.8%
9/22/24
$
9.1
9.1
9.1
NewStar Clarendon 2014-1A Class D
(w)(v)
Diversified Financials
18.1%
1/25/27
$
8.3
2.5
3.5
Opendoor Labs Inc, 2L Term Loan
(w)(v)
Real Estate
10.0%
1/23/26
$
151.0
148.9
151.0
Orchard Marine Limited, Class B Common Stock
(ac)(w)(y)(v)
Transportation
1,964
3.1
Orchard Marine Limited, Series A Preferred Stock
(ac)(w)(y)(v)
Transportation
62,976
62.0
51.7
Pretium Partners LLC P1, Structured Mezzanine
(w)(v)
Real Estate
2.8%, 5.3% PIK (5.3% Max PIK)
10/22/26
$
6.7
6.2
6.7
Prime ST LLC, Private Equity
(ad)(w)(y)(v)
Real Estate
6,634,509
8.3
10.8
Prime ST LLC, Structured Mezzanine
(ad)(w)(v)
Real Estate
5.0%, 6.0% PIK (6.0% Max PIK)
3/12/30
$
49.4
47.3
49.4
Star Mountain Diversified Credit Income Fund III, LP, Private Equity
(w)(o)
Diversified Financials
21,000,000
21.0
21.1
Toorak Capital Funding LLC, Membership Interest
(ad)(w)(y)(v)
Real Estate
1,723,140
1.9
1.7
Toorak Capital Partners LLC, Private Equity
(ad)(v)
Real Estate
198,139,270
198.1
248.4
Toorak Capital Partners LLC, Structured Mezzanine
(ad)(x)
Real Estate
L+650 PIK (L+650 Max PIK)
11/11/21
$
20.0
20.0
20.0
Wind River CLO Ltd. 2012 1A Class Subord. B
(w)(y)(v)
Diversified Financials
1/15/26
$
42.5
13.5
1.2
Total Asset Based Finance
2,070.1
2,124.0
Unfunded commitments
(124.4
)
(124.4
)
Net Asset Based Finance
1,945.7
1,999.6
Credit Opportunities Partners JV, LLC18.1%
Credit Opportunities Partners JV, LLC
(v)(w)(ad)
Diversified Financials
$
1,462.3
1,396.7
1,398.8
Credit Opportunities Partners JV, LLC
1,396.7
1,398.8
Portfolio
Company (a)
Footnotes
Industry
Rate (b)
Floor (b)
Maturity
Number of
Shares
Amortized
Cost
Fair
Value (d)
Equity/Other10.9% (e)
Abaco Energy Technologies LLC, Common Stock
(y)(v)
Energy
3,055,556
$
0.2
$
0.3
Abaco Energy Technologies LLC, Preferred Stock
(y)(v)
Energy
12,734,481
1.5
1.8
Affordable Care Inc, Preferred Stock
(v)(ac)
Health Care Equipment & Services
11.8% PIK (11.8% Max PIK)
49,073,000
48.1
49.3
American Vision Partners, Private Equity
(y)(v)
Health Care Equipment & Services
2,450,230
2.5
2.5
Amtek Global Technology Pte Ltd, Common Stock
(ad)(w)(y)(g)(v)
Automobiles & Components
7,046,126
Amtek Global Technology Pte Ltd, Ordinary Shares
(ad)(w)(y)(g)
Automobiles & Components
5,735,804,056
30.7
See
notes to unaudited consolidated financial statements.
15
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio
Company (a)
Footnotes
Industry
Rate (b)
Floor (b)
Maturity
Number of
Shares
Amortized
Cost
Fair
Value (d)
Amtek Global Technology Pte Ltd, Private Equity
(ad)(w)(y)(g)
Automobiles & Components
4,097
$
$
Angelica Corp, Limited Partnership Interest
(y)(h)
Health Care Equipment & Services
877,044
47.7
Ap Plasman Inc, Warrant
(w)(y)(v)
Capital Goods
5/25/26
6,985
2.5
Arcos LLC/VA, Preferred Stock
(v)
Software & Services
L+950 PIK (L+950 Max PIK)
1.0%
4/30/31
15,000,000
13.9
15.2
Ardonagh Ltd, Ordinary Shares
(w)(y)(v)
Insurance
16,450
Ardonagh Ltd, Ordinary Shares
(w)(y)(v)
Insurance
116,814
0.2
0.3
Ardonagh Ltd, Preferred Stock
(w)(y)(v)
Insurance
6,113,719
9.1
13.3
Arena Energy LP, Warrants
(y)(v)
Energy
68,186,525
0.4
0.5
Ascent Resources Utica Holdings LLC / ARU Finance Corp, Common Stock
(y)(p)
Energy
10,193
9.7
2.5
Ascent Resources Utica Holdings LLC / ARU Finance Corp, Trade Claim
(y)(p)
Energy
86,607,143
19.4
21.3
Aspect Software Inc, Common Stock
(y)(l)(v)(s)
Software & Services
1,309,955
2.3
2.7
Aspect Software Inc, Warrant
(y)(l)(v)(s)
Software & Services
1/15/24
181,730
0.3
0.3
ATX Networks Corp, Common Stock
(w)(y)(v)(s)(ad)
Capital Goods
3,483
AVF Parent LLC, Trade Claim
(y)(v)
Retailing
44,507
Belk Inc, Common Stock
(ac)(y)(v)
Retailing
94,950
Borden (New Dairy Opco), Common Stock
(ac)(y)(h)(n)
Food, Beverage & Tobacco
11,167,000
9.1
10.1
Bowery Farming Inc, Warrants
(y)(v)
Food, Beverage & Tobacco
4/30/26
161,828
0.0
0.0
Catalina Marketing Corp, Common Stock
(y)(v)
Media & Entertainment
6,522
CDS US Intermediate Holdings Inc, Warrant
(w)(y)(v)
Media & Entertainment
2,023,714
Cengage Learning, Inc, Common Stock
(y)(v)
Media & Entertainment
227,802
7.5
4.6
Charlotte Russe Inc, Common Stock
(ac)(y)(v)
Retailing
22,575
12.5
Chisholm Oil & Gas Operating LLC, Series A Units
(y)(v)(n)(o)
Energy
300,000
0.1
Cimarron Energy Inc, Common Stock
(y)(v)
Energy
4,302,293
Cimarron Energy Inc, Participation Option
(y)(v)
Energy
25,000,000
Constellis Holdings LLC, Private Equity
(ac)(y)(f)(v)
Capital Goods
849,702
10.3
9.4
CTI Foods Holding Co LLC, Common Stock
(y)(v)
Food, Beverage & Tobacco
5,892
0.7
0.0
Cubic Corp, Preferred Stock
(v)
Software & Services
11.0% PIK (11.0% Max PIK)
42,141,600
39.7
42.2
Empire Today LLC, Common Stock
(v)
Retailing
1,005
5.7
10.0
Envigo Laboratories Inc, Series A Warrant
(y)(s)
Health Care Equipment & Services
4/29/24
10,924
Envigo Laboratories Inc, Series B Warrant
(y)(s)
Health Care Equipment & Services
4/29/24
17,515
Fairway Group Holdings Corp, Common Stock
(ac)(y)(v)
Food & Staples Retailing
103,091
Fox Head Inc, Common Stock
(y)(j)(v)
Consumer Durables & Apparel
10,000,000
8.0
10.4
Fronton BV, Common Stock
(ac)(y)(o)
Consumer Services
14,943
1.5
Genesys Telecommunications Laboratories Inc, Class A Shares
(y)(v)
Technology Hardware & Equipment
40,529
Genesys Telecommunications Laboratories Inc, Ordinary Shares
(y)(v)
Technology Hardware & Equipment
41,339
Genesys Telecommunications Laboratories Inc, Preferred Stock
(y)(v)
Technology Hardware & Equipment
1,050,465
Harvey Industries Inc, Common Stock
(y)(v)
Capital Goods
5,000,000
2.2
4.2
Hilding Anders, Class A Common Stock
(ad)(w)(y)(v)
Consumer Durables & Apparel
4,503,411
0.1
See
notes to unaudited consolidated financial statements.
16
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio
Company (a)
Footnotes
Industry
Rate (b)
Floor (b)
Maturity
Number of
Shares
Amortized
Cost
Fair
Value (d)
Hilding Anders, Class B Common Stock
(ad)(w)(y)(v)
Consumer Durables & Apparel
574,791
$
0.0
$
Hilding Anders, Class C Common Stock
(ad)(w)(y)(v)
Consumer Durables & Apparel
213,201
Hilding Anders, Equity Options
(ad)(w)(y)(v)
Consumer Durables & Apparel
11/30/25
236,160,807
15.0
HM Dunn Co Inc, Preferred Stock, Series A
(ad)(y)(v)(s)
Capital Goods
85,385
7.1
8.6
HM Dunn Co Inc, Preferred Stock, Series B
(ad)(y)(v)(s)
Capital Goods
15,000
Imagine Communications Corp, Common Stock
(y)(v)
Media & Entertainment
33,034
3.8
2.5
Jones Apparel Holdings, Inc., Common Stock
(y)(v)
Consumer Durables & Apparel
5,451
0.9
JW Aluminum Co, Common Stock
(ad)(y)(j)(v)(u)
Materials
2,105
0.0
JW Aluminum Co, Preferred Stock
(ad)(j)(v)(u)
Materials
12.5% PIK (12.5% Max PIK)
2/15/28
15,279
171.1
119.0
Maverick Natural Resources LLC, Common Stock
(y)(n)(o)
Energy
259,211
84.5
133.9
MB Precision Holdings LLC, Class A2 Units
(y)(n)(o)
Capital Goods
8,081,288
0.5
Med-Metrix, Common Stock
(y)(h)
Software & Services
29,403
2.9
2.9
Miami Beach Medical Group LLC, Common Stock
(y)(v)
Health Care Equipment & Services
5,000,000
4.8
4.1
Micronics Filtration Holdings Inc, Common Stock
(ac)(y)(v)
Capital Goods
53,073
0.6
Micronics Filtration Holdings Inc, Preferred Stock, Series A
(ac)(y)(v)
Capital Goods
55
0.6
Micronics Filtration Holdings Inc, Preferred Stock, Series B
(ac)(y)(v)
Capital Goods
23
0.2
Micronics Filtration Holdings Inc, Preferred Stock, Series B PIK
(ac)(y)(v)
Capital Goods
112,780
Micronics Filtration Holdings Inc, Preferred Stock, Series C PIK
(ac)(y)(v)
Capital Goods
54,000
Misys Ltd, Preferred Stock
(w)(v)
Software & Services
L+1,025 PIK (L+1,025 Max PIK)
77,447,484
71.3
76.9
NBG Home, Common Stock
(y)(v)
Consumer Durables & Apparel
1,903
2.6
0.1
Nine West Holdings Inc, Common Stock
(y)(v)
Consumer Durables & Apparel
5,451
6.5
One Call Care Management Inc, Common Stock
(ad)(y)(v)
Health Care Equipment & Services
34,872
2.1
2.4
One Call Care Management Inc, Preferred Stock A
(ad)(y)(v)
Health Care Equipment & Services
371,992
22.8
25.4
One Call Care Management Inc, Preferred Stock B
(ad)(v)
Health Care Equipment & Services
9.0% PIK (9.0% Max PIK)
10/25/29
7,672,347
8.0
9.0
Petroplex Acidizing Inc, Preferred Stock A
(ac)(v)(ac)(y)(v)
Energy
25,012,540
4.9
Petroplex Acidizing Inc, Warrant
(ac)(y)(v)
Energy
12/15/26
8
Polyconcept North America Inc, Class A1 Units
(y)(v)
Household & Personal Products
30,000
3.0
3.3
Production Resource Group LLC, Preferred Stock, Series A PIK
(ad)(y)(v)
Media & Entertainment
8/21/24
434,250
18.1
13.9
Production Resource Group LLC, Preferred Stock, Series B PIK
(ad)(y)(v)
Media & Entertainment
8/21/24
140
Professional Plumbing Group Inc, Common Stock
(y)(j)
Materials
3,000,000
2.6
2.7
Proserv Acquisition LLC, Class A Common Units
(ac)(w)(y)(v)
Energy
2,635,005
33.5
3.4
Proserv Acquisition LLC, Class A Preferred Units
(ac)(w)(y)(v)
Energy
837,780
5.4
9.5
Quorum Health Corp, Trade Claim
(y)(v)
Health Care Equipment & Services
8,301,000
0.7
0.9
Quorum Health Corp, Trust Initial Funding Units
(y)(v)
Health Care Equipment & Services
143,400
0.2
0.2
Ridgeback Resources Inc, Common Stock
(w)(y)(j)(v)(u)
Energy
1,969,418
9.1
10.0
Sequential Brands Group Inc., Common Stock
(y)(j)(v)
Consumer Durables & Apparel
18,519
2.8
Sorenson Communications LLC, Common Stock
(ac)(y)(j)(v)(u)
Telecommunication Services
89,959
42.5
74.5
See
notes to unaudited consolidated financial statements.
17
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company (a)
Footnotes
Industry
Rate (b)
Floor (b)
Maturity
Number of
Shares
Amortized
Cost
Fair
Value (d)
Sound United LLC, Common Stock
(ad)(v)
Consumer Durables & Apparel
12,857,143
$
17.3
$
75.2
Stuart Weitzman Inc, Common Stock
(y)(v)
Consumer Durables & Apparel
5,451
Sungard Availability Services Capital Inc, Common Stock
(ac)(y)(v)(s)(u)
Software & Services
262,516
6.9
5.1
Swift Worldwide Resources Holdco Ltd, Common Stock
(y)(v)
Energy
1,250,000
1.2
1.0
ThermaSys Corp, Common Stock
(ac)(y)(v)(u)
Capital Goods
17,383,026
10.2
ThermaSys Corp, Preferred Stock
(ac)(y)(v)
Capital Goods
1,529
1.7
Trace3 Inc, Common Stock
(y)(v)
Software & Services
61,798
3.9
10.2
Versatile Processing Group Inc, Class A2 Units
(y)(u)
Materials
3,637,500
3.6
Warren Resources Inc, Common Stock
(ad)(y)(v)
Energy
3,483,788
12.8
21.1
Zeta Interactive Holdings Corp, Common Stock
(aa)(y)(v)
Software & Services
3,610,212
30.8
21.2
Total Equity/Other
900.9
839.4
TOTAL INVESTMENTS204.6%
$
15,723.9
15,824.2
LIABILITIES IN EXCESS OF OTHER ASSETS(104.6%)
(8,088.2
)
NET ASSETS100%
$
7,736.0
See notes to
unaudited consolidated financial statements.
18
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Foreign currency forward contracts
Foreign Currency
Settlement
Date
Counterparty
Amount and
Transaction
US$ Value at
Settlement Date
US$ Value at
September 30,
2021
Unrealized Appreciation
(Depreciation)
AUD
10/17/2022
JP Morgan Chase Bank
A$
3.0 Sold
$
2.1
$
2.2
$
(0.1
)
CAD
6/7/2022
JP Morgan Chase Bank
$
1.4 Sold
1.1
1.1
0.0
CAD
6/7/2022
JP Morgan Chase Bank
$
1.9 Sold
1.5
1.5
0.0
CAD
11/10/2022
JP Morgan Chase Bank
$
1.5 Sold
1.2
1.1
0.1
CAD
11/15/2024
JP Morgan Chase Bank
$
4.0 Sold
3.2
3.1
0.1
EUR
5/6/2022
JP Morgan Chase Bank
6.1 Sold
7.5
7.1
0.4
EUR
5/6/2022
JP Morgan Chase Bank
1.6 Sold
2.0
1.9
0.1
EUR
5/6/2022
JP Morgan Chase Bank
0.7 Sold
0.9
0.9
0.0
EUR
5/6/2022
JP Morgan Chase Bank
2.2 Sold
2.7
2.6
0.1
EUR
5/6/2022
JP Morgan Chase Bank
0.9 Sold
1.2
1.1
0.1
EUR
7/17/2023
JP Morgan Chase Bank
1.3 Sold
1.7
1.5
0.2
EUR
8/8/2025
JP Morgan Chase Bank
4.8 Sold
5.7
5.8
(0.1
)
EUR
8/8/2025
JP Morgan Chase Bank
1.9 Sold
2.3
2.4
(0.1
)
GBP
1/11/2023
JP Morgan Chase Bank
£
1.9 Sold
2.9
2.6
0.3
GBP
1/11/2023
JP Morgan Chase Bank
£
1.7 Sold
2.6
2.3
0.3
GBP
1/11/2023
JP Morgan Chase Bank
£
3.4 Sold
4.8
4.6
0.2
GBP
1/11/2023
JP Morgan Chase Bank
£
5.0 Sold
6.6
6.7
(0.1
)
GBP
1/11/2023
JP Morgan Chase Bank
£
1.4 Sold
1.9
1.9
0.0
GBP
10/13/2023
JP Morgan Chase Bank
£
6.2 Sold
8.5
8.3
0.2
NOK
8/8/2025
JP Morgan Chase Bank
NOK
49.1 Sold
5.2
5.4
(0.2
)
NOK
8/8/2025
JP Morgan Chase Bank
NOK
11.4 Sold
1.2
1.3
(0.1
)
SEK
3/15/2024
JP Morgan Chase Bank
SEK
72.8 Sold
8.5
8.4
0.1
SEK
5/10/2024
JP Morgan Chase Bank
SEK
430.3 Sold
51.4
49.7
1.7
SEK
5/10/2024
JP Morgan Chase Bank
SEK
503 Sold
60.1
58.1
2.0
SEK
5/10/2024
JP Morgan Chase Bank
SEK
34.5 Sold
4.1
4.0
0.1
SEK
8/8/2025
JP Morgan Chase Bank
SEK
119.3 Sold
13.3
13.9
(0.6
)
SEK
8/8/2025
JP Morgan Chase Bank
SEK
27.8 Sold
3.1
3.2
(0.1
)
Total
$
207.3
$
202.7
$
4.6
(a)
Security may be an obligation of one or more entities affiliated with the named company.
(b)
Certain variable rate securities in the Companys portfolio bear interest at a rate determined by a
publicly disclosed base rate plus a basis point spread. As of September 30, 2021, the three-month London Interbank Offered Rate, or LIBOR or L, was 0.13%, the Euro Interbank Offered Rate, or EURIBOR, was (0.55)%, Candian Dollar
Offer Rate, or CDOR was 0.45%, the Australian Bank Bill Swap Bid Rate, or BBSY, or B, was 0.07%, the Reykjavik Interbank Offered Rate, or REIBOR, was 1.89%, the Stockholm Interbank Offered Rate, or STIBOR or SR, was (0.08)%,
the Sterling Interbank Offered Rate, or SONIA or SA, was 0.05%, and the U.S. Prime Lending Rate, or Prime, was 3.25%. PIK means paid-in-kind. PIK income
accruals may be adjusted based on the fair value of the underlying investment. Variable rate securities with no floor rate use the respective benchmark rate in all cases.
(c)
Denominated in U.S dollars unless otherwise noted.
(d)
Fair value determined by the Companys board of directors (see Note 8).
(e)
Listed investments may be treated as debt for GAAP or tax purposes.
(f)
Security or portion thereof held within Ambler Funding LLC and is pledged as collateral supporting the amounts
outstanding under the revolving credit facility with Ally Bank (see Note 9).
See notes to
unaudited consolidated financial statements.
19
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
(g)
Security or portion thereof held within CCT Dublin Funding Limited.
(h)
Security held within CCT Holdings II, LLC, a wholly-owned subsidiary of the Company.
(i)
Security or portion thereof held within CCT Tokyo Funding LLC and pledged as collateral supporting the amounts
outstanding under the revolving credit facility with Sumitomo Mitsui Banking Corporation (see Note 9).
(j)
Security or portion thereof held within Cobbs Creek LLC and is pledged as collateral supporting the amounts
outstanding under the senior secured revolving credit facility (see Note 9).
(k)
Security or portion thereof held within Darby Creek LLC and is pledged as collateral supporting the amounts
outstanding under a revolving credit facility with Deutsche Bank AG, New York Branch (see Note 9).
(l)
Security or portion thereof held within Dunlap Funding LLC and is pledged as collateral supporting the amounts
outstanding under a revolving credit facility with Deutsche Bank AG, New York Branch (see Note 9).
(m)
Security or portion thereof held within FS KKR MM CLO 1 LLC (see Note 9).
(n)
Security held within FSIC II Investments, Inc., a wholly-owned subsidiary of the Company.
(o)
Security held within FSIC Investments, Inc., a wholly-owned subsidiary of the Company.
(p)
Security held within IC American Energy Investments, Inc., a wholly-owned subsidiary of the Company.
(q)
Security held within IC Arches Investments, LLC, a wholly-owned subsidiary of the Company.
(r)
Security held within IC II Arches Investments, LLC, a wholly-owned subsidiary of the Company.
(s)
Security or portion thereof held within Juniata River LLC and is pledged as collateral supporting the amounts
outstanding under a term loan credit facility with JPMorgan Chase Bank, N.A. (see Note 9).
(t)
Security or portion thereof held within Meadowbrook Run LLC and is pledged as collateral supporting the amounts
outstanding under a revolving credit facility with Morgan Stanley Senior Funding, Inc. (see Note 9).
(u)
Security or portion thereof held within Race Street Funding LLC. Security is available as collateral to support
the amounts outstanding under the Senior Secured Revolving Credit Facility (see Note 9).
(v)
Security or portion thereof is pledged as collateral supporting the amounts outstanding under the Senior Secured
Revolving Credit Facility (see Note 9).
(w)
The investment, or portion of the investment is not a qualifying asset under the Investment Company Act of 1940,
as amended. A business development company may not acquire any asset other than qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the companys total assets. As of September 30,
2021, 75.8% of the Companys total assets represented qualifying assets.
(x)
Security is an unfunded commitment. Reflects the stated spread at the time of commitment, but may not be the
actual rate received upon funding.
(y)
Security is non-income producing.
(z)
Asset is on non-accrual status.
(aa) Security is classified as Level 1 or Level 2 in the Companys fair value hierarchy (see Note 8).
(ab) Not used.
See notes to
unaudited consolidated financial statements.
20
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
(ac)
Under the Investment Company Act of 1940, as amended, the Company generally is deemed to be an affiliated
person of a portfolio company if it owns 5% or more of the portfolio companys voting securities and generally is deemed to control a portfolio company if it owns more than 25% of the portfolio companys voting securities
or it has the power to exercise control over the management or policies of such portfolio company. As of September 30, 2021, the Company held investments in portfolio companies of which it is deemed to be an affiliated person but is
not deemed to control. The following table presents certain information with respect to investments in portfolio companies of which the Company was deemed to be an affiliated person as of September 30, 2021:
Portfolio Company
Fair Value at
December 31,
2020
Gross
Additions (1)
Gross
Reductions (2)
Net Realized
Gain (Loss)
Net Change in
Unrealized
Appreciation
(Depreciation)
Fair Value at
September 30,
2021
Interest
Income (3)
PIK
Income (3)
Fee
Income (3)
Dividend
Income (3)
Senior Secured LoansFirst Lien
Affordable Care Inc
$
$
$
$
$
$
$
$
$
0.3
$
Affordable Care Inc
115.1
0.3
115.4
1.4
1.6
Belk Inc
39.3
(1.3
)
0.1
12.8
50.9
0.9
Belk Inc
21.7
0.4
22.1
1.1
Borden (New Dairy Opco)
7.6
10.5
0.9
19.0
0.4
Borden (New Dairy Opco)
16.8
23.3
1.9
42.0
1.7
Borden Dairy Co
1.3
(1.3
)
Constellis Holdings LLC
13.9
1.1
15.0
0.5
Fairway Group Holdings Corp
1.7
(0.7
)
(0.4
)
0.6
0.4
Fairway Group Holdings Corp
HM Dunn Co Inc (5)
0.3
(0.6
)
0.3
HM Dunn Co Inc (5)
0.2
(0.3
)
0.1
Micronics Filtration Holdings LLC
35.5
4.5
40.0
One Call Care Management Inc (5)
4.7
0.1
(4.9
)
0.5
(0.4
)
0.2
Petroplex Acidizing Inc
4.5
0.7
1.7
6.9
Sorenson Communications LLC (4)
61.7
(3.3
)
0.1
3.8
62.3
1.6
Sungard Availability Services Capital
Inc (4)
5.6
0.4
6.0
0.1
ThermaSys Corp
3.9
0.4
(1.1
)
3.2
0.5
Senior Secured LoansSecond Lien
Belk Inc
4.2
0.4
4.6
Constellis Holdings LLC
12.5
1.0
13.5
0.2
0.3
Fairway Holdings Group Corp
Sorenson Communications LLC (4)
21.3
(15.0
)
0.3
0.3
6.9
0.4
0.8
Sungard Availability Services Capital
Inc (4)
13.4
0.1
1.0
14.5
0.5
0.1
Other Senior Secured Debt
JW Aluminum Co (5)
41.8
(39.4
)
(2.4
)
Subordinated Debt
Home Partners of America Inc
3.5
(3.5
)
0.1
Asset Based Finance
Home Partners JV, Structured Mezzanine
38.5
81.8
(37.3
)
5.0
88.0
1.6
4.8
Home Partners JV, Private Equity
5.4
3.1
8.5
Home Partners JV, Private Equity
(0.6
)
0.6
Home Partners JV, Common Stock
21.5
45.9
(22.9
)
7.7
21.4
73.6
Home Partners JV 2, Structured Mezzanine
2.1
0.1
2.2
0.1
Home Partners JV 2, Private Equity
Home Partners JV 2, Private Equity
1.0
1.0
See notes to
unaudited consolidated financial statements.
21
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company
Fair Value at
December 31,
2020
Gross
Additions (1)
Gross
Reductions (2)
Net Realized
Gain (Loss)
Net Change in
Unrealized
Appreciation
(Depreciation)
Fair Value at
September 30,
2021
Interest
Income (3)
PIK
Income (3)
Fee
Income (3)
Dividend
Income (3)
Jet Edge International LLC, Preferred Stock
$
$
20.9
$
$
$
(4.3
)
$
16.6
$
0.1
$
$
$
Jet Edge International, Warrant
4.3
4.3
Jet Edge International, Term Loan
39.4
(0.7
)
0.3
39.0
0.8
0.3
Orchard Marine Limited, Class B Common Stock
Orchard Marine Limited, Series A Preferred Stock
24.6
27.1
51.7
Equity/Other
Affordable Care Inc, Preferred Stock
48.1
1.2
49.3
0.9
ASG Technologies, Common Stock
42.7
(78.7
)
55.3
(19.3
)
ASG Technologies, Warrant
3.5
(10.2
)
3.7
3.0
Belk Inc, Common Stock
Borden (New Dairy Opco), Common Stock
3.2
5.2
1.7
10.1
Charlotte Russe Inc, Common Stock
Constellis Holdings LLC, Private Equity
10.3
(0.9
)
9.4
Fairway Group Holdings Corp, Common Stock
Fronton BV, Common Stock
1.2
0.3
1.5
HM Dunn Co Inc, Preferred Stock, Series
A (5)
HM Dunn Co Inc, Preferred Stock, Series
B (5)
Home Partners of America Inc, Common Stock
130.5
(214.3
)
130.7
(46.9
)
Home Partners of America Inc, Warrant
2.1
(4.4
)
4.1
(1.8
)
JW Aluminum Co, Common Stock (5)
JW Aluminum Co, Preferred Stock (5)
93.7
(107.3
)
13.6
4.2
Micronics Filtration Holdings Inc, Common Stock
Micronics Filtration Holdings Inc, Preferred Stock, Series A
Micronics Filtration Holdings Inc, Preferred Stock, Series B
Micronics Filtration Holdings Inc, Preferred Stock, Series B PIK
Micronics Filtration Holdings Inc, Preferred Stock, Series C PIK
One Call Care Management Inc, Common
Stock (5)
2.4
(3.0
)
0.6
One Call Care Management Inc, Preferred Stock
A (5)
25.5
(32.3
)
6.8
One Call Care Management Inc, Preferred Stock
B (5)
10.6
(9.8
)
(0.8
)
Petroplex Acidizing Inc, Preferred Stock A
0.4
(0.4
)
0.4
Petroplex Acidizing Inc, Warrant
Proserv Acquisition LLC, Class A Common Units
9.0
(5.6
)
3.4
Proserv Acquisition LLC, Class A Preferred Units
9.5
9.5
Sorenson Communications LLC, Common
Stock (4)
42.5
32.0
74.5
Sungard Availbaility Services Capital Inc, Common Stock (4)
6.9
(1.8
)
5.1
ThermaSys Corp, Common Stock
ThermaSys Corp, Preferred Stock
Total
$
533.8
$
658.8
$
(589.8
)
$
203.2
$
64.6
$
870.6
$
12.0
$
12.0
$
1.9
$
0.4
(1)
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK
interest, the amortization of unearned income, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.
See notes to
unaudited consolidated financial statements.
22
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
(2)
Gross reductions include decreases in the cost basis of investments resulting from principal collections related
to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.
(3) Interest,
PIK, fee and dividend income presented for the full nine months ended September 30, 2021.
(4)
The Company held this investment as of December 31, 2020 but it was not deemed to be an affiliated
person of the portfolio company or deemed to control the portfolio company as of December 31, 2020. Transfers in or out have been presented at amortized cost.
(5)
The Company held this investment as of September 30, 2021 but it was deemed to control the
portfolio company as of September 30, 2021. Transfers in or out have been presented at amortized cost.
