FS KKR Capital Corp. Form 8-K Summary
Business Context and Reporting Period
FS KKR Capital Corp. (FSK) filed this Current Report on Form 8-K on July 15, 2019. The filing reports the entry into a material definitive agreement and the creation of a direct financial obligation related to a new debt issuance.
Key Financial Metrics and Transaction Details
- Debt Issuance: $400,000,000 aggregate principal amount of 4.625% Notes due 2024.
- Interest Rate: 4.625% per annum, payable semi-annually starting January 15, 2020.
- Maturity Date: July 15, 2024.
- Net Proceeds: Approximately $393.5 million.
- Transaction Costs: Approximately $4.0 million in underwriting discounts/commissions and $600,000 in estimated offering expenses.
- Use of Proceeds: Repayment of outstanding indebtedness under existing financing arrangements.
Material Changes and Debt Structure
The Company entered into a Fourth Supplemental Indenture with U.S. Bank National Association. The Notes are general unsecured obligations with the following seniority:
- Rank senior to all existing and future indebtedness expressly subordinated to the Notes.
- Rank pari passu with all existing and future unsecured unsubordinated indebtedness.
- Rank effectively junior to secured indebtedness to the extent of the value of securing assets.
- Rank structurally junior to all indebtedness incurred by subsidiaries or financing vehicles.
Management Commentary, Risks, and Covenants
The Indenture includes covenants requiring compliance with asset coverage requirements under the Investment Company Act of 1940. A "change of control repurchase event" will generally require the Company to offer to purchase outstanding Notes at 100% of principal plus accrued interest. The filing does not provide specific revenue, profit, cash flow, or margin data for the period, as this is a transaction-specific report rather than a periodic financial statement.
Key Facts for Investor Verification
- Verify the exact amount of outstanding indebtedness being repaid with the $393.5 million in net proceeds.
- Confirm the impact of the new 4.625% interest obligation on the Company's overall cost of capital and asset coverage ratios.
- Review the full text of the Fourth Supplemental Indenture (Exhibit 4.1) for specific limitations and exceptions to covenants.
- Monitor the Company's ability to meet semi-annual interest payments commencing January 15, 2020.