FSK Closes $150M KKR Preferred Stock Deal, Advisor Waives Incentive Fees

summarizeSummary

FS KKR Capital Corp. finalized a $150 million convertible preferred stock issuance to KKR at a significant premium to its current stock price, securing vital capital and strategic partnership. Concurrently, its advisor waived 50% of its incentive fees for three quarters, providing direct expense relief.

check_boxKey Events · Financing and Capital Events · FSK

• Closing of $150M Convertible Preferred Stock Issuance

  FS KKR Capital Corp. issued and sold 6,000,000 shares of Cumulative Convertible Perpetual Preferred Stock, Series A, to KKR Alternative Assets L.P. for $25.00 per share, generating $150 million in gross proceeds. This finalizes a capital raise previously announced on May 11, 2026.

• Terms of Convertible Preferred Stock Established

  The company filed Articles Supplementary detailing the preferred stock terms, including its seniority to common stock, 5.00% cash / 7.00% PIK cumulative dividends, and an initial conversion price of $18.83 per share (FSK's NAV). KKR also gains the right to elect two board members.

• Advisory Fee Waiver Announced

  FS/KKR Advisor, LLC agreed to waive 50% of its subordinated income incentive fee for the fiscal quarters ending June 30, 2026, through March 31, 2027. This waiver is not subject to recoupment, providing direct expense reduction for the company.

auto_awesomeAnalysis · FSK · Unknown

This 8-K marks the closing of a significant $150 million convertible preferred stock issuance to KKR, a key part of FSK's strategy to address recent financial challenges. The preferred stock, issued at $25.00 per share with an initial conversion price of $18.83 (FSK's NAV), represents a substantial capital infusion at a premium to the current common stock price of $10.64. This provides crucial liquidity for general corporate purposes, including potential share repurchases or debt repayment. Additionally, the advisor's waiver of 50% of its subordinated income incentive fee for three quarters, without recoupment, offers a direct and material reduction in expenses, further supporting the company's financial stability and profitability during a critical period. KKR's board representation also signals a deeper strategic partnership.