(ad)
Under the Investment Company Act of 1940, as amended, the Company generally is deemed to control a
portfolio company if it owns more than 25% of the portfolio companys voting securities or it has the power to exercise control over the management or policies of such portfolio company. As of September 30, 2021, the Company held
investments in portfolio companies of which it is deemed to be an affiliated person and deemed to control. During the nine months ended September 30, 2021, the Company disposed of investments in portfolio companies of
which it was deemed to be an affiliated person and deemed to control. The following table presents certain information with respect to investments in portfolio companies of which the Company was deemed to be an affiliated
person and deemed to control as of September 30, 2021:
Portfolio Company
Fair Value at
December 31,
2020
Gross
Additions (1)
Gross
Reductions (2)
Net Realized
Gain (Loss)
Net Change in
Unrealized
Appreciation
(Depreciation)
Fair Value at
September 30,
2021
Interest
Income (3)
PIK
Income (3)
Fee
Income (3)
Dividend
Income (3)
Senior Secured LoansFirst Lien
Advanced Lighting Technologies Inc
$
12.0
$
4.1
$
(15.9
)
$
(4.6
)
$
4.4
$
$
$
$
$
Amtek Global Technology Pte Ltd
59.7
2.4
(6.7
)
55.4
1.1
1.4
ATX Networks Corp
45.8
45.8
0.3
HM Dunn Co Inc (4)
48.6
(7.1
)
(8.5
)
33.0
HM Dunn Co Inc (4)
14.0
(19.0
)
7.0
2.0
0.4
0.8
One Call Care Management Inc
9.7
(5.1
)
0.1
0.3
5.0
0.2
0.1
Production Resource Group LLC
121.0
9.1
130.1
3.1
1.9
Production Resource Group LLC
3.3
0.1
3.4
0.1
Production Resource Group LLC
0.1
0.1
Production Resource Group LLC
56.3
(0.3
)
4.6
60.6
1.5
0.4
Production Resource Group LLC
10.0
0.1
10.1
0.1
0.1
Sound United LLC
14.9
(15.0
)
0.1
0.4
Warren Resources Inc (4)
19.2
(2.0
)
0.1
1.3
18.6
0.7
0.1
Senior Secured LoansSecond Lien
Amtek Global Technology Pte Ltd
0.1
(1.9
)
(10.6
)
12.4
(1.9
)
Sound United LLC
20.9
0.8
(22.6
)
0.9
1.0
Other Senior Secured Debt
Advanced Lighting Technologies Inc
(0.7
)
(22.9
)
23.6
JW Aluminum Co (4)
75.5
6.7
82.2
4.2
One Call Care Management Inc (4)
42.5
(21.9
)
1.7
22.3
0.4
1.1
Subordinated Debt
ATX Networks Corp
4.8
4.8
Hilding Anders
32.4
18.7
51.1
Hilding Anders
Hilding Anders
30.3
(30.3
)
Asset Based Finance
801 5th Ave, Seattle, Structure Mezzanine
29.4
24.0
2.1
55.5
2.4
0.9
801 5th Ave, Seattle, Private Equity
10.3
9.6
2.6
22.5
Avida Holding AB, Common Stock
38.3
8.4
5.7
52.4
Kilter Finance, Preferred Stock
0.2
32.4
1.5
34.1
0.7
0.6
See notes to
unaudited consolidated financial statements.
23
Table of Contents
FS KKR Capital Corp.
Unaudited Consolidated Schedule of Investments (continued)
As of September 30, 2021
(in millions, except share amounts)
Portfolio Company
Fair Value at
December 31,
2020
Gross
Additions (1)
Gross
Reductions (2)
Net Realized
Gain (Loss)
Net Change in
Unrealized
Appreciation
(Depreciation)
Fair Value at
September 30,
2021
Interest
Income (3)
PIK
Income (3)
Fee
Income (3)
Dividend
Income (3)
Kilter Finance, Private Equity
$
0.2
$
0.3
$
$
$
$
0.5
$
$
$
$
KKR Rocket Loans Aggregtor LLC, Partnership Interest
0.8
0.8
Prime St LLC, Private Equity
3.9
5.2
1.7
10.8
Prime St LLC, Structured Mezzanine
22.8
24.5
2.1
49.4
0.3
1.4
Toorak Capital Funding LLC, Membership Interest
6.6
1.3
(4.9
)
(1.3
)
1.7
Toorak Capital Partners LLC, Private Equity
235.9
2.3
10.2
248.4
14.5
Toorak Capital Partners LLC, Structured Mezzanine
18.0
(18.0
)
0.1
Credit Opportunities Partners JV, LLC
Credit Opportunities Partners JV, LLC
712.5
586.4
99.9
1,398.8
85.3
Equity/Other
Advanced Lighting Technologies Inc, Common Stock
(16.5
)
16.5
Advanced Lighting Technologies Inc, Warrant
(0.1
)
0.1
Amtek Global Technology Pte Ltd, Common Stock
Amtek Global Technology Pte Ltd, Ordinary Shares
Amtek Global Technology Pte Ltd, Trade Claim
(1.4
)
0.4
1.0
Amtek Global Technology Pte Ltd, Private Equity
ATX Networks Corp, Common Stock
Hilding Anders, Class A Common Stock
Hilding Anders, Class B Common Stock
Hilding Anders, Class C Common Stock
Hilding Anders, Equity Options
HM Dunn Preferred Stock, Series A (4)
7.1
1.5
8.6
HM Dunn Preferred Stock, Series A (5)
JW Aluminum Co, Common Stock (4)
JW Aluminum Co, Preferred Stock (4)
171.1
(52.1
)
119.0
1.7
12.8
One Call Care Management Inc, Common
Stock (4)
4.5
(2.2
)
(0.2
)
0.3
2.4
One Call Care Management Inc, Preferred Stock
A (4)
48.6
(23.7
)
(2.1
)
2.6
25.4
One Call Care Management Inc, Preferred Stock
B (4)
15.7
(8.8
)
1.1
1.0
9.0
0.7
Production Resource Group LLC, Preferred Stock, Series A PIK
18.1
(4.2
)
13.9
Production Resource Group LLC, Preferred Stock, Series B PIK
Sound United LLC, Class A Units
(1.1
)
1.1
Sound United LLC, Common Stock
29.3
45.9
75.2
20.0
Sound United LLC, Series I Units
(0.5
)
0.5
Sound United LLC, Series II Units
(0.5
)
0.5
Warren Resources Inc, Common Stock
12.8
8.3
21.1
Total
$
1,259.7
$
1,447.3
$
(168.6
)
$
(58.0
)
$
193.6
$
2,674.0
$
15.8
$
22.7
$
0.6
$
119.8
(1)
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest, the amortization of
unearned income, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.
(2)
Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or
sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.
(3) Interest,
PIK, fee and dividend income presented for the full nine months ended September 30, 2021.
(4) The
Company held this investment as of December 31, 2020 but it was not deemed to control the portfolio company as of
December 31, 2020. Transfers in or out have been presented at amortized cost.
See
notes to unaudited consolidated financial statements.
24
Table of Contents
FS KKR Capital Corp.
Consolidated Schedule of Investments
As of December 31, 2020
(in millions, except share amounts)
Portfolio Company (a)
Footnotes
Industry
Rate (b)
Floor
Maturity
Principal
Amount (c)
Amortized
Cost
Fair
Value (d)
Senior Secured LoansFirst Lien111.4%
5 Arch Income Fund 2 LLC
(l)(n)(q)(w)
Diversified Financials
9.0%
11/18/23
$
28.8
$
28.8
$
25.5
5 Arch Income Fund 2 LLC
(l)(n)(q)(v)(w)
Diversified Financials
9.0%
11/18/23
4.5
4.5
4.0
A10 Capital LLC
(g)(h)
Diversified Financials
L+650
1.0%
5/1/23
12.8
12.7
12.6
A10 Capital LLC
(v)
Diversified Financials
L+650
1.0%
5/1/23
14.1
14.1
14.0
Abaco Systems, Inc
(g)(h)(i)
Capital Goods
L+600
1.0%
12/7/21
60.6
60.0
60.6
ABB CONCISE Optical Group LLC
(g)(x)
Retailing
L+500
1.0%
6/15/23
0.7
0.7
0.7
Accuride Corp
(g)(h)(i)(x)
Capital Goods
L+525
1.0%
11/17/23
17.7
17.6
16.1
Acproducts Inc
(g)(h)(x)
Consumer Durables & Apparel
L+650
1.0%
8/18/25
41.8
39.7
43.1
Advanced Lighting Technologies Inc
(g)(n)(w)(z)
Materials
L+750
1.0%
10/4/22
19.8
16.4
12.0
All Systems Holding LLC
(f)(g)(h)
Commercial & Professional Services
L+625
1.0%
10/31/23
112.2
112.3
112.6
All Systems Holding LLC
(v)
Commercial & Professional Services
L+625
1.0%
10/31/23
7.2
7.2
7.2
American Tire Distributors Inc
(g)(x)
Automobiles & Components
L+750, 0.0% PIK (1.5% Max PIK)
1.0%
9/2/24
23.0
21.7
22.0
Amtek Global Technology Pte Ltd
(j)(l)(z)
Automobiles & Components
E+500
0.0%
4/4/24
54.4
66.3
59.7
Apex Group Limited
(g)(l)
Diversified Financials
L+700
1.3%
6/15/23
$
0.6
0.6
0.6
Apex Group Limited
(l)(v)
Diversified Financials
L+700
1.3%
6/15/23
1.3
1.2
1.3
Apex Group Limited
(g)(h)(l)
Diversified Financials
L+700
1.3%
6/16/25
18.6
18.3
18.7
Apex Group Limited
(g)(l)
Diversified Financials
L+700
1.5%
6/16/25
£
31.3
39.7
43.2
Ardonagh Group Ltd
(g)(l)
Insurance
L+750, 0.0% PIK (2.3% Max PIK)
0.8%
7/14/26
0.1
0.2
0.2
Ardonagh Group Ltd
(l)(v)
Insurance
L+750, 0.0% PIK (2.3% Max PIK)
0.8%
7/14/26
0.7
0.8
0.9
Aspect Software Inc
(g)
Software & Services
8.0% PIK (8.0% Max PIK)
1/15/21
0.0
0.0
0.0
Aspect Software Inc
(v)
Software & Services
L+500
1.0%
7/15/23
0.7
0.7
0.7
Berner Food & Beverage LLC
(g)(h)(i)
Food & Staples Retailing
L+875
1.0%
3/16/22
87.6
87.3
91.6
Borden (New Dairy Opco)
(g)(y)
Food, Beverage & Tobacco
L+250
1.0%
7/20/25
7.6
7.6
7.6
Borden (New Dairy Opco)
(g)(y)
Food, Beverage & Tobacco
L+700, 0.0% PIK (1.0% Max PIK)
1.0%
7/20/25
16.8
16.8
16.8
Borden Dairy Co
(g)(n)(w)(y)
Food, Beverage & Tobacco
L+825
1.0%
7/6/23
26.0
24.1
Charles Taylor PLC
(g)(l)
Diversified Financials
L+575
0.0%
1/24/27
£
33.6
42.9
43.3
CSafe Global
(g)
Capital Goods
L+625
1.0%
12/23/27
$
0.1
0.1
0.1
CSafe Global
(v)
Capital Goods
L+625
1.0%
12/23/27
1.5
1.5
1.5
CSafe Global
(g)(h)
Capital Goods
L+625
1.0%
12/23/27
16.0
15.9
15.9
CSM Bakery Products
(g)(x)
Food, Beverage & Tobacco
L+625
1.0%
1/4/22
1.1
1.1
1.1
CTI Foods Holding Co LLC
(g)
Food, Beverage & Tobacco
L+577, 3.0% PIK (3.0% Max PIK)
1.0%
5/3/24
3.0
3.0
2.5
Distribution International Inc
(g)(h)(x)
Retailing
L+575
1.0%
12/15/23
27.6
25.2
25.3
Eagle Family Foods Inc
(v)
Food, Beverage & Tobacco
L+650
1.0%
6/14/23
7.1
7.1
7.1
Eagle Family Foods Inc
(g)(h)(i)
Food, Beverage & Tobacco
L+650
1.0%
6/14/24
45.6
45.3
45.6
Empire Today LLC
(g)(h)
Retailing
L+650
1.0%
11/17/22
75.6
75.6
76.4
Entertainment Benefits Group LLC
(g)
Media & Entertainment
L+575, 2.5% PIK (2.5% Max PIK)
1.0%
9/30/24
4.3
4.3
3.6
Entertainment Benefits Group LLC
(v)
Media & Entertainment
L+575, 2.5% PIK (2.5% Max PIK)
1.0%
9/30/24
0.5
0.5
0.4
Entertainment Benefits Group LLC
(g)(h)
Media & Entertainment
L+575, 2.5% PIK (2.5% Max PIK)
1.0%
9/30/25
30.1
29.8
25.3
FloWorks International LLC
(g)(h)
Capital Goods
L+600
1.0%
10/14/26
17.2
17.0
17.0
FloWorks International LLC
(g)
Capital Goods
L+600
1.0%
10/14/26
6.4
6.4
6.4
FloWorks International LLC
(v)
Capital Goods
L+600
1.0%
10/14/26
6.4
6.4
6.4
Frontline Technologies Group LLC
(g)
Software & Services
L+525
1.0%
9/18/23
22.3
22.3
22.3
Frontline Technologies Group LLC
(g)(h)(i)
Software & Services
L+575
1.0%
9/18/23
51.9
51.6
52.0
Greystone & Co Inc
(g)(h)
Diversified Financials
L+800
1.0%
4/17/24
36.8
36.6
37.2
See notes to
unaudited consolidated financial statements.
25
Table of Contents
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
Portfolio Company (a)
Footnotes
Industry
Rate (b)
Floor
Maturity
Principal
Amount (c)
Amortized
Cost
Fair
Value (d)
Greystone Equity Member Corp
(g)(l)
Diversified Financials
L+725
3.8%
4/1/26
$
60.8
$
60.8
$
60.3
Heniff Transportation Systems LLC
(g)
Transportation
L+575
1.0%
12/3/24
3.4
3.4
3.4
Heniff Transportation Systems LLC
(v)
Transportation
L+575
1.0%
12/3/24
4.8
4.8
4.7
Heniff Transportation Systems LLC
(g)(h)(i)
Transportation
L+575
1.0%
12/3/26
64.4
64.1
64.0
HM Dunn Co Inc
(g)(n)(w)(y)
Capital Goods
L+875 PIK (L+875 Max PIK)
1.0%
12/31/21
0.9
0.6
0.3
HM Dunn Co Inc
(g)(y)
Capital Goods
15.0% PIK (15.0% Max PIK)
12/31/21
0.3
0.3
0.2
Hudson Technologies Co
(g)(l)
Commercial & Professional Services
L+1,025
1.0%
10/10/23
32.4
32.2
26.8
ID Verde
(g)(l)
Commercial & Professional Services
E+500, 2.3% PIK (2.3% Max PIK)
0.0%
3/29/24
30.3
33.3
37.1
ID Verde
(g)(l)
Commercial & Professional Services
L+525, 2.3% PIK (2.3% Max PIK)
0.0%
3/29/24
£
4.3
5.1
5.9
Individual FoodService
(g)
Capital Goods
L+625
1.0%
11/22/24
$
0.1
0.1
0.1
Individual FoodService
(v)
Capital Goods
L+625
1.0%
11/22/24
0.4
0.4
0.4
Individual FoodService
(g)
Capital Goods
L+625
1.0%
11/22/25
6.8
6.8
6.8
Individual FoodService
(v)
Capital Goods
L+625
1.0%
11/22/25
0.5
0.5
0.5
Industria Chimica Emiliana Srl
(g)(l)
Pharmaceuticals, Biotechnology & Life Sciences
E+725
0.0%
6/30/26
19.3
20.7
23.9
Industria Chimica Emiliana Srl
(g)(l)
Pharmaceuticals, Biotechnology & Life Sciences
E+725
0.0%
9/27/26
8.1
9.3
10.1
Industry City TI Lessor LP
(g)
Consumer Services
10.8%, 1.0% PIK (1.0% Max PIK)
6/30/26
$
24.1
24.1
26.4
J S Held LLC
(g)(h)
Insurance
L+600
1.0%
7/1/25
65.5
65.1
66.1
J S Held LLC
(v)
Insurance
L+600
1.0%
7/1/25
1.4
1.4
1.4
J S Held LLC
(g)
Insurance
L+600
1.0%
7/1/25
1.1
1.1
1.1
J S Held LLC
(v)
Insurance
L+600
1.0%
7/1/25
5.1
5.1
5.1
Jarrow Formulas Inc
(g)(i)
Household & Personal Products
L+625
1.0%
11/30/26
57.3
56.6
56.6
Jo-Ann Stores Inc
(g)(h)(x)
Retailing
L+500
1.0%
10/20/23
8.7
8.7
8.5
Kellermeyer Bergensons Services LLC
(g)(h)(i)
Commercial & Professional Services
L+650
1.0%
11/7/26
117.7
117.0
118.9
Kellermeyer Bergensons Services LLC
(v)
Commercial & Professional Services
L+650
1.0%
11/7/26
28.3
28.3
28.6
Kodiak BP LLC
(h)
Capital Goods
L+725
1.0%
12/1/24
10.2
10.2
10.3
Kodiak BP LLC
(g)(h)
Capital Goods
L+725
1.0%
12/1/24
125.0
124.8
126.2
Koosharem LLC
(g)(x)
Commercial & Professional Services
L+450
1.0%
4/18/25
0.0
0.0
0.0
Lexitas Inc
(g)(h)(i)
Commercial & Professional Services
L+600
1.0%
11/14/25
34.7
34.4
34.6
Lexitas Inc
(v)
Commercial & Professional Services
L+600
1.0%
11/14/25
4.3
4.2
4.3
Lexitas Inc
(v)
Commercial & Professional Services
L+600
1.0%
11/14/25
2.5
2.5
2.5
Lipari Foods LLC
(g)(h)(i)
Food & Staples Retailing
L+588
1.0%
1/6/25
84.4
83.8
85.0
Lipari Foods LLC
(g)
Food & Staples Retailing
L+588
1.0%
1/6/25
19.2
19.2
19.3
Matchesfashion Ltd
(g)(h)(l)
Consumer Durables & Apparel
L+463, 1.0% PIK (1.0% Max PIK)
0.0%
10/11/24
12.7
12.1
9.8
Miami Beach Medical Group LLC
(v)
Health Care Equipment & Services
L+650
1.0%
12/14/26
1.4
1.4
1.4
Miami Beach Medical Group LLC
(g)
Health Care Equipment & Services
L+650
1.0%
12/14/26
7.8
7.8
7.8
Micronics Filtration Holdings Inc
(g)(n)(w)(y)
Capital Goods
7.5% PIK (7.5% Max PIK)
3/29/24
47.6
45.0
35.5
Motion Recruitment Partners LLC
(g)(h)
Commercial & Professional Services
L+650
1.0%
12/19/25
37.5
37.2
33.7
Motion Recruitment Partners LLC
(v)
Commercial & Professional Services
L+650
1.0%
12/20/25
29.8
29.8
29.8
NBG Home
(g)(h)(i)
Consumer Durables & Apparel
L+550
1.0%
4/26/24
69.3
69.0
55.4
NCI Inc
(g)(h)(i)
Software & Services
L+500, 2.5% PIK (2.5% Max PIK)
1.0%
8/15/24
83.5
82.9
59.0
Omnimax International Inc
(g)(h)
Capital Goods
L+725
1.0%
10/8/26
44.7
44.0
44.0
Omnimax International Inc
(v)
Capital Goods
L+725
1.0%
10/8/26
7.7
7.7
7.7
One Call Care Management Inc
(g)(x)(y)
Health Care Equipment & Services
L+525
1.0%
11/27/22
4.9
4.3
4.7
P2 Energy Solutions Inc.
(g)
Software & Services
L+675
1.0%
1/31/25
2.3
2.3
2.2
P2 Energy Solutions Inc.
(v)
Software & Services
L+675
1.0%
1/31/25
4.7
4.7
4.5
P2 Energy Solutions Inc.
(g)(h)(i)
Software & Services
L+675
1.0%
2/2/26
116.5
115.2
111.0
See notes to
unaudited consolidated financial statements.
26
Table of Contents
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
Portfolio Company (a)
Footnotes
Industry
Rate (b)
Floor
Maturity
Principal
Amount (c)
Amortized
Cost
Fair
Value (d)
Petroplex Acidizing Inc
(g)(n)(w)(y)
Energy
L+900 PIK (L+900 Max PIK)
1.0%
12/30/21
$
24.6
$
22.2
$
4.5
Polyconcept North America Inc
(g)(x)
Household & Personal Products
L+450 PIK (L+450 Max PIK)
1.0%
8/16/23
21.5
21.2
20.4
Premium Credit Ltd
(g)(l)
Diversified Financials
L+650
0.0%
1/16/26
£
40.0
51.2
53.9
Project Marron
(g)(l)
Consumer Services
B+575
0.0%
7/3/25
A$
1.5
1.0
1.0
PSKW LLC
(g)
Health Care Equipment & Services
L+625
1.0%
3/9/26
$
137.3
135.7
137.6
Qdoba Restaurant Corp
(g)(h)(x)
Consumer Services
L+700
1.0%
3/21/25
11.1
10.9
10.4
Reliant Rehab Hospital Cincinnati LLC
(g)(h)(i)
Health Care Equipment & Services
L+675
0.0%
9/2/24
64.8
64.5
62.4
Revere Superior Holdings Inc
(g)(h)
Software & Services
L+575
1.0%
9/30/26
12.9
12.9
13.0
Revere Superior Holdings Inc
(v)
Software & Services
L+575
1.0%
9/30/26
1.0
1.0
1.0
Roadrunner Intermediate Acquisition Co LLC
(h)
Health Care Equipment & Services
L+675
1.0%
3/15/23
10.7
10.7
10.7
RSC Insurance Brokerage Inc
(v)
Insurance
L+550
1.0%
9/30/26
3.2
3.1
3.2
RSC Insurance Brokerage Inc
(g)(h)(i)
Insurance
L+550
1.0%
10/30/26
98.4
97.8
98.3
RSC Insurance Brokerage Inc
(v)
Insurance
L+550
1.0%
10/30/26
6.3
6.3
6.3
Safe-Guard Products International LLC
(g)(i)
Diversified Financials
L+575
0.0%
1/27/27
40.0
39.6
39.9
Savers Inc
(g)(h)
Retailing
L+800, 0.8% PIK (0.8% Max PIK)
1.5%
3/28/24
44.9
44.6
44.4
Savers Inc
(g)(l)
Retailing
C+850, 0.8% PIK (0.8% Max PIK)
1.5%
3/28/24
$
62.4
46.1
49.2
Sequa Corp
(h)(x)
Capital Goods
L+675, 0.0% PIK (1.0% Max PIK)
1.0%
11/28/23
$
11.4
10.8
11.4
Sequel Youth & Family Services LLC
(g)
Health Care Equipment & Services
L+700
1.0%
9/1/23
13.7
13.7
9.2
Sequel Youth & Family Services LLC
(g)(h)
Health Care Equipment & Services
L+800
1.0%
9/1/23
80.0
80.0
53.7
Sequential Brands Group Inc.
(g)(h)
Consumer Durables & Apparel
L+875
0.0%
2/7/24
59.0
57.8
50.9
Sorenson Communications LLC
(h)(x)
Telecommunication Services
L+650
0.0%
4/29/24
10.1
9.9
10.1
Sound United LLC
(g)(h)(z)
Consumer Durables & Apparel
L+700
1.0%
12/31/23
15.0
15.0
14.9
Sungard Availability Services Capital Inc
(g)
Software & Services
L+375, 3.8% PIK (3.8% Max PIK)
1.0%
7/1/24
0.6
0.7
0.7
Sungard Availability Services Capital Inc
(v)
Software & Services
L+375, 3.8% PIK (3.8% Max PIK)
1.0%
7/1/24
0.3
0.4
0.4
Sweeping Corp of America Inc
(g)
Commercial & Professional Services
L+575
1.0%
11/30/26
10.7
10.6
10.6
Sweeping Corp of America Inc
(v)
Commercial & Professional Services
L+575
1.0%
11/30/26
3.4
3.4
3.4
Sweeping Corp of America Inc
(v)
Commercial & Professional Services
L+575
1.0%
11/30/26
1.7
1.7
1.7
Sweet Harvest Foods Management Co
(g)(i)
Food & Staples Retailing
L+775, 1.0% PIK (1.0% Max PIK)
1.0%
6/23/23
24.4
24.3
24.4
Sweet Harvest Foods Management Co
(v)
Food & Staples Retailing
L+775, 1.0% PIK (1.0% Max PIK)
1.0%
6/23/23
0.8
0.8
0.8
Tangoe LLC
(g)(h)(i)
Software & Services
L+650
1.0%
11/28/25
89.2
88.5
82.5
ThermaSys Corp
(g)(y)
Capital Goods
L+1,100 PIK (L+1,100 Max PIK)
1.0%
1/1/24
7.5
7.9
3.9
ThreeSixty Group
(g)(h)(i)
Retailing
L+375, 3.8% PIK (3.8% Max PIK)
1.5%
3/1/23
51.6
51.3
46.6
ThreeSixty Group
(g)(h)(i)
Retailing
L+375, 3.8% PIK (3.8% Max PIK)
1.5%
3/1/23
51.3
50.9
46.3
Torrid Inc
(g)(h)
Retailing
L+675
1.0%
12/16/24
26.3
26.0
26.3
Trace3 Inc
(g)(h)
Software & Services
L+675
1.0%
8/3/24
89.0
89.0
89.0
Transaction Services Group Ltd
(g)(l)
Software & Services
B+600
0.0%
10/15/26
A$
7.6
5.0
5.5
Transaction Services Group Ltd
(g)(h)(l)
Software & Services
L+600
0.0%
10/15/26
$
15.9
15.9
14.8
Transaction Services Group Ltd
(g)(l)
Software & Services
L+600
0.0%
10/15/26
£
6.1
7.8
7.8
Truck-Lite Co LLC
(g)
Capital Goods
L+625
1.0%
12/13/24
$
9.3
9.2
9.0
Truck-Lite Co LLC
(v)
Capital Goods
L+625
1.0%
12/13/24
2.5
2.5
2.5
Truck-Lite Co LLC
(g)(h)(i)
Capital Goods
L+625
1.0%
12/13/26
125.4
124.1
121.8
Utility One Source LP
(h)(x)
Capital Goods
L+425
0.0%
4/18/25
0.0
0.0
0.0
Virgin Pulse Inc
(g)(h)(i)
Software & Services
L+650
1.0%
5/22/25
115.6
114.9
115.6
Warren Resources Inc
(g)(h)
Energy
L+900, 1.0% PIK (1.0% Max PIK)
1.0%
5/21/21
0.7
0.7
0.7
Wheels Up Partners LLC
(g)
Transportation
L+855
1.0%
10/15/21
4.3
4.3
4.3
Wheels Up Partners LLC
(g)
Transportation
L+855
1.0%
7/15/22
4.6
4.6
4.6
See notes to
unaudited consolidated financial statements.
27
Table of Contents
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
Portfolio Company (a)
Footnotes
Industry
Rate (b)
Floor
Maturity
Principal
Amount (c)
Amortized
Cost
Fair
Value (d)
Wheels Up Partners LLC
(g)
Transportation
L+710
1.0%
6/30/24
$
16.9
$
16.9
$
17.1
Wheels Up Partners LLC
(g)
Transportation
L+710
1.0%
11/1/24
7.0
7.0
7.1
Wheels Up Partners LLC
(g)
Transportation
L+710
1.0%
12/21/24
14.9
14.9
15.1
Wheels Up Partners LLC
(g)
Transportation
L+710
1.0%
12/21/24
11.7
11.6
11.8
Zeta Interactive Holdings Corp
(g)(h)
Software & Services
L+750
1.0%
7/29/22
15.8
15.8
15.8
Total Senior Secured LoansFirst Lien
3,750.9
3,603.5
Unfunded Loan Commitments
(154.0
)
(154.0
)
Net Senior Secured LoansFirst Lien
3,596.9
3,449.5
Senior Secured LoansSecond Lien28.4%
Abaco Systems, Inc
(g)
Capital Goods
L+1,050
1.0%
6/7/22
63.4
63.0
63.4
Amtek Global Technology Pte Ltd
(g)(j)(l)(n)(w)(z)
Automobiles & Components
E+500 PIK (E+500 Max PIK)
0.0%
4/4/24
44.9
51.3
0.1
athenahealth Inc
(g)
Health Care Equipment & Services
L+850
0.0%
2/11/27
$
112.9
112.0
114.0
Belk Inc
(g)(n)(w)
Retailing
10.5%
6/12/23
19.5
14.0
2.7
Belk Inc
(g)(n)(w)
Retailing
10.5%
10/29/25
99.6
90.5
13.9
Byrider Finance LLC
(f)(g)
Automobiles & Components
L+1,000, 0.5% PIK (0.5% Max PIK)
1.3%
6/7/22
18.0
18.0
17.9
Culligan International Co
(g)(h)
Household & Personal Products
L+850
1.0%
12/13/24
85.0
84.4
85.0
Datatel Inc
(g)
Software & Services
L+800
1.0%
10/9/28
53.7
53.0
53.0
Gruden Acquisition Inc
(g)(x)
Transportation
L+850
1.0%
8/18/23
10.0
9.8
9.2
MedAssets Inc
(g)
Health Care Equipment & Services
L+975
1.0%
4/20/23
63.0
62.2
62.6
NBG Home
(g)(n)(w)
Consumer Durables & Apparel
L+1,275 PIK (L+1,275 Max PIK)
1.0%
9/30/24
27.6
24.7
17.0
NEP Broadcasting LLC
(g)(x)
Media & Entertainment
L+700
0.0%
10/19/26
1.0
1.0
0.9
OEConnection LLC
(g)
Software & Services
L+825
0.0%
9/25/27
34.1
33.7
33.8
Paradigm Acquisition Corp
(g)(x)
Health Care Equipment & Services
L+750
0.0%
10/26/26
1.9
1.9
1.7
Peak 10 Holding Corp
(g)(n)(w)(x)
Telecommunication Services
L+725
0.0%
8/1/25
0.2
0.2
0.1
Petrochoice Holdings Inc
(g)
Capital Goods
L+875
1.0%
8/21/23
65.0
64.1
54.9
Polyconcept North America Inc
(g)
Household & Personal Products
11.0% PIK (11.0% Max PIK)
2/16/24
8.7
8.6
7.5
Pretium Packaging LLC
(g)
Household & Personal Products
L+825
0.8%
11/6/28
18.6
18.3
18.3
Pure Fishing Inc
(g)
Consumer Durables & Apparel
L+838
1.0%
12/31/26
81.1
80.4
76.0
Rise Baking Company
(g)(h)
Food, Beverage & Tobacco
L+800
1.0%
8/9/26
31.1
30.9
29.1
Sequa Corp
(h)(x)
Capital Goods
L+1,075, 0.0% PIK (6.8% Max PIK)
1.0%
4/28/24
3.6
3.5
3.1
Sorenson Communications LLC
(f)(h)
Telecommunication Services
L+1,150 PIK (L+1,150 Max PIK)
4/30/25
18.4
18.0
18.4
Sound United LLC
(g)(z)
Consumer Durables & Apparel
13.5% PIK (13.5% Max PIK)
6/30/24
21.8
20.9
20.9
Sparta Systems Inc
(g)
Software & Services
L+825
1.0%
8/21/25
35.1
34.7
34.9
Sungard Availability Services Capital Inc
(g)
Software & Services
L+400, 2.8% PIK (2.8 % Max PIK)
1.0%
8/1/24
1.9
1.9
1.9
Vestcom International Inc
(g)(h)
Consumer Services
L+825
1.0%
12/19/24
70.5
70.1
70.5
WireCo WorldGroup Inc
(h)(x)
Capital Goods
L+900
1.0%
9/30/24
3.4
3.4
2.8
Wittur Holding GmbH
(g)(l)
Capital Goods
E+850, 0.5% PIK (0.5% Max PIK)
0.0%
9/23/27
56.7
60.6
66.3
Total Senior Secured LoansSecond Lien
1,035.1
879.9
Other Senior Secured Debt2.8%
Advanced Lighting Technologies Inc
(g)(n)(w)(z)
Materials
L+1,700 PIK (L+1,700 Max PIK)
1.0%
10/4/23
$
38.3
23.6
Angelica Corp
(n)(t)(w)
Health Care Equipment & Services
10.0% PIK (10.0% Max PIK)
12/30/22
48.4
42.3
23.9
Black Swan Energy Ltd
(g)(l)
Energy
9.0%
1/20/24
6.0
6.0
5.9
JW Aluminum Co
(g)(x)(y)
Materials
10.3%
6/1/26
39.3
39.4
41.8
See notes to
unaudited consolidated financial statements.
