PHILADELPHIA and NEW YORK - FS KKR Capital Corp. (NYSE: NYSE:FSK), a business development company, has priced a public offering of $600 million in unsecured notes with a 6.875% interest rate, maturing on August 15, 2029. The company announced that the offering is set to close on June 6, 2024, pending customary closing conditions. These notes can be redeemed at any time at par plus a make-whole premium, although they are redeemable at par one month before maturity.
A consortium of financial institutions, including BofA Securities, BMO Capital Markets, and J.P. Morgan Securities, are serving as joint book-running managers for the offering. Other firms such as Barclays (LON:BARC) Capital and Goldman Sachs (NYSE:GS) & Co. are acting as joint lead managers, with additional co-managers involved.
FSK plans to allocate the net proceeds from this offering for general corporate purposes, which may include the repayment of existing debt under its credit facilities and other notes.
Investors are encouraged to review FSK's investment objectives, risks, charges, and expenses before investing. Relevant documents, including a pricing term sheet, a preliminary prospectus supplement, and the accompanying prospectus have been filed with the U.S. Securities and Exchange Commission (SEC) and should be read carefully.
FS KKR Capital Corp. specializes in providing credit solutions to private middle market U.S. companies, primarily investing in senior secured and subordinated debt. FS/KKR Advisor, LLC, a partnership between FS Investments and KKR Credit, advises FSK.
FS Investments, a global alternative asset manager, oversees more than $79 billion in assets and offers a range of investment solutions. KKR, a major global investment firm, provides alternative asset management and capital markets and insurance solutions.
The announcement includes forward-looking statements regarding FSK's future performance and operations. These statements are subject to uncertainties, and actual results could differ materially due to various factors, including economic changes, disruptions from events like terrorism or natural disasters, legislative changes, and market conditions.
This news article is based on a press release statement.
InvestingPro Insights
FS KKR Capital Corp. (FSK), known for its strategic credit solutions to private middle market U.S. companies, has recently been under the scrutiny of financial analysts and investors alike. As of the last twelve months leading up to Q1 2024, FSK reported a solid revenue of $1.808 billion, reflecting a growth of 6.67%. This growth, however, was not consistent into the first quarter of 2024, where the company experienced a quarterly revenue decline of 4.82%.
From an investment perspective, one of the standout InvestingPro Tips for FSK is its commendable track record of raising its dividend for 3 consecutive years, and even more impressively, maintaining those payments for 11 consecutive years. This consistency is a testament to the company's commitment to shareholder returns, and it aligns with the substantial dividend yield of 14.81% reported as of May 2024. Additionally, FSK's stock has been characterized by low price volatility, which could be appealing for investors seeking stable investments in uncertain market conditions.
On the valuation front, FSK's current Price/Earnings (P/E) ratio stands at 8.45, which might suggest an attractive entry point for value-oriented investors. However, it's important to note that some analysts have revised their earnings expectations downwards for the upcoming period, which could signal caution. Moreover, FSK's valuation implies a poor free cash flow yield, a metric that savvy investors often scrutinize when assessing the financial health of a company.
For those considering adding FSK to their portfolio, it's worth mentioning that the company is trading near its 52-week high, at 96.47% of this peak value. This could indicate a strong market confidence in the company's fundamentals or possibly a caution for those wary of buying at the top.
Investors looking for more in-depth analysis and additional InvestingPro Tips can explore https://www.investing.com/pro/FSK. There are currently 9 additional tips available, providing a broader investment perspective. For those interested in a yearly or biyearly Pro and Pro+ subscription, use the coupon code PRONEWS24 to get an additional 10% off, enhancing your market insight with valuable, actionable information.
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