FS KKR Capital closes $150M convertible preferred stock sale to KKR

FS KKR Capital Corp. (NYSE: FSK) has closed a $150 million issuance of cumulative convertible perpetual preferred stock, purchased by KKR Alternative Assets L.P., a subsidiary of KKR & Co. Inc. (NYSE: KKR), according to a press release dated June 29, 2026.

The company said it intends to use the proceeds for general corporate purposes, including funding its common stock repurchase program or debt repayment.

The preferred stock carries a cash dividend rate of 5.00% per annum, or 7.00% per annum in payment-in-kind dividends at the company's option. After 5.5 years from the issue date, the dividend rate will increase by 1.00% per annum annually. The stock ranks junior to all existing company debt and senior to common stock.

The initial conversion price is set at $18.83 per share, equal to the company's net asset value per share as of March 31, 2026. After six months, holders may convert the preferred stock into common shares at the then-current conversion price. The company may redeem the preferred stock in cash at any time, and after three years may redeem it in common stock if the 30-day volume-weighted average price meets or exceeds the conversion price.

Holders of the convertible preferred stock are entitled to vote on an as-converted basis on all matters put to stockholders and have the right to elect two members to the company's board of directors. A majority of holders may require the company to redeem all outstanding shares upon certain change-of-control events.

The securities were issued in reliance on Section 4(a)(2) of the Securities Act of 1933 and have not been registered under federal or state securities laws.

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