FS KKR Capital Corp Dossier
Qualitative Analysis
Business overview
FS KKR Capital Corp. (NYSE: FSK) is an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940. The company's primary investment objective is to generate current income and, to a lesser extent, long-term capital appreciation. FSK focuses on providing customized credit solutions, primarily investing in senior secured debt (first-lien and second-lien loans) of private middle-market U.S. companies, typically targeting businesses with annual EBITDA between $50 million and $150+ million. The company is advised by FS/KKR Advisor, LLC, a partnership between FS Investments and KKR Credit.
Research as of 19 Jun 2026
Strategic Initiatives
Growth programs, investments, and their expected impact
A multi-part strategic support package totaling approximately $600 million in combined measures from KKR and the board to stabilize the fund, enhance shareholder value, and improve liquidity.
Expected impact: Designed to support net investment income, improve trading profile, and help the company transition toward a smaller and better-positioned balance sheet.
A KKR subsidiary agreed to invest $150 million in cumulative convertible perpetual preferred stock ranking junior to debt but senior to common stock.
Expected impact: Carries a current dividend rate of 5.00% cash or 7.00% PIK, with an initial conversion price of $18.83 per share (March 31, 2026 NAV). Proceeds are expected to be used for stock repurchases or debt repayment.
A KKR subsidiary's fixed-price tender offer to purchase up to $150 million of FSK common stock at $11.00 per share.
Expected impact: Provides liquidity to shareholders and demonstrates KKR's belief that the stock is undervalued relative to its intrinsic value.
Authorization of a $300 million stock repurchase program to buy back shares when trading below intrinsic value.
Expected impact: Aims to support the trading price, manage leverage levels, and enhance long-term shareholder value.
Mergers, Acquisitions & Partnerships
Recent deals and strategic collaborations
Strategic Partnerships
FS KKR Capital Corp, alongside Blackstone and Apollo, entered into a recapitalization agreement to take ownership of enterprise customer experience platform Medallia from Thoma Bravo. The transaction significantly reduces Medallia's outstanding debt and injects $150 million of new capital to accelerate AI-driven innovation.
Terms: The lender group led by Blackstone, Apollo, and FSK is investing $150 million of new capital in Medallia as part of a debt-for-equity swap. The transaction is expected to close by the end of 2026, pending regulatory approvals.
An off-balance sheet joint venture designed to invest in a diversified portfolio of middle-market loans, enhancing FSK's investment reach and portfolio diversification.
Terms: COPJV represented approximately 13.9% of FSK's portfolio fair value as of March 31, 2026.