FS Investment Corporation IV

FSIC IV

Share class:

Currently, only Class T shares are available. Class T shares are only available through independent broker dealers. Consult with your financial advisor for more information.

Investment objectives

Generate current income and, to a lesser extent, long-term capital appreciation

Overview

FSIC IV is a business development company (BDC) designed to provide a high level of current income. The fund primarily invests in floating rate, senior secured loans of private U.S. middle market companies.

Adviser

FSIC IV Advisor, LLC
An affiliate of FS Investments

Sub-adviser

GSO / Blackstone Debt Funds Management LLC
An affiliate of GSO Capital Partners LP


Pricing

Public offering price 1 (as of 9/21/2016) $11.05
Net investment amount 2 (as of 9/21/2016) $10.81
Annualized distribution rate 3 (based on public offering price) 5.86%
Annualized distribution amount 3 (as of 9/21/2016) $0.65


View Pricing Disclosure For Footnotes 123
1The public offering price of FSIC IV’s shares of Class T common stock is subject to an upfront sales load of up to 2.20%. Shares of FSIC IV’s Class T common stock are also subject to offering expenses of up to 0.75% of the gross proceeds received in FSIC IV’s offering and an annual distribution fee of 1.40% of the estimated value of the shares, as determined in accordance with applicable FINRA rules. Class T shares are subject to a contingent deferred sales charge (CDSC) if they are tendered within certain time periods as described in FSIC IV’s prospectus. The public offering price is subject to change. FSIC IV’s total expenses as a percentage of average net assets attributable to common stock was 5.72% for the period from January 6, 2016 (commencement of operations) to June 30, 2016. Expenses and fees are described more fully in FSIC IV’s prospectus. Please consult the prospectus and read it carefully.
2The net investment amount for shares of FSIC IV’s Class T common stock is the public offering price, net of the maximum upfront sales load of 2.20%.
3The annualized distribution rate shown is expressed as a percentage equal to the projected annualized distribution amount per share of Class T common stock (which is calculated by annualizing the regular weekly cash distribution per share of Class T common stock as of the date indicated, without compounding), divided by the public offering price per share of Class T common stock as of the date indicated. The annualized distribution rate shown may be rounded. The payment of future distributions on FSIC IV’s shares of Class T common stock is subject to the discretion of FSIC IV’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. For the six months ended June 30, 2016, 77% of FSIC IV’s distributions were funded through short-term capital gains proceeds from the sales of assets. A portion of FSIC IV’s distributions during the six months ended June 30, 2016, was funded through expense reimbursements from FSIC IV’s sponsor. The determination of the tax attributes of FSIC IV’s distributions is made annually at the end of FSIC IV’s fiscal year, and a determination made on an interim basis may not be representative of the actual tax attributes of FSIC IV’s distributions for a full year. The actual tax characteristics of distributions to stockholders are reported to stockholders annually on Form 1099-DIV.

Performance – returns


Stockholder returns 1
Without sales charge, compounded monthly
YTD
7.50%
1 year
––
3 years
Annualized
––
5 years
Annualized
––
Since inception
Annualized
––
Cumulative total return
Since inception
7.50%
Cumulative total return 2
Since inception (with sales charge, compounded monthly)
1.23%
Cumulative cash distributions per share 3
Since inception
$0.37
Inception date
1/6/2016
As of 7/31/2016, unless otherwise noted. Numbers may be rounded.
Returns shown are historical only and are based on past performance. Past performance is not a guarantee of future results.
View Returns disclosure For Footnotes 123
1

Stockholder returns (without sales charge) are the total returns an investor received for the highlighted period taking into account all distributions paid during such period, compounded monthly. The calculation assumes that the investor purchased shares at the public offering price for FSIC IV’s shares of Class T common stock, excluding selling commissions, at the beginning of the applicable period and reinvested all distributions pursuant to FSIC IV’s distribution reinvestment plan (DRP). Valuation as of the end of each period is the repurchase price pursuant to FSIC IV’s share repurchase program on such date. Stockholder returns (without sales charge) do not include selling commissions, which could total up to 2.20% of the public offering price per share of Class T common stock, or any CDSC. Had such selling commissions been included, performance would be lower. Upon liquidation or repurchase, market conditions may cause the actual values to be more or less than the values shown.

