FS KKR Capital Corp. Announces First Quarter 2025 Results
Net investment income increased to $0.67 per share from $0.61 in Q4 2024, while adjusted net investment income slightly decreased to $0.65 per share from $0.66. Net asset value declined to $23.37 per share from $23.64.
The company's portfolio reached $14.1 billion in fair value, with 63.3% invested in senior secured securities. Total purchases were $1,998 million versus $1,407 million in sales and repayments. The weighted average yield on accruing debt investments was 11.0%, down from 11.3% in Q4 2024.
FSK maintained its quarterly distribution structure with a $0.64 base and $0.06 supplemental distribution. The net debt to equity ratio increased to 114% from 104%, with investments on non-accrual status representing 2.1% of the portfolio at fair value.
Il reddito netto da investimenti è aumentato a 0,67 $ per azione rispetto a 0,61 nel quarto trimestre 2024, mentre il reddito netto da investimenti rettificato è leggermente diminuito a 0,65 $ per azione da 0,66. Il valore netto patrimoniale è sceso a 23,37 $ per azione da 23,64.
Il portafoglio della società ha raggiunto un valore equo di 14,1 miliardi di dollari, con il 63,3% investito in titoli senior garantiti. Gli acquisti totali sono stati di 1.998 milioni di dollari contro 1.407 milioni di vendite e rimborsi. Il rendimento medio ponderato sugli investimenti in debito in corso di maturazione è stato dell'11,0%, in calo rispetto all'11,3% del quarto trimestre 2024.
FSK ha mantenuto la struttura di distribuzione trimestrale con una base di 0,64 $ e una distribuzione supplementare di 0,06 $. Il rapporto tra debito netto e patrimonio netto è salito al 114% dal 104%, con investimenti in stato di non maturazione che rappresentano il 2,1% del portafoglio a valore equo.
Los ingresos netos por inversiones aumentaron a 0,67 $ por acción desde 0,61 en el cuarto trimestre de 2024, mientras que los ingresos netos ajustados por inversiones disminuyeron ligeramente a 0,65 $ por acción desde 0,66. El valor neto de los activos disminuyó a 23,37 $ por acción desde 23,64.
La cartera de la compañía alcanzó un valor justo de 14,1 mil millones de dólares, con un 63,3% invertido en valores senior garantizados. Las compras totales fueron de 1.998 millones de dólares frente a 1.407 millones en ventas y reembolsos. El rendimiento promedio ponderado de las inversiones en deuda devengada fue del 11,0%, por debajo del 11,3% del cuarto trimestre de 2024.
FSK mantuvo su estructura de distribución trimestral con una base de 0,64 $ y una distribución suplementaria de 0,06 $. La relación deuda neta a patrimonio aumentó al 114% desde el 104%, con inversiones en estado no devengado que representan el 2,1% de la cartera a valor justo.
순투자수익은 2024년 4분기 0.61달러에서 주당 0.67달러로 증가했으며, 조정 순투자수익은 0.66달러에서 주당 0.65달러로 소폭 감소했습니다. 순자산 가치는 23.64달러에서 23.37달러로 하락했습니다.
회사의 포트폴리오 공정 가치는 141억 달러에 달하며, 이 중 63.3%가 선순위 담보 증권에 투자되어 있습니다. 총 매입액은 19억 9,800만 달러, 매출 및 상환액은 14억 700만 달러였습니다. 발생 이자 부채 투자의 가중 평균 수익률은 11.3%에서 11.0%로 하락했습니다.
FSK는 분기별 배당 구조를 유지하며 기본 배당금 0.64달러와 추가 배당금 0.06달러를 지급했습니다. 순부채 대비 자본 비율은 104%에서 114%로 증가했으며, 발생하지 않은 투자 비중은 포트폴리오 공정 가치의 2.1%를 차지합니다.
