The BDC reduced leverage through disciplined sales and repayments, targeting net investment income of 8%-9% of NAV for the rest of 2026.
FS KKR Capital Corp. lowered its net debt-to-equity ratio to 122% in Q2 2026, returning to its target range after $1.3 billion in net sales and repayments. The move followed valuation declines in select portfolio companies, including PRG and ATX, which drove a 2.8% drop in NAV.
The company sold $500 million in investments at prices aligned with prior valuations, improving asset quality. Portfolio companies showed resilience with a 6% weighted average EBITDA growth rate, despite inflationary pressures.
Management expects net investment income to remain at 8%-9% of NAV for the rest of 2026, contingent on geopolitical stability. A $300 million stock repurchase program is planned through 2027, balancing buybacks with liquidity targets.