FS Credit Opportunities Corp. · NYSE:FSCO
FS Credit Opportunities — IPO Roadshow (November 2022)
28 slides from FS Credit Opportunities's IPO roadshow presentation, Nov 10, 2022
Slide 1: A flexible credit solution for today's complex and changing markets
FS Credit Opportunities Corp. A flexible credit solution for today’s complex and changing markets November 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 193 3, 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. The Fund will rank as one of the largest credit - focused closed - end funds based on total assets with an attractive
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: FSCO at a glance
6 1. As of June 30, 2022. 2. Based on the Fund’s net asset value as of October 31, 2022. The actual dividend yield at listing may be higher or lower based on the then current NAV. The payment of future dividends on FSCO’s common shares is subject to the discretion of FSCO's board of directors and ap
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: Track record of generating strong risk-adjusted returns
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 in vestments and performance
Slide 10: Management team & investment process
10 Management team & investment process
Slide 11: The team assumed full management of FSCO in January 2018
The team assumed full management of FSCO in January 2018 FS Investments Liquid Credit & Special Situations Team Andrew Beckman, Head Portfolio Manager Nicholas Heilbut, Portfolio Manager, Director of Research Team member Title Years of experience Focus area Scott Giardina Managing Director 21 Tradin
Slide 12: Leading alternative asset manager
CONFIDENTIAL. FOR FINANCIAL PROFESSIONAL USE ONLY. NOT FOR USE WITH INVESTORS. 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 never
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: Seek excess return with downside protection across public and private credit
Seek excess return with downside protection by investing across 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 opportunity set a
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 Investments' 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 Cre dit and Special Situations Team, including $834 million of CLO transactions in Bri
Slide 17: Portfolio highlights & competitive positioning
17 Portfolio highlights & competitive positioning
Slide 18: FSCO investment portfolio overview
FSCO investment portfolio overview Asset type 53% Senior S ecured Loans – 1st Lien 9% Senior Secured Loans – 2nd Lien 19% Senior Secured Bonds 5% Subordinated Debt 7% Asset Based Finance 7% Equity/Other Geographic location Sector allocations 4 95% United States 1% Europe 4% Other 13% Consumer Servic
Slide 19: FSCO has significant scale vs. closed-end fund peers
19 Assets under management ($ millions) Source: Company filings. As of latest publicly available information. FSCO, BGB and KIO are as of June 30, 2022. ARDC and AIF ar e as of July 31, 2022. FSCO is FS Credit Opportunities Corp. BGB is Blackstone Strategic Credit Fund. ARDC is Ares Dynamic Credit A
Slide 20: FSCO offers an attractive, fully-funded dividend
20 Dividend yield based on net asset value Annualized dividend as % of last reported NAV 1 Dividend coverage Net investment income as % of dividend 3 FSCO offers an attractive, fully - funded dividend 142% 124% 115% 106% 98% FSCO BGB ARDC KIO AIF 10.1% 10.0% 9.3% 9.0% 2 7.7% KIO AIF ARDC FSCO BGB Di
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, 20 22. Preferred financing offers competitive advantages Funding source Rate Amount Outstanding ($M) Undrawn ($M) Maturity Revolving Credit Facility L + 1.10% $50 $
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 indebtednes s n ot represented by credit facility borrowings and term preferred shares, to the aggregate amount of credit facility borrowings ou tstanding represe
Slide 24: A phased approach to the listing
FOR ADVISOR USE ONLY. NOT FOR INVESTOR USE. A phased approach to the listing 24 1. The timing of the listing is subject to market conditions and the satisfaction of other customary conditions. The net asse t v alue per share used to determine which accounts meet this threshold was based on the Fund'
Slide 25: Valuations and stock prices have generally increased after initial downward pressure
Valuations and stock prices have generally increased after initial downward pressure 25 Price - to - book value (indexed) Daily trading volume as % of shares outstanding For illustrative purposes only. Historical performance is not a guarantee or reliable indicator of future results. Public listings
Slide 26: Performance as of October 31, 2022
26 As of October 31, 2022 Past performance is not a guarantee of future results. Returns for periods greater than one year are annualized. Returns assume dividends are invested pursuant to the Fund’s divide nd reinvestment plan. FS Investments’ Liquid Credit & Special Situations Group took over all
Slide 27: Risk factors
27 FS Credit Opportunities Corp. (FSCO or the Company) is a non - diversified, closed - end management investment company that carries out the investment strategies generally described herein. An investment in FSCO involves a high degree of risk and may be considered speculative. The following are s
Slide 28: Risk factors (continued)
28 • FSCO’s investments in securities and other obligations of companies that are experiencing distress involve a substantial degr ee of risk, require a high level of analytical sophistication for successful investment and require active monitoring. • FSCO’s investments in various types of debt secu
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