FSK Stock: Dividend Cut, NAV and Non-Accruals (SEC Filings)

Did FSK cut its dividend? Yes, twice, then edged it up

Every row is a declaration in FSK's distribution tables (10-K for 2025, 10-Qs for 2026) or its October 2026 8-K. FSK labels each one by the quarter it covers.

The percentages are against $0.70 (our arithmetic). The same table for 2024 shows $0.70 a quarter ($0.64 plus $0.06) plus two $0.05 special distributions declared in November 2023 and paid in February and May 2024, which is why the calendar totals were $2.90 for 2024 and $2.80 for 2025. For 2026 the five declarations so far add up to $1.98 per share (our arithmetic).

Two points are easy to miss. First, the reasons the company gives in filings are short. In the February 2026 release the chief executive said, “we acknowledge specific challenges associated with a few investments which impacted our results during the second and fourth quarters of the year.” Second, the $0.20 special is not income the company earned in the third quarter: the October release says it “represents a portion of the Company’s estimated undistributed taxable income,” a tax mechanism for a fund that must distribute its income to keep its regulated-investment-company status, and the company adds that the declared regular distribution “should not be viewed as a projection, forecast or guarantee.”

Is the dividend covered? NII per share against what was declared

NII per share is from each quarter's earnings release; “declared” is the regular distribution FSK declared for that quarter (base plus supplemental, excluding the two $0.05 specials of 2024). Coverage is our arithmetic.

Reading the table. The $0.70 was covered through Q3 2024 and not again; the cut in February 2026 came after four consecutive quarters at 69% to 96% (our arithmetic). The second-quarter 2026 coverage of 105% needs a footnote: net expenses in the quarter include an $11 million waiver of the subordinated income incentive fee, which on 280,060,267 weighted shares is about $0.04 a share, so NII without the waiver would have been about $0.40 (our arithmetic), 95% of the $0.42 declared for the quarter and 91% of the $0.44 declared for the next one. The adviser agreed to waive 50% of that fee for each quarter from the second quarter of 2026 through the first quarter of 2027, with no recoupment, and the May 2026 release says the waiver is “expected to support the Company’s level of net investment income and, accordingly, support the Company’s quarterly distribution level.” That is the part of the payout whose end date is already in the filing.

Where NAV went: $24.46 to $18.30 in ten quarters

From the financial highlights in the 10-K and the June 2026 10-Q (per share, our sums across periods):

The last row adds the three periods; the $0.01 of buyback accretion in 2026 closes the bridge (our arithmetic). The loss column is more than ten times the gap between what FSK earned and what it paid: of the $6.16 fall in NAV, about $0.51 is distributions in excess of NII and $5.66 is realized and unrealized loss. The largest quarterly steps were Q1 2026 (-$2.06, -9.9%), Q2 2025 (-$1.44, -6.2%) and Q4 2025 (-$1.10, -5.0%). For the first of those, the May 2026 release quotes a joint statement from the chief executive and the president: “Our first quarter decline in net asset value was driven by investments which have impacted prior quarters, certain new non-accrual assets, and the impact of market-driven spread widening in certain segments of our portfolio.” The 10-Q for the quarter names Affordable Care, Production Resources Group and Medallia among the largest markdowns; the June 10-Q names COPJV, Production Resources Group and Medallia for the first half.

The filings also print the share price at each period end, which gives the discount to NAV at those dates (our arithmetic; these are quarter-end prices as printed, not a current quote):

The big move in the share price came in the third quarter of 2025, when NAV was flat ($21.93 to $21.99) and the printed price fell from $20.75 to $14.93. NAV is the company’s own mark of its loans; the market was pricing something else. For today's price use a live quote.

