FS KKR Capital Corp

Non-accrual debt across US-registered business development companies jumped to 1.9% of total debt at cost in Q1 2026, up 52 basis points from the prior quarter, signaling growing borrower distress in private credit. Adjusted non-accrual exposure, counting all debt owed by borrowers with at least one non-accrual tranche, rose to 3.3% of total debt at cost, up 116 basis points from Q4 2025. Among the ten largest publicly traded BDCs, reported non-accrual debt reached 3.95% of total debt at cost in Q2, up 20 basis points, while adjusted exposure rose 54 basis points to 5.95%. The number of borrowers with at least one non-accrual instrument climbed to 356 in Q1 2026, representing 4.69% of all borrowers, up from 4.26% a year earlier. Two borrowers, Medallia and Inovalon, accounted for $4.4 billion of the Q1 2026 non-accrual total.

FS KKR Capital Corp. reported a 2.8% decline in Net Asset Value during its second quarter 2026 earnings call, driven by valuation marks on portfolio names including PRG, ATX, and Wittur. The company reduced its net debt-to-equity ratio to 122%, back within its 1x to 1.25x target range, supported by $1.3 billion in net sales and repayments. Management also sold $500 million in investments to third parties at prices consistent with prior valuations as part of a strategic portfolio rotation toward higher-quality assets. KKR provided a $150 million tender offer and a $150 million convertible preferred stock investment to bolster liquidity, while KKR waived its subordinated income incentive fee for four consecutive quarters, adding $11 million to net investment income this quarter. Non-accruals fell to 3.8% of the portfolio on a fair value basis, aided by the restructuring and removal of Dental Care Alliance and Affordable Care. Net investment income is projected to remain in the 8% to 9% of NAV range for the rest of 2026, and the company plans to complete its remaining $300 million stock repurchase program over 2026 and 2027.

Blue Owl Capital reduced its base quarterly dividend from $0.37 to $0.31 to align with its go-forward earnings power, as adjusted net investment income per share fell to $0.31 in the first quarter of 2026. The cut reflects a declining interest rate environment, with the average rate on its loans dropping from 11.1% at the end of 2024 to 10% by early 2026, and a net asset value per share decline to $14.41 from $14.81 at year-end 2025. Similar pressures are evident across the business development company sector: Main Street Capital saw its average private loan rate fall to 10.3% from 11.4% a year earlier, though its net asset value per share rose to $33.46 and its base dividend of $0.795 appears secure. Ares Capital Corporation reported second-quarter 2026 net investment income of $0.50 per share, covering its $0.48 dividend, but its average loan rate dropped to 10.3% and non-accrual loans rose to 2.4% of the portfolio. FS KKR Capital has already cut its base dividend to $0.42, with adjusted net investment income falling to $0.41 per share, net asset value declining to $18.83, and non-accrual loans surging to 4.2%.

Bragar Eagel & Squire, P.C. has filed a class action lawsuit against FS KKR Capital Corp. in the United States District Court for the Eastern District of Pennsylvania. The suit represents investors who purchased or acquired FS KKR Capital securities between May 8, 2024 and February 25, 2026. The complaint alleges that the company made false or misleading statements and failed to disclose that it overstated the effectiveness of its portfolio restructuring efforts, the valuation of its portfolio investments, and the durability of its quarterly distribution strategy. Investors have until July 6, 2026 to seek appointment as lead plaintiff.

Faruqi & Faruqi, LLP reminds investors in FS KKR Capital Corp. of the July 3, 2026 deadline to seek lead plaintiff appointment in a federal securities class action. The lawsuit alleges the company and its executives made false and misleading statements by overstating the effectiveness of portfolio restructuring efforts for nonaccrual companies, overstating portfolio investment valuations, and overstating the durability of its quarterly distribution strategy. The class period runs from May 8, 2024 to February 25, 2026, during which the stock price dropped sharply following disclosures of a 6.2% decline in net asset value, a $474 million drop in total fair value of investments, a loss per share of negative $0.75, further NAV deterioration, an additional $406 million decline in investment fair value, and a dividend cut from $0.70 to $0.48 per share. Investors who purchased or acquired FSK stock during that period and suffered losses may contact the firm to discuss their legal rights.

משרד רוזן עורכי דין מזכיר למשקיעים שרכשו ניירות ערך של FS KKR Capital Corp. בין 8 במאי 2024 ל-25 בפברואר 2026 כי המועד האחרון להגשת תביעה ייצוגית בניירות ערך הוא 6 ביולי 2026. על פי התביעה, החברה מסרה הצהרות כוזבות ומטעות בנוגע ליעילות ארגון מחדש של תיק ההשקעות, הערכת שווי השקעותיה ועמידות אסטרטגיית החלוקה הרבעונית. ייתכן שאתם זכאים לפיצוי ללא דמי השתתפות עצמית, או עלויות מכוח הסדר תשלום מותנה. משקיעים המעוניינים להצטרף לתביעה או לשמש כתובע מרכזי יכולים לפנות למשרד רוזן עורכי דין.

