FS Specialty Lending Fund Completes First Day on NYSE, Closes at $14.00

FS Specialty Lending Fund – previously a non-traded business development company sponsored by Future Standard – officially began trading on the New York Stock Exchange yesterday under the ticker symbol “FSSL.” The listing marks a key liquidity event for the fund, which transitioned from a business development company to a closed-end fund last month.

The fund was formerly known as FS Energy and Power Fund prior to its conversion and then briefly, New FS Specialty Lending Fund.

FSSL began trading at a price of $14.13 per share, and closed at $14.00 per share, down 0.92%.

In preparation for the conversion and going public and as previously reported by AltsWire, the fund approved a 6-for-1 reverse share split, which took effect on May 15. The split was based on the fund’s net asset value of $3.37 per share as of March 31, resulting in a post-split NAV of $20.22 per share. The split was implemented to meet NYSE rules which mandate a minimum listing price of $4.00 per share. The split also aligned the fund’s share price with the typical range of closed-end funds.

The fund began trading as a direct listing on the NYSE yesterday rather through an initial public offering where the public share price is determined by the offering price. Thus, FSSL’s public share price was determined by supply and demand market dynamics.

Coinciding with the listing, the fund activated a new investment advisory agreement and a fee waiver agreement with FS Specialty Lending Advisor, which reflects a more investor-friendly fee structure for the publicly traded fund.

FSSL’s base management fee decreased to an annual rate of 1.5% of the fund’s gross assets. The income incentive fee remains at 20% of “pre-incentive fee net investment income,” but the hurdle rate was lowered to 6% of the fund’s net assets. Similarly, the catch-up provision applies until the quarterly pre-incentive fee net investment income equals 1.875% (7.5% annually) of net assets, after which the 20% rate applies. The base management fee is payable quarterly in arrears and will be appropriately pro-rated for any partial quarter.

The fee waiver also took effect; the adviser contractually agreed to waive a portion of both the base management fee and the income incentive fee. Specifically, the waiver reduces the base management fee by 0.15% of the fund’s gross assets and lowers the income incentive fee to 10% of pre-incentive fee net investment income. This waiver will remain in effect until the fund ceases to be registered under the Investment Company Act of 1940, unless terminated earlier.

The fund’s distribution reinvestment plan, or DRIP, previously approved by the fund’s board, additionally became effective upon listing. Under the DRP, the fund will automatically reinvest all cash dividends or distributions into additional common shares on behalf of shareholders who do not elect to opt out and receive their distributions in cash.

The fund has previously said it expects to pay a full quarterly enhanced distribution for the third quarter of 2025 given the Q4 2025 listing. In Q4 2025, it said it would target a monthly or quarterly distribution representing an annualized distribution rate of approximately 9% to 9.5% of the fund’s NAV.

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