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 and Year Ended December 31, 2021
All information is as of December 31, 2021 unless otherwise noted
Summary of Quarterly Results
- Net investment income (NII) for the quarter ended December 31, 2021 was $189 million, or $0.66 per share, as compared to $201 million, or $0.71 per share, for the quarter ended September 30, 2021.
- Adjusted net investment income (Adjusted NII) for the quarter ended December 31, 2021 was $185 million, or $0.65 per share, as compared to $181 million, or
Fourth Quarter Performance | $0.64 per share, for the quarter ended September 30, 2021(1). |
- Net asset value (NAV) per share as of December 31, 2021 was $27.17, compared to $27.14 as of September 30, 2021.
- New investment fundings in the fourth quarter were approximately $2.1 billion. Net investment activity in the fourth quarter was $1.2 billion, including $1.0 billion of sales to Credit Opportunities Partners JV, LLC (COPJV).
Dividend
Portfolio Diversification
Capital Structure
Enhancement
- Paid a dividend of $0.62 per share for the fourth quarter of 2021.
- Declared a dividend of $0.63 per share for the first quarter of 2022.
- For the quarter ended December 31, 2021, the Adjusted NII / Dividend coverage ratio was 103%(2).
- Annualized dividend yield on market value of common stock was 11.5% as of February 25, 2022(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 December 31, 2021.
- In October we issued $500 million of 2024 unsecured notes at 1.625% and $750 million of 2028 unsecured notes at 3.125% with a blended coupon of 2.54%.
- Closed on four bi-lateral amendments in December which reduced interest expense and extended $1.25 billion of maturities from 2024 to 2025.
- 51% of our drawn leverage was unsecured as of December 31, 2021 and our weighted average effective rate on borrowings was 3.04%.
- In January 2022 we issued $500 million of 3.250% unsecured notes maturing in 2027.
- See the Appendix for a reconciliation between NII and Adjusted NII.
- Based on the declared first quarter distribution of $0.63 per share.
- Based on the declared first quarter distribution of $0.63 per share annualized as a percentage of FSK's closing market price as of February 25, 2022.
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Financial Results
(Dollar amounts in millions, except per share data) | 12/31/20 | 3/31/21 | 6/30/21 | 9/30/21 | 12/31/21 |
NII per share | $0.63 | $0.63 | $0.77 |
Adjusted NII per share(1) | $0.72 | $0.63 | $0.74 |
Net realized and unrealized gains (losses) per share | $0.53 | $0.98 | $4.98 |
Adjusted net realized and unrealized gains (losses) per share | $0.53 | $0.98 | $0.87 |
Net increase (decrease) in net assets resulting from operations (earnings per share) | $1.16 | $1.61 | $5.75 |
Adjusted Net increase (decrease) in net assets resulting from operations (earnings per share) | $1.16 | $1.61 | $1.64 |
Stockholder distributions declared per share | $0.60 | $0.60 | $0.65 |
Net asset value per share at period end | $25.02 | $26.03 | $26.84 |
(2)
(2)
$0.71 | $0.66 |
$0.64 | $0.65 |
$0.24 | ($0.02) |
$0.31 | $0.03 |
$0.95 | $0.64 |
$0.95 | $0.64 |
$0.62 | $0.63 |
$27.14 | $27.17 |
Weighted average shares outstanding (in millions) | 123.8 | 123.8 | 150.4 | 285.1 | 284.9 |
Shares outstanding, end of period (in millions) | 123.8 | 123.8 | 285.1 | 285.1 | 284.5 |
Total investments at fair value | $6,780 | $6,457 | $14,734 | $15,824 | $16,101 |
Total assets | $7,237 | $6,964 | $15,723 | $16,620 | $17,228 |
Cash(3) | $191 | $149 | $499 | $241 | $377 |
Total debt(4) | $4,042 | $3,633 | $7,740 | $8,511 | $9,179 |
Debt-to-equity, Net(5) | 1.19x | 1.00x | 0.90x | 1.03x | 1.07x |
Adjusted NII / stockholder distributions declared | 120% | 105% | 114% | 103% | 103% |
- See the Appendix for a reconciliation between NII and Adjusted NII.
