FS KKR CAPITAL CORP.

Red flags

• The company has no employees and depends on FS/KKR Advisor, LLC; the Advisor may terminate the investment advisory agreement on 60 days' notice, creating key-person, sourcing, and continuity risk.
• The 150% asset-coverage requirement, reduced from 200%, permits materially more leverage; actual borrowings and headroom are not provided here, so downside sensitivity cannot be underwritten.
• A significant portion of the portfolio lacks readily available market prices and is fair-valued in good faith by the board, leaving NAV exposed to model and judgment risk.
• Distribution quality is uncertain: the filing says distributions may come from offering proceeds, borrowings, or asset sales, and may represent return of capital.
• Incentive compensation may be payable on income not received, while affiliate conflicts and limited control over portfolio companies can weaken alignment and recovery outcomes.