Why FS KKR Capital Corp (NYSE: FSK) stock is rising

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FS KKR Capital Corp (NYSE: FSK) stock rose over 7% on June 16th, 2020 and continued it’s bullish momentum on June 17th, 2020, rising over 1.2% in the pre – market session (Source: Google finance) after the company has started trading on the New York Stock Exchange on a split-basis on June 16, 2020.  Due to the reverse stock split, the share count got reduced on a 4 : 1 basis, in which each shareholder will receive 1 share for every 4 shares owned. The Company also filed a separate Articles of Amendment to its charter to provide that there will be no change in the par value of $0.001 per share due to the reverse stock split. Meanwhile, the company had previously declared a regular quarterly cash dividend of $0.15 per share, which will be paid on or about July 2, 2020 to shareholders of record as of the close of business on June 17, 2020. Due to the reverse stock split effect, the cash distribution to be paid on or about July 2, 2020 will instead be $0.60 per share. This is due to fact of the total amount that would have been payable on four shares prior to the reverse stock split.

Further, FS KKR Capital Corp. II (FSK II) expects that its shares of common stock will start trading on the NYSE with the ticker symbol “FSKR” on or around June 17, 2020. However, there is no assurance that FSK II will be able to complete the Listing on the expected timeframe, or at all.

On the other hand, the company on April 30, 2020, had closed an issuance of $250 million total principal amount of unsecured notes. The notes will mature on May 15, 2025 and have an interest at a rate of 8.625% per year, which is subject to certain adjustments, and will be paid semi-annually. These notes will be offered to the qualified institutional buyers according to Rule 144A under the Securities Act of 1933, and to certain non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act. The company in May had amended its senior secured revolving credit facility & had reset the minimum shareholders’ equity covenant to reference shareholders’ equity as of March 31, 2020, rather than November 7, 2019.  This amendments are expected to provide FSK with enhanced operating flexibility.

Additionally, for the first quarter of 2020, the company’s net investment income was of $0.19 per share, compared to $0.18 per share for the first quarter ended March 31, 2019

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