Le revenu net d’investissement est passé à 0,67 $ par action contre 0,61 au quatrième trimestre 2024, tandis que le revenu net d’investissement ajusté a légèrement diminué à 0,65 $ par action contre 0,66. La valeur nette d’actif a baissé à 23,37 $ par action contre 23,64.
Le portefeuille de la société a atteint une juste valeur de 14,1 milliards de dollars, avec 63,3 % investi dans des titres garantis senior. Les achats totaux se sont élevés à 1 998 millions de dollars contre 1 407 millions en ventes et remboursements. Le rendement moyen pondéré des investissements en dette courante était de 11,0 %, en baisse par rapport à 11,3 % au quatrième trimestre 2024.
FSK a maintenu sa structure de distribution trimestrielle avec une base de 0,64 $ et une distribution supplémentaire de 0,06 $. Le ratio dette nette sur capitaux propres a augmenté à 114 % contre 104 %, les investissements en statut non productif représentant 2,1 % du portefeuille à juste valeur.
Das Nettoanlageergebnis stieg von 0,61 $ im vierten Quartal 2024 auf 0,67 $ pro Aktie, während das bereinigte Nettoanlageergebnis leicht von 0,66 auf 0,65 $ pro Aktie sank. Der Nettoinventarwert fiel von 23,64 $ auf 23,37 $ pro Aktie.
Das Portfolio des Unternehmens erreichte einen beizulegenden Zeitwert von 14,1 Milliarden Dollar, wobei 63,3 % in vorrangig besicherte Wertpapiere investiert sind. Die Gesamtkäufe betrugen 1.998 Millionen Dollar gegenüber 1.407 Millionen Dollar an Verkäufen und Rückzahlungen. Die gewichtete durchschnittliche Rendite auf aufgelaufene Schuldeninvestitionen betrug 11,0 %, gegenüber 11,3 % im vierten Quartal 2024.
FSK behielt seine vierteljährliche Ausschüttungsstruktur mit einer Basis von 0,64 $ und einer zusätzlichen Ausschüttung von 0,06 $ bei. Das Verhältnis von Nettoverschuldung zu Eigenkapital stieg von 104 % auf 114 %, wobei Investitionen im Ausfallstatus 2,1 % des Portfolios zum beizulegenden Zeitwert ausmachen.
- Net investment income increased to $0.67 per share from $0.61 in previous quarter
- Maintained stable quarterly distribution of $0.70 per share
- Strong origination activity with $2.0 billion of new investments
- High weighted average yield of 11.0% on accruing debt investments
- Slight improvement in non-accrual investments (2.1% vs 2.2% previous quarter)
- Net asset value declined to $23.37 per share from $23.64
- Adjusted net investment income decreased to $0.65 from $0.66 per share
- Net debt to equity ratio increased to 114% from 104%
- Total net realized and unrealized loss increased to $0.24 per share from $0.09
- Earnings per share decreased to $0.43 from $0.52 in previous quarter
Insights
FSK delivered mixed Q1 results with slight ANII decline and NAV drop, though maintaining its $0.70 distribution despite increasing leverage.
FS KKR Capital Corp's Q1 2025 results present a mixed financial picture for this business development company. The headline adjusted net investment income (ANII) of $0.65 per share represents a slight decrease from the previous quarter's $0.66, yet still covers the base distribution of $0.64 while falling short of the full $0.70 distribution that includes the supplemental component.
The firm's net asset value (NAV) declined by 1.1% quarter-over-quarter from $23.64 to $23.37 per share, primarily driven by realized and unrealized losses of $0.24 per share, which increased from $0.09 in Q4 2024. This contributed to total earnings per share dropping to $0.43 from $0.52 last quarter.
FSK's portfolio metrics show some concerning trends alongside strengths. The weighted average yield on accruing debt investments decreased to 11.0% from 11.3%, signaling slight compression in returns. However, non-accruals remained relatively stable at 2.1% of fair value versus 2.2% in the previous quarter. The company maintained its defensive positioning with 63.3% in senior secured securities.
