FS KKR Capital Corp.

Good morning, ladies and gentlemen. Welcome to FSKKR Capital Corporation's first quarter 2020 earnings conference call. Your lines will be in a listen-only mode during remarks by FSK's management. At the conclusion of the company's remarks, we will begin the question and answer session, at which time I will give you instructions on entering the queue. Please note that this conference is being recorded. At this time, Robert Pond, Head of Investor Relations, will proceed with the introduction. Mr. Pond, you may begin.

Thank you. Good morning and welcome to FSKKR Capital Corp's first quarter 2020 earnings conference call. Please note that FSKKR Capital Corp may be referred to as FSK, the fund, or the company throughout the call. Today's conference call is being recorded and an audio replay of the call will be available for 30 days. Replay information is included in a press release that FSK issued on May 6, 2020. In addition, FSK has posted on its website a presentation containing supplemental financial information with respect to its portfolio and financial performance for the quarter ended March 31, 2020. A link to today's webcast and the presentation is available on the investor relations section of the company's website under events and presentations. Please note that this call is the property of FSK. Any unauthorized rebroadcast of this call in any form is strictly prohibited. Today's conference call includes forward-looking statements, and we ask that you refer to FSK's most recent filings with the SEC for important factors that could cause actual results or outcomes to differ materially from these statements. FSK does not undertake to update its forward-looking statements unless required to do so by law. In addition, this call will include certain non-GAAP financial measures. For such measures, reconciliations to the most directly comparable GAAP measures can be found in FSK's first quarter earnings release. It was filed with the SEC on May 6, 2020. Non-GAAP information should be considered supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly named measures reported by other companies. To obtain copies of the company's latest SEC filings, please visit FSK's website. Speaking on today's call will be Michael Forman, Chairman and Chief Executive Officer, Dan Pietrzak, Chief Investment Officer and Co-President, Brian Gerson, co-president, and Stephen Lilly, chief financial officer. Also joining us on the phone are co-chief operating officers Drew O'Toole and Ryan Wilson. I will now turn the call over to Michael.

Thank you, Robert, and welcome, everyone, to FSKKR Capital Corp's first quarter 2020 earnings conference call. We have a lot of information to cover on today's call, so I'll jump right in. This continues to be a tumultuous time, a time of shared emotion, shared sacrifice, and in certain circumstances, shared concern. We appreciate that all of you, like us, continue to be concerned for loved ones, friends, and associates. Companies' investments are important, but the events of the last two months have helped remind much of the world what's truly important in a very tangible way. Like many of you on this call this morning, the FSK CARE team has been working remotely since early March Thankfully, we were well prepared to operate in a remote environment given our prior investments in both technology and personnel. Since the beginning of the FSKKR joint venture in April of 2018, we've employed a defensive strategy with respect to investing new capital. While we are pleased with the results of our new investments, we continue to face volatility in the performance of certain investments made prior to the establishment of the FSKKR advisory. Many of these investments face headwinds coming into this year, which have been exacerbated by COVID-19. In addition, the impact has been felt by all markets and underlying operating companies within them to varying degrees. As a result, our investment portfolio declined in value during the first quarter by 10.9%. As we will discuss in detail later in the call, we estimate that 70% to 75% of our portfolio depreciation during the quarter related to the COVID-19 pandemic and the related market volatility. With this portfolio decline, our net asset value declined to $6.09 per share at March 31, 2020, compared to $7.64 at year-end 2019. From a general operating perspective, our net investment income was 19 cents per share during the quarter, which was equal to our first quarter dividend of 19 cents per share. Stephen will provide details regarding our operating activities during his portion of the call. From a forward-looking perspective, we recognize that in an environment as volatile as the one in which we are all operating, it is impossible to predict the future. As a result, we believe the most transparent communication with shareholders and investors regarding our dividend for the next several quarters is to estimate our current level of quarterly net investment income and announce a dividend of 100 percent of that amount on a quarterly basis. For the second quarter, we expect our net investment income per share to be at least 15 cents, and therefore, our Board has declared a 15-cent distribution for the second quarter. When we report our second-quarter earnings, we will announce our third-quarter dividend, which we expect will equate to our estimated third-quarter net investment income. Over the long term, we continue to expect our annual dividends will equate to a NAV yield of approximately 9%, though we acknowledge there will be certain quarters where our annualized yield may be greater or less than this range. From a capital structure standpoint, yesterday we announced the issuance of a $250 million unsecured bond with a private financing partner. While our ability to place this bond is a direct example of the strength of the FSKPR franchise, It also helps us anchor our capital structure by providing incremental liquidity for future investment opportunities and to support our existing portfolio companies. While the interest rate on the bond is higher than our previously issued bonds, we believe the strategic merits of accessing capital to preserve our strong liquidity position outweigh the incremental cost. I also would note that the bond is callable after two years. Yesterday, we also announced an amendment of our bank revolver, whereby we amended certain financial covenants and other metrics. In a manner similar to our bond offering, our credit facility amendment provides us greater operational flexibility and cushion during this time of increased volatility. With regard to the equity component of our balance sheet, during April we completed the remaining portion of our previously committed $200 million stock buyback program. And finally, we announced yesterday that certain affiliates of FS and KKR have committed $100 million towards a $350 million investment vehicle. This investment vehicle has been established to invest from time to time in shares of our common stock through open market purchases or other means, such as the potential establishment of a 10B51 purchase plan. We are pleased to announce the establishment of this vehicle and its further evidence of our core belief in the long-term strategic value of the FS KKR franchise. And with that, I'll turn the call over to Dan and the team.