FS KKR Capital Corp (FS Investment Corporation) - 8-K Summary
Business Context and Reporting Period
This Form 8-K, dated August 9, 2017, reports on FS Investment Corporation (the "Company"). The filing incorporates by reference a press release detailing operating results for the quarter ended June 30, 2017. The Company is a Maryland corporation with principal executive offices in Philadelphia, Pennsylvania.
Key Financial Metrics and Distributions
- Regular Cash Distribution: $0.22275 per share, payable on or about October 3, 2017, to stockholders of record as of September 20, 2017.
- Fee Waiver: Effective October 1, 2017, through September 30, 2018, the investment adviser (FB Income Advisor, LLC) will waive a portion of the base management fee to reduce the effective rate to 1.50% of average gross assets (down from 1.75%).
- Incentive Fee Calculation: The subordinated incentive fee will continue to be calculated as if the base management fee remained at 1.75%.
- Financial Results: Specific revenue, profit, cash flow, margin, debt, and liquidity figures for the quarter ended June 30, 2017, are not provided in this filing text; they are contained in the attached Press Release (Exhibit 99.1).
Material Changes and Future Outlook
- Distribution Reduction: Subject to market conditions, the Board intends to reduce the regular cash distribution to $0.19 per share for the fourth quarter of 2017 and subsequent quarters.
- Special Distribution Plan: The Company intends to make a special distribution in the fourth quarter of 2018. This distribution will equal the cumulative net investment income earned during the twelve months following October 1, 2017, that exceeds $0.76 per share.
- Management Commentary: The Company will host a conference call on August 10, 2017, and provide a presentation on its website regarding the Q2 2017 results.
Risks and Contingencies
The filing includes standard forward-looking statement disclaimers. Risks cited include economic changes, potential operational disruptions due to terrorism or natural disasters, regulatory changes, and stock price volatility on the New York Stock Exchange. The Company undertakes no obligation to update these statements.
Investor Verification Checklist
- Verify the specific Q2 2017 net investment income and earnings per share in the attached Press Release (Exhibit 99.1).
- Confirm the exact date of the record date (September 20, 2017) and payment date (October 3, 2017) for the $0.22275 distribution.
- Monitor the Company's website for the presentation and conference call transcript scheduled for August 10, 2017.
- Review the Investment Advisory Agreement to understand the mechanics of the fee waiver and the calculation of the special distribution in 2018.