Rosen Law Firm reminds purchasers of FS KKR Capital Corp. securities between May 8, 2024 and February 25, 2026 of the July 6, 2026 lead plaintiff deadline in a securities class action. If you purchased FS KKR Capital securities during the Class Period you may be entitled to compensation without payment of any out of pocket fees or costs through a contingency fee arrangement. The lawsuit alleges that throughout the Class Period, defendants made false and misleading statements and failed to disclose that FS KKR Capital overstated the effectiveness of its portfolio restructuring efforts for nonaccrual companies, overstated the valuation of its portfolio investments and the effectiveness of its valuation process, and overstated the durability of its quarterly distribution strategy. Investors with losses in excess of $100,000 are encouraged to secure counsel before the deadline.

The Law Offices of Frank R. Cruz reminds investors that class action lawsuits have been filed on behalf of shareholders of FS KKR Capital Corp. and Graphic Packaging Holding Company, with a lead plaintiff deadline of July 6, 2026. The FS KKR Capital Corp. class action covers a class period from May 8, 2024 to February 25, 2026, alleging the company overstated the effectiveness of its portfolio restructuring, the valuation of its investments, and the durability of its distribution strategy. The Graphic Packaging Holding Company class action covers a class period from February 4, 2025 to February 2, 2026, alleging the company failed to disclose significant inventory management issues, reduced demand and volumes, increased costs, and that its fiscal year 2025 financial guidance was unreliable. Investors who suffered losses are encouraged to contact the law firm to discuss their legal rights.

Bronstein, Gewirtz & Grossman LLC has filed a class action lawsuit against FS KKR Capital Corp. and certain officers, alleging violations of federal securities laws. The suit covers investors who purchased or acquired FS KKR Capital securities between May 8, 2024 and February 25, 2026. The complaint claims the company overstated the effectiveness of its portfolio restructuring, the valuation of its investments, and the durability of its distribution strategy, making positive statements materially misleading. Investors have until July 3, 2026 to seek lead plaintiff appointment. The law firm is handling the case on a contingency fee basis.

Rosen Law Firm reminds purchasers of FS KKR Capital Corp. securities between May 8, 2024 and February 25, 2026 of the July 6, 2026 lead plaintiff deadline in a securities class action. If you purchased FS KKR Capital securities during the Class Period you may be entitled to compensation without payment of any out of pocket fees or costs through a contingency fee arrangement. The lawsuit alleges that throughout the Class Period, defendants made false and misleading statements and failed to disclose that FS KKR Capital overstated the effectiveness of its portfolio restructuring efforts, overstated the valuation of its portfolio investments and the effectiveness of its valuation process, and overstated the durability of its quarterly distribution strategy. Investors with losses in excess of $100,000 are encouraged to secure counsel before the deadline.

The fair value estimate for FS KKR Capital has been reduced from US$17.33 to US$11.50, reflecting a more cautious analyst outlook. RBC Capital lowered its price target in multiple updates, while Keefe Bruyette cut its target by US$4, signaling tighter expectations around earnings and growth. The forecast revenue decline deepened from 7.64% to 14.00%, and the target forward P/E multiple was lowered from 8.76x to 5.17x, though the net profit margin assumption rose from 63.43% to 97.98%. The discount rate was adjusted slightly from 12.50% to 12.46%.

Institutional investors who held FS KKR Capital Corp. shares between May 8, 2024 and February 25, 2026 may seek lead plaintiff appointment in a pending securities class action. The lawsuit alleges the company and certain officers made materially misleading statements about portfolio health, restructuring progress, and distribution sustainability. FSK shares fell $2.03 per share, or 15.24%, to $11.29 on February 26, 2026, after the company cut its quarterly dividend from $0.70 to $0.48 and disclosed that non-accrual investments had risen above the long-term BDC industry average. Combined fair value declines across the second and fourth quarters of 2025 totaled approximately $880 million. The lead plaintiff deadline is July 6, 2026.

Bragar Eagel & Squire, P.C. reminds investors that a class action lawsuit has been filed against FS KKR Capital Corp. in the United States District Court for the Eastern District of Pennsylvania, and the deadline to seek lead plaintiff appointment is July 6, 2026. The lawsuit covers purchasers of FS KKR Capital securities between May 8, 2024 and February 25, 2026, alleging the company made false or misleading statements about its portfolio restructuring, investment valuations, and quarterly distribution strategy. Investors who suffered losses are encouraged to contact the firm’s partners Brandon Walker or Melissa Fortunato at (212) 355-4648 to discuss their legal rights.

Bernstein Liebhard LLP reminds FS KKR Capital Corp. investors that the July 6, 2026 deadline is approaching to join a securities fraud class action lawsuit. The lawsuit, filed on behalf of investors who purchased or acquired FS KKR Capital securities between May 8, 2024 and February 25, 2026, alleges violations of the Securities Exchange Act of 1934 against the company and certain senior officers. The complaint claims that defendants made materially false and misleading statements about the company's business operations, growth prospects, and financial stability, causing shares to trade at artificially inflated prices and resulting in significant investor losses when the truth was disclosed. Investors who wish to serve as lead plaintiff must file papers by the July 6 deadline, though participation in any recovery does not require serving as lead plaintiff. Bernstein Liebhard LLP, which has recovered over $3.5 billion for clients since 1993, is handling the case on a contingency fee basis.