FS Credit Opportunities Corp. proxy voting complete, listing preparations continue
Summary
On March 7, 2022, FS Global Credit Opportunities Fund announced that its board of trustees approved a plan to prepare for the listing of its common stock on the New York Stock Exchange (NYSE).
On March 23, 2022, FS Global Credit Opportunities Fund was converted from a Delaware statutory trust into a Maryland corporation and was renamed FS Credit Opportunities Corp. (the “Fund” or “FSCO”). Subject to market conditions and final approval by the board of directors (the “Board”), the Fund currently anticipates that its shares of common stock will commence trading prior to the end of the third quarter or beginning of the fourth quarter of 2022 on the NYSE with the ticker symbol “FSCO”. There can be no assurance that the Fund will be able to complete the listing within the expected time frame or at all.
On April 28, 2022, the Fund filed a definitive proxy statement with the U.S. Securities and Exchange Commission.
On June 22, 2022, the Fund held its annual meeting of stockholders where stockholders approved proposals for the election of each member of the board of directors and the implementation of a phased approach to the listing. The meeting was adjourned with respect to the investment advisory agreement amendment proposal to permit additional time to solicit stockholder votes for the proposal. The reconvened meeting will be held on August 16, 2022, at 2:30 pm, Eastern Time at 201 Rouse Boulevard, Philadelphia, PA 19112.
On July 14, 2022, the Board approved the following items:
- The termination of FSCO’s existing distribution reinvestment plan effective as of the listing. At the same time, the Board adopted an amended and restated distribution reinvestment plan, which will become effective upon the listing. However, the amended and restated distribution reinvestment plan will not go into effect until 181 days following the listing to coincide with the phased approach to the listing, under which all shares will be available for trading 181 days after the listing.
- The implementation of the phased approach to liquidity, as approved by shareholders on June 22, 2022. Shareholders with account balances of $15,000 or less in shares will have all shares available for trading at listing. The record date for calculating account balances will be determined prior to the listing.
- In connection with the listing, the elimination of any outstanding fractional shares of FSCO’s common stock by rounding up the number of fractional shares held by each shareholder to the nearest whole number of shares. The date for eliminating fractional shares will be determined prior to the listing.
On August 16, 2022, stockholders approved advisory agreement changes, which upon listing will reduce the management fee and amend the hurdle rate for the calculation of the incentive fee.
Please note that we will provide additional details on the listing plans and operational considerations well in advance of the listing, including account-level considerations.
Register for our upcoming fund update webinar to learn more about the fund's performance and liquidity plans
June 9, 2022 at 4PM ET
Listing overview
Company name
- On March 23, 2022, in preparation for the listing, the Fund was converted from a Delaware statutory trust into a Maryland corporation and renamed FS Credit Opportunities Corp.
- Ticker symbol: FSCO
Expected listing
- Early Q4 2022: Targeted listing on the NYSE, subject to market conditions and final Board approval
Quarterly repurchase offer
- The Q1 2022 quarterly tender offer was the final regular quarterly tender offer ahead of the planned listing.
Fee structure changes upon the listing + enhanced dividend
- The investment advisory agreement will be amended upon listing
- Reduction in management fee upon listing from 1.50% to 1.35% based on daily gross assets
- Hurdle rate for the calculation of the incentive fee to be expressed as a percentage of net assets upon listing (compared to adjusted capital currently), consistent with other publicly traded closed-end funds with an incentive fee
- The reduction in management fee is expected to enhance the Fund’s net investment income, providing the Fund with the potential to sustain an annualized distribution yield of 7.50%+ at listing based on the Fund’s net asset value as of June 30, 2022.1
Post-listing liquidity
- At the annual meeting of stockholders on June 22, 2022, stockholders approved a proposal for the Fund to implement a phased approach to the listing. The phased approach is intended to help ease the anticipated downward pressure on the market price of the Fund’s shares in the period shortly following the listing.
- On July 14, 2022, the Board approved the implementation of the phased approach to the listing, under which shares will be available for trading based on the following schedule:
- At listing: up to 1/3 of shares held by all shareholders.
- 90 days post-listing: up to 2/3 of shares held by all shareholders
- 180 days post-listing: All shares held by all shareholders
- Shareholders with account balances of $15,000 or less in shares will have all shares available for trading at listing. The record date for calculating account balances will be determined prior to the listing.
- The actual dividend yield at listing may be higher or lower based on the current NAV. Based on the Fund’s net asset value as of June 30, 2022. The payment of future distributions on FSCO’s common shares is subject to the discretion of FSCO’s board of directors and applicable legal restrictions and, therefore, there can be no assurance as to the amount or timing of any such future distributions.
IMPORTANT INFORMATION
The Company, its directors and certain of its officers may be deemed to be participants in the solicitation of proxies from stockholders in connection with the matters to be considered at the Company’s 2022 annual meeting (the “2022 Annual Meeting”). On April 28, 2022, the Company filed a definitive proxy statement with the SEC in connection with any such solicitation of proxies from stockholders. Stockholders are strongly encouraged to read the proxy statement as it contains important information. Information regarding the identity of potential participants, and their direct or indirect interests in the Company, by security holdings or otherwise, are set forth in the proxy statement and any other materials filed with the SEC in connection with the 2022 Annual Meeting. Stockholders are able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by the Company with the SEC for no charge at the SEC’s website at www.sec.gov. Copies are available at no charge at the Company’s website at https://fsinvestments.com/investments/all-investments/fsco/.