Notable is FSK's significant increase in leverage, with net debt-to-equity rising to 114% from 104% last quarter, reflecting an aggressive origination strategy that saw $1,998 million in new purchases versus $1,407 million in sales and repayments. While higher leverage can enhance returns in favorable environments, it also increases risk if portfolio companies underperform.
Management's reference to "building spillover income during prior periods of elevated interest rates" is particularly telling - this undistributed taxable income reservoir provides flexibility to maintain distributions even if current earnings face pressure. The effective interest rate of 5.48% against portfolio yields still provides reasonable spread, though narrower than in previous quarters.
The maintained quarterly distribution of $0.70 ($0.64 base + $0.06 supplemental) signals confidence in near-term distribution stability despite the mixed performance indicators.
Declares Second Quarter 2025 Distribution of
Financial and Operating Highlights for the Quarter Ended March 31, 2025(1)
- Net investment income of
$0.67 $0.61 - Adjusted net investment income(2) of
$0.65 $0.66
- Adjusted net investment income(2) of
- Net asset value of
$23.37 $23.64 - Total net realized and unrealized loss of
$0.24 $0.09 - Adjusted net realized and unrealized loss(2) of
$0.22 $0.07
- Adjusted net realized and unrealized loss(2) of
- Earnings per Share of
$0.43 $0.52 - Total purchases of
$1,998 million $1,407 million $290 - Net debt to equity ratio(3) as of March 31, 2025 was
114% , compared to104% as of December 31, 2024 - Paid distributions to stockholders totaling
$0.70
"We are pleased to deliver a strong start to the year, generating
Declaration of Distribution for Second Quarter 2025
On May 5, 2025, FSK's board of directors declared a distribution for the second quarter of
Portfolio Highlights as of March 31, 2025
- Total fair value of investments was
$14.1 billion 63.3% was invested in senior secured securities. - Weighted average annual yield on accruing debt investments(5) was
11.0% , compared to11.3% as of December 31, 2024. Excluding the impact of merger accounting, weighted average annual yield on accruing debt investments was10.8% , compared to11.0% as of December 31, 2024. - Weighted average annual yield on all debt investments(5) was
10.4% , compared to10.7% as of December 31, 2024. Excluding the impact of merger accounting, weighted average annual yield on all debt investments was10.2% , compared to10.4% as of December 31, 2024. - Exposure to the top ten largest portfolio companies by fair value was
20% , compared to21% as of December 31, 2024. - As of March 31, 2025, investments on non-accrual status represented
2.1% and3.5% of the total investment portfolio at fair value and amortized cost, respectively, compared to2.2% and3.7% as of December 31, 2024.
Portfolio Data | As of March 31, 2025 | As of December 31, 2024 |
Total fair value of investments | ||
Asset Class (based on fair value) | ||
Senior Secured Loans — First Lien | 58.1 % | 57.8 % |
Senior Secured Loans — Second Lien | 4.8 % | 5.1 % |
Other Senior Secured Debt | 0.4 % | 0.9 % |
Subordinated Debt | 1.7 % | 1.7 % |
Asset Based Finance | 15.4 % | 15.6 % |
Credit Opportunities Partners JV, LLC | 11.8 % | 10.1 % |
Equity/Other | 7.8 % | 8.8 % |
Interest Rate Type (based on fair value) | ||
% Variable Rate Debt Investments | 67.2 % | 65.8 % |
% Fixed Rate Debt Investments | 8.2 % | 9.5 % |
% Other Income Producing Investments | 17.3 % | 16.4 % |
% Non-Income Producing Investments(7) | 5.2 % | 6.1 % |
% of Investments on Non-Accrual(6) | 2.1 % | 2.2 % |
Leverage and Liquidity as of March 31, 2025
- Net debt to equity ratio(3) of
114% , based on$8.0 billion $472 million $62 million $6.5 billion 5.48% . - Cash, cash equivalents and foreign currency of
$472 million $2.6 billion - As of March 31, 2025,
54% of the Company's$8.0 billion 46% in secured debt.
