FS Credit Opportunities Corp. (FSCO) Declares Distribution for August 2024

Rhea-AI Summary

FS Credit Opportunities Corp. (NYSE: FSCO) has announced its monthly distribution for August 2024. The Fund will pay $0.06 per share on August 30, 2024, maintaining an annualized distribution yield of 10.1% based on NAV and 11.1% based on market price as of July 31, 2024. The Fund's monthly distributions have been fully covered by net investment income throughout 2024. Year-to-date through July 31, 2024, FSCO has generated an estimated total return of 9.5% on NAV and 22.7% on market price.

FSCO, with approximately $2.3 billion in assets under management, focuses on event-driven credit, special situations, private capital solutions, and other non-traditional credit opportunities. The ex-date, record date, and payable date for the August distribution are all set for August 23, 2024.

Positive

• Monthly distribution of $0.06 per share maintained
• High annualized distribution yield of 10.1% based on NAV and 11.1% based on market price
• Distributions fully covered by net investment income in 2024
• Strong year-to-date total returns: 9.5% on NAV and 22.7% on market price
• $2.3 billion in assets under management

Negative

• None.

Insights

Financial Analyst

As a financial analyst, I find this distribution announcement for FS Credit Opportunities Corp. (FSCO) to be noteworthy. The $0.06 per share monthly distribution translates to an impressive 10.1% annualized distribution yield based on NAV and 11.1% based on market price. These high yields are particularly attractive in the current market environment.

What's even more compelling is that the distribution has been fully covered by the Fund's net investment income throughout 2024. This indicates strong underlying performance and sustainability of the payout. The Fund's year-to-date total returns are also impressive, with 9.5% based on NAV and a substantial 22.7% based on market price.

With $2.3 billion in assets under management, FSCO has significant scale in the alternative credit space. Its focus on event-driven credit, special situations and private capital solutions suggests a strategy aimed at capturing higher yields in less efficient market segments. This approach can be beneficial in generating above-average returns but may also carry higher risks.

Investors should note that while the high yield is attractive, it's essential to consider the underlying risks and potential for NAV volatility in this type of fund. The significant outperformance of market price return compared to NAV return year-to-date also suggests that the fund may be trading at a premium, which could present valuation risks.

Market Research Analyst

From a market perspective, FSCO's distribution announcement and performance metrics offer valuable insights into the alternative credit sector. The fund's ability to maintain a high distribution rate while fully covering it with net investment income is indicative of the opportunities present in non-traditional credit markets.

The 22.7% year-to-date return based on market price significantly outpaces many traditional fixed income investments and even surpasses equity market returns. This outperformance highlights the growing investor appetite for alternative yield sources in a challenging interest rate environment.

However, it's important to contextualize this performance within the broader market. The substantial gap between NAV return (9.5%) and market price return (22.7%) suggests that investor enthusiasm may be driving the fund's market price above its intrinsic value. This divergence could indicate a potential market inefficiency or reflect changing investor risk preferences in the current economic landscape.

The fund's focus on event-driven credit and special situations positions it well to capitalize on market dislocations and corporate actions. As economic uncertainties persist, this strategy could continue to find attractive opportunities. However, investors should be aware that such strategies can be more sensitive to market cycles and liquidity conditions compared to traditional credit investments.

PHILADELPHIA, Aug. 1, 2024 /PRNewswire/ -- The Board of Directors of FS Credit Opportunities Corp. (the Fund) (NYSE: FSCO) announced the monthly distribution for August 2024. The distribution of $0.06 per share will be paid on August 30, 2024. Further information on the distribution is summarized in the charts below.

The current annualized distribution rate equates to an annualized distribution yield¹ of 10.1% and 11.1%, respectively, based on the Fund's net asset value (NAV) and market price as of July 31, 2024. The monthly distribution has been fully covered by the Fund's net investment income throughout 2024, and the Fund has generated an estimated total return on NAV of 9.5% and 22.7% on market price year-to-date through July 31, 2024.

