Entry into a Material Definitive Agreement.
On December 10, 2020, FS KKR Capital Corp. (the “Company”) and
U.S. Bank National Association (the “Trustee”), entered into a
Seventh Supplemental Indenture (the “Seventh Supplemental
Indenture”) to the Indenture, dated July 14, 2014, between the
Company and the Trustee (the “Base Indenture”; and together with
the Seventh Supplemental Indenture, the “Indenture”). The Seventh
Supplemental Indenture relates to the Company’s issuance of
$1,000,000,000 aggregate principal amount of its 3.400% notes due
2026 (the “Notes”).
The Notes will mature on January 15, 2026 and may be redeemed
in whole or in part at the Company’s option at any time or from
time to time at the redemption prices set forth in the Indenture.
The Notes bear interest at a rate of 3.400% per year payable
semi-annually on January 15th and July 15th of each year,
commencing on July 15, 2021. The Notes are general unsecured
obligations of the Company that rank senior in right of payment to
all of the Company’s existing and future indebtedness that is
expressly subordinated in right of payment to the Notes, rank
pari passu with all existing and future unsecured
unsubordinated indebtedness issued by the Company, rank effectively
junior to any of the Company’s secured indebtedness (including
unsecured indebtedness that the Company later secures) to the
extent of the value of the assets securing such indebtedness, and
rank structurally junior to all existing and future indebtedness
(including trade payables) incurred by the Company’s subsidiaries,
financing vehicles or similar facilities.
The Indenture contains certain covenants, including covenants
requiring the Company to comply with the asset coverage
requirements of Section 18(a)(1)(A) as modified by
Section 61(a)(1) and (2) of the Investment Company Act of
1940, as amended, whether or not it is subject to those
requirements, and to provide financial information to the holders
of the Notes and the Trustee if the Company is no longer subject to
the reporting requirements under the Securities Exchange Act of
1934, as amended. These covenants are subject to important
limitations and exceptions that are described in the Indenture.
In addition, on the occurrence of a “change of control repurchase
event,” as defined in the Indenture, the Company will generally be
required to make an offer to purchase the outstanding Notes at a
price equal to 100% of the principal amount of such Notes plus
accrued and unpaid interest to the repurchase date.
The Notes were offered and sold in an offering registered under the
Securities Act of 1933, as amended, pursuant to the Registration
Statement on Form N-2 (File
No. 333-231221) (as
amended, the “Registration Statement”), the prospectus supplement
dated December 3, 2020 and the pricing term sheet filed with
the U.S. Securities and Exchange Commission on December 3,
2020. The transaction closed on December 10, 2020. The net
proceeds to the Company were approximately $977.7 million,
after deducting the underwriting discounts and commissions of
approximately $10.0 million payable by the Company and
estimated offering expenses of approximately $600,000 payable by
the Company. The Company intends to use the net proceeds to repay
outstanding indebtedness under its financing arrangements.
The foregoing descriptions of the Seventh Supplemental Indenture
and the Notes do not purport to be complete and are qualified in
their entirety by reference to the full text of the Seventh
Supplemental Indenture and the Notes, respectively, each filed as
exhibits hereto and incorporated by reference herein.
Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
The information required by Item 2.03 contained in
Item 1.01 of this Current Report on Form 8-K is incorporated herein by
Regulation FD Disclosure.
On December 10, 2020, the Company issued a press release, a
copy of which is attached hereto as Exhibit 99.1.
The information in this Item 7.01, including Exhibit 99.1 and the
information set forth therein, is deemed to have been furnished to,
and shall not be deemed to be “filed” with, the U.S. Securities and