28
Table of Contents
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
Portfolio Company (a)
Footnotes
Industry
Rate (b)
Floor
Maturity
Principal
Amount (c)
Amortized
Cost
Fair
Value (d)
Lycra
(g)(l)(x)
Consumer Durables & Apparel
7.5%
5/1/25
$
5.4
$
5.4
$
4.8
TruckPro LLC
(g)(x)
Capital Goods
11.0%
10/15/24
2.8
2.6
3.0
Velvet Energy Ltd
(g)(l)
Energy
9.0%
10/5/23
7.5
7.5
6.2
Total Other Senior Secured Debt
126.8
85.6
Subordinated Debt5.5%
All Systems Holding LLC
(g)
Commercial & Professional Services
10.0% PIK (10.0% Max PIK)
10/31/22
0.0
0.0
0.0
Ardonagh Group Ltd
(g)(l)(x)
Insurance
11.5%
1/15/27
0.8
0.8
0.8
athenahealth Inc
(g)
Health Care Equipment & Services
L+1,113 PIK (L+1,113 Max PIK)
2/11/27
71.2
71.2
71.5
ClubCorp Club Operations Inc
(g)(x)
Consumer Services
8.5%
9/15/25
19.0
18.8
17.8
Cornerstone (Ply Gem Holdings Inc)
(g)(x)
Capital Goods
8.0%
4/15/26
0.2
0.2
0.2
Craftworks Rest & Breweries Group Inc
(g)(n)(w)
Consumer Services
14.0% PIK (14.0% Max PIK)
11/1/24
7.3
7.2
Hilding Anders
(g)(l)(n)(z)
Consumer Durables & Apparel
110.5
Hilding Anders
(g)(l)(n)(z)
Consumer Durables & Apparel
24.8
26.9
30.3
Hilding Anders
(g)(l)(n)(w)(z)
Consumer Durables & Apparel
13.0% PIK (13.0% Max PIK)
6/30/21
118.2
99.4
32.4
Legends Hospitality LLC
(g)
Consumer Services
L+1,000 PIK (L+1,000 Max PIK)
1.0%
5/6/26
18.2
17.9
17.9
Total Subordinated Debt
242.4
170.9
Portfolio Company (a)
Footnotes
Industry
Rate (b)
Floor
Maturity
Principal
Amount (c) /
Shares
Amortized
Cost
Fair
Value (d)
Asset Based Finance30.8%
801 5th Ave, Seattle, Private Equity
(g)(l)(n)(z)
Real Estate
4,529,676
$
4.5
$
10.3
801 5th Ave, Seattle, Structure Mezzanine
(g)(l)(z)
Real Estate
8.0%, 3.0% PIK (3.0% Max PIK)
12/19/29
$
29.4
29.4
29.4
Abacus JV, Private Equity
(g)(l)
Insurance
29,115,242
29.1
31.0
Accelerator Investments Aggregator LP, Private Equity
(g)(l)(n)
Diversified Financials
4,285,347
5.0
3.8
Altavair AirFinance, Private Equity
(g)(l)
Capital Goods
46,599,209
46.6
46.6
AMPLIT JV LP, Limited Partnership Interest
(g)(l)(n)
Diversified Financials
N/A
3.8
Australis Maritime, Common Stock
(g)(l)
Transportation
19,792,141
19.8
19.6
Avida Holding AB, Common Stock
(g)(l)(n)(z)
Diversified Financials
328,271,754
35.5
38.3
Bank of Ireland, Class B Credit Linked Floating Rate Note
(j)(l)
Banks
L+1,185
12/4/27
$
14.7
14.7
14.5
Byrider Finance LLC, Structured Mezzanine
(g)
Automobiles & Components
L+1,050
0.3%
6/3/28
$
2.1
2.1
2.1
Byrider Finance LLC, Structured Mezzanine
(v)
Automobiles & Components
L+1,050
0.3%
6/3/28
$
5.5
5.5
5.5
Byrider Finance LLC, Sub Note
(g)(l)
Automobiles & Components
8.7%
2/17/25
$
2.1
2.0
2.2
Callodine Commercial Finance LLC, 2L Term Loan A
(g)
Diversified Financials
L+900
1.0%
11/3/25
$
37.5
37.5
37.5
Callodine Commercial Finance LLC, 2L Term Loan B
(v)
Diversified Financials
L+900
1.0%
11/3/25
$
12.1
12.1
12.1
Capital Automotive LP, Private Equity
(g)(l)(n)
Real Estate
10,001,344
10.0
10.0
Capital Automotive LP, Structured Mezzanine
(g)(l)
Real Estate
11.0% PIK (11.0% MAX PIK)
12/22/28
$
20.0
20.0
20.0
Global Jet Capital LLC, Preferred Stock
(f)(g)(n)
Commercial & Professional Services
69,429,554
69.4
Global Jet Capital LLC, Structured Mezzanine
(g)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
1/30/25
$
1.3
1.2
1.2
Global Jet Capital LLC, Structured Mezzanine
(g)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
4/30/25
$
8.5
7.5
7.4
Global Jet Capital LLC, Structured Mezzanine
(g)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
9/3/25
$
1.7
1.5
1.5
Global Jet Capital LLC, Structured Mezzanine
(g)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
9/29/25
$
1.6
1.5
1.4
Global Jet Capital LLC, Structured Mezzanine
(f)(g)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
12/4/25
$
99.2
87.9
87.5
Global Jet Capital LLC, Structured Mezzanine
(f)(g)(l)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
12/4/25
$
22.1
19.6
19.5
See notes to
unaudited consolidated financial statements.
29
Table of Contents
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
Portfolio Company (a)
Footnotes
Industry
Rate (b)
Floor
Maturity
Principal
Amount (c) /
Shares
Amortized
Cost
Fair
Value (d)
Global Jet Capital LLC, Structured Mezzanine
(f)(g)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
12/9/25
$
2.3
$
2.0
$
2.0
Global Jet Capital LLC, Structured Mezzanine
(f)(g)(l)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
12/9/25
$
17.6
15.6
15.5
Global Jet Capital LLC, Structured Mezzanine
(f)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
1/29/26
$
8.5
7.5
7.5
Global Jet Capital LLC, Structured Mezzanine
(f)(l)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
1/29/26
$
1.9
1.7
1.7
Global Jet Capital LLC, Structured Mezzanine
(g)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
4/14/26
$
21.2
18.8
18.7
Global Jet Capital LLC, Structured Mezzanine
(g)
Commercial & Professional Services
15.0% PIK (15.0% Max PIK)
12/2/26
$
20.9
18.5
18.4
Global Lending Services LLC, Private Equity
(g)(l)
Diversified Financials
5,092,915
5.1
5.7
Global Lending Services LLC, Private Equity
(g)(l)
Diversified Financials
1,836,896
1.8
1.9
Home Partners JV, Common Stock
(g)(l)(n)(y)
Real Estate
16,886,437
16.9
21.5
Home Partners JV, Private Equity
(g)(l)(n)(x)(y)
Real Estate
585,960
0.6
0.0
Home Partners JV, Structured Mezzanine
(g)(l)(y)
Real Estate
11.0% PIK (11.0% Max PIK)
3/25/29
$
38.5
38.5
38.5
Home Partners JV, Structured Mezzanine
(l)(v)(y)
Real Estate
11.0% PIK (11.0% Max PIK)
3/25/29
$
9.7
9.7
9.7
Kilter Finance, Preferred Stock
(g)(l)(z)
Insurance
6.0%, 6.0% PIK (6.0% Max PIK)
228,173
0.2
0.2
Kilter Finance, Private Equity
(g)(l)(n)(z)
Insurance
247,441
0.2
0.2
KKR Central Park Leasing Aggregator L.P., Partnership Interest
(g)(l)
Capital Goods
16.0%
5/31/23
N/A
39.1
38.8
KKR Zeno Aggregator LP (K2 Aviation), Partnership Interest
(g)(l)
Capital Goods
18,232,157
18.2
20.2
Lenovo Group Ltd, Structured Mezzanine
(g)(l)
Technology Hardware & Equipment
8.0%
6/22/22
7.4
8.4
9.0
Lenovo Group Ltd, Structured Mezzanine
(g)(l)
Technology Hardware & Equipment
12.0%
6/22/22
$
4.7
5.3
5.7
Opendoor Labs Inc, 2L Term Loan
(g)(l)
Real Estate
10.0%
1/23/26
$
23.6
23.6
23.6
Opendoor Labs Inc, 2L Term Loan
(l)(v)
Real Estate
10.0%
1/23/26
$
47.1
47.1
47.1
Orchard Marine Limited, Class B Common Stock
(g)(l)(n)(y)
Transportation
1,964
3.1
Orchard Marine Limited, Series A Preferred Stock
(g)(l)(n)(y)
Transportation
62,976
62.0
24.6
Prime ST LLC, Private Equity
(g)(l)(n)(z)
Real Estate
3,058,733
3.1
3.9
Prime ST LLC, Structured Mezzanine
(g)(l)(z)
Real Estate
5.0%, 6.0% PIK (6.0% Max PIK)
3/12/30
$
22.8
22.8
22.8
Rampart CLO 2007 1A Class Subord.
(g)(l)(n)
Diversified Financials
10/25/21
$
10.0
Sofi Lending Corp, Purchase Facility
(g)(l)
Diversified Financials
32,231,687
32.2
32.6
Star Mountain Diversified Credit Income Fund III, LP, Private Equity
(l)(p)
Diversified Financials
12,500,000
12.5
12.1
Toorak Capital Funding LLC, Membership Interest
(g)(l)(z)
Real Estate
N/A
5.5
6.6
Toorak Capital Partners LLC, Private Equity
(g)(z)
Real Estate
N/A
195.8
235.9
Wind River CLO Ltd. 2012 1A Class Subord. B
(g)(l)(n)
Diversified Financials
1/15/26
42.5
17.5
Total Asset Based Finance
1,099.5
1,025.8
Unfunded Asset Based Finance Commitments
(74.4
)
(74.4
)
Net Asset Based Finance
1,025.1
951.4
Strategic Credit Opportunities, LLC23.0%
Strategic Credit Opportunities Partners, LLC
(g)(l)(z)
Diversified Financials
$
810.3
810.3
712.5
Total Strategic Credit Opportunities Partners
810.3
712.5
See notes to
unaudited consolidated financial statements.
30
Table of Contents
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
Portfolio Company (a)
Footnotes
Industry
Rate (b)
Floor
Maturity
Number of
Shares
Amortized
Cost
Fair
Value (d)
Equity/Other17.1% (m)
Advanced Lighting Technologies Inc, Common Stock
(g)(n)(z)
Materials
587,637
$
16.5
$
Advanced Lighting Technologies Inc, Warrant
(g)(n)(z)
Materials
10/4/27
9,262
0.1
Alion Science & Technology Corp, Class A Membership Interest
(g)(n)
Capital Goods
7,350,267
7.3
12.4
All Systems Holding LLC, Common Stock
(g)(n)
Commercial & Professional Services
586,763
0.6
0.9
Amtek Global Technology Pte Ltd, Ordinary Shares
(j)(l)(n)(z)
Automobiles & Components
5,735,804,056
30.7
Amtek Global Technology Pte Ltd, Private Equity
(j)(l)(n)(z)
Automobiles & Components
4,097
Amtek Global Technology Pte Ltd, Trade Claim
(j)(l)(n)(z)
Automobiles & Components
1,190,759
1.0
Angelica Corp, Limited Partnership Interest
(n)(t)
Health Care Equipment & Services
877,044
47.6
Ap Plasman Inc, Warrant
(g)(l)(n)
Capital Goods
5/25/26
6,985
2.5
Ardonagh Ltd, Ordinary Shares
(g)(l)(n)
Insurance
16,450
Ardonagh Ltd, Ordinary Shares
(g)(l)(n)
Insurance
116,814
0.2
0.2
Ardonagh Ltd, Preferred Stock
(g)(l)(n)
Insurance
6,113,719
9.1
9.7
Arena Energy LP, Warrants
(g)(n)
Energy
9,740,932
0.0
0.0
Ascent Resources Utica Holdings LLC / ARU Finance Corp, Common Stock
(n)(o)
Energy
10,193
9.7
2.3
Ascent Resources Utica Holdings LLC / ARU Finance Corp, Trade Claim
(o)
Energy
86,607,143
19.4
19.3
ASG Technologies, Common Stock
(g)(n)(y)
Software & Services
1,149,421
23.4
42.7
ASG Technologies, Warrant
(g)(n)(y)
Software & Services
6/27/22
229,541
6.5
3.5
Aspect Software Inc, Common Stock
(g)(n)
Software & Services
161,261
0.3
0.3
Aspect Software Inc, Warrant
(g)(n)
Software & Services
1/15/24
161,008
0.2
AVF Parent LLC, Trade Claim
(g)(n)
Retailing
56,969
Belk Inc, Units
(g)(n)
Retailing
1,642
7.8
Borden (New Dairy Opco), Common Stock
(n)(t)(y)
Food, Beverage & Tobacco
4,466,800
3.9
3.2
Cengage Learning, Inc, Common Stock
(g)(n)
Media & Entertainment
227,802
7.5
3.3
Charlotte Russe Inc, Common Stock
(g)(n)(y)
Retailing
22,575
12.5
Chisholm Oil & Gas Operating LLC, Series A Units
(n)(p)
Energy
75,000
0.1
CTI Foods Holding Co LLC, Common Stock
(g)(n)
Food, Beverage & Tobacco
5,836
0.7
0.0
Directed LLC, Warrant
(g)(n)
Consumer Durables & Apparel
12/31/25
649,538
Empire Today LLC, Common Stock
(g)(n)
Retailing
375
1.1
3.3
Fronton BV, Common Stock
(n)(p)(y)
Consumer Services
14,943
1.2
Genesys Telecommunications Laboratories Inc, Class A Shares
(g)(n)
Technology Hardware & Equipment
40,529
Genesys Telecommunications Laboratories Inc, Ordinary Shares
(g)(n)
Technology Hardware & Equipment
41,339
Genesys Telecommunications Laboratories Inc, Preferred Stock
(g)(n)
Technology Hardware & Equipment
1,050,465
Harvey Industries Inc, Common Stock
(g)(n)
Capital Goods
2,333,333
1.9
Hilding Anders, Class A Common Stock
(g)(l)(n)(z)
Consumer Durables & Apparel
4,503,411
0.1
Hilding Anders, Class B Common Stock
(g)(l)(n)(z)
Consumer Durables & Apparel
574,791
Hilding Anders, Class C Common Stock
(g)(l)(n)(z)
Consumer Durables & Apparel
213,201
Hilding Anders, Equity Options
(g)(l)(n)(z)
Consumer Durables & Apparel
11/30/25
236,160,807
15.0
HM Dunn Co Inc, Preferred Stock, Series A
(g)(n)(y)
Capital Goods
214
0.0
HM Dunn Co Inc, Preferred Stock, Series B
(g)(n)(y)
Capital Goods
214
Home Partners of America Inc, Common Stock
(g)(n)(y)
Real Estate
81,625
83.6
130.5
Home Partners of America Inc, Warrant
(g)(n)(y)
Real Estate
8/7/24
2,675
0.3
2.1
See notes to
unaudited consolidated financial statements.
31
Table of Contents
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
Portfolio Company (a)
Footnotes
Industry
Rate (b)
Floor
Maturity
Number of
Shares
Amortized
Cost
Fair
Value (d)
Imagine Communications Corp, Common Stock
(g)(n)
Media & Entertainment
33,034
$
3.8
$
2.9
Jones Apparel Holdings, Inc., Common Stock
(g)(n)
Consumer Durables & Apparel
5,451
0.9
JW Aluminum Co, Common Stock
(f)(g)(n)(y)
Materials
1,474
JW Aluminum Co, Preferred Stock
(f)(g)(y)
Materials
12.5% PIK (12.5% Max PIK)
2/15/28
8,404
107.3
93.7
Maverick Natural Resources, Common Stock
(n)
Energy
160,101
44.0
48.6
MB Precision Holdings LLC, Class A2 Units
(n)(p)
Capital Goods
1,426,110
0.5
Miami Beach Medical Group LLC, Common Stock
(g)(n)
Health Care Equipment & Services
269,107
0.3
0.3
Micronics Filtration Holdings Inc, Common Stock
(g)(n)(y)
Capital Goods
53,073
0.6
Micronics Filtration Holdings Inc, Preferred Stock, Series A
(g)(n)(y)
Capital Goods
55
0.6
Micronics Filtration Holdings Inc, Preferred Stock, Series B
(g)(n)(y)
Capital Goods
23
0.2
Micronics Filtration Holdings Inc, Preferred Stock, Series B PIK
(g)(y)
Capital Goods
3.0% PIK (3.0% Max PIK)
3/31/24
112,780
Micronics Filtration Holdings Inc, Preferred Stock, Series C PIK
(g)(y)
Capital Goods
7.5% PIK (7.5% Max PIK)
3/31/24
54,000
NBG Home, Common Stock
(g)(n)
Consumer Durables & Apparel
1,903
2.6
Nine West Holdings Inc, Common Stock
(g)(n)
Consumer Durables & Apparel
5,451
6.5
One Call Care Management Inc, Common Stock
(g)(n)(y)
Health Care Equipment & Services
4,370,566,806
3.0
2.4
One Call Care Management Inc, Preferred Stock A
(g)(n)(y)
Health Care Equipment & Services
466,194
32.3
25.5
One Call Care Management Inc, Preferred Stock B
(g)(y)
Health Care Equipment & Services
9.0% PIK (9.0% Max PIK)
10/25/29
9,615,247
9.8
10.6
Petroplex Acidizing Inc, Preferred Stock A
(g)(y)
Energy
2.0% PIK (2.0% Max PIK)
24,642,082
4.5
Petroplex Acidizing Inc, Warrant
(g)(n)(y)
Energy
12/15/26
8
Polyconcept North America Inc, Class A1 Units
(g)(n)
Household & Personal Products
29,376
2.9
2.1
Proserv Acquisition LLC, Class A Common Units
(g)(l)(n)(y)
Energy
2,635,005
33.5
9.0
Proserv Acquisition LLC, Class A Preferred Units
(g)(l)(n)(y)
Energy
837,780
5.4
9.5
Quorum Health Corp, Common Stock
(g)(n)
Health Care Equipment & Services
32,622
0.3
0.3
Quorum Health Corp, Trade Claim
(g)(n)
Health Care Equipment & Services
3,334,000
0.3
0.3
Quorum Health Corp, Trust Initial Funding Units
(g)(n)
Health Care Equipment & Services
57,595
0.1
0.1
Ridgeback Resources Inc, Common Stock
(f)(l)(n)
Energy
324,954
2.0
1.3
Sequential Brands Group Inc., Common Stock
(g)(x)
Consumer Durables & Apparel
5,167
2.8
0.1
Sorenson Communications LLC, Common Stock
(f)(n)
Telecommunication Services
46,163
42.3
Sound United LLC, Class A Units
(g)(n)(z)
Consumer Durables & Apparel
649,538
1.1
Sound United LLC, Common Stock
(g)(n)(z)
Consumer Durables & Apparel
12,857,143
17.3
29.3
Sound United LLC, Series I Units
(g)(n)(z)
Consumer Durables & Apparel
308,948
0.5
Sound United LLC, Series II Units
(n)(p)(z)
Consumer Durables & Apparel
316,770
0.5
SSC (Lux) Limited S.a r.l., Common Stock
(g)(l)(n)
Health Care Equipment & Services
113,636
2.3
4.9
Stuart Weitzman Inc, Common Stock
(g)(n)
Consumer Durables & Apparel
5,451
Sungard Availability Services Capital Inc, Common Stock
(f)(g)(n)
Software & Services
44,857
3.1
1.5
Sweet Harvest Foods Management Co, Warrant
(g)(i)(n)
Food & Staples Retailing
6/30 /30
2,883,007
1.1
ThermaSys Corp, Common Stock
(f)(g)(n)(y)
Capital Goods
17,383,026
10.2
ThermaSys Corp, Preferred Stock
(g)(n)(y)
Capital Goods
1,529
1.7
Trace3 Inc, Common Stock
(g)(n)
Software & Services
19,312
0.2
1.4
Versatile Processing Group Inc, Class A2 Units
(f)(n)
Materials
3,637,500
3.6
Warren Resources Inc, Common Stock
(g)(n)
Energy
113,515
0.5
0.1
Zeta Interactive Holdings Corp, Preferred Stock, Series E1
(g)(n)
Software & Services
215,662
1.7
2.2
See notes to
unaudited consolidated financial statements.
32
Table of Contents
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
Portfolio Company (a)
Footnotes
Industry
Rate (b)
Floor
Maturity
Number of
Shares
Amortized
Cost
Fair
Value (d)
Zeta Interactive Holdings Corp, Preferred Stock, Series F
(g)(n)
Software & Services
196,151
$
1.7
$
3.4
Zeta Interactive Holdings Corp, Warrant
(g)(n)
Software & Services
4/20/27
29,422
0.1
Total Equity/Other
616.1
530.0
TOTAL INVESTMENTS219.0%
$
7,452.7
6,779.8
LIABILITIES IN EXCESS OF OTHER ASSETS(119.0%)
(3,683.8
)
NET ASSETS100%
$
3,096.0
Foreign currency forward contracts
Foreign Currency
Settlement
Date
Counterparty
Amount and
Transaction
US$ Value at
Settlement Date
US$ Value at
December 31, 2020
Unrealized Appreciation
(Depreciation)
AUD
10/17/2022
JP Morgan Chase Bank
A$
3.0 Sold
$
2.1
$
2.3
$
(0.2
)
EUR
5/6/2022
JP Morgan Chase Bank
6.1 Sold
7.5
7.5
EUR
7/17/2023
JP Morgan Chase Bank
1.3 Sold
1.7
1.6
0.1
EUR
8/8/2025
JP Morgan Chase Bank
4.8 Sold
5.7
6.1
(0.4
)
GBP
10/13/2021
JP Morgan Chase Bank
£
0.6 Sold
0.9
0.8
0.1
GBP
10/13/2021
JP Morgan Chase Bank
£
0.6 Bought
(0.8
)
(0.8
)
GBP
1/11/2023
JP Morgan Chase Bank
£
2.0 Bought
(2.7
)
(2.7
)
GBP
1/11/2023
JP Morgan Chase Bank
£
7.0 Sold
9.4
9.6
(0.2
)
GBP
1/11/2023
JP Morgan Chase Bank
£
1.9 Sold
2.9
2.7
0.2
GBP
1/11/2023
JP Morgan Chase Bank
£
1.7 Sold
2.6
2.4
0.2
GBP
1/11/2023
JP Morgan Chase Bank
£
3.4 Sold
4.8
4.7
0.1
GBP
1/11/2023
JP Morgan Chase Bank
£
1.4 Sold
1.9
1.9
NOK
8/8/2025
JP Morgan Chase Bank
NOK
49.1 Sold
5.2
5.6
(0.4
)
SEK
8/8/2025
JP Morgan Chase Bank
SEK
119.3 Sold
13.3
14.8
(1.5
)
Total
$
54.5
$
56.5
$
(2.0
)
(a)
Security may be an obligation of one or more entities affiliated with the named company.
(b)
Certain variable rate securities in the Companys portfolio bear interest at a rate determined by a
publicly disclosed base rate plus a basis point spread. As of December 31, 2020, the three-month London Interbank Offered Rate, or LIBOR or L, was 0.24%, the Euro Interbank Offered Rate, or EURIBOR, was (0.55)%, Canadian Dollar
Offer Rate, or CDOR, was 0.48% and the U.S. Prime Lending Rate, or Prime, was 3.25%. PIK means paid-in-kind. PIK income accruals may be adjusted based on the fair value
of the underlying investment.
(c)
Denominated in U.S. dollars unless otherwise noted.
See notes to
unaudited consolidated financial statements.
33
Table of Contents
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
(d)
Fair value determined by the Companys board of directors (see Note 8).
(e)
Not used.
(f)
Security or portion thereof held within Race Street Funding LLC and is pledged as collateral supporting the
amounts outstanding under the revolving credit facility with ING Capital LLC (see Note 9).
(g)
Security or portion thereof is pledged as collateral supporting the amounts outstanding under the Senior Secured
Revolving Credit Facility (see Note 9).
(h)
Security or portion thereof held within FS KKR MM CLO 1 LLC (see Note 9).
(i)
Security or portion thereof was held within CCT Tokyo Funding LLC and was pledged as collateral supporting the
amounts outstanding under the revolving credit facility with Sumitomo Mitsui Banking Corporation (see Note 9).
(j)
Security or portion thereof was held within CCT Dublin Funding Limited
(k)
Not used.
(l)
The investment is not a qualifying asset under the Investment Company Act of 1940, as amended. A business
development company may not acquire any asset other than qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the companys total assets. As of December 31, 2020, 73.4% of the
Companys total assets represented qualifying assets.
(m)
Listed investments may be treated as debt for GAAP or tax purposes.
(n)
Security is non-income producing.
(o)
Security held within IC American Energy Investments, Inc., a wholly-owned subsidiary of the Company.
(p)
Security held within FSIC Investments, Inc., a wholly-owned subsidiary of the Company.
(q)
Security held within IC Arches Investments LLC, a wholly-owned subsidiary of the Company.
(r)
Not used.
(s)
Not used.
(t)
Security held within CCT Holdings II, LLC, a wholly-owned subsidiary of the Company.
(u)
Not used.
(v)
Security is an unfunded commitment. Reflects the stated spread at the time of commitment, but may not be the
actual rate received upon funding.
(w)
Asset is on non-accrual status.
(x)
Security is classified as Level 1 or 2 in the Companys fair value hierarchy (see Note 8).
See notes to
unaudited consolidated financial statements.