The Fund has approximately $2.3 billion in assets under management and invests in event-driven credit, special situations, private capital solutions and other non-traditional credit opportunities.

Month	Ticker	Fund Name		Monthly Dividend
August	FSCO	FS Credit Opportunities Corp.		$0.06

The distribution will be made on the following schedule:

Month	Ex-Date	Record Date	Payable Date
August	August 23, 2024	August 23, 2024	August 30, 2024

The Fund pays regular monthly cash distributions to common shareholders at a level rate that may be adjusted from time to time. The amount of monthly distributions may be affected by numerous factors, including changes in portfolio and market conditions.

Shareholders should not use the information provided here in preparing their tax returns. The Fund will send a Form 1099-DIV to shareholders for the calendar year that will tell them how to report these distributions for federal income tax purposes.

Investors should consider, among other things, the investment objectives, risks, charges and expenses of the Fund carefully before investing. Investors can find the Fund's most recent reports and other filings on the Securities and Exchange Commission's EDGAR Database or on the Fund's website (https://fsinvestments.com/fs-credit-opportunities-corp/).

About FS Investments
FS Investments is a global alternative asset manager dedicated to delivering superior performance and innovative investment and capital solutions. The firm manages over $75 billion in assets for a wide range of clients, including institutional investors, financial professionals and individual investors. FS Investments provides access to a broad suite of alternative asset classes and strategies through its best-in-class investment teams and partners. With its diversified platform and flexible capital solutions, the firm is a valued partner to general partners, asset owners and portfolio companies. FS Investments is grounded in its high-performance culture and guided by its commitment to building value for its clients, investing in its colleagues and giving back to its communities. The firm has more than 500 employees across offices in the U.S., Europe and Asia and is headquartered in Philadelphia.

Contact Information:

Investor Relations
Joe Montelione
joseph.montelione@fsinvestments.com 

Media
Sarah Hilferty
media@fsinvestments.com

Forward Looking Statements
Statements included herein may constitute "forward-looking" statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements with regard to future events or the future performance or operations of the Fund. Words such as "intends," "will," "expects," and "may" or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements. Factors that could cause actual results to differ materially include changes in the economy, geopolitical risks, risks associated with possible disruption to the Fund's operations or the economy generally due to hostilities, terrorism, natural disasters or pandemics such as COVID-19, future changes in laws or regulations and conditions in the Fund's operating area, unexpected costs, the price at which the Fund's shares of common stock may trade on the New York Stock Exchange and such other factors that are disclosed in the Fund's filings with the Securities and Exchange Commission. The inclusion of forward-looking statements should not be regarded as a representation that any plans, estimates or expectations will be achieved. Any forward-looking statements speak only as of the date of this communication. Except as required by federal securities laws, the Fund undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on any of these forward-looking statements.

¹ Annualized distribution yield reflects the current month's distribution per share annualized and divided by the estimated current month end net asset value (NAV) per share or market price per share; because annualized distribution yield is based on estimated current month end NAV, it is an estimate that is subject to change.

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SOURCE FS Investments

FAQ

What is the August 2024 distribution amount for FS Credit Opportunities Corp. (FSCO)?

FS Credit Opportunities Corp. (FSCO) declared a distribution of $0.06 per share for August 2024, payable on August 30, 2024.

What is the current annualized distribution yield for FSCO as of July 31, 2024?

As of July 31, 2024, FSCO's annualized distribution yield is 10.1% based on net asset value (NAV) and 11.1% based on market price.

What are FSCO's year-to-date total returns through July 31, 2024?

FSCO has generated an estimated total return of 9.5% on NAV and 22.7% on market price year-to-date through July 31, 2024.

How much assets under management does FSCO have as of August 2024?

FS Credit Opportunities Corp. (FSCO) has approximately $2.3 billion in assets under management.