FS KKR Capital Corp. 8-K Summary
Business Context and Reporting Period
FS KKR Capital Corp. (NYSE: FSK) filed a Current Report on Form 8-K dated July 26, 2019. The filing reports the creation of a direct financial obligation through the issuance of additional senior notes.
Key Financial Metrics
- Debt Issuance: $175 million aggregate principal amount of 4.750% Notes due 2022 (Add-On Notes).
- Net Proceeds: Approximately $175.7 million.
- Transaction Costs: Approximately $1.1 million in underwriting discounts and commissions, plus approximately $350,000 in estimated offering expenses.
- Interest Rate: 4.750% per annum.
- Interest Accrual: Commenced May 15, 2019.
- Interest Payment Dates: Semi-annually on May 15 and November 15, starting November 15, 2019.
- Maturity Date: May 15, 2022.
Material Changes
The Company increased its outstanding debt under the existing 4.750% Notes due 2022 series. The Add-On Notes are fungible with the previously issued $275 million of Existing Notes, bringing the total principal amount of this series to $450 million. The filing does not provide comparative financial metrics such as revenue, profit, or cash flow for the period.
Outlook, Risks, and Use of Proceeds
Use of Proceeds: The Company intends to use the net proceeds to repay outstanding indebtedness under its financing arrangements.
Security Status: The Notes are general unsecured obligations ranking pari passu with existing unsecured unsubordinated indebtedness and structurally junior to subsidiary indebtedness.
Covenants: The Indenture requires compliance with asset coverage requirements under the Investment Company Act of 1940. A change of control repurchase event would require the Company to offer to purchase the Notes at 100% of principal plus accrued interest.
Investor Verification Checklist
- Verify the total outstanding principal of the 4.750% Notes due 2022 is now $450 million ($275 million existing + $175 million new).
- Confirm the specific financing arrangements being repaid with the $175.7 million in net proceeds.
- Review the Company's current asset coverage ratio to ensure compliance with Investment Company Act covenants following the new issuance.
- Check for any subsequent filings regarding the redemption or refinancing of the Notes prior to the May 15, 2022 maturity.