FS Credit Opportunities Corp. prepares for second phase of listing

Summary

FS Credit Opportunities Corp. (the “Fund” or “FSCO”) listed its shares on the New York Stock Exchange (NYSE) on November 14, 2022 through a direct listing. The Fund ranks as one of the largest credit-focused closed-end funds by asset size in the market investing in public and private credit.

The second phase of the listing will occur on February 13, 2023, through which an additional 1/3 of all shares will be available for trading.

Upcoming webinars

To keep you as informed as possible as we approach the listing, we will be hosting regular webinars to provide updates and answer any questions.

Watch our latest webinar with Portfolio Manager Andrew Beckman to hear more on FSCO’s portfolio and market opportunity.

Overview

Ticker

  • NYSE: FSCO

Listing date

  • November 14, 2022

Post-listing liquidity

  • Shareholders and the Fund’s board of directors (the “Board”) approved a proposal for the Fund to implement a phased approach to the listing based on the following schedule
    • November 14, 2022: up to 1/3 of shares held by all shareholders will be available for trading. Accounts with balances of $15,000 or less prior to listing had all shares made available for trading at listing.
    • February 13, 2023 (90 days post-listing): an additional 1/3 of shares held by all shareholders will be available for trading
    • May 15, 2023 (180 days post-listing): the remaining 1/3 of shares held by all shareholders will be available for trading

Dividend

  • On November 18, 2022, the Board of directors (the “Board”) announced an increase to the monthly dividend for December from $0.0425 per share to $0.04945 per share. On an annualized basis, the dividend increased from $0.51 per share to approximately $0.59 per share, representing an annualized dividend yield of 9.34% based on the Fund’s net asset value as of December 31, 2022.
  • The Board declared dividends of $0.04945 per share for January to be paid on January 31, 2023.
  • The payment of future dividends on FSCO’s common shares is subject to the discretion of FSCO’s Board and applicable legal restrictions and, therefore, there can be no assurance as to the amount or timing of any such future dividends.

Distribution reinvestment plan

  • The Board adopted an amended and restated distribution reinvestment plan (A&R DRP), which became effective upon the listing.
  • To account for the three phases of the listing in November 2022, the A&R DRP was suspended at listing, and we expect the Fund to reinstate the A&R DRP 181 days following the third phase of the listing (May 16, 2023).
  • Therefore, monthly dividends will be paid in cash during the three phases of the listing.

Client accounts

  • Following the listing, client accounts now reflect FSCO’s public market price
  • To account for the three phases of the listing, a shareholder’s shares were split evenly across three separate accounts at the transfer agent with each account holding 1/3 of a shareholder’s total shares at listing
    • Once each phase of the listing is complete, the respective shares will be automatically moved to a single account
    • There is no action financial advisors or shareholders need to take to complete these transactions

Account maintenance freeze

  • In advance of the second phase of the listing, an account maintenance freeze will go into effect at the Fund’s transfer agent from February 1, 2023 to February 13, 2023.
  • After February 13, 2023, shareholders may be able to re-register accounts or change custodians for shares held with SS&C Technologies, Inc (transfer agent) during the phased liquidity process, subject to broker dealer and clearing firm policies and procedures.
View important footnotes + disclosures  
  1. Based on the Fund’s net asset value as of December 31, 2022. The payment of future dividends 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 dividends.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Statements included herein may constitute “forward-looking” statements as that term is defined in Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including statements with regard to future events or the future performance or operations of the Company. Words such as “intends,” “will,” “expects,” and “may” or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements. Factors that could cause actual results to differ materially include changes in the economy, geo- political risks, risks associated with possible disruption to the Company’s operations or the economy generally due to hostilities, terrorism, natural disasters or pandemics such as COVID-19, future changes in laws or regulations and conditions in the Company’s operating area, unexpected costs, the price at which the Company’s shares of common stock may trade on the New York Stock Exchange and such other factors that are disclosed in the Company’s filings with the Securities and Exchange Commission (the “SEC”). There can be no assurances that the investment fund will be established, and if it is, the amount or timing of any purchases of Company shares. The inclusion of forward-looking statements should not be regarded as a representation that any plans, estimates or expectations will be achieved. Any forward-looking statements speak only as of the date of this communication. Except as required by federal securities laws, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on any of these forward-looking statements.