FS KKR Capital Corp
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
FSK$11.70+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-11.
0001628280-26-033118
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001628280-26-053783
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 186 previous paragraphs and 177 current paragraphs.
117 unchanged; 40 reworded; 19 added; 28 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 17 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
•purchase activity in respect of the Company’s shares of common stock, including with respect to the Company’s publicly announced purchase programs;
Current report
•the Company Share Repurchase Authorization does not require the Company to repurchase any specific number of shares; there is no assurance that the Company or any of its affiliates will purchase shares of the Company’s common stock at any specific discount levels or in any specific amounts; and there is no assurance that the market price of the Company’s shares of common stock, either absolutely or relative to net asset value, will increase as a result of any share purchase activity, or that any purchase program or plan will enhance stockholder value over the long term;
Current report
(2)Ratio of incentive fees, interest expense and excise taxes to average net assets, excluding the effect of incentive fee waivers, was 2.34% and 4.57% for the three and six months ended June 30, 2026, respectively. There was no incentive fee waiver in effect for the three and six months ended June 30, 2025.
Current report
(3)Ratio of net operating expenses, excluding certain expenses, to average net assets, excluding the effect of incentive fee waivers, was 1.24% and 2.22% for the three and six months ended June 30, 2026, respectively.
Current report
Provision for Taxes on Realized Gains on Investments
Current report
During the three and six months ended June 30, 2026 and 2025, we recorded a provision for taxes on realized gains with respect to one of our equity investments of $0 and $(11), respectively.
Current report
Realized Losses from Extinguishment of Debt
Current report
During the three and six months ended June 30, 2026 and 2025, we recorded a net realized loss from the extinguishment of debt of $(2) and $(3), respectively.
Current report
On June 18, 2026, our stockholders approved a proposal to authorize us, with the approval of the Board, to issue warrants, options or rights to subscribe for, convert to, or purchase shares of our common stock in one or more public or private offerings, which may include convertible preferred stock and convertible debentures. In connection with seeking stockholder approval, our management and the Board determined that it would be advantageous for us to have the ability to issue warrants, options or rights to subscribe for, convert to or purchase shares of our common stock in connection with our financing and capital-raising activities. Each issuance of warrants, options or rights to subscribe for, convert to or purchase shares of our common stock pursuant to the stockholder authorization, which has no expiration, will comply with Section 61(a)(4) of the 1940 Act. We do not currently have any plans to issue warrants, options or rights to subscribe for, convert to, or purchase shares of our common stock pursuant to Section 61(a)(4) of the 1940 Act.
Current report
In addition, our ability to pay dividends or distributions (other than dividends payable in our common stock) to holders of any class of our capital stock, or to purchase any such capital stock, would be restricted if our “senior securities representing indebtedness” fail to have an asset coverage of at least 150% (measured at the time of declaration of such distribution or at the time of any such purchase, and accounting for such distribution or purchase price). The 1940 Act does not apply this limitation to privately arranged debt that is not intended to be publicly distributed, unless this limitation is specifically negotiated by the lender. In addition, our ability to pay dividends or distributions (other than dividends payable in our common stock) to our common stockholders, or to purchase any shares of our common stock, would be restricted if our “senior securities that are stock” fail to have an asset coverage of at least 150% (measured at the time of declaration of such distribution, or at the time of any such purchase, and accounting for such distribution or purchase price). If the value of our assets declines, we might be unable to satisfy these asset coverage requirements. To satisfy the 150% asset coverage requirement in the event that we are seeking to pay a distribution, for example, we might either have to (i) liquidate a portion of our portfolio to repay a portion of our indebtedness or (ii) issue common stock. This may occur at a time when a sale of a portfolio asset may be disadvantageous, or when we have limited access to capital markets on agreeable terms. In addition, any amounts that we use to service our indebtedness or outstanding preferred stock, or for offering costs, will not be available for distributions to our stockholders. If we are unable to regain the requisite asset coverage through these methods, we may be forced to suspend the payment of such dividends or distributions. As of June 30, 2026, the aggregate amount outstanding of the senior securities issued by us was $6.6 billion. As of June 30, 2026, our asset coverage on our “senior securities representing indebtedness” was 179% and our asset coverage on our “senior securities that are stock” was 177%. See Note 9 for a discussion of the Company’s financing arrangements.
Current report
(10)The Convertible Preferred Stock will pay dividends of 5.00% cash or 7.00% PIK, at the Company’s option, in either case increasing annually by 1.00% per annum beginning on the 5.5-year anniversary of the issue date. See “Note 4. Related Party Transactions” for more information.
Current report
On June 29, 2026, we issued and sold 6,000,000 shares of the Convertible Preferred Stock to the Purchaser pursuant to the Purchase Agreement, at a price of $25.00 per share. We intend to use the gross proceeds of $150.0 million from the sale of Convertible Preferred Stock for general corporate purposes including, without limitation, funding any repurchase program relating to shares of the our common stock or debt repayment. See “Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” in Part II of this Quarterly Report on Form 10-Q for more information.
Current report
Dividends are payable quarterly in arrears on March 31, June 30, September 30, and December 31 of each year, each, a Dividend Payment Date, or, if such date is not a business day, on the next succeeding business day. Dividends accumulate from the date of issuance, June 29, 2026. The first Dividend Payment Date is September 30, 2026, covering the period from June 29, 2026 through September 30, 2026. Dividends are paid to holders of record as of the close of business on the record date designated by the Board for the applicable Dividend Payment Date. Each dividend period begins on and includes a Dividend Payment Date (or, for the initial period, the issue date) and ends on, but excludes, the next succeeding Dividend Payment Date.
