FS Credit Opportunities Corp. has listed on NYSE
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- NYSE: FSCO
- November 14, 2022
- Shareholders and the Fund’s board of directors (the “Board”) approved a proposal for the Fund to implement a phased approach to the listing. Shares will be available for trading based on the following schedule:
- November 14, 2022: up to 1/3 of shares held by all shareholders will be available for trading
- February 13, 2023: an additional 1/3 of shares held by all shareholders will be available for trading
- May 15, 2023: the remaining 1/3 of shares held by all shareholders will be available for trading
- Pre-listing: To help ensure the Fund is operationally prepared for the listing, the Board approved accelerating the payment of the monthly distribution for October and the suspension of the distribution reinvestment plan (DRP) effective on or about October 3. As a result, the full October monthly distribution was paid in cash on October 20 to shareholders of record as of October 18.
- We expect the Fund to increase the distribution at listing to support a target annualized distribution rate of 9% based on the Fund’s net asset value (NAV) as of October 31, 2022, subject to market conditions and board approval.1
- Post-listing: The Board recently adopted an amended and restated distribution reinvestment plan (A&R DRP), which became effective upon the listing
- The A&R DRP will be suspended at listing for 180 days, however, we expect the Fund to reinstate the A&R DRP 181 days following the listing
- Therefore, monthly distributions will be paid in cash during the three phases of the listing
- Client accounts will reflect FSCO’s public market price at listing
- 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, all shares will be automatically moved to a single account
- There is no action financial advisors or shareholders need to take to complete these transactions
- Subject to broker dealer and clearing firm policies and procedures, shareholders may be able to reregister accounts or change custodians for shares held with SS&C Technologies, Inc (transfer agent) during the phased liquidity.
Share repurchase program
- Following the listing, certain directors and officers of FSCO and its affiliates expect to make commitments to an investment fund that is currently intended to be established to invest from time to time in shares of FSCO.
- The investment fund would be managed by a third party and the FSCO-related investors would not exercise investment or voting control over the investment fund. As a result, FSCO has determined not to implement the previously disclosed open-market share repurchase program under Rule 10b5-1 under the Securities Exchange Act of 1934.
- 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 October 31, 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.
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.