FS KKR Capital Cuts Quarterly Dividend to 42 Cents

FS KKR Capital Corp. (NYSE: FSK) cut its quarterly dividend to $0.42 per share from $0.48 per share, a 12.5% reduction, with the stock trading ex-dividend on June 17, 2026.

The cut interrupts a two-year stretch of dividend growth for the financial-services company. Based on the locked dividend data, FSK’s annual dividend per share is $2.30, implying a forward annual yield of 21.34% at a share price of $10.22. The company had previously cut its dividend in 2023, and its dividend safety score is 31 out of 100, with an F grade.

Credit Pressure Behind the Reset

FS KKR Capital is a publicly traded business development company focused on providing customized credit solutions to private middle-market U.S. companies, with investments primarily in senior secured debt and, to a lesser extent, subordinated debt and asset-based financing loans, according to the company’s investor website: https://www.fskkrcapitalcorp.com/.

The dividend reduction comes after a difficult stretch for the company’s credit portfolio. The Financial Times reported in February that FSK’s shares fell after the company disclosed a rise in troubled loans, lower investment income and asset valuation cuts, pointing to broader pressure in private credit markets: https://www.ft.com/content/06213ba6-5634-4c1c-b949-07013824c79f.

The Wall Street Journal later reported that the fund recorded a sizable first-quarter loss tied to defaults and portfolio stress, and that KKR planned support measures including preferred-share purchases, a tender offer and an incentive-fee waiver: https://www.wsj.com/finance/investing/kkr-private-credit-fund-takes-560-million-loss-f6bfb576.

Those reports frame the dividend action as part of a broader effort to align payouts with weaker portfolio performance and protect balance-sheet flexibility. For BDCs, dividend capacity is closely tied to recurring investment income, credit quality and access to leverage, making credit losses and non-accrual trends especially important to payout durability.

What It Means for Income Investors

For income investors, the immediate impact is lower quarterly cash income from FSK shares. The yield remains high on the locked data, but the cut, the prior 2023 reduction and the F safety grade all point to elevated payout risk. The key issue now is whether credit performance and investment income stabilize enough to support the new distribution level.