FS KKR Capital Corp 8-K

What Happened
FS KKR Capital Corp (FSK) announced it completed a $389,500,000 term debt securitization through its wholly owned subsidiary KKR - FSK CLO 3 LLC on December 18, 2025. The issuer sold secured notes and loans backed primarily by a diversified portfolio of middle‑market loans (the Collateral Obligations). The debt matures January 15, 2038 and was privately placed (not registered under the Securities Act).

Key Details

• Total issuance: $389,500,000 in multiple tranches (notes and convertible loans).
• Tranche breakdown and coupon spreads to Term SOFR:
  • Class A-1 Notes: $125,500,000 — Term SOFR + 1.47% (3‑month tenor)
  • Class A-1 Senior Floating Rate Loans: $150,000,000 — Term SOFR + 1.47% (convertible to A-1 Notes)
  • Class A-2 Notes: $19,000,000 — Term SOFR + 1.65%
  • Class B Notes: $35,625,000 — Term SOFR + 1.80%
  • Class C Notes: $33,250,000 — Term SOFR + 2.10% (deferrable)
  • Class D Notes: $26,125,000 — Term SOFR + 3.15% (deferrable)
• FSK has held 100% of the membership interests in the issuer since its formation (Sept 11, 2025); those Membership Interests had a nominal value of approximately $87.1 million at closing. If the fair market value of transferred collateral exceeds cash paid by the issuer, the excess is treated as a capital contribution by FSK.
• FSK will act as portfolio manager under a Portfolio Management Agreement and has irrevocably waived any base management fee or subordinated interest while serving in that role.
• The debt is secured by the issuer’s collateral, governed by customary indenture/credit agreements, and was issued in a private placement (not registered for public resale).

Why It Matters
This transaction expands FSK’s financing activity and creates a new securitized vehicle backed mainly by middle‑market loans, which can affect the company’s asset mix and fee/management arrangements. Investors should note the size ($389.5M), structured tranches with different yields and deferral features, the long maturity (2038), and that the issuer is a consolidated, wholly owned subsidiary of FSK. The private placement nature limits resale options for these securities and the company’s waiver of management fees while acting as portfolio manager may affect near‑term fee income.