Conference Call Information
FSK will host its first quarter 2025 results conference call via live webcast on Thursday, May 8, 2025 at 9:00 a.m. (Eastern Time). All interested parties are welcome to participate and can access the live webcast from the Investor Relations section of FSK's website at www.fskkradvisor.com under Events or through the following URL: https://edge.media-server.com/mmc/p/isyxsvi2.
Research analysts who wish to participate in the conference call are requested to register a day in advance or at a minimum 15 minutes before the start of the call using the following URL: https://register.vevent.com/register/BI88609fffb868418db921e13cda59543e. Upon registration, all telephone participants will receive a confirmation email detailing how to join the conference call, including the dial-in number along with a unique PIN number that can be used to access the call.
An investor presentation of financial information will be available by visiting the Investor Relations section of FSK's website, under Presentations after the market close on Wednesday, May 7, 2025.
A replay of the call will be available beginning shortly after the end of the call by visiting the Investor Relations section of FSK's website, under Events.
Supplemental Information
An investor presentation of financial information will be available by visiting the Investor Relations section of FSK's website at www.fskkradvisor.com, under Presentations, after the market close on Wednesday, May 7, 2025.
About FS KKR Capital Corp.
FSK is a leading publicly traded business development company (BDC) focused on providing customized credit solutions to private middle market
About FS/KKR Advisor, LLC
FS/KKR Advisor, LLC (FS/KKR) is a partnership between FS Investments and KKR Credit that serves as the investment adviser to FSK and other business development companies.
FS Investments is a global alternative asset manager dedicated to delivering superior performance and innovative investment and capital solutions. The firm manages over
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR's insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR's investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR's website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group's website at www.globalatlantic.com.
Forward-Looking Statements and Important Disclosure Notice
This announcement may contain certain forward-looking statements, including statements with regard to future events or future performance or operations of FSK. Words such as "believes," "expects," "projects," and "future" or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements. Factors that could cause actual results to differ materially include changes in the economy, risks associated with possible disruption in FSK's operations or the economy generally due to terrorism, geo-political risks, natural disasters or pandemics, future changes in laws or regulations and conditions in FSK's operating area and the price at which shares of FSK's common stock trade on the New York Stock Exchange. Some of these factors are enumerated in the filings FSK makes with the SEC. FSK undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
The press release above contains summaries of certain financial and statistical information about FSK. The information contained in this press release is summary information that is intended to be considered in the context of FSK's SEC filings and other public announcements that FSK may make, by press release or otherwise, from time to time. FSK undertakes no duty or obligation to update or revise the information contained in this press release. In addition, information related to past performance, while helpful as an evaluative tool, is not necessarily indicative of future results, the achievement of which cannot be assured. Investors should not view the past performance of FSK, or information about the market, as indicative of FSK's future results.
Other Information
The information in this press release is summary information only and should be read in conjunction with FSK's quarterly report on Form 10-Q for the quarter ended March 31, 2025, which FSK filed with the
Certain Information About Distributions
The determination of the tax attributes of FSK's distributions is made annually as of the end of its fiscal year based upon its taxable income and distributions paid, in each case, for the full year. Therefore, a determination as to the tax attributes of the distributions made on a quarterly basis may not be representative of the actual tax attributes for a full year. FSK intends to update stockholders quarterly with an estimated percentage of its distributions that resulted from taxable ordinary income. The actual tax characteristics of distributions to stockholders will be reported to stockholders annually on Form 1099-DIV.
The timing and amount of any future distributions on FSK's shares of common stock are subject to applicable legal restrictions and the sole discretion of its board of directors. There can be no assurance as to the amount or timing of any such future distributions.
FSK may fund its distributions to stockholders from any sources of funds legally available to it, including net investment income from operations, capital gains proceeds from the sale of assets, non-capital gains proceeds from the sale of assets, dividends or other distributions paid to it on account of preferred and common equity investments in portfolio companies, proceeds from the sale of shares of FSK's common stock and borrowings. FSK has not established limits on the amount of funds it may use from available sources to make distributions. There can be no assurance that FSK will be able to pay distributions at a specific rate or at all.
