FS KKR Capital Corp (FSK): Results of Operations and Financial Condition
FS KKR Capital Corp (FSK) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 FS KKR Capital Corp. Announces Second Quarter 2026 Results Declares Third Quarter 2026 Distribution of $0.44 per share PHILADELPHIA, PA AND NEW YORK, NY – August 6, 2026 – FS KKR Capital Corp. (NYSE: FSK), or the Company, today announced its financial and operating r
How this was made
The 30-second read
Why it matters
The 8-K introduces a new declared distribution for Q3 2026 and updates key credit-quality and leverage metrics (NAV, non-accrual, debt-to-equity, NII per share). Traders may rebalance around income timing (record date Sep 16, pay about Oct 2) and around NAV/credit-mark risk.
Market read
New quarterly disclosure plus a forward cash distribution date can affect near-term positioning for income and credit-risk exposure, with NAV and loss metrics shaping sentiment.
What to watch
Non-accrual percentages improved (3.8% vs 4.2% on fair value), and leverage ratios eased (debt-to-equity 127% vs 138%), which may mitigate concerns about the NAV drawdown.
FS KKR Capital Corp. Announces Second Quarter 2026 Results Declares Third Quarter 2026 Distribution of $0.44 per share
Net investment income increased from the prior quarter and leverage and non-accrual exposure declined, but net asset value fell and the Company reported an earnings loss per share.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net investment income per shareGAAP | $0.44 per share | – | – |
| Adjusted net investment income per sharenon-GAAP | $0.43 per share | – | – |
| Net asset value per shareother | $18.30 per share | – | – |
| Total net realized and unrealized loss per shareGAAP | $0.56 per share | – | – |
| Adjusted net realized and unrealized loss per sharenon-GAAP | $0.55 per share | – | – |
| Earnings (Loss) per shareGAAP | ($0.13) | – | – |
| Total purchasesother | $590 million | – | – |
| Sales and repaymentsother | $1,334 million | – | – |
| Net sales to Credit Opportunities Partners JV, LLCother | $9 million | – | – |
| Debt to equity ratioother | 127% | – | – |
| Net debt to equity ratioother | 122% | – | – |
| Paid distributions to common stockholdersother | $0.42 per share | – | – |
| Total fair value of investmentsother | $11,418 million | – | – |
| Weighted average annual yield on accruing debt investmentsother | 9.8% | – | – |
| Weighted average annual yield on all debt investmentsother | 8.8% | – | – |
| Exposure to top ten largest portfolio companies by fair valueother | 21% | – | – |
| Investments on non-accrual status as a percentage of total investment portfolio at fair valueother | 3.8% | – | – |
| Investments on non-accrual status as a percentage of total investment portfolio at amortized costother | 7.1% | – | – |
| Senior Secured Loans — First Lienother | 58.7% | – | – |
| Senior Secured Loans — Second Lienother | 3.9% | – | – |
| Other Senior Secured Debtother | 0.4% | – | – |
| Subordinated Debtother | 0.9% | – | – |
| Asset Based Financeother | 12.6% | – | – |
| Credit Opportunities Partners JV, LLCother | 14.4% | – | – |
| Equity/Otherother | 9.1% | – | – |
| Variable Rate Debt Investmentsother | 59.4% | – | – |
| Fixed Rate Debt Investmentsother | 9.1% | – | – |
| Other Income Producing Investmentsother | 21.1% | – | – |
| Non-Income Producing Investmentsother | 6.6% | – | – |
| Weighted average effective interest rateother | 5.49% | – | – |
third quarter 2026 outlook
- NoteDistribution of $0.44 per share of common stock, to be paid on or about October 2, 2026 to common stockholders of record as of the close of business on September 16, 2026.
- NoteCash dividend of $0.315972 per share of convertible preferred stock for the period from June 29, 2026 to September 30, 2026, to be paid on or about September 30, 2026 to convertible preferred stockholders of record as of the close of business on September 15, 2026.
