FS KKR Capital Corp. Successfully Secures $150 Million Through Convertible Preferred Stock Offering
FS KKR Capital Corp. (NYSE: FSK) has marked a significant milestone by closing a $150 million offering of cumulative convertible perpetual preferred stock as part of its ongoing strategy to enhance financial stability and support its corporate initiatives. The announcement, made on June 29, 2026, underscores the company's proactive approach to sourcing capital and optimizing its balance sheet.
The issuance was acquired by KKR Alternative Assets L.P., a subsidiary of the global investment firm KKR. With this procurement, FS KKR aims to leverage the raised capital for various general corporate purposes, which may include replenishing its common stock repurchase program or addressing existing debt obligations. Such financial maneuvers are critical as the company positions itself for future growth and market responsiveness.
The newly issued convertible preferred stock carries a dividend yield of 5.00% per annum payable in cash or 7.00% in payment-in-kind (PIK) dividends at the company’s discretion. In an appealing structure for investors, the dividend rate is designed to rise by 1.00% annually after the first 5.5 years, aligning incentives for long-term commitment. This stock ranks junior to all existing debts but senior to common stock, creating a strategic leverage point for the company's financial architecture.
Importantly, the preferred shares harbor redemption features. The company holds the flexibility to repurchase these shares at any point in cash, or, after a three-year window, by converting preferred stock into the company's common shares, provided that the common stock reaches certain price thresholds. This variable conversion price is pegged at $18.83 per share, reflective of FS KKR's net asset value as of March 31, 2026, and can be adjusted under customary conditions, which include anti-dilution safeguards.
Holders of the preferred shares will wield voting rights on an as-converted basis regarding significant corporate decisions, empowering them further within the company's governance structure. Additionally, shareholders controlling a majority of the outstanding preferred stocks may compel the company to redeem all issued preferred shares upon specified events, particularly during changes of control.
With this move, FS KKR continues to demonstrate its commitment to enhancing its capital structure and delivering shareholder value. The convertible preferred stock was marketed in compliance with Section 4(a)(2) of the Securities Act of 1933, which entitles investors to a level of protection and assurance typical in such financial transactions.
About FS KKR Capital Corp.
FS KKR Capital Corp. positions itself as a significant player in the business development segment, focusing on delivering tailored credit solutions to U.S. middle-market enterprises. The firm primarily invests in senior secured debts, with supplementary interest in subordinated loans and certain asset-backed financing vehicles. Guided by FS/KKR Advisor, LLC, the firm boasts over 30 years of experience in value creation and manages an impressive asset portfolio amounting to over $94 billion.
About FS/KKR Advisor, LLC
This partnership between Future Standard and KKR Credit functions as the investment adviser for FS KKR and its associated business development entities. Future Standard excels in alternative asset management for a broad spectrum of institutional and private clients, committed to generating unparalleled growth and sustainable value across various investment classes.
Stay tuned as FS KKR progresses with its strategic goals and aims to create impactful pathways in the competitive financial landscape, showcasing its ongoing dedication to enhancing stakeholder engagement and operational excellence.
The issuance was acquired by KKR Alternative Assets L.P., a subsidiary of the global investment firm KKR. With this procurement, FS KKR aims to leverage the raised capital for various general corporate purposes, which may include replenishing its common stock repurchase program or addressing existing debt obligations. Such financial maneuvers are critical as the company positions itself for future growth and market responsiveness.
The newly issued convertible preferred stock carries a dividend yield of 5.00% per annum payable in cash or 7.00% in payment-in-kind (PIK) dividends at the company’s discretion. In an appealing structure for investors, the dividend rate is designed to rise by 1.00% annually after the first 5.5 years, aligning incentives for long-term commitment. This stock ranks junior to all existing debts but senior to common stock, creating a strategic leverage point for the company's financial architecture.
Importantly, the preferred shares harbor redemption features. The company holds the flexibility to repurchase these shares at any point in cash, or, after a three-year window, by converting preferred stock into the company's common shares, provided that the common stock reaches certain price thresholds. This variable conversion price is pegged at $18.83 per share, reflective of FS KKR's net asset value as of March 31, 2026, and can be adjusted under customary conditions, which include anti-dilution safeguards.
Holders of the preferred shares will wield voting rights on an as-converted basis regarding significant corporate decisions, empowering them further within the company's governance structure. Additionally, shareholders controlling a majority of the outstanding preferred stocks may compel the company to redeem all issued preferred shares upon specified events, particularly during changes of control.
With this move, FS KKR continues to demonstrate its commitment to enhancing its capital structure and delivering shareholder value. The convertible preferred stock was marketed in compliance with Section 4(a)(2) of the Securities Act of 1933, which entitles investors to a level of protection and assurance typical in such financial transactions.
About FS KKR Capital Corp.
FS KKR Capital Corp. positions itself as a significant player in the business development segment, focusing on delivering tailored credit solutions to U.S. middle-market enterprises. The firm primarily invests in senior secured debts, with supplementary interest in subordinated loans and certain asset-backed financing vehicles. Guided by FS/KKR Advisor, LLC, the firm boasts over 30 years of experience in value creation and manages an impressive asset portfolio amounting to over $94 billion.
About FS/KKR Advisor, LLC
This partnership between Future Standard and KKR Credit functions as the investment adviser for FS KKR and its associated business development entities. Future Standard excels in alternative asset management for a broad spectrum of institutional and private clients, committed to generating unparalleled growth and sustainable value across various investment classes.
Stay tuned as FS KKR progresses with its strategic goals and aims to create impactful pathways in the competitive financial landscape, showcasing its ongoing dedication to enhancing stakeholder engagement and operational excellence.
Topics Financial Services & Investing）
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