FS KKR Capital Corp. II, Decreases Net Asset Value (NAV)
According to its website, FS KKR Capital Corp. II is a business development company (BDC) designed to provide a high level of current income. The fund primarily invests in floating rate, senior secured loans of private U.S. middle market companies.
An investment in the common stock of FSK II involves a high degree of risk and may be considered speculative, according to its prospectus.
“Because there is no public trading market for shares of FSK II’s common stock and FSK II is not obligated to effectuate a liquidity event by a specified date, if at all, it is unlikely that you will be able to sell your shares. If you are able to sell your shares before FSK II completes a liquidity event, it is likely that you will receive less than you paid for them. FSK II historically repurchased a limited number of shares pursuant to its share repurchase program, which has currently been suspended. FSK II may reinstate, amend, suspend or terminate its share repurchase program at any time. In addition, any such repurchases will be at the distribution reinvestment price on the date of repurchase.”
Similar to non-traded REITs, Business Development Companies (BDCs) are illiquid investments. Investors looking to sell BDCs, such as FS KKR Capital Corp. II, often have difficulty finding a buyer, and can suffer significant losses on the sale.
Update on April 13, 2020
According to filings with the SEC on April 3, 2020, FS KKR Capital Corp. II, announced a decrease in its NAV per share to $6.20 per share. This marks a decline of approximately 15.8% since the December 2019 close of the merger.
Central Trade & Transfer, secondary market for BDCs and non-traded REITs, recently sold shares of FS KKR Capital Corp. II for $3.52 per share. This may mean significant losses to investors, as the original purchase price was $10.00 share.
Securities Fraud Investigation
The White Law Group is currently representing many BDC investors in claims against the brokerage firms that recommended products like FS KKR Capital Corp. II.
These claims result when broker-dealers fail to perform adequate due diligence on the investments before offering them for sale to their clients. Additionally the brokerage firms often fail to determine whether the investments were appropriate in light of their clients’ age, investment, experience, net worth, and tolerance for risk.
If you are concerned about your investments, such as FS KKR Capital Corp. II, please call the securities attorneys of The White Law Group at (888) 637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.
For more information on The White Law Group, visit https://www.whitesecuritieslaw.com.