##### Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549   FORM 10-Q    ☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2020  ☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  FOR THE TRANSITION PERIOD FROM                 
TO COMMISSION FILE NUMBER: 814-00926   FS KKR Capital Corp. II (Exact name of registrant as specified in its charter)    Maryland

80-0741103(State or other jurisdiction ofincorporation or organization)

(I.R.S. EmployerIdentification No.)  201 Rouse BoulevardPhiladelphia, Pennsylvania

19112(Address of principal executive offices)

(Zip Code) Registrants telephone number, including area code:
(215) 495-1150 Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes  ☐    No  ☐ Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of large accelerated
filer, accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act.  Large accelerated filer

☐

Accelerated filer

☐Non-accelerated filer

☒

Smaller reporting company

☐Emerging growth company

☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the
extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes  ☐    No  ☒ Securities registered pursuant to
Section 12(b) of the Act: None  Title of each class

Trading
Symbol(s)

Name of each exchange
on which registeredN/A

N/A

N/A Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the
latest practicable date. The issuer had 684,810,154 shares of common stock outstanding as of May 8, 2020.




---

##### Table of Contents

TABLE OF CONTENTS  PagePART IFINANCIAL INFORMATIONITEM 1.

FINANCIAL STATEMENTS


1Consolidated Balance Sheets as of March 31, 2020 (Unaudited) and December 31,
2019


1Unaudited Consolidated Statements of Operations for the three months ended March 31, 2020 and
2019


2Unaudited Consolidated Statements of Changes in Net Assets for the three months ended March 
31, 2020 and 2019


4Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and
2019


5Consolidated Schedules of Investments as of March 31, 2020 (Unaudited) and December 31,
2019


6Notes to Unaudited Consolidated Financial Statements


33ITEM 2.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS


68ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


84ITEM 4.

CONTROLS AND PROCEDURES


85PART IIOTHER INFORMATIONITEM 1.

LEGAL PROCEEDINGS


86ITEM 1A.

RISK FACTORS


86ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


87ITEM 3.

DEFAULTS UPON SENIOR SECURITIES


87ITEM 4.

MINE SAFETY DISCLOSURES


87ITEM 5.

OTHER INFORMATION


87ITEM 6.

EXHIBITS


88SIGNATURES


93




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##### Table of Contents

PART IFINANCIAL INFORMATION  Item 1.
Financial Statements. FS KKR Capital Corp. II Consolidated Balance
Sheets (in millions, except share and per share amounts)    March 31, 2020(Unaudited)


December 31,2019AssetsInvestments, at fair valueNon-controlled/unaffiliated investments (amortized cost$7,364 and $8,004
respectively)

$
6,600


$
7,670Non-controlled/affiliated investments (amortized cost$543 and $478,
respectively)


325



356Controlled/affiliated investments (amortized cost$612 and $559, respectively)


539



565Total investments, at fair value (amortized cost$8,519 and $9,041, respectively)


7,464



8,591Cash


225



163Foreign currency, at fair value (cost$7 and $4, respectively)


7



4Collateral held at broker for open interest rate swap contracts


59



44Due from counterparty


4



45Receivable for investments sold and repaid


321



23Interest receivable


88



84Deferred financing costs


11



12Unrealized appreciation on foreign currency forward contracts


1



Prepaid expenses and other assets


4



4Total assets

$
8,184


$
8,970LiabilitiesPayable for investments purchased

$
114


$
37Debt (net of deferred financing costs of $5 and $0, respectively)(1)


3,629



3,809Stockholder distributions payable


102



Management fees payable


33



35Subordinated income incentive fees payable(2)


23



11Administrative services expense payable


3



3Interest payable


25



30Unrealized depreciation on foreign currency forward contracts






1Unrealized depreciation on total return swap


1



4Unrealized depreciation on interest rate swaps


59



29Other accrued expenses and liabilities


9



15Total liabilities


3,998



3,974Commitments and contingencies(3)Stockholders equityPreferred stock, $0.001 par value, 50,000,000 shares authorized, none issued and outstanding






Common stock, $0.001 par value, 900,000,000 shares authorized, 678,379,301 and 678,379,301 shares issued and outstanding,
respectively


1



1Capital in excess of par value


5,794



5,794Retained earnings (accumulated deficit)(4)


(1,609
)


(799
)Total stockholders equity


4,186



4,996Total liabilities and stockholders equity

$
8,184


$
8,970Net asset value per share of common stock at period end

$
6.17


$
7.36  (1)
See Note 9 for a discussion of the Companys financing arrangements.  (2)
See Note 2 for a discussion of the methodology employed by the Company in calculating the subordinated income incentive fees.  (3)
See Note 10 for a discussion of the Companys commitments and contingencies.  (4)
See Note 5 for a discussion of the sources of distributions paid by the Company. See notes to unaudited consolidated financial statements.  1




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##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Statements of Operations (in millions, except share and per share amounts)    Three Months Ended March 31,2020


2019Investment incomeFrom non-controlled/unaffiliated investments:Interest income

$
145


$
103Paid-in-kind interest income


11



2Fee income


15



7Dividend income


2



From non-controlled/affiliated investments:Interest income


3



5Paid-in-kind interest income


3



3Fee income






From controlled/affiliated investments:Interest income


3



Paid-in-kind interest income






Dividend income


13



Total investment income


195



120Operating expensesManagement fees


33



18Subordinated income incentive fees(1)


23



11Administrative services expenses


2



1Stock transfer agent fees


1



1Accounting and administrative fees


1



0Interest expense(2)


40



30Other general and administrative expenses


2



1Net expenses


102



62Net investment income


93



58 See notes to unaudited consolidated financial statements.  2




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##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Statements of Operations (continued) (in millions, except share and per share amounts)    Three Months Ended March 31,2020


2019Realized and unrealized gain/lossNet realized gain (loss) on investments:Non-controlled/unaffiliated investments


(217
)


(19
)Non-controlled/affiliated investments


0



0Controlled/affiliated investments






Net realized gain (loss) on total return swap


(2
)


Net realized gain (loss) on foreign currency forward contracts


0



Net realized gain (loss) on interest rate swaps


(2
)


Net realized gain (loss) on foreign currency


1



0Net change in unrealized appreciation (depreciation) on investments:Non-controlled/unaffiliated investments


(429
)


37Non-controlled/affiliated investments


(96
)


0Controlled/affiliated investments


(80
)


Net change in unrealized appreciation (depreciation) on total return swap


3



Net change in unrealized appreciation (depreciation) on foreign currency forward contracts


2



Net change in unrealized appreciation (depreciation) on interest rate swaps


(30
)


(4
)Net change in unrealized gain (loss) on foreign currency


49



(1
)Total net realized and unrealized gain (loss) on investments


(801
)


13Net increase (decrease) in net assets resulting from operations

$
(708
)

$
71Per share informationbasic and dilutedNet increase (decrease) in net assets resulting from operations (Earnings per Share)

$
(1.04
)

$
0.22Weighted average shares outstanding


678,379,301



324,309,084  (1)
See Note 2 for a discussion of the methodology employed by the Company in calculating the subordinated income incentive fees.  (2)
See Note 9 for a discussion of the Companys financing arrangements. See notes to unaudited consolidated financial statements.  3




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##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Statements of Changes in Net Assets (in millions)    Three Months Ended March 31,2020


2019OperationsNet investment income

$
93


$
58Net realized gain (loss) on investments and foreign currency


(220
)


(19
)Net change in unrealized appreciation (depreciation) on investments and interest rate swaps(1)


(630
)


33Net change in unrealized gain (loss) on foreign currency


49



(1
)Net increase (decrease) in net assets resulting from operations


(708
)


71Stockholder distributions(2)Distributions to stockholders


(102
)


(61
)Net decrease in net assets resulting from stockholder distributions


(102
)


(61
)Capital share transactions(3)Reinvestment of stockholder distributions






26Repurchases of common stock






(27
)Net increase (decrease) in net assets resulting from capital share transactions






(1
)Total increase (decrease) in net assets


(810
)


9Net assets at beginning of period


4,996



2,567Net assets at end of period

$
4,186


$
2,576  (1)
See Note 7 for a discussion of these financial instruments.  (2)
See Note 5 for a discussion of the sources of distributions paid by the Company.  (3)
See Note 3 for a discussion of the Companys capital share transactions. See notes to unaudited consolidated financial statements.  4




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##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Statements of Cash Flows (in millions)    Three Months Ended March 31,2020


2019Cash flows from operating activitiesNet increase (decrease) in net assets resulting from operations

$
(708
)

$
71Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in)
operating activities:Purchases of investments


(1,317
)


(454
)Paid-in-kind interest


(18
)


(5
)Proceeds from sales and repayments of investments


1,643



203Net realized (gain) loss on investments


217



18Net change in unrealized (appreciation) depreciation on investments


605



(36
)Net change in unrealized (appreciation) depreciation on total return
swap(1)


(3
)


Net change in unrealized (appreciation) depreciation on foreign currency forward contracts


(2
)


Net change in unrealized (appreciation) depreciation on interest rate swaps


30



4Accretion of discount


(5
)


(2
)Amortization of deferred financing costs


1



1Unrealized (gain) loss on borrowings in foreign currency


(49
)


1(Increase) decrease in collateral held at broker for open swap contracts


(15
)


(Increase) decrease in due from counterparty


41



(Increase) decrease in receivable for investments sold and repaid


(298
)


1(Increase) decrease in income receivable


(4
)


(9
)(Increase) decrease in prepaid expenses and other assets






(2
)Increase (decrease) in payable for investments purchased


77



12Increase (decrease) in management fees payable


(2
)


1Increase (decrease) in subordinated income incentive fees payable


12



5Increase (decrease) in administrative services expense payable






0Increase (decrease) in interest payable


(5
)


2Increase (decrease) in other accrued expenses and liabilities


(6
)


0Net cash provided by (used in) operating activities


194



(189
)Cash flows from financing activitiesRepurchases of common stock






(27
)Stockholder distributions






(35
)Borrowings under financing arrangements(1)


1,108



437Repayments of financing arrangements(1)


(1,232
)


(217
)Deferred financing costs paid


(5
)


(2
)Net cash provided by financing activities


(129
)


156Total increase (decrease) in cash


65



(33
)Cash, restricted cash and foreign currency at beginning of period


167



151Cash, restricted cash and foreign currency at end of period

$
232


$
118Supplemental disclosureNon-cash purchase of investments

$
(69
)

$
0Non-cash sale of investments

$
69


$
0Distributions reinvested

$



$
26Local and excise taxes paid

$
2


$
2  (1)
See Note 9 for a discussion of the Companys financing arrangements. During the three months ended March 31, 2020 and 2019, the
Company paid $44 and $27 respectively, in interest expense on the credit facilities. See notes to
unaudited consolidated financial statements.  5




---

##### Table of Contents

FS
KKR Capital Corp. II Unaudited Consolidated Schedule of Investments As of March 31, 2020 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes


Industry


Rate(b)

Floor(b)


Maturity

PrincipalAmount(c)



AmortizedCost


FairValue(d)Senior Secured LoansFirst Lien122.2%5 Arch Income Fund 2, LLC


(r)(x)(y)



Diversified Financials


10.5%





11/18/23

$
97.3


$
97.3


$
92.35 Arch Income Fund 2, LLC


(r)(s)(x)(y)



Diversified Financials


10.5%





11/18/23


16.2



16.2



15.4Accuride Corp


(l)(n)(ab)



Capital Goods


L+525


1.0
%

11/17/23


12.6



10.6



5.5Acproducts Inc


(k)(l)(o)(p)



Consumer Durables & Apparel


L+650


1.0
%

8/18/25


64.9



64.2



63.0Advanced Lighting Technologies Inc


(n)(t)(u)(ad)



Materials


L+750


1.0
%

10/4/22


9.0



7.8



6.6Advantage Sales & Marketing Inc


(n)(ab)



Commercial & Professional Services


L+325


1.0
%

7/23/21


31.3



29.9



25.3All Systems Holding LLC


(f)(k)(l)(m)(n)(o)(p)



Commercial & Professional Services


L+625


1.0
%

10/31/23


209.3



209.3



204.6All Systems Holding LLC


(s)



Commercial & Professional Services


L+625


1.0
%

10/31/23


3.0



3.0



2.9American Tire Distributors Inc


(n)(ab)



Automobiles & Components


L+600, 1.0% PIK (1.0% Max PIK)


1.0
%

9/1/23


2.6



2.5



2.4American Tire Distributors Inc


(n)(ab)



Automobiles & Components


L+750


1.0
%

9/2/24


16.3



14.4



11.0Apex Group Limited


(n)(r)



Diversified Financials


L+700


1.3
%

6/15/23


2.3



2.2



2.2Apex Group Limited


(r)(s)



Diversified Financials


L+700


1.3
%

6/15/23


2.3



2.2



2.2Apex Group Limited


(f)(n)(q)(r)



Diversified Financials


L+700


1.0
%

6/15/25


32.5



32.4



31.7Apex Group Limited


(f)(k)(l)(n)(q)(r)



Diversified Financials


L+700


1.3
%

6/15/25


37.7



37.1



36.8Apex Group Limited


(n)(r)



Diversified Financials


L+700


1.5
%

6/15/25

£
23.1



29.4



28.5Arrotex Australia Group Pty Ltd


(n)(r)



Pharmaceuticals, Biotechnology & Life Sciences


B+525


1.0
%

7/10/24

A$
47.8



32.8



28.0Aspect Software Inc


(n)



Software & Services


8.0% PIK (8.0% Max PIK)





6/30/20

$
0.2







0.2Aspect Software Inc


(n)



Software & Services


L+500


1.0
%

7/15/23


1.4



1.4



1.4Aspect Software Inc


(s)



Software & Services


L+500


1.0
%

7/15/23


1.9



1.9



1.9Aspect Software Inc


(l)(n)(p)



Software & Services


L+500


1.0
%

1/15/24


21.1



19.1



19.1ATX Networks Corp


(n)(o)(r)(ab)



Technology Hardware & Equipment


L+600, 1.0% PIK (1.0% Max PIK)


1.0
%

6/11/21


81.4



78.6



67.6Belk Inc


(n)(ab)



Retailing


L+675


1.0
%

7/31/25


50.7



42.3



29.0Bellatrix Exploration Ltd


(n)(r)



Energy


10.0%





5/29/20


0.6



0.6



0.6Bellatrix Exploration Ltd


(r)(s)



Energy


10.0%





5/29/20


0.8



0.8



0.8Berner Food & Beverage LLC


(n)



Food & Staples Retailing


L+875


1.0
%

2/2/23


4.3



4.3



4.2Borden Dairy Co


(n)(t)(u)



Food, Beverage & Tobacco


L+750


1.0
%

7/6/23


105.0



103.1



45.4Bugaboo International BV


(n)(r)



Consumer Durables & Apparel


7.8% PIK (7.8% Max PIK)





3/20/25


1.6



1.9



1.7Caprock Midstream LLC


(n)(ab)



Energy


L+475





11/3/25

$
13.5



12.8



7.8Charles Taylor PLC


(n)(r)



Diversified Financials


L+575





1/24/27

£
19.4



24.7



23.1CHS/Community Health Systems, Inc.


(g)(h)(k)(r)(aa)(ab)



Health Care Equipment & Services


8.0%





3/15/26

$
17.6



17.1



16.8Cimarron Energy Inc


(n)



Energy


10.0%





6/30/21


7.5



7.5



6.9Conservice LLC


(f)(n)(o)(p)



Consumer Services


L+525





11/29/24


59.4



58.9



59.4Conservice LLC


(s)



Consumer Services


L+525





11/29/24


2.9



2.9



2.9Conservice LLC


(n)



Consumer Services


L+525





11/29/24


1.1



1.1



1.1Conservice LLC


(s)



Consumer Services


L+525





11/29/24


2.3



2.3



2.3Constellis Holdings LLC


(n)(ad)



Capital Goods


L+1,000


1.0
%

6/30/21


8.4



8.4



8.4Constellis Holdings LLC


(n)(ad)



Capital Goods


L+750


1.0
%

3/31/24


15.0



15.0



15.0CSafe Global


(n)



Capital Goods


L+650


1.0
%

11/1/21


9.1



9.1



8.9CSafe Global


(f)(k)(l)(p)(q)



Capital Goods


L+650





10/31/23


76.8



76.8



74.8CSafe Global


(l)(n)



Capital Goods


L+650


1.0
%

10/31/23


14.4



14.4



14.1CSafe Global


(s)



Capital Goods


L+650


1.0
%

10/31/23


13.2



13.2



12.9CSM Bakery Products


(l)(n)(ab)



Food, Beverage & Tobacco


L+400


1.0
%

7/3/20


6.4



6.2



5.3CTI Foods Holding Co LLC


(n)



Food, Beverage & Tobacco


L+700


1.0
%

5/3/24


0.0



0.0



0.0  See
notes to unaudited consolidated financial statements.  6




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of March 31, 2020 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor(b)


Maturity

PrincipalAmount(c)



AmortizedCost


FairValue(d)Eacom Timber Corp

(n)(r)

Materials

L+650


1.0
%

11/30/23

$
2.6


$
2.6


$
2.3Eagle Family Foods Inc

(n)

Food, Beverage & Tobacco

L+675


1.0
%

6/14/23


2.9



2.9



2.7Eagle Family Foods Inc

(s)

Food, Beverage & Tobacco

L+675


1.0
%

6/14/23


5.3



5.2



4.9Eagle Family Foods Inc

(f)(k)(l)(n)(p)

Food, Beverage & Tobacco

L+675


1.0
%

6/14/24


53.5



53.1



49.4Eagleclaw Midstream Ventures LLC

(n)(ab)

Energy

L+425


1.0
%

6/24/24


8.9



8.2



4.0EIF Van Hook Holdings LLC

(n)(ab)

Energy

L+525





9/5/24


2.2



2.1



1.6Electronics For Imaging Inc

(n)(ab)

Technology Hardware & Equipment

L+500





7/23/26


15.6



14.8



13.0Empire Today LLC

(f)(k)(l)(n)(o)(p)(q)

Retailing

L+650


1.0
%

11/17/22


133.5



133.5



130.5Entertainment Benefits Group LLC

(n)

Media & Entertainment

L+575


1.0
%

9/30/24


5.0



5.0



4.5Entertainment Benefits Group LLC

(s)

Media & Entertainment

L+575


1.0
%

9/30/24


0.9



0.9



0.9Entertainment Benefits Group LLC

(f)(k)(l)(n)

Media & Entertainment

L+575


1.0
%

9/30/25


32.5



32.2



29.8Fairway Group Holdings Corp

(n)(ad)

Food & Staples Retailing

L+1,000





10/21/20


3.0



2.9



3.0Fairway Group Holdings Corp

(n)(ad)

Food & Staples Retailing

L+1,000





10/23/20


7.1



7.1



7.1Fairway Group Holdings Corp

(n)(t)(u)(ad)

Food & Staples Retailing

12.0% PIK (12.0% Max PIK)





11/27/23


11.3



11.3



3.0Fairway Group Holdings Corp

(n)(t)(u)(ad)

Food & Staples Retailing

10.0% PIK (10.0% Max PIK)





11/28/23


7.3



5.6



Fox Head Inc

(l)(n)(p)

Consumer Durables & Apparel

L+850


1.0
%

12/19/20


36.4



36.4



33.7Frontline Technologies Group LLC

(n)

Software & Services

L+575


1.0
%

9/18/23


5.3



5.3



5.1Greystone Equity Member Corp

(n)(r)

Diversified Financials

L+725


3.8
%

4/1/26


161.7



161.7



159.1Greystone Equity Member Corp

(r)(s)

Diversified Financials

L+725


3.8
%

4/1/26


2.5



2.5



2.5Heniff Transportation Systems LLC

(n)

Transportation

L+575


1.0
%

12/3/24


4.0



4.0



3.8Heniff Transportation Systems LLC

(s)

Transportation

L+575


1.0
%

12/3/24


5.6



5.6



5.3Heniff Transportation Systems LLC

(f)(k)(l)(n)

Transportation

L+575


1.0
%

12/3/26


75.2



74.9



72.0HM Dunn Co Inc

(n)(t)(u)(ad)

Capital Goods

L+875 PIK (L+875 Max PIK)


1.0
%

6/30/21


56.3



44.4



13.0HM Dunn Co Inc

(n)(ad)

Capital Goods

15.0% PIK (15.0% Max PIK)





6/30/21


5.3



5.3



5.3HM Dunn Co Inc

(s)(ad)

Capital Goods

15.0% PIK (15.0% Max PIK)





6/30/21


1.5



1.5



1.5Hudson Technologies Co

(n)(r)

Commercial & Professional Services

L+1,025


1.0
%

10/10/23


54.2



53.9



28.2ID Verde

(n)(r)

Commercial & Professional Services

E+700





3/29/24


0.2



0.2



0.2ID Verde

(n)(r)

Commercial & Professional Services

E+700





3/29/24

£
0.1



0.1



0.1ID Verde

(n)(r)

Commercial & Professional Services

E+700





3/29/25


0.9



1.1



1.0ID Verde

(n)(r)

Commercial & Professional Services

L+725





3/29/25

£
0.6



0.8



0.7Industria Chimica Emiliana Srl

(r)(s)

Pharmaceuticals, Biotechnology & Life Sciences

E+650





6/30/26


13.6



14.8



14.1Industria Chimica Emiliana Srl

(n)(r)

Pharmaceuticals, Biotechnology & Life Sciences

L+650





6/30/26


51.8



55.4



53.8Industry City TI Lessor LP

(n)(p)

Consumer Services

10.8%, 1.0% PIK (1.0% Max PIK)





6/30/26

$
10.4



10.4



11.5J S Held LLC

(f)(n)(o)(p)

Insurance

L+600


1.0
%

7/1/25


71.5



70.9



69.8J S Held LLC

(s)

Insurance

L+600


1.0
%

7/1/25


13.5



13.5



13.2J S Held LLC

(n)

