FS KKR Capital Corp 2024年度报告

Fellow Stockholder, On behalf of my colleagues at FS Investments and our partners at KKR Credit, I hope this letter finds you well following a year ofsignificant change in the global economy, financial markets, and political landscape. FS KKR Capital Corp. (“FSK”) delivered a total return to shareholders of over 23% in 2024 thanks to the hard work, dedication, andstrategic focus of our entire team. This performance was driven by our focus on four key objectives during the year: •Delivering a consistent, high level of income.FSK paid distributions to shareholders totaling $2.90 per share during 2024,consisting of a base distribution of $2.80 per share and $0.10 per share in special distributions. This equates to a 12.1% yieldon our average net asset value during the year. Based on our current view of interest rates and the earnings power of FSK, webelieve we will continue to provide shareholders with an attractive distribution in 2025.•Remaining disciplined amid a competitive lending environment.Since the establishment of FS/KKR Advisor, LLC (the“FS/KKR Advisor”) almost seven years ago, we have originated over $27 billion of new investments. During 2024, our goalwas to remain extremely disciplined from an origination standpoint, even if that discipline meant passing on certaintransactions. In 2024, our investment team deployed $4.7 billion of capital into compelling new transactions. We enter 2025with ample liquidity which will serve as a competitive strength as we evaluate new investment opportunities.•Improving credit quality and portfolio stability.The percentage of assets on non-accrual fell 58% during the year. As ofDecember 31, 2024, FSK’s non-accrual rate was 3.7% on a cost basis and 2.2% on a fair value basis. Within the 89% of theportfolio originated by KKR Credit, non-accruals were even lower, at just 2.0% on a cost basis and 0.8% on a fair value basisas of December 31, 2024.•Maintaining our strong balance sheet.During 2024, we issued $1.3 billion of unsecured notes maturing in 2029 and 2030.The proceeds of these issuances were used primarily to repay outstanding debt. We continue to proactively manage ourliability structure for upcoming maturities, and we expect to continue to opportunistically access the unsecured market during2025. The macroeconomic environment presents a balancing act for investors between expectations for strong yet moderating growth,lingering inflationary pressures, and evolving monetary policy expectations. Additionally, increasing uncertainty surrounding threatsof significant tariffs with large trading partners has somewhat tempered enthusiasm for a quick start to 2025 from a merger andacquisition (“M&A”) standpoint, as companies take steps to quantify what effects these potential policies may have on theirbusinesses. We continue to expect a robust increase in M&A activity over the coming years but believe the increase may take longer tomaterialize than certain industry observers have been forecasting. Against this backdrop, we continue to see strong tailwinds in the direct lending market. Lower interest rates have eased borrowingcosts for portfolio companies compared to the highs of 2023, while still delivering attractive levels of income-driven total return forinvestors. Credit defaults have remained largely contained across the business development company (“BDC”) industry, andborrowers continue to generate solid revenue and earnings growth. All of this points to direct lending market fundamentals remainingstrong, and we believe the scales will continue moving in favor of private credit providers. Looking forward, we believe FSK is well positioned to capitalize within this operating environment for the following reasons: •Our world-class credit platform:FSK is one of the largest publicly traded BDCs in the market, with approximately $14.2billion in assets under management as of December 31, 2024. Additionally, our access to KKR Credit’s global, multi-channelorigination network of financial sponsors, corporate issuers, and third-party intermediaries provides us with a consistentlydeep channel of deal flow, economies of scale, and in-depth market insights.•Focus on senior secured debt:Since the establishment of the FS/KKR Advisor, we have maintained a disciplinedunderwriting approach focused on what we believe are well collateralized senior secured investment structures. As ofDecember 31, 2024, approximately 73% of our total investment portfolio’s fair value was comprised of senior secured debt,including investments held in Credit Opportunities Partners JV, LLC, a joint venture between FSK and South CarolinaRetirement Systems Group Trust.•Competitive advantages through our focus on the upper middle market and asset-based finance:We remain focused onlarge, high-quality borrowers with strong operating margins and significant equity cushions. The weighted average EBITDA of our portfolio companies was $239 million as of December 31, 2024. Additionally, our portfolio co