34
Table of Contents
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
(y)
Under the Investment Company Act of 1940, as amended, the Company generally is deemed to be an affiliated
person of a portfolio company if it owns 5% or more of the portfolio companys voting securities and generally is deemed to control a portfolio company if it owns more than 25% of the portfolio companys voting securities
or it has the power to exercise control over the management or policies of such portfolio company. As of December 31, 2020, the Company held investments in portfolio companies of which it is deemed to be an affiliated person but is
not deemed to control. The following table presents certain information with respect to investments in portfolio companies of which the Company was deemed to be an affiliated person as of December 31, 2020:
Portfolio Company
Fair Value at
December 31,
2019
Gross
Additions (1)
Gross
Reductions (2)
Net Realized
Gain (Loss)
Net Change in
Unrealized
Appreciation
(Depreciation)
Fair Value at
December 31,
2020
Interest
Income (3)
PIK
Income (3)
Fee
Income (3)
Dividend
Income (3)
Senior Secured LoansFirst Lien
AltEn, LLC
$
1.5
$
$
$
(2.7
)
$
1.2
$
$
$
Borden (New Dairy Opco)
7.6
7.6
0.1
Borden (New Dairy Opco)
16.8
16.8
0.6
Borden Dairy Co (4)
70.7
(11.6
)
(35.0
)
(24.1
)
HM Dunn Co Inc
0.4
(0.1
)
0.3
HM Dunn Co Inc
0.1
0.2
(0.1
)
0.2
MB Precision Holdings LLC
4.6
0.2
(3.9
)
(0.8
)
(0.1
)
0.3
Micronics Filtration Holdings Inc (4)
61.6
(16.6
)
(9.5
)
35.5
One Call Care Management Inc
4.6
0.1
4.7
0.5
Petroplex Acidizing Inc
22.2
(17.7
)
4.5
Safariland LLC
2.6
(2.5
)
(0.3
)
0.2
Safariland LLC
116.2
8.8
(117.4
)
(14.7
)
7.1
1.3
ThermaSys Corp
6.4
0.8
(3.3
)
3.9
0.2
0.6
Z Gallerie LLC
0.9
(1.5
)
0.6
Senior Secured LoansSecond Lien
Z Gallerie LLC
2.8
(2.0
)
(0.9
)
0.1
0.1
0.1
Other Senior Secured Debt
JW Aluminum Co
38.3
2.9
0.6
41.8
3.9
Mood Media Corp
36.4
3.6
(40.5
)
0.5
0.4
Z Gallerie LLC
Z Gallerie LLC
1.4
(1.5
)
0.1
0.1
Asset Based Finance
Home Partners JV, Common Stock
13.2
4.4
3.9
21.5
Home Partners JV, Private Equity
Home Partners JV, Structured Mezzanine
25.0
14.0
(0.5
)
38.5
3.3
Orchard Marine Limited, Class B Common Stock
Orchard Marine Limited, Series A Preferred Stock
22.7
1.9
24.6
Equity/Other
AltEn, LLC, Membership Units
(3.0
)
3.0
ASG Technologies, Common Stock
56.5
(13.8
)
42.7
ASG Technologies, Warrants
6.3
(2.8
)
3.5
Borden (New Dairy Opco), Common Stock
3.9
(0.7
)
3.2
Charlotte Russe Inc, Common Stock
Fronton BV, Common Stock
1.4
(0.2
)
1.2
HM Dunn Co Inc, Preferred Stock, Series A
HM Dunn Co Inc, Preferred Stock, Series B
See notes to
unaudited consolidated financial statements.
35
Table of Contents
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
Portfolio Company
Fair Value at
December 31,
2019
Gross
Additions (1)
Gross
Reductions (2)
Net Realized
Gain (Loss)
Net Change in
Unrealized
Appreciation
(Depreciation)
Fair Value at
December 31,
2020
Interest
Income (3)
PIK
Income (3)
Fee
Income (3)
Dividend
Income (3)
Home Partners of America Inc, Common Stock
$
134.1
$
$
$
$
(3.6
)
$
130.5
$
$
$
$
Home Partners of America Inc, Warrant
2.0
0.1
2.1
JW Aluminum Co, Common Stock
JW Aluminum Co, Preferred Stock
127.2
16.9
(50.4
)
93.7
2.4
14.6
MB Precision Holdings LLC, Class A2 Units
(0.5
)
0.5
MB Precision Holdings LLC, Preferred Stock
1.2
(1.9
)
0.7
Micronics Filtration Holdings Inc, Common
Stock (4)
0.6
(0.6
)
Micronics Filtration Holdings Inc, Preferred Stock, Series A (4)
0.6
(0.6
)
Micronics Filtration Holdings Inc, Preferred Stock, Series B (4)
0.2
(0.2
)
Micronics Filtration Holdings Inc, Preferred Stock, Series B PIK (4)
Micronics Filtration Holdings Inc, Preferred Stock, Series C PIK (4)
Mood Media Corp, Common Stock
0.9
(11.8
)
10.9
Mood Media LLC, Class A Warrants
Mood Media LLC, Class B Warrants
Mood Media LLC, Class C Warrants
One Call Care Management Inc, Common Stock
3.0
(0.6
)
2.4
One Call Care Management Inc, Preferred Stock A
32.3
(6.8
)
25.5
One Call Care Management Inc, Preferred Stock B
9.8
0.8
10.6
0.9
Petroplex Acidizing Inc, Preferred Stock A
4.2
0.3
(4.5
)
0.4
Petroplex Acidizing Inc, Warrant
Proserv Acquisition LLC, Class A Common Units
14.4
(5.4
)
9.0
Proserv Acquisition LLC, Class A Preferred Units
9.5
9.5
Safariland LLC, Common Equity
6.4
(1.0
)
(2.0
)
(3.4
)
ThermaSys Corp, Common Stock
6.9
(6.9
)
ThermaSys Corp, Preferred Stock
1.5
(1.5
)
Z Gallerie LLC, Common Stock
0.7
(0.7
)
Total
$
716.7
$
215.1
$
(140.9
)
$
(131.8
)
$
(125.3
)
$
533.8
$
9.8
$
19.4
$
0.2
$
0.4
(1)
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK
interest, the amortization of unearned income, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.
(2)
Gross reductions include decreases in the cost basis of investments resulting from principal collections related
to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.
(3)
Interest, PIK, fee and dividend income presented for the full year ended December 31, 2020.
(4)
The Company held this investment as of December 31, 2019 but it was not deemed to be an affiliated
person of the portfolio company as of December 31, 2019. Transfers in or out have been presented at amortized cost.
See notes to
unaudited consolidated financial statements.
36
Table of Contents
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
(z)
Under the Investment Company Act of 1940, as amended, the Company generally is deemed to control a
portfolio company if it owns more than 25% of the portfolio companys voting securities or it has the power to exercise control over the management or policies of such portfolio company. As of December 31, 2020, the Company held
investments in one portfolio company of which it is deemed to be an affiliated person and deemed to control. During the year ended December 31, 2020, the Company disposed of investments in one portfolio of which it was
deemed to be an affiliated person and deemed to control. The following table presents certain information with respect to investments in portfolio companies of which the Company was deemed to be an affiliated person and
deemed to control as of December 31, 2020:
Portfolio Company
Fair Value at
December 31,
2019
Gross
Additions (1)
Gross
Reductions (2)
Net Realized
Gain (Loss)
Net Change in
Unrealized
Appreciation
(Depreciation)
Fair Value at
December 31,
2020
Interest
Income (3)
PIK
Income (3)
Fee
Income (3)
Dividend
Income (3)
Senior Secured LoansFirst Lien
Advanced Lighting Technologies Inc
$
13.1
$
$
(1.5
)
$
$
0.4
$
12.0
$
$
$
$
Amtek Global Technology Pte Ltd
55.3
5.8
(1.4
)
59.7
3.0
Sound United LLC
27.4
(12.5
)
14.9
0.3
Senior Secured LoansSecond Lien
Amtek Global Technology Pte Ltd
36.3
6.5
(0.1
)
(42.6
)
0.1
Sound United LLC
22.8
(1.9
)
20.9
0.7
Other Senior Secured Debt
Advanced Lighting Technologies Inc
Subordinated Debt
Hilding Anders
76.8
(26.9
)
(3.0
)
(14.5
)
32.4
Hilding Anders
0.2
(0.5
)
0.3
Hilding Anders
(0.9
)
0.9
Hilding Anders
3.6
(12.9
)
9.3
Hilding Anders
Hilding Anders
26.9
3.4
30.3
Asset Based Finance
801 5th Ave, Seattle, Structure Mezzanine
52.9
0.9
(24.4
)
29.4
3.2
1.4
801 5th Ave, Seattle, Private Equity
8.8
(6.3
)
2.0
5.8
10.3
Avida Holding AB, Common Stock
35.5
2.8
38.3
Kilter Finance, Preferred Stock
0.2
0.2
Kilter Finance, Private Equity
0.2
0.2
Prime ST LLC, Private Equity
5.7
(0.3
)
(2.3
)
0.8
3.9
Prime ST LLC, Structured Mezzanine
41.4
(18.6
)
22.8
0.6
1.7
Toorak Capital Funding LLC, Membership Interest
5.3
3.8
(2.5
)
6.6
Toorak Capital Partners LLC, Private Equity
240.5
11.5
(4.4
)
(11.7
)
235.9
9.6
Strategic Credit Opportunities Partners, LLC
Strategic Credit Opportunities Partners, LLC
479.0
319.4
(85.9
)
712.5
70.4
Equity/Other
Advanced Lighting Technologies Inc, Common
Stock (4)
Advanced Lighting Technologies Inc,
Warrant (4)
Amtek Global Technology Pte Ltd, Ordinary Shares
5.2
(5.2
)
Amtek Global Technology Pte Ltd, Trade Claim
0.6
(0.6
)
See notes to
unaudited consolidated financial statements.
37
Table of Contents
FS KKR Capital Corp.
Consolidated Schedule of Investments (continued)
As of December 31, 2020
(in millions, except share amounts)
Portfolio Company
Fair Value at
December 31,
2019
Gross
Additions (1)
Gross
Reductions (2)
Net Realized
Gain (Loss)
Net Change in
Unrealized
Appreciation
(Depreciation)
Fair Value at
December 31,
2020
Interest
Income (3)
PIK
Income (3)
Fee
Income (3)
Dividend
Income (3)
Amtek Global Technology Pte Ltd, Private Equity
$
$
$
$
$
$
$
$
$
$
Hilding Anders, ARLE PIK Interest
Hilding Anders, Class A Common Stock
Hilding Anders, Class B Common Stock
Hilding Anders, Class C Common Stock
Hilding Anders, Equity Options
1.3
(1.3
)
KKR BPT Holdings Aggregator LLC, Membership Interest
(0.4
)
(17.2
)
17.6
Sound United LLC, Class A Units
1.1
(1.1
)
Sound United LLC, Common Stock
17.3
12.0
29.3
Sound United LLC, Series I Units
0.5
(0.5
)
Sound United LLC, Series II Units
0.5
(0.5
)
Total
$
978.9
$
527.4
$
(99.8
)
$
(34.8
)
$
(112.0
)
$
1,259.7
$
7.1
$
3.8
$
$
80.0
(1)
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK
interest, the amortization of unearned income, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company into this category from a different category.
(2)
Gross reductions include decreases in the cost basis of investments resulting from principal collections related
to investment repayments or sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.
(3)
Interest, PIK and dividend income presented for the full year ended December 31, 2020.
See notes to
unaudited consolidated financial statements.
38
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements
(in millions, except share and per share amounts)
Note 1. Principal Business and Organization
FS KKR Capital Corp. (NYSE: FSK), or the Company, was incorporated under the general corporation laws of the State of Maryland on
December 21, 2007 and formally commenced investment operations on January 2, 2009. The Company is an externally managed, non-diversified, closed-end management
investment company that has elected to be regulated as a business development company, or BDC, under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, the Company has elected to be treated for U.S. federal income tax
purposes, and intends to qualify annually, as a regulated investment company, or RIC, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. As of September 30, 2021, the Company had various wholly-owned
subsidiaries, including special-purpose financing subsidiaries and subsidiaries through which it holds interests in portfolio companies. The unaudited consolidated financial statements include both the Companys accounts and the accounts of its
wholly-owned subsidiaries as of September 30, 2021. All intercompany transactions have been eliminated in consolidation. Certain of the Companys consolidated subsidiaries are subject to U.S. federal and state income taxes.
The Companys investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation. The
Companys portfolio is comprised primarily of investments in senior secured loans and second lien secured loans of private middle-market U.S. companies and, to a lesser extent, subordinated loans and certain asset-based financing loans of
private U.S. companies. In addition, a portion of the Companys portfolio may be comprised of equity and equity-related securities, corporate bonds, structured products, other debt securities and derivatives, including total return swaps and
credit default swaps.
The Company is externally managed by FS/KKR Advisor, LLC, or the Advisor, pursuant to an investment advisory
agreement, dated as of June 16, 2021, or the investment advisory agreement. Prior to entering into the investment advisory agreement, the Company was a party to an investment advisory agreement, dated as of December 20, 2018, with the
Advisor, or the prior investment advisory agreement, which remained in effect until June 16, 2021.
On June 15, 2020, the Company
filed Articles of Amendment to its Articles of Incorporation, or the Reverse Stock Split Amendment, with the State Department of Assessments and Taxation of the State of Maryland to effect a 4 to 1 reverse split of the Companys shares of
common stock, or the Reverse Stock Split. The Reverse Stock Split became effective in accordance with the terms of the Reverse Stock Split Amendment on June 15, 2020.
The Reverse Stock Split affected all shareholders uniformly and did not alter any shareholders percentage interest in the Companys
equity, except to the extent that the Reverse Stock Split resulted in some shareholders owning a fractional share. In that regard, no fractional shares were issued in connection with the Reverse Stock Split. Shareholders of record who would have
otherwise been entitled to receive a fractional share instead received a cash payment based on the closing price of the Companys common stock as reported on the NYSE as of June 15, 2020.
On June 16, 2021, the Company completed its acquisition, or the 2021 Merger, of FS KKR Capital Corp. II, or FSKR, pursuant to that certain
Agreement and Plan of Merger, or the 2020 Merger Agreement, dated as of November 23, 2020, by and among the Company, FSKR, Rocky Merger Sub, Inc., a former wholly-owned subsidiary of the Company, or Merger Sub, and the Advisor. See Note 12 for
a discussion of the 2021 Merger.
Note 2. Summary of Significant Accounting Policies
Basis of Presentation: The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with
accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. For a more complete discussion of significant accounting policies and certain other information, the Companys interim unaudited consolidated financial statements should be read
in conjunction with its audited consolidated financial statements as of and for the year ended December 31, 2020 included in the Companys annual report on Form 10-K for the year ended
December 31, 2020. Operating results for the nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. The December 31, 2020 consolidated
balance sheet and consolidated schedule of investments
39
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 2. Summary of Significant Accounting
Policies (continued)
are derived from the Companys audited consolidated financial statements as of and for the year ended December 31, 2020. The Company is considered an investment company under GAAP and
follows the accounting and reporting guidance applicable to investment companies under Accounting Standards Codification Topic 946, Financial ServicesInvestment Companies .
Use of Estimates: The preparation of the unaudited consolidated financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Capital Gains Incentive Fee: Pursuant to the terms of the
investment advisory agreement, the incentive fee on capital gains is determined and payable in arrears as of the end of each calendar year (or upon termination of the investment advisory agreement). This fee equals 20.0% of the Companys
incentive fee capital gains, which shall equal the realized capital gains of Corporate Capital Trust, Inc., or CCT, (as predecessor-by-merger to the Company), FSKR (as predecessor-by-merger to the Company) and the Company (without duplication) on a cumulative basis from inception, calculated as of the end of each calendar year, computed net
of all realized capital losses and unrealized capital depreciation (without duplication) on a cumulative basis, less the aggregate amount of any capital gain incentive fees previously paid by CCT, FSKR and the Company. On a quarterly basis, the
Company accrues for the capital gains incentive fee by calculating such fee as if it were due and payable as of the end of such period.
The Company includes unrealized gains in the calculation of the capital gains incentive fee expense and related accrued capital gains incentive
fee. This accrual reflects the incentive fees that would be payable to the Advisor if the Companys entire portfolio was liquidated at its fair value as of the balance sheet date even though the Advisor is not entitled to an incentive fee with
respect to unrealized gains unless and until such gains are actually realized.
Subordinated Income Incentive Fee: Pursuant to the
terms of the investment advisory agreement, the Advisor may also be entitled to receive a subordinated incentive fee on income. The subordinated incentive fee on income under the investment advisory agreement, which is calculated and payable
quarterly in arrears, equals 17.5% of the Companys pre-incentive fee net investment income for the immediately preceding quarter and is subject to a hurdle rate, expressed as a rate
of return on the value of the Companys net assets, equal to 1.75% per quarter, or an annualized hurdle rate of 7.0%. As a result, the Advisor will not earn this incentive fee for any quarter until the
Companys pre-incentive fee net investment income for such quarter exceeds the hurdle rate of 1.75%. Once the Companys pre-incentive fee
net investment income in any quarter exceeds the hurdle rate, the Advisor will be entitled to a catch-up fee equal to the amount of
the pre-incentive fee net investment income in excess of the hurdle rate, until the Companys pre-incentive fee net investment income for such
quarter equals 2.12%, or 8.48% annually, of net assets. Thereafter, the Advisor will be entitled to receive 17.5% of pre-incentive fee net investment income. See Note 4 for a discussion of
subordinated incentive fee on income under the prior investment advisory agreement.
Reclassifications: Certain amounts in the
unaudited consolidated financial statements as of and for the three and nine months ended September 30, 2020 and the audited consolidated financial statements as of and for the year ended December 31, 2020 may have been reclassified to
conform to the classifications used to prepare the unaudited consolidated financial statements as of and for the three and nine months ended September 30, 2021.
Revenue Recognition: Security transactions are accounted for on the trade date. The Company records interest income on an accrual basis
to the extent that it expects to collect such amounts. The Company records dividend income on the ex-dividend date. Distributions received from limited liability company (LLC) and limited
partnership (LP) investments are evaluated to determine if the distribution should be recorded as dividend income or a return of capital. The Company does not accrue as a receivable interest or dividends on loans and securities if it has
reason to doubt its ability to collect such income. The Companys policy is to place investments on non-accrual status when there is reasonable doubt that interest income will be collected. The Company
considers many factors relevant to an investment when placing it on or removing it from non-accrual status including, but not limited to, the delinquency status of the investment, economic and business
conditions, the overall financial condition of the underlying investment, the value of the underlying collateral, bankruptcy status, if any, and any other facts or circumstances relevant to the investment. If there is reasonable doubt that the
Company will receive any previously accrued interest, then the
40
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 2. Summary of Significant Accounting
Policies (continued)
accrued interest will be written-off. Payments received on non-accrual investments may be recognized as income or
applied to principal depending upon the collectability of the remaining principal and interest. Non-accrual investments may be restored to accrual status when principal and interest become current and are
likely to remain current based on the Companys judgment.
Loan origination fees, original issue discount and market discount are
capitalized and the Company amortizes such amounts as interest income over the respective term of the loan or security. Upon the prepayment of a loan or security, any unamortized loan origination fees and original issue discount are recorded as
interest income. Structuring and other non-recurring upfront fees are recorded as fee income when earned. For the nine months ended September 30, 2021 and 2020, the Company recognized $34 and $10,
respectively, in structuring fee revenue. The Company records prepayment premiums on loans and securities as fee income when it receives such amounts.
Derivative Instruments: The Companys derivative instruments include foreign currency forward contracts and cross currency swaps.
The Company recognizes all derivative instruments as assets or liabilities at fair value in its consolidated financial statements. Derivative contracts entered into by the Company are not designated as hedging instruments, and as a result, the
Company presents changes in fair value through net change in unrealized appreciation (depreciation) on derivative instruments in the consolidated statements of operations. Realized gains and losses of the derivative instruments are included in net
realized gains (losses) on derivative instruments in the consolidated statements of operations.
Recent Accounting Pronouncements:
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) , which provides optional expedients and exceptions for applying GAAP to contracts, hedging
relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference London Interbank Offered Rate
(LIBOR) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) ,
which expanded the scope of Topic 848 to include derivative instruments impacted by discounting transition. ASU 2020-04 and ASU 2021-01 are effective for all entities
through December 31, 2022. The expedients and exceptions provided by the amendments do not apply to contract modifications and hedging relationships entered into or evaluated after December 31, 2022, except for hedging transactions as of
December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The Company is currently evaluating the impact of the adoption of ASU 2020-04 and 2021-01 on its consolidated financial statements.
Note 3. Share
Transactions
Below is a summary of transactions with respect to shares of the Companys common stock during the nine months ended
September 30, 2021 and 2020:
Nine Months Ended September 30,
2021
2020
Shares
Amount
Shares (1)
Amount
Share Repurchase Program
(53,374
)
$
(1
)
(2,823,750
)
$
(47
)
Fractional Share Repurchase
(2,051
)
(0
)
Issuance of Common Stock (2)
161,374,028
3,642
Net Proceeds from Share Transactions
161,320,654
$
3,641
(2,825,801
)
$
(47
)
(1)
The number of shares repurchased has been retroactively adjusted to reflect the Reverse Stock Split as discussed
below.
(2)
Issuance of common stock for the 2021 Merger. Shares were issued at fair value of FSK common stock at the merger
date.
During the nine months ended September 30, 2021, the administrator for the Companys distribution
reinvestment plan, or DRP, purchased 707,727 shares of common stock in the open market at an average price per share of $19.69 (totaling $14) pursuant to the DRP, and distributed such shares to participants in the DRP. During the nine months ended
September 30, 2020, the administrator for the DRP purchased 1,196,874 shares of common stock in the open market at an average price per share of
41
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 3. Share Transactions (continued)
$15.70 (totaling $19) pursuant to the DRP, and distributed such shares to participants in the DRP. During the period from October 1, 2021 to November 5, 2021, the administrator for
the DRP purchased 613,887 shares of common stock in the open market at an average price per share of $22.68 (totaling $14) pursuant to the DRP, and distributed such shares to participants in the DRP. For additional information regarding the terms of
the DRP, see Note 5.
September 2021 Share Repurchase Program
In November 2020, the Companys board of directors authorized a stock repurchase program, which went into effect in September 2021 following the consummation of the 2021 Merger. Under the
program, the Company may repurchase up to $100 in the aggregate of its outstanding common stock in the open market at prices below the then-current net asset value per share. The timing, manner, price and amount of any share repurchases was
determined by the Company based upon the evaluation of economic and market conditions, the Companys stock price, applicable legal and regulatory requirements and other factors. The program is expected to be in effect for one year from the
effective date, unless extended, or until the aggregate repurchase amount that has been approved by the Companys board of directors has been expended, or the plan otherwise terminates pursuant to its terms. The program does not require the
Company to repurchase any specific number of shares and the Company cannot assure stockholders that any shares will be repurchased under the program. The program may be suspended, extended, modified or discontinued at any time.
During the nine months ended September 30, 2021, the Company repurchased 53,374 shares of common stock pursuant to the share
repurchase program at an average price per share (inclusive of commissions paid) of $22.32 (totaling $1).
During the period
from October 1, 2021 to October 31, 2021, the Company repurchased 92,410 shares of common stock pursuant to the share repurchase program at an average price per share (inclusive of commissions paid) of $22.65 (totaling $2).
December 2018 Share Repurchase Program
In December 2018, the Companys board of directors authorized a stock repurchase program. Under the program, the Company was permitted to repurchase up to $200 in the aggregate of its
outstanding common stock in the open market at prices below the then- current net asset value per share. The program has terminated since the aggregate repurchase amount that was approved by the Companys board of directors has been expended.
During the nine months ended September 30, 2020, the Company repurchased 2,823,750 shares of common stock pursuant to the
share repurchase program at an average price per share (inclusive of commissions paid) of $16.71 (totaling $47).
The number of
shares repurchased and the average price per share amounts have been retroactively adjusted to reflect the Reverse Stock Split as discussed below.
Reverse Stock Split and Fractional Shares
As a result of the Reverse Stock
Split, which was effective on June 15, 2020, every four shares of the Companys common stock issued and outstanding were automatically combined into one share of the Companys common stock, and the number of outstanding shares of the
Companys common stock was reduced from approximately 495.0 million to approximately 123.75 million as of June 15, 2020. The Reverse Stock Split did not modify the rights or preferences of the Companys common stock. The
Company also filed a separate Articles of Amendment to Articles of Incorporation with the State Department of Assessments and Taxation of the State of Maryland to provide that there would be no change in the par value of $0.001 per share as a result
of the Reverse Stock Split.
The Reverse Stock Split affected all shareholders uniformly and did not alter any
shareholders percentage interest in the Companys equity, except to the extent that the Reverse Stock Split resulted in some shareholders owning a fractional share. In that regard, no fractional shares were issued in connection with the
Reverse Stock Split. Shareholders of record who would have otherwise been entitled to receive a fractional share instead received a cash payment based on the closing price of the Companys common stock as reported on the NYSE as of
June 15, 2020.
42
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 3. Share Transactions (continued)
Acquisition of FSKR
In accordance with the terms of the 2020 Merger Agreement, at the time of the transactions contemplated by the 2020 Merger Agreement, each outstanding share of FSKR common stock was converted into the
right to receive 0.9498 shares of the Companys common stock. As a result, the Company issued an aggregate of approximately 161,374,028 shares of its common stock to former FSKR stockholders.
Note 4. Related Party Transactions
Compensation of the Investment Adviser
Pursuant to the investment advisory agreement, the Advisor is entitled to a base management fee calculated at an annual rate of 1.50% of the average weekly value of the Companys gross assets
excluding cash and cash equivalents (gross assets equal the total assets of the Company as set forth on the Companys consolidated balance sheets) and an incentive fee based on the Companys performance. Effective June 15, 2019, in
connection with stockholder approval of the modification of the asset coverage requirement applicable to senior securities from 200% to 150%, the Advisor reduced (by permanent waiver) the annual base management fee payable under the investment
advisory agreement from 1.5% to 1.0% on all assets financed using leverage over 1.0x debt-to-equity. The base management fee is payable quarterly in arrears. All or any
part of the base management fee not taken as to any quarter will be deferred without interest and may be taken in such other quarter as the Advisor determines. The prior investment advisory agreement had substantially similar terms as the investment
advisory agreement, except that the investment advisory agreement amended the prior investment advisory agreement to (i) reduce the Companys income incentive fee rate from 20% to 17.5%; and (ii) remove the total return lookback
provision applicable to the subordinated incentive fee on income from the prior investment advisory agreement. Under the prior investment advisory agreement, the subordinated incentive fee on income was subject to a cap equal to (i) 20.0% of the
per share pre-incentive fee return for the then-current and eleven preceding calendar quarters minus the cumulative per share incentive fees accrued and/or payable for the eleven
preceding calendar quarters multiplied by (ii) the weighted average number of shares outstanding during the calendar quarter (or any portion thereof) for which the subordinated incentive fee on income was being calculated. The definitions of
per share pre-incentive fee return and per share incentive fees under the prior investment advisory agreement took into account the historic per share
pre-incentive fee return of both the Company and CCT, together with the historic per share incentive fees paid by both the Company and CCT. For the purpose of calculating the per share pre-incentive fee return, any unrealized appreciation or depreciation recognized as a result of the purchase accounting for the Companys acquisition of CCT was excluded. See Note 2 for a discussion of
the capital gains and subordinated income incentive fees that the Advisor may be entitled to under the investment advisory agreement.
In connection with the entry into the investment advisory agreement, the Advisor has agreed to waive income incentive fees in the amount of $15 per quarter for the first six full fiscal quarters of
operations following the closing of the 2021 Merger, commencing on July 1, 2021, for a total waiver of $90. In addition, the Advisor has agreed to exclude from the calculation of the subordinated incentive fee on income and the incentive fee on
capital gains any changes to the fair value recorded for the assets and liabilities of FSKR resulting solely from the new cost basis of the acquired FSKR investments determined in accordance with Accounting Standards Codification Topic 805-50, Business CombinationsRelated Issues as a result of the 2021 Merger.
On
April 9, 2018, the Company entered into an administration agreement with the Advisor, or the administration agreement. Pursuant to the administration agreement, the Advisor oversees the Companys day-to-day operations, including the provision of general ledger accounting, fund accounting, legal services, investor relations, certain government and regulatory affairs activities, and other administrative
services. The Advisor also performs, or oversees the performance of, the Companys corporate operations and required administrative services, which includes being responsible for the financial records that the Company is required to maintain
and preparing reports for the Companys stockholders and reports filed with the U.S. Securities and Exchange Commission, or the SEC. In addition, the Advisor assists the Company in calculating its net asset value, overseeing the preparation and
filing of tax returns and the printing and dissemination of reports to the Companys stockholders, and generally overseeing the payment of the Companys expenses and the performance of administrative and professional services rendered to
the Company by others.
43
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FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 4. Related Party
Transactions (continued)
Pursuant to the administration agreement, the Company reimburses the Advisor for expenses
necessary to perform services related to its administration and operations, including the Advisors allocable portion of the compensation and related expenses of certain personnel of Franklin Square Holdings, L.P., which does business as FS
Investments, or FS Investments, and KKR Credit Advisors (US), LLC, or KKR Credit, providing administrative services to the Company on behalf of the Advisor. The Company reimburses the Advisor no less than quarterly for all costs and expenses
incurred by the Advisor in performing its obligations and providing personnel and facilities under the administration agreement. The Advisor allocates the cost of such services to the Company based on factors such as total assets, revenues, time
allocations and/or other reasonable metrics. The Companys board of directors reviews the methodology employed in determining how the expenses are allocated to the Company and the proposed allocation of administrative expenses among the Company
and certain affiliates of the Advisor. The Companys board of directors then assesses the reasonableness of such reimbursements for expenses allocated to it based on the breadth, depth and quality of such services as compared to the estimated
cost to the Company of obtaining similar services from third-party service providers known to be available. In addition, the Companys board of directors considers whether any single third-party service provider would be capable of providing
all such services at comparable cost and quality. Finally, the Companys board of directors compares the total amount paid to the Advisor for such services as a percentage of the Companys net assets to the same ratio as reported by other
comparable BDCs.
The following table describes the fees and expenses accrued under the investment advisory agreement, the prior investment
advisory agreement and the administration agreement, as applicable, during the three and nine months ended September 30, 2021 and 2020:
Three Months Ended
September 30,
Nine Months Ended
September 30,
Related Party
Source Agreement
Description
2021
2020
2021
2020
The Advisor
Investment advisory agreement and prior investment advisory agreement
Base Management Fee (1)
$
58
$
24
$
113
$
80
The Advisor
Investment advisory agreement and prior investment advisory agreement
Subordinated Incentive Fee on Income (2)
$
20
$
$
28
$
The Advisor
Administration agreement
Administrative Services Expenses (3)
$
5
$
1
$
9
$
6
(1)
During the nine months ended September 30, 2021 and 2020, $104 and $86, respectively, in base management
fees were paid to the Advisor. As of September 30, 2021, $58 in base management fees were payable to the Advisor.
(2)
The Advisor agreed, effective July 1, 2021, to waive up to $15 per quarter of the subordinated incentive
fee on income to which it is entitled to under the investment advisory agreement. During the three and nine months ended September 30, 2021, the amount shown is net of waivers of $15 and $15, respectively. During the nine months ended
September 30, 2021 and 2020, $29 and $0, respectively, of subordinated incentive fees on income were paid to the Advisor. As of September 30, 2021, subordinated incentive fees on income of $20 were payable to the Advisor.