Insurance

L+600


1.0
%

7/1/25


4.6



4.5



4.5J S Held LLC

(s)

Insurance

L+600


1.0
%

7/1/25


3.3



3.3



3.2JC Penney Corp Inc

(n)(r)(ab)

Retailing

L+425


1.0
%

6/23/23


3.8



3.4



1.6Jo-Ann Stores Inc

(n)(ab)

Retailing

L+500


1.0
%

10/20/23


13.1



11.7



5.1Kellermeyer Bergensons Services LLC

(f)(k)(l)(n)(o)(p)(q)

Commercial & Professional Services

L+650


1.0
%

11/7/26


164.5



163.3



155.3Kellermeyer Bergensons Services LLC

(s)

Commercial & Professional Services

L+650


1.0
%

11/7/26


40.6



40.6



38.3Kodiak BP LLC

(f)(k)(l)(m)(n)(o)(p)(q)

Capital Goods

L+725


1.0
%

12/1/24


222.6



222.6



222.3Kodiak BP LLC

(s)

Capital Goods

L+725


1.0
%

12/1/24


10.7



10.7



10.7LBM Borrower LLC

(l)(n)(ab)

Capital Goods

L+375


1.0
%

8/20/22


5.3



5.0



4.7  See
notes to unaudited consolidated financial statements.  7




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of March 31, 2020 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor(b)


Maturity

PrincipalAmount(c)



AmortizedCost


FairValue(d)Lexitas Inc

(k)(l)(n)

Commercial & Professional Services

L+575


1.0
%

11/14/25

$
26.9


$
26.7


$
25.7Lexitas Inc

(s)

Commercial & Professional Services

L+575


1.0
%

11/14/25


4.3



4.3



4.1Lexitas Inc

(s)

Commercial & Professional Services

L+575


1.0
%

11/14/25


2.9



2.9



2.8Lionbridge Technologies Inc

(f)(k)(p)(q)

Consumer Services

L+625


1.0
%

12/29/25


90.0



89.6



87.5Lipari Foods LLC

(f)(m)(n)(o)(p)

Food & Staples Retailing

L+588


1.0
%

1/6/25


151.0



149.7



145.2Lipari Foods LLC

(f)(n)

Food & Staples Retailing

L+588


1.0
%

1/6/25


22.0



22.0



21.1Luxembourg Life FundAbsolute Return Fund I

(n)(r)

Insurance

L+750


1.5
%

3/1/25


8.2



8.1



8.0MB Precision Holdings LLC

(k)(n)(ad)

Capital Goods

L+725, 2.3% PIK (2.3% Max PIK)


1.3
%

7/23/22


21.5



21.1



20.9Monitronics International Inc

(f)(n)(ab)(ac)

Commercial & Professional Services

L+650


1.3
%

3/29/24


39.3



37.5



27.0Monitronics International Inc

(f)(ab)

Commercial & Professional Services

L+500


1.5
%

7/3/24


1.9



1.9



1.5Monitronics International Inc

(n)(ab)

Commercial & Professional Services

L+500


1.5
%

7/3/24


30.7



30.7



30.7Monitronics International Inc

(s)(ab)

Commercial & Professional Services

L+500


1.5
%

7/3/24


39.3



39.3



39.3Motion Recruitment Partners LLC

(n)(q)

Commercial & Professional Services

L+600


1.0
%

12/20/25


43.8



43.4



41.8Motion Recruitment Partners LLC

(s)

Commercial & Professional Services

L+600


1.0
%

12/20/25


34.6



34.6



33.0NCI Inc

(n)

Software & Services

L+750


1.0
%

8/15/24


4.2



4.2



3.8One Call Care Management Inc

(n)(ab)(ad)

Insurance

L+525


1.0
%

11/27/22


2.9



2.5



2.4P2 Energy Solutions Inc

(n)

Software & Services

L+675


1.0
%

1/31/25


2.7



2.7



2.6P2 Energy Solutions Inc

(s)

Software & Services

L+675


1.0
%

1/31/25


5.4



5.4



5.2P2 Energy Solutions Inc

(f)(k)(p)(q)

Software & Services

L+675


1.0
%

1/31/26


136.1



134.4



130.2Peak 10 Holding Corp

(n)(ab)

Telecommunication Services

L+350





8/1/24


25.5



23.0



18.4PF Changs China Bistro Inc

(n)(ab)

Consumer Services

L+625





3/1/26


14.9



14.7



7.0Premium Credit Ltd

(n)(r)

Diversified Financials

L+650





1/16/26

£
58.6



74.8



68.9Pretium Packaging LLC

(f)(k)(l)(n)(p)(q)

Household & Personal Products

L+625


1.0
%

1/15/27

$
111.2



110.1



107.9Pretium Packaging LLC

(s)

Household & Personal Products

L+625


1.0
%

1/15/27


22.7



22.4



22.0Production Resource Group LLC

(m)(n)(t)(u)

Media & Entertainment

L+700


1.0
%

8/21/24


381.0



381.0



263.8Project Marron

(n)(r)

Consumer Services

B+625





7/3/25

A$
36.5



24.0



21.1Project Marron

(f)(n)(r)

Consumer Services

L+625





7/2/25

C$
28.7



21.9



19.3Propulsion Acquisition LLC

(f)(l)(m)(n)(p)(q)

Capital Goods

L+600


1.0
%

7/13/21

$
113.9



112.6



110.7PSKW LLC

(l)(m)(o)(p)(q)

Health Care Equipment & Services

L+625


1.0
%

3/9/26


161.7



159.7



159.7Quorum Health Corp

(n)(ab)

Health Care Equipment & Services

L+675


1.0
%

4/29/22


7.6



7.6



6.4Reliant Rehab Hospital Cincinnati LLC

(f)(l)(o)(p)

Health Care Equipment & Services

L+675





9/2/24


117.7



116.9



110.5Roadrunner Intermediate Acquisition Co LLC

(l)(m)(o)(q)

Health Care Equipment & Services

L+675


1.0
%

3/15/23


95.7



95.7



94.1RSC Insurance Brokerage Inc

(f)(k)(l)(n)(o)(p)

Insurance

L+550


1.0
%

11/1/26


93.2



92.4



87.9RSC Insurance Brokerage Inc

(s)

Insurance

L+550


1.0
%

11/1/26


19.3



19.1



18.2RSC Insurance Brokerage Inc

(s)

Insurance

L+550


1.0
%

11/1/26


3.7



3.6



3.5Safe-Guard Products International LLC

(f)(p)(q)

Diversified Financials

L+575





1/27/27


76.1



75.4



70.6Savers Inc

(f)(n)(o)(p)

Retailing

L+650, 0.8% PIK (0.8% Max PIK)


1.5
%

3/28/24


52.6



52.1



50.9Savers Inc

(f)(n)

Retailing

L+700, 0.8% PIK (0.8% Max PIK)


1.5
%

3/28/24

C$
73.1



53.9



50.1Sequa Corp

(n)(ab)

Materials

L+500


1.0
%

11/28/21

$
4.8



4.7



3.9Sequel Youth & Family Services LLC

(f)(o)(p)

Health Care Equipment & Services

L+700


1.0
%

9/1/23


15.5



15.5



15.0Sequel Youth & Family Services LLC

(f)(l)(n)(p)

Health Care Equipment & Services

L+800





9/1/23


90.0



90.0



86.9Sequential Brands Group Inc.

(k)(l)(n)

Consumer Durables & Apparel

L+875





2/7/24


213.9



210.7



205.8SIRVA Worldwide Inc

(n)(ab)

Commercial & Professional Services

L+550





8/4/25


7.4



7.3



5.6Smart & Final Stores LLC

(m)(n)(ab)

Food & Staples Retailing

L+675





6/20/25


20.3



18.4



17.9  See
notes to unaudited consolidated financial statements.  8




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of March 31, 2020 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor(b)


Maturity

PrincipalAmount(c)



AmortizedCost


FairValue(d)SMART Global Holdings Inc

(r)(s)

Semiconductors & Semiconductor Equipment

L+400





2/9/21

$
0.1


$
0.1


$
0.1Sorenson Communications LLC

(f)(k)(m)(n)(q)(ab)

Telecommunication Services

L+650





4/29/24


76.5



73.9



71.7Staples Canada

(n)(r)

Retailing

L+700


1.0
%

9/12/24

C$
4.3



3.5



3.1Sungard Availability Services Capital Inc

(n)

Software & Services

L+750


1.0
%

2/3/22

$
2.4



2.3



2.5Sungard Availability Services Capital Inc

(s)

Software & Services

L+750


1.0
%

2/3/22


2.4



2.3



2.5Sutherland Global Services Inc

(n)(p)(r)(ab)

Software & Services

L+538


1.0
%

4/23/21


6.1



6.0



4.5Swift Worldwide Resources Holdco Ltd

(k)(n)(q)

Energy

9.5% L+150 PIK (L+150 Max PIK)


2.5
%

7/20/21


37.9



37.9



37.6Syncsort Inc

(n)(ab)

Software & Services

L+600


1.0
%

8/16/24


4.8



3.8



3.9Tangoe LLC

(f)(n)(o)(p)

Software & Services

L+650


1.0
%

11/28/25


102.5



101.6



99.0Torrid Inc

(f)(k)(l)(n)

Retailing

L+675


1.0
%

12/14/24


39.7



39.3



39.1Total Safety US Inc

(f)(n)(ab)

Capital Goods

L+600


1.0
%

8/16/25


1.0



0.9



0.8Trace3 Inc

(f)(k)(l)(n)(o)(p)

Software & Services

L+675


1.0
%

8/3/24


168.9



168.9



165.3Transaction Services Group Ltd

(n)(r)

Consumer Services

L+600





10/15/26

A$
72.7



48.2



40.9Transaction Services Group Ltd

(n)(r)

Consumer Services

L+600





10/15/26

£
7.7



9.8



8.8Transaction Services Group Ltd

(n)(r)

Consumer Services

L+600





10/15/26

$
20.1



20.1



18.4Truck-Lite Co LLC

(n)

Capital Goods

L+625


1.0
%

12/13/24

USD
8.8



8.7



8.4Truck-Lite Co LLC

(s)

Capital Goods

L+625


1.0
%

12/13/24


4.9



4.8



4.6Truck-Lite Co LLC

(f)(k)(n)(o)(p)

Capital Goods

L+625


1.0
%

12/13/26


127.6



126.4



121.5Truck-Lite Co LLC

(s)

Capital Goods

L+625


1.0
%

12/13/26


18.8



18.6



17.9Virgin Pulse Inc

(f)(l)(m)(o)(p)

Software & Services

L+650


1.0
%

5/22/25


159.0



158.0



155.2Warren Resources Inc

(n)(ad)

Energy

L+1,000, 1.0% PIK (1.0% Max PIK)


1.0
%

5/22/20


21.0



21.0



19.1West Corp

(l)(ab)

Software & Services

L+350


1.0
%

10/10/24


4.9



4.4



3.7West Corp

(l)(o)(ab)

Software & Services

L+400


1.0
%

10/10/24


19.6



18.1



14.8Wheels Up Partners LLC

(n)

Transportation

L+855


1.0
%

1/26/21


0.5



0.5



0.5Wheels Up Partners LLC

(n)

Transportation

L+855


1.0
%

8/26/21


0.3



0.3



0.3Wheels Up Partners LLC

(n)

Transportation

L+710


1.0
%

6/30/24


1.0



1.0



1.0Wheels Up Partners LLC

(n)

Transportation

L+710


1.0
%

11/1/24


0.4



0.4



0.4Wheels Up Partners LLC

(n)

Transportation

L+710


1.0
%

12/21/24


0.2



0.2



0.2Wheels Up Partners LLC

(n)

Transportation

L+710


1.0
%

12/21/24


0.7



0.7



0.7Wheels Up Partners LLC

(n)

Transportation

L+710


1.0
%

12/21/24


0.7



0.7



0.7Zeta Interactive Holdings Corp

(m)(n)(o)(p)(q)

Software & Services

L+750


1.0
%

7/29/22


122.2



122.2



122.2Zeta Interactive Holdings Corp

(s)

Software & Services

L+750


1.0
%

7/29/22


4.4



4.4



4.4Total Senior Secured LoansFirst Lien


















5,908.4



5,419.0Unfunded Loan Commitments


















(302.9
)


(302.9
)Net Senior Secured LoansFirst Lien


















5,605.5



5,116.1Senior Secured LoansSecond Lien16.5%Advantage Sales & Marketing Inc

(n)(ab)

Commercial & Professional Services

L+650


1.0
%

7/25/22


8.1



7.1



5.9American Bath Group LLC

(l)(n)(ab)

Capital Goods

L+975


1.0
%

9/30/24


3.0



3.0



2.7Ammeraal Beltech Holding BV

(f)(n)(o)(r)

Capital Goods

L+800





7/27/26


51.3



50.4



47.7Applied Systems Inc

(n)(ab)

Software & Services

L+700


1.0
%

9/19/25


2.6



2.6



2.4Arena Energy LP

(l)(n)(o)(p)(t)(u)

Energy

L+900, 4.0% PIK (4.0% Max PIK)


1.0
%

1/24/21


54.4



53.5



36.0athenahealth Inc

(f)(m)(n)(p)

Health Care Equipment & Services

L+850





2/11/27


129.2



128.0



126.3BCA Marketplace PLC

(n)(r)

Retailing

L+825





11/12/27

£
30.2



37.3



35.1  See
notes to unaudited consolidated financial statements.  9




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of March 31, 2020 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor(b)


Maturity

PrincipalAmount(c)



AmortizedCost


FairValue(d)Bellatrix Exploration Ltd

(n)(r)(t)(u)

Energy

8.5%





9/11/23

$
5.6


$
5.6


$
4.4Bellatrix Exploration Ltd

(n)(r)(t)(u)

Energy

8.5%





9/11/23


13.5



12.3



Byrider Finance LLC

(n)

Automobiles & Components

L+1,000, 0.5% PIK (0.5% Max PIK)


1.3
%

6/7/22


35.9



35.9



35.9CDS US Intermediate Holdings Inc

(l)(n)(r)(t)(u)(ab)

Media & Entertainment

L+825


1.0
%

7/10/23


21.2



18.9



8.7Chisholm Oil & Gas Operating LLC

(n)(t)(u)

Energy

L+550, 3.0% PIK (3.0% Max PIK)


1.3
%

3/21/24


38.6



38.3



14.6CommerceHub Inc

(n)

Software & Services

L+775





5/21/26


3.2



3.1



3.1Constellis Holdings LLC

(f)(n)(ad)

Capital Goods

L+100, 10% PIK (10% Max PIK)


1.0
%

3/31/25


13.5



13.5



13.5Dayton Superior Corp

(n)

Materials

L+700


2.0
%

12/4/24


1.9



1.9



1.9Electronics For Imaging Inc

(n)(ab)

Technology Hardware & Equipment

L+900





7/23/27


3.9



3.7



3.1Emerald Performance Materials LLC

(l)(n)(ab)

Materials

L+775


1.0
%

8/1/22


5.3



5.3



4.4Excelitas Technologies Corp

(l)(n)(ab)

Technology Hardware & Equipment

L+750


1.0
%

12/1/25


6.6



6.7



5.2Fairway Group Holdings Corp

(n)(t)(u)(ad)

Food & Staples Retailing

11.0% PIK (11.0% Max PIK)





2/24/24


6.5



5.0



Gruden Acquisition Inc

(m)(p)(ab)

Transportation

L+850


1.0
%

8/18/23


25.0



24.4



22.8Invictus

(n)(ab)

Materials

L+675





3/30/26


0.1



0.1



0.1LBM Borrower LLC

(l)(n)(p)(q)(ab)

Capital Goods

L+925


1.0
%

8/20/23


75.0



72.1



68.8NEP Broadcasting LLC

(n)(ab)

Media & Entertainment

L+700





10/19/26


5.8



5.6



3.0OEConnection LLC

(f)(p)

Software & Services

L+825





9/25/27


42.9



42.5



40.4Ontic Engineering & Manufacturing Inc

(f)(n)

Capital Goods

L+850





10/29/27


26.8



26.3



24.8OPE Inmar Acquisition Inc

(l)(n)(ab)

Software & Services

L+800


1.0
%

5/1/25


15.0



15.0



11.1Paradigm Acquisition Corp

(l)(n)(ab)

Health Care Equipment & Services

L+750





10/26/26


3.7



3.7



2.9Peak 10 Holding Corp

(n)(ab)

Telecommunication Services

L+725


1.0
%

8/1/25


15.9



13.6



6.4Polyconcept North America Inc

(n)

Household & Personal Products

L+1,000


1.0
%

2/16/24


0.6



0.6



0.6Pure Fishing Inc

(f)(n)

Consumer Durables & Apparel

L+838


1.0
%

12/31/26


45.9



45.5



36.7Rise Baking Company

(f)(l)(n)

Food, Beverage & Tobacco

L+800


1.0
%

8/9/26


17.6



17.5



17.0Sequa Corp

(n)(ab)

Materials

L+900


1.0
%

4/28/22


2.3



2.3



1.7SIRVA Worldwide Inc

(n)(ab)

Commercial & Professional Services

L+950





8/3/26


6.5



5.9



5.2Sorenson Communications LLC

(n)(o)(p)

Telecommunication Services

11.5% PIK (11.5% Max PIK)





4/30/25


15.4



15.4



15.4Sparta Systems Inc

(n)

Software & Services

L+825


1.0
%

8/21/25


2.4



2.4



2.1Sungard Availability Services Capital Inc

(m)(n)

Software & Services

L+400, 2.5% PIK (2.5% Max PIK)


1.0
%

11/3/22


12.7



12.7



12.7Titan Energy LLC

(n)(t)(u)(ad)

Energy

L+900


1.0
%

5/23/20


137.2



100.7



Vantage Specialty Chemicals Inc

(n)(ab)

Materials

L+825


1.0
%

10/27/25


0.8



0.7



0.5WireCo WorldGroup Inc

(n)(ab)

Capital Goods

L+900


1.0
%

9/30/24


14.1



13.9



12.4Wittur Holding GmbH

(n)(r)

Capital Goods

E+850, 0.5% PIK (0.5% Max PIK)





9/23/27


55.2



60.5



57.1Total Senior Secured LoansSecond Lien


















913.5



692.6Other Senior Secured Debt3.6%Advanced Lighting Technologies Inc

(n)(t)(u)(ad)

Materials

L+1,700 PIK (L+1,700 Max PIK)


1.0
%

10/4/23

$
15.1



10.7



APTIM Corp

(g)(n)(ab)

Diversified Financials

7.8%





6/15/25


8.2



8.1



2.8Black Swan Energy Ltd

(n)(r)

Energy

9.0%





1/20/24


4.0



4.0



3.2Cleaver-Brooks Inc

(h)(aa)(ab)

Capital Goods

7.9%





3/1/23


0.2



0.2



0.2Diamond Resorts International Inc

(m)(ab)

Consumer Services

7.8%





9/1/23


4.9



4.9



3.5Enterprise Development Authority

(g)(h)(aa)(ab)

Consumer Services

12.0%





7/15/24


8.2



8.5



7.2FourPoint Energy LLC

(n)(p)

Energy

9.0%





12/31/21


46.3



45.7



37.1  See
notes to unaudited consolidated financial statements.  10




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of March 31, 2020 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor(b)


Maturity

PrincipalAmount(c)



AmortizedCost


FairValue(d)JW Aluminum Co

(g)(h)(p)(aa)(ab)(ad)

Materials

10.3%





6/1/26

$
34.5


$
34.5


$
30.3Lycra

(g)(h)(n)(r)(aa)(ab)

Consumer Durables & Apparel

7.5%





5/1/25


16.4



16.4



9.6Mood Media Corp

(n)(t)(u)(ad)

Media & Entertainment

14.0% PIK (14.0% Max PIK)





12/31/23


43.9



42.9



23.3TruckPro LLC

(g)(h)(aa)(ab)

Capital Goods

11.0%





10/15/24


7.9



7.5



7.5Velvet Energy Ltd

(n)(r)

Energy

9.0%





10/5/23


7.5



7.5



6.4Vivint Inc

(g)(h)(k)(m)(aa)(ab)

Commercial & Professional Services

7.9%





12/1/22


19.2



18.9



18.4Total Other Senior Secured Debt


















209.8



149.5Subordinated Debt5.5%All Systems Holding LLC

(n)

Commercial & Professional Services

10.0% PIK (10.0% Max PIK)





10/31/22


0.2



0.2



0.2Ascent Resources Utica Holdings LLC / ARUFinance Corp

(g)(h)(aa)(ab)

Energy

10.0%





4/1/22


26.0



26.0



14.1athenahealth Inc

(n)

Health Care Equipment & Services

L+1,125 PIK (L+1,125 MaxPIK)





2/11/27


74.9



74.8



72.3Byrider Finance LLC

(n)

Automobiles & Components

20.0% PIK (20.0% Max PIK)





3/31/22


2.3



2.3



2.3ClubCorp Club Operations Inc

(g)(h)(n)(aa)(ab)

Consumer Services

8.5%





9/15/25


31.8



30.9



19.4Craftworks Rest & Breweries Group Inc

(n)(t)(u)

Consumer Services

12.0% PIK (12.0% Max PIK)





11/1/24


6.2



6.2



Diamond Resorts International Inc

(g)(h)(aa)(ab)

Consumer Services

10.8%





9/1/24


4.4



4.6



2.7Intelsat Jackson Holdings SA

(g)(h)(n)(r)(aa)(ab)

Media & Entertainment

5.5%





8/1/23


3.7



3.4



2.3Kenan Advantage Group Inc

(h)(aa)(ab)

Transportation

7.9%





7/31/23


19.2



17.2



16.3LifePoint Hospitals Inc

(g)(h)(aa)(ab)

Health Care Equipment & Services

9.8%





12/1/26


10.3



10.6



9.8Montage Resources Corp

(h)(n)(r)(aa)(ab)