Non-accruals: 3.8% at fair value, 7.1% at cost, and who is on the list

A loan on non-accrual is one where FSK has stopped recognizing interest as income because it doubts it will be collected. The company reports two percentages in each earnings release:

The gap between the two columns is the point: at June 30, 2026, $898.3 million of cost was marked at $431.0 million, 48 cents on the dollar (our sums of the flagged lines in the schedule of investments). The 10-Q itself reports only the fair-value percentage; the cost percentages are in the earnings releases, and our line-by-line sums agree with them (7.1% of $12,605 million of cost, 3.8% of $11,418 million of fair value). The March 2024 net debt-to-equity figure is printed in that release under a December 2023 date; it is read here as March 31, 2024 because it is compared with 113% at December 31, 2023.

Every position carrying footnote (z), “Asset is on non-accrual status,” in the schedule of investments, grouped by borrower (amounts in $ millions, cost and fair value summed over each borrower's lines; our arithmetic):

Three things stand out. Medallia is the single largest item: $233.0 million of cost, 25.9% of the flagged total (our arithmetic), a first-lien software loan that the December 2025 schedule marks at 79% of cost and the June 2026 schedule at 50%. Its $117.4 million fair value is 2.3% of the $5,118 million of net assets. Five names, Medallia, ATX Networks, Heniff, Kellermeyer and Prime ST, hold $608.2 million of cost, 68% of the flagged total (our arithmetic). And Heniff is new: in the March schedule it was an accruing loan maturing 12/2026 at about 89% of cost; in June it is flagged, with a 07/2027 maturity and a PIK feature.

Movement in the second quarter: three borrowers that were flagged at December or March no longer carry the flag and now appear with new 2031 or 2032 maturities and marks at or near cost. These are Dental Care Alliance (cost $106.7 million at March 31; June lines of $58.2 million and $10.0 million of principal), Affordable Care ($148.7 million of cost at March 31 including preferred stock; its June lines include a $16.2 million loan) and 48Forty Solutions (which was $189.9 million at cost on the December list). We read this from the schedules and do not know the terms of the amendments; the 10-Q does not use the word “restructured” for them. Cubic Corp's flagged cost went to zero. One more number from the 10-Q's income note: PIK interest was $42 million of the quarter's $290 million of investment income (14.5%), and accretion and PIK together were $46 million of non-cash income.

What changed between May and August 2026

All of the following is in the June 2026 10-Q, the 8-Ks and the May and August releases.

On the tender, the release says “KKR believes the intrinsic value of FSK’s common stock is in excess of the Tender price of $11.00 per share.” At 75.779% proration, the 13,636,363 shares accepted imply about 18.0 million shares were tendered, around 6.4% of the 280.07 million outstanding (our arithmetic). The $11.00 price was 42% below the $18.83 March 31 NAV (our arithmetic), and the preferred converts at that same $18.83, so the two KKR investments were struck at very different reference points for the same common stock. The preferred ranks ahead of common for dividends and in liquidation; at 5.00% cash it costs $7.5 million a year, or $10.5 million if paid in kind at 7.00% (our arithmetic). It counts as a senior security in the 150% asset-coverage test, which stood at 179% for debt and 177% including the preferred.

Leverage, maturities and the 2027 notes

At June 30, 2026 FSK had $6,641 million of financing arrangements outstanding including the preferred, $3,052 million available subject to borrowing base limits, and $109 million of cash. The earnings release gives debt to equity of 127% ($6.5 billion of debt against $5.1 billion of common equity) and net debt to equity of 122%, a weighted average effective interest rate of 5.49%, and 72% of debt unsecured. The chief executive's quote says the company “reduced net leverage to within our target range”; the filings we read do not state the range.

The $900 million that falls due in 2027 (the January 2027 and July 2027 notes, our arithmetic) is about 30% of the $3,052 million available and carries coupons of 2.63% and 3.25%; the notes issued in June 2026 carry 7.50%. Refinancing the 2027 maturities at recent coupons would raise interest cost, though the filings do not say how FSK intends to repay them. The base management fee is 1.50% of average gross assets excluding cash, reduced to 1.0% on assets financed with leverage above 1.0 times debt to equity.