(3)
During the nine months ended September 30, 2021 and 2020, $7 and $4, respectively, of administrative
services expenses related to the allocation of costs of administrative personnel for services rendered to the Company by the Advisor and the remainder related to other reimbursable expenses, including reimbursement of fees related to transactional
expenses for prospective investments, such as fees and expenses associated with performing due diligence reviews of investments that do not close, often referred to as broken deal costs. Broken deal costs were $1.0 for the nine months
ended September 30, 2021. The Company paid $7 and $6, respectively, in administrative services expenses to the Advisor during the nine months ended September 30, 2021 and 2020.
Potential Conflicts of Interest
The
members of the senior management and investment teams of the Advisor serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as the Company does, or of investment vehicles managed by
the same personnel. The officers, managers and other personnel of the Advisor may serve in similar or other capacities for the investment advisers to future investment vehicles affiliated with FS Investments or KKR Credit. In serving in these
multiple and other capacities, they may have obligations to other clients or investors in those entities, the fulfillment of which may not be in the Companys best interests or in the best interest of the Companys stockholders. The
Companys investment objectives may overlap with the investment objectives of such investment funds, accounts or other investment
44
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FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 4. Related Party
Transactions (continued)
vehicles. For additional information regarding potential conflicts of interest, see the Companys annual report on Form 10-K for the year ended
December 31, 2020.
Exemptive Relief
As a BDC, the Company is subject to certain regulatory restrictions in making its investments. For example, BDCs generally are not permitted
to co-invest with certain affiliated entities in transactions originated by the BDC or its affiliates in the absence of an exemptive order from the SEC. However, BDCs are permitted to, and may, simultaneously co-invest in transactions where price is the only negotiated term.
In an order dated June 4, 2013, or the FS Order, the SEC granted exemptive relief permitting the Company, subject to the satisfaction
of certain conditions, to co-invest in certain privately negotiated investment transactions with certain affiliates of its former investment adviser, including FS Energy and Power Fund and any future
BDCs that are advised by its former investment adviser or its affiliated investment advisers. However, in connection with the investment advisory relationship with the Advisor, and in an effort to mitigate potential future conflicts of interest, the
Companys board of directors authorized and directed that the Company (i) withdraw from the FS Order, except with respect to any transaction in which the Company participated in reliance on the FS Order prior to April 9, 2018, and
(ii) rely on an exemptive relief order, dated January 5, 2021, that permits the Company, subject to the satisfaction of certain conditions, to co-invest in certain privately negotiated
investment transactions, including investments originated and directly negotiated by the Advisor or KKR Credit, with certain affiliates of the Advisor.
Affiliated Purchaser Program
As previously disclosed, certain affiliates
of the owners of the Advisor committed $100 to a $350 investment vehicle that may invest from time to time in shares of the Companys common stock. In September 2021, that investment vehicle entered into a written trading plan with a third
party broker in accordance with Rule 10b5-1 and Rule 10b-18 promulgated under the Exchange Act to facilitate the purchase of shares of the Companys common stock
pursuant to the terms and conditions of such plan. The Company is not a party to any transaction with the investment vehicle.
Note 5.
Distributions
The following table reflects the cash distributions per share that the Company has declared on its common
stock during the nine months ended September 30, 2021 and 2020:
Distribution
For the Three Months Ended
Per Share (1)
Amount
Fiscal 2020
March 31, 2020
$
0.76000
$
95
June 30, 2020
0.60000
75
September 30, 2020
0.60000
74
Total
$
1.96000
$
244
Fiscal 2021
March 31, 2021
$
0.60000
$
74
June 30, 2021
0.60000
75
September 30, 2021
0.65000
186
Total
$
1.85000
$
335
(1)
The amount of each per share distribution has been retroactively adjusted to reflect the Reverse Stock Split as discussed above in Note 3.
On November 5, 2021, the Companys board of directors declared a regular quarterly cash
distribution of $0.62 per share, which will be paid on or about January 4, 2022 to stockholders of record as of the close of business on December 15, 2021. The
45
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 5. Distributions (continued)
timing and amount of any future distributions to stockholders are subject to applicable legal restrictions and the sole discretion of the Companys board of directors.
Pursuant to the DRP, the Company will reinvest all cash dividends or distributions declared by the Companys board of directors on behalf
of stockholders who do not elect to receive their distributions in cash. As a result, if the Companys board of directors declares a distribution, then stockholders who have not elected to opt out of the DRP will have their
distributions automatically reinvested in additional shares of the Companys common stock.
With respect to each distribution pursuant
to the DRP, the Company reserves the right to either issue new shares of common stock or purchase shares of common stock in the open market in connection with implementation of the DRP. Unless the Company, in its sole discretion, otherwise directs
the plan administrator, (A) if the per share market price (as defined in the DRP) is equal to or greater than the estimated net asset value per share (rounded up to the nearest whole cent) of the Companys common stock on the payment date
for the distribution, then the Company will issue shares of common stock at the greater of (i) net asset value per share of common stock or (ii) 95% of the market price; or (B) if the market price is less than the net asset value per
share, then, in the sole discretion of the Company, (i) shares of common stock will be purchased in open market transactions for the accounts of participants to the extent practicable, or (ii) the Company will issue shares of common stock
at net asset value per share. Pursuant to the terms of the DRP, the number of shares of common stock to be issued to a participant will be determined by dividing the total dollar amount of the distribution payable to a participant by the price per
share at which the Company issues such shares; provided, however, that shares purchased in open market transactions by the plan administrator will be allocated to a participant based on the average purchase price, excluding any brokerage charges or
other charges, of all shares of common stock purchased in the open market.
If a stockholder receives distributions in the form of common
stock pursuant to the DRP, such stockholder generally will be subject to the same federal, state and local tax consequences as if it elected to receive distributions in cash. If the Companys common stock is trading at or below net asset value,
a stockholder receiving distributions in the form of additional common stock will be treated as receiving a distribution in the amount of cash that they would have received if they had elected to receive the distribution in cash. If the
Companys common stock is trading above net asset value, a stockholder receiving distributions in the form of additional common stock will be treated as receiving a distribution in the amount of the fair market value of the Companys
common stock. The stockholders basis for determining gain or loss upon the sale of common stock received in a distribution will be equal to the total dollar amount of the distribution payable to the stockholder. Any stock received in a
distribution will have a holding period for tax purposes commencing on the day following the day on which the shares of common stock are credited to the stockholders account.
The Company may fund its cash distributions to stockholders from any sources of funds legally available to it, including proceeds from the sale
of shares of the Companys common stock, borrowings, net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, and
dividends or other distributions paid to the Company on account of preferred and common equity investments in portfolio companies. The Company has not established limits on the amount of funds it may use from available sources to make distributions.
During certain periods, the Companys distributions may exceed its earnings. As a result, it is possible that a portion of the distributions the Company makes may represent a return of capital. A return of capital generally is a return of a
stockholders investment rather than a return of earnings or gains derived from the Companys investment activities. Each year a statement on Form 1099-DIV identifying the sources of the
distributions (i.e., paid from ordinary income, paid from net capital gains on the sale of securities, and/or a return of capital, which is a nontaxable distribution) will be mailed to the Companys stockholders. There can be no assurance that
the Company will be able to pay distributions at a specific rate or at all.
46
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FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 5. Distributions (continued)
The following table reflects the sources of the cash distributions on a tax basis that
the Company has paid on its common stock during the nine months ended September 30, 2021 and 2020:
Nine Months Ended September 30,
2021
2020
Source of Distribution
Distribution
Amount
Percentage
Distribution
Amount
Percentage
Return of capital
$
$
Net investment income (1)
335
100
%
244
100
%
Short-term capital gains proceeds from the sale of assets
Long-term capital gains proceeds from the sale of assets
Total
$
335
100
%
$
244
100
%
(1)
During the nine months ended September 30, 2021 and 2020, 85.5% and 88.2%, respectively, of the Companys gross investment income
was attributable to cash income earned, 4.7% and 1.7%, respectively, was attributable to non-cash accretion of discount and 9.8% and 10.1%, respectively, was attributable to PIK interest.
The determination of the tax attributes of the Companys distributions is made annually as of the end
of the Companys fiscal year based upon the Companys taxable income for the full year and distributions paid for the full year. Therefore, a determination made on a quarterly basis may not be representative of the actual tax attributes of
the Companys distributions for a full year. The actual tax characteristics of distributions to stockholders are reported to stockholders annually on Form 1099-DIV.
Net capital losses may be carried forward indefinitely, and their character is retained as short-term or long-term losses. As of
September 30, 2021, the Company had short-term and long-term capital loss carryforwards available to offset future realized capital gains of $69 and $1,732, respectively. $85 of such losses were carried over from CCT due to the Companys
acquisition of CCT, or the 2018 Merger, $1,212 were carried over from FSKR due to the 2021 Merger, and $177 of such losses were carried over from losses generated by the Company prior to the 2018 Merger. Because of the loss limitation rules of the
Code, some of the tax basis losses may be limited in their use. Any unused balances resulting from such limitations may be carried forward into future years indefinitely.
As of September 30, 2021 and December 31, 2020, the Companys gross unrealized appreciation on a tax basis was $1,671 and $1,121, respectively. As of September 30, 2021 and
December 31, 2020, the Companys gross unrealized depreciation on a tax basis was $1,927 and $1,280, respectively.
The aggregate cost of the Companys investments for U.S. federal income tax purposes totaled $16,807 and $7,622 as of
September 30, 2021 and December 31, 2020, respectively. The aggregate net unrealized appreciation (depreciation) on investments on a tax basis was $(983) and $(842) as of September 30, 2021 and December 31, 2020, respectively.
The aggregate net unrealized appreciation (depreciation) on investments on a tax basis excludes net unrealized appreciation (depreciation) from merger accounting, foreign currency forward contracts and foreign currency transactions.
As of September 30, 2021, the Company had a deferred tax liability of $7 resulting from unrealized appreciation on investments held
by the Companys wholly-owned taxable subsidiaries and a deferred tax asset of $50 resulting from net operating losses, capital losses, and interest expense limitation carryforwards of the Companys wholly-owned taxable subsidiaries and
unrealized depreciation on investments held by the Companys wholly-owned taxable subsidiaries. As of September 30, 2021, certain wholly-owned taxable subsidiaries anticipated that they would be unable to fully utilize their generated net
operating losses and capital losses, therefore the deferred tax asset was offset by a valuation allowance of $43. For the nine months ended September 30, 2021, the Company did not record a provision for taxes related to wholly-owned taxable
subsidiaries.
47
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio
The following table summarizes the composition of the Companys investment portfolio at cost and fair value as of September 30,
2021 and December 31, 2020:
September 30,
2021
(Unaudited)
December 31, 2020
Amortized
Cost (1)
Fair
Value
Percentage
of
Portfolio
Amortized
Cost (1)
Fair
Value
Percentage
of
Portfolio
Senior Secured LoansFirst Lien
$
9,531
$
9,689
61.2
%
$
3,597
$
3,449
50.9
%
Senior Secured LoansSecond Lien
1,635
1,669
10.6
%
1,035
880
13.0
%
Other Senior Secured Debt
147
136
0.9
%
127
86
1.3
%
Subordinated Debt
167
93
0.6
%
243
171
2.5
%
Asset Based Finance
1,946
1,999
12.6
%
1,025
951
14.0
%
Credit Opportunities Partners JV, LLC
1,397
1,399
8.8
%
810
713
10.5
%
Equity/Other
901
839
5.3
%
616
530
7.8
%
Total
$
15,724
$
15,824
100.0
%
$
7,453
$
6,780
100.0
%
(1)
Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on
investments.
In general, under the 1940 Act, the Company would be presumed to control a
portfolio company if it owned more than 25% of its voting securities or it had the power to exercise control over the management or policies of such portfolio company, and would be an affiliated person of a portfolio company if it owned
5% or more of its voting securities.
As of September 30, 2021, the Company held investments in sixteen portfolio
companies of which it is deemed to control. As of September 30, 2021, the Company held investments in seventeen portfolio companies of which it is deemed to be an affiliated person but is not deemed to
control. For additional information with respect to such portfolio companies, see footnotes (ac) and (ad) to the unaudited consolidated schedule of investments as of September 30, 2021 in this quarterly report on Form 10-Q.
As of December 31, 2020, the Company held investments in ten portfolio companies
of which it is deemed to control. As of December 31, 2020, the Company held investments in thirteen portfolio companies of which it is deemed to be an affiliated person but is not deemed to control. For
additional information with respect to such portfolio companies, see footnotes (y) and (z) to the consolidated schedule of investments as of December 31, 2020 in this quarterly report on Form 10-Q.
The Companys investment portfolio may contain loans and other unfunded arrangements that are in the form of lines of
credit, revolving credit facilities, delayed draw credit facilities or other investments, which require the Company to provide funding when requested by portfolio companies in accordance with the terms of the underlying agreements. As of
September 30, 2021, the Company had unfunded debt investments with aggregate unfunded commitments of $(1,313.7), unfunded equity/other commitments of $511.3 and unfunded commitments of $350.2 to Credit Opportunities Partners JV, LLC. As of
December 31, 2020, the Company had unfunded debt investments with aggregate unfunded commitments of $228.4, unfunded equity commitments of $142.9 and unfunded commitments of $65.8 to Credit Opportunities Partners JV, LLC. The Company maintains
sufficient cash on hand and available borrowings to fund such unfunded commitments should the need arise. For additional details regarding the Companys unfunded debt investments, see the Companys unaudited consolidated schedule of
investments as of September 30, 2021 and the Companys audited consolidated schedule of investments as of December 31, 2020.
48
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
The table below describes investments by industry classification and enumerates the
percentage, by fair value, of the total portfolio assets in such industries as of September 30, 2021 and December 31, 2020:
September 30,
2021
(Unaudited)
December 31, 2020
Industry Classification
Fair
Value
Percentage
of
Portfolio
Fair
Value
Percentage
of
Portfolio
Automobiles & Components
$
168
1.1
%
$
104
1.5
%
Banks
14
0.1
%
14
0.2
%
Capital Goods
2,244
14.2
%
799
11.8
%
Commercial & Professional Services
1,569
9.9
%
564
8.3
%
Consumer Durables & Apparel
756
4.8
%
385
5.7
%
Consumer Services
263
1.7
%
145
2.1
%
Credit Opportunities Partners JV, LLC
1,399
8.8
%
713
10.5
%
Diversified Financials
691
4.4
%
467
6.9
%
Energy
234
1.5
%
107
1.6
%
Food & Staples Retailing
277
1.7
%
221
3.3
%
Food, Beverage & Tobacco
282
1.8
%
106
1.6
%
Health Care Equipment & Services
1,663
10.5
%
604
8.9
%
Household & Personal Products
283
1.8
%
190
2.8
%
Insurance
724
4.6
%
208
3.1
%
Materials
215
1.3
%
147
2.2
%
Media & Entertainment
533
3.4
%
36
0.5
%
Pharmaceuticals, Biotechnology & Life Sciences
243
1.5
%
34
0.5
%
Real Estate
790
5.0
%
555
8.2
%
Retailing
211
1.3
%
344
5.1
%
Software & Services
2,728
17.2
%
770
11.3
%
Technology Hardware & Equipment
49
0.3
%
15
0.2
%
Telecommunication Services
162
1.0
%
71
1.0
%
Transportation
326
2.1
%
181
2.7
%
Total
$
15,824
100.0
%
$
6,780
100.0
%
Credit Opportunities Partners JV, LLC
Credit Opportunities Partners JV, LLC (formerly known as Strategic Credit Opportunities Partners, LLC), or COPJV, is a joint venture between the Company and South Carolina Retirement Systems Group Trust,
or SCRS. SCRS purchased its interests in COPJV from Conway Capital, LLC, an affiliate of Guggenheim Life and Annuity Company and Delaware Life Insurance Company, in June 2019, which had no impact on the significant terms governing COPJV other than
an increase in the aggregate capital commitment (but not the percentage of the aggregate capital committed by each member) to COPJV. Effective as of June 18, 2021, Credit Opportunities Partners, LLC, or COP, merged with and into COPJV, with
COPJV surviving the merger, or the COPJV Merger. As of June 18, 2021, COPJV assumed all of COPs obligations under its credit facilities, and COPs wholly-owned special purpose financing subsidiaries became wholly-owned special
purpose financing subsidiaries of COPJV, in each case, as a result of the consummation of the COPJV Merger. COPJVs second amended and restated limited liability company agreement, or the COPJV Agreement, requires the Company and SCRS to
provide capital to COPJV of up to $2,000 in the aggregate where the Company and SCRS would provide 87.5% and 12.5%, respectively, of the committed capital. Pursuant to the terms of the COPJV Agreement, the Company and SCRS each have 50% voting
control of COPJV and are required to agree on all investment decisions as well as certain other significant actions for COPJV. COPJV invests its capital in a range of investments, including senior secured loans (both first lien and second lien) to
middle market companies, broadly syndicated loans, equity, warrants and other investments. As administrative agent of COPJV, the Company performs certain day-to-day
management responsibilities on behalf of COPJV and is entitled to a fee of 0.25% of COPJVs assets under administration,
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FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
calculated and payable quarterly in arrears. As of September 30, 2021, the Company and SCRS have funded approximately $1,599.8 to COPJV, of which $1,399.8 was from the Company.
On September 2, 2021, Jersey City Funding LLC, or Jersey City Funding, a wholly-owned subsidiary of COPJV, prepaid all outstanding
borrowings under, and terminated, its revolving credit facility with Goldman Sachs Bank.
Chestnut Street Funding LLC, or Chestnut Street
Funding, a wholly-owned subsidiary of COPJV, has a revolving credit facility with Citibank, N.A., or as amended, the Chestnut Street Funding Credit Facility, which provides for up to $400 of borrowings as of September 30, 2021. The Chestnut
Street Funding Credit Facility provides loans in U.S. dollars, Australian dollars, Canadian dollars, Euros and pounds sterling. U.S. dollar loans bear interest at the rate of three-month LIBOR (subject to a 0% floor) plus 2.25%. Foreign currency
loans bear interest at the applicable floating rate (subject to a 0% floor) plus 2.25%. Chestnut Street Funding also pays a commitment fee of up to 0.50% on undrawn commitments. The Chestnut Street Funding Credit Facility matures on
September 18, 2024. As of September 30, 2021, total outstanding borrowings under the Chestnut Street Funding Credit Facility were $177.6. Borrowings under the Chestnut Street Funding Credit Facility are secured by substantially all of the
assets of Chestnut Street Funding.
Boxwood Drive Funding LLC, or Boxwood Drive Funding, a wholly-owned subsidiary of COPJV, has a
revolving credit facility with BNP Paribas, or as amended, the Boxwood Drive Funding Credit Facility, which provides for up to $300 of borrowings as of September 30, 2021. The Boxwood Drive Funding Credit Facility provides for loans in U.S.
dollars, Australian dollars, Canadian dollars, New Zealand dollars, Euros and pounds sterling. U.S. dollar loans bear interest at the rate of LIBOR (subject to a 0% floor) plus a spread of 2.05% to 3.15% during the reinvestment period and 2.50% to
3.25% thereafter. Foreign currency loans bear interest at the applicable floating rate (subject to a 0% floor) plus the spread applicable to the specified currency. Boxwood Drive Funding also pays a commitment fee of up to 1.00% on undrawn
commitments. The Boxwood Drive Funding Credit Facility matures on April 15, 2025. As of September 30, 2021, total outstanding borrowings under the Boxwood Drive Funding Credit Facility were $49.7. Borrowings under the Boxwood Drive Funding
Credit Facility are secured by substantially all of the assets of Boxwood Drive Funding.
Big Cedar Creek LLC, or Big Cedar Creek Funding,
a wholly-owned subsidiary of COPJV, has a revolving credit facility with BNP Paribas, or as amended, the Big Cedar Creek Funding Credit Facility, which provides for up to $300 of borrowings as of September 30, 2021. The Big Cedar Creek Funding
Credit Facility provides loans in U.S. dollars, Australian dollars, Canadian dollars, New Zealand dollars, Euros and pounds sterling. U.S. dollar loans bear interest at the rate of LIBOR (subject to a 0% floor) plus a spread of 1.85% to 2.55% during
the reinvestment period and 2.00% to 2.65% thereafter. Foreign currency loans bear interest at the applicable floating rate (subject to a 0% floor) plus a spread of 1.85% to 2.55% during the reinvestment period and 2.00% to 2.65% thereafter. Big
Cedar Creek Funding also pays a commitment fee of up to 1.00% on undrawn commitments. The Big Cedar Creek Funding Credit Facility matures on March 11, 2025. As of September 30, 2021, total outstanding borrowings under the Big Cedar Creek
Funding Credit Facility were $87.6. Borrowings under the Big Cedar Creek Funding Credit Facility are secured by substantially all of the assets of Big Cedar Creek.
Green Creek LLC, or Green Creek Funding, a wholly-owned subsidiary of COPJV, has a revolving credit facility with Goldman Sachs Bank, or as
amended, the Green Creek Funding Credit Facility, which provides for up to $500 of borrowings as of September 30, 2021. The Green Creek Credit Facility provides for loans in U.S. dollars, Canadian dollars, Euros and pounds sterling. U.S. dollar
loans bear interest at the rate of three-month LIBOR (subject to a 0% floor) plus 3.30%. Foreign currency loans bear interest at the rate of the applicable floating rate (subject to a 0% floor) plus the spread applicable to the specified currency.
Green Creek Funding also pays a commitment fee of up to 3.30% on undrawn commitments. The Green Creek Funding Credit Facility matures on January 30, 2022. As of September 30, 2021, total outstanding borrowings under the Green Creek Funding
Credit Facility were $348.9. Borrowings under the Green Creek Funding Credit Facility are secured by substantially all of the assets of Green Creek Funding.
On August 17, 2021, COPJV sold in a private placement $225 of aggregate principal amount of Series B senior unsecured notes, or the COPJV
Notes, to qualified institutional buyers in reliance on Section 4(a)(2) of the Securities Act. Interest of the COPJV Notes is payable semi-annually on the 17th of each of February and August, at a fixed annual rate of 3.62%, commencing
50
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
February 17, 2022. This interest rate is subject to increase up to 4.12% in the event that the COPJV Notes cease to be rated investment grade, and the COPJV Notes will be subject to an
additional 2.0% of default interest during the continuance of an event of default. The COPJV Notes mature on August 17, 2026, unless redeemed, purchased or prepaid prior to such date by COPJV in accordance with their terms. The COPJV Notes are
general unsecured obligations that rank pari passu with all outstanding and future unsecured and unsubordinated indebtedness that COPJV may issue. COPJV used the net proceeds from the private placement for general corporate purposes, including to
make investments, repay existing debt and make permitted distributions.
COPJV was in compliance with all covenants required by
its financing arrangements as of September 30, 2021 and December 31, 2020.
During the nine months ended
September 30, 2021, the Company sold investments with a cost of $596.1 for proceeds of $615.5 to COPJV and recognized a net realized gain (loss) of $19.4 in connection with the transactions. As of September 30, 2021, $351.9 of these sales
to COPJV are included in receivable for investments sold in the consolidated statements of assets and liabilities.
As of
September 30, 2021 and December 31, 2020, COPJV had total investments with a fair value of $2,481.7 and $1,544.3, respectively. As of September 30, 2021 and December 31, 2020, COPJV had two and two investments on non-accrual status, respectively.
Below is a summary of COPJVs portfolio, followed by
a listing of the individual loans in COPJVs portfolio as of September 30, 2021 and December 31, 2020:
As of
September 30,
2021
December 31,
2020
Total debt investments (1)
$
2,276.5
$
1,436.3
Weighted average annual yield on accruing debt investments (2)
8.5
%
8.6
%
Number of portfolio companies in COPJV
78
66
Largest investment in a single portfolio company (1)
$
131.0
$
72.6
Unfunded commitments (1)
$
27.7
$
21.6
(1)
Debt Investments means investments that pay or are expected to pay a stated interest rate, stated dividend rate or other similar
stated return.
(2)
The Weighted Average Annual Yield on Accruing Debt Investments is computed as (i) the sum of (a) the stated annual interest rate, dividend
rate or other similar stated return of each accruing Debt Investment, multiplied by its par amount, adjusted to U.S. dollars and for any partial income accrual when necessary, as of the end of the applicable reporting period, plus (b) the annual
amortization of the purchase or original issue discount or premium of each accruing Debt Investment; divided by (ii) the total amortized cost of Debt Investments included in the calculated group as of the end of the applicable reporting period.
51
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Credit Opportunities Partners JV, LLC Portfolio
As of September 30, 2021 (in millions)
(Unaudited)
Company (a)
Footnotes
Industry
Interest Rate (b)
Base
Rate
Floor
Maturity
Date
No.
Shares/
Principal
Amount (c)
Cost
Fair
Value (d)
Senior Secured LoansFirst Lien99.6%
ABB CONCISE Optical Group LLC
(j)(k)
Retailing
L+500
1.0%
6/15/23
$
15.5
$
13.5
$
15.0
Advania Sverige AB
(e)
Software & Services
R+610, 0.0%
PIK (2.0%
Max PIK)
0.0%
3/30/28
ISK
1,644.9
12.8
12.6
Advania Sverige AB
(e)
Software & Services
SR+610
0.0%
4/1/28
SEK
588.0
66.4
67.3
Alstom SA
(k)
Transportation
L+550, 2.5%
PIK (2.5%
Max PIK)
1.0%
8/29/23
$
6.1
5.1
4.6
Ammeraal Beltech Holding BV
(h)(k)
Capital Goods
E+375
0.0%
7/30/25
4.8
4.6
5.5
Ardonagh Group Ltd
(e)(i)
Insurance
E+725
1.0%
7/14/26
0.5
0.5
0.6
Ardonagh Group Ltd
(e)(i)
Insurance
L+725
0.8%
7/14/26
£
3.8
4.7
5.2
Arrotex Australia Group Pty Ltd
(e)(j)(k)(n)
Pharmaceuticals,
Biotechnology & Life
Sciences
B+525
1.0%
7/10/24
A$
109.4
73.8
79.1
Arrotex Australia Group Pty Ltd
(e)(f)
Pharmaceuticals,
Biotechnology & Life
Sciences
B+525
1.0%
7/10/24
8.0
5.7
5.7
BearCom Acquisition Corp
(e)(j)
Technology Hardware &
Equipment
L+600
1.0%
7/5/24
$
2.2
2.2
2.2
BearCom Acquisition Corp
(e)(j)
Technology Hardware &
Equipment
C+550
1.0%
7/5/24
C$
14.4
10.5
11.0
BearCom Acquisition Corp
(e)(f)
Technology Hardware &
Equipment
C+550
1.0%
1/5/24
1.3
1.0
1.0
Belk Inc
(o)(p)(g)
Retailing
10.0%, 0.0%
PIK
(8.0% Max
PIK)
7/31/25
$
2.8
1.3
2.2
Belk Inc
Retailing
L+750
1.0%
7/31/25
0.6
0.6
0.6
Big Bus Tours Ltd
(e)(j)
Consumer Services
E+850 PIK
(E+850 Max
PIK)
1.0%
3/15/24
11.3
12.6
8.1
52
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company (a)
Footnotes
Industry
Interest Rate (b)
Base
Rate
Floor
Maturity
Date
No.
Shares/
Principal
Amount (c)
Cost
Fair
Value (d)
Big Bus Tours Ltd
(e)(j)
Consumer Services
L+850 PIK
(L+850 Max
PIK)
1.0%
3/15/24
$
16.0
$
16.0
$
9.9
Bugaboo International BV
(e)(h)(n)
Consumer Durables &
Apparel
E+700, 0.0%
PIK (7.8%
Max PIK)
0.0%
3/20/25
35.0
40.8
40.5
Caprock Midstream LLC
(i)
Energy
L+475
0.0%
11/3/25
$
13.3
13.1
13.2
Catapult Learning LLC
(e)(j)(n)
Consumer Services
L+850
1.0%
4/24/23
14.8
14.7
14.8
Catapult Learning LLC
(e)(i)(j)
Consumer Services
L+453
1.0%
4/24/23
38.9
38.6
38.9
Catapult Learning LLC
(e)(f)
Consumer Services
L+850
1.0%
4/24/23
0.4
0.4
0.4
Catapult Learning LLC
(e)(f)
Consumer Services
L+475
1.0%
4/24/23
4.4
4.4
4.4
Catapult Learning LLC
(e)(f)
Consumer Services
L+453
1.0%
4/24/23
1.2
1.2
1.2
Child Development Schools Inc
(e)(j)
Consumer Services
L+425
1.0%
5/21/23
8.4
8.4
8.4
Child Development Schools Inc
(e)(f)
Consumer Services
L+425
1.0%
5/21/23
2.5
2.5
2.5
CSafe Global
(e)(k)
Capital Goods
L+625
1.0%
12/23/27
24.9
24.8
25.1
Cubic Corp
(i)
Software & Services
L+425
0.8%
5/25/28
9.2
9.2
9.2
Datatel Inc
(h)
Software & Services
L+375
0.8%
10/7/27
2.4
2.4
2.4
Distribution International Inc
(k)
Retailing
L+575
1.0%
12/15/23
13.8
12.2
13.9
Eagleclaw Midstream Ventures LLC
(k)
Energy
L+425
1.0%
6/24/24
11.1
10.6
11.1
EIF Van Hook Holdings LLC
(i)(k)
Energy
L+525
0.0%
9/5/24
8.4
8.0
7.8
Entertainment Benefits Group LLC
(e)(k)
Media & Entertainment
L+575, 2.5%
PIK (2.5%
Max PIK)
1.0%
9/30/25
2.6
2.6
2.5
FloWorks International LLC
(e)(h)(k)
Capital Goods
L+700
1.0%
10/14/26
24.8
24.5
24.5
Frontline Technologies Group LLC
(e)(i)
Software & Services
L+575
1.0%
9/18/23
19.8
19.8
19.8
Greystone Equity Member Corp
(e)
Diversified Financials
L+725
3.8%
4/1/26
30.2
30.0
30.1
HealthChannels LLC
(j)
Health Care
Equipment & Services
L+450
0.0%
4/3/25
15.8
15.7
15.1
53
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company (a)
Footnotes
Industry
Interest Rate (b)
Base
Rate
Floor
Maturity
Date
No.