Energy

8.9%





7/15/23


10.6



10.5



7.2MultiPlan Inc

(g)(h)(n)(aa)(ab)

Health Care Equipment & Services

7.1%





6/1/24


10.0



10.1



8.8Opendoor Labs Inc

(n)(r)

Real Estate

10.0%





1/23/26


26.8



26.8



26.8Opendoor Labs Inc

(r)(s)

Real Estate

10.0%





1/23/26


53.6



53.6



53.7Plastipak Holdings Inc

(g)(h)(aa)(ab)

Materials

6.3%





10/15/25


1.4



1.3



1.3Quorum Health Corp

(g)(h)(n)(t)(u)(aa)(ab)

Health Care Equipment & Services

11.6%





4/15/23


6.0



6.0



4.0Radiology Partners Inc

(h)(aa)(ab)

Health Care Equipment & Services

9.3%





2/1/28


2.5



2.5



2.2SRS Distribution Inc

(g)(h)(p)(aa)(ab)

Capital Goods

8.3%





7/1/26


22.8



22.6



20.7Team Health Inc

(g)(h)(n)(aa)(ab)

Health Care Equipment & Services

6.4%





2/1/25


20.5



18.4



7.4Vivint Inc

(g)(h)(aa)(ab)

Commercial & Professional Services

7.6%





9/1/23


14.3



13.4



11.2Total Subordinated Debt


















341.4



282.7Unfunded Debt Commitments


















(53.6
)


(53.6
)Net Subordinated Debt


















287.8



229.1  See
notes to unaudited consolidated financial statements.  11




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of March 31, 2020 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes


Industry


Rate(b)


Floor(b)


Maturity


PrincipalAmount(c)/Shares


Cost


FairValue(d)Asset Based Finance14.0%801 5th Ave, Seattle, Private Equity


(n)(r)(t)(ae)



Real Estate















7,819,411


$
7.8


$
7.6801 5th Ave, Seattle, Structure Mezzanine


(n)(r)(ae)



Real Estate



8.0%, 0.0% PIK (3.0% Max PIK)







12/19/29


$
47.1



47.1



47.1Abacus JV, Private Equity


(n)(r)



Insurance















34,147,572



34.1



36.8Accelerator Investments Aggregator LP, PrivateEquity


(n)(r)(t)



Diversified Financials















153,628



0.2



0.1Altavair AirFinance, Private Equity


(n)(r)



Capital Goods















31,984,765



32.0



29.1Australis Maritime, Common Stock


(n)(r)(t)



Transportation















19,832,267



19.8



19.8Global Jet Capital LLC, Preferred Stock


(i)(n)(t)



Commercial & Professional Services















76,447,526



76.4



Global Jet Capital LLC, Structured Mezzanine


(n)



Commercial & Professional Services



15.0% PIK (15.0% Max PIK)







1/30/25


$
2.4



2.2



2.0Global Jet Capital LLC, Structured Mezzanine


(n)



Commercial & Professional Services



15.0% PIK (15.0% Max PIK)







4/30/25


$
15.1



13.9



12.9Global Jet Capital LLC, Structured Mezzanine


(n)



Commercial & Professional Services



15.0% PIK (15.0% Max PIK)







9/3/25


$
3.1



2.9



2.7Global Jet Capital LLC, Structured Mezzanine


(n)



Commercial & Professional Services



15.0% PIK (15.0% Max PIK)







9/29/25


$
2.9



2.7



2.5Global Jet Capital LLC, Structured Mezzanine


(i)(n)



Commercial & Professional Services



15.0% PIK (15.0% Max PIK)







12/4/25


$
88.7



81.6



75.8Global Jet Capital LLC, Structured Mezzanine


(i)(n)(r)



Commercial & Professional Services



15.0% PIK (15.0% Max PIK)







12/4/25


$
19.7



18.2



16.9Global Jet Capital LLC, Structured Mezzanine


(i)(n)



Commercial & Professional Services



15.0% PIK (15.0% Max PIK)







12/9/25


$
2.0



1.9



1.7Global Jet Capital LLC, Structured Mezzanine


(i)(n)(r)



Commercial & Professional Services



15.0% PIK (15.0% Max PIK)







12/9/25


$
15.7



14.4



13.4Global Jet Capital LLC, Structured Mezzanine


(i)(n)



Commercial & Professional Services



15.0% PIK (15.0% Max PIK)







1/29/26


$
7.6



7.0



6.5Global Jet Capital LLC, Structured Mezzanine


(i)(n)(r)



Commercial & Professional Services



15.0% PIK (15.0% Max PIK)







1/29/26


$
1.7



1.6



1.4Global Jet Capital LLC, Structured Mezzanine


(n)



Commercial & Professional Services



15.0% PIK (15.0% Max PIK)







2/17/26


$
20.4



18.8



17.5Global Jet Capital LLC, Structured Mezzanine


(n)



Commercial & Professional Services



15.0% PIK (15.0% Max PIK)







4/14/26


$
12.7



11.6



10.8Global Jet Capital LLC, Structured Mezzanine


(n)



Commercial & Professional Services



15.0% PIK (15.0% Max PIK)







12/2/26


$
21.5



19.8



18.4Global Lending Services LLC, Private Equity


(n)(r)(t)



Diversified Financials















12,984,642



13.0



13.3Home Partners JV, Common Stock


(n)(r)(t)



Real Estate















16,434,441



16.4



17.8Home Partners JV, Private Equity


(n)(r)(t)(ab)



Real Estate















706,596



0.7



Home Partners JV, Structured Mezzanine


(n)(r)



Real Estate



11.0% PIK (11.0% Max PIK)







3/25/29


$
35.8



35.8



35.8Home Partners JV, Structured Mezzanine


(r)(s)



Real Estate



11.0% PIK (11.0% Max PIK)







3/25/29


$
19.5



19.5



19.5KKR Zeno Aggregator LP (K2 Aviation), Partnership Interest


(n)(r)



Capital Goods















5,432,797



5.4



6.0Lenovo Group Ltd, Structured Mezzanine


(n)(r)



Technology Hardware & Equipment



8.0%







6/22/22



9.3



10.6



10.2Lenovo Group Ltd, Structured Mezzanine


(n)(r)



Technology Hardware & Equipment



8.0%







6/22/22


$
19.5



19.5



19.5Lenovo Group Ltd, Structured Mezzanine


(n)(r)



Technology Hardware & Equipment



12.0%







6/22/22



5.9



6.7



6.5Lenovo Group Ltd, Structured Mezzanine


(n)(r)



Technology Hardware & Equipment



12.0%







6/22/22


$
12.4



12.4



12.4NewStar Clarendon 2014-1A Class D


(n)(r)(t)



Diversified Financials











1/25/27


$
8.3



2.5



2.7Pretium Partners LLC P1, Structured Mezzanine


(n)(r)



Real Estate



2.8%, 5.3% PIK (5.3% Max PIK)







10/22/26


$
6.5



6.5



6.3Pretium Partners LLC P2, Structured Mezzanine


(n)(r)



Real Estate



2.0%, 7.5% PIK (7.5% Max PIK)







5/29/25


$
14.8



14.8



14.7Prime ST LLC, Private Equity


(n)(r)(t)(ae)



Real Estate















6,635,747



6.6



6.6Prime ST LLC, Structured Mezzanine


(n)(r)(ae)



Real Estate



5.0%, 6.0% PIK (6.0% Max PIK)







3/12/30


$
47.2



47.2



47.2Sofi Lending Corp, Purchase Facility


(n)(r)(t)



Diversified Financials















40,637,805



40.6



43.0Toorak Capital Funding LLC, Membership Interest


(n)(r)



Diversified Financials















N/A



18.7



21.7Total Asset Based Finance


























690.9



606.2Unfunded Commitments


























(19.5
)


(19.5
)Net Asset Based Finance


























671.4



586.7  See
notes to unaudited consolidated financial statements.  12




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of March 31, 2020 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes


Industry


Rate(b)


Floor(b)


Maturity


PrincipalAmount(c)/Shares


Cost


FairValue(d)Credit Opportunities Partners, LLC10.3%Credit Opportunities Partners, LLC


(n)(r)(ae)



Diversified Financials














$
503.1


$
503.1


$
430.2Total Credit Opportunities Partners, LLC


























503.1



430.2Equity/Other6.2%Abaco Energy Technologies LLC, Common Stock


(n)(t)



Energy















3,055,556



3.1



0.5Abaco Energy Technologies LLC, Preferred Stock


(n)(t)



Energy















12,734,481



0.6



3.0Advanced Lighting Technologies Inc, Common Stock


(n)(t)(ad)



Materials















265,747



7.5



Advanced Lighting Technologies Inc, Warrant


(n)(t)(ad)



Materials











10/4/27



4,189



0.0



All Systems Holding LLC, Common Stock


(n)(t)



Commercial & Professional Services















1,880,308



1.8



1.8ASG Technologies, Common Stock


(n)(t)(ad)



Software & Services















625,178



13.5



24.6ASG Technologies, Warrant


(n)(t)(ad)



Software & Services











6/27/22



314,110



9.0



5.5Aspect Software Inc, Common Stock


(l)(n)(p)(t)



Software & Services















1,148,694



1.9



1.7Aspect Software Inc, Warrant


(l)(n)(p)(t)



Software & Services











1/15/24



1,146,890







ATX Networks Corp, Common Stock


(n)(r)(t)



Technology Hardware & Equipment















156,123



0.2



AVF Parent LLC, Trade Claim


(n)(t)



Retailing















121,058







1.7Bellatrix Exploration Ltd, Warrant


(n)(r)(t)



Energy











9/11/23



382,476







Byrider Finance LLC, Common Stock


(n)(t)



Automobiles & Components















1,667







Catalina Marketing Corp, Common Stock


(n)(t)



Media & Entertainment















6,522







Chisholm Oil & Gas Operating LLC, Series A Units


(t)(v)(w)(z)



Energy















225,000



0.2



Cimarron Energy Inc, Common Stock


(n)(t)



Energy















4,302,293



3.9



0.2Cimarron Energy Inc, Participation Option


(n)(t)



Energy















25,000,000



1.3



1.1Constellis Holdings LLC, Private Equity


(f)(n)(t)(ad)



Capital Goods















849,702



18.9



18.9Crossmark Holdings Inc, Warrant


(n)(t)



Commercial & Professional Services















8,358







CSafe Global, Common Stock


(n)(t)



Capital Goods















608,700



0.6



0.8CTI Foods Holding Co LLC, Common Stock


(n)(t)



Food, Beverage & Tobacco















56



0.0



0.0Dayton Superior Corp, Common Stock


(n)(t)



Materials















16,977



1.0



1.0Dayton Superior Corp, Warrants


(n)(t)



Materials











12/2/21



4,287







Empire Today LLC, Common Stock


(n)(t)



Retailing















630



1.9



2.8Envigo Laboratories Inc, Series A Warrant


(p)(t)



Health Care Equipment & Services











4/29/24



10,924







Envigo Laboratories Inc, Series B Warrant


(p)(t)



Health Care Equipment & Services











4/29/24



17,515







Fairway Group Holdings Corp, Common Stock


(n)(t)(ad)



Food & Staples Retailing















103,091



3.3



FourPoint Energy LLC, Common Stock, Class CIIA Units


(t)(v)



Energy















13,000



13.0



0.2FourPoint Energy LLC, Common Stock, Class D Units


(t)(v)



Energy















2,437



1.6



0.0FourPoint Energy LLC, Common Stock, Class EII Units


(t)(v)



Energy















29,730



7.4



0.4FourPoint Energy LLC, Common Stock, Class EIII Units


(t)(v)



Energy















43,875



11.0



0.6Fox Head Inc, Common Stock


(i)(n)(t)



Consumer Durables & Apparel















10,000,000



10.0



Harvey Industries Inc, Common Stock


(n)(t)



Capital Goods















2,666,667



2.7



6.4HM Dunn Co Inc, Preferred Stock, Series A


(n)(p)(t)(ad)



Capital Goods















14,786







HM Dunn Co Inc, Preferred Stock, Series B


(n)(p)(t)(ad)



Capital Goods















14,786







JHC Acquisition LLC, Common Stock


(n)(t)



Capital Goods















9,517



9.5



5.6JSS Holdings Ltd, Net Profits Interest


(n)(t)



Capital Goods















54







0.6JW Aluminum Co, Common Stock


(i)(n)(t)(ad)



Materials















631







JW Aluminum Co, Preferred Stock


(i)(n)(ad)



Materials



12.5% PIK (12.5% Max PIK)







2/15/28



6,875



55.6



75.8  See
notes to unaudited consolidated financial statements.  13




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of March 31, 2020 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes


Industry


Rate(b)


Floor(b)


Maturity


PrincipalAmount(c)/Shares


Cost


FairValue(d)MB Precision Holdings LLC, Class A2 Units


(t)(v)(ad)



Capital Goods















6,655,178


$
2.3


$
MB Precision Holdings LLC, Preferred Stock


(t)(v)(ad)



Capital Goods















41,778,909



8.8



5.5Misys Ltd, Preferred Stock


(n)(r)



Software & Services



L+1,025











2,841



2.8



2.5Mood Media Corp, Common Stock


(n)(t)(ad)



Media & Entertainment















17,400,835



12.6



One Call Care Management Inc, Common Stock


(n)(t)(ad)



Insurance















2,604,293,203



1.8



1.5One Call Care Management Inc, Preferred Stock A


(n)(t)(ad)



Insurance















277,791



19.3



16.3One Call Care Management Inc, Preferred Stock B


(n)(ad)



Insurance



9.0% PIK (9.0% Max PIK)







10/25/29



5,729,445



5.8



6.0Polyconcept North America Inc, Class A1 Units


(n)(t)



Household & Personal Products















624



0.1



0.1Professional Plumbing Group Inc, Common Stock


(i)(t)



Materials















3,000,000



3.0



4.1Ridgeback Resources Inc, Common Stock


(i)(n)(r)(t)



Energy















1,644,464



10.1



5.0Sequential Brands Group Inc., Common Stock


(i)(n)(t)(ab)



Consumer Durables & Apparel















534,076



7.2



0.1Sorenson Communications LLC, Common Stock


(i)(n)(t)



Telecommunication Services















43,796







25.5SSC (Lux) Limited S.a r.l., Common Stock


(n)(r)(t)



Health Care Equipment & Services















125,000



2.5



3.8Sungard Availability Services Capital Inc, Common Stock


(m)(n)(o)(t)



Software & Services















217,659



15.2



8.7Swift Worldwide Resources Holdco Ltd, Common Stock


(n)(t)



Energy















1,250,000



2.0



0.3Templar Energy LLC, Common Stock


(i)(t)(v)(w)(ab)



Energy















847,547



7.2



0.1Templar Energy LLC, Preferred Stock


(i)(n)(t)(ab)



Energy















561,819



5.6



Titan Energy LLC, Common Stock


(i)(n)(t)(ab)(ad)



Energy















272,778



8.6



Trace3 Inc, Common Stock


(n)(t)



Software & Services















42,486



0.4



0.5Warren Resources Inc, Common Stock


(n)(t)(ad)



Energy















3,370,272



15.8



Zeta Interactive Holdings Corp, Preferred Stock, Series E1


(n)(t)



Software & Services















1,051,348



8.4



10.9Zeta Interactive Holdings Corp, Preferred Stock, Series F


(n)(t)



Software & Services















956,233



8.4



15.1Zeta Interactive Holdings Corp, Warrant


(n)(t)



Software & Services











4/20/27



143,435







0.1Total Equity/Other


























327.4



259.3TOTAL INVESTMENTS178.3%

























$
8,518.5



7,463.5LIABILITIES IN EXCESS OF OTHER ASSETS(78.3%)






























(3,277.5
)NET ASSETS100.0%





























$
4,186.0  See
notes to unaudited consolidated financial statements.  14




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of March 31, 2020 (in millions, except share amounts)    Foreign currency forward contracts  Foreign Currency

SettlementDate


Counterparty


Amount andTransaction


US$ Value atSettlement Date


US$ Value atMarch 31, 2020


UnrealizedAppreciation(Depreciation)AUD


4/8/2020



ING Capital LLC


A$




6.8 Sold


$
4.6


$
4.2


$
0.4EUR


4/8/2020



ING Capital LLC







5.6 Sold



6.3



6.2



0.1GBP


4/8/2020



ING Capital LLC


£




0.4 Sold



0.5



0.4



0.1EUR


7/17/2023



JP Morgan Chase Bank







0.1 Sold



0.1



0.1



Total

















$
11.5


$
10.9


$
0.6 Interest rate swaps  Counterparty

NotionalAmount


CompanyReceivesFloating Rate


CompanyPays FixedRate


TerminationDate


PremiumsPaid/(Received)


Value


UnrealizedDepreciationJP Morgan Chase Bank

$
200



3-Month LIBOR



2.78
%


12/18/2023


$



$
(18
)

$
(18
)JP Morgan Chase Bank

$
200



3-Month LIBOR



2.81
%


12/18/2021







(9
)


(9
)ING Capital Markets

$
250



3-Month LIBOR



2.59
%


1/14/2024







(22
)


(22
)ING Capital Markets

$
250



3-Month LIBOR



2.62
%


1/14/2022







(10
)


(10
)$



$
(59
)

$
(59
)  (a)
Security may be an obligation of one or more entities affiliated with the named company.  (b)
Certain variable rate securities in the Companys portfolio bear interest at a rate determined by a publicly disclosed base rate plus a
basis point spread. As of March 31, 2020, the three-month London Interbank Offered Rate, or LIBOR or L, was 1.45%, the Euro Interbank Offered Rate, or EURIBOR, was (0.36)%, Candian Dollar Offer Rate, or CDOR was 1.24%, and the
Australian Bank Bill Swap Bid Rate, or BBSY, or B, was 0.42%, and the U.S. Prime Lending Rate, or Prime, was 3.25%. PIK means paid-in-kind. PIK income
accruals may be adjusted based on the fair value of the underlying investment. Variable rate securities with no floor rate use the respective benchmark rate in all cases.  (c)
Denominated in U.S. dollars unless otherwise noted.  (d)
Fair value determined by the Companys board of directors (see Note 8).  (e)
Not used.  (f)
Security or portion thereof held within Ambler Funding LLC and is pledged as collateral supporting the amounts outstanding under the revolving
credit facility with Ally Bank (see Note 9).  (g)
Security or portion thereof held within Broomall Funding LLC and is pledged as collateral supporting the amounts outstanding under the prime
brokerage facility with BNP Paribas Prime Brokerage, Inc., or BNPP. Securities held within Broomall Funding LLC may be rehypothecated from time to time as permitted under Rule 15c-1(a)(1) of the Securities
Exchange Act of 1934, as amended, or the Exchange Act, subject to the terms and conditions governing the prime brokerage facility with BNPP (see Note 9).  See
notes to unaudited consolidated financial statements.  15




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of March 31, 2020 (in millions, except share amounts)    (h)
Security or portion thereof held within Burholme Funding LLC and is pledged as collateral supporting the amounts outstanding under the prime
brokerage facility with BNP Paribas Prime Brokerage, Inc., or BNPP. Securities held within Burholme Funding LLC may be rehypothecated from time to time as permitted under Rule 15c-1(a)(1) of the Securities
Exchange Act of 1934, as amended, or the Exchange Act, subject to the terms and conditions governing the prime brokerage facility with BNPP (see Note 9).  (i)
Security or portion thereof held within Cobbs Creek LLC and is pledged as collateral supporting the amounts outstanding under the senior
secured revolving credit facility (see Note 9).  (j)
Not used.  (k)
Security or portion thereof held within Darby Creek LLC and is pledged as collateral supporting the amounts outstanding under a revolving
credit facility with Deutsche Bank AG, New York Branch (see Note 9).  (l)
Security or portion thereof held within Dunlap Funding LLC and is pledged as collateral supporting the amounts outstanding under a revolving
credit facility with Deutsche Bank AG, New York Branch (see Note 9).  (m)
Security or portion thereof held within Germantown Funding LLC and is pledged as collateral supporting the amounts outstanding under a term
loan credit facility with Goldman Sachs (see Note 9).  (n)
Security or portion thereof is pledged as collateral supporting the amounts outstanding under the senior secured revolving credit facility
(see Note 9).  (o)
Security or portion thereof held within Jefferson Square Funding LLC and is pledged as collateral supporting the amounts outstanding under a
revolving credit facility with JPMorgan Chase Bank, National Association (see Note 9).  (p)
Security or portion thereof held within Juniata River LLC and is pledged as collateral supporting the amounts outstanding under a revolving
credit facility with JPMorgan Chase Bank, N.A. (see Note 9).  (q)
Security or portion thereof held within Meadowbrook Run LLC and is pledged as collateral supporting the amounts outstanding under a revolving
credit facility with Morgan Stanley Senior Funding, Inc. (see Note 9).  (r)
The investment is not a qualifying asset under the Investment Company Act of 1940, as amended, or the 1940 Act. A business development company
may not acquire any asset other than qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the companys total assets. As of March 31, 2020, 77.4% of the Companys total assets
represented qualifying assets.  (s)
Security is an unfunded commitment. Reflects the stated spread at the time of commitment, but may not be the actual rate received upon
funding.  (t)
Security is non-income producing.  (u)
Asset is on non-accrual status.  (v)
Security held within FSIC II Investments, Inc., a wholly-owned subsidiary of the Company.  (w)
Security held within FSIC III Investments, Inc., a wholly-owned subsidiary of the Company.  (x)
Security held within IC II Arches Investments, LLC, a wholly-owned subsidiary of the Company.  (y)
Security held within IC III Arches Investments, LLC, a wholly-owned subsidiary of the Company.  (z)
Security held within FSIC IV Investments, LLC, a wholly-owned subsidiary of the Company.  (aa)
Security or portion thereof held within Burholme Funding LLC has been rehypothecated under Rule
15c-1(a)(1) of the Exchange Act, subject to the terms and conditions governing the prime brokerage facility with BNPP (see Note 9). As of March 31, 2020, the fair value of securities rehypothecated by
BNPP was $114.  (ab)
Security is classified as Level 1 or Level 2 in the Companys fair value hierarchy (see Note 8).  (ac)
Position or portion thereof unsettled as of March 31, 2020.  See
notes to unaudited consolidated financial statements.  16