Current report
The IRS currently requires that a RIC that has two or more classes of stock allocate to each such class proportionate amounts of each type of its income (such as ordinary income and capital gains) based upon the percentage of total dividends paid to each class for the tax year. Accordingly, while the Convertible Preferred Stock is outstanding, we intend to allocate capital gain dividends, if any, between shares of our common stock and preferred stock in proportion to the total dividends paid to each class with respect to such tax year.
Current report
Common Stock Distribution
Current report
Convertible Preferred Stock Distribution
Current report
On July 30, 2026, our Board of Directors declared a cash dividend on the Convertible Preferred Stock for the period from June 29, 2026 through September 30, 2026 in the amount of $0.315972 per preferred share, which will be paid on or about September 30, 2026 to the holder of record as of the close of business on September 15, 2026.
Current report
Issuer Share Repurchases
Current report
During the period from July 1, 2026 to August 5, 2026, 2026, the Company repurchased 3,348,353 shares of common stock pursuant to the Company Share Repurchase Authorization at an average price per share (inclusive of commissions paid) of $10.75 (totaling $36). All such repurchases were made on the Company’s behalf by a third-party agent on the open market at prices below net asset value per share in transactions intended to qualify for the safe harbors provided by Rules 10b5-1 and 10b-18 under the Exchange Act.
Removed paragraphs (28)
Previous report
(3)As of March 31, 2026, there was $29 term loan outstanding at SOFR+1.90% and $14 revolving commitment outstanding at SOFR+2.05%.
Previous report
Distribution
Previous report
On May 8, 2026, the Company entered into Amendment No. 1 to Third Amended and Restated Senior Secured Revolving Credit Agreement, or Amendment No. 1, amending that certain Third Amended and Restated Senior Secured Revolving Credit Agreement, originally dated July 16, 2025, by and among the Company, as borrower, each of the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and ING Capital LLC, as collateral agent. Amendment No. 1 provides for, among other things, (i) a reduction of the total commitments to approximately $4,051.7 from $4,700.0, (ii) an increase in the applicable margin with respect to lenders other than any non-extending lender with respect to the Company (a) if the Gross Borrowing Base is equal to or greater than 1.60 times the Combined Debt Amount of the Company, (x) with respect to any ABR Loan, to 0.775% per annum from 0.65% per annum, and (y) in the case of any Term Benchmark Loan or RFR Loan, to 1.775% per annum from 1.65% per annum, and (b) if the Gross Borrowing Base of the Company is less than 1.60 times the Covered Debt Amount of the Company, (x) with respect to any ABR Loan, to 0.9% per annum from 0.775% per annum, and (y) in the case of any Term Benchmark Loan or RFR Loan, to 1.9% per annum from 1.775% per annum and (iii) a reset of the minimum Shareholders’ Equity floor to $3,750.0 from approximately $5,048.6.
Previous report
KKR Tender Offer
Previous report
Concurrently with the release of the Company’s financial results for the three months ended March 31, 2026, KKR Alternative Assets L.P., a Delaware limited partnership (the “Purchaser”), announced a third-party tender offer for up to $150.0 million in aggregate amount of shares of the Company’s common stock at a fixed price (the “KKR Tender Offer”).
Previous report
Company Share Repurchase Program
Previous report
On May 6, 2026, the Board authorized the repurchase by the Company of up to $300.0 million in aggregate amount of the Company’s common stock in the open market, by tender offer or in privately negotiated purchases in compliance with the Exchange Act and other applicable law (the “Company Share Repurchase Authorization”). In connection with the Company Share Repurchase Authorization, and after the completion of the KKR Tender Offer, the Company intends to enter into a trading plan under Exchange Act Rule 10b5-1, pursuant to which repurchases of shares of the Company’s common stock may be made in the open market beginning 11 business days after the completion of the KKR Tender Offer, at prices below net asset value per share. The timing, manner, price and amount of any share repurchases will be determined by the Company based upon the evaluation of economic and market conditions, the market price of the shares, applicable legal, contractual and regulatory requirements and other factors. The Company Share Repurchase Authorization is scheduled to expire on June 1, 2027, unless extended, or until the aggregate repurchase amount that has been approved by the Board has been expended. The Company Share Repurchase Authorization does not require the Company to repurchase any specific number of shares of the Company’s common stock and the Company cannot assure its stockholders that any shares will be repurchased under the program. The Company Share Repurchase Authorization may be suspended, extended, modified or discontinued at any time.
Previous report
Convertible Preferred Stock Purchase Agreement
Previous report
On May 10, 2026, the Company entered into a purchase agreement (the “Purchase Agreement”) with the Purchaser, pursuant to which the Purchaser has agreed to purchase $150.0 million in newly issued shares of the Company’s cumulative convertible perpetual preferred stock (the “Convertible Preferred Stock”). The Convertible Preferred Stock will be a series of the Company’s preferred stock, par value $0.001 per share.
Previous report
The closing of the purchase is subject to the expiration of the KKR Tender Offer, and other customary closing conditions and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and is expected to occur on the 11th business day following the expiration of the KKR Tender Offer.
Previous report
The Company intends to use the proceeds from the sale of Convertible Preferred Stock for general corporate purposes including, without limitation, funding any Company common stock repurchase program or debt repayment. The Convertible Preferred Stock will rank senior to the Company’s common stock with respect to all liquidation, winding up, dissolution, dividend and distribution rights. The Convertible Preferred Stock will have a liquidation preference equal to $25.00 per share (the “Liquidation Preference”), plus an amount equal to all accrued but unpaid dividends, if any, accumulated to (but excluding) the date fixed for distribution or payment, whether or not earned or declared by the Company, but excluding interest on any such distribution or payment. Dividends on the Convertible Preferred Stock will be payable on a quarterly basis in an initial amount equal to 5.00% per annum of the Liquidation
Previous report
After the 6-month anniversary of the issue date, the Convertible Preferred Stock will be convertible into (i) the number of shares of the Company’s common stock equal to the quotient of (a) the Liquidation Preference, plus an amount equal to accumulated but unpaid dividends, if any, on such shares (whether or not earned or declared, but excluding interest on such dividends) to, but excluding, the date fixed for such conversion and (b) the conversion price as of the applicable conversion date (which shall not be less than the NYSE Minimum Price (as defined below)), plus (ii) cash in lieu of fractional shares. The initial conversion price will equal $18.83; provided, however, that in no event shall the conversion price be less than the NYSE Minimum Price.