Shares/
Principal
Amount (c)
Cost
Fair
Value (d)
Industria Chimica Emiliana Srl
(e)(j)(k)(n)
Pharmaceuticals,
Biotechnology & Life
Sciences
E+725
0.0%
9/27/26
113.9
$
125.0
$
137.7
KBP Investments LLC
(e)(h)(i)
Food & Staples
Retailing
L+500
0.8%
5/26/27
$
23.8
23.6
23.5
Kellermeyer Bergensons Services LLC
(e)(i)(j)
Commercial &
Professional Services
L+575
1.0%
11/7/26
29.5
28.1
29.7
Kettle Cuisine LLC
(j)
Food, Beverage &
Tobacco
L+375
1.0%
8/25/25
16.5
16.4
15.7
Lexitas Inc
(e)(h)
Commercial &
Professional Services
L+600
1.0%
11/14/25
18.7
18.6
19.1
Lionbridge Technologies Inc
(e)(i)(j)
Consumer Services
L+700
1.0%
12/29/25
28.7
28.0
29.0
Lipari Foods LLC
(e)(k)
Food & Staples
Retailing
L+575
1.0%
1/6/25
65.6
65.6
66.3
Monitronics International Inc
(h)(i)(k)
Commercial &
Professional Services
L+500
1.5%
7/3/24
35.5
32.7
35.8
One Call Care Management Inc
(h)
Health Care
Equipment & Services
L+550
0.8%
4/22/27
5.0
5.0
5.0
Ontic Engineering & Manufacturing Inc
(h)
Capital Goods
L+400
0.0%
10/30/26
2.1
1.9
2.2
Parts Town LLC
(e)(k)(n)
Retailing
L+550
1.0%
10/15/25
52.3
52.1
51.5
Parts Town LLC
(e)(f)
Retailing
L+550
1.0%
10/15/25
3.2
3.2
3.1
Precision Global Corp
(e)(j)
Materials
L+475
1.0%
8/3/24
9.0
8.7
8.6
Premium Credit Ltd
(e)(h)(i)
Diversified Financials
L+650
0.0%
1/16/26
£
51.2
66.3
69.0
Project Marron
(e)(h)(j)
Consumer Services
B+575
0.0%
7/2/25
A$
66.8
46.0
44.9
Project Marron
(e)(i)(j)
Consumer Services
C+575
0.0%
7/2/25
C$
52.5
39.8
38.7
Pure Fishing Inc
(i)
Consumer Durables &
Apparel
L+450
0.0%
12/22/25
$
9.9
9.8
9.8
Qdoba Restaurant Corp
(k)(n)
Consumer Services
L+700
1.0%
3/21/25
3.5
3.2
3.4
Reliant Rehab Hospital Cincinnati LLC
(e)(j)
Health Care
Equipment & Services
L+675
0.0%
9/2/24
19.8
19.2
19.1
Revere Superior Holdings Inc
(e)(k)
Software & Services
L+575
1.0%
9/30/26
19.8
19.8
20.0
Rise Baking Company
(e)(k)
Food, Beverage &
Tobacco
L+625
1.0%
8/13/27
16.0
15.7
15.7
54
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company (a)
Footnotes
Industry
Interest Rate (b)
Base
Rate
Floor
Maturity
Date
No.
Shares/
Principal
Amount (c)
Cost
Fair
Value (d)
Rise Baking Company
(e)(k)
Food, Beverage &
Tobacco
L+625
1.0%
8/13/27
$
0.3
$
0.3
$
0.3
Rise Baking Company
(e)(f)
Food, Beverage &
Tobacco
L+625
1.0%
8/13/27
1.6
1.6
1.6
RSC Insurance Brokerage Inc
(e)(k)
Insurance
L+550
1.0%
10/30/26
19.0
19.0
19.2
Safe-Guard Products International LLC
(e)(i)(j)(k)
Diversified Financials
L+500
0.5%
1/27/27
75.5
76.1
75.5
Sequa Corp
(h)(j)(k)
Capital Goods
L+675, 0.0%
PIK (1.0%
Max PIK)
1.0%
11/28/23
45.4
43.7
46.2
SIRVA Worldwide Inc
(i)
Commercial &
Professional Services
L+550
0.0%
8/4/25
7.1
6.7
6.7
Staples Canada
(e)(h)(i)(k)(n)
Retailing
C+700
1.0%
9/12/24
C$
90.5
69.0
71.4
Total Safety US Inc
(h)(i)
Capital Goods
L+600
1.0%
8/16/25
$
11.1
9.5
11.0
Trace3 Inc
(e)(k)
Software & Services
L+675
1.0%
8/3/24
32.6
32.4
32.6
Transaction Services Group Ltd
(e)(j)(k)(n)
Software & Services
B+650
0.0%
10/15/26
A$
162.0
111.0
114.9
West Corp
(i)
Software & Services
L+350
1.0%
10/10/24
$
2.6
$
2.5
$
2.5
West Corp
(i)
Software & Services
L+400
1.0%
10/10/24
12.4
12.1
12.2
WireCo WorldGroup Inc
(k)
Capital Goods
L+500
1.0%
9/29/23
0.1
0.1
0.1
Woolpert Inc
(e)(h)(i)(j)
Capital Goods
L+600
1.0%
4/5/28
53.7
53.1
53.9
Yak Access LLC
(n)
Capital Goods
L+500
0.0%
7/11/25
0.8
0.6
0.6
Total Senior Secured LoansFirst Lien
1,581.6
1,612.9
Unfunded Loan Commitments
(20.0
)
(20.0
)
Net Senior Secured LoansFirst Lien
1,561.6
1,592.9
Senior Secured LoansSecond Lien24.7%
Access CIG LLC
(h)(i)
Commercial &
Professional Services
L+775
0.0%
2/27/26
2.5
2.2
2.5
Ammeraal Beltech Holding BV
(e)(k)(n)
Capital Goods
L+775
0.0%
9/12/26
93.0
91.0
92.1
EaglePicher Technologies LLC
(h)
Capital Goods
L+725
0.0%
3/8/26
0.4
0.4
0.4
55
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company (a)
Footnotes
Industry
Interest Rate (b)
Base
Rate
Floor
Maturity
Date
No.
Shares/
Principal
Amount (c)
Cost
Fair
Value (d)
Excelitas Technologies Corp
(h)(i)
Technology Hardware &
Equipment
L+750
1.0%
12/1/25
$
16.0
$
12.9
$
16.0
Misys Ltd
(h)(i)(k)
Software & Services
L+725
1.0%
6/13/25
41.2
38.6
41.5
Paradigm Acquisition Corp
(k)
Health Care
Equipment & Services
L+750
0.0%
10/26/26
0.2
0.2
0.2
Pure Fishing Inc
(e)(k)
Consumer Durables &
Apparel
L+838
1.0%
12/31/26
46.8
42.0
46.8
Sequa Corp
(k)(n)
Capital Goods
L+1,075, 0.0%
PIK (6.8%
Max PIK)
1.0%
4/28/24
39.1
33.4
38.6
SIRVA Worldwide Inc
(j)
Commercial &
Professional Services
L+950
0.0%
8/3/26
3.8
3.0
3.4
Transplace
(k)
Transportation
L+875
1.0%
10/6/25
3.3
2.6
3.3
Watchfire Enterprises Inc
(e)(j)
Technology Hardware &
Equipment
L+825
1.0%
10/2/24
9.3
8.8
9.3
WireCo WorldGroup Inc
(n)
Capital Goods
L+900
1.0%
9/30/24
8.8
7.4
8.8
Wittur Holding GmbH
(e)(j)(k)(n)
Capital Goods
E+850, 0.5%
PIK (0.5%
Max PIK)
0.0%
9/23/27
120.2
131.0
132.0
Total Senior Secured LoansSecond Lien
373.5
394.9
Other Senior Secured Debt1.4%
One Call Care Management Inc
(e)
Health Care
Equipment & Services
8.5%
PIK (8.5%
Max PIK)
11/1/28
$
22.5
21.9
22.3
Total Other Senior Secured Debt
21.9
22.3
Asset Based Finance24.6%
Abacus JV, Private Equity
(e)
Insurance
31,916,927
32.8
34.1
Comet Aircraft S.a.r.l., Common Stock
(e)(o)(p)(g)(n)
Capital Goods
12.4%
2/28/22
$
21.5
21.5
2.7
GA Capital Specialty Lending Fund, Limited Partnership Interest
(e)(n)
Diversified Financials
$
1.0
0.0
4.9
56
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company (a)
Footnotes
Industry
Interest Rate (b)
Base
Rate
Floor
Maturity
Date
No.
Shares/
Principal
Amount (c)
Cost
Fair
Value (d)
Global Lending Services LLC, Private Equity
(e)(n)
Diversified Financials
4,102,288
$
4.1
$
5.4
Home Partners JV, Common Stock
(e)(o)
Real Estate
15,249,687
22.9
34.5
Home Partners JV, Structured Mezzanine
(e)
Real Estate
11.0%
PIK (11.0%
Max PIK)
3/25/29
$
37.3
37.3
37.3
KKR Zeno Aggregator LP (K2 Aviation), Partnership Interest
(e)(o)(n)
Capital Goods
19,642,734
24.4
18.6
Lenovo Group Ltd, Structured Mezzanine
(e)(n)
Technology Hardware &
Equipment
11.8%
9/22/24
£
1.3
1.8
1.7
Lenovo Group Ltd, Structured Mezzanine
(e)(n)
Technology Hardware &
Equipment
11.8%
9/22/24
4.8
5.6
5.5
Lenovo Group Ltd, Structured Mezzanine
(e)(n)
Technology Hardware &
Equipment
11.8%
9/22/24
$
7.4
7.4
7.4
Lenovo Group Ltd, Structured Mezzanine
(e)(n)
Technology Hardware &
Equipment
7.8%
9/22/24
6.9
8.1
8.0
Lenovo Group Ltd, Structured Mezzanine
(e)(n)
Technology Hardware &
Equipment
7.8%
9/22/24
$
10.7
10.7
10.7
Lenovo Group Ltd, Structured Mezzanine
(e)(n)
Technology Hardware &
Equipment
7.8%
9/22/24
£
1.9
2.6
2.5
Luxembourg Life FundAbsolute Return Fund I, 1L Term Loan
(e)(h)(n)
Insurance
L+750
1.5%
2/27/25
$
28.1
28.1
28.6
Luxembourg Life FundAbsolute Return Fund III, Term Loan
(e)(h)(k)(n)
Insurance
L+925
0.0%
5/27/26
$
49.8
49.4
49.4
Luxembourg Life FundAbsolute Return Fund III, Term Loan
(e)(f)
Insurance
L+925
0.0%
5/27/26
$
7.7
7.7
7.6
57
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company (a)
Footnotes
Industry
Interest Rate (b)
Base
Rate
Floor
Maturity
Date
No.
Shares/
Principal
Amount (c)
Cost
Fair
Value (d)
Luxembourg Life FundLong Term Growth Fund, Term Loan
(e)(h)(i)(k)(n)
Insurance
L+925
0.0%
4/1/23
$
94.6
$
94.1
$
94.3
NewStar Clarendon 2014-1A Class D
(e)(k)(n)
Diversified Financials
17.2%
1/25/27
$
30.0
9.3
12.5
Pretium Partners LLC P1, Structured Mezzanine
(e)(h)(i)
Real Estate
2.8%, 5.3%
PIK (5.3%
Max PIK)
10/22/26
$
18.9
18.6
18.9
Sealane Trade Finance
(e)(m)
Banks
L+963
0.0%
5/8/23
$
11.2
11.2
10.8
Sealane Trade Finance
(e)(m)
Banks
L+375
0.0%
5/8/23
$
5.0
5.0
5.0
Total Asset Based Finance
402.6
400.4
Unfunded Commitments
(7.7
)
(7.7
)
Net Asset Based Finance
394.9
392.7
Equity/Other4.9%
Ascent Resources Utica Holdings LLC / ARU Finance Corp, Common Stock
(e)(l)(o)
Energy
13,556
3.6
3.3
Ascent Resources Utica Holdings LLC / ARU Finance Corp, Trade Claim
(e)(l)(o)
Energy
115,178,571
30.5
28.3
Belk Inc, Common Stock
(e)(o)
Retailing
381
One Call Care Management Inc, Common Stock
(e)(o)
Health Care
Equipment & Services
34,873
2.2
2.4
One Call Care Management Inc, Preferred Stock A
(e)(o)
Health Care
Equipment & Services
371,993
23.7
25.5
One Call Care Management Inc, Preferred Stock B
(e)
Health Care
Equipment & Services
9.0%
PIK (9.0%
Max PIK)
10/25/29
7,672,346
8.8
9.0
58
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company (a)
Footnotes
Industry
Interest Rate (b)
Base
Rate
Floor
Maturity
Date
No.
Shares/
Principal
Amount (c)
Cost
Fair
Value (d)
Zeta Interactive Holdings Corp, Common Stock
(o)(k)
Software & Services
1,766,696
$
15.1
$
10.4
Total Equity/Other
83.9
78.9
TOTAL INVESTMENTS155.2%
$
2,435.8
$
2,481.7
Derivative Instruments(0.7)%
Foreign currency forward contracts
$
(12.0
)
(a)
Security may be an obligation of one or more entities affiliated with the named company.
(b)
Certain variable rate securities in the Companys portfolio bear interest at a rate determined by a publicly disclosed base rate plus a
basis point spread. As of September 30, 2021, the three-month London Interbank Offered Rate, or LIBOR or L, was 0.13%, the Euro Interbank Offered Rate, or EURIBOR, was (0.55)%, Candian Dollar Offer Rate, or CDOR was 0.45%, the
Australian Bank Bill Swap Bid Rate, or BBSY, or B, was 0.07%, the Reykjavik Interbank Offered Rate, or REIBOR, was 1.89%, the Stockholm Interbank Offered Rate, or STIBOR or SR, was (0.08)%, and the U.S. Prime Lending Rate, or
Prime, was 3.25%. PIK means paid-in-kind. PIK income accruals may be adjusted based on the fair value of the underlying investment.
(c)
Denominated in U.S. dollars unless otherwise noted.
(d)
Fair value determined by the Companys board of directors.
(e)
Investments classified as Level 3.
(f)
Security is an unfunded commitment. The stated rate reflects the spread disclosed at the time of commitment and may not indicate the actual
rate received upon funding.
(g)
Asset is on non-accrual status.
(h)
Security or portion thereof held within Big Cedar Creek LLC and is pledged as collateral supporting the amounts outstanding under the
revolving credit facility with BNP Paribas.
(i)
Security or portion thereof held within Boxwood Drive Funding and is pledged as collateral supporting the amounts outstanding under the
revolving credit facility with BNP Paribas.
(j)
Security or portion thereof held within Chestnut Street Funding LLC and is pledged as collateral supporting the amounts outstanding under the
revolving credit facility with Citibank.
(k)
Security or portion thereof held within Green Creek LLC and is pledged as collateral supporting the amounts outstanding under the revolving
credit facility with Goldman Sachs Bank.
(l)
Security or portion thereof held within IC II American Energy Investment, Inc., a wholly-owned subsidiary of the company.
(m)
Security or portion thereof held within JCF Cayman Ltd and is pledged as collateral supporting the amounts outstanding under the revolving
credit facility with Goldman Sachs Bank.
59
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
(n)
Security or portion thereof held within Jersey City Funding LLC and is pledged as collateral supporting the amounts outstanding under the
revolving credit facility with Goldman Sachs Bank.
(o)
Security is non-income producing.
(p)
Asset is on non-accrual status.
Credit Opportunities Partners JV, LLC Portfolio
As of December 31, 2020 (in millions)
Company (a)
Footnotes
Industry
Interest Rate (b)
Base
Rate
Floor
Maturity
Date
No.
Shares/
Principal
Amount (c)
Cost
Fair
Value (d)
Senior Secured LoansFirst Lien124.6%
A10 Capital LLC
(e)(h)(i)
Diversified Financials
L+650
1.0%
5/1/23
$
17.5
$
17.3
$
17.3
ABB CONCISE Optical Group LLC
(i)
Retailing
L+500
1.0%
6/15/23
12.1
10.0
11.0
Apex Group Limited
(e)(h)
Diversified Financials
L+700
1.3%
6/15/23
0.7
0.6
0.7
Apex Group Limited
(e)(f)
Diversified Financials
L+700
1.3%
6/15/23
1.4
1.3
1.4
Apex Group Limited
(e)(h)(i)
Diversified Financials
L+700
1.3%
6/16/25
67.4
67.2
68.1
Ardonagh Group Ltd
(e)(k)
Insurance
E+750, 0.0%
PIK (2.3%
Max PIK)
1.0%
7/14/26
0.5
0.5
0.6
Ardonagh Group Ltd
(e)(k)
Insurance
L+750, 0.0%
PIK (2.3%
Max PIK)
0.8%
7/14/26
£
3.7
4.6
5.2
Arrotex Australia Group Pty Ltd
(e)(h)(i)
Pharmaceuticals,
Biotechnology & Life
Sciences
B+525
1.0%
7/10/24
A$
68.9
46.0
53.6
Arrotex Australia Group Pty Ltd
(e)(f)
Pharmaceuticals,
Biotechnology & Life
Sciences
B+525
1.0%
7/10/24
4.9
3.8
3.8
BearCom Acquisition Corp
(e)(f)
Technology Hardware &
Equipment
C+550
1.0%
1/5/24
C$
1.3
1.0
1.0
BearCom Acquisition Corp
(e)(i)
Technology Hardware &
Equipment
L+550
1.0%
7/5/24
$
2.2
2.2
2.2
BearCom Acquisition Corp
(e)(i)
Technology Hardware &
Equipment
C+550
1.0%
7/5/24
C$
14.5
10.5
11.1
Belk Inc
(g)(l)
Retailing
L+675
1.0%
7/31/25
$
3.8
3.4
1.4
60
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company (a)
Footnotes
Industry
Interest Rate (b)
Base
Rate
Floor
Maturity
Date
No.
Shares/
Principal
Amount (c)
Cost
Fair
Value (d)
Big Bus Tours Ltd
(e)(i)
Consumer Services
E+850
PIK (E+850
Max PIK)
1.0%
3/18/24
10.5
$
11.7
$
8.7
Big Bus Tours Ltd
(e)(i)
Consumer Services
L+850
PIK (L+850
Max PIK)
1.0%
3/18/24
$
14.9
14.9
10.1
Bugaboo International BV
(e)(h)
Consumer Durables &
Apparel
E+775
PIK (E+775
Max PIK)
0.0%
3/20/25
35.0
40.6
42.7
Cambium Learning Group Inc
(i)(k)
Consumer Services
L+450
0.0%
12/18/25
$
45.1
43.4
44.9
Catapult Learning LLC
(e)(i)
Consumer Services
L+475
1.0%
4/24/23
2.1
2.1
2.1
Catapult Learning LLC
(e)(f)
Consumer Services
L+475
1.0%
4/24/23
2.3
2.4
2.3
Catapult Learning LLC
(e)(i)(k)
Consumer Services
L+635
1.0%
4/24/23
39.1
38.7
38.7
Catapult Learning LLC
(e)(f)
Consumer Services
L+635
1.0%
4/24/23
1.2
1.2
1.1
Catapult Learning LLC
(e)(h)(i)
Consumer Services
L+635
1.0%
4/24/23
14.9
14.7
14.7
Catapult Learning LLC
(e)(f)
Consumer Services
L+635
1.0%
4/24/23
0.4
0.4
0.4
Child Development Schools Inc
(e)(i)
Consumer Services
L+425
1.0%
5/21/23
9.3
9.3
9.2
Child Development Schools Inc
(e)(f)
Consumer Services
L+425
5/21/23
2.5
2.5
2.5
CSM Bakery Products
(h)
Food, Beverage &
Tobacco
L+625
1.0%
1/4/22
1.3
1.2
1.3
Diamond Resorts International Inc
(h)
Consumer Services
L+375
1.0%
9/2/23
5.7
5.6
5.5
Eacom Timber Corp
(e)(h)(i)(k)
Materials
L+650
1.0%
11/20/23
59.2
59.2
59.2
Frontline Technologies Group LLC
(e)
Software & Services
L+575
1.0%
9/18/23
19.9
20.0
20.0
61
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company (a)
Footnotes
Industry
Interest Rate (b)
Base
Rate
Floor
Maturity
Date
No.
Shares/
Principal
Amount (c)
Cost
Fair
Value (d)
HealthChannels LLC
(i)
Health Care
Equipment & Services
L+450
0.0%
4/3/25
$
24.3
$
24.1
$
23.3
Huws Gray Ltd
(e)(h)
Materials
L+525
0.5%
4/11/25
£
21.7
28.7
29.3
Huws Gray Ltd
(e)(f)
Materials
L+525
0.5%
4/11/25
6.7
8.9
8.9
ID Verde
(e)(h)
Commercial &
Professional Services
E+500, 2.3%
PIK (2.3%
Max PIK)
0.0%
3/29/24
3.1
3.7
3.8
ID Verde
(e)(h)
Commercial &
Professional Services
L+525, 2.3%
PIK (2.3%
Max PIK)
0.0%
3/29/24
£
1.3
1.7
1.8
ID Verde
(e)(h)
Commercial &
Professional Services
E+500, 2.3%
PIK (2.3%
Max PIK)
0.0%
3/29/25
16.3
$
19.1
$
19.9
ID Verde
(e)(h)
Commercial &
Professional Services
L+525, 2.3%
PIK (2.3%
Max PIK)
0.0%
3/29/25
£
6.0
7.9
8.1
Industria Chimica Emiliana Srl
(e)(h)(i)
Pharmaceuticals,
Biotechnology & Life
Sciences
E+725
0.0%
6/30/26
62.5
68.6
77.3
Kellermeyer Bergensons Services LLC
(e)(i)(k)
Commercial &
Professional Services
L+650
1.0%
11/7/26
$
29.8
28.2
30.1
Kettle Cuisine LLC
(i)
Food, Beverage &
Tobacco
L+375
1.0%
8/25/25
16.6
16.5
14.2
Koosharem LLC
(k)
Commercial &
Professional Services
L+450
1.0%
4/18/25
17.1
17.0
16.8
Lionbridge Technologies Inc
(e)(i)(k)
Consumer Services
L+625
1.0%
12/29/25
29.8
29.0
29.8
MedAssets Inc
(h)
Health Care
Equipment & Services
L+450
1.0%
10/20/22
6.8
6.8
6.8
Parts Town LLC
(e)(h)
Retailing
L+550
1.0%
10/15/25
24.8
24.6
23.8
Precision Global Corp
(e)(i)
Materials
L+475
1.0%
8/3/24
9.1
8.7
8.3
Premium Credit Ltd
(e)(k)
Diversified Financials
L+650
0.0%
1/16/26
£
10.6
13.0
14.3
Project Marron
(e)(i)
Consumer Services
C+575
0.0%
7/2/25
C$
23.8
18.0
17.5
Project Marron
(e)(i)
Consumer Services
B+575
0.0%
7/3/25
A$
28.8
19.5
20.5
62
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company (a)
Footnotes
Industry
Interest Rate (b)
Base
Rate
Floor
Maturity
Date
No.
Shares/
Principal
Amount (c)
Cost
Fair
Value (d)
Qdoba Restaurant Corp
(h)
Consumer Services
L+700
1.0%
3/21/25
$
1.6
$
1.4
$
1.5
Reliant Rehab Hospital Cincinnati LLC
(e)
Health Care
Equipment & Services
L+675
0.0%
9/2/24
19.9
19.2
19.2
Roadrunner Intermediate Acquisition Co LLC
(e)(i)(k)
Health Care
Equipment & Services
L+675
1.0%
3/15/23
19.9
19.7
19.9
Safe-Guard Products International LLC
(e)(i)
Diversified Financials
L+575
0.0%
1/27/27
20.5
20.4
20.4
Sequa Corp
(i)
Capital Goods
L+675, 0.0%
PIK (1.0%
Max PIK)
1.0%
11/28/23
12.2
11.6
12.3
Smart & Final Stores LLC
(k)
Food & Staples
Retailing
L+675
0.0%
6/20/25
18.5
17.1
18.7
Staples Canada
(e)(h)
Retailing
C+700
1.0%
9/12/24
C$
43.6
32.9
34.6
Technimark LLC
(i)
Materials
L+375
0.0%
8/8/25
$
18.4
18.3
18.2
Total Safety US Inc
(k)
Capital Goods
L+600
1.0%
8/16/25
3.9
3.2
3.7
Transaction Services Group Ltd
(e)(h)(i)
Software & Services
B+600
0.0%
10/15/26
A$
99.5
68.6
71.2
Virgin Pulse Inc
(e)
Software & Services
L+650
1.0%
5/22/25
$
19.9
19.9
19.9
Yak Access LLC
(h)
Capital Goods
L+500
0.0%
7/11/25
0.8
0.6
0.7
Total Senior Secured LoansFirst Lien
1,013.2
1,035.6
Unfunded Loan Commitments
(21.6
)
(21.6)
Net Senior Secured LoansFirst Lien
991.6
1,014.0
63
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company (a)
Footnotes
Industry
Interest Rate (b)
Base
Rate
Floor
Maturity
Date
No.
Shares/
Principal
Amount (c)
Cost
Fair
Value (d)
Senior Secured LoansSecond Lien28.9%
Access CIG LLC
(k)
Commercial &
Professional Services
L+775
0.0%
2/27/26
$
0.6
$
0.5
$
0.6
Ammeraal Beltech Holding BV
(e)(h)
Capital Goods
L+800
1.0%
9/12/26
40.7
40.0
39.2
BCA Marketplace PLC
(e)(h)
Retailing
L+825
0.0%
11/22/27
£
47.7
62.4
64.0
Excelitas Technologies Corp
(k)
Technology
Hardware & Equipment
L+750
1.0%
12/1/25
$
8.4
6.6
8.5
Misys Ltd
(k)
Software & Services
L+725
1.0%
6/13/25
6.2
4.9
6.2
Resource Label Group LLC
(e)(i)
Materials
L+850
1.0%
11/26/23
15.0
13.4
14.9
Sequa Corp
(h)
Capital Goods
L+1,075,
0.0%
PIK (6.8%
Max PIK)
1.0%
4/28/24
19.4
15.3
16.9
SIRVA Worldwide Inc
(i)
Commercial &
Professional Services
L+950
0.0%
8/3/26
3.8
3.0
3.2
Watchfire Enterprises Inc
(e)(i)
Technology Hardware &
Equipment
L+800
1.0%
10/2/21
9.3
7.6
9.1
WireCo WorldGroup Inc
(h)
Capital Goods
L+900
1.0%
9/30/24
10.3
8.4
8.4
Wittur Holding GmbH
(e)(h)(i)
Capital Goods
E+850, 0.5%
PIK (0.5%
Max PIK)
0.0%
9/23/27
55.3
60.3
64.6
Total Senior Secured LoansSecond Lien
222.4
235.6
Other Senior Secured Debt1.0%
Cleaver-Brooks Inc
(h)
Capital Goods
7.9%
3/1/23
$
8.4
7.1
8.3
Total Other Senior Secured Debt
7.1
8.3
64
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company (a)
Footnotes
Industry
Interest Rate (b)
Base
Rate
Floor
Maturity
Date
No.
Shares/
Principal
Amount (c)
Cost
Fair
Value (d)
Subordinated Debt5.3%
Home Partners of America Inc
(e)(h)
Real Estate
L+625
1.0%
10/8/22
$
42.9
$
42.6
$
42.8
Total Subordinated Debt
42.6
42.8
Asset Based Finance23.8%
Comet Aircraft S.a.r.l., Common Stock
(e)(g)(h)(l)
Capital Goods
12.4%
2/28/22
$
21.5
21.5
4.8
GA Capital Specialty Lending Fund, Limited Partnership Interest
(e)(h)
Diversified Financials
N/A
8.9
Global Lending Services LLC, Private Equity
(e)(h)(l)
Diversified Financials
6,981,478
7.0
7.8
KKR Zeno Aggregator LP (K2 Aviation), Partnership Interest
(e)(h)
Capital Goods
19,642,734
24.4
21.8
Lenovo Group Ltd, Structured Mezzanine
(e)(h)
Technology Hardware &
Equipment
8.0%
6/22/22
$
15.5
15.5
15.5
Lenovo Group Ltd, Structured Mezzanine
(e)(h)
Technology
Hardware & Equipment
12.0%
6/22/22
$
9.8
9.8
9.8
Luxembourg Life FundAbsolute Return Fund I, 1L Term Loan
(e)(h)
Insurance
L+750
1.5%
2/27/25
$
30.6
30.7
30.7
Luxembourg Life FundLong Term Growth Fund, 1L Term Loan
(e)(h)
Insurance
9.0%
7/23/21
$
32.5
32.0
32.5
65
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Company (a)
Footnotes
Industry
Interest Rate (b)
Base
Rate
Floor
Maturity
Date
No.