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of March 31, 2020 (in millions, except share amounts)    (ad)
Under the 1940 Act, the Company generally is deemed to be an affiliated person of a portfolio company if it owns 5% or more of the
portfolio companys voting securities and generally is deemed to control a portfolio company if it owns more than 25% of the portfolio companys voting securities or it has the power to exercise control over the management or
policies of such portfolio company. As of March 31, 2020, the Company held investments in portfolio companies of which it is deemed to be an affiliated person but is not deemed to control. The following table presents
certain financial information with respect to investments in portfolio companies of which the Company was deemed to be an affiliated person for the three months ended March 31, 2020:  Portfolio Company

Fair Value atDecember 31,2019


GrossAdditions(1)



GrossReductions(2)



Net RealizedGain (Loss)


Net Change inUnrealizedAppreciation(Depreciation)


Fair Value atMarch 31,2020


InterestIncome(3)



PIKIncome(3)


FeeIncome(3)Senior Secured LoansFirst LienAdvanced Lighting Technologies Inc

$
5.9


$



$
(0.3
)

$
0.0


$
1.0


$
6.6


$
0.0


$



$
Constellis Holdings LLC






8.4















8.4



0.0







Constellis Holdings LLC






15.0















15.0











Fairway Group Holdings Corp






3.0



(0.1
)






0.1



3.0











Fairway Group Holdings Corp






7.1















7.1



0.1







Fairway Group Holdings Corp


6.3



0.0



(6.3
)


0.1



(0.1
)






0.0



0.0



Fairway Group Holdings Corp


6.5















(3.5
)


3.0











Fairway Group Holdings Corp


































HM Dunn Co Inc


26.0















(13.0
)


13.0











HM Dunn Co Inc


5.2



0.6



(0.5
)










5.3



0.3



0.2



MB Precision Holdings LLC


21.4



0.2



(0.1
)


0.0



(0.6
)


20.9



0.6



0.1



One Call Care Management Inc


2.7



0.0



0.0



0.0



(0.3
)


2.4



0.1







Warren Resources Inc


21.0



0.0











(1.9
)


19.1



0.6



0.1



Senior Secured LoansSecond LienConstellis Holdings LLC






13.5















13.5



0.0







Fairway Group Holdings Corp


































Titan Energy LLC


































Other Senior Secured DebtAdvanced Lighting Technologies Inc


































JW Aluminum Co


36.3















(6.0
)


30.3



0.9







Mood Media Corp


39.0



3.4











(19.1
)


23.3



0.5







Equity/OtherAdvanced Lighting Technologies Inc, Common Stock


































Advanced Lighting Technologies Inc, Warrant


































ASG Technologies, Common Stock


30.7















(6.1
)


24.6











ASG Technologies, Warrant


8.6















(3.1
)


5.5











Constellis Holdings LLC






18.9















18.9











Fairway Group Holdings Corp, Common Stock


































HM Dunn Co Inc, Preferred Stock, Series A


































HM Dunn Co Inc, Preferred Stock, Series B


































JW Aluminum Co, Common Stock


































JW Aluminum Co, Preferred Stock


104.1



3.0











(31.3
)


75.8







2.8



MB Precision Holdings LLC, Class A2 Units


































MB Precision Holdings LLC, Preferred Stock


5.6















(0.1
)


5.5











Mood Media Corp, Common Stock


1.0















(1.0
)














  See
notes to unaudited consolidated financial statements.  17




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of March 31, 2020 (in millions, except share amounts)    Portfolio Company

Fair Value atDecember 31,2019


GrossAdditions(1)



GrossReductions(2)



Net RealizedGain (Loss)


Net Change inUnrealizedAppreciation(Depreciation)


Fair Value atMarch 31,2020


InterestIncome(3)



PIKIncome(3)


FeeIncome(3)One Call Care Management Inc, Common Stock

$
1.8


$



$



$



$
(0.3
)

$
1.5


$



$



$
One Call Care Management Inc, Preferred Stock A


19.3















(3.0
)


16.3











One Call Care Management Inc, Preferred Stock B


5.8







0.0







0.2



6.0







0.1



Titan Energy LLC, Common Stock


































Warren Resources Inc, Common Stock


8.3















(8.3
)














Total

$
355.5


$
73.1


$
(7.3
)

$
0.1


$
(96.4
)

$
325.0


$
3.1


$
3.3


$
  (1)
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest, the amortization of
unearned income, the exchange of one or more existing securities of one or more new securities and the movement of an existing portfolio company into this category from a different category.  (2)
Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or
sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.  (3)
Interest, PIK and fee income presented for the three months ended March 31, 2020.  (ae)
Under the Investment Company Act of 1940, as amended, the Company generally is deemed to control a portfolio company if it owns
more than 25% of the portfolio companys voting securities or it has the power to exercise control over the management or policies of such portfolio company. As of March 31, 2020, the Company held investments in portfolio companies of
which it is deemed to be an affiliated person and deemed to control. The following table presents certain information with respect to investments in portfolio companies of which the Company was deemed to be an affiliated
person and deemed to control for the three months ended March 31, 2020:  Portfolio Company

Fair Value atDecember 31,2019


GrossAdditions(1)



GrossReductions(2)



Net RealizedGain (Loss)


Net Change inUnrealizedAppreciation(Depreciation)


Fair Value atMarch 31,2020


InterestIncome(3)



PIKIncome(3)


DividendIncome(3)Asset Based Finance801 5th Ave, Seattle, Structure Mezzanine

$
47.1


$



$



$



$



$
47.1


$
1.3


$



$
801 5th Ave, Seattle, Private Equity


7.8















(0.2
)


7.6











Prime ST LLC, Structured Mezzanine






47.2















47.2



1.5







Prime ST LLC, Private Equity






6.6















6.6











Credit Opportunities Partners, LLCCredit Opportunities Partners, LLC


510.0







(0.3
)






(79.5
)


430.2











13.1Total

$
564.9


$
53.8


$
(0.3
)

$



$
(79.7
)

$
538.7


$
2.8


$



$
13.1  (1)
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest, the amortization of
unearned income, the exchange of one or more existing securities of one or more new securities and the movement of an existing portfolio company into this category from a different category.  (2)
Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or
sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.  (3)
Interest, PIK and dividend income presented for the three months ended March 31, 2020.  See
notes to unaudited consolidated financial statements.  18




---

##### Table of Contents

FS KKR Capital Corp. II Consolidated Schedule of Investments As of December 31, 2019 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes


Industry

Rate(b)


Floor

Maturity

PrincipalAmount(c)


AmortizedCost


FairValue(d)Senior Secured LoansFirst Lien114.4%5 Arch Income Fund 2, LLC


(r)(x)(y)


Diversified Financials


10.5%




11/18/23

$
109.5


$
109.6


$
106.05 Arch Income Fund 2, LLC


(r)(s)(x)(y)


Diversified Financials


10.5%




11/18/23


112.9



112.9



109.2ABB CONCISE Optical Group LLC


(n)(ab)


Retailing


L+500


1.0%

6/15/23


3.6



3.6



3.4Accuride Corp


(n)(ab)


Capital Goods


L+525


1.0%

11/17/23


9.2



7.9



7.3Advanced Lighting Technologies Inc


(n)(ad)


Materials


L+750


1.0%

10/4/22


9.0



8.1



5.9Advantage Sales & Marketing Inc


(n)(ab)


Commercial & Professional Services


L+325


1.0%

7/23/21


30.6



29.0



29.7All Systems Holding LLC


(f)(k)(l)(m)(n)(o)(p)


Commercial & Professional Services


L+625


1.0%

10/31/23


198.3



198.3



200.4All Systems Holding LLC


(n)


Commercial & Professional Services


L+625


1.0%

10/31/23


4.4



4.4



4.4All Systems Holding LLC


(s)


Commercial & Professional Services


L+625


1.0%

10/31/23


10.2



10.2



10.3Alstom SA


(n)(r)(ab)


Transportation


L+450


1.0%

8/29/21


6.2



6.0



5.8American Tire Distributors Inc


(n)(ab)


Automobiles & Components


L+600, 1.0% PIK (1.0% Max PIK)


1.0%

9/1/23


2.6



2.5



2.6American Tire Distributors Inc


(n)(ab)


Automobiles & Components


L+750


1.0%

9/2/24


16.3



14.5



14.7Ammeraal Beltech Holding BV


(n)(r)(ab)


Capital Goods


E+375




7/30/25


3.3



3.8



3.6Apex Group Limited


(r)(s)


Diversified Financials


L+700


1.3%

6/15/23

$
4.6



4.5



4.5Apex Group Limited


(f)(k)(l)(n)(q)(r)


Diversified Financials


L+700


1.3%

6/15/25


70.4



69.7



70.5Apex Group Limited


(n)(r)


Diversified Financials


L+700


1.5%

6/15/25

£
23.2



29.5



30.9Arrotex Australia Group Pty Ltd


(n)(r)


Pharmaceuticals, Biotechnology & Life Sciences


B+525


1.0%

7/10/24

A$
47.8



32.8



33.0Aspect Software Inc


(s)


Software & Services


L+500


1.0%

7/15/23

$
3.3



3.3



3.3Aspect Software Inc


(l)(n)(p)


Software & Services


L+500


1.0%

1/15/24


21.2



19.0



19.2ATX Networks Corp


(j)(n)(o)(r)(ab)


Technology Hardware & Equipment


L+600, 1.0% PIK (1.0% Max PIK)


1.0%

6/11/21


48.8



47.8



45.7AVF Parent LLC


(n)(t)(u)


Retailing


L+925 PIK (L+925 Max PIK)


1.3%

3/1/24


118.9



114.7



37.5Belk Inc


(n)(ab)


Retailing


L+675


1.0%

7/31/25


54.3



45.1



38.2Bellatrix Exploration Ltd


(n)(r)


Energy


10.0%




3/31/20


2.0



2.0



2.0Bellatrix Exploration Ltd


(r)(s)


Energy


10.0%




3/31/20


0.8



0.8



0.8Berner Food & Beverage LLC


(n)


Food & Staples Retailing


L+875


1.0%

2/2/23


4.3



4.3



4.3Borden Dairy Co


(n)(t)(u)


Food, Beverage & Tobacco


L+750


1.0%

7/6/23


105.0



103.3



54.3Brand Energy & Infrastructure Services Inc


(n)(ab)(ac)


Capital Goods


L+425


1.0%

6/21/24


22.2



21.5



22.2Bugaboo International BV


(n)(r)


Consumer Durables & Apparel


7.8% PIK (7.8% Max PIK)




3/20/25


1.5



1.8



1.7Caprock Midstream LLC


(n)(ab)


Energy


L+475




11/3/25

$
11.7



11.1



10.8CEPSA Holdco (Matador Bidco)


(n)(r)(ab)


Energy


L+475




10/15/26


4.8



4.8



4.9CHS/Community Health Systems, Inc.


(g)(h)(k)(n)(r)(aa)(ab)


Health Care Equipment & Services


8.0%




3/15/26


17.6



17.1



18.1Cimarron Energy Inc


(n)


Energy


10.0%




6/30/21


7.5



7.5



7.5Compassus LLC


(n)(ab)(ac)


Health Care Equipment & Services


L+500


1.0%

12/31/26


6.8



6.7



6.8Conservice LLC


(f)(n)(o)(p)


Consumer Services


L+525




11/29/24


59.5



59.0



59.8Conservice LLC


(s)


Consumer Services


L+525




11/29/24


2.9



2.9



2.9Conservice LLC


(s)


Consumer Services


L+525




11/29/24


3.4



3.3



3.4Constellis Holdings LLC


(f)(n)(o)(p)(t)(u)


Capital Goods


L+625


1.0%

4/15/22


92.8



91.8



61.4CSafe Global


(n)


Capital Goods


L+650


1.0%

11/1/21


5.9



5.9



5.9CSafe Global


(s)


Capital Goods


L+650


1.0%

11/1/21


3.2



3.2



3.2CSafe Global


(f)(k)(l)(n)(p)(q)


Capital Goods


L+650


1.0%

10/31/23


86.4



86.5



85.8CSafe Global


(s)


Capital Goods


L+650


1.0%

10/31/23


18.3



18.3



18.1CSM Bakery Products


(l)(n)(ab)


Food, Beverage & Tobacco


L+400


1.0%

7/3/20


7.5



7.2



7.3CTI Foods Holding Co LLC


(n)


Food, Beverage & Tobacco


L+700


1.0%

5/3/24










  See
notes to unaudited consolidated financial statements.  19




---

##### Table of Contents

FS KKR Capital Corp. II Consolidated Schedule of Investments (continued) As of December 31, 2019 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor

Maturity

PrincipalAmount(c)


AmortizedCost


FairValue(d)Diamond Resorts International Inc

(l)(n)(ab)

Consumer Services

L+375

1.0%

9/2/23

$
46.1


$
43.9


$
45.2Distribution International Inc

(n)(ab)

Retailing

L+575

1.0%

12/15/23


13.1



11.8



12.6Eacom Timber Corp

(n)(r)

Materials

L+650

1.0%

11/30/23


2.6



2.6



2.5Eagle Family Foods Inc

(n)

Food, Beverage & Tobacco

L+650

1.0%

6/14/23


1.5



1.4



1.4Eagle Family Foods Inc

(s)

Food, Beverage & Tobacco

L+650

1.0%

6/14/23


6.7



6.7



6.5Eagle Family Foods Inc

(f)(k)(l)(n)(p)

Food, Beverage & Tobacco

L+650

1.0%

6/14/24


53.7



53.2



52.0Eagleclaw Midstream Ventures LLC

(n)(ab)

Energy

L+425

1.0%

6/24/24


5.5



5.1



5.1EaglePicher Technologies LLC

(n)(ab)(ac)

Capital Goods

L+325



3/8/25










Electronics For Imaging Inc

(n)(ab)

Technology Hardware & Equipment

L+500



7/23/26


13.9



13.3



13.0Empire Today LLC

(f)(k)(l)(n)(o)(p)(q)

Retailing

L+650

1.0%

11/17/22


133.9



133.9



133.6Entertainment Benefits Group LLC

(n)

Media & Entertainment

L+575

1.0%

9/30/24


1.2



1.2



1.2Entertainment Benefits Group LLC

(s)

Media & Entertainment

L+575

1.0%

9/30/24


4.7



4.7



4.7Entertainment Benefits Group LLC

(f)(k)(l)(n)

Media & Entertainment

L+575

1.0%

9/30/25


32.6



32.2



32.3Fairway Group Holdings Corp

(n)(ad)

Food & Staples Retailing

4.0%, 11.0% PIK (11.0% Max PIK)



8/28/23


6.3



6.2



6.3Fairway Group Holdings Corp

(n)(ad)

Food & Staples Retailing

12.0% PIK (12.0% Max PIK)



11/27/23


11.3



11.3



6.5Fairway Group Holdings Corp

(n)(t)(u)(ad)

Food & Staples Retailing

10.0% PIK (10.0% Max PIK)



11/28/23


7.2



5.6



FHC Health Systems Inc

(n)(ab)

Health Care Equipment & Services

L+400

1.0%

12/23/21


8.7



7.6



8.8Fox Head Inc

(l)(n)(p)

Consumer Durables & Apparel

L+850

1.0%

12/19/20


36.5



36.5



36.1Frontline Technologies Group LLC

(n)

Software & Services

L+575

1.0%

9/18/23


5.3



5.3



5.3FullBeauty Brands Holdings Corp

(n)

Retailing

L+1,000

1.0%

2/7/22


0.7



0.7



0.7FullBeauty Brands Holdings Corp

(n)(ab)

Retailing

L+900

1.0%

2/7/24


4.0



3.9



1.9Greystone Equity Member Corp

(n)(r)

Diversified Financials

L+725

3.8%

4/1/26


158.3



158.3



154.3Greystone Equity Member Corp

(r)(s)

Diversified Financials

L+725

3.8%

4/1/26


5.9



5.9



5.8Heniff Transportation Systems LLC

(n)

Transportation

L+575

1.0%

12/3/24


0.8



0.8



0.8Heniff Transportation Systems LLC

(s)

Transportation

L+575

1.0%

12/3/24


8.8



8.8



8.8Heniff Transportation Systems LLC

(f)(l)

Transportation

L+575

1.0%

12/3/26


45.1



45.1



45.1Heniff Transportation Systems LLC

(k)(l)(n)

Transportation

L+575

1.0%

12/3/26


30.1



29.8



29.8HM Dunn Co Inc

(n)(t)(u)(ad)

Capital Goods

L+875 PIK (L+875 Max PIK)

1.0%

6/30/21


56.3



44.4



26.0HM Dunn Co Inc

(n)(ad)

Capital Goods

15.0% PIK (15.0% Max PIK)



6/30/21


5.2



5.2



5.2Hudson Technologies Co

(n)(r)

Commercial & Professional Services

L+1,025

1.0%

10/10/23


54.6



54.2



31.1Icynene Group Ltd

(f)(l)(m)(n)(o)(p)(q)

Materials

L+700

1.0%

11/30/24


117.6



117.6



118.8ID Verde

(n)(r)

Commercial & Professional Services

E+700



3/29/24


0.2



0.2



0.2ID Verde

(n)(r)

Commercial & Professional Services

E+700



3/29/24

£
0.1



0.1



0.1ID Verde

(n)(r)

Commercial & Professional Services

E+700



3/29/25


0.9



1.1



1.1ID Verde

(n)(r)

Commercial & Professional Services

L+725



3/29/25

£
0.6



0.8



0.8Industria Chimica Emiliana Srl

(n)(r)

Pharmaceuticals, Biotechnology & Life Sciences

L+650



6/30/26


51.8



55.3



56.8Industria Chimica Emiliana Srl

(r)(s)

Pharmaceuticals, Biotechnology & Life Sciences

E+650



6/30/26


13.6



14.8



14.8Industry City TI Lessor LP

(n)(p)

Consumer Services

10.8%, 1.0% PIK (1.0% Max PIK)



6/30/26

$
10.6



10.6



11.5Ivanti Software Inc

(l)(ab)

Software & Services

L+425

1.0%

1/20/24


7.4



7.3



7.4J S Held LLC

(f)(n)(o)(p)

Insurance

L+600

1.0%

7/1/25


68.8



68.2



68.8J S Held LLC

(s)

Insurance

L+600

1.0%

7/1/25


16.4



16.4



16.4J S Held LLC

(n)

Insurance

L+600

1.0%

7/1/25


1.4



1.4



1.4J S Held LLC

(s)

Insurance

L+600

1.0%

7/1/25


6.4



6.4



6.4JC Penney Corp Inc

(n)(r)(ab)

Retailing

L+425

1.0%

6/23/23


3.4



3.1



3.0  See
notes to unaudited consolidated financial statements.  20




---

##### Table of Contents

FS KKR Capital Corp. II Consolidated Schedule of Investments (continued) As of December 31, 2019 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor

Maturity

PrincipalAmount(c)


AmortizedCost


FairValue(d)Jo-Ann Stores Inc

(n)(ab)

Retailing

L+500

1.0%

10/20/23

$
11.2


$
10.3


$
7.9Jostens Inc

(n)(ab)

Consumer Services

L+550



12/19/25


16.0



15.8



16.0Kellermeyer Bergensons Services LLC

(s)

Commercial & Professional Services

L+650

1.0%

2/5/20


31.1



31.1



30.8Kellermeyer Bergensons Services LLC

(f)(k)(l)(n)(o)(p)

Commercial & Professional Services

L+650

1.0%

11/7/26


135.2



133.9



133.9Kellermeyer Bergensons Services LLC

(s)

Commercial & Professional Services

L+650

1.0%

11/7/26


40.6



40.6



40.2Kodiak BP LLC

(f)(k)(l)(m)(n)(o)(p)

Capital Goods

L+725

1.0%

12/1/24


223.1



223.1



223.0Kodiak BP LLC

(s)

Capital Goods

L+725

1.0%

12/1/24


10.7



10.7



10.7Laird PLC

(n)(r)(ab)

Technology Hardware & Equipment

L+450



7/9/25


4.4



4.0



4.4LBM Borrower LLC

(l)(n)(ab)

Capital Goods

L+375

1.0%

8/20/22


13.7



13.4



13.8LD Intermediate Holdings Inc

(n)(ab)

Software & Services

L+588

1.0%

12/9/22


31.5



29.8



31.6Lexitas Inc

(s)

Commercial & Professional Services

L+575

1.0%

11/14/25


2.9



2.9



2.9Lexitas Inc

(k)(l)(n)

Commercial & Professional Services

L+575

1.0%

11/14/25


22.0



21.8



21.8Lexitas Inc

(s)

Commercial & Professional Services

L+575

1.0%

11/14/25


9.3



9.3



9.2Lionbridge Technologies Inc

(f)(k)(l)(p)(q)

Consumer Services

L+625

1.0%

12/27/25


115.3



114.7



114.7Lipari Foods LLC

(f)(n)

Food & Staples Retailing

L+588

1.0%

1/6/25


22.0



22.0



22.0Lipari Foods LLC

(s)

Food & Staples Retailing

L+588

1.0%

1/6/25


49.9



49.9



49.9Lipari Foods LLC

(f)(m)(n)(o)(p)

Food & Staples Retailing

L+588

1.0%

1/6/25


151.0



149.7



150.9MB Precision Holdings LLC

(k)(n)(ad)

Capital Goods

L+725, 2.3% PIK (2.3% Max PIK)

1.3%

1/23/21


21.5



21.0



21.4MedAssets Inc

(n)(ab)

Health Care Equipment & Services

L+450

1.0%

10/20/22


0.1



0.1



0.1MI Windows & Doors Inc

(n)(ab)

Capital Goods

L+550

1.0%

11/6/26


20.0



19.0



20.1Mitel US Holdings Inc

(n)(ab)

Technology Hardware & Equipment

L+450



11/30/25


0.3



0.3



0.3Monitronics International Inc

(f)(n)(ab)(ac)

Commercial & Professional Services

L+650

1.3%

3/29/24


36.1



34.8



30.8Monitronics International Inc

(f)(n)(ab)

Commercial & Professional Services

L+500

1.5%

7/3/24


17.8



17.8



17.8Monitronics International Inc

(n)(ab)

Commercial & Professional Services

L+500

1.5%

7/3/24


7.7



7.7



7.7Monitronics International Inc

(s)(ab)

Commercial & Professional Services

L+500

1.5%

7/3/24


62.3



62.3



62.3Motion Recruitment Partners LLC

(n)

Commercial & Professional Services

L+600

1.0%

12/20/25


43.9



43.5



43.5Motion Recruitment Partners LLC

(s)

Commercial & Professional Services

L+600

1.0%

12/20/25


7.9



7.9



7.9Motion Recruitment Partners LLC

(s)

Commercial & Professional Services

L+600

1.0%

12/20/25


34.6



34.6



34.6Multi-Color Corp

(n)(r)(ab)

Commercial & Professional Services

6.8%



7/15/26


10.4



10.4



11.0NaviHealth Inc.