Capital returns
- Paid distributions to common stockholders totaling $0.42 per share.
- The board of directors declared a third quarter 2026 distribution of $0.44 per share for common stockholders.
- From July 1, 2026 through August 5, 2026, the Company repurchased 3,348,353 shares at an average price per share of $10.75, totaling $36 million.
- From the commencement of the repurchase plan on June 29, 2026 through the end of the second quarter, the Company repurchased 377,800 shares totaling $4 million at an average price per share of $10.57.
- The weighted average purchase price of all shares repurchased from June 29, 2026 to August 5, 2026 was $10.73.
- The $150 million tender offer for shares of FSK’s common stock conducted by a subsidiary of KKR was successfully completed.
- The $150 million issuance of convertible preferred stock by FSK to a subsidiary of KKR closed.
- FSK’s $300 million share repurchase program commenced.
What drove it
- Net investment income was $0.44 per share, compared to $0.42 per share for the quarter ended March 31, 2026.
- The 50% subordinated income incentive fee waiver helped to support Net Investment Income and the third quarter distribution.
- Total purchases were $590 million versus $1,334 million of sales and repayments, including $9 million of net sales to Credit Opportunities Partners JV, LLC.
- Investments on non-accrual status represented 3.8% and 7.1% of the total investment portfolio at fair value and amortized cost, respectively, compared to 4.2% and 8.1% as of March 31, 2026.
Concerns
- Net asset value was $18.30 per share as of June 30, 2026, compared to $18.83 per share as of March 31, 2026.
- Earnings (Loss) per share was ($0.13).
- Total net realized and unrealized loss was $0.56 per share.
- Total fair value of investments was $11,418 million, compared to $12,269 million as of March 31, 2026.
- Exposure to the top ten largest portfolio companies by fair value was 21%, compared to 20% as of March 31, 2026.
- The weighted average annual yield on accruing debt investments was 9.8%, compared to 9.9% as of March 31, 2026.
What to watch
- The third quarter 2026 common-stock distribution of $0.44 per share.
- Further repurchase activity under the $300 million share repurchase program.
- Portfolio rotation efforts and progress enhancing portfolio quality.
- Future movement in investments on non-accrual status, which were 3.8% of total investment portfolio at fair value as of June 30, 2026.
- Net debt to equity ratio, which was 122% as of June 30, 2026.
Balance sheet and cash flow
- Debt to equity ratio of 127%, based on $6.5 billion in total debt outstanding and common stockholders’ equity of $5.1 billion.
- Net debt to equity ratio of 122%, based on $6.6 billion in total debt outstanding, including convertible preferred stock, net of $109 million of cash, cash equivalents, restricted cash and foreign currency and $309 million of net receivable for investments sold and repaid and common stockholders’ equity of $5.1 billion.
- Cash, cash equivalents, restricted cash and foreign currency of $109 million and availability under the Company’s financing arrangements of $3.1 billion, subject to borrowing base and other limitations.
- 72% of the Company’s $6.5 billion of total debt outstanding was in unsecured debt and 28% was in secured debt.
Analysis
FSK reported net investment income of $0.44 per share, compared to $0.42 per share in the quarter ended March 31, 2026. Adjusted net investment income was $0.43 per share, compared to $0.41 per share. The Company reported Earnings (Loss) per share of ($0.13), while total net realized and unrealized loss was $0.56 per share. Both measures were materially less negative than the reported prior-quarter losses of ($1.57) per share and $2.00 per share, respectively.
Portfolio activity reflected $590 million of total purchases versus $1,334 million of sales and repayments, including $9 million of net sales to Credit Opportunities Partners JV, LLC. Total fair value of investments was $11,418 million, compared with $12,269 million as of March 31, 2026. The portfolio remained concentrated in senior secured securities, which represented 63.0% of total fair value of investments, while exposure to the top ten largest portfolio companies by fair value was 21%.