Previous report
At any time, upon approval by the Board, including a majority of the Independent Directors, the Company may, at its election, redeem all or any part of the then-outstanding shares of Convertible Preferred Stock in cash at a price per share equal to the Liquidation Preference, plus an amount equal to all accumulated but unpaid dividends, if any, accumulated to (but excluding) the date fixed for redemption, whether or not earned or declared by the Company, but excluding interest on any such distribution or payment. The Purchaser will have the right to convert any shares of the Convertible Preferred Stock prior to the date fixed for such redemption. At any time on or after the thirty-six month anniversary of the issue date, upon approval by the Board, including a majority of the Independent Directors, so long as the volume weighted average price of the Company’s Shares on the NYSE for the 30 consecutive trading days ending on (and including) the trading day immediately preceding the date on which the Company delivers notice of redemption equals or exceeds the conversion price then in effect, the Company may, at its election, redeem all or any part of the then then-outstanding shares of Convertible Preferred Stock by delivering Shares in lieu of cash, at a redemption price equal to the Liquidation Preference, plus an amount equal to all accumulated but unpaid dividends, if any, accumulated to (but excluding) the date fixed for redemption, whether or not earned or declared by the Company, but excluding interest on any such distribution or payment. The Purchaser will have the right to convert any shares of the Convertible Preferred Stock prior to the date fixed for such redemption.
Previous report
At any time after the 6-year anniversary of the issue date, upon 90 days’ notice, the Purchaser will have the option, at its election, to require the Company to redeem any or all of the then-outstanding shares of Convertible Preferred Stock for cash consideration equal to the Liquidation Preference of the shares of Convertible Preferred Stock to be redeemed, plus an amount equal to accumulated but unpaid dividends, if any, on such shares (whether or not earned or declared, but excluding interest on such dividends) to, but excluding, the date fixed for such redemption. The Purchaser will have the right to convert any shares of Convertible Preferred Stock prior to the date fixed for any such redemption.
Previous report
Upon the occurrence of a Change of Control of the Company (as defined in the articles supplementary that will establish the Convertible Preferred Stock), the Purchaser will have the option to require the Company to immediately redeem all then-outstanding shares of Convertible Preferred Stock for cash consideration equal to the Liquidation Preference thereof, plus an amount equal to all accumulated but unpaid dividends thereon to, but excluding, the redemption date (whether or not earned or declared, but excluding interest). The Purchaser will have the right to convert any shares of Convertible Preferred Stock prior to the date fixed for such Change of Control redemption.
Previous report
Pursuant to the Purchase Agreement, the Purchaser has agreed that, for a period of one year following the issuance of the Convertible Preferred Stock (the “Restriction Date”), it will not, directly or indirectly, sell, pledge, transfer, dispose of, or enter into any swap or other arrangement that transfers any of the economic consequences of ownership of the Convertible Preferred Stock or the shares of the Company’s common stock into which it is convertible, subject to exceptions for (i) redemption of Convertible Preferred Stock by the Company and (ii) the Purchaser’s exercise of its conversion right. Following the Restriction Date, the Purchaser will be required to notify the Board of any transfer substantially concurrently therewith.
Previous report
Each holder of Convertible Preferred Stock will be entitled to vote on an as-converted basis on each matter submitted to a vote of stockholders of the Company. In addition, for so long as the Company is subject to the 1940 Act, the holders of Convertible Preferred Stock, voting separately as a single class, shall have the right to elect two (2) members of the Board at all times (initially expected to be James H. Kropp and Elizabeth J. Sandler), and the balance of the directors shall be elected by the holders of shares of the Company’s common stock and the Convertible Preferred Stock voting together; provided, however, if the Adviser is the Company’s investment adviser and the Purchaser or its affiliates beneficially own greater than 50% of the outstanding Convertible Preferred Stock, the Independent Directors of the Company selected by the Purchaser or its affiliates shall be eligible to serve as directors elected separately by the holders of Convertible Preferred Stock. If, at any time, accumulated dividends on the outstanding shares of Convertible Preferred Stock equal to at least two full years’ dividends shall be due and unpaid, or if holders of any other preferred stock become entitled to elect a majority of directors of the Company under the 1940 Act, then the number of directors constituting the Board shall automatically increase by the smallest number that, when added to the two directors elected exclusively by holders of the Convertible Preferred Stock, would constitute a majority of the Board. During any such period, the holders of the
Previous report
Convertible Preferred Stock and the holders of any other outstanding preferred stock of the Company shall have the power to elect such additional directors, voting separately as a class.
Previous report
“NYSE Minimum Price” means the lower of (x) the official closing price of the shares of the Company’s common stock on the NYSE immediately preceding the signing of the Purchase Agreement and (y) the average official closing price of the shares of the Company’s common stock on the NYSE for the five trading days immediately preceding the signing of the Purchase Agreement, in each case, as adjusted pursuant to certain anti-dilution adjustments.
Previous report
The shares of Convertible Preferred Stock were offered in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). These securities have not and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, as applicable.
Previous report
The description above is only a summary of the material provisions of the Purchase Agreement and is qualified in its entirety by reference to the copy of the Purchase Agreement, which is filed as Exhibit 10.2 to this Quarterly Report on Form 10-Q.