(n)(ab)

Health Care Equipment & Services

L+500



8/1/25


24.9



24.2



24.9NCI Inc

(n)

Software & Services

L+750

1.0%

8/15/24


4.2



4.2



4.1North Haven Cadence Buyer Inc

(s)

Consumer Services

L+500

1.0%

9/2/21


3.6



3.6



3.6North Haven Cadence Buyer Inc

(f)(k)(n)(p)

Consumer Services

L+650

1.0%

9/2/22


44.0



44.0



44.0North Haven Cadence Buyer Inc

(s)

Consumer Services

L+650

1.0%

9/2/22


10.7



10.7



10.7North Haven Cadence Buyer Inc

(f)(l)(n)(o)(p)

Consumer Services

L+793

1.0%

9/2/22


72.5



72.5



72.5One Call Care Management Inc

(n)(ab)(ad)

Insurance

L+525

1.0%

11/27/22


2.9



2.5



2.7Ontic Engineering & Manufacturing Inc

(n)(ab)

Capital Goods

L+475



10/30/26


1.9



1.9



1.9Ontic Engineering & Manufacturing Inc

(s)(ab)

Capital Goods

L+238



10/31/26


0.3



0.3



0.3Onvoy LLC

(n)(ab)

Telecommunication Services

L+450

1.0%

2/10/24


0.2



0.1



0.1P2 Energy Solutions, Inc.

(n)(ab)

Software & Services

L+375

1.0%

10/30/20


2.5



2.4



2.5PAE Holding Corp

(n)(ab)

Capital Goods

L+550

1.0%

10/20/22


7.3



7.4



7.4Peak 10 Holding Corp

(k)(n)(ab)

Telecommunication Services

L+350



8/1/24


22.4



20.2



18.7PF Changs China Bistro Inc

(n)(ab)

Consumer Services

L+625



3/1/26


14.9



14.8



12.2Power Distribution Inc

(f)(n)

Capital Goods

L+725

1.3%

1/25/23


65.1



65.1



60.6  See
notes to unaudited consolidated financial statements.  21




---

##### Table of Contents

FS KKR Capital Corp. II Consolidated Schedule of Investments (continued) As of December 31, 2019 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor

Maturity

PrincipalAmount(c)


AmortizedCost


FairValue(d)Production Resource Group LLC

(k)(l)(m)(n)(p)

Media & Entertainment

L+700

1.0%

8/21/24

$
381.0


$
381.0


$
306.2Project Marron

(n)(r)

Consumer Services

B+625



7/3/25

A$
36.5



23.9



25.7Project Marron

(f)(n)(r)

Consumer Services

L+625



7/2/25

C$
28.7



21.9



22.4Propulsion Acquisition LLC

(f)(l)(m)(n)(p)(q)

Capital Goods

L+600

1.0%

7/13/21

$
113.9



112.4



112.9PSKW LLC

(n)(o)(p)

Health Care Equipment & Services

L+768

1.0%

11/25/21


16.5



16.5



16.5PSKW LLC

(l)(m)(n)(o)(p)(q)

Health Care Equipment & Services

L+768

1.0%

11/25/21


191.6



191.6



191.6PSKW LLC

(m)(n)

Health Care Equipment & Services

L+768

1.0%

11/25/21


20.4



20.2



20.4Qdoba Restaurant Corp

(n)(ab)

Consumer Services

L+700

1.0%

3/21/25


2.0



1.9



2.0Quorum Health Corp

(n)(ab)

Health Care Equipment & Services

L+675

1.0%

4/29/22


7.6



7.6



7.5Reliant Rehab Hospital Cincinnati LLC

(f)(n)(o)(p)

Health Care Equipment & Services

L+675

1.0%

9/2/24


118.0



117.1



115.6Roadrunner Intermediate Acquisition Co LLC

(l)(m)(o)(q)

Health Care Equipment & Services

L+675

1.0%

3/15/23


96.4



96.4



94.7RSC Insurance Brokerage Inc

(f)(k)(l)(n)(o)(p)

Insurance

L+550

1.0%

11/1/26


90.0



89.1



89.1RSC Insurance Brokerage Inc

(s)

Insurance

L+550

1.0%

11/1/26


22.7



22.5



22.5RSC Insurance Brokerage Inc

(s)

Insurance

L+550

1.0%

11/1/26


3.7



3.6



3.6Safariland LLC

(n)

Capital Goods

L+775

1.1%

11/18/23


2.2



2.2



2.1Safariland LLC

(f)(k)(l)(n)(p)

Capital Goods

L+775

1.1%

11/18/23


115.7



115.7



109.0Savers Inc

(f)(n)(o)(p)

Retailing

L+650, 0.8% PIK (0.8% Max PIK)

1.5%

3/28/24


52.7



52.1



52.2Savers Inc

(f)(n)

Retailing

L+700, 0.8% PIK (0.8% Max PIK)

1.5%

3/28/24

C$
73.1



53.9



57.4Sequa Corp

(n)(ab)(ac)

Materials

L+500

1.0%

11/28/21

$
30.2



29.8



30.2Sequel Youth & Family Services LLC

(f)(o)(p)

Health Care Equipment & Services

L+700

1.0%

9/1/23


15.6



15.6



15.6Sequel Youth & Family Services LLC

(f)(l)(n)(p)

Health Care Equipment & Services

L+800



9/1/23


90.0



90.0



90.1Sequential Brands Group Inc.

(k)(l)(n)

Consumer Durables & Apparel

L+875



2/7/24


213.9



210.6



210.4SI Group Inc

(n)(ab)

Materials

L+475



10/15/25


2.0



1.9



2.0SIRVA Worldwide Inc

(n)(ab)

Commercial & Professional Services

L+550



8/4/25


6.6



6.4



6.5Smart Foodservice

(n)(ab)

Food & Staples Retailing

L+475



6/20/26


5.8



5.7



5.8Smart & Final Stores LLC

(m)(n)(ab)

Food & Staples Retailing

L+675



6/20/25


28.0



25.4



27.1SMART Global Holdings Inc

(r)(s)

Semiconductors & Semiconductor Equipment

L+400



2/9/21


0.1



0.1



0.1SMART Global Holdings Inc

(n)(r)

Semiconductors & Semiconductor Equipment

L+625

1.0%

8/9/22


3.2



3.2



3.2Sorenson Communications LLC

(f)(k)(m)(n)(ab)

Telecommunication Services

L+650



4/29/24


78.6



75.8



78.2Staples Canada

(n)(r)

Retailing

L+700

1.0%

9/12/24

C$
4.4



3.6



3.5Sungard Availability Services Capital Inc

(n)

Software & Services

L+750

1.0%

2/3/22


2.4



2.3



2.5Sungard Availability Services Capital Inc

(s)

Software & Services

L+750

1.0%

2/3/22


2.4



2.3



2.5Sutherland Global Services Inc

(n)(p)(r)(ab)

Software & Services

L+538

1.0%

4/23/21


26.9



26.1



26.7Swift Worldwide Resources Holdco Ltd

(k)(n)(q)

Energy

9.5% L+150 PIK (L+150 Max PIK)

2.5%

7/20/21


37.6



37.6



37.6Syncsort Inc

(n)(ab)

Software & Services

L+600

1.0%

8/16/24


9.5



8.7



9.1Tangoe LLC

(f)(n)(o)(p)

Software & Services

L+650

1.0%

11/28/25


102.7



101.8



102.8Team Health Inc

(n)(ab)

Health Care Equipment & Services

L+275

1.0%

2/6/24


1.1



1.1



0.9Torrid Inc

(f)(k)(l)(n)

Retailing

L+675

1.0%

12/14/24


40.0



39.6



40.2Total Safety US Inc

(f)(n)(ab)

Capital Goods

L+600

1.0%

8/16/25


9.1



8.2



8.6Trace3 Inc

(f)(k)(l)(n)(o)(p)

Software & Services

L+675

1.0%

8/3/24


169.8



169.8



168.3Transaction Services Group Ltd

(n)(r)

Consumer Services

L+600



10/15/26

A$
63.0



41.8



43.4Transaction Services Group Ltd

(n)(r)

Consumer Services

L+600



10/15/26

£
7.7



9.8



10.1Transaction Services Group Ltd

(r)(s)

Consumer Services

L+600



10/15/26

$
26.6



26.6



26.1Truck-Lite Co LLC

(s)

Automobiles & Components

L+625

1.0%

12/13/24


13.7



13.5



13.5  See
notes to unaudited consolidated financial statements.  22




---

##### Table of Contents

FS KKR Capital Corp. II Consolidated Schedule of Investments (continued) As of December 31, 2019 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor

Maturity

PrincipalAmount(c)


AmortizedCost


FairValue(d)Truck-Lite Co LLC

(f)(k)(n)(o)(p)

Automobiles & Components

L+625

1.0%

12/13/26

$
127.9


$
126.7


$
126.6Truck-Lite Co LLC

(s)

Automobiles & Components

L+625

1.0%

12/13/26


18.8



18.6



18.6Vertiv Group Corp

(n)(ab)

Technology Hardware & Equipment

L+400

1.0%

11/30/23


16.5



15.7



16.5Virgin Pulse Inc

(f)(l)(m)(n)(o)(p)

Software & Services

L+650

1.0%

5/22/25


159.4



158.4



159.5Vivint Inc

(l)(n)(ab)

Commercial & Professional Services

L+500



4/1/24


20.8



20.0



20.8Warren Resources Inc

(n)(ad)

Energy

L+1,000, 1.0% PIK (1.0% MaxPIK)

1.0%

5/22/20


21.0



21.0



21.0West Corp

(l)(ab)

Software & Services

L+350

1.0%

10/10/24


4.9



4.4



4.1West Corp

(l)(o)(ab)

Software & Services

L+400

1.0%

10/10/24


19.6



18.1



16.7Wheels Up Partners LLC

(n)

Transportation

L+855

1.0%

1/26/21


0.6



0.6



0.6Wheels Up Partners LLC

(n)

Transportation

L+855

1.0%

8/26/21


0.3



0.3



0.3Wheels Up Partners LLC

(n)

Transportation

L+710

1.0%

6/30/24


1.1



1.1



1.1Wheels Up Partners LLC

(n)

Transportation

L+710

1.0%

11/1/24


0.4



0.4



0.4Wheels Up Partners LLC

(n)

Transportation

L+710

1.0%

12/21/24


1.7



1.7



1.7WireCo WorldGroup Inc

(n)(ab)

Capital Goods

L+500

1.0%

9/29/23


0.1



0.1



0.1Zeta Interactive Holdings Corp

(m)(n)(o)(p)(q)

Software & Services

L+750

1.0%

7/29/22


122.2



122.2



122.2Zeta Interactive Holdings Corp

(s)

Software & Services

L+750

1.0%

7/29/22


4.4



4.4



4.4Total Senior Secured LoansFirst Lien
















6,596.0



6,295.8Unfunded Loan Commitments
















(578.6
)


(578.6
)Net Senior Secured LoansFirst Lien
















6,017.4



5,717.2Senior Secured LoansSecond Lien16.2%Access CIG LLC

(n)(ab)

Software & Services

L+775



2/27/26

$
1.5


$
1.5


$
1.5Advantage Sales & Marketing Inc

(n)(ab)

Commercial & Professional Services

L+650

1.0%

7/25/22


7.2



6.2



6.5Albany Molecular Research Inc

(n)(ab)

Pharmaceuticals, Biotechnology & Life Sciences

L+700

1.0%

8/30/25


0.9



0.9



0.9American Bath Group LLC

(l)(n)(ab)

Capital Goods

L+975

1.0%

9/30/24


10.0



9.6



10.0Ammeraal Beltech Holding BV

(f)(n)(o)(r)

Capital Goods

L+800



7/27/26


51.3



50.4



49.5Applied Systems Inc

(n)(ab)

Software & Services

L+700

1.0%

9/19/25


2.6



2.6



2.7Arena Energy LP

(l)(n)(o)(p)

Energy

L+900, 4.0% PIK (4.0% Max PIK)

1.0%

1/24/21


53.9



53.9



52.4athenahealth Inc

(f)(m)(n)(p)

Health Care Equipment & Services

L+850



2/11/27


129.2



128.0



131.8BCA Marketplace PLC

(n)(r)

Retailing

L+825



9/24/27

£
30.2



37.3



39.5Bellatrix Exploration Ltd

(n)(r)(t)(u)

Energy

8.5%



9/11/23

$
13.5



12.3



4.3Bellatrix Exploration Ltd

(n)(r)

Energy

8.5%



9/11/23


5.6



5.6



5.6Byrider Finance LLC

(n)

Automobiles & Components

L+1,000, 0.5% PIK (4.0% Max PIK)

1.3%

6/7/22


35.8



35.8



35.9CDS US Intermediate Holdings Inc

(l)(n)(r)(ab)

Media & Entertainment

L+825

1.0%

7/10/23


18.0



16.4



15.1Chisholm Oil & Gas Operating LLC

(n)(p)

Energy

L+550, 3.0% PIK (3.0% Max PIK)

1.3%

3/21/24


38.3



38.0



28.9CommerceHub Inc

(n)

Software & Services

L+775



5/21/26


3.2



3.1



3.2Dayton Superior Corp

(n)

Materials

L+700

2.0%

12/3/24


1.7



1.6



1.6EaglePicher Technologies LLC

(n)(ab)

Capital Goods

L+725



3/8/26


0.4



0.4



0.4Electronics For Imaging Inc

(n)(ab)

Technology Hardware & Equipment

L+900



7/23/27


3.9



3.7



3.7Emerald Performance Materials LLC

(l)(n)(ab)

Materials

L+775

1.0%

8/1/22


10.0



9.9



9.8Excelitas Technologies Corp

(l)(n)(ab)

Technology Hardware & Equipment

L+750

1.0%

12/1/25


13.3



13.3



12.9Fairway Group Holdings Corp

(n)(t)(u)(ad)

Food & Staples Retailing

11.0% PIK (11.0% Max PIK)



2/24/24


6.5



5.0



Gruden Acquisition Inc

(m)(p)(ab)

Transportation

L+850

1.0%

8/18/23


25.0



24.4



24.8  See
notes to unaudited consolidated financial statements.  23




---

##### Table of Contents

FS KKR Capital Corp. II Consolidated Schedule of Investments (continued) As of December 31, 2019 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor

Maturity

PrincipalAmount(c)


AmortizedCost


FairValue(d)Invictus

(n)(ab)

Materials

L+675



3/30/26

$
0.1


$
0.1


$
0.1LBM Borrower LLC

(l)(n)(p)(q)(ab)

Capital Goods

L+925

1.0%

8/20/23


58.6



57.6



57.8Misys Ltd

(n)(r)(ab)

Software & Services

L+725

1.0%

6/13/25


7.3



7.2



7.1NEP Broadcasting LLC

(n)(ab)

Media & Entertainment

L+700



10/19/26


5.6



5.4



5.1New Arclin US Holding Corp

(n)(r)(ab)

Materials

L+875

1.0%

2/14/25


0.3



0.3



0.3OEConnection LLC

(f)(n)

Software & Services

L+825



9/25/27


42.9



42.5



42.6Ontic Engineering & Manufacturing Inc

(f)(n)

Capital Goods

L+850



10/29/27


26.8



26.3



26.3OPE Inmar Acquisition Inc

(l)(n)(ab)

Software & Services

L+800

1.0%

5/1/25


24.6



24.1



23.1P2 Energy Solutions, Inc.

(n)(ab)

Software & Services

L+800

1.0%

4/30/21


14.5



14.6



14.2Paradigm Acquisition Corp

(n)(ab)

Health Care Equipment & Services

L+750



10/26/26


3.7



3.7



3.7Peak 10 Holding Corp

(n)(ab)

Telecommunication Services

L+725

1.0%

8/1/25


11.9



11.1



7.5Polyconcept North America Inc

(n)

Household & Personal Products

L+1,000

1.0%

2/16/24


0.6



0.6



0.6Pure Fishing Inc

(f)(n)

Consumer Durables & Apparel

L+838

1.0%

12/31/26


45.9



45.5



39.6Rise Baking Company

(f)(l)(n)

Food, Beverage & Tobacco

L+800

1.0%

8/9/26


17.6



17.5



17.3Sequa Corp

(n)(ab)

Materials

L+900

1.0%

4/28/22


11.5



11.2



11.3SIRVA Worldwide Inc

(n)(ab)

Commercial & Professional Services

L+950



8/3/26


5.7



5.1



5.5Sorenson Communications LLC

(n)(o)(p)

Telecommunication Services

11.5% PIK (11.5% Max PIK)



4/30/25


15.4



15.4



15.4Sparta Systems Inc

(n)

Software & Services

L+825

1.0%

7/27/25


2.4



2.4



2.2Sungard Availability Services Capital Inc

(m)(n)

Software & Services

L+400, 2.5% PIK (2.5% Max PIK)

1.0%

11/3/22


12.6



12.6



12.6Titan Energy LLC

(n)(t)(u)(ad)

Energy

L+1,300 PIK (L+1,300 Max PIK)

1.0%

2/23/20


137.2



100.7



Transplace

(n)(ab)

Transportation

L+875

1.0%

10/6/25


3.3



3.2



3.1Vantage Specialty Chemicals Inc

(n)(ab)

Materials

L+825

1.0%

10/27/25


0.8



0.7



0.7WireCo WorldGroup Inc

(n)(ab)

Capital Goods

L+900

1.0%

9/30/24


12.5



12.5



11.4Wittur Holding GmbH

(n)(r)

Capital Goods

E+850, 0.5% PIK (0.5% Max PIK)



9/23/27


55.2



60.5



60.2Total Senior Secured LoansSecond Lien
















940.7



808.7Other Senior Secure Debt4.6%Advanced Lighting Technologies Inc

(n)(t)(u)(ad)

Materials

L+1,700 PIK (L+1,700 Max PIK)

1.0%

10/4/23

$
14.4



10.7



APTIM Corp

(g)(n)(ab)

Diversified Financials

7.8%



6/15/25


8.2



8.2



4.9Black Swan Energy Ltd

(n)(r)

Energy

9.0%



1/20/24


4.0



4.0



4.0Cleaver-Brooks Inc

(n)(ab)

Capital Goods

7.9%



3/1/23


0.3



0.3



0.3Cornerstone Chemical Co

(n)(ab)

Materials

6.8%



8/15/24


2.7



2.7



2.4Diamond Resorts International Inc

(m)(ab)

Consumer Services

7.8%



9/1/23


12.0



12.0



12.3Enterprise Development Authority

(g)(h)(n)(aa)(ab)

Consumer Services

12.0%



7/15/24


8.2



8.5



9.4FourPoint Energy LLC

(n)(p)

Energy

9.0%



12/31/21


46.3



45.6



44.0Genesys Telecommunications Laboratories Inc

(g)(h)(n)(aa)(ab)

Technology Hardware & Equipment

10.0%



11/30/24


2.6



2.8



2.8JC Penney Corp Inc

(g)(h)(n)(r)(aa)(ab)

Retailing

5.7%



6/1/20


0.3



0.3



0.3JW Aluminum Co

(g)(n)(p)(ab)(ad)

Materials

10.3%



6/1/26


34.5



34.5



36.3Lycra

(g)(h)(n)(r)(aa)(ab)

Consumer Durables & Apparel

7.5%



5/1/25


16.4



16.4



13.2Mood Media Corp

(n)(ad)

Media & Entertainment

L+1,400 PIK (L+1,400 Max PIK)



12/31/23


40.6



39.5



39.0Pattonair Holdings Ltd

(g)(h)(n)(r)(aa)(ab)

Capital Goods

9.0%



11/1/22


16.5



16.9



17.3TruckPro LLC

(g)(h)(n)(aa)(ab)

Capital Goods

11.0%



10/15/24


7.9



7.4



8.2Velvet Energy Ltd

(n)(r)

Energy

9.0%



10/5/23


7.5



7.5



7.7Vivint Inc

(g)(h)(k)(m)(n)(aa)(ab)

Commercial & Professional Services

7.9%



12/1/22


25.5



25.2



25.8Total Other Senior Secured Debt
















242.5



227.9  See
notes to unaudited consolidated financial statements.  24




---

##### Table of Contents

FS KKR Capital Corp. II Consolidated Schedule of Investments (continued) As of December 31, 2019 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor

Maturity

PrincipalAmount(c)


AmortizedCost


FairValue(d)Subordinated Debt9.8%All Systems Holding LLC

(n)

Commercial & Professional Services

10.0% PIK (10.0% Max PIK)



10/31/22

$
0.3


$
0.3


$
0.3Ascent Resources Utica Holdings LLC / ARU Finance Corp

(g)(h)(aa)(ab)

