FS KKR Capital Corp. II (FSK II), a non-traded business development company, has priced a private placement offering of $475 million of its 4.25 percent unsecured notes due 2025. The offering is expected to close on February 14, 2020.
FSK II expects to use the net proceeds of the offering to repay outstanding debt under its senior secured revolving credit facility.
The notes will mature on February 14, 2025 and may be redeemed in whole or in part at FSK II’s option at any time at par plus a “make-whole” premium, provided that the notes may be redeemed at par one month prior to their maturity.
The new notes will be offered only to qualified institutional buyers under Rule 144A of the Securities Act or to non-U.S. persons in compliance with Regulation S under the Securities Act.
FSK II was formed from the December 2019 merger of four non-traded BDCs including FS Investment Corporation II, FS Investment Corporation III, FS Investment Corporation IV, and Corporate Capital Trust II. The combined company became the second largest BDC with more than $9.5 billion in assets and, as of September 30, 2019, 210 portfolio companies across 21 industries.
FSK II invests primarily in the senior secured debt and, to a lesser extent, the subordinated debt of private middle market companies. The company is advised by FS/KKR Advisor LLC, a partnership between FS Investments and KKR Credit Advisors.
The company plans to list its common stock on the New York Stock Exchange during 2020, depending on market conditions and board approval. As of December 16, 2019, FSK II had a net asset value per share of $7.36.