Shares/
Principal
Amount (c)
Cost
Fair
Value (d)
MP4 2013-2A Class Subord. B
(e)(h)(l)
Diversified Financials
7/25/29
$
21.0
$
4.2
$
3.1
NewStar Clarendon 2014-1A Class D
(e)(h)(l)
Diversified Financials
1/25/27
$
17.9
6.5
5.6
Pretium Partners LLC P1, Structured Mezzanine
(e)(k)
Real Estate
2.8%, 5.3%
PIK (5.3%
Max PIK)
10/22/26
$
12.0
11.7
12.0
Pretium Partners LLC P2, Structured Mezzanine
(e)(k)
Real Estate
2.0%, 7.5%
PIK (7.5%
Max PIK)
5/29/25
$
25.3
23.8
25.5
Sealane Trade Finance
(e)(j)
Banks
L+375
0.0%
5/8/23
$
5.0
5.0
5.0
Sealane Trade Finance
(e)(j)
Banks
L+963
0.0%
5/8/23
$
12.0
12.0
11.1
Total Asset Based Finance
204.1
194.1
Equity/Other6.1%
ASG Technologies, Common Stock
(e)(i)(l)
Software & Services
540,346
30.0
20.1
Home Partners of America Inc, Common Stock
(e)(i)(l)
Real Estate
18,419
30.0
29.4
Total Equity/Other
60.0
49.5
TOTAL INVESTMENTS189.7%
$
1,527.8
$
1,544.3
Derivative Instruments(1.4)%
Foreign currency forward contracts
$
(11.4
)
(a)
Security may be an obligation of one or more entities affiliated with the named company.
(b)
Certain variable rate securities in the Companys portfolio bear interest at a rate determined by a publicly disclosed base rate plus a
basis point spread. As of December 31, 2020, the three-month London Interbank Offered Rate, or LIBOR or L, was 0.24% and the Euro Interbank Offered Rate, or EURIBOR, was (0.55)%, Canadian Dollar Offer Rate, or CDOR, was 0.48% and
the Australian Interbank Rate,
66
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
or BBSY or B, was 0.06%. PIK means paid-in-kind. PIK income accruals may be adjusted based on the fair
value of the underlying investment.
(c)
Denominated in U.S. dollars unless otherwise noted.
(d)
Fair value determined by the Companys board of directors.
(e)
Investments classified as Level 3.
(f)
Security is an unfunded commitment. The stated rate reflects the spread disclosed at the time of commitment and
may not indicate the actual rate received upon funding.
(g)
Asset is on non-accrual status.
(h)
Security or portion thereof held within Jersey City Funding LLC and is pledged as collateral supporting the
amounts outstanding under the revolving credit facility with Goldman Sachs.
(i)
Security or portion thereof held within Chestnut Street Funding LLC and is pledged as collateral supporting the
amounts outstanding under the revolving credit facility with Citibank, N.A.
(j)
Security or portion thereof held within JCF Cayman Ltd and is pledged as collateral supporting the amounts
outstanding under the revolving credit facility with Goldman Sachs.
(k)
Security or portion thereof held within Boxwood Drive Funding LLC and is pledged as collateral supporting the
amounts outstanding under the revolving credit facility with BNP Paribas.
(l)
Security is non-income producing.
Below is selected balance sheet information for COPJV as of September 30, 2021 and December 31, 2020:
As of
September 30,
2021
December 31,
2020
Selected Balance Sheet Information
Total investments, at fair value
$
2,481.7
$
1,544.3
Cash and other assets
728.5
188.6
Total assets
3,210.2
1,732.9
Debt
1,183.5
722.0
Other liabilities
428.1
196.8
Total liabilities
1,611.6
918.8
Members equity
$
1,598.6
$
814.1
67
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 6. Investment Portfolio (continued)
Below is selected statement of operations information for COPJV for the three and nine months
ended September 30, 2021 and 2020:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2021
2020
2021
2020
Selected Statement of Operations Information
Total investment income
$
56.6
$
32.8
$
128.8
$
81.3
Expenses
Interest expense
12.7
5.3
27.0
16.4
Custodian and accounting fees
0.5
0.2
0.7
0.4
Administrative services
2.7
0.9
4.5
2.9
Professional services
0.2
0.1
0.5
0.5
Other
0.2
0.0
0.3
0.0
Total expenses
16.3
6.5
33.0
20.2
Net investment income
40.3
26.3
95.8
61.1
Net realized and unrealized gain (loss)
(10.1
)
31.7
56.6
(117.8
)
Net increase in net assets resulting from operations
$
30.2
$
58.0
$
152.4
$
(56.7
)
Note 7. Financial Instruments
The following is a summary of the fair value and location of the Companys derivative instruments in the consolidated balance sheets held
as of September 30, 2021 and December 31, 2020:
Fair Value
Derivative Instrument
Statement Location
September 30,
2021
December 31,
2020
Foreign currency forward contracts
Unrealized appreciation on foreign currency forward contracts
$
6
$
1
Foreign currency forward contracts
Unrealized depreciation on foreign currency forward contracts
(1)
(3)
Total
$
5
$
(2)
Net realized and unrealized gains and losses on derivative instruments recorded by the Company for the nine
months ended September 30, 2021 and 2020 are in the following locations in the consolidated statements of operations:
Net Realized Gains (Losses)
Nine Months Ended
September 30,
Derivative Instrument
Statement Location
2021
2020
Foreign currency forward contracts
Net realized gain (loss) on foreign currency forward contracts
$
0
$
0
Total
$
0
$
0
68
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 7. Financial Instruments (continued)
Net Unrealized Gains (Losses)
Nine Months Ended
September 30,
Derivative Instrument
Statement Location
2021
2020
Foreign currency forward contracts
Net change in unrealized appreciation (depreciation) on foreign currency forward contracts
$
8
$
1
Total
$
8
$
1
Offsetting of Derivative Instruments
The Company has derivative instruments that are subject to master netting agreements. These agreements include provisions to offset positions
with the same counterparty in the event of default by one of the parties. The Companys unrealized appreciation and depreciation on derivative instruments are reported as gross assets and liabilities, respectively, in the consolidated balance
sheets. The following tables present the Companys assets and liabilities related to derivatives by counterparty, net of amounts available for offset under a master netting arrangement and net of any collateral received or pledged by the
Company for such assets and liabilities as of September 30, 2021 and December 31, 2020:
As of September 30, 2021
Counterparty
Derivative
Assets Subject to
Master Netting
Agreement
Derivatives
Available for
Offset
Non-cash
Collateral
Received (1)
Cash Collateral
Received (1)
Net Amount of
Derivative
Assets (2)
JP Morgan Chase Bank
$
6
$
(1)
$
$
$
5
Total
$
6
$
(1)
$
$
$
5
Counterparty
Derivative
Liabilities
Subject to
Master Netting
Agreement
Derivatives
Available for
Offset
Non-cash
Collateral
Pledged (1)
Cash Collateral
Pledged (1)
Net Amount of
Derivative
Liabilities (3)
JP Morgan Chase Bank
$
(1)
$
1
$
$
$
Total
$
(1)
$
1
$
$
$
As of December 31, 2020
Counterparty
Derivative
Assets Subject to
Master Netting
Agreement
Derivatives
Available for
Offset
Non-cash
Collateral
Received (1)
Cash Collateral
Received (1)
Net Amount of
Derivative
Assets (2)
JP Morgan Chase Bank
$
1
$
(1)
$
$
$
Total
$
1
$
(1)
$
$
$
Counterparty
Derivative
Liabilities
Subject to
Master Netting
Agreement
Derivatives
Available for
Offset
Non-cash
Collateral
Pledged (1)
Cash Collateral
Pledged (1)
Net Amount of
Derivative
Liabilities (3)
JP Morgan Chase Bank
$
(3)
$
1
$
$
$
(2
)
Total
$
(3)
$
1
$
$
$
(2
)
(1)
In some instances, the actual amount of the collateral received and/or pledged may be more than the amount shown
due to overcollateralization.
69
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 7. Financial Instruments (continued)
(2)
Net amount of derivative assets represents the net amount due from the counterparty to the Company.
(3)
Net amount of derivative liabilities represents the net amount due from the Company to the counterparty.
Foreign Currency Forward Contracts and Cross Currency Swaps:
The Company may enter into foreign currency forward contracts and cross currency swaps from time to time to facilitate settlement of purchases
and sales of investments denominated in foreign currencies and to economically hedge the impact that an adverse change in foreign exchange rates would have on the value of the Companys investments denominated in foreign currencies. A foreign
currency forward contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. These contracts are marked-to-market by
recognizing the difference between the contract forward exchange rate and the forward market exchange rate on the last day of the period presented as unrealized appreciation or depreciation. Realized gains or losses are recognized when forward
contracts are settled. Risks arise as a result of the potential inability of the counterparties to meet the terms of their contracts. The Company attempts to limit counterparty risk by only dealing with well-known counterparties.
Cross currency swaps are interest rate swaps in which interest cash flows are exchanged between two parties based on the notional amounts of
two different currencies. These swaps are marked-to-market by recognizing the difference between the present value of cash flows of each leg of the swaps as unrealized
appreciation or depreciation. Realized gain or loss is recognized when periodic payments are received or paid and the swaps are terminated. The entire notional value of a cross currency swap is subject to the risk that the counterparty to the swap
will default on its contractual delivery obligations. The Company attempts to limit counterparty risk by only dealing with well-known counterparties. The Company utilizes cross currency swaps from time to time in order to hedge a portion of its
investments in foreign currency.
The average notional balance for foreign currency forward contracts during the nine months ended
September 30, 2021 and 2020 was $129.0 and $36.1, respectively.
Note 8. Fair Value of Financial Instruments
Under existing accounting guidance, fair value is defined as the price that the Company would receive upon selling an investment or pay to
transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment. This accounting guidance emphasizes valuation techniques that maximize the use of observable market inputs and
minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are
inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the assumptions market
participants would use in pricing an asset or liability developed based on the best information available in the circumstances. The Company classifies the inputs used to measure these fair values into the following hierarchy as defined by current
accounting guidance:
Level 1 : Inputs that are quoted prices (unadjusted) in active markets for identical assets
or liabilities.
Level 2 : Inputs that are quoted prices for similar assets or liabilities in active markets.
Level 3 : Inputs that are unobservable for an asset or liability.
A financial instruments categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the
fair value measurement.
70
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 8. Fair Value of Financial
Instruments (continued)
As of September 30, 2021 and December 31, 2020, the Companys investments were
categorized as follows in the fair value hierarchy:
September 30, 2021
Valuation Inputs
(Unaudited)
December 31, 2020
Level 1Price quotations in active markets
$
21
$
Level 2Significant other observable inputs
861
260
Level 3Significant unobservable inputs
13,543
5,807
Investments measured at net asset
value (1)
1,399
713
$
15,824
$
6,780
(1)
Certain investments that are measured at fair value using the net asset value per share (or its equivalent)
practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet.
In addition, the Company had foreign currency forward contracts, as described in Note 7, which were categorized as
Level 2 in the fair value hierarchy as of September 30, 2021 and December 31, 2020.
The Companys investments consist
primarily of debt investments that were acquired directly from the issuer. Debt investments, for which broker quotes are not available, are valued by independent valuation firms, which determine the fair value of such investments by considering,
among other factors, the borrowers ability to adequately service its debt, prevailing interest rates for like investments, expected cash flows, call features, anticipated repayments and other relevant terms of the investments. Except as
described below, all of the Companys equity/other investments are also valued by independent valuation firms, which determine the fair value of such investments by considering, among other factors, contractual rights ascribed to such
investments, as well as various income scenarios and multiples of earnings before interest, taxes, depreciation and amortization, or EBITDA, cash flows, net income, revenues or, in limited instances, book value or liquidation value. An investment
that is newly issued and purchased near the date of the financial statements is valued at cost if the Companys board of directors determines that the cost of such investment is the best indication of its fair value. Such investments described
above are typically classified as Level 3 within the fair value hierarchy. Investments that are traded on an active public market are valued at their closing price as of the date of the financial statements and are classified as Level 1
within the fair value hierarchy. Except as described above, the Company typically values its other investments by using the midpoint of the prevailing bid and ask prices from dealers on the date of the relevant period end, which are provided by
independent third-party pricing services and screened for validity by such services and are typically classified as Level 2 within the fair value hierarchy.
The Company periodically benchmarks the bid and ask prices it receives from the third-party pricing services and/or dealers and independent
valuation firms as applicable, against the actual prices at which the Company purchases and sells its investments. Based on the results of the benchmark analysis and the experience of the Companys management in purchasing and selling these
investments, the Company believes that these prices are reliable indicators of fair value. The valuation committee of the Companys board of directors, or the valuation committee, and the board of directors reviewed and approved the valuation
determinations made with respect to these investments in a manner consistent with the Companys valuation policy.
71
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FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 8. Fair Value of Financial
Instruments (continued)
The following is a reconciliation for the nine months ended September 30, 2021 and
2020 of investments for which significant unobservable inputs (Level 3) were used in determining fair value:
For the Nine Months Ended September 30, 2021
Senior
Secured
LoansFirst
Lien
Senior
Secured
LoansSecond
Lien
Other
Senior
Secured
Debt
Subordinated
Debt
Asset
Based
Finance
Equity/
Other
Total
Fair value at beginning of period
$
3,276
$
862
$
36
$
152
$
951
$
530
$
5,807
Accretion of discount (amortization of premium)
28
8
2
1
39
Net realized gain (loss)
35
(93
)
(21
)
(7
)
9
191
114
Net change in unrealized appreciation (depreciation)
280
158
25
(4
)
126
31
616
Purchases
7,907
974
52
8
1,217
451
10,609
Paid-in-kind interest
12
4
29
21
66
Sales and repayments
(2,197
)
(628
)
(48
)
(93
)
(335
)
(410
)
(3,711
)
Transfers into Level 3
3
3
Transfers out of Level 3
Fair value at end of period
$
9,341
$
1,285
$
44
$
56
$
1,999
$
818
$
13,543
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
$
290
$
84
$
(1
)
$
19
$
125
$
84
$
601
For the Nine Months Ended September 30, 2020
Senior
Secured
LoansFirst
Lien
Senior
Secured
LoansSecond
Lien
Other
Senior
Secured
Debt
Subordinated
Debt
Asset
Based
Finance
Equity/
Other
Total
Fair value at beginning of period
$
3,358
$
1,015
$
152
$
313
$
737
$
572
$
6,147
Accretion of discount (amortization of premium)
5
2
1
1
9
Net realized gain (loss)
(131
)
(16
)
(93
)
(17
)
(4
)
(89
)
(350
)
Net change in unrealized appreciation (depreciation)
(42
)
(114
)
13
(67
)
(53
)
(42
)
(305
)
Purchases
1,061
5
27
335
48
1,476
Paid-in-kind interest
15
3
3
11
19
12
63
Sales and repayments
(960
)
(59
)
(42
)
(120
)
(177
)
(13
)
(1,371
)
Transfers into Level 3
58
58
Transfers out of Level 3
Fair value at end of period
$
3,364
$
836
$
33
$
148
$
857
$
489
$
5,727
The amount of total gains or losses for the period included in changes in net assets attributable to the change in
unrealized gains or losses relating to investments still held at the reporting date
$
(71
)
$
(118
)
$
(11
)
$
(76
)
$
(6
)
$
(103
)
$
(385
)
72
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 8. Fair Value of Financial
Instruments (continued)
The valuation techniques and significant unobservable inputs used in recurring Level 3
fair value measurements as of September 30, 2021 and December 31, 2020 were as follows:
Type of Investment
Fair Value at
September 30, 2021
(Unaudited)
Valuation
Technique (1)
Unobservable
Input
Range (Weighted Average)
Impact to
Valuation from
an Increase in
Input (2)
Senior Debt
$
7,852
Discounted Cash Flow
Discount Rate
4.7% - 25.7% (8.2%)
Decrease
1,543
Cost
1,251
Waterfall
EBITDA Multiple
0.1x - 11.0x (6.5x)
Increase
24
Other (3)
Subordinated Debt
56
Waterfall
EBITDA Multiple
7.0x - 8.0x (7.9x)
Increase
Asset Based Finance
967
Waterfall
EBITDA Multiple
1.0x - 18.8x (3.8x)
Increase
893
Discounted Cash Flow
Discount Rate
4.2% - 15.9% (10.0%)
Decrease
99
Other (3)
35
Cost
5
Indicative Dealer
Quotes
2.8% - 41.8% (29.9%)
Increase
Equity/Other
691
Waterfall
EBITDA Multiple
0.1x - 15.3x (7.5x)
Increase
59
Discounted Cash Flow
Discount Rate
10.0% - 25.0% (11.9%)
Decrease
55
Cost
13
Other (3)
Total
$
13,543
Type of Investment
Fair Value at
December 31, 2020
Valuation
Technique (1)
Unobservable
Input
Range
Impact to
Valuation from
an Increase in
Input (2)
Senior Debt
$
3,519
Discounted Cash Flow
Discount Rate
5.7% - 18.6% (9.0%)
Decrease
418
Waterfall
EBITDA Multiple
0.1x - 12.7x (7.2x)
Increase
237
Cost
Subordinated Debt
71
Discounted Cash Flow
Discount Rate
12.3% - 12.3% (12.3%)
Decrease
63
Waterfall
EBITDA Multiple
7.8x - 11.5x (7.8x)
Increase
18
Cost
Asset Based Finance
535
Waterfall
EBITDA Multiple
1.0x - 12.0x (3.6x)
Increase
287
Discounted Cash Flow
Discount Rate
4.2% - 15.2% (9.9%)
Decrease
59
Other (3)
70
Cost
Equity/Other
346
Waterfall
EBITDA Multiple
0.1x - 12.5x (7.4x)
Increase
135
Option Pricing Model
Equity Illiquidity Discount
11.0% - 50.0% (11.9%)
Decrease
49
Other (3)
Total
$
5,807
(1)
Investments using a market quotes valuation technique were primarily valued by using the midpoint of the
prevailing bid and ask prices from dealers on the date of the relevant period end, which were provided by independent third-party pricing services and screened for validity by such services. Investments valued using an EBITDA multiple or a revenue
multiple pursuant to the market comparables valuation technique may be conducted using an enterprise valuation waterfall analysis.
(2)
Represents the directional change in the fair value of the Level 3 investments that would result from an
increase to the corresponding unobservable input. A decrease to the input would have the opposite effect. Significant changes in these inputs in isolation could result in significantly higher or lower fair value measurements.
(3)
Fair value based on expected outcome of proposed corporate transactions and/or other factors.
Note 9. Financing Arrangements
Prior to June 14, 2019, in accordance with the 1940 Act, the Company was allowed to borrow amounts such that its asset coverage,
calculated pursuant to the 1940 Act, was at least 200% after such borrowing. Effective June 15, 2019, the Companys asset coverage requirement applicable to senior securities was reduced from 200% to 150%. As of September 30,
2021, the aggregate amount outstanding of the senior securities issued by the Company was $8,511. As of September 30, 2021, the Companys asset coverage was 191%.
73
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 9. Financing Arrangements (continued)
The following tables present summary information with respect to the Companys
outstanding financing arrangements as of September 30, 2021 and December 31, 2020. For additional information regarding these financing arrangements, see the notes to the Companys audited consolidated financial statements contained
in its annual report on Form 10-K for the year ended December 31, 2020. Any significant changes to the Companys financing arrangements during the nine months ended September 30, 2021 are
discussed below.
As of September 30, 2021
(Unaudited)
Arrangement
Type of Arrangement
Rate
Amount
Outstanding
Amount
Available
Maturity Date
Ambler Credit Facility (2)(8)
Revolving Credit Facility
L+2.25% (1)
$
140
$
60
November 22, 2024
Burholme Prime Brokerage
Facility (2)(8)
Prime Brokerage Facility
L+1.25% (1)
March 28, 2022
CCT Tokyo Funding Credit Facility (2)
Revolving Credit Facility
L+1.75% - 2.00% (1)(3)
240
60
June 2, 2024
Darby Creek Credit Facility (2)(8)
Revolving Credit Facility
L+1.95% (1)
250
February 26, 2024
Dunlap Credit Facility (2)(8)
Revolving Credit Facility
L+2.00% (1)
470
30
February 26, 2024
Juniata River Credit Facility (2)(8)
Revolving Credit Facility
L+2.50% - L+2.75% (1)
640
July 15, 2022 - April 11, 2023
Meadowbrook Run Credit Facility (2)(8)
Revolving Credit Facility
L+2.25% (1)
300
November 22, 2024
Senior Secured Revolving Credit
Facility (2)
Revolving Credit Facility
L+1.75% - 2.00% (1)(4)
2,429
(5)
1,771
December 23, 2025
4.750% Notes due 2022 (6)
Unsecured Notes
4.75%
450
May 15, 2022
5.000% Notes due 2022 (6)
Unsecured Notes
5.00%
245
June 28, 2022
4.625% Notes due 2024 (6)
Unsecured Notes
4.63%
400
July 15, 2024
4.125% Notes due 2025 (6)
Unsecured Notes
4.13%
470
February 1, 2025
4.250% Notes due 2025 (6)(8)
Unsecured Notes
4.25%
475
February 14, 2025
8.625% Notes due 2025 (6)
Unsecured Notes
8.63%
250
May 15, 2025
3.400% Notes due 2026 (6)
Unsecured Notes
3.40%
1,000
January 15, 2026
2.625% Notes due 2027 (6)
Unsecured Notes
2.63%
400
January 15, 2027
CLO-1
Notes (2)(7)
Collateralized Loan
Obligation
L+1.85% - 3.01% (1)
352
January 15, 2031
Total
$
8,511
$
1,921
(1)
LIBOR is subject to a 0% floor.
(2)
The carrying amount outstanding under the facility approximates its fair value.
(3)
The spread over LIBOR is determined by reference to the amount outstanding under the facility.
(4)
The spread over LIBOR is determined by reference to the ratio of the value of the borrowing base to the
aggregate amount of certain outstanding indebtedness of the Company.
(5)
Amount includes borrowing in Euros, Canadian dollars, pounds sterling and Australian dollars. Euro balance
outstanding of 236 has been converted to U.S. dollars at an exchange rate of 1.00 to $1.16 as of September 30, 2021 to reflect total amount outstanding in U.S. dollars. Canadian dollar balance outstanding of CAD4 has been converted
to U.S dollars at an exchange rate of CAD1.00 to $0.79 as of September 30, 2021 to reflect total amount outstanding in U.S. dollars. Pounds sterling balance outstanding of £98 has been converted to U.S dollars at an exchange rate of
£1.00 to $1.35 as of September 30, 2021 to reflect total amount outstanding in U.S. dollars. Australian dollar balance outstanding of AUD118 has been converted to U.S dollars at an exchange rate of AUD1.00 to $0.72 as of
September 30, 2021 to reflect total amount outstanding in U.S. dollars.
(6)
As of September 30, 2021, the fair value of the 4.750% notes, the 5.000% notes, the 4.625% notes, the
4.125% notes, the 4.250% notes, the 8.625% notes, the 3.400% notes and the 2.625% notes was approximately $460, $245, $432, $502, $502, $280, $1,045 and $401, respectively. These valuations are considered Level 2 valuations within the fair
value hierarchy.
(7)
As of September 30, 2021, there were $281.4 of Class A-1R
notes outstanding at L+1.85%, $20.5 of Class A-2R notes outstanding at L+2.25%, $32.4 of Class B-1R notes outstanding at L+2.60% and $17.4 of Class B-2R notes outstanding at 3.011%.
74
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 9. Financing Arrangements (continued)
(8)
As of June 16, 2021, the Company assumed all of FSKRs obligations under its notes, credit facilities, and FSKRs wholly-owned
special purpose financing subsidiaries became wholly-owned special purpose financing subsidiaries of the Company, in each case, as a result of the consummation of the 2021 Merger.
As of December 31, 2020
Arrangement
Type of Arrangement
Rate
Amount
Outstanding
Amount
Available
Maturity Date
CCT Tokyo Funding Credit Facility (2)
Revolving Credit Facility
L+1.75% -
2.00% (1)(3)
$
260
$
40
December 2, 2023
Senior Secured Revolving Credit Facility (2)
Revolving Credit Facility
L+1.75% - 2.00% (1)(4)
615
(5)
1,000
December 23, 2025
4.750% Notes due 2022 (6)
Unsecured Notes
4.75%
450
May 15, 2022
5.000% Notes due 2022 (6)
Unsecured Notes
5.00%
245
June 28, 2022
4.625% Notes due 2024 (6)
Unsecured Notes
4.63%
400
July 15, 2024
4.125% Notes due 2025 (6)
Unsecured Notes
4.13%
470
February 1, 2025
8.625% Notes due 2025 (6)
Unsecured Notes
8.63%
250
May 15, 2025
3.400% Notes due 2026 (6)
Unsecured Notes
3.40%
1,000
January 15, 2026
CLO-1 Notes (2)(7)
Collateralized Loan
Obligation
L+1.85%3.01% (1)
352
January 15, 2031
Total
$
4,042
$
1,040
(1)
LIBOR is subject to a 0% floor.
(2)
The carrying amount outstanding under the facility approximates its fair value.
(3)
The spread over LIBOR is determined by reference to the amount outstanding under the facility.
(4)
The spread over LIBOR is determined by reference to the ratio of the value of the borrowing base to the aggregate amount of certain
outstanding indebtedness of the Company.
(5)
Amount includes borrowing in Euros, Canadian dollars, pounds sterling and Australian dollars. Euro balance outstanding of 164 has been
converted to U.S. dollars at an exchange rate of 1.00 to $1.22 as of December 31, 2020 to reflect total amount outstanding in U.S. dollars. Canadian dollar balance outstanding of CAD63 has been converted to U.S dollars at an exchange rate
of CAD1.00 to $0.78 as of December 31, 2020 to reflect total amount outstanding in U.S. dollars. Pounds sterling balance outstanding of £111 has been converted to U.S dollars at an exchange rate of £1.00 to $1.37 as of
December 31, 2020 to reflect total amount outstanding in U.S. dollars. Australian dollar balance outstanding of AUD6 has been converted to U.S dollars at an exchange rate of AUD1.00 to $0.77 as of December 31, 2020 to reflect total amount
outstanding in U.S. dollars.
(6)
As of December 31, 2020, the fair value of the 4.750% notes, the 5.000% notes, the 4.625% notes, the 4.125% notes, the 8.625% notes and
the 3.400% notes was approximately $468, $245, $422, $490, $285 and $994 respectively. These valuations are considered Level 2 valuations within the fair value hierarchy.
(7)
As of December 31, 2020, there were $281.4 of Class A-1R notes outstanding at L+1.85%, $20.5
of Class A-2R notes outstanding at L+2.25%, $32.4 of Class B-1R notes outstanding at L+2.60% and $17.4 of
Class B-2R notes outstanding at 3.011%.
75
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FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 9. Financing Arrangements (continued)
For the three and nine months ended September 30, 2021 and 2020, the components of total
interest expense for the Companys financing arrangements were as follows:
Three Months Ended September 30,
2021
2020
Arrangement (1)
Direct
Interest
Expense
Amortization of
Deferred
Financing Costs
and Discount /
Premium
Total Interest
Expense
Direct
Interest
Expense
Amortization of
Deferred
Financing Costs
and Discount
Total Interest
Expense
Ambler Credit Facility (2)
$
1
$
$
1
$
$
$
Burholme Prime Brokerage Facility (2)
CCT Tokyo Funding Credit Facility (2)
1
0
1
1
1
2
Darby Creek Credit Facility (2)
2
2
Dunlap Credit Facility (2)
2
2
Juniata River Credit Facility (2)
5
5
Locust Street Credit Facility (2)
2
1
3
Meadowbrook Run Credit Facility (2)
3
3
Senior Secured Revolving Credit
Facility (2)
13
1
14
7
1
8
4.750% Notes due 2022
5
0
5
5
0
5
5.000% Notes due 2022
3
3
3
3
4.625% Notes due 2024
5
1
6
5
0
5
4.125% Notes due 2025
5
1
6
5
1
6
4.250% Notes due 2025
5
(2
)
3
8.625% Notes due 2025
5
0
5
5
1
6
3.400% Notes due 2026
8
1
9
2.625% Notes due 2027
3
0
3
CLO-1 Notes
2
0
2
2
0
2
Total
$
68
$
2
$
70
$
35
$
5
$
40
Nine Months Ended September 30,
2021
2020
Arrangement (1)
Direct
Interest
Expense
Amortization of
Deferred
Financing Costs
and Discount /
Premium
Total Interest
Expense
Direct
Interest
Expense
Amortization of
Deferred
Financing Costs
and Discount
Total Interest
Expense
Ambler Credit Facility (2)
$
1
$
$
1
$
$
$
Burholme Prime Brokerage Facility (2)
CCT Tokyo Funding Credit Facility (2)
3
0
3
5
1
6
Darby Creek Credit Facility (2)
2
2
Dunlap Credit Facility (2)
3
3
Juniata River Credit Facility (2)
6
6
Locust Street Funding Credit
Facility (2)
11
1
12
Meadowbrook Run Credit Facility (2)
3
3
Senior Secured Revolving Credit
Facility (2)
23
2
25
33
2
35
4.750% Notes due 2022
16
0
16
16
0
16
5.000% Notes due 2022
9
9
9
9
4.625% Notes due 2024
14
1
15
14
1
15
4.125% Notes due 2025
15
1
16
15
2
17
4.250% Notes due 2025
6
(2
)
4
8.625% Notes due 2025
16
1
17
9
1
10
3.400% Notes due 2026
25
4
29
2.625% Notes due 2027
3
0
3
CLO-1 Notes
6
0
6
8
0
8
Total
$
151
$
7
$
158
$
120
$
8
$
128
76
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 9. Financing Arrangements (continued)
(1)
Borrowings of each of the Companys wholly-owned, special-purpose financing subsidiaries are considered
borrowings of the Company for purposes of complying with the asset coverage requirements applicable to BDCs under the 1940 Act.
(2)
Direct interest expense includes the effect of non-usage fees.
The Companys average borrowings and weighted average interest rate, including the effect of non-usage fees, for the nine months ended September 30, 2021 were $5,502 and 3.59%, respectively. As of September 30, 2021, the Companys weighted average effective interest rate on
borrowings, including the effect of non-usage fees, was 3.22%.