The stockholder returns reflect FSIC IV’s expenses for each period shown. FSIC IV’s total expenses as a percentage of average net assets attributable to common stock was 5.72% for the period from January 6, 2016 (commencement of operations) to June 30, 2016. Expenses and fees are described more fully in FSIC IV’s prospectus. Please consult the prospectus and read it carefully.

2The cumulative total return (with sales charge) is the total return an investor received since inception taking into account all distributions paid during such period, compounded monthly. The calculation assumes that the investor purchased shares at FSIC IV’s public offering price per share of Class T common stock, including the maximum selling commissions, at inception and reinvested all distributions pursuant to FSIC IV’s DRP. Valuation as of the end of the period assumes such investor tendered all shares of Class T common stock pursuant to FSIC IV’s share repurchase program at the repurchase price on such date and was subject to the applicable CDSC, as further described in FSIC IV’s prospectus. Had the investor not tendered his or her shares at the end of the period (and was therefore not subject to any CDSC), the cumulative total return (with sales charge) would be 5.13%. Upon liquidation or repurchase, market conditions may cause the actual value to be more or less than the value shown.
3Cumulative cash distributions per share reflect the total regular cash distributions paid since inception on a per share basis as of July 31, 2016. The payment of future distributions on FSIC IV’s shares of Class T common stock is subject to the discretion of FSIC IV’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.

Portfolio composition1

View Portfolio disclosure For Footnotes 1
1

Asset: As of June 30, 2016. Calculated as a percentage of fair value. Fair value is determined by FSIC IV’s board of directors. Includes investments held by FSIC IV and the assets underlying FSIC IV’s total return swap (TRS) financing arrangement with Citibank, N.A. Excluding investments held under the TRS, floating rate investments comprised 80% of FSIC IV’s investment portfolio and investment allocations were 43% first lien senior secured loans, 37% second lien senior secured loans, 19% subordinated debt and 1% equity/other. Securities may be an obligation of one or more entities affiliated with the named company. Percentages shown are net of unfunded commitment amounts.

Industry: As of June 30, 2016. Calculated as a percentage of fair value. Fair value is determined by FSIC IV’s board of directors. Does not include assets underlying FSIC IV’s TRS financing arrangement with Citibank, N.A.

Top 10 holdings: As of June 30, 2016. Calculated as a percentage of fair value. Fair value is determined by FSIC IV’s board of directors. Securities may be an obligation of one or more entities affiliated with the named company. Percentages shown are net of unfunded commitment amounts. Does not include assets underlying FSIC IV’s TRS financing arrangement with Citibank, N.A.

Key facts*

Inception date January 6, 2016
Registered shares 1 250 million
Total AUM (as of 6/30/2016) $83.45 million
Number of portfolio companies 9
Min. initial investment amount $5,000.00
Sponsor commitment 2 $8.35 million
Floating rate assets 3 95% of portfolio
Distribution frequency 4 Monthly
Liquidity 5 Quarterly tender offers
Tax reporting Form 1099-DIV
*As of 6/30/2016, unless otherwise noted.

Core investment strategies 6

Direct originations
4%
Opportunistic
54%

Total
58%
View key facts and core investment strategies disclosure For Footnotes 123456
1Registered shares means the shares registered on the registration statement relating to FSIC IV’s initial public offering that was initially declared effective by the SEC on October 28, 2015, as amended.
2Sponsor commitment means proceeds from investors affiliated with FSIC IV Advisor, LLC and GSO / Blackstone Debt Funds Management LLC, including members of FSIC IV’s board of directors.
3Calculated as a percentage of fair value. Fair value is determined by FSIC IV’s board of directors. Includes investments held by FSIC IV and the assets underlying FSIC IV’s TRS with Citibank, N.A. Excluding investments held under the TRS, floating rate investments comprised 80% of FSIC IV’s investment portfolio.
4The payment of future distributions on FSIC IV’s shares of Class T common stock is subject to the discretion of FSIC IV’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.
5FSIC IV intends to repurchase a limited number of shares pursuant to its share repurchase program. FSIC IV may amend, suspend or terminate its share repurchase program at any time. Any such repurchases will be at the net offering price in effect for shares of Class T common stock on the date of repurchase. Such repurchases are also subject to a CDSC of up to 3.90% of the lesser of the estimated value of the shares as of the date of repurchase and the public offering price at the times such shares were purchased if they are tendered within certain periods as described in FSIC IV’s prospectus. See FSIC IV’s prospectus for more information.
6Calculated as a percentage of fair value. Fair value is determined by FSIC IV’s board of directors. FSIC IV defines core investment strategies as any investment that is a direct origination or an opportunistic investment. Broadly syndicated/other investments comprised 42% of FSIC IV’s portfolio as of June 30, 2016.
View risk factors disclosure