Previous report
Registration Rights Agreement
Previous report
Concurrently with the issuance of the Convertible Preferred Stock, the Company and the Purchaser expect to enter into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which the Purchaser (and certain permitted transferees) will have the right to require the Company to register for resale under the Securities Act shares of the Company’s common stock issued upon conversion of the Convertible Preferred Stock and certain other shares of the Company’s common stock held by the Purchaser and its affiliates as of the closing date of the Convertible Preferred Stock offering (collectively, the “Registrable Securities”). The Purchaser will have demand registration rights (not to exceed three Demand Requests (as defined in the Registration Rights Agreement) in any 365-day period), customary piggyback registration rights in connection with Company-initiated registrations, and the right to require the Company to use commercially reasonable efforts to maintain a continuously effective shelf registration statement on Form N-2 covering the Registrable Securities from and after the Registration Date until the Purchaser has sold all Registrable Securities. The Registration Rights Agreement will include customary indemnification and contribution provisions, which survive termination of the Registration Rights Agreement.
Previous report
The description above is only a summary of the material provisions of the Registration Rights Agreement and is qualified in its entirety by reference to the copy of the Registration Rights Agreement, a form of which is included in the Purchase Agreement filed as Exhibit 10.2 to this Quarterly Report on Form 10-Q.
Previous report
Subordinated Income Incentive Fee Waiver
Previous report
Beginning with the quarter ending June 30, 2026, KKR Credit has agreed to waive 100% of its portion of the subordinated income incentive fee (the “Incentive Fee Waiver”). The Incentive Fee Waiver applies to 50% of the subordinated income incentive fee that would otherwise be paid by the Company under the Advisory Agreement. The Incentive Fee Waiver will continue for four consecutive quarters.
Previous report
Off-Balance Sheet Arrangements
Previous report
We currently have no off-balance sheet arrangements, including any risk management of commodity pricing or other hedging practices.
Reworded paragraphs (40)
Previous wording
(in millions, except share and per share amounts)
Current wording
(dollar amounts in millions, except per share amounts)
Previous wording
Words such as “anticipate,” “believe,” “expect” and “intend” indicate a forward-looking statement, although not all forward-looking statements include these words. The forward-looking statements contained in this quarterly report on Form 10-Q are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause our actual results to differ materially from those expressed or forecasted in the forward-looking statements. Factors that could cause actual results to differ materially include changes relating to those set forth above and the following, among others:
Current wording
Words such as “anticipate,” “believe,” “expect,” “intend,” “project” and “future” or similar expressions indicate a forward-looking statement, although not all forward-looking statements include these words. The forward-looking statements contained in this quarterly report on Form 10-Q are not guarantees of future performance or events and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause our actual results or future events to differ materially from those expressed or forecasted in the forward-looking statements for any reason, including those factors set forth in “Item 1A. Risk Factors,” in the Company’s annual report on Form 10-K and subsequent filings. Factors that could cause actual results or future events to differ materially include changes relating to those set forth above and the following, among others:
Previous wording
•the price at which shares of our common stock may trade on the New York Stock Exchange, or NYSE.
Current wording
•the price at which shares of our common stock may trade on the NYSE.
Previous wording
Portfolio Investment Activity for the Three Months Ended March 31, 2026 and for the Year Ended December 31, 2025
Current wording
Portfolio Investment Activity for the Three and Six Months Ended June 30, 2026 and for the Year Ended December 31, 2025
Previous wording
The following tables present certain selected information regarding our portfolio investment activity for the three months ended March 31, 2026 and the year ended December 31, 2025:
Current wording
The following tables present certain selected information regarding our portfolio investment activity for the three and six months ended June 30, 2026 and the year ended December 31, 2025:
Previous wording
For the three months ended March 31, 2026, our total return based on net asset value was (7.56)% and our total return based on market value was (28.21)%. For the year ended December 31, 2025, our total return based on net asset value was 0.21% and our total return based on market value was (20.31)%. See footnotes 5 and 6 to the table included in Note 11 to our unaudited consolidated financial statements included herein for information regarding the calculation of our total return based on net asset value and total return based on market value, respectively.
Current wording
For the six months ended June 30, 2026, our total return based on net asset value was (8.09)% and our total return based on market value was (22.98)%. For the year ended December 31, 2025, our total return based on net asset value was 0.21% and our total return based on market value was (20.31)%. See footnotes 5 and 6 to the table included in Note 11 to our unaudited consolidated financial statements included herein for information regarding the calculation of our total return based on net asset value and total return based on market value, respectively.
Previous wording
Comparison of the Three Months Ended March 31, 2026 and March 31, 2025
Current wording
Comparison of the Three and Six Months Ended June 30, 2026 and June 30, 2025
Previous wording
Our investment income for the three months ended March 31, 2026 and 2025 was as follows:
Current wording
Our investment income for the three and six months ended June 30, 2026 and 2025 was as follows:
Previous wording
(1)Such revenues represent $262 and $330 of cash income earned as well as $42 and $70 in non-cash portions relating to accretion of discount and PIK interest for the three months ended March 31, 2026 and 2025, respectively. Cash flows related to such non-cash revenues may not occur for a number of reporting periods or years after such revenues are recognized.
Current wording
(1)Such revenues represent $244 and $337 of cash income earned as well as $46 and $61 in non-cash portions relating to accretion of discount and PIK interest for the three months ended June 30, 2026 and 2025, respectively, and $506 and $667 of cash income earned as well as $88 and$131 in non-cash portions relating to accretion of discount and PIK interest for the six months ended June 30, 2026 and 2025, respectively. Cash flows related to such non-cash revenues may not occur for a number of reporting periods or years after such revenues are recognized.
Previous wording
The decrease in interest and PIK income during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 is primarily attributable to the Company placing certain assets on non-accrual status during the three months ended March 31, 2026.