The Companys
average borrowings and weighted average interest rate, including the effect of non-usage fees, for the nine months ended September 30, 2020 were $4,269 and 3.72%, respectively. As of
September 30, 2020, the Companys weighted average effective interest rate on borrowings, including the effect of non-usage fees, was 3.65%.
Under its financing arrangements, the Company has made certain representations and warranties and is required to comply with various covenants,
reporting requirements and other customary requirements for similar financing arrangements. The Company was in compliance with all covenants required by its financing arrangements as of September 30, 2021 and December 31, 2020.
2.625% Notes due 2027
On June 17,
2021, the Company and U.S. Bank National Association, or the Trustee entered into an Eighth Supplemental Indenture, or the Eighth Supplemental Indenture, to the Indenture, dated July 14, 2014, between the Company and the Trustee, or the Base
Indenture, and together with the Eighth Supplemental Indenture, the Indenture. The Eighth Supplemental Indenture relates to the Companys issuance of $400 aggregate principal amount of its 2.625% notes due 2027, or the 2.625% notes.
The Notes will mature on January 15, 2027 and may be redeemed in whole or in part at the Companys option at any time or from time to
time at the redemption prices set forth in the Indenture. The Notes bear interest at a rate of 2.625% per year payable semi-annually on January 15th and July 15th of each year, commencing on January 15, 2022. The Notes are general unsecured
obligations of the Company that rank senior in right of payment to all of the Companys existing and future indebtedness that is expressly subordinated in right of payment to the Notes, rank pari passu with all existing and future
unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Companys secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets
securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables) incurred by the Companys subsidiaries, financing vehicles or similar facilities.
The Indenture contains certain covenants, including covenants requiring the Company to comply with the asset coverage requirements of
Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the Investment Company Act of 1940, as amended, whether or not it is subject to those requirements, and to provide financial information to the holders of the Notes and
the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the Indenture.
In addition, on the occurrence of a change of control repurchase event, as defined in the Indenture, the Company will generally be
required to make an offer to purchase the outstanding Notes at a price equal to 100% of the principal amount of such Notes plus accrued and unpaid interest to the repurchase date.
Senior Secured Revolving Credit Facility
On July 30, 2021, the Company entered into Commitment Increase Agreements in connection with its senior secured revolving credit facility
originally entered into on August 9, 2018, or as subsequently amended and restated, the Senior Secured Revolving Credit Facility, with JPMorgan Chase Bank, N.A., as administrative agent, ING Capital LLC, as collateral agent, and the lenders
party thereto, which, among other things, increased the total facility amount from $4,025 to $4,200.
77
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 9. Financing Arrangements (continued)
FSKR Credit Facilities
On June 16, 2021, as a result of the consummation of the 2021 Merger, the Company assumed all of FSKRs obligations under its Senior
Secured Revolving Credit Facility, resulting in FSK remaining the sole borrower thereunder, and the various wholly-owned special purpose financing subsidiaries of FSKR became wholly-owned special purpose financing subsidiaries of the Company. Such
special purpose financing subsidiaries and their outstanding credit facilities are (a) Darby Creek LLC and the Darby Creek Credit Facility, (b) Dunlap Funding LLC and the Dunlap Credit Facility, (c) Juniata River LLC and the Juniata
River Credit Facility, (d) Burholme Funding LLC and the Burholme Prime Brokerage Facility, (e) Ambler Funding LLC and the Ambler Credit Facility and (f) Meadowbrook Run LLC and the Meadowbrook Run Credit Facility (such credit
facilities, together with the prior obligations of FSKR under the Senior Secured Revolving Credit Facility, collectively, the FSKR Credit Facilities). Information regarding the FSKR Credit Facilities is set forth in Part
IItem 1. Financial StatementsNotes to Unaudited Consolidated Financial StatementsNote 9. Financing Arrangements in FSKRs Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 2021, filed with the SEC on May 10, 2021.
Note 10. Commitments and Contingencies
The Company enters into contracts that contain a variety of indemnification provisions. The Companys maximum exposure under these
arrangements is unknown; however, the Company has not had prior claims or losses pursuant to these contracts. The Advisor has reviewed the Companys existing contracts and expects the risk of loss to the Company to be remote.
The Company is not currently subject to any material legal proceedings and, to the Companys knowledge, no material legal proceedings are
threatened against the Company. From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Companys rights under contracts with its
portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, the Company does not expect that any such proceedings will have a material effect upon its financial condition or results of operations.
Unfunded commitments to provide funds to portfolio companies are not recorded in the Companys consolidated balance sheets. Since these
commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The Company has sufficient liquidity to fund these commitments. As of September 30, 2021, the
Companys unfunded commitments consisted of the following:
Category /
Company (1)
Commitment
Amount
Senior Secured LoansFirst Lien
Advanced Dermatology & Cosmetic Surgery
$
3.6
Advanced Dermatology & Cosmetic Surgery
8.7
Advania Sverige AB
37.5
Affordable Care Inc
12.8
Affordable Care Inc
43.5
Alera Group Intermediate Holdings Inc
9.2
American Vision Partners
7.8
American Vision Partners
38.9
Arcos LLC/VA
4.5
Ardonagh Group Ltd
22.8
Ardonagh Group Ltd
54.8
Arrotex Australia Group Pty Ltd
2.2
AxiomSL Ltd
2.4
AxiomSL Ltd
2.3
Barbri Inc
30.2
BGB Group LLC
19.9
Corsearch Intermediate Inc
4.4
78
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 10. Commitments and
Contingencies (continued)
Category /
Company (1)
Commitment
Amount
CSafe Global
30.7
Dental Care Alliance Inc
18.0
Entertainment Benefits Group LLC
1.2
FloWorks International LLC
21.5
Follett Software Co
5.6
Foundation Consumer Brands LLC
6.6
Galway Partners Holdings LLC
11.7
Galway Partners Holdings LLC
31.7
Heniff Transportation Systems LLC
11.3
Higginbotham Insurance Agency Inc
2.6
Individual FoodService
4.5
Individual FoodService
3.3
Insight Global LLC
21.1
J S Held LLC
13.9
J S Held LLC
24.1
Karman Space Inc
3.6
KBP Investments LLC
26.7
Kellermeyer Bergensons Services LLC
47.4
Lakeview Farms Inc
10.8
Lakeview Farms Inc
6.0
Lexitas Inc
15.0
Lexitas Inc
5.4
MB2 Dental Solutions LLC
90.0
Med-Metrix
31.3
Med-Metrix
7.8
Monitronics International Inc
33.8
Motion Recruitment Partners LLC
59.6
Net Documents
7.3
Net Documents
2.9
New Era Technology Inc
18.5
New Era Technology Inc
4.6
Oxford Global Resources LLC
15.3
Oxford Global Resources LLC
6.4
P2 Energy Solutions Inc.
10.6
Parata Systems
22.0
Parata Systems
5.5
Production Resource Group LLC
20.2
Revere Superior Holdings Inc
3.2
Rise Baking Company
4.4
RSC Insurance Brokerage Inc
7.6
RSC Insurance Brokerage Inc
23.2
SAMBA Safety Inc
6.1
SAMBA Safety Inc
2.4
Sequel Youth & Family Services LLC
14.5
Sequential Brands Group Inc.
7.7
Source Code LLC
15.0
Spins LLC
7.9
79
Table of Contents
FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 10. Commitments and
Contingencies (continued)
Category / Company (1)
Commitment
Amount
Summit Interconnect Inc
48.7
Sweeping Corp of America Inc
1.3
Sweeping Corp of America Inc
3.9
Truck-Lite Co LLC
25.2
Wealth Enhancement Group LLC
28.2
Wealth Enhancement Group LLC
0.4
Woolpert Inc
25.6
Asset Based Finance
Byrider Finance LLC, Structured Mezzanine
11.0
Callodine Commercial Finance LLC, 2L Term Loan B
40.3
Home Partners JV 2, Structured Mezzanine
14.8
Jet Edge International LLC, Term Loan
38.3
Toorak Capital Partners LLC, Structured Mezzanine
20.0
Total
$
1,313.7
Unfunded Asset Based Finance/Other commitments
$
511.3
(1)
May be commitments to one or more entities affiliated with the named company.
As of September 30, 2021, the Companys debt commitments are comprised of $332.4 revolving credit facilities and $981.3 delayed
draw term loans, which generally are used for acquisitions or capital expenditures and are subject to certain performance tests. Such unfunded debt commitments have a fair value representing unrealized appreciation (depreciation) of $(5.6). The
Companys unfunded Asset Based Finance/Other commitments generally require certain conditions to be met or actual approval from the Advisor prior to funding.
As of September 30, 2021, the Company also has an unfunded commitment to provide $350.2 of capital to COPJV. The capital commitment can be satisfied with contributions of cash and/or
investments. The capital commitments cannot be drawn without an affirmative vote by both the Companys and SCRSs representatives on COPJVs board of managers.
While the Company does not expect to fund all of its unfunded commitments, there can be no assurance that it will not be required to do so.
In the normal course of business, the Company may enter into guarantees on behalf of portfolio companies. Under such arrangements, the
Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. The Company has no such guarantees outstanding at September 30,
2021 and December 31, 2020.
Note 11. Financial Highlights
The following is a schedule of financial highlights of the Company for the nine months ended September 30, 2021 and the year ended
December 31, 2020:
Nine Months Ended
September 30, 2021
(Unaudited)
Year Ended
December 31, 2020
Per Share Data: (1)
Net asset value, beginning of period
$
25.02
$
30.54
Results of operations (2)
Net investment income (loss)
2.11
2.66
Net realized and unrealized appreciation (depreciation) on investments and secured borrowing and gain/loss on foreign
currency
4.29
(5.85
)
Net increase (decrease) in net assets resulting from operations
6.40
(3.19
)
80
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FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 11. Financial Highlights (continued)
Nine Months Ended
September 30, 2021
(Unaudited)
Year Ended
December 31, 2020
Stockholder distributions (3)
Distributions from net investment income
(1.85
)
(2.56
)
Distributions from net realized gain on investments
Net decrease in net assets resulting from stockholder distributions
(1.85
)
(2.56
)
Capital share transactions
Issuance of common stock (4)
(2.20
)
Repurchases of common stock (5)
0.00
0.23
Deduction of deferred costs (6)
(0.23
)
Net increase (decrease) in net assets resulting from capital share transactions
(2.43
)
0.23
Net asset value, end of period
$
27.14
$
25.02
Per share market value, end of period
$
22.04
$
16.56
Shares outstanding, end of period
285,076,619
123,755,965
Total return based on net asset
value (7)
15.87
%
(9.69
)%
Total return based on market
value (8)
44.74
%
(19.73
)%
Ratio/Supplemental Data:
Net assets, end of period
$
7,736
$
3,096
Ratio of net investment income to average net
assets (9)
10.71
%
10.44
%
Ratio of total operating expenses to average net assets (9)
9.14
%
9.71
%
Ratio of net operating expenses to average net
assets (9)
8.73
%
9.71
%
Portfolio turnover (10)
37.81
%
32.95
%
Total amount of senior securities outstanding, exclusive of treasury securities
$
8,511
$
4,042
Asset coverage per unit (11)
1.91
1.77
(1)
Per share data may be rounded in order to recompute the ending net asset value per share.
(2)
The per share data was derived by using the weighted average shares outstanding during the applicable period.
(3)
The per share data for distributions reflect the actual amount of distributions paid per share during the
applicable period.
(4)
The issuance of common stock on a per share basis reflects the incremental net asset value changes as a result
of the issuance of shares of common stock pursuant to the 2021 Merger at the fair value of FSKs common stock issued based on the shares outstanding resulting from the 2021 Merger.
(5)
Represents the incremental impact of the Companys share repurchase program by buying shares in the open
market at a price lower than net asset value per share.
(6)
Represents the impact on NAV of merger accounting by the permanent
write-off of the Companys deferred merger costs and FSKRs deferred costs and prepaid assets as well as the
mark-to-market of FSKRs 4.25% Notes.
(7)
The total return based on net asset value for each period presented was calculated by taking the net asset
value per share as of the end of the applicable period, adding the cash distributions per share that were declared during the period and dividing the total by the net asset value per share at the beginning of the period. Total return based on net
asset value does not consider the effect of any sales commissions or charges that may be incurred in connection with the sale of shares of the Companys common stock. The historical calculation of total return based on net asset value in the
table should not be considered a representation of the Companys future total return based on net asset value, which may be greater or less than
81
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FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 11. Financial Highlights (continued)
the return shown in the table due to a number of factors, including the Companys ability or inability to make investments in companies that meet its investment criteria, the interest rates
payable on the debt securities the Company acquires, the level of the Companys expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which the Company encounters competition in its
markets and general economic conditions. As a result of these factors, results for any previous period should not be relied upon as being indicative of performance in future periods. The total return calculations set forth above represent the total
return on the Companys investment portfolio during the applicable period and do not represent an actual return to stockholders.
(8)
The total return based on market value for each period presented was calculated based on the change in market
price during the applicable period, including the impact of distributions reinvested in accordance with the Companys DRP. Total return based on market value does not consider the effect of any sales commissions or charges that may be incurred
in connection with the sale of shares of the Companys common stock. The historical calculation of total return based on market value in the table should not be considered a representation of the Companys future total return based on
market value, which may be greater or less than the return shown in the table due to a number of factors, including the Companys ability or inability to make investments in companies that meet its investment criteria, the interest rates
payable on the debt securities the Company acquires, the level of the Companys expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which the Company encounters competition in its
markets, general economic conditions and fluctuations in per share market value. As a result of these factors, results for any previous period should not be relied upon as being indicative of performance in future periods.
(9)
Weighted average net assets during the applicable period are used for this calculation. Ratios for the nine
months ended September 30, 2021 are annualized. Annualized ratios for the nine months ended September 30, 2021 are not necessarily indicative of the ratios that may be expected for the year ending December 31, 2021. The following is a
schedule of supplemental ratios for the nine months ended September 30, 2021 and year ended December 31, 2020:
Nine Months Ended
September 30, 2021
(Unaudited)
Year Ended
December 31, 2020
Ratio of net subordinated income incentive fees to average net assets
0.76
%
Ratio of interest expense to average net assets
4.28
%
5.36
%
Ratio of excise taxes to average net assets
0.32
%
(10)
Portfolio turnover for the nine months ended September 30, 2021 is not annualized.
(11)
Asset coverage per unit is the ratio of the carrying value of the Companys total consolidated assets,
less liabilities and indebtedness not represented by senior securities, to the aggregate amount of senior securities representing indebtedness.
Note 12. Acquisition of FSKR
On
June 16, 2021, the Company completed its acquisition of FSKR, pursuant the 2020 Merger Agreement. Pursuant to the 2020 Merger Agreement, Merger Sub merged with and into FSKR, with FSKR continuing as the surviving company and as a wholly-owned
subsidiary of the Company, or the First Merger, and, immediately thereafter, FSKR merged with and into the Company, with the Company continuing as the surviving company, or together with the First Merger, the 2021 Merger.
In accordance with the terms of the 2020 Merger Agreement, each outstanding share of FSKR common stock was converted into the right to receive
0.9498 shares of the Companys common stock. This exchange ratio was determined based on the closing net asset value, or NAV, per share of $26.77 and $25.42 for the Company and FSKR, respectively, as of June 14, 2021, to ensure that the
NAV of shares investors would in FSK was equal to the NAV of the shares they held in FSKR. As a result, the Company issued an aggregate of approximately 161,374,028 shares of its common stock to former FSKR stockholders.
The 2021 Merger was considered a tax-free reorganization. The 2021 Merger was accounted for in
accordance with the asset acquisition method of accounting as detailed in Accounting Standards Codification 805-50, Business Combinations
82
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FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 12. Acquisition of FSKR (continued)
Related Issues . The fair value of the consideration paid by the Company in the 2021 Merger was allocated to the assets acquired and liabilities assumed based on
their relative fair values as of the date of acquisition and did not give rise to goodwill.
The following table summarized the allocation
of the purchase price to the assets acquired and liabilities assumed as a result of the 2021 Merger:
Common stock purchased
$
3,650
Total purchase price
$
3,650
Assets acquired, at fair value:
Investments
$
7,227
Cash and cash equivalents
293
Other assets
221
Total assets acquired
$
7,741
Debt
3,794
Distributions payable
93
Other liabilities assumed
204
Total purchase price
$
3,650
The company incurred $8 of professional fees and other costs associated with the 2021 Merger. Such costs were
capitalized by the Company and included in the purchase price of the 2021 Merger. Deferred costs and prepaid assets of $19 were permanently written off. Additionally, the Company
marked-to-market the fair value of FSKRs 4.25% Notes, which was $26 greater than its carrying amount.
Note 13. Subsequent Events
1.650% Notes due 2024
Notes and 3.125% Notes due 2028
On October 12, 2021, the Company and U.S. Bank National Association, or the Trustee, entered into
a Ninth Supplemental Indenture, or the Ninth Supplemental Indenture, and a Tenth Supplemental Indenture, or the Tenth Supplemental Indenture, to the Indenture, dated July 14, 2014, between the Company and the Trustee, or the Base Indenture, and
together with the Ninth Supplemental Indenture and the Tenth Supplemental Indenture, the Indenture. The Ninth Supplemental Indenture relates to the Companys issuance of $500 aggregate principal amount of its 1.650% notes due 2024, or the 2024
Notes. The Tenth Supplemental Indenture relates to the Companys issuance of $750 aggregate principal amount of its 3.125% notes due 2028, or the 2028 Notes, and together with the 2024 Notes, the Notes.
The 2024 Notes will mature on October 12, 2024 and the 2028 Notes will mature on October 12, 2028. The Notes may be redeemed in whole
or in part at the Companys option at any time or from time to time at the redemption prices set forth in the Indenture. The 2024 Notes bear interest at a rate of 1.650% per year, and the 2028 Notes bear interest at a rate of 3.125% per year,
payable semi-annually on April 12th and October 12th of each year, commencing on April 12, 2022. The Notes are general unsecured obligations of the Company that rank senior in right of payment to all of the Companys existing and future
indebtedness that is expressly subordinated in right of payment to the Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the Company, rank effectively junior to any of the Companys secured
indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to all existing and future indebtedness (including trade payables)
incurred by the Companys subsidiaries, financing vehicles or similar facilities.
The Indenture contains certain covenants, including
covenants requiring the Company to comply with the asset coverage requirements of Section 18(a)(1)(A) as modified by Section 61(a)(1) and (2) of the Investment Company Act of 1940, as amended, whether or not it is subject to those
requirements, and to provide financial information to the holders of the Notes and
83
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FS KKR Capital Corp.
Notes to Unaudited Consolidated Financial Statements (continued)
(in millions, except share and per share amounts)
Note 13. Subsequent Events (continued)
the Trustee if the Company is no longer subject to the reporting requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and
exceptions that are described in the Indenture.
In addition, on the occurrence of a change of control repurchase event, as
defined in the Indenture, the Company will generally be required to make an offer to purchase the outstanding Notes at a price equal to 100% of the principal amount of such Notes plus accrued and unpaid interest to the repurchase date.
5.000% Notes due 2022
On
October 12, 2021, the Company issued a notice of redemption providing for the redemption of its 5.00% senior notes due 2022, or the 2022 Notes, in full on November 11, 2021 for 100% of the aggregate principal amount of the 2022 Notes, plus
the accrued and unpaid interest through, but excluding, November 11, 2021. All of the 2022 Notes will be redeemed in connection with the redemption.
Juniata River Credit Facility
On
October 12, 2021, Juniata River LLC prepaid all outstanding borrowings under, and terminated, its revolving credit facility with JPMorgan Chase Bank, N.A.
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Item 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations.
(in millions, except share and per share amounts)
The information contained in this section should be read in conjunction with our unaudited consolidated financial statements and related notes
thereto appearing elsewhere in this quarterly report on Form 10-Q. In this report, we, us, our and the Company refer to FS KKR Capital Corp. and the
Advisor refers to FS/KKR Advisor, LLC.
Forward-Looking Statements
Some of the statements in this quarterly report on Form 10-Q constitute forward-looking statements
because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q may include statements as to:
our future operating results;
our business prospects and the prospects of the companies in which we may invest, including our and their ability
to achieve our respective objectives as a result of the current COVID-19 pandemic;
the impact of the investments that we expect to make;
the ability of our portfolio companies to achieve their objectives;
our current and expected financings and investments;
receiving and maintaining corporate credit ratings and changes in the general interest rate environment;
the adequacy of our cash resources, financing sources and working capital;
the timing and amount of cash flows, distributions and dividends, if any, from our portfolio companies;
our contractual arrangements and relationships with third parties;
actual and potential conflicts of interest with the other funds in the Advisor, FS Investments, KKR Credit or any
of their respective affiliates;
the dependence of our future success on the general economy and its effect on the industries in which we may
invest;
general economic and political trends and other external factors, including the current COVID-19 pandemic and related disruptions caused thereby;
our use of financial leverage;
the ability of the Advisor to locate suitable investments for us and to monitor and administer our investments;
the ability of the Advisor or its affiliates to attract and retain highly talented professionals;
our ability to maintain our qualification as a RIC and as a BDC;
the impact on our business of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, and the
rules and regulations issued thereunder;
the effect of changes to tax legislation on us and the portfolio companies in which we may invest and our and
their tax position; and
the tax status of the enterprises in which we may invest.
In addition, words such as anticipate, believe, expect and intend indicate a forward-looking
statement, although not all forward-looking statements include these words. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results
could differ materially from those implied or expressed in the forward-looking statements for any reason. Factors that could cause actual results to differ materially include:
changes in the economy;
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risks associated with possible disruption in our operations or the economy generally due to terrorism, natural
disasters or pandemics;
future changes in laws or regulations and conditions in our operating areas; and
the price at which shares of our common stock may trade on the New York Stock Exchange, or NYSE.
We have based the forward-looking statements included in this quarterly report on Form
10-Q on information available to us on the date of this quarterly report on Form 10-Q. Except as required by the federal securities laws, we undertake no obligation to
revise or update any forward-looking statements, whether as a result of new information, future events or otherwise. Stockholders are advised to consult any additional disclosures that we may make directly to stockholders or through reports that we
may file in the future with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. The forward-looking statements and projections contained in this quarterly report on Form 10-Q are excluded from the safe harbor protection provided by
Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Exchange Act.
Overview
We were incorporated under the general corporation laws of the State of Maryland on December 21, 2007 and formally commenced investment
operations on January 2, 2009. We are an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a BDC
under the 1940 Act and has elected to be treated for U.S. federal income tax purposes, and intends to qualify annually, as a RIC under Subchapter M of the Code.
We are externally managed by the Advisor pursuant to an investment advisory agreement, or the investment advisory agreement, and supervised by
our board of directors, a majority of whom are independent.
Our investment objectives are to generate current income and, to a lesser
extent, long-term capital appreciation. We seek to meet our investment objectives by:
utilizing the experience and expertise of the management team of the Advisor;
employing a defensive investment approach focused on long-term credit performance and principal protection;
focusing primarily on debt investments in a broad array of private U.S. companies, including middle-market
companies, which we define as companies with annual EBITDA of $25 million to $100 million at the time of investment;
investing primarily in established, stable enterprises with positive cash flows; and
maintaining rigorous portfolio monitoring in an attempt to anticipate and
pre-empt negative credit events within our portfolio, such as an event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company.
We pursue our investment objective by investing primarily in the debt of middle market U.S. companies with a focus on originated transactions
sourced through the network of the Advisor and its affiliates. We define direct originations as any investment where the Companys investment adviser, sub-adviser or their affiliates had negotiated the
terms of the transaction beyond just the price, which, for example, may include negotiating financial covenants, maturity dates or interest rate terms. These directly originated transactions include participation in other originated transactions
where there may be third parties involved, or a bank acting as an intermediary, for a closely held club, or similar transactions. These direct originations include investments originated by our former investment adviser, our former investment sub-adviser or their affiliates.
Our portfolio is comprised primarily of investments in senior secured
loans and second lien secured loans of private middle market U.S. companies and, to a lesser extent, subordinated loans and certain asset-based financing loans of private U.S. companies. Although we do not expect a significant portion of our
portfolio to be comprised of subordinated loans, there is no limit on the amount of such loans in which we may invest. We may purchase interests in loans or make other debt investments, including investments in senior secured bonds, through
secondary market transactions in the over-the-counter market or directly from our target companies as primary market or directly originated investments. In
connection with our debt investments, we may on occasion receive equity interests such as warrants or options as additional consideration. We may also purchase or otherwise acquire interests in the form of common or preferred equity or
equity-related securities, such as rights and warrants that may be converted into or exchanged for common stock or other equity or the cash value of common stock or other equity, including through a
co-investment with a financial sponsor or possibly the restructuring of an investment. In addition, a portion of our portfolio may be comprised of corporate bonds, structured products, other debt securities
and derivatives, including total
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return swaps and credit default swaps. The Advisor will seek to tailor our investment focus as market conditions evolve. Depending on market conditions, we may increase or decrease our exposure
to less senior portions of the capital structures of our portfolio companies or otherwise make opportunistic investments, such as where the market price of loans, bonds or other securities reflects a lower value than deemed warranted by the
Advisors fundamental analysis. Such investment opportunities may occur due to general dislocations in the markets, a misunderstanding by the market of a particular company or an industry being out of favor with the broader investment community
and may include event driven investments, anchor orders and structured products.
The senior secured loans, second lien secured loans and
senior secured bonds in which we invest generally have stated terms of three to seven years and subordinated debt investments that we make generally have stated terms of up to ten years, but the expected average life of such securities is generally
three to four years. However, we may invest in loans and securities with any maturity or duration. Our debt investments may be rated by a NRSRO and, in such case, generally will carry a rating below investment grade (rated lower than
Baa3 by Moodys or lower than BBB- by S&P). We may invest without limit in debt or other securities of any rating, as well as debt or other securities that have not been rated
by a NRSRO.
Acquisition of FSKR
On
June 16, 2021, we completed the 2021 Merger. Pursuant to the 2020 Merger Agreement, Merger Sub merged with and into FSKR, with FSKR continuing as the surviving company and as a wholly-owned subsidiary of the Company, or the First Merger, and,
immediately thereafter, FSKR merged with and into the Company, with the Company continuing as the surviving company. In accordance with the terms of the 2020 Merger Agreement, (i) each outstanding share of FSKR common stock was converted into
the right to receive 0.9498 shares of the Companys common stock. This exchange ratio was determined based on the closing net asset value, or NAV, per share of $26.77 and $25.42 for the Company and FSKR, respectively, as of June 14, 2021,
to ensure that the NAV of shares investors will own in FSK is equal to the NAV of the shares they held in FSKR. As a result, the Company issued an aggregate of approximately 161,374,028 shares of its common stock to former FSKR stockholders.
Following the consummation of the 2021 Merger, we entered into the investment advisory agreement, which replaced the prior investment advisory agreement.
Revenues
The principal measure of our
financial performance is net increase in net assets resulting from operations, which includes net investment income, net realized gain or loss on investments, net realized gain or loss on foreign currency, net unrealized appreciation or depreciation
on investments and net unrealized gain or loss on foreign currency. Net investment income is the difference between our income from interest, dividends, fees and other investment income and our operating and other expenses. Net realized gain or loss
on investments is the difference between the proceeds received from dispositions of portfolio investments and their amortized cost, including the respective realized gain or loss on foreign currency for those foreign denominated investment
transactions. Net realized gain or loss on foreign currency is the portion of realized gain or loss attributable to foreign currency fluctuations. Net unrealized appreciation or depreciation on investments is the net change in the fair value of our
investment portfolio, including the respective unrealized gain or loss on foreign currency for those foreign denominated investments. Net unrealized gain or loss on foreign currency is the net change in the value of receivables or accruals due to
the impact of foreign currency fluctuations.
We principally generate revenues in the form of interest income on the debt investments we
hold. In addition, we generate revenues in the form of non-recurring commitment, closing, origination, structuring or diligence fees, monitoring fees, fees for providing managerial assistance, consulting fees,
prepayment fees and performance-based fees. We may also generate revenues in the form of dividends and other distributions on the equity or other securities we hold.
Expenses
Our primary operating expenses
include the payment of management and incentive fees and other expenses under the investment advisory agreement and the administration agreement, interest expense from financing arrangements and other indebtedness, and other expenses necessary for
our operations. The management and incentive fees compensate the Advisor for its work in identifying, evaluating, negotiating, executing, monitoring and servicing our investments.
The Advisor oversees our day-to-day operations, including the
provision of general ledger accounting, fund accounting, legal services, investor relations, certain government and regulatory affairs activities, and other administrative services. The Advisor also performs, or oversees the performance of, our
corporate operations and required administrative services, which includes being responsible for the financial records that we are required to maintain and preparing reports for our stockholders and reports filed with the SEC. In addition, the
Advisor assists us in calculating our net asset value, overseeing the preparation
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and filing of tax returns and the printing and dissemination of reports to our stockholders, and generally overseeing the payment of our expenses and the performance of administrative and
professional services rendered to us by others.
Pursuant to the administration agreement, we reimburse the Advisor for expenses necessary
to perform services related to our administration and operations, including the Advisors allocable portion of the compensation and related expenses of certain personnel of FS Investments and KKR Credit providing administrative services to us
on behalf of the Advisor. We reimburse the Advisor no less than quarterly for all costs and expenses incurred by the Advisor in performing its obligations and providing personnel and facilities under the administration agreement. The Advisor
allocates the cost of such services to us based on factors such as total assets, revenues, time allocations and/or other reasonable metrics. Our board of directors reviews the methodology employed in determining how the expenses are allocated to us
and the proposed allocation of administrative expenses among us and certain affiliates of the Advisor. Our board of directors then assesses the reasonableness of such reimbursements for expenses allocated to us based on the breadth, depth and
quality of such services as compared to the estimated cost to us of obtaining similar services from third-party service providers known to be available. In addition, our board of directors considers whether any single third-party service provider
would be capable of providing all such services at comparable cost and quality. Finally, our board of
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.