Energy

10.0%



4/1/22


26.0



26.0



25.9athenahealth Inc

(n)

Health Care Equipment & Services

L+1,125 PIK (L+1,125 MaxPIK)



2/11/27


72.6



72.6



73.1Avantor Inc

(g)(m)(n)(o)(ab)

Pharmaceuticals, Biotechnology & Life Sciences

9.0%



10/1/25


85.0



85.6



95.2Byrider Finance LLC

(n)

Automobiles & Components

20.0% PIK (20.0% Max PIK)



3/31/22


2.3



2.3



2.3Calumet Specialty Products

(h)(n)(r)(aa)(ab)

Energy

7.8%



4/15/23


10.3



10.3



10.3ClubCorp Club Operations Inc

(g)(h)(n)(aa)(ab)

Consumer Services

8.5%



9/15/25


31.8



30.9



27.8Craftworks Rest & Breweries Group Inc

(n)

Consumer Services

12.0% PIK (12.0% Max PIK)



11/1/24


6.2



6.2



4.7Diamond Resorts International Inc

(g)(h)(aa)(ab)

Consumer Services

10.8%



9/1/24


4.4



4.6



4.6GFL Environmental Inc

(g)(h)(n)(r)(aa)(ab)

Commercial & Professional Services

8.5%



5/1/27


13.4



13.7



14.7Intelsat Jackson Holdings SA

(g)(h)(n)(r)(aa)(ab)

Media & Entertainment

5.5%



8/1/23


11.1



10.2



9.5Kenan Advantage Group Inc

(n)(ab)

Transportation

7.9%



7/31/23


19.2



17.0



18.8LifePoint Hospitals Inc

(g)(h)(n)(aa)(ab)

Health Care Equipment & Services

9.8%



12/1/26


24.8



25.2



28.1Montage Resources Corp

(h)(n)(r)(aa)(ab)

Energy

8.9%



7/15/23


16.4



16.2



15.1MultiPlan Inc

(g)(h)(n)(aa)(ab)

Health Care Equipment & Services

7.1%



6/1/24


17.1



17.2



16.6Nouryon (fka Akzo Nobel Specialty Chemicals)

(g)(h)(n)(r)(aa)(ab)

Materials

8.0%



10/1/26


15.3



15.3



16.3PAREXEL International Corp

(g)(h)(n)(aa)(ab)

Pharmaceuticals, Biotechnology & Life Sciences

6.4%



9/1/25


0.8



0.8



0.8Plastipak Holdings Inc

(g)(h)(n)(aa)(ab)

Materials

6.3%



10/15/25


2.4



2.2



2.1Ply Gem Holdings Inc

(g)(h)(n)(aa)(ab)

Capital Goods

8.0%



4/15/26


19.1



18.3



20.0Quorum Health Corp

(g)(h)(n)(aa)(ab)

Health Care Equipment & Services

11.6%



4/15/23


6.0



6.0



5.1SRS Distribution Inc

(g)(h)(n)(p)(aa)(ab)

Capital Goods

8.3%



7/1/26


28.5



28.2



29.5Team Health Inc

(g)(h)(n)(aa)(ab)

Health Care Equipment & Services

6.4%



2/1/25


20.5



18.3



13.8Vertiv Group Corp

(g)(h)(aa)(ab)

Technology Hardware & Equipment

9.3%



10/15/24


23.7



23.4



25.6Vivint Inc

(g)(h)(m)(n)(p)(aa)(ab)

Commercial & Professional Services

8.8%



12/1/20


15.5



15.1



15.5Vivint Inc

(g)(h)(n)(aa)(ab)

Commercial & Professional Services

7.6%



9/1/23


14.3



13.3



13.5Total Subordinated Debt
















479.2



489.2  See
notes to unaudited consolidated financial statements.  25




---

##### Table of Contents

FS KKR Capital Corp. II Consolidated Schedule of Investments (continued) As of December 31, 2019 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes


Industry

Rate(b)


Floor


Maturity


PrincipalAmount(c)/
Number ofShares


Cost


FairValue(d)Asset Based Finance9.7%801 5th Ave, Seattle, Structure Mezzanine


(n)(r)(ae)


Real Estate


8.0%, 0.0% PIK (3.0% Max PIK)







12/19/29


$
47.1


$
47.1


$
47.1801 5th Ave, Seattle, Private Equity


(n)(r)(t)(ae)


Real Estate














7,819,411



7.8



7.8Abacus JV, Private Equity


(n)(r)


Insurance














31,301,941



31.3



31.3Accelerator Investments Aggregator LP, Private Equity


(n)(r)(t)


Diversified Financials














153,628



0.2



0.2Altavair Air Finance, Private Equity


(n)(r)


Capital Goods














10,964,023



11.0



11.2Australis Maritime, Common Stock


(n)(r)(t)


Transportation














10,790,511



10.8



10.8Global Jet Capital LLC, Structured Mezzanine


(n)


Commercial & Professional Services


15.0% PIK (15.0% Max PIK)







1/30/25


$
2.3



2.1



2.3Global Jet Capital LLC, Structured Mezzanine


(n)


Commercial & Professional Services


15.0% PIK (15.0% Max PIK)







4/30/25


$
14.6



13.6



14.6Global Jet Capital LLC, Structured Mezzanine


(n)


Commercial & Professional Services


15.0% PIK (15.0% Max PIK)







9/3/25


$
3.0



2.8



3.0Global Jet Capital LLC, Structured Mezzanine


(n)


Commercial & Professional Services


15.0% PIK (15.0% Max PIK)







9/29/25


$
2.8



2.6



2.8Global Jet Capital LLC, Structured Mezzanine


(i)(n)


Commercial & Professional Services


15.0% PIK (15.0% Max PIK)







12/4/25


$
85.4



79.6



85.4Global Jet Capital LLC, Structured Mezzanine


(i)(n)(r)


Commercial & Professional Services


15.0% PIK (15.0% Max PIK)







12/4/25


$
19.0



17.7



19.0Global Jet Capital LLC, Structured Mezzanine


(i)(n)


Commercial & Professional Services


15.0% PIK (15.0% Max PIK)







12/9/25


$
2.0



1.8



2.0Global Jet Capital LLC, Structured Mezzanine


(i)(n)(r)


Commercial & Professional Services


15.0% PIK (15.0% Max PIK)







12/9/25


$
15.1



14.1



15.1Global Jet Capital LLC, Structured Mezzanine


(i)(n)


Commercial & Professional Services


15.0% PIK (15.0% Max PIK)







1/29/26


$
7.3



6.8



7.3Global Jet Capital LLC, Structured Mezzanine


(i)(n)(r)


Commercial & Professional Services


15.0% PIK (15.0% Max PIK)







1/29/26


$
1.6



1.5



1.6Global Jet Capital LLC, Structured Mezzanine


(n)


Commercial & Professional Services


15.0% PIK (15.0% Max PIK)







2/17/26


$
19.7



18.3



19.7Global Jet Capital LLC, Structured Mezzanine


(n)


Commercial & Professional Services


15.0% PIK (15.0% Max PIK)







4/14/26


$
12.2



11.4



12.2Global Jet Capital LLC, Structured Mezzanine


(n)


Commercial & Professional Services


15.0% PIK (15.0% Max PIK)







12/2/26


$
20.7



19.3



20.7Global Jet Capital LLC, Preferred Stock


(i)(n)(t)


Commercial & Professional Services














76,447,526



76.4



9.6Global Lending Services LLC, Private Equity


(n)(r)(t)


Diversified Financials














8,092,505



8.1



8.1Home Partners JV, Structured Mezzanine


(n)(r)


Real Estate


11.0% PIK (11.0% Max PIK)







3/25/29


$
30.1



30.1



30.1Home Partners JV, Structured Mezzanine


(r)(s)


Real Estate


11.0% PIK (11.0% Max PIK)







3/25/29


$
22.3



22.3



22.3Home Partners JV, Common Stock


(n)(r)(t)


Real Estate














15,059,448



15.1



16.0Home Partners JV, Private Equity


(n)(r)(t)(ab)


Real Estate














706,596



0.7



0.1KKR Zeno Aggregator LP (K2 Aviation), Partnership Interest


(n)(r)


Capital Goods














5,432,797



5.4



6.4Lenovo Group Ltd, Structured Mezzanine


(n)(r)


Technology Hardware & Equipment


8.0%







6/22/22



9.3



10.6



10.4Lenovo Group Ltd, Structured Mezzanine


(n)(r)


Technology Hardware & Equipment


8.0%







6/22/22


$
19.5



19.5



19.5Lenovo Group Ltd, Structured Mezzanine


(n)(r)


Technology Hardware & Equipment


12.0%







6/22/22



5.9



6.7



6.6Lenovo Group Ltd, Structured Mezzanine


(n)(r)


Technology Hardware & Equipment


12.0%







6/22/22


$
12.4



12.4



12.4NewStar Clarendon 2014-1A Class D


(n)(r)(t)


Diversified Financials










1/25/27


$
8.3



4.6



3.3Pretium Partners LLC P1, Structured Mezzanine


(n)(r)


Real Estate


2.8%, 5.3% PIK (5.3% Max PIK)







10/22/26


$
6.5



6.5



6.5Pretium Partners LLC P2, Structured Mezzanine


(n)(r)


Real Estate


2.0%, 7.5% PIK (7.5% Max PIK)







5/29/25


$
14.3



14.3



14.4Sofi Lending Corp, 2019-C R1


(n)(r)


Diversified Financials










11/16/48


$
26.7



15.1



15.2Toorak Capital Funding LLC, Membership Interest


(n)(r)


Diversified Financials














N/A



9.9



12.6Total Asset Based Finance
























557.5



507.6Unfunded Loan Commitments
























(22.3
)


(22.3
)Net Asset Based Finance
























535.2



485.3Credit Opportunities Partners, LLC10.2%Credit Opportunities Partners, LLC


(n)(r)(ae)


Diversified Financials













$
503.1



503.4



510.0Total Credit Opportunities Partners, LLC
























503.4



510.0  See
notes to unaudited consolidated financial statements.  26




---

##### Table of Contents

FS KKR Capital Corp. II Consolidated Schedule of Investments (continued) As of December 31, 2019 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes


Industry

Rate(b)


Floor


Maturity


PrincipalAmount(c)/Number ofShares


Cost


FairValue(d)Equity/Other7.1%(e)Abaco Energy Technologies LLC, Preferred Stock


(n)(t)


Energy














12,734,481


$
0.6


$
5.3Abaco Energy Technologies LLC, Common Stock


(n)(t)


Energy














3,055,556



3.1



1.0Advanced Lighting Technologies Inc, Common Stock


(n)(t)(ad)


Materials














265,747



7.5



Advanced Lighting Technologies Inc, Warrant


(n)(t)(ad)


Materials










10/4/27



4,189







All Systems Holding LLC, Common Stock


(n)(t)


Commercial & Professional Services














1,880,308



1.8



2.5ASG Technologies, Common Stock


(n)(t)(ad)


Software & Services














625,178



13.5



30.7ASG Technologies, Warrant


(n)(t)(ad)


Software & Services










6/27/22



314,110



9.0



8.6Aspect Software Inc, Common Stock


(l)(n)(p)(t)


Software & Services














1,148,694



1.9



2.0Aspect Software Inc, Warrant


(l)(n)(p)(t)


Software & Services










1/15/24



1,146,890







ATX Networks Corp, Common Stock


(n)(r)(t)


Technology Hardware & Equipment














83,488



0.1



0.1Bellatrix Exploration Ltd, Warrant


(n)(r)(t)


Energy










9/11/23



382,476







Byrider Finance LLC, Common Stock


(n)(t)


Automobiles & Components














1,667







Catalina Marketing Corp, Common Stock


(n)(t)


Media & Entertainment














6,522







Chisholm Oil & Gas Operating LLC, Series A Units


(t)(v)(w)(z)


Energy














225,000



0.2



Cimarron Energy Inc, Common Stock


(n)(t)


Energy














4,302,293



3.9



0.3Cimarron Energy Inc, Participation Option


(n)(t)


Energy














25,000,000



1.3



1.6Crossmark Holdings Inc, Warrant


(n)(t)


Commercial & Professional Services














8,358







CSafe Global, Common Stock


(n)(t)


Capital Goods














608,700



0.6



1.0CTI Foods Holding Co LLC, Common Stock


(n)(t)


Food, Beverage & Tobacco














56







Dayton Superior Corp, Common Stock


(n)(t)


Materials














14,552



0.9



0.9Dayton Superior Corp, Warrants


(n)(t)


Materials










12/2/21



3,675







Empire Today LLC, Common Stock


(n)(t)


Retailing














630



1.9



3.5Envigo Laboratories Inc, Series A Warrant


(p)(t)


Health Care Equipment & Services










4/29/24



10,924







Envigo Laboratories Inc, Series B Warrant


(p)(t)


Health Care Equipment & Services










4/29/24



17,515







Fairway Group Holdings Corp, Common Stock


(n)(t)(ad)


Food & Staples Retailing














103,091



3.3



FourPoint Energy LLC, Common Stock, Class CIIA Units


(t)(v)


Energy














13,000



13.0



1.4FourPoint Energy LLC, Common Stock, Class D Units


(t)(v)


Energy














2,437



1.6



0.3FourPoint Energy LLC, Common Stock, Class EII Units


(t)(v)


Energy














29,730



7.4



3.1FourPoint Energy LLC, Common Stock, Class EIII Units


(t)(v)


Energy














43,875



11.0



4.6Fox Head Inc, Common Stock


(i)(n)(t)


Consumer Durables & Apparel














10,000,000



10.0



0.9FullBeauty Brands Holdings Corp, Common Stock


(n)(t)


Retailing














20,297



0.1



Harvey Industries Inc, Common Stock


(n)(t)


Capital Goods














2,666,667



2.7



6.7HM Dunn Co Inc, Preferred Stock, Series A


(n)(p)(t)(ad)


Capital Goods














14,786







HM Dunn Co Inc, Preferred Stock, Series B


(n)(p)(t)(ad)


Capital Goods














14,786







JHC Acquisition LLC, Common Stock


(n)(t)


Capital Goods














9,517



9.5



15.5JSS Holdings Ltd, Net Profits Interest


(n)(t)


Capital Goods














54







1.6JW Aluminum Co, Common Stock


(i)(n)(t)(ad)


Materials














631







JW Aluminum Co, Preferred Stock


(i)(n)(ad)


Materials


12.5% PIK







2/15/28



6,875



52.6



104.1MB Precision Holdings LLC, Class A2 Units


(t)(v)(ad)


Capital Goods














6,655,178



2.3



  See
notes to unaudited consolidated financial statements.  27




---

##### Table of Contents

FS KKR Capital Corp. II Consolidated Schedule of Investments (continued) As of December 31, 2019 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes


Industry

Rate(b)


Floor


Maturity


PrincipalAmount(c)/Number ofShares


Cost


FairValue(d)MB Precision Holdings LLC, Preferred Stock


(t)(v)(ad)


Capital Goods














41,778,909


$
8.8


$
5.6Misys Ltd, Preferred Stock


(n)(r)(t)


Software & Services


L+1,025











2,841



2.8



2.8Mood Media Corp, Common Stock


(n)(t)(ad)


Media & Entertainment














17,400,835



12.6



1.0North Haven Cadence Buyer Inc, Common Stock


(n)(t)


Consumer Services














3,958,333



4.0



8.5One Call Care Management Inc, Common Stock


(n)(t)(ad)


Insurance














2,604,293,203



1.8



1.8One Call Care Management Inc, Preferred Stock A


(n)(t)(ad)


Insurance














277,791



19.3



19.3One Call Care Management Inc, Preferred Stock B


(n)(ad)


Insurance


9.0% PIK (9.0% Max PIK)







10/25/29



5,729,445



5.8



5.8Polyconcept North America Inc, Class A1 Units


(n)(t)


Household & Personal Products














624



0.1



0.1Power Distribution Inc, Common Stock


(n)(t)


Capital Goods














4,530,006



3.9



1.8Professional Plumbing Group Inc, Common Stock


(i)(t)


Materials














3,000,000



3.0



9.0Ridgeback Resources Inc, Common Stock


(i)(n)(r)(t)


Energy














1,644,464



10.1



8.7Sequential Brands Group Inc., Common Stock


(i)(n)(t)(ab)


Consumer Durables & Apparel














534,076



7.2



0.2Sorenson Communications LLC, Common Stock


(i)(n)(t)


Telecommunication Services














43,796







33.6SSC (Lux) Limited S.a r.l., Common Stock


(n)(r)(t)


Health Care Equipment & Services














125,000



2.5



3.9Sungard Availability Services Capital Inc, Common Stock


(m)(n)(o)(t)


Software & Services














217,659



15.2



14.2Sunnova Energy International Inc, Common Stock


(n)(t)(ab)


Energy














487,528



5.5



5.4Swift Worldwide Resources Holdco Ltd, Common Stock


(n)(t)


Energy














1,250,000



2.0



0.5Templar Energy LLC, Common Stock


(i)(t)(v)(w)(ab)


Energy














847,547



7.2



0.1Templar Energy LLC, Preferred Stock


(i)(n)(t)(ab)


Energy














561,819



5.6



Titan Energy LLC, Common Stock


(i)(n)(t)(ab)(ad)


Energy














272,778



8.6



Trace3 Inc, Common Stock


(n)(t)


Software & Services














42,486



0.4



1.5VICI Properties Inc, Common Stock


(n)(t)(ab)


Consumer Services














66,020



1.2



1.7Warren Resources Inc, Common Stock


(n)(t)(ad)


Energy














3,370,272



15.8



8.3White Star Petroleum LLC, Common Stock


(t)(v)(w)


Energy














3,351,997



2.8



Zeta Interactive Holdings Corp, Preferred Stock, Series E1


(n)(t)


Software & Services














1,051,348



8.4



12.0Zeta Interactive Holdings Corp, Preferred Stock, Series F


(n)(t)


Software & Services














956,233



8.4



10.9Zeta Interactive Holdings Corp, Warrant


(n)(t)


Software & Services










4/20/27



143,435







0.4Total Equity/Other
























322.8



352.8TOTAL INVESTMENTS172.0%























$
9,010.7



8,561.0LIABILITIES IN EXCESS OF OTHER ASSETS(72.0%)




























(3,565.0
)NET ASSETS100.0%



























$
4,996.0Notional


UnrealizedTotal Return Swap


















Amount


DepreciationCitibank TRS Facility (Note 9)
























93.5



(4.4
)  See
notes to unaudited consolidated financial statements.  28




---

##### Table of Contents

FS KKR Capital Corp. II Consolidated Schedule of Investments (continued) As of December 31, 2019 (in millions, except share amounts)    Foreign currency forward contracts  Foreign Currency

SettlementDate


Counterparty


Amount andTransaction


US$ Value atSettlement Date


US$ Value atDecember 31, 2019


UnrealizedAppreciation(Depreciation)AUD


1/14/2020



ING Capital LLC



A$



4.8 Sold


$
3.3



3.4



(0.1
)AUD


1/14/2020



ING Capital LLC



A$



1.9 Sold



1.3



1.3



AUD


1/14/2020



ING Capital LLC



A$



0.3 Sold



0.2



0.2



AUD


4/8/2020



ING Capital LLC



A$



6.8 Sold



4.6



4.8



(0.2
)CAD


1/14/2020



JP Morgan Chase Bank



C$



5.7 Sold



4.3



4.4



(0.1
)CAD


1/14/2020



ING Capital LLC



C$



1.5 Sold



1.2



1.2



CAD


1/14/2020



ING Capital LLC



C$



3.9 Sold



3.0



3.0



EUR


1/14/2020



ING Capital LLC







1.0 Sold



1.1



1.1



EUR


1/14/2020



ING Capital LLC







0.8 Sold



0.9



0.9



EUR


4/8/2020



ING Capital LLC







5.6 Sold



6.3



6.3



EUR


7/17/2023



JP Morgan Chase Bank







0.1 Sold



0.1



0.1



GBP


1/14/2020



ING Capital LLC



£



2.9 Sold



3.6



3.9



(0.3
)GBP


1/14/2020



ING Capital LLC



£



3.3 Sold



4.1



4.4



(0.3
)GBP


4/8/2020



ING Capital LLC



£



0.4 Sold



0.5



0.5



Total

















$
34.5


$
35.5


$
(1.0
) Interest rate swaps  Counterparty

NotionalAmount


CompanyReceivesFloating Rate


CompanyPays FixedRate


TerminationDate


PremiumsPaid/(Received)


Value


UnrealizedDepreciationJP Morgan Chase Bank

$
200



3-Month LIBOR



2.78
%


12/18/2023


$



$
(9
)

$
(9
)JP Morgan Chase Bank

$
200



3-Month LIBOR



2.81
%


12/18/2021







(5
)


(5
)ING Capital LLC

$
250



3-Month LIBOR



2.59
%


1/14/2024







(8
)


(8
)ING Capital LLC

$
250



3-Month LIBOR



2.62
%


1/14/2022







(7
)


(7
)$


$(29)


$(29)  (a)
Security may be an obligation of one or more entities affiliated with the named company.  (b)
Certain variable rate securities in the Companys portfolio bear interest at a rate determined by a publicly disclosed base rate plus a
basis point spread. As of December 31, 2019, the three-month London Interbank Offered Rate, or LIBOR or L, was 1.91%, the Euro Interbank Offered Rate, or EURIBOR, was (0.38)%, Candian Dollar Offer Rate, or CDOR was 2.08%, and the
Australian Bank Bill Swap Bid Rate, or BBSY, or B, was 0.92%, and the U.S. Prime Lending Rate, or Prime, was 4.75%. PIK means paid-in-kind. PIK income
accruals may be adjusted based on the fair value of the underlying investment. Variable rate securities with no floor rate use the respective benchmark rate in all cases.  (c)
Denominated in U.S. dollars unless otherwise noted.  (d)
Fair value determined by the Companys board of directors (see Note 8).  See
notes to unaudited consolidated financial statements.  29