Contact Information:
Investor Relations Contact
Anna Kleinhenn
Anna.Kleinhenn@fsinvestments.com
FS Investments Media Team
Melanie Hemmert
Melanie.Hemmert@fsinvestments.com
Unaudited Consolidated Statements of Operations (in millions, except share and per share amounts) | ||||
Three Months Ended | ||||
March 31, | ||||
2025 | 2024 | |||
Investment income | ||||
From non-controlled/unaffiliated investments: | ||||
Interest income | $ 217 | $ 288 | ||
Paid-in-kind interest income | 16 | 17 | ||
Fee income | 14 | 17 | ||
Dividend and other income | 12 | 6 | ||
From non-controlled/affiliated investments: | ||||
Interest income | 8 | 6 | ||
Paid-in-kind interest income | 18 | 10 | ||
Fee income | 3 | — | ||
Dividend and other income | 9 | 4 | ||
From controlled/affiliated investments: | ||||
Interest income | 15 | 21 | ||
Paid-in-kind interest income | 28 | 8 | ||
Fee income | — | — | ||
Dividend and other income | 60 | 57 | ||
Total investment income | 400 | 434 | ||
Operating expenses | ||||
Management fees | 52 | 55 | ||
Subordinated income incentive fees | 39 | 43 | ||
Administrative services expenses | 3 | 3 | ||
Accounting and administrative fees | 1 | 1 | ||
Interest expense | 113 | 116 | ||
Other general and administrative expenses | 5 | 4 | ||
Total operating expenses | 213 | 222 | ||
Net investment income | 187 | 212 | ||
Realized and unrealized gain/loss | ||||
Net realized gain (loss) on investments: | ||||
Non-controlled/unaffiliated investments | (40) | (225) | ||
Non-controlled/affiliated investments | 9 | (10) | ||
Controlled/affiliated investments | 13 | (8) | ||
Net realized gain (loss) on foreign currency forward contracts | 0 | (0) | ||
Net realized gain (loss) on foreign currency | 1 | (3) | ||
Net change in unrealized appreciation (depreciation) on investments: | ||||
Non-controlled/unaffiliated investments | 58 | 172 | ||
Non-controlled/affiliated investments | (20) | 20 | ||
Controlled/affiliated investments | (52) | (6) | ||
Net change in unrealized appreciation (depreciation) on foreign currency forward contracts | (10) | 8 | ||
Net change in unrealized gain (loss) on foreign currency | (26) | 13 | ||
Total net realized and unrealized gain (loss) | (67) | (39) | ||
Net increase (decrease) in net assets resulting from operations | $ 120 | $ 173 | ||
Per share information—basic and diluted | ||||
Net increase (decrease) in net assets resulting from operations (Earnings (Losses) per Share) | $ 0.43 | $ 0.62 | ||
Weighted average shares outstanding | 280,066,433 | 280,066,433 | ||
Consolidated Balance Sheets (in millions, except share and per share amounts)
| ||||
March 31, 2025 | December 31, 2024 | |||
(Unaudited) | ||||
Assets | ||||
Investments, at fair value | ||||
Non-controlled/unaffiliated investments (amortized cost— | $ 9,109 | $ 8,573 | ||
Non-controlled/affiliated investments (amortized cost— | 1,184 | 1,140 | ||
Controlled/affiliated investments (amortized cost— | 3,829 | 3,777 | ||
Total investments, at fair value (amortized cost— | 14,122 | 13,490 | ||
Cash and cash equivalents | 289 | 278 | ||
Foreign currency, at fair value (cost— | 183 | 18 | ||
Receivable for investments sold and repaid | 65 | 186 | ||
Income receivable | 180 | 187 | ||
Unrealized appreciation on foreign currency forward contracts | 0 | 3 | ||
Deferred financing costs | 26 | 26 | ||
Prepaid expenses and other assets | 50 | 31 | ||
Total assets | $ 14,915 | $ 14,219 | ||
Liabilities | ||||
Payable for investments purchased | $ 3 | $ 2 | ||
Debt (net of deferred financing costs and discount of | 7,989 | 7,351 | ||
Unrealized depreciation on foreign currency forward contracts | 8 | 1 | ||
Stockholder distributions payable | 196 | — | ||
Management fees payable | 52 | 53 | ||
Subordinated income incentive fees payable | 39 | 35 | ||
Administrative services expense payable | 5 | 3 | ||
Interest payable | 65 | 108 | ||
Other accrued expenses and liabilities | 12 | 44 | ||