Current wording
The decrease in interest and PIK income during the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 is primarily attributable to a reduction in the size of our investment portfolio, in addition to the Company placing certain assets on non-accrual status during the three and six months ended June 30, 2026.
Previous wording
The decrease in dividend income during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 is primarily attributable to the decrease in dividends paid in respect to certain equity and asset based finance investments, partially offset by higher dividends on our investment in COPJV during the three months ended March 31, 2026.
Current wording
The decrease in dividend income during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 is primarily attributable to the decrease in dividends paid in respect to certain equity and asset based finance investments, and the decrease in dividends on our investment in COPJV during the three months ended June 30, 2026. The decrease in dividend income during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 is primarily attributable to the decrease in dividends paid in respect to certain equity and asset based finance investments during the six months ended June 30, 2026. On February 23, 2026, we reduced our equity interests in COPJV to approximately 79% from 87.5%.
Previous wording
Our operating expenses for the three months ended March 31, 2026 and 2025 were as follows:
Current wording
Our operating expenses for the three and six months ended June 30, 2026 and 2025 were as follows:
Previous wording
The decrease in expenses during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 can primarily be attributed to a decrease in subordinated income incentive fees and management fees as a result of the lower asset base and lower investment income as discussed above.
Current wording
The decrease in expenses during the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 can primarily be attributed to a decrease in management fees and interest expense as a result of the lower asset base and leverage during the three and six months ended June 30, 2026, in addition to the reduction in subordinated income incentive fees as a result of lower investment income as discussed above and the partial waiver of such subordinated income incentive fee during the three months ended June 30, 2026.
Previous wording
The following table reflects selected expense ratios as a percent of average net assets for the three months ended March 31, 2026 and 2025:
Current wording
The following table reflects selected expense ratios as a percent of average net assets for the three and six months ended June 30, 2026 and 2025:
Previous wording
Our net investment income totaled $117 ($0.42 per share) and $187 ($0.67 per share) for the three months ended March 31, 2026 and 2025, respectively.
Current wording
Our net investment income totaled $122 ($0.44 per share) and $173 ($0.62 per share) for the three months ended June 30, 2026 and 2025, respectively. Our net investment income totaled $239 ($0.85 per share) and $360 ($1.29 per share) for the six months ended June 30, 2026 and 2025, respectively.
Previous wording
The decrease in net investment income during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 can primarily be attributed to lower investment income during the three months ended March 31, 2026 as discussed above.
Current wording
The decrease in net investment income during the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 can primarily be attributed to lower investment income during the three and six months ended June 30, 2026 as discussed above.
Previous wording
Our net realized gains (losses) on investments, foreign currency forward contracts and foreign currency for the three months ended March 31, 2026 and 2025 were as follows:
Current wording
Our net realized gains (losses) on investments, foreign currency forward contracts and foreign currency for the three and six months ended June 30, 2026 and 2025 were as follows:
Previous wording
(1)We sold investments and received principal repayments, respectively, of $585 and $125 during the three months ended March 31, 2026 and $881 and $526 during the three months ended March 31, 2025.
Current wording
(1)We sold investments and received principal repayments, respectively, of $755 and $579 during the three months ended June 30, 2026 and $498 and $858 during the three months ended June 30, 2025. We sold investments and received principal repayments, respectively, of $1,340 and $704 during the six months ended June 30, 2026 and $1,379 and $1,384 during the six months ended June 30, 2025.
Previous wording
Our net change in unrealized appreciation (depreciation) on investments, foreign forward currency forward contracts and unrealized gain (loss) on foreign currency for the three months ended March 31, 2026 and 2025 were as follows:
Current wording
Our net change in unrealized appreciation (depreciation) on investments, foreign forward currency forward contracts and unrealized gain (loss) on foreign currency for the three and six months ended June 30, 2026 and 2025 were as follows:
Previous wording
The net change in unrealized appreciation (depreciation) on investments during the three months ended March 31, 2026 was driven primarily by reduced valuations of certain portfolio companies during the three months ended March 31, 2026, including Affordable Care Inc., Production Resources Group and Medallia Inc. The net change in unrealized appreciation (depreciation) on investments during the three months ended March 31, 2025 was driven primarily by reduced valuations of certain portfolio companies during the year, including Production Resources Group and 48Forty Solutions.
Current wording
The net change in unrealized appreciation (depreciation) on investments during the three months ended June 30, 2026 was driven primarily by reduced valuations of certain portfolio companies during the three months ended June 30, 2026, including COPJV and Production Resources Group. The net change in unrealized appreciation (depreciation) on investments during the six months ended June 30, 2026 was driven primarily by reduced valuations of certain portfolio companies during the six months ended June 30, 2026, including COPJV, Production Resources Group and Medallia Inc. The net change in unrealized appreciation (depreciation) on investments during the three and six months ended June 30, 2025 was driven primarily by reduced valuations of certain portfolio companies during the year, including Production Resources Group, 48Forty Solutions and Kellermeyer Bergensons Services LLC.
Previous wording
For the three months ended March 31, 2026, the net decrease in net assets resulting from operations was $(441) ($(1.57) per share) compared to a net increase in net assets resulting from operations of $120 ($0.43 per share) during the three months ended March 31, 2025.
Current wording
For the three months ended June 30, 2026, the net decrease in net assets resulting from operations was $(34) ($(0.13) per share) compared to a net increase in net assets resulting from operations of $(209) ($(0.75) per share) during the three months ended June 30, 2025.