Credit indicators improved from the prior quarter. Investments on non-accrual status represented 3.8% of the total investment portfolio at fair value and 7.1% at amortized cost, compared with 4.2% and 8.1%, respectively, as of March 31, 2026. The weighted average annual yield on accruing debt investments declined to 9.8% from 9.9%, while the weighted average annual yield on all debt investments increased to 8.8% from 8.7%.
Balance-sheet leverage moved lower, with debt to equity ratio at 127% compared to 138% as of March 31, 2026, and net debt to equity ratio at 122% compared to 131%. The Company reported $109 million of cash, cash equivalents, restricted cash and foreign currency, alongside $3.1 billion of availability under financing arrangements, subject to borrowing base and other limitations. Its weighted average effective interest rate was 5.49%.
Capital actions were prominent. FSK paid distributions totaling $0.42 per share and declared a third quarter 2026 distribution of $0.44 per share. The Company’s repurchase program commenced, with $4 million of repurchases through June 30, 2026 and a further $36 million of repurchases from July 1, 2026 through August 5, 2026. Management also cited the completed $150 million tender offer, the closed $150 million issuance of convertible preferred stock, and the 50% subordinated income incentive fee waiver as actions supporting net investment income and the third quarter distribution.
Management, verbatim
During the second quarter, FSK generated Net Investment Income of $0.44 per share, reduced net leverage to within our target range, and made progress reducing our non-accrual assets.
Michael C. Forman, Chief Executive Officer and Chairman
During the second quarter, the $150 million tender offer for shares of FSK’s common stock conducted by a subsidiary of KKR was successfully completed, the $150 million issuance of convertible preferred stock by FSK to a subsidiary of KKR closed, FSK’s $300 million share repurchase program commenced, and the 50% subordinated income incentive fee waiver helped to support our Net Investment Income and third quarter distribution.
Daniel R. Pietrzak, President and Chief Investment Officer of FSK and Partner and Global Head of Private Credit at KKR
Not in the filing
stated, not guessed- Total revenue or total investment income
- Revenue comparisons and revenue growth
- Segment revenue and segment growth
- Gross margin
- Operating income
- Operating expenses
- Net income
- GAAP and non-GAAP EPS reconciliation beyond the reported Earnings (Loss) per share and adjusted net investment income per share
- Operating cash flow
- Free cash flow
- Prior-year comparisons for reported metrics
- Prior-quarter percentage changes for reported metrics
- Forward revenue, gross margin, operating expense, or tax-rate guidance
- Previous-release outlook for comparison with actual results
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
FS KKR Capital Corp is a NYSE-listed investment company reporting quarterly results and declaring distributions; this filing covers the quarter ended June 30, 2026.
Ticker impact
FSK reported Q2 2026 results, declared a $0.44/share Q3 distribution, and disclosed NAV decline to $18.30 from $18.83.
Likely modest volatility around distribution expectations and leverage/NAV trajectory; direction depends on how investors weigh NII stability versus NAV drawdown.
The filing provides concrete, time-stamped datapoints (NII per share, EPS loss, NAV, non-accrual %, leverage ratios) and a new forward cash distribution, but it is not a guidance raise or a major balance-sheet reset beyond previously described strategic actions.
Market effects
Adds datapoints on private credit BDC-style leverage, non-accrual levels, and income coverage, relevant to the broader closed-end/BDC income complex.
Primarily US-listed income/credit investors; limited direct regional spillover beyond US credit sentiment.
Low; impacts are mostly within US private credit and leveraged income strategies.
Counterpoint
The NAV decline and realized/unrealized losses may signal worsening credit marks, so the distribution could be viewed as supported by fee waivers and portfolio rotation rather than improving fundamentals.
Key entities
- companyFS KKR Capital Corp
Reported Q2 2026 results, declared Q3 2026 distribution of $0.44/share, and provided NAV, NII, and leverage/non-accrual metrics.
- advisorFS/KKR Advisor
Referenced as progressing strategic actions announced in May, including tender offer, convertible preferred issuance, and share repurchase program.
