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November 25, 2020 | Bloomberg<\/p>\n
Two business development companies managed by a joint venture of FS Investments and KKR & Co.\u2019s credit arm are planning to merge, creating a $15 billion lending vehicle that will be one of the largest providers of financing to midsized firms in the U.S.<\/p>\n
The merger combines FS KKR Capital Corp. and FS KKR Capital Corp. II into an entity with more than $3 billion of committed capital available for new investments, according to a Tuesday statement. The newly combined BDC, which will keep operating under FS KKR Capital Corp. banner, will continue to focus mainly on senior secured debt investments.<\/p>\n
\u201cWe\u2019re focused on the upper end of the middle market,\u201d KKR\u2019s Daniel Pietrzak said in an interview. \u201cWe believe — and Covid has shown to be true — that larger companies probably have a deeper management team, less customer and supplier concentration and just more levers to pull if there\u2019s a challenge.\u201d<\/p>\n
BDCs, the most visible corner of the $850 billion private debt market, have ballooned since the 2008 financial crisis as traditional lenders retrenched from providing financing to small- and medium-sized businesses. Since then — often operating under the purview of some of the biggest names in credit and private equity — they\u2019ve grown larger and begun doing bigger deals, too.<\/p>\n
FS KKR Capital Corp. will have enhanced access to the investment-grade debt markets, a stronger dividend profile and lower overall expenses, Michael Forman, chief executive officer of both BDCs, said in the statement.<\/p>\n
The boards of both BDCs have approved the merger, which is expected to close during the second or third quarter of 2021. FS\/KKR Advisor LLC — a partnership between FS Investments and KKR Credit — is investment adviser to the BDCs.<\/p>\n
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Two business development companies managed by a joint venture of FS Investments and KKR & Co.\u2019s credit arm are planning to merge, creating a…<\/p>\n","protected":false},"author":2700,"featured_media":36880,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3010,2862,2880,2815,2963],"tags":[],"class_list":["post-37955","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-asset-manager-news","category-fs-investments","category-kkr","category-lending","category-merger"],"acf":[],"yoast_head":"\n