Previous wording
As of March 31, 2026, we had $133 in cash, cash equivalents, including money market funds, restricted cash and foreign currency, which we or our wholly-owned financing subsidiaries held in custodial accounts, and $2,602 in borrowings available under our financing arrangements, subject to borrowing base and other limitations. As of March 31, 2026, we also had broadly syndicated investments and opportunistic investments that could be sold to create additional liquidity. As of March 31, 2026, we had unfunded debt investments with aggregate unfunded commitments of $1,326.0, unfunded equity/other commitments of $87.2 and unfunded commitments of $434.0 to COPJV. We maintain sufficient cash on hand, available borrowings and liquid securities to fund such unfunded commitments should the need arise.
Current wording
As of June 30, 2026, we had $109 in cash, cash equivalents, including money market funds, restricted cash and foreign currency, which we or our wholly-owned financing subsidiaries held in custodial accounts, and $3,052 in borrowings available under our financing arrangements, subject to borrowing base and other limitations. As of June 30, 2026, we also had broadly syndicated investments and opportunistic investments that could be sold to create additional liquidity. As of June 30, 2026, we had unfunded debt investments with aggregate unfunded commitments of $1,110.5, unfunded equity/other commitments of $70.7 and unfunded commitments of $434.0 to COPJV. We maintain sufficient cash on hand, available borrowings and liquid securities to fund such unfunded commitments should the need arise.
Previous wording
We currently generate cash primarily from cash flows from fees, interest and dividends earned from our investments, as well as principal repayments and proceeds from sales of our investments. We may also fund a portion of our investments through borrowings from banks and issuances of senior securities or other financing transactions. Our primary use of cash is investments in portfolio companies, payments of our expenses, including management fees, incentive fees and cost of any borrowings or other financing arrangements, including interest expenses, and the payment of cash distributions to our shareholders.
Current wording
We currently generate cash primarily from cash flows from fees, interest and dividends earned from our investments, as well as principal repayments and proceeds from sales of our investments. We may also fund a portion of our investments through borrowings from banks and issuances of senior securities, including preferred stock, or other financing transactions. Our primary use of cash is investments in portfolio companies, payments of our expenses, including management fees, incentive fees and cost of any borrowings or other financing arrangements, including interest expenses, and the payment of cash distributions or dividends to holders of our common stock and/or preferred stock.
Previous wording
To seek to enhance our returns, we also employ leverage as market conditions permit and at the discretion of the Adviser, but in no event will leverage employed exceed the maximum amount permitted by the 1940 Act. Prior to June 14, 2019, in accordance with the 1940 Act, we were allowed to borrow amounts such that our asset coverage, calculated pursuant to the 1940 Act, was at least 200% after such borrowing. Effective June 15, 2019, our asset coverage requirement applicable to senior securities was reduced from 200% to 150%. For purposes of the 1940 Act, “asset coverage” means the ratio of (1) the total assets of a BDC, less all liabilities and indebtedness not represented by senior securities, to (2) the aggregate amount of senior securities representing indebtedness (plus, in the case of senior securities represented by preferred stock, the aggregate involuntary liquidation preference of such BDC’s preferred stock). As of March 31, 2026, the aggregate amount outstanding of the senior securities issued by us was $7.3 billion. As of March 31, 2026, our asset coverage was 172%. See Note 9 for a discussion of the Company’s financing arrangements.
Current wording
To seek to enhance our returns, we also employ leverage as market conditions permit and at the discretion of the Adviser, but in no event will leverage employed exceed the maximum amount permitted by the 1940 Act. Prior to June 14, 2019, in accordance with the 1940 Act, we were allowed to borrow amounts such that our asset coverage, calculated pursuant to the 1940 Act, was at least 200% after such borrowing. Effective June 15, 2019, our asset coverage requirement applicable to senior securities was reduced from 200% to 150%. For purposes of the 1940 Act, “asset coverage” means the ratio of (1) the total assets of a BDC, less all liabilities and indebtedness not represented by senior securities, to (2) the aggregate amount of senior securities representing indebtedness (plus, in the case of senior securities represented by preferred stock, the aggregate involuntary liquidation preference of such BDC’s preferred stock). Under the 1940 Act, any preferred shares we issue, including the Convertible Preferred Stock, will constitute a “senior security” for purposes of the 150% asset coverage test.
Previous wording
(4)The spread over the benchmark rate is determined by reference to the ratio of the value of the borrowing base to the aggregate amount of certain outstanding indebtedness of the Company. In addition to the spread over the benchmark rate, a credit spread adjustment of 0.10% and 0.0326% is applicable to borrowings in U.S. dollars and pounds sterling, respectively.
Current wording
(3)The spread over the benchmark rate is determined by reference to the ratio of the value of the borrowing base to the aggregate amount of certain outstanding indebtedness of the Company. In addition to the spread over the benchmark rate, a credit spread adjustment of 0.10% and 0.0326% is applicable to borrowings in U.S. dollars and pounds sterling, respectively.
Previous wording
(5)Amount includes borrowing in Euros, pounds sterling and Australian dollars. Euro balance outstanding of €330 has been converted to U.S. dollars at an exchange rate of €1.00 to $1.15 as of March 31, 2026 to reflect total amount outstanding in U.S. dollars. Pounds sterling balance outstanding of £130 has been converted to U.S dollars at an exchange rate of £1.00 to $1.32 as of March 31, 2026 to reflect total amount outstanding in U.S. dollars. Australian dollar balance outstanding of AUD3 has been converted to U.S dollars at an exchange rate of AUD1.00 to $0.69 as of March 31, 2026 to reflect total amount outstanding in U.S. dollars.
Current wording
(4)Amount includes borrowing in Euros, pounds sterling and Australian dollars. Euro balance outstanding of €348 has been converted to U.S. dollars at an exchange rate of €1.00 to $1.14 as of June 30, 2026 to reflect total amount outstanding in U.S. dollars. Pounds sterling balance outstanding of £73 has been converted to U.S dollars at an exchange rate of £1.00 to $1.33 as of June 30, 2026 to reflect total amount outstanding in U.S. dollars. Australian dollar balance outstanding of AUD6 has been converted to U.S dollars at an exchange rate of AUD1.00 to $0.69 as of June 30, 2026 to reflect total amount outstanding in U.S. dollars.
