FS KKR CAPITAL CORP. FS KKR Capital Corp.
F i n a n c i a l I n f o r m a t i o n
Quarter Ended March 31, 2023
All information is as of March 31, 2023 unless otherwise noted
Summary of Quarterly Results
First Quarter Performance
Distribution/Dividend
Portfolio Diversification
- Net investment income (NII) for the quarter ended March 31, 2023 was $229 million, or $0.81 per share, as compared to $226 million, or $0.80 per share, for the quarter ended December 31, 2022.
- Adjusted net investment income (Adjusted NII) for the quarter ended March 31, 2023 was $219 million, or $0.78 per share, as compared to $229 million, or $0.81 per share, for the quarter ended December 31, 2022(1).
- Net asset value (NAV) per share as of March 31, 2023 was $24.93, compared to $24.89 as of December 31, 2022.
- New investment fundings in the first quarter were approximately $270 million. Net investment activity in the first quarter was $6 million, including $122 million of sales to Credit Opportunities Partners JV, LLC (COPJV).
- Paid a total distribution of $0.70 per share for the first quarter of 2023.
- Declared a distribution of $0.70 per share for the second quarter of 2023, which consists of a base distribution amount of $0.64 per share and a supplemental distribution amount of $0.06 per share.
- Declared special distributions totaling $0.15 per share, which will be paid in three equal installments of $0.05 per share by the end of 2023.
- For the quarter ended March 31, 2023, the Adjusted NII / Dividend coverage ratio was 111%(2).
- Dividend yield on NAV per share was 11.8% and dividend yield on market value of common stock was 16.3% as of May 3, 2023(3).
- Diversified portfolio with 189 portfolio companies spread across 23 industries.
- Exposure to the top ten largest portfolio companies by fair value was 19% as of March 31, 2023.
Capital Structure
- 54% of our drawn leverage was unsecured as of March 31, 2023 and our weighted average effective rate on borrowings was 5.08%.
- $3.0 billion of liquidity in undrawn debt, cash, and unsettled trades.
- No upcoming maturities until July 2024.
- See the Appendix for a reconciliation between NII and Adjusted NII.
- Based on the declared second quarter distribution of $0.70 per share.
- Based on the 2023 expected minimum total distributions of $2.95 per share as a percentage of FSK's NAV per share of $24.93 and FSK's closing market price as of May 3, 2023.
2
Financial Results
(Dollar amounts in millions, except per share data) | 3/31/22 | 6/30/22 | 9/30/22 | 12/31/22 | 3/31/23 |
NII per share | $0.77 | $0.71 | $0.76 | $0.80 | $0.81 |
Adjusted NII per share(1) | $0.72 | $0.67 | $0.73 | $0.81 | $0.78 |
Net realized and unrealized gains (losses) per share | $0.02 | ($0.96) | ($1.21) | ($0.56) | ($0.11) |
Adjusted net realized and unrealized gains (losses) per share | $0.07 | ($0.92) | ($1.17) | ($0.52) | ($0.07) |
Net increase (decrease) in net assets resulting from operations (earnings per share) | $0.79 | ($0.26) | ($0.45) | $0.24 | $0.71 |
Stockholder distributions declared per share | $0.68 | $0.67 | $0.68 | $0.70 | $0.70 |
Special distributions declared per share(2) | - | - | - | - | $0.05 |
Net asset value per share at period end | $27.33 | $26.41 | $25.30 | $24.89 | $24.93 |
Weighted average shares outstanding (in millions) | 284.3 | 283.9 | 283.2 | 282.7 | 280.9 |
Shares outstanding, end of period (in millions) | 284.1 | 283.5 | 283.0 | 281.7 | 280.1 |
Total investments at fair value | $16,554 | $16,178 | $15,792 | $15,377 | $15,277 |
Total assets | $17,985 | $17,189 | $16,716 | $16,124 | $16,058 |
Cash(3) | $369 | $269 | $266 | $251 | $250 |
Total debt(4) | $9,879 | $9,347 | $9,176 | $8,731 | $8,713 |
Debt-to-equity, Net(5) | 1.12x | 1.15x | 1.19x | 1.18x | 1.18x |
Adjusted NII / stockholder distributions declared | 106% | 100% | 107% | 116% | 111% |
- See the Appendix for a reconciliation between NII and Adjusted NII.
- Consists of three payments of $0.05 per share during Q2 2023, Q3 2023, and Q4 2023.
- Includes cash, restricted cash, and cash denominated in foreign currency.
- Principal amount outstanding.
- Net debt-to-equity ratio is debt outstanding, net of cash and foreign currency and net payable/receivable for investments purchased/sold and repaid, divided by net assets.