Total liabilities | 8,369 | 7,597 | ||
Commitments and contingencies | ||||
Stockholders' equity | ||||
Preferred stock, | — | — | ||
Common stock, | 0 | 0 | ||
Capital in excess of par value | 9,284 | 9,284 | ||
Retained earnings (accumulated deficit) | (2,738) | (2,662) | ||
Total stockholders' equity | 6,546 | 6,622 | ||
Total liabilities and stockholders' equity | $ 14,915 | $ 14,219 | ||
Net asset value per share of common stock at period end | $ 23.37 | $ 23.64 | ||
Non-GAAP Financial Measures
This press release contains certain financial measures that have not been prepared in accordance with generally accepted accounting principles in
Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with FSK's consolidated financial statements prepared in accordance with GAAP. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures has been provided in this press release, and investors are encouraged to review the reconciliation.
Reconciliation of Non-GAAP Financial Measures(1) | |||
Three Months Ended | |||
March 31, 2025 | December 31, 2024 | ||
GAAP net investment income per share | |||
Accretion resulting from merger accounting | |||
Excise taxes | |||
Adjusted net investment income per share(2) | |||
GAAP Net realized and unrealized gain (loss) per share | |||
Unrealized appreciation from merger accounting | |||
Adjusted net realized and unrealized gain(2) | |||
1) | Per share data was derived by using the weighted average shares of FSK's common stock outstanding during the applicable period. Per share numbers may not sum due to rounding. | |||||||||||
2) | Adjusted net investment income is a non-GAAP financial measure. Adjusted net investment income is presented for all periods as GAAP net investment income excluding (i) the accrual for the capital gains incentive fee for realized and unrealized gains; (ii) excise taxes (iii) the impact of accretion resulting from merger accounting; and (iv) certain non-recurring operating expenses that are one-time in nature and are not representative of ongoing operating expenses incurred during FSK's normal course of business. FSK uses this non-GAAP financial measure internally in analyzing financial results and believes that the use of this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends and in comparing its financial results with other business development companies. Adjusted net realized and unrealized gain is a non-GAAP financial measure. Adjusted net realized and unrealized gain is presented for all periods as GAAP realized and unrealized gains to exclude the impact of the merger accounting. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. A reconciliation of GAAP net investment income to adjusted net investment income and GAAP net realized and unrealized gain to adjusted net realized and unrealized gain can be found above. | |||||||||||
3) | 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. | |||||||||||
4) | The per share data for distributions reflects the amount of distributions paid per share of our common stock to stockholders of record during each applicable period. | |||||||||||
5) | See FSK's quarterly report on Form 10-Q for the quarter ended March 31, 2025 for important information, including information related to the calculation and definition of weighted average annual yield on accruing debt investments, weighted average annual yield on all debt investments, variable rate debt investments, fixed rate debt investments, other income producing investments and non-income producing investments. | |||||||||||
6) | Interest income is recorded on an accrual basis. See FSK's quarterly report on Form 10-Q for the quarter ended March 31, 2025 for a description of FSK's revenue recognition policy. | |||||||||||
7) | Does not include investments on non-accrual status. | |||||||||||
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SOURCE FS Investments
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