Previous wording
(6)The amount available for borrowing under the Senior Secured Revolving Credit Facility is reduced by any standby letters of credit issued under the Senior Secured Revolving Credit Facility. As of March 31, 2026, $44 of such letters of credit have been issued.
Current wording
(5)The amount available for borrowing under the Senior Secured Revolving Credit Facility is reduced by any standby letters of credit issued under the Senior Secured Revolving Credit Facility. As of June 30, 2026, $51 of such letters of credit have been issued.
Previous wording
(7)As of March 31, 2026, the fair value of the 2.625% Notes due 2027, the 3.250% Notes due 2027, the 3.125% Notes due 2028, the 7.875% Notes due 2029, the 6.875% Notes due 2029, the 6.125% Notes due 2030 and the 6.125% Notes due 2031 was approximately $388, $480, $685, $405, $609, $715 and $399, respectively. These valuations are considered Level 2 valuations within the fair value hierarchy.
Current wording
(6)As of June 30, 2026, the fair value of the 2.625% Notes due 2027, the 3.250% Notes due 2027, the 3.125% Notes due 2028, the 7.875% Notes due 2029, the 6.875% Notes due 2029, the 6.125% Notes due 2030, the 6.125% Notes due 2031 and the 7.500% Notes due 2031 was approximately $393, $487, $706, $411, $612, $718, $400 and $900, respectively. These valuations are considered Level 2 valuations within the fair value hierarchy.
Previous wording
(8)As of March 31, 2026, the carrying values of the 6.875% Notes due 2029, the 6.125% Notes due 2030 and the 6.125% Notes due 2031 include a $9, $15 and $(1) increase (decrease), respectively, as a result of an effective hedge accounting relationship. See Note 7 for additional information.
Current wording
(7)As of June 30, 2026, the carrying values of the 6.875% Notes due 2029, the 6.125% Notes due 2030, the 6.125% Notes due 2031 and the 7.500% Notes due 2031 include a $12, $18, $0 and $0 increase (decrease), respectively, as a result of an effective hedge accounting relationship. See Note 7 for additional information.
Previous wording
(9)As of March 31, 2026, there were $160.0 of Class A-1 Notes outstanding at SOFR+1.48%, $100.0 of Class A-1L Notes outstanding at SOFR+1.48%, $30.0 of Class A-1W Notes outstanding at SOFR+1.48%, $20.0 of Class A-2L Notes outstanding at SOFR+1.60%, $30.0 of Class B Notes outstanding at SOFR+1.75% and $40.0 of Class C Notes outstanding at SOFR+2.15%.
Current wording
(8)As of June 30, 2026, there were $160.0 of Class A-1 Notes outstanding at SOFR+1.48%, $100.0 of Class A-1L Notes outstanding at SOFR+1.48%, $30.0 of Class A-1W Notes outstanding at SOFR+1.48%, $20.0 of Class A-2L Notes outstanding at SOFR+1.60%, $30.0 of Class B Notes outstanding at SOFR+1.75% and $40.0 of Class C Notes outstanding at SOFR+2.15%.
Previous wording
(10)As of March 31, 2026, there were $125.5 of Class A-1 Notes outstanding at SOFR+1.47%, $150.0 of Class A-1 Senior Floating Rate Loans outstanding at SOFR+1.47%, $19.0 of Class A-2 Notes outstanding at SOFR+1.65%, $35.6 of Class B Notes outstanding at SOFR+1.80% and $33.2 of Class C Notes outstanding at SOFR+2.10%.
Current wording
(9)As of June 30, 2026, there were $125.5 of Class A-1 Notes outstanding at SOFR+1.47%, $150.0 of Class A-1 Senior Floating Rate Loans outstanding at SOFR+1.47%, $19.0 of Class A-2 Notes outstanding at SOFR+1.65%, $35.6 of Class B Notes outstanding at SOFR+1.80% and $33.2 of Class C Notes outstanding at SOFR+2.10%.
Previous wording
On May 9, 2025, we entered into separate equity distribution agreements, or the Equity Distribution Agreements, with each of Truist Securities, Inc., RBC Capital Markets, LLC, KKR Capital Markets LLC, and SMBC Nikko Securities America, Inc., pursuant to which we may, from time to time, issue and sell up to an aggregate gross amount of $750 million in shares of our common stock through public or at-the-market offerings, or the ATM Program. During the three months ended March 31, 2026, the Company did not issue or sell shares of its common stock under the ATM Program. For further details regarding the ATM Program and the Equity Distribution Agreements, see “At the Market” Offering” in Note 3 to our consolidated financial statements included herein.
Current wording
On May 9, 2025, we entered into separate equity distribution agreements, or the Equity Distribution Agreements, with each of Truist Securities, Inc., RBC Capital Markets, LLC, KKR Capital Markets LLC, and SMBC Nikko Securities America, Inc., pursuant to which we may, from time to time, issue and sell up to an aggregate gross amount of $750 million in shares of our common stock through public or at-the-market offerings, or the ATM Program. During the six months ended June 30, 2026, the Company did not issue or sell shares of its common stock under the ATM Program. For further details regarding the ATM Program and the Equity Distribution Agreements, see “At the Market” Offering” in Note 3 to our unaudited consolidated financial statements included herein.
Previous wording
Subject to applicable legal restrictions and the sole discretion of our Board, we intend to authorize, declare and pay regular cash distributions on a quarterly basis. We will calculate each stockholder’s specific distribution amount for the period using record and declaration dates and each stockholder’s distributions will begin to accrue on the date that shares of our common stock are issued to such stockholder. From time to time, we may also pay special interim distributions in the form of cash or shares of our common stock at the discretion of our Board.