3
Portfolio Highlights
As of and for Three Months Ended | |||||
(Dollar amounts in millions) | 3/31/22 | 6/30/22 | 9/30/22 | 12/31/22 | 3/31/23 |
Investment at Fair Value: | |||||
First Lien Senior Secured Loans | 59.9% | 61.9% | 61.9% | 60.3% | 61.0% |
Second Lien Senior Secured Loans | 8.6% | 8.0% | 7.9% | 7.8% | 7.7% |
Other Senior Secured Debt | 0.7% | 0.7% | 0.7% | 0.7% | 0.7% |
Subordinated Debt | 0.5% | 0.5% | 1.6% | 1.7% | 1.8% |
Asset Based Finance | 13.2% | 13.1% | 11.6% | 12.4% | 11.7% |
Credit Opportunities Partners JV, LLC | 8.9% | 9.3% | 9.3% | 9.3% | 9.1% |
Preferred Equity(1) | 4.2% | 3.9% | 4.7% | 5.3% | 5.7% |
Equity/Other | 4.0% | 2.6% | 2.3% | 2.5% | 2.3% |
Total Investments | $16,554 | $16,178 | $15,792 | $15,377 | $15,277 |
Number of portfolio companies(2) | 193 | 192 | 195 | 197 | 189 |
Interest Rate Type:(3) | |||||
% Floating Rate | 87.1% | 87.4% | 89.1% | 89.0% | 89.4% |
% Fixed Rate | 12.9% | 12.6% | 10.9% | 11.0% | 10.6% |
Net Interest Margin: | |||||
Weighted average annual yield on accruing debt investments(4) | 8.3% | 9.2% | 10.4% | 11.4% | 11.7% |
Weighted average effective interest rate on borrowings(5) | 3.1% | 3.5% | 4.2% | 4.8% | 5.1% |
- Included within Equity/Other in FSK's Quarterly and Annual Reports on Form 10-Q and 10-K, respectively.
- Does not look through to FSK's portfolio companies held solely in COPJV. COPJV is a joint venture between FSK and South Carolina Retirement Systems Group Trust (SCRS).
- Represents interest rates on debt investments (see FSK's Quarterly Report on Form 10-Q for the definition of debt investments) at US$ fair value. Floating Rate includes variable interest rates on Asset Based Finance investments that can change quarter to quarter.
- Excludes the impact of the Merger in Q2 2021. On June 16, 2021, FS KKR Capital Corp. ("FSK") completed its merger (the "Merger") with FS KKR Capital Corp. II. Pursuant to the Merger, FS KKR Capital Corp. II merged with and into FSK, with FSK continuing as the surviving company. Excluding the impact of the Merger, FSK's weighted average annual yield on all debt investments was 10.8% as of March 31, 2023. See FSK's Quarterly Report on Form 10-Q for additional information on the calculation of weighted average annual yield on accruing debt investments and weighted average annual yield on all debt investments. On a GAAP basis, FSK's weighted average annual yield was 12.3% on accruing debt investments and 11.4% on all debt investments as of March 31, 2023.
- Includes the effect of non-usage fees.
4
FSK Investment Portfolio Overview
189 | 19% | 69% | $114mm / 6.0x |
portfolio companies(1) | FV in top-10 portfolio | of investments in | median portfolio company EBITDA & |
companies(2) | senior secured debt(2) | leverage(3) | |
89% | 11.7% | 2.7% | ~75% |
of debt investments | wtd. avg. annual yield on | non-accrual rate at FV | lead, co-lead, or sole origination(6) |
are floating rate(4) | accruing debt investments(5) |
Security Exposure (by fair value)
5.7% | ||||||
2.3% | Senior Secured Loans-First Lien | |||||
9.1% | Senior Secured Loans-Second Lien | |||||
Other Senior Secured Debt | ||||||
11.7% | Subordinated Debt | |||||
1.8% | 61.0% | Asset Based Finance | ||||
7.7% | Credit Opportunities Partners JV, LLC | |||||
0.7% | Preferred Equity (7) | |||||
Equity/Other
Sector Exposure (by fair value)
14.5% | 16.5% | Software & Services | |
Capital Goods | |||
1.8% | |||
Health Care Equipment & Services | |||
2.0% | |||
Commercial & Professional Services | |||
4.8% | |||
15.4% | Credit Opportunities Partners JV, LLC | ||
5.2% | Insurance | ||
Financial Services | |||
6.3% | |||
Media & Entertainment | |||
9.1% | 12.8% | Equity Real Estate Investment Trusts (REITs) | |
Consumer Discretionary Distribution & Retail | |||
11.6% | Other | ||
Total Investment Portfolio at Fair Value: $15.3bn
- Does not look through to FSK's portfolio companies held solely in COPJV.
- Figure excludes the impact of FSK's investment in COPJV.
- Based on underlying Direct Origination corporate investments using most recently reported financial information and may include pro forma adjustments. Certain Asset Based Finance, Equity/Other and portfolio companies with negative or de minimis EBITDA are excluded.
- See FSK's Quarterly Report on Form 10-Q for its definition of debt investments.
- Excludes the impact of the Merger. See FSK's Quarterly Report on Form 10-Q for additional information on the calculation of weighted average annual yield on accruing debt investments. On a GAAP basis, FSK's weighted average annual yield on accruing debt investments was 12.3% as of March 31, 2023.
- Figure based on fair value of Direct Origination investments only. KKR & BDC accounts' participation, KKR Capital Markets' involvement, and deal teams leading the negotiations/structuring are all considered when determining the Origination Role.
- Included within Equity/Other in FSK's Quarterly and Annual Reports on Form 10-Q and 10-K, respectively.
5
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
FS KKR Capital Corp. published this content on 05 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 May 2023 10:40:11 UTC.