Investing in FSIC IV may be considered speculative and involves a high level of risk, including the risk of a substantial loss of investment. The following are some of the risks an investment in FSIC IV’s common stock involves; however, you should carefully consider all of the information found in the section of FSIC IV’s prospectus entitled “Risk Factors” before deciding to invest in shares of FSIC IV’s common stock.

  • Because there is no public trading market for shares of FSIC IV’s common stock and FSIC IV is not obligated to effectuate a liquidity event by a specified date, if at all, it is unlikely that you will be able to sell your shares. If you are able to sell your shares before FSIC IV completes a liquidity event, it is likely that you will receive less than you paid for them. While FSIC IV intends to conduct quarterly tender offers for FSIC IV’s shares, only a limited number of shares will be eligible for repurchase and FSIC IV may amend, suspend or terminate the share repurchase program at any time. In addition, any such repurchases will be at a discount to the current offering price on the date of repurchase.
  • FSIC IV intends to invest in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as “junk,” have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. They may also be difficult to value and illiquid.
  • FSIC IV’s distributions may be funded from unlimited amounts of offering proceeds or borrowings, which may constitute a return of capital and reduce the amount of capital available to FSIC IV for investment. Any capital returned to stockholders through distributions will be distributed after payment of fees and expenses.
  • An investment strategy focused primarily on privately held companies presents certain challenges, including lack of available information about these companies.
  • Investing in middle market companies involves a number of significant risks, any one of which could have a material adverse effect on FSIC IV’s operating results.
  • A lack of liquidity in certain of FSIC IV’s investments may adversely affect FSIC IV’s business.
  • FSIC IV is subject to financial market risks, including changes in interest rates, which may have a substantial negative impact on FSIC IV’s investments.
  • FSIC IV has borrowed funds to make investments, which increases the volatility of FSIC IV’s investments and may increase the risks of investing in FSIC IV’s securities.
  • FSIC IV has limited operating history and is subject to the business risks and uncertainties associated with any new business.
  • If FSIC IV is unable to raise substantial funds in its ongoing, continuous “best efforts” public offering, then FSIC IV will be more limited in the number and type of investments it may make.
  • FSIC IV’s previous distributions to stockholders were funded in significant part from the reimbursement of certain expenses, including through the waiver of certain investment advisory fees that are subject to repayment to FSIC IV’s affiliate, FS Investments, and FSIC IV’s future distributions may be funded from such waivers and reimbursements. Significant portions of these distributions may not be based on FSIC IV’s investment performance, and such waivers and reimbursements by FS Investments may not continue in the future. If FS Investments were not to reimburse certain of FSIC IV’s expenses, including through the waiver of certain of its advisory fees, significant portions of these distributions may come from offering proceeds or borrowings. The repayment of any amount owed to FS Investments will reduce the future distributions to which you would otherwise be entitled.
  • Please see FSIC IV’s prospectus for a more complete list of risks associated with investing in syndicated loans.

To invest in FSIC IV, an investor must have either (i) a net worth (not including home, furnishings and personal automobiles) of at least $70,000 and an annual gross income of at least $70,000, or (ii) a net worth (not including home, furnishings and personal automobiles) of at least $250,000. Some states impose heightened suitability standards. Please consult the prospectus for a detailed description of the suitability standards imposed on investors, including heightened standards required by certain states. 

Shares of FSIC IV are currently not available for investment by residents of New Jersey. This webpage is not approved for use in Massachusetts.

An investment in FSIC IV’s common stock involves significant costs and investors should review the information in FSIC IV’s prospectus regarding fees and expenses. 

FSIC IV Q3 2016 tender documents

Corporate governance

FS Investment Solutions, LLC | 201 Rouse Boulevard | Philadelphia, PA 19112 

877-372-9880 | Member FINRA/SIPC

If you want to learn more, contact us at: Support