Current wording
Subject to applicable legal restrictions and the sole discretion of our Board, we intend to authorize, declare and pay regular cash distributions to our common stockholders on a quarterly basis. We will calculate each stockholder’s specific distribution amount for the period using record and declaration dates and each stockholder’s distributions will begin to accrue on the date that shares of our common stock are issued to such stockholder. From time to time, we may also pay to our common stockholders special interim distributions in the form of cash or shares of our common stock at the discretion of our Board.
Previous wording
Preference per share, payable in cash or, at the Company's option, 7.00% per annum of the Liquidation Preference per share payable in additional shares of Convertible Preferred Stock; provided that the Company shall be prohibited from paying dividends in additional shares of Convertible Preferred Stock if the conversion feature at the time of issuance of such additional shares is equal to or greater than 10.00% of the value of the Convertible Preferred Stock. After the 5.5-year anniversary of the issue date, the dividend rate will increase annually by 1.00% per annum.
Current wording
Holders of the Convertible Preferred Stockare entitled to receive cumulative dividends at an annual rate of 5.00% of the Liquidation Preference per share, computed on the basis of a 360-day year consisting of twelve 30-day months, payable in cash. At the Company’s option, dividends may instead be paid at an annual rate of 7.00% of the Liquidation Preference per share in additional shares of Convertible Preferred Stock, or a PIK Dividend, valued at the Liquidation Preference per share; provided that the Company is prohibited from paying dividends in additional shares if the conversion feature at the time of issuance of such additional shares is equal to or greater than 10.00% of the value of the Convertible Preferred Stock. After the 5.5-year anniversary of the issue date, both the cash dividend rate and the PIK Dividend rate will each increase by 1.00% per annum on each annual anniversary thereafter.
Previous wording
During certain periods, our distributions may exceed our earnings. As a result, it is possible that a portion of the distributions we make may represent a return of capital. A return of capital generally is a return of a stockholder’s investment rather than a return of earnings or gains derived from our investment activities. Each year a statement on Form 1099-DIV identifying the sources of the distributions will be mailed to our stockholders. No portion of the distributions paid during the three months ended March 31, 2026 or 2025 represented a return of capital.
Current wording
During certain periods, our distributions may exceed our earnings. As a result, it is possible that a portion of the distributions we make may represent a return of capital. A return of capital generally is a return of a stockholder’s investment rather than a return of earnings or gains derived from our investment activities. Each year a statement on Form 1099-DIV identifying the sources of the distributions will be mailed to our stockholders. No portion of the distributions paid during the six months ended June 30, 2026 or 2025 represented a return of capital.
Previous wording
We intend to make our regular distributions in the form of cash, out of assets legally available for distribution, except for those stockholders who receive their distributions in the form of shares of our common stock under the DRP. Any distributions reinvested under the plan will nevertheless remain taxable to a stockholder.
Current wording
We intend to make our regular distributions on common stock in the form of cash, out of assets legally available for distribution, except for those stockholders who receive their distributions in the form of shares of our common stock under the DRP. Any distributions reinvested under the plan will nevertheless remain taxable to a stockholder.
Previous wording
The following tables reflect the distributions per share that we have declared on our common stock during the three months ended March 31, 2026 and 2025:
Current wording
The following tables reflect the distributions per share that we have declared on our common stock during the six months ended June 30, 2026 and 2025:
Previous wording
On May 6, 2026, our Board of Directors declared a regular quarterly distribution of $0.42 per share which will be paid on or about July 2, 2026 to stockholders of record as of the close of business on June 17, 2026. The timing and amount of any future distributions to stockholders are subject to applicable legal restrictions and the sole discretion of our Board of Directors.
Current wording
On August 5, 2026, our Board of Directors declared a regular quarterly distribution of $0.44 per share which will be paid on or about October 2, 2026 to common stockholders of record as of the close of business on September 16, 2026. The timing and amount of any future distributions to common stockholders are subject to applicable legal restrictions and the sole discretion of our Board of Directors.
Previous wording
As of March 31, 2026, our investment portfolio, valued at fair value in accordance with our Board-approved valuation policy, represented 95.67% of our total assets, as compared to 94.76% of our total assets as of December 31, 2025.
Current wording
As of June 30, 2026, our investment portfolio, valued at fair value in accordance with our Board-approved valuation policy, represented 95.20% of our total assets, as compared to 94.76% of our total assets as of December 31, 2025.
Previous wording
We have entered into agreements with the Adviser to provide us with investment advisory and administrative services. Payments for investment advisory services under the Advisory Agreement are equal to (a) an annual base management fee based on the average weekly value of our gross assets (excluding cash and cash equivalents) and (b) an incentive fee based on our performance.
Current wording
We have entered into agreements with the Adviser to provide us with investment advisory and administrative services. Payments for investment advisory services under the Advisory Agreement are equal to (a) an annual base management fee based on the average weekly value of our gross assets (excluding cash and cash equivalents) and (b) an incentive fee based on our performance. The Adviser is reimbursed for administrative expenses incurred on our behalf. See Note 4 to our unaudited consolidated financial statements included herein for a discussion of these agreements and for the amount of fees and expenses accrued under these agreements during the six months ended June 30, 2026 and 2025.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For the six months ended June 30, 2026, the net decrease in net assets resulting from operations was $(475) ($(1.70) per share) compared to a net increase in net assets resulting from operations of $(89) ($(0.32) per share) during the six months ended June 30, 2025.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The Adviser is reimbursed for administrative expenses incurred on our behalf. See Note 4 to our unaudited consolidated financial statements included herein for a discussion of these agreements and for the amount of fees and expenses accrued under these agreements during the three months ended March 31, 2026 and 2025.