---

##### Table of Contents

FS KKR Capital Corp. II Consolidated Schedule of Investments (continued) As of December 31, 2019 (in millions, except share amounts)    (e)
Listed investments may be treated as debt for GAAP or tax purposes.  (f)
Security or portion thereof held within Ambler Funding LLC and is pledged as collateral supporting the amounts outstanding under the revolving
credit facility with Ally Bank (see Note 9).  (g)
Security or portion thereof held within Broomall Funding LLC and is pledged as collateral supporting the amounts outstanding under the prime
brokerage facility with BNP Paribas Prime Brokerage, Inc., or BNPP. Securities held within Broomall Funding LLC may be rehypothecated from time to time as permitted under Rule 15c-1(a)(1) of the Securities
Exchange Act of 1934, as amended, or the Exchange Act, subject to the terms and conditions governing the prime brokerage facility with BNPP (see Note 9).  (h)
Security or portion thereof held within Burholme Funding LLC and is pledged as collateral supporting the amounts outstanding under the prime
brokerage facility with BNP Paribas Prime Brokerage, Inc., or BNPP. Securities held within Burholme Funding LLC may be rehypothecated from time to time as permitted under Rule 15c-1(a)(1) of the Securities
Exchange Act of 1934, as amended, or the Exchange Act, subject to the terms and conditions governing the prime brokerage facility with BNPP (see Note 9).  (i)
Security or portion thereof held within Cobbs Creek LLC and is pledged as collateral supporting the amounts outstanding under the senior
secured revolving credit facility (see Note 9).  (j)
Security or portion thereof held within Cooper River LLC and is pledged as collateral supporting the amounts outstanding under the revolving
credit facility with Citibank, N.A. (see Note 9).  (k)
Security or portion thereof held within Darby Creek LLC and is pledged as collateral supporting the amounts outstanding under a revolving
credit facility with Deutsche Bank AG, New York Branch (see Note 9).  (l)
Security or portion thereof held within Dunlap Funding LLC and is pledged as collateral supporting the amounts outstanding under a revolving
credit facility with Deutsche Bank AG, New York Branch (see Note 9).  (m)
Security or portion thereof held within Germantown Funding LLC and is pledged as collateral supporting the amounts outstanding under a term
loan credit facility with Goldman Sachs (see Note 9).  (n)
Security or portion thereof is pledged as collateral supporting the amounts outstanding under the senior secured revolving credit facility
(see Note 9).  (o)
Security or portion thereof held within Jefferson Square Funding LLC and is pledged as collateral supporting the amounts outstanding under a
revolving credit facility with JPMorgan Chase Bank, National Association (see Note 9).  (p)
Security or portion thereof held within Juniata River LLC and is pledged as collateral supporting the amounts outstanding under a revolving
credit facility with JPMorgan Chase Bank, N.A. (see Note 9).  (q)
Security or portion thereof held within Meadowbrook Run LLC and is pledged as collateral supporting the amounts outstanding under a revolving
credit facility with Morgan Stanley Senior Funding, Inc. (see Note 9).  (r)
The investment is not a qualifying asset under the Investment Company Act of 1940, as amended, or the 1940 Act. A business development company
may not acquire any asset other than qualifying assets, unless, at the time the acquisition is made, qualifying assets represent at least 70% of the companys total assets. As of December 31, 2019, 79.5% of the Companys total assets
represented qualifying assets. In addition, the Company also calculates its compliance with the qualifying asset test on a look through basis by disregarding the value of the Companys total return swap and treating each loan
underlying the total return swap as either a qualifying asset or non-qualifying asset based on whether the obligor is an eligible portfolio company. On this basis, 79.6% of the Companys total assets
represented qualifying assets as of December 31, 2019.  (s)
Security is an unfunded commitment. Reflects the stated spread at the time of commitment, but may not be the actual rate received upon
funding.  (t)
Security is non-income producing.  (u)
Asset is on non-accrual status.  (v)
Security held within FSIC II Investments, Inc., a wholly-owned subsidiary of the Company.  (w)
Security held within FSIC III Investments, Inc., a wholly-owned subsidiary of the Company.  (x)
Security held within IC II Arches Investments, LLC, a wholly-owned subsidiary of the Company.  (y)
Security held within IC III Arches Investments, LLC, a wholly-owned subsidiary of the Company.  (z)
Security held within FSIC IV Investments, LLC, a wholly-owned subsidiary of the Company.  See
notes to unaudited consolidated financial statements.  30




---

##### Table of Contents

FS KKR Capital Corp. II Consolidated Schedule of Investments (continued) As of December 31, 2019 (in millions, except share amounts)    (aa)
Security or portion thereof held within Burholme Funding LLC has been rehypothecated under Rule
15c-1(a)(1) of the Exchange Act, subject to the terms and conditions governing the prime brokerage facility with BNPP (see Note 9). As of December 31, 2019, the fair value of securities rehypothecated by
BNPP was $123.  (ab)
Security is classified as Level 1 or Level 2 in the Companys fair value hierarchy (see Note 8).  (ac)
Position or portion thereof unsettled as of December 31, 2019.  (ad)
Under the 1940 Act, the Company generally is deemed to be an affiliated person of a portfolio company if it owns 5% or more of the
portfolio companys voting securities and generally is deemed to control a portfolio company if it owns more than 25% of the portfolio companys voting securities or it has the power to exercise control over the management or
policies of such portfolio company. As of December 31, 2019, the Company held investments in portfolio companies of which it is deemed to be an affiliated person but is not deemed to control. The following table presents
certain financial information with respect to investments in portfolio companies of which the Company was deemed to be an affiliated person for the year ended December 31, 2019:  Portfolio Company

Fair Value atDecember 31,2018


GrossAdditions(1)


GrossReductions(2)


Net RealizedGain (Loss)


Net Change inUnrealizedAppreciation(Depreciation)


Fair Value atDecember 31,2019


InterestIncome(3)


PIKIncome(3)


FeeIncome(3)Senior Secured LoansFirst LienAdvanced Lighting Technologies Inc

$
9.1


$
0.2


$



$



$
(3.4
)

$
5.9


$
0.9


$



$
Fairway Group Holdings Corp(4)






6.2











0.1



6.3



0.4



0.4



Fairway Group Holdings Corp(4)






11.3











(4.8
)


6.5



0.6



0.6



Fairway Group Holdings Corp(4)






5.6











(5.6
)














HM Dunn Co Inc


7.1



5.8











13.1



26.0











HM Dunn Co Inc






5.2















5.2



0.2



0.1



MB Precision Holdings LLC


21.3



1.2



(0.8
)


0.2



(0.5
)


21.4



2.6



0.5



One Call Care Management Inc






5.8



(8.2
)


4.9



0.2



2.7



0.2







Warren Resources Inc


14.7



6.3















21.0



2.1



0.1



Senior Secured LoansSecond LienFairway Group Holdings Corp(4)






5.0











(5.0
)














One Call Care Management Inc(4)






13.2



(5.4
)


(7.8
)










1.6



0.5



Titan Energy LLC(4)






100.7











(100.7
)














Other Senior Secured DebtAdvanced Lighting Technologies Inc


3.6















(3.6
)














JW Aluminum Co


32.9



1.5











1.9



36.3



3.4







Mood Media Corp


28.5



11.1











(0.6
)


39.0



5.5







Equity/OtherAdvanced Lighting Technologies Inc, Common Stock


































Advanced Lighting Technologies Inc, Warrant


































Advanced Lighting Technologies Inc, Warrant


































ASG Technologies, Common Stock


31.7















(1.0
)


30.7











ASG Technologies, Warrant


7.4



1.8











(0.6
)


8.6











Fairway Group Holdings Corp, Common
Stock(4)






3.3











(3.3
)














HM Dunn Co Inc, Preferred Stock, Series A


































HM Dunn Co Inc, Preferred Stock, Series B


































JW Aluminum Co, Common Stock


































JW Aluminum Co, Preferred Stock


43.9



20.6











39.6



104.1







7.4



  See
notes to unaudited consolidated financial statements.  31




---

##### Table of Contents

FS KKR Capital Corp. II Consolidated Schedule of Investments (continued) As of December 31, 2019 (in millions, except share amounts)    Portfolio Company

Fair Value atDecember 31,2018


GrossAdditions(1)


GrossReductions(2)


Net RealizedGain (Loss)


Net Change inUnrealizedAppreciation(Depreciation)


Fair Value atDecember 31,2019


InterestIncome(3)


PIKIncome(3)


FeeIncome(3)MB Precision Holdings LLC, Class A2 Units

$



$



$



$



$



$



$



$



$
MB Precision Holdings LLC, Preferred Stock


5.8



0.2











(0.4
)


5.6











Mood Media Corp, Common Stock


15.8















(14.8
)


1.0











One Call Care Management Inc, Common Stock






1.8















1.8











One Call Care Management Inc, Preferred Stock A






19.3















19.3











One Call Care Management Inc, Preferred Stock B






5.8















5.8







0.1



Titan Energy LLC, Common Stock(4)






8.6











(8.6
)














Warren Resources Inc, Common Stock


5.6



4.7











(2.0
)


8.3











Total

$
227.4


$
245.2


$
(14.4
)

$
(2.7
)

$
(100.0
)

$
355.5


$
3.1


$
3.3


$
  (1)
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest, the amortization of
unearned income, the exchange of one or more existing securities of one or more new securities and the movement of an existing portfolio company into this category from a different category.  (2)
Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or
sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.  (3)
Interest, PIK and fee income presented for the year ended December 31, 2019.  (4)
The Company held this investment as of December 31, 2018 but it was not deemed to be an affiliated person of the portfolio
company as December 31, 2018. Transfers in or out have been presented at amortized cost.  (ae)
Under the Investment Company Act of 1940, as amended, the Company generally is deemed to control a portfolio company if it owns
more than 25% of the portfolio companys voting securities or it has the power to exercise control over the management or policies of such portfolio company. As of December 31, 2019, the Company held investments in portfolio companies of
which it is deemed to be an affiliated person and deemed to control. The following table presents certain information with respect to investments in portfolio companies of which the Company was deemed to be an affiliated
person and deemed to control for the year ended December 31, 2019:  Portfolio Company

Fair Value atDecember 31,2018


GrossAdditions(1)


GrossReductions(2)


Net RealizedGain (Loss)


Net Change inUnrealizedAppreciation(Depreciation)


Fair Value atDecember 31,2019


InterestIncome(3)


PIKIncome(3)


DividendIncome(3)Asset Based Finance801 5th Ave, Seattle, Structure Mezzanine

$



$
47.1


$



$



$



$
47.1


$
0.2


$



$
801 5th Ave, Seattle, Private Equity






7.8















7.8











Credit Opportunities Partners, LLCCredit Opportunities Partners, LLC






503.4











6.6



510.0











13.1Total

$



$
558.3


$



$



$
6.6


$
564.9


$
2.8


$



$
13.1  (1)
Gross additions include increases in the cost basis of investments resulting from new portfolio investments, PIK interest, the amortization of
unearned income, the exchange of one or more existing securities of one or more new securities and the movement of an existing portfolio company into this category from a different category.  (2)
Gross reductions include decreases in the cost basis of investments resulting from principal collections related to investment repayments or
sales, the exchange of one or more existing securities for one or more new securities and the movement of an existing portfolio company out of this category into a different category.  (3)
Interest, PIK and dividend income presented for the year ended December 31, 2019.  See
notes to unaudited consolidated financial statements.  32




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (in millions, except share and per share amounts)   Note 1. Principal Business and Organization FS KKR Capital Corp. II, or the Company, was incorporated under the general corporation laws of the State of Maryland on
July 13, 2011 and formally commenced investment operations on June 18, 2012. The Company is an externally managed, non-diversified, closed-end management
investment company that has elected to be regulated as a business development company, or BDC, under the Investment Company Act of 1940, as amended, or the 1940 Act. In addition, the Company has elected to be treated for U.S. federal income tax
purposes, and intends to qualify annually, as a regulated investment company, or RIC, as defined under Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code. As of March 31, 2020, the Company had various wholly-owned
subsidiaries, including special-purpose financing subsidiaries and subsidiaries through which it holds interests in portfolio companies. The unaudited consolidated financial statements include both the Companys accounts and the accounts of its
wholly-owned subsidiaries as of March 31, 2020. All significant intercompany transactions have been eliminated in consolidation. Certain of the Companys consolidated subsidiaries are subject to U.S. federal and state income taxes. The Companys investment objectives are to generate current income and, to a lesser extent, long-term capital
appreciation. The Companys portfolio is comprised primarily of investments in senior secured loans and second lien secured loans of private middle-market U.S. companies and, to a lesser extent, subordinated loans and certain asset-based
financing loans of private U.S. companies. In addition, a portion of the Companys portfolio may be comprised of equity and equity-related securities, corporate bonds, structured products, other debt securities and derivatives, including total
return swaps and credit default swaps. The Company is externally managed by FS/KKR Advisor, LLC, or the Advisor, pursuant to
an investment advisory agreement, dated as of December 18, 2019, or the investment advisory agreement. On April 9, 2018, GSO/Blackstone Debt Funds Management LLC, or GDFM, resigned as the investment
sub-adviser to the Company and terminated the investment sub-advisory agreement, or the investment sub-advisory agreement,
between FSIC II Advisor, LLC, or FSIC II Advisor, and GDFM, effective April 9, 2018. In connection with GDFMs resignation as the investment sub-adviser to the Company, on April 9, 2018, the
Company entered into an investment advisory and administrative services agreement, or the prior investment advisory and administrative services agreement, with the Advisor. The prior investment advisory and administrative services agreement replaced
an investment advisory and administrative services agreement, dated February 8, 2012, or the FSIC II Advisor investment advisory and administrative services agreement, by and between the Company and FSIC II Advisor. On December 18, 2019, the Company completed its acquisitions, or the Mergers, of FS Investment Corporation III, or FSIC III, FS
Investment Corporation IV, or FSIC IV, and Corporate Capital Trust II, or CCT II, pursuant to that certain Agreement and Plan of Merger, or the Merger Agreement, dated as of May 31, 2019, by and among the Company, FSIC III, FSIC IV, CCT II, NT
Acquisition 1, Inc., a former wholly-owned subsidiary of the Company, or Merger Sub 1, NT Acquisition 2, Inc., a former wholly-owned subsidiary of the Company, or Merger Sub 2, NT Acquisition 3, Inc., a former wholly-owned subsidiary of the Company,
or Merger Sub 3, and the Advisor. Note 2. Summary of Significant Accounting Policies Basis of Presentation: The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance
with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. For a more complete discussion of significant accounting policies and certain other information, the Companys interim unaudited consolidated financial statements should be read
in conjunction with its audited consolidated financial statements as of and for the year ended December 31, 2019 included in the Companys annual report on Form 10-K for the year ended
December 31, 2019. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The December 31, 2019 consolidated balance
sheet and consolidated schedule of investments are derived from the Companys audited consolidated financial statements as of and for the year ended December 31, 2019. The Company is considered an investment company under GAAP and follows
the accounting and reporting guidance applicable to investment companies under Financial Accounting Standards Boards, or the FASB, Accounting Standards Codification Topic 946, Financial ServicesInvestment Companies.  33




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 2. Summary of Significant Accounting
Policies (continued)  Use of Estimates: The preparation of the unaudited consolidated financial
statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Capital Gains Incentive Fee: Pursuant to the terms of the investment advisory agreement, the incentive fee on capital gains is
determined and payable in arrears as of the end of each calendar year (or upon termination of the investment advisory agreement). This fee equals 20.0% of the Companys incentive fee capital gains, which shall equal each of FSIC III, FSIC
IV, CCT II and the Companys realized capital gains (without duplication) on a cumulative basis from inception, calculated as of the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation
(without duplication) on a cumulative basis, less the aggregate amount of any capital gain incentive fees previously paid by FSIC III, FSIC IV, CCT II and the Company. On a quarterly basis, the Company accrues for the capital gains incentive fee by
calculating such fees as if it were due and payable as of the end of such period. The Company includes unrealized gains in the
calculation of the capital gains incentive fee expense and related accrued capital gains incentive fee. This accrual reflects the incentive fees that would be payable to the Advisor if the Companys entire portfolio was liquidated at its fair
value as of the balance sheet date even though the Advisor is not entitled to an incentive fee with respect to unrealized gains unless and until such gains are actually realized. Subordinated Income Incentive Fee: Pursuant to the terms of the investment advisory agreement, the Advisor may also be entitled to
receive a subordinated incentive fee on income. The subordinated incentive fee on income under the investment advisory agreement, which is calculated and payable quarterly in arrears, equals 20.0% of the
Companys pre-incentive fee net investment income for the immediately preceding quarter and is subject to a hurdle rate, expressed as a rate of return on the value of the
Companys net assets, equal to 1.75% per quarter, or an annualized hurdle rate of 7.0%. As a result, the Advisor will not earn this incentive fee for any quarter until the
Companys pre-incentive fee net investment income for such quarter exceeds the hurdle rate of 1.75%. Once the Companys pre-incentive fee
net investment income in any quarter exceeds the hurdle rate, the Advisor will be entitled to a catch-up fee equal to the amount of
the pre-incentive fee net investment income in excess of the hurdle rate, until the Companys pre-incentive fee net investment income for such
quarter equals 2.1875%, or 8.75% annually, of net assets. Thereafter, the Advisor will be entitled to receive 20.0% of the pre-incentive fee net investment income. Commencing with the ninth full calendar quarter following the closing of the Mergers, the subordinated incentive fee on income is subject
to a cap equal to (i) 20.0% of the per share pre-incentive fee return for the then-current calendar quarter and the eleven calendar quarters (or fewer number of calendar quarters) preceding the
then-current calendar quarter (commencing with the first full calendar quarter following the Mergers) minus the cumulative per share incentive fees accrued and/or payable for the eleven calendar quarters (or fewer number of calendar
quarters) preceding the then-current calendar quarter (commencing with the first full calendar quarter following the Mergers) multiplied by (ii) the weighted average number of shares outstanding during the calendar quarter (or any portion
thereof) for which the subordinated incentive fee on income is being calculated. Reclassifications: Certain amounts in
the unaudited consolidated financial statements as of and for the three months ended March 31, 2019 and the audited consolidated financial statements as of and for the year ended December 31, 2019 may have been reclassified to conform to
the classifications used to prepare the unaudited consolidated financial statements as of and for the three months ended March 31, 2020. Revenue Recognition:Security transactions are accounted for on the trade date. The Company records interest income on an accrual basis to the extent that it expects to collect such amounts. The
Company records dividend income on the ex-dividend date. Distributions received from limited liability company (LLC) and limited partnership (LP) investments are evaluated to determine
if the distribution should be recorded as dividend income or a return of capital. The Company does not accrue as a receivable interest or dividends on loans and securities if it has reason to doubt its ability to collect such income. The
Companys policy is to place investments on non-accrual status when there is reasonable doubt that interest income will be collected. The Company considers many factors relevant to an investment when
placing it on or removing it from non-accrual status including, but not limited to, the delinquency status of the investment, economic and business conditions, the overall financial condition of  34




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 2. Summary of Significant Accounting
Policies (continued)  the underlying investment, the value of the underlying collateral, bankruptcy status, if any, and any other facts or circumstances relevant to the investment. If there is reasonable doubt that
the Company will receive any previously accrued interest, then the accrued interest income will be written-off. Payments received on non-accrual investments may be
recognized as income or applied to principal depending upon the collectability of the remaining principal and interest. Non-accrual investments may be restored to accrual status when principal and interest
become current and are likely to remain current based on the Companys judgment. Loan origination fees, original issue
discount and market discount are capitalized and the Company amortizes such amounts as interest income over the respective term of the loan or security. Upon the prepayment of a loan or security, any unamortized loan origination fees and original
issue discount are recorded as interest income. Structuring and other non-recurring upfront fees are recorded as fee income when earned. For the three months ended March 31, 2020, the Company recognized
$8 in structuring fee revenue. The Company records prepayment premiums on loans and securities as fee income when it receives such amounts. Derivative Instruments:The Companys derivative instruments include foreign currency forward contracts and interest rate swaps. The Company recognizes all derivative instruments as assets or
liabilities at fair value in its consolidated financial statements. Derivative contracts entered into by the Company are not designated as hedging instruments, and as a result, the Company presents changes in fair value through net change in
unrealized appreciation (depreciation) on derivative instruments in the consolidated statements of operations. Realized gains and losses of the derivative instruments are included in net realized gains (losses) on derivative instruments in the
consolidated statements of operations. Recent Accounting Pronouncements: In August 2018 FASB issued Accounting
Standards Update 2018-13, Fair Value MeasurementDisclosures FrameworkChanges to Disclosure Requirements of Fair Value Measurement (Topic 820), or
ASU 2018-13. ASU 2018-13 introduces new fair value disclosure requirements and eliminates and modifies certain existing fair value disclosure requirements. ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company implemented ASU 2018-13 during the
three months ended March 31, 2020, and it did not have a significant impact on the Companys disclosure over fair value. Note 3.
Share Transactions Below is a summary of transactions with respect to shares of the Companys common stock during the
three months ended March 31, 2020 and 2019:  Three Months Ended March 31,2020


2019Shares


Amount


Shares


AmountReinvestment of Distributions





$




3,191,361


$
26Share Repurchase Program










(3,297,056
)


(27
)Net Proceeds from Share Transactions





$




(105,695
)

$
(1
) During the period from April 1, 2020 to May 8, 2020, the Company issued 6,430,853 shares of
common stock pursuant to its distribution reinvestment plan, or DRP, for gross proceeds of $39,871,288 at an average price per share of $6.20. For additional information regarding the terms of the DRP, see Note 5. Acquisitions of FSIC III, FSIC IV and CCT II In accordance with the terms of the Merger Agreement, at the time of the transactions contemplated by the Merger Agreement, (i) each outstanding share of FSIC III common stock was converted into the
right to receive 0.9804 shares of the Companys common stock, (ii) each outstanding share of beneficial interest of CCT II was converted into the right to receive 1.1319 shares of the Companys common stock and (iii) each
outstanding share of FSIC IV common stock was converted into the  35




