KKR FS Income Trust Select Buys All Tendered Shares After Requests Top 5% Cap

KKR FS Income Trust Select, a privately offered business development company managed by FS/KKR Advisor LLC, accepted all of the approximately 2.05 million shares tendered in its third-quarter repurchase offer after requests reached 5.06% of shares outstanding, topping the 5% the fund had offered to buy.

Shareholders tendered 2,051,610.547 shares before the offer expired Sept. 29, representing approximately 5.06% of the fund’s shares outstanding as of June 30, the company said. The fund accepted the roughly 26,000 shares above that amount under a U.S. Securities and Exchange Commission tender offer rule that allows an issuer to buy additional shares totaling as much as 2% of its outstanding shares without extending the offer.

Tendered shares will be repurchased at the fund’s net asset value per share as of Sept. 30, which had not been reported as of Oct. 6. At the Aug. 31 NAV of $24.85 per share, the accepted shares would be valued at about $51 million.

Third-quarter requests mark a sharp increase from a year earlier. The fund accepted 185,151.777 shares, less than 1% of shares outstanding, in its offer that expired Sept. 30, 2025, and 254,594.801 shares, also less than 1%, in its December 2025 offer. Tenders then climbed to approximately 3.7% of outstanding shares in the first quarter of 2026, for an aggregate purchase price of $33.7 million, and approximately 3% in the second quarter, for $34.6 million, the company said.

KKR FS Income Trust, the larger sister fund also managed by FS/KKR Advisor, accepted 874,710.237 shares in its offer that expired the same day, approximately 1.5% of its shares outstanding as of June 30, that company said. KKR FS Income Trust reported an aggregate NAV of approximately $1.662 billion as of Aug. 31.

Credit Facility Upsized and Extended

On Sept. 30, KKR FS Income Trust Select amended its senior secured revolving credit facility with ING Capital LLC as administrative agent. The amendment increases total commitments to $375 million from $325 million and raises the accordion feature, which permits further increases, to as much as $800 million.

The amendment extends the commitment termination date to Sept. 30, 2030, from July 2, 2028, and the maturity date to Sept. 30, 2031, from July 2, 2029. It also raises the applicable margin on term benchmark and risk-free rate, or RFR, loans to 2.25% from 2.125% and on alternate base rate, or ABR, loans to 1.25% from 1.125%, while removing a 0.10% credit adjustment spread on U.S. dollar borrowings. The amendment also resets the facility’s minimum shareholders’ equity test.

As of June 30, the fund had $123.4 million outstanding on the ING facility and total borrowings of $572.9 million across three credit facilities, the company said. Its asset coverage ratio was 276%.

About the Fund

KKR FS Income Trust Select commenced operations Feb. 27, 2024, when affiliates of the adviser funded a $35 million seed contribution. Its investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation, primarily by investing in the debt securities of private middle-market U.S. companies.

The fund sells shares monthly to accredited investors through a continuous private offering of up to $5 billion under Regulation D. As of Sept. 18, it had sold approximately 40.96 million shares for total consideration of approximately $1.041 billion, excluding shares issued through its distribution reinvestment plan, and reported an aggregate NAV of approximately $996.3 million as of Aug. 31.

As of June 30, the portfolio held investments in 149 companies with a fair value of $1.55 billion, the company said. First-lien senior secured loans accounted for 74.4% of the portfolio and asset-based finance for 25.3%. Software and services was the largest industry exposure, at 22.4% of fair value, followed by capital goods at 16.8% and financial services at 12.8%. The fund reported no investments on nonaccrual status.

On Oct. 5, the fund’s board of trustees declared a monthly distribution of $0.175 per share, payable on or about Nov. 25 to shareholders of record as of Oct. 30. The amount matches the distribution the board declared Sept. 4. Annualized, the distribution equals about 8.45% of the Aug. 31 NAV per share, based on AltsWire calculations.

NAV per share declined from $25.67 as of Sept. 30, 2025, to $24.84 as of June 30, 2026, before edging up to $24.85 as of Aug. 31. The fund reported a total return based on NAV of 1.23% for the six months ended June 30, 2026, compared with 5.75% for the same period in 2025.

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