What the portfolio is made of

At June 30, 2026 FSK held 232 portfolio companies with $11,418 million of investments at fair value, down from $13,009 million at December 31, 2025. The top ten companies were 21% of fair value.

Two features differ from a plain loan book. Asset based finance and COPJV together are 27.0% of the portfolio (our arithmetic), and the 10-Q says dividend income fell because of lower dividends on COPJV and on certain equity and asset-based investments. On February 23, 2026 FSK sold $189 million of its COPJV equity interests to its partner, reducing its stake from 87.5% to about 79%; it still has $434.0 million of unfunded commitments to COPJV. And the weighted average yield on all debt investments was 8.8% at June 30 against 9.3% at December 31, 2025, which is what shrinking and non-accruing assets do to income: total investment income was $434 million in Q1 2024 and $290 million in Q2 2026, down 33% (our arithmetic).

FSK next to the non-traded funds from the same adviser

FS/KKR Advisor, LLC, which manages FSK, is also the adviser to KKR FS Income Trust (K-FIT) and KKR FS Income Trust Select (K-FITS), the non-exchange-traded BDCs this site tracks on its K-FIT redemptions page. The June 2026 filings of both vehicles put the contrast in numbers:

K-FIT is a different kind of vehicle and the comparison is not like for like. What it shows is that the non-accrual and leverage figures above are FSK's own: K-FIT's June 10-Q reports none on non-accrual. It also shows the difference between a mark and a price: FSK's stock is the visible discount to the mark, while a non-traded fund's NAV reflects the manager's valuations with the tender offer as the only exit. For the broader field, see the BDC stocks list, the 36-BDC non-accrual comparison and, for another listed BDC with a base-dividend cut, Goldman Sachs BDC.

What a holder or reader can do with this

This is a checklist built from the filings, not a recommendation.

• Test the dividend two ways. NII against the $0.44 regular distribution is one test; NII before the incentive-fee waiver is another (about $0.40 in the second quarter, our arithmetic). The third-quarter release on November 5, 2026 is the next data point, and the waiver ends after the first quarter of 2027.
• Read non-accruals at cost, not only fair value. At June 30 the fair-value percentage was 3.8% and the cost percentage 7.1%. The names to watch are the five holding 68% of the flagged cost, and whether Heniff and Medallia are marked lower or come off the list in November.
• Check what rank you hold. Common stock sits behind $6.5 billion of debt and now a $150 million preferred that has first claim on dividends; the 150% asset-coverage test limits distributions if coverage falls (it was 177% to 179% at June 30).
• Do not read the preferred or the tender as a price target. The filings give the terms ($18.83 conversion, $11.00 tender); they do not tell you what the shares are worth.
• Keep the tax side separate. The $0.20 special and the regular payouts are characterized for tax at year end; the 1099-DIV timeline for BDC and REIT holders explains when the form arrives.
• If you hold a K-series fund from the same adviser, the FSK numbers are about FSK's loans, not yours; compare the two sets of filings, starting with the K-FIT page.

FAQ

All figures are from FS KKR Capital Corp.'s SEC filings (CIK 1422183) read on EDGAR on October 15, 2026: the Forms 10-K for 2023, 2024 and 2025 (accessions 0001628280-24-006912, 0001628280-25-008175, 0001628280-26-011734); the Forms 10-Q for March 2024 through June 2026 (the last two 0001628280-26-033118 and 0001628280-26-053783); the earnings releases (Exhibit 99.1 to the 8-Ks of February 26, May 8, August 6 and November 6, 2024, February 26, May 7, August 6 and November 5, 2025, and February 25, May 11 and August 6, 2026); the 8-Ks of May 11, June 8, June 29 and October 8, 2026; and K-FIT's Form 10-Q for June 30, 2026 (accession 0001628280-26-056131). Borrower-level non-accrual amounts are our sums of the schedule-of-investments lines flagged (z); coverage ratios, per-share effects, shares tendered and percentages of NAV are our arithmetic. Share prices are those printed in the filings at period end, not current quotes. This is analysis of public documents, not investment, legal or tax advice.