FS KKR Capital Corp. Form 8-K Summary
Business Context and Reporting Period
FS KKR Capital Corp. (NYSE: FSK) filed a Current Report on Form 8-K dated December 18, 2025. The filing details the completion of a material definitive agreement involving a collateralized loan obligation (CLO) transaction by a wholly-owned special purpose financing subsidiary, KKR - FSK CLO 3 LLC.
Key Financial Metrics and Transaction Details
The Company completed a $389.5 million term debt securitization on December 18, 2025. The debt is secured by a diversified portfolio primarily consisting of middle market loans and participation interests. The capital structure of the transaction is as follows:
- Total Debt Issued: $389,500,000
- Class A-1 Senior Secured Floating Rate Notes: $125,500,000 (Term SOFR + 1.47%)
- Class A-1 Senior Secured Floating Rate Loans: $150,000,000 (Term SOFR + 1.47%, convertible to Notes)
- Class A-2 Senior Secured Floating Rate Notes: $19,000,000 (Term SOFR + 1.65%)
- Class B Senior Secured Floating Rate Notes: $35,625,000 (Term SOFR + 1.80%)
- Class C Secured Deferrable Floating Rate Notes: $33,250,000 (Term SOFR + 2.10%)
- Class D Secured Deferrable Floating Rate Notes: $26,125,000 (Term SOFR + 3.15%)
- Equity Interest (Membership Interests): Approximately $87.1 million nominal value held 100% by the Company.
- Maturity Date: January 15, 2038
The filing does not provide specific revenue, profit, cash flow, or margin figures for the Company as a whole, as this report focuses solely on the specific debt transaction.
Material Changes and Management Commentary
The primary material change is the establishment of the new CLO vehicle and the transfer of an initial loan portfolio (Collateral Obligations) from the Company to the Issuer. In exchange, the Issuer transferred a portion of the net cash proceeds to the Company. Any excess fair market value of the collateral over the cash purchase price is deemed a capital contribution to the Issuer.
Management commentary highlights that the Company will serve as the portfolio manager for the Issuer. Notably, the Company has elected to irrevocably waive any base management fee or subordinated interest it may be entitled to under the Portfolio Management Agreement for the duration of its service.
Risks and Contingencies
The Debt has not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption. The indenture and credit agreements governing the Debt include customary covenants and events of default. The transaction relies on the performance of the underlying middle market loan portfolio.
Investor Verification Checklist
- Verify the composition and credit quality of the initial loan portfolio transferred to KKR - FSK CLO 3 LLC.
- Review the specific terms of the Portfolio Management Agreement (Exhibit 10.3) to confirm the scope of the fee waiver.
- Assess the impact of the $87.1 million nominal equity interest on the Company's consolidated balance sheet and leverage ratios.
- Confirm the liquidity implications of the net cash proceeds received from the Issuer.
- Examine the covenants and events of default detailed in the Indenture (Exhibit 10.1) and Credit Agreements (Exhibits 10.4 and 10.5).