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 3. Share Transactions (continued)  right to receive 1.3634 shares of the Companys common stock. As a result, the Company issued an aggregate of approximately 289,084,117 shares of its common stock to former FSIC III
stockholders, 14,031,781 shares of its common stock to former CCT II shareholders and 43,668,803 shares of its common stock to former FSIC IV stockholders. Share Repurchase Program Historically, the Company conducted quarterly
tender offers pursuant to a share repurchase program. The Companys board of directors suspended the share repurchase program in connection with the execution of the Merger Agreement. The Company is not obligated to reimplement a share
repurchase program on any specific terms or at all. Historically, the Company limited the number of shares of common stock to
be repurchased during any calendar year to the lesser of (i) the number of shares of common stock that the Company could repurchase with the proceeds it received from the issuance of shares of common stock under the DRP and (ii) 10% of the
weighted average number of shares of common stock outstanding in the prior calendar year, or 2.5% in each calendar quarter. On May 8, 2017, the board of directors of the Company amended the share repurchase program. As amended, the Company
limits the maximum number of shares of common stock to be repurchased for any repurchase offer to the greater of (A) the number of shares of common stock that the Company can repurchase with the proceeds it has received from the sale of shares
of common stock under the DRP during the twelve-month period ending on the date the applicable repurchase offer expires (less the amount of proceeds used to repurchase shares of common stock on each previous repurchase date for repurchase offers
conducted during such twelve-month period) (the Company refers to this limitation as the twelve-month repurchase limitation) and (B) the number of shares of common stock that the Company can repurchase with the proceeds it received from the
sale of shares of common stock under the DRP during the three-month period ending on the date the applicable repurchase offer expires (the Company refers to this limitation as the three-month repurchase limitation). In addition to this limitation,
the maximum number of shares of common stock to be repurchased for any repurchase offer will also be limited to 10% of the weighted average number of shares of common stock outstanding in the prior calendar year, or 2.5% in each calendar quarter. As
a result, the maximum number of shares of common stock to be repurchased for any repurchase offer will not exceed the lesser of (i) 10% of the weighted average number of shares of common stock outstanding in the prior calendar year, or 2.5% in
each calendar quarter, and (ii) whichever is greater of the twelve-month repurchase limitation described in clause (A) above and the three-month repurchase limitation described in clause (B) above. Under the Companys former share repurchase program, the Company offered to repurchase shares of common stock at a price equal to the
price at which shares of common stock are issued pursuant to the DRP on the distribution date coinciding with the applicable share repurchase date. The price at which shares of common stock are issued under the DRP is determined by the
Companys board of directors or a committee thereof, in its sole discretion, and will be (i) not less than the net asset value per share of the Companys common stock as determined in good faith by the Companys board of
directors or a committee thereof, in its sole discretion, immediately prior to the payment date of the distribution and (ii) not more than 2.5% greater than the net asset value per share as of such date.  36




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 3. Share Transactions (continued)  The following table provides information concerning the Companys repurchases of
shares of common stock pursuant to its former share repurchase program during the three months ended March 31, 2020 and 2019:  For the Three Months Ended

RepurchaseDate


SharesRepurchased


Percentage ofSharesTenderedThat WereRepurchased


Percentage ofOutstandingSharesRepurchasedas of
theRepurchaseDate


RepurchasePrice PerShare


AggregateConsiderationforRepurchasedSharesFiscal 2019December 31, 2018


January 2, 2019



3,297,056



16.7
%


1.01
%

$
8.050


$
(27
)Total






3,297,056














$
(27
)Fiscal 2020December 31, 2019(1)

















$



$
Total





















$
  (1)
The Company suspended its share repurchase program on May 31, 2019. Note 4. Related Party Transactions Compensation of the Investment Adviser Pursuant to the investment advisory agreement, the Advisor is entitled to a base management fee calculated at an annual rate of 1.50% of the average weekly value of the Companys gross assets
excluding cash and cash equivalents (gross assets equal the total assets of the Company as set forth on the Companys consolidated balance sheets), which base management fee is reduced from 1.50% to 1.00% on all assets financed using leverage
over 1.0x debt-to-equity, and an incentive fee based on the Companys performance. The base management fee is payable quarterly in arrears. All or any part of the
base management fee not taken as to any quarter will be deferred without interest and may be taken in such other quarter as the Advisor determines. The prior investment advisory and administrative services agreement had substantially similar terms,
except that cash and cash equivalents were not excluded from gross assets. See Note 2 for a discussion of the capital gains and subordinated income incentive fees that the Advisor may be entitled to under the investment advisory agreement. On December 18, 2019, the Company entered into an administration agreement with the Advisor, or the administration
agreement. Pursuant to the administration agreement, the Advisor oversees the Companys day-to-day operations, including the provision of general ledger accounting,
fund accounting, legal services, investor relations, certain government and regulatory affairs activities, and other administrative services. The Advisor also performs, or oversees the performance of, the Companys corporate operations and
required administrative services, which includes being responsible for the financial records that the Company is required to maintain and preparing reports for the Companys stockholders and reports filed with the U.S. Securities and Exchange
Commission, or the SEC. In addition, the Advisor assists the Company in calculating its net asset value, overseeing the preparation and filing of tax returns and the printing and dissemination of reports to the Companys stockholders, and
generally overseeing the payment of the Companys expenses and the performance of administrative and professional services rendered to the Company by others. Pursuant to the administration agreement, the Company reimburses the Advisor for expenses necessary to perform services related to its administration and operations, including the Advisors allocable
portion of the compensation and related expenses of certain personnel of Franklin Square Holdings, L.P., which does business as FS Investments, or FS Investments, and KKR Credit Advisors (US), LLC, or KKR Credit, providing administrative services to
the Company on behalf of the Advisor. The Company reimburses the Advisor no less than quarterly for all costs and expenses incurred by the Advisor in performing its obligations and providing personnel and facilities under the administration
agreement. The Advisor allocates the cost of such services to the Company based on factors such as total assets, revenues, time allocations and/or other reasonable metrics. The Companys board of directors reviews the methodology employed in
determining how the expenses are allocated to the Company and the proposed  37




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 4. Related Party
Transactions (continued)  allocation of administrative expenses among the Company and certain affiliates of the Advisor. The Companys board of directors then assesses the reasonableness of such reimbursements for
expenses allocated to it based on the breadth, depth and quality of such services as compared to the estimated cost to the Company of obtaining similar services from third-party service providers known to be available. In addition, the
Companys board of directors considers whether any single third-party service provider would be capable of providing all such services at comparable cost and quality. Finally, the Companys board of directors compares the total amount paid
to the Advisor for such services as a percentage of the Companys net assets to the same ratio as reported by other comparable BDCs. The administrative services provisions of the FSIC II Advisor investment advisory and administrative
services agreement and the prior investment advisory and administrative services agreement were substantially similar to the administration agreement. The following table describes the fees and expenses accrued under the investment advisory agreement, the administration agreement, the prior investment advisory and administrative services agreement and
the FSIC II Advisor investment advisory and administrative services agreement, as applicable, during the three months ended March 31, 2020 and 2019:  Three Months Ended March 31,Related Party

Source Agreement

Description

2020

2019The Advisor

Investment advisory agreement and prior investment advisory and administrative services agreement

Base Management Fee(1)

$33

$18The Advisor

Investment advisory agreement and prior investment advisory and administrative services agreement

Subordinated Incentive Fee on
Income(2)

$23

$11The Advisor

Administration agreement and prior investment advisory and administrative services agreement

Administrative Services Expenses(3)

$2

$1  (1)
During the three months ended March 31, 2020 and 2019, $35 and $17, respectively, in base management fees were paid to the Advisor. As of
March 31, 2020, $33 in base management fees were payable to the Advisor.  (2)
During the three months ended March 31, 2020 and 2019, $11 and $6, respectively, of subordinated incentive fees on income were paid to
the Advisor. As of March 31, 2020, a subordinated incentive fee on income of $23 was payable to the Advisor.  (3)
During the three months ended March 31, 2020 and 2019, $1 and $1, respectively, of the accrued administrative services expenses related
to the allocation of costs of administrative personnel for services rendered to the Company by the Advisor and the remainder related to other reimbursable expenses, including reimbursement of fees related to transactional expenses for prospective
investments, including fees and expenses associated with performing due diligence reviews of investments that do not close, often referred to as broken deal costs. Broken deal costs were $0.2 for the three months ended March 31,
2020. The Company paid $2 and $1 in administrative services expenses to the Advisor during the three months ended March 31, 2020 and 2019, respectively. Potential Conflicts of Interest The members of the senior management and
investment teams of the Advisor serve or may serve as officers, directors or principals of entities that operate in the same or a related line of business as the Company does, or of investment vehicles managed by the same personnel. For example, the
Advisor is the investment adviser to FS KKR Capital Corp., and the officers, managers and other personnel of the Advisor may serve in similar or other capacities for the investment advisers to future investment vehicles affiliated with FS
Investments or KKR Credit. In serving in these multiple and other capacities, they may have obligations to other clients or investors in those entities, the fulfillment of which may not be in the Companys best interests or in the best interest
of the Companys stockholders. The Companys investment objectives may overlap with the investment objectives of such investment funds, accounts or other investment vehicles. For additional information regarding potential conflicts of
interest, see the Companys annual report on Form 10-K for the year ended December 31, 2019. Exemptive Relief As a
BDC, the Company is subject to certain regulatory restrictions in making its investments. For example, BDCs generally are not permitted to co-invest with certain affiliated entities in transactions
originated by the BDC or its affiliates in the absence of an exemptive order from the SEC. However, BDCs are permitted to, and may, simultaneously co-invest in transactions where price is the only
negotiated term.  38




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 4. Related Party
Transactions (continued)  In an order dated June 4, 2013, or the FS Order, the SEC granted exemptive relief
permitting the Company, subject to the satisfaction of certain conditions, to co-invest in certain privately negotiated investment transactions with certain affiliates of its former investment
adviser, including FS Energy and Power Fund, FS KKR Capital Corp., and any future BDCs that are advised by its former investment adviser or its affiliated investment advisers. However, in connection with the investment advisory relationship with the
Advisor, and in an effort to mitigate potential future conflicts of interest, the Companys board of directors authorized and directed that the Company (i) withdraw from the FS Order, except with respect to any transaction in which the
Company participated in reliance on the FS Order prior to April 9, 2018, and (ii) rely on an exemptive relief order, dated April 3, 2018, that permits the Company, subject to the satisfaction of certain conditions, to co-invest in certain privately negotiated investment transactions, including investments originated and directly negotiated by the Advisor or KKR Credit, with certain affiliates of the Advisor. Note 5. Distributions The following table reflects the cash distributions per share that the Company declared and paid on its common stock during the three months ended March 31, 2020 and 2019:  DistributionFor the Three Months Ended

Per Share


AmountFiscal 2019March 31, 2019

$
0.1885


$
61Total

$
0.1885


$
61Fiscal 2020March 31, 2020

$
0.1500


$
102Total

$
0.1500


$
102 On April 28, 2020, the Companys board of directors declared a regular quarterly cash
distribution of $0.15 per share, which will be paid on or about July 2, 2020 to stockholders of record as of the close of business on June 17, 2020. The timing and amount of any future distributions to stockholders are subject to
applicable legal restrictions and the sole discretion of the Companys board of directors. The Company has adopted an
opt in DRP for its stockholders. As a result, if the Company makes a cash distribution, its stockholders will receive the distribution in cash unless they specifically opt in to the DRP so as to have their cash distributions
reinvested in additional shares of the Companys common stock. However, certain state authorities or regulators may impose restrictions from time to time that may prevent or limit a stockholders ability to participate in the DRP. Under the Companys DRP, cash distributions to participating stockholders will be reinvested in additional shares of the
Companys common stock at a purchase price determined by the Companys board of directors, or a committee thereof, in its sole discretion, that is (i) not less than the net asset value per share of the Companys common stock as
determined in good faith by the Companys board of directors or a committee thereof, in its sole discretion, immediately prior to the payment of the distribution and (ii) not more than 2.5% greater than the net asset value per share of the
Companys common stock as of such date. Although distributions paid in the form of additional shares of common stock will generally be subject to U.S. federal, state and local taxes in the same manner as cash distributions, stockholders who
elect to participate in the Companys DRP will not receive any corresponding cash distributions with which to pay any such applicable taxes. Stockholders receiving distributions in the form of additional shares of common stock will be treated
as receiving a distribution in the amount of the fair market value of the Companys shares of common stock. The Company
may fund its cash distributions to stockholders from any sources of funds legally available to it, including proceeds from the sale of shares of the Companys common stock, borrowings, net investment income from operations, capital gains  39




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 5. Distributions (continued)  proceeds from the sale of assets, gains from interest rate swaps, non-capital gains proceeds from the sale of assets and dividends or other distributions
paid to the Company on account of preferred and common equity investments in portfolio companies. The Company has not established limits on the amount of funds it may use from available sources to make distributions. During certain periods, the
Companys distributions may exceed its earnings. As a result, it is possible that a portion of the distributions the Company makes may represent a return of capital. A return of capital generally is a return of a stockholders investment
rather than a return of earnings or gains derived from the Companys investment activities. Each year a statement on Form 1099-DIV identifying the sources of the distributions (i.e., paid from ordinary
income, paid from net capital gains on the sale of securities, and/or a return of capital, which is a nontaxable distribution) will be mailed to the Companys stockholders. There can be no assurance that the Company will be able to pay
distributions at a specific rate or at all. The following table reflects the sources of the cash distributions on a tax basis
that the Company paid on its common stock during the three months ended March 31, 2020 and 2019:  Three Months Ended March 31,2020


2019Source of Distribution

DistributionAmount


Percentage


DistributionAmount


PercentageReturn of capital

$







$




Net investment income(1)


102



100
%


61



100
%Short-term capital gains proceeds from the sale of assets














Long-term capital gains proceeds from the sale of assets














Total

$
102



100
%

$
61



100
%  (1)
During the three months ended March 31, 2020 and 2019, 90.2% and 94.0%, respectively, of the Companys gross investment income was
attributable to cash income earned, 2.6% and 1.9%, respectively, was attributable to non-cash accretion of discount and 7.2% and 4.1%, respectively, was attributable to paid-in-kind, or PIK, interest. The determination of the tax
attributes of the Companys distributions is made annually as of the end of the Companys fiscal year based upon the Companys taxable income for the full year and distributions paid for the full year. Therefore, a determination made
on a quarterly basis may not be representative of the actual tax attributes of the Companys distributions for a full year. The actual tax characteristics of distributions to stockholders are reported to stockholders annually on Form 1099-DIV. Net capital losses incurred for tax years beginning after December 22, 2010, may
be carried forward indefinitely, and their character is retained as short-term or long-term losses. As of March 31, 2020, the Company had short-term and long-term capital loss carryforwards available to offset future realized capital gains of $13
and $601, respectively. $191 of such losses were carried over from the target companies due to the Merger, and $246 of such losses were carried over from losses generated by the Company prior to the Merger. Because of the loss limitation rules of
the Code, some of the tax basis losses may be limited in their use. Any unused balances resulting from such limitations may be carried forward into future years indefinitely. As of March 31, 2020 and December 31, 2019, the gross unrealized appreciation was $162 and $276, respectively. As of March 31, 2020 and December 31, 2019, the gross unrealized
depreciation $1,197 and $687, respectively. The aggregate cost of the Companys investments for U.S. federal income tax
purposes totaled $8,689 and $9,167 as of March 31, 2020 and December 31, 2019, respectively. The aggregate net unrealized appreciation (depreciation) on a tax basis was $(1,285) and $(609) as of March 31, 2020 and December 31,
2019, respectively. As of March 31, 2020, the Company had a deferred tax asset of $21 resulting from net operating losses
and capital losses of the Companys wholly-owned taxable subsidiaries. As of March 31, 2020, the wholly-owned taxable subsidiaries anticipated that they would be unable to fully utilize their generated net operating losses, therefore the
deferred tax asset was offset by a valuation allowance of $21. For the three months ended March 31, 2020, the Company did not record a provision for taxes related to its wholly-owned taxable subsidiaries.  40




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)    Note 6. Investment Portfolio The following table summarizes the composition of the Companys investment portfolio at cost and fair value as of March 31, 2020
and December 31, 2019:  March 31,
2020(Unaudited)


December 31, 2019AmortizedCost(1)


FairValue


Percentageof 
Portfolio


AmortizedCost(1)


FairValue


Percentageof 
PortfolioSenior Secured LoansFirst Lien

$
5,606


$
5,116



69
%

$
6,017


$
5,717



67
%Senior Secured LoansSecond Lien


914



693



9
%


941



809



9
%Other Senior Secured Debt


210



150



2
%


243



228



3
%Subordinated Debt


288



229



3
%


479



489



5
%Asset Based Finance


671



587



8
%


535



485



6
%Credit Opportunities Partners, LLC


503



430



6
%


503



510



6
%Equity/Other


327



259



3
%


323



353



4
%Total

$
8,519


$
7,464



100
%

$
9,041


$
8,591



100
% The following table summarizes the composition of the Companys investment portfolio at cost and fair
value as of March 31, 2020 and December 31, 2019 to include, on a look-through basis, the investments underlying the TRS, as disclosed in Note 9 to our unaudited financial statements included herein. The investments underlying the TRS had
a notional amount and market value of $0 and $0, and $94 and $89, respectively, as of March 31, 2020 and December 31, 2019:  March 31,
2020(Unaudited)


December 31, 2019AmortizedCost(1)


FairValue


Percentageof 
Portfolio


AmortizedCost(1)


FairValue


Percentageof 
PortfolioSenior Secured LoansFirst Lien

$
5,606


$
5,116



69
%

$
6,090


$
5,788



67
%Senior Secured LoansSecond Lien


914



693



9
%


961



827



10
%Other Senior Secured Debt


210



150



2
%


243



228



3
%Subordinated Debt


288



229



3
%


479



489



5
%Asset Based Finance


671



587



8
%


535



485



5
%Credit Opportunities Partners, LLC


503



430



6
%


503



510



6
%Equity/Other


327



259



3
%


324



353



4
%Total

$
8,519


$
7,464



100
%

$
9,135


$
8,680



100
%  (1)
Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on
investments. In general, under the 1940 Act, the Company would be presumed to control a
portfolio company if it owned more than 25% of its voting securities or it had the power to exercise control over the management or policies of such portfolio company, and would be an affiliated person of a portfolio company if it owned
5% or more of its voting securities. As of March 31, 2020, the Company held investments in three portfolio companies of
which it is deemed to control. As of March 31, 2020, the Company held investments in eleven portfolio companies of which it is deemed to be an affiliated person but is not deemed to control. For additional
information with respect to such portfolio companies, see footnotes (ad) and (ae) to the unaudited consolidated schedule of investments as of March 31, 2020 in this quarterly report on Form 10-Q. As of December 31, 2019, the Company held investments in two portfolio companies of which it is deemed to
control. As of December 31, 2019, the Company held investments in ten portfolio companies of which it was deemed to be an affiliated person but was not deemed to control. For additional information with
respect to such portfolio companies, see footnotes (ad) and (ae) to the consolidated schedule of investments as of December 31, 2019 in this quarterly report on Form 10-Q. The Companys investment portfolio may contain loans and other unfunded arrangements that are in the form of lines of credit,
revolving credit facilities, delayed draw credit facilities or other investments, which require the Company to provide funding when requested by portfolio companies in accordance with the terms of the underlying agreements. As of March 31,  41




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)  2020, the Company had unfunded debt investments with aggregate unfunded commitments of $376.0, unfunded equity/other commitments of $245.1, and unfunded commitments of $371.9 of Credit
Opportunities Partners, LLC. As of December 31, 2019, the Company had unfunded debt investments with aggregate unfunded commitments of $600.9, unfunded equity/other commitments of $258.0 and unfunded commitments of $21.9 of Credit Opportunities
Partners, LLC. The Company maintains sufficient cash on hand, available borrowings and liquid securities to fund such unfunded commitments should the need arise. For additional details regarding the Companys unfunded debt investments, see
the Companys unaudited consolidated schedule of investments as of March 31, 2020 and audited consolidated schedule of investments as of December 31, 2019. The table below describes investments by industry classification and enumerates the percentage, by fair value, of the total portfolio assets in such industries as of March 31, 2020 and
December 31, 2019:  March 31, 2020(Unaudited)


December 31, 2019Industry Classification

FairValue


Percentage 
ofPortfolio


FairValue


Percentage 
ofPortfolioAutomobiles & Components

$
52



1
%

$
182



2
%Capital Goods


961



13
%


1,139



13
%Commercial & Professional Services


769



10
%


861



10
%Consumer Durables & Apparel


351



5
%


302



3
%Consumer Services


308



4
%


548



6
%Credit Opportunities Partners, LLC


430



6
%


510



6
%Diversified Financials


596



8
%


402



5
%Energy


212



3
%


328



4
%Food & Staples Retailing


201



3
%


223



3
%Food, Beverage & Tobacco


120



1
%


132



2
%Health Care Equipment & Services


727



10
%


888



10
%Household & Personal Products


108



1
%


1



0
%Insurance


232



3
%


220



3
%Materials


134



2
%


354



4
%Media & Entertainment


335



4
%


409



5
%Pharmaceuticals, Biotechnology & Life Sciences


81



1
%


187



2
%Real Estate


210



3
%


122



1
%Retailing


349



4
%


435



5
%Semiconductors & Semiconductor Equipment










3



0
%Software & Services


875



12
%


874



10
%Technology Hardware & Equipment


138



2
%


174



2
%Telecommunication Services


137



2
%


154



2
%Transportation


138



2
%


143



2
%Total

$
7,464



100
%

$
8,591



100
% Credit Opportunities Partners, LLC On September 30, 2019, Credit