The tender offer at $11.00/share represents a deep discount to NAV of $18.83, signaling management's view that intrinsic value exceeds the tender price but also highlighting severe capital structure stress. Monitor the tender offer expiration and HSR clearance for the preferred investment. The $300M buyback program is contingent on net repayment levels and leverage targets, so near-term repurchase activity may be limited. The incentive fee waiver supports NII but does not address the core portfolio credit deterioration driving NAV erosion.
Price Chart
Executive Summary
FSK reported Q1 2026 results with a GAAP net loss of $1.57 per share, driven by a $558M net realized and unrealized loss, while net investment income fell to $0.42 per share from $0.48 in Q4 2025. NAV per share declined 10% to $18.83 from $20.89. Concurrently, the company announced a $150M convertible preferred investment from a KKR affiliate, a $150M tender offer at $11.00/share, a $300M share repurchase program, and a 50% subordinated income incentive fee waiver for four quarters. The combination of deteriorating fundamentals and a capital restructuring package signals significant financial stress.
Key Financial Metrics
Key Facts
- GAAP net loss of $1.57 per share for Q1 2026 vs. loss of $0.41 in Q4 2025
- Net investment income fell to $0.42 per share from $0.48 in Q4 2025
- NAV per share declined to $18.83 from $20.89, a 10% drop
- Total net realized and unrealized loss of $558M for the quarter
- Non-accrual investments increased to 8.1% of portfolio at amortized cost from 5.5%
- KKR affiliate to invest $150M in convertible preferred stock at 5% cash / 7% PIK dividend
- KKR launching $150M tender offer at $11.00/share, a 42% discount to NAV of $18.83
- Board authorized $300M share repurchase program expiring June 1, 2027
- KKR waiving 50% of subordinated income incentive fee for four quarters starting Q2 2026
- Credit facility reduced to $4.05B from $4.70B with higher margins and lower equity floor
Financial Impact
NAV decline of $2.06 per share (10% QoQ); net investment income down 12.5% QoQ; non-accruals nearly doubled to 8.1% of amortized cost
Risk Factors
- Further NAV erosion from non-accrual assets and market-driven spread widening
- Dilution risk from preferred stock conversion at $18.83/share if common stock appreciates
- Leverage ratio increased to 131% from 122%, limiting financial flexibility
- Credit facility amendment with higher margins increases interest expense
- Tender offer at $11.00 may pressure common stock price toward that level
Market Snapshot
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001104659-26-058250 |
| Document: tm2614112d1_ex99-1.htm | 0001104659-26-058250 |
| Document: tm2614112d1_8k.htm | 0001104659-26-058250 |
| Document: 0001104659-26-058250-index-headers.html | 0001104659-26-058250 |
| Document: 0001104659-26-058250-index.html | 0001104659-26-058250 |
| Document: 0001104659-26-058250.txt | 0001104659-26-058250 |
| 8-K Data (Synthetic) | 0001104659-26-058250 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Jun 29, 2026 13w ago | 8-K | $10.50 $11.17 | ▲ +6.38% | ▲ +3.56% | $11.11 (+5.81%) |
Jun 23, 2026 14w ago | DEFA14A | $10.04 $11.74 | ▲ +16.93% | ▲ +14.09% | $11.11 (+10.66%) |
Jun 8, 2026 16w ago | 8-K | $10.87 $12.25 | ▲ +12.70% | ▲ +8.88% | $11.11 (+2.21%) |
Jun 2, 2026 17w ago | 8-K | $10.80 $12.23 | ▼ −13.24% | ▼ −10.74% | $11.11 (−2.87%) |
Jun 2, 2026 17w ago | 8-K | $10.90 $12.16 | ▲ +11.56% | ▲ +10.44% | $11.11 (+1.93%) |
May 18, 2026 19w ago | 8-K | $10.59 $12.64 | ▲ +19.36% | ▲ +13.07% | $11.11 (+4.91%) |
May 12, 2026 20w ago | 8-K | $10.72 $12.44 | ▲ +16.04% | ▲ +11.61% | $11.11 (+3.64%) |
May 11, 2026 20w ago | 8-K | $10.76 $11.04 | ▼ −2.60% | ▲ +1.79% | $11.11 (−3.25%) |
May 5, 2026 21w ago | DEFA14A | $11.50 $10.56 | ▼ −8.17% | ▼ −10.91% | $11.11 (−3.39%) |
Apr 30, 2026 22w ago | DEFA14A | $11.55 $10.99 | ▼ −4.85% | ▼ −7.92% | $11.11 (−3.81%) |
US Market Status
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