FS Credit Opportunities Corp. · NYSE:FSCO
FS Credit Opportunities — Investor Presentation (November 2022)
26 slides from FS Credit Opportunities's investor presentation, Nov 2, 2022
Slide 1: FS Credit Opportunities Corp.: A flexible credit solution
FS Credit Opportunities Corp. A flexible credit solution for today’s complex and changing markets October 2022 All information is as of June 30, 2022, unless otherwise noted.
Slide 2: Forward-looking statements
2 Forward - looking statements Statements included herein may constitute “forward - looking” statements as that term is defined in Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities
Slide 3: Executive summary
3 FS Credit Opportunities Corp. (the “Fund” or “FSCO”) intends to list its shares on the NYSE on or around November 14, 2022, through a direct listing, subject to market conditions and final board approval. Once listed, the Fund will rank as one of the largest credit - focused closed - end funds in
Slide 4: Agenda
4 1 Strategy overview 2 Management team & investment process 3 Portfolio highlights & competitive positioning 4 Appendix Agenda
Slide 5: Strategy overview
Strategy overview
Slide 6: Fund overview and key facts
6 1. As of June 30, 2022. 2. Based on the Fund’s net asset value as of September 30, 2022. The actual dividend yield at listing may be higher or lower based on the then current NAV. The payment of future distributions on FSCO’s common shares is subject to the discretion of FSCO's board of directors
Slide 7: Flexible strategy investing in public and private markets
7 Flexible strategy investing in public and private markets Public markets Private markets • Event - driven investing in credits with catalysts for price appreciation, including M&A, refinancing, debt maturities, earnings growth • Opportunistic performing credit ‒ High quality credits in out - of -
Slide 8: Differentiated strategy vs. competitor set
8 Differentiated strategy vs. competitor set FSCO vs. Public closed - end funds FSCO vs. Direct lending strategies • Ability to increase private credit allocation when risk - reward is more compelling vs. public markets • Strategy more heavily focused on event - driven investing vs. peers • Greater
Slide 9: FSCO has outperformed the liquid indexes since January 2018
9 FSCO has outperformed the liquid indexes since the change in management in January 2018 Past performance is not a guarantee of future results. The benchmarks are shown for illustrative purposes only. An investment cannot be made directly in an index. The Fund’s actual investments and performance m
Slide 10: Management team & investment process
10 Management team & investment process
Slide 11: FS Investments Liquid Credit & Special Situations Team
DLJ Goldman Sachs (SSG) Serengeti Magnetar DW Partners FS Investments Liquid Credit & Special Situations Team The team assumed full management of FSCO in January 2018 Andrew Beckman, Head Portfolio Manager Nicholas Heilbut, Portfolio Manager, Director of Research Team member Title Years of experienc
Slide 12: Leading alternative asset manager
CONFIDENTIAL. FOR FINANCIAL PROFESSIONAL USE ONLY. NOT FOR USE WITH IN VESTORS. Leading alternative asset manager FS Investments strives to solve investor needs by creating access to alternative ideas and institutional - quality managers to achieve a higher probability of investment success. We neve
Slide 13: Leveraging the full scale of FS Investments' platform
13 All figures as of August 31, 2022. Leveraging the full scale of FS Investments’ platform Investment + markets expertise Shared insights among various research teams, including internal managers and external investment partners Operations + technology A team of 89 professionals oversee the firm’s
Slide 14: Investment philosophy: excess return with downside protection
Seek excess return with downside protection by investing in complex situations in public and private credit Investment philosophy Dynamically allocate to most attractive areas of the credit market • Ability to adjust exposure between public and private credit and floating vs. fixed rate based on the
Slide 15: Investment process: Disciplined and repeatable
Investment process: Disciplined and repeatable 15 Key considerations Sourcing • Unique deal flow through dedicated investment team complemented by the relationships of FS Investments’ platform • Combination of newly originated assets and secondary market purchases Investment diligence • Robust, priv
Slide 16: Relationships across FS platform provide sourcing edge
Relationships across FS Investments’ platform provide significant sourcing competitive edge 1. Last 12 months as of June 30, 2022. Represents transaction volume for FSCO and other vehicles managed by the FS Liquid Credit and Special Situations Team, including $834 million of CLO transactions in Brid
Slide 17: Portfolio highlights & competitive positioning
17 Portfolio highlights & competitive positioning
Slide 18: FSCO investment portfolio overview
FSCO investment portfolio overview Asset type 53% Senior Secured Loans – 1st Lien 9% Senior Secured Loans – 2nd Lien 19% Senior Secured Bonds 5% Subordinated Debt 7% Asset Based Finance 7% Equity/Other Geographic location Sector allocations 3 95% United States 1% Europe 4% Other 13% Consumer Service
Slide 19: FSCO has significant scale vs. closed-end fund peers
19 Assets under management ($ millions) Source: Company filings. As of latest publicly available information. FSCO, BGB and KIO are as of June 30, 2022. ARDC and AIF are as of July 31, 2022. FSCO is FS Credit Opportunities Corp. BGB is Blackstone Strategic Credit Fund. ARDC is Ares Dynamic Credit Al
Slide 20: FSCO offers an attractive, fully-funded distribution
20 Dividend yield based on net asset value Annualized dividend as % of last reported NAV 1 Dividend post - listing Dividend coverage Net investment income as % of distribution 2 FSCO offers an attractive, fully - funded distribution 142% 124% 115% 106% 98% KIO AIF ARDC FSCO BGB FSCO BGB ARDC KIO AIF
Slide 21: Preferred financing offers competitive advantages
21 1. Calculation excludes preferred equity. When including the preferred shares, the debt - to - equity ratio was 0.54x as of June 30, 2022. Preferred financing offers competitive advantages Funding source Rate Amount Outstanding ($M) Undrawn ($M) Maturity Revolving Credit Facility L + 1.10% $50 $1
Slide 22: Appendix
22 Appendix
Slide 23: Financial highlights
23 Financial highlights 1. Represents the value of the Fund’s total assets available to cover senior securities, less all liabilities and indebtedness not represented by credit facility borrowings and term preferred shares, to the aggregate amount of credit facility borrowings outstanding representi
Slide 24: A phased approach to the listing
A phased approach to the listing 24 The timing of the listing is subject to market conditions and the satisfaction of other customary conditions. Designed to help ease downward pressure on FSCO’s market share price shortly after listing An additional 1/3 of all shares available for trading Day of Li
Slide 25: Valuations and stock prices after prior listings
Valuations and stock prices have generally increased after initial downward pressure For illustrative purposes only. Historical performance is not a guarantee or reliable indicator of future results. Public listings are subject to current market and economic conditions which can impact performance.
Slide 26: Performance disclosures
Past performance is not a guarantee of future results. Returns for periods greater than one year are annualized. Returns assume distributions are invested pursuant to the Fund’s dividend reinvestment plan. FS Investments’ Liquid Credit & Special Situations Group took over all portfolio management re
FS Credit Opportunities — Investor Presentation (November 2022) on 6ix