- 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.
- 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.
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Portfolio Highlights
As of and for Three Months Ended | |||||
(Dollar amounts in millions) | 12/31/20 | 3/31/21 | 6/30/21 | 9/30/21 | 12/31/21 |
Investment at Fair Value: | |||||
First Lien Senior Secured Loans | 50.9% | 51.2% | 56.4% | 61.2% | 60.7% |
Second Lien Senior Secured Loans | 13.0% | 11.0% | 12.4% | 10.6% | 9.7% |
Other Senior Secured Debt | 1.3% | 1.3% | 1.3% | 0.9% | 0.7% |
Subordinated Debt | 2.5% | 1.2% | 0.7% | 0.6% | 0.7% |
Asset Based Finance | 14.0% | 14.7% | 12.9% | 12.6% | 13.9% |
Credit Opportunities Partners JV, LLC | 10.5% | 11.3% | 9.5% | 8.8% | 8.7% |
Equity/Other | 7.8% | 9.3% | 6.8% | 5.3% | 5.6% |
Total Investments | $6,780 | $6,457 | $14,734 | $15,824 | $16,101 |
Number of portfolio companies(1) | 164 | 152 | 195 | 190 | 189 |
Interest Rate Type:(2) | |||||
% Floating Rate | 87.6% | 87.4% | 88.3% | 88.1% | 87.2% |
% Fixed Rate | 12.4% | 12.6% | 11.7% | 11.9% | 12.8% |
Net Interest Margin: | |||||
Weighted average annual yield on accruing debt investments(3) | 8.8% | 8.6% | 8.5% | 8.1% | 8.4% |
Weighted average interest rate on borrowings(4) | 3.9% | 4.2% | 3.4% | 3.2% | 3.0% |
- Does not look through to FSK's portfolio companies held solely in COPJV. COPJV is a joint venture between FSK and South Carolina Retirement Systems Group Trust (SCRS).
- Represents interest rates on debt investments (see FSK's Annual Report on Form 10-K for the definition of debt investments) at US$ 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 beginning in Q2 2021. Excluding the impact of the Merger, FSK's weighted average annual yield on all debt investments was 7.9% as of December 31, 2021. See FSK's Annual Report on Form 10-K 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 9.2% on accruing debt investments and 8.7% on all debt investments as of December 31, 2021.
- Includes the effect of non-usage fees.
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FSK Investment Portfolio Overview
189 | 19% | 71% | $79mm / 5.9x |
portfolio companies(1) | FV in top-10 portfolio | of investments in | median portfolio company EBITDA & |
companies(2) | senior secured debt(2) | leverage(3) | |
87% | 8.4% | 1.9% | >85% |
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)
5.6% | Senior Secured Loans-First Lien | ||||
8.7% | Senior Secured Loans-Second Lien | ||||
13.9% | Other Senior Secured Debt | ||||
Subordinated Debt | |||||
0.7% | |||||
60.7% | Asset Based Finance | ||||
0.7% | |||||
9.7% | |||||
Credit Opportunities Partners JV, LLC | |||||
Equity/Other
Sector Exposure (by fair value)
17.2% | 16.8% | Software & Services | |
Capital Goods | |||
Commercial & Professional Services | |||
3.4% | Health Care Equipment & Services | ||
Credit Opportunities Partners JV, LLC | |||
4.2% | 14.2% | ||
Insurance | |||
4.5% | |||
Real Estate | |||
5.4% | |||
10.0% | Media & Entertainment | ||
5.6% | Diversified Financials | ||
Consumer Durables & Apparel | |||
8.7% | 10.0% | ||
Other | |||
Total Investment Portfolio at Fair Value: $16.1bn
- 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 Annual Report on Form 10-K for its definition of debt investments.
- Excludes the impact of the Merger. See FSK's Annual Report on Form 10-K 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 9.2% as of December 31, 2021.
- 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.
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FS KKR Capital Corp. published this content on 28 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 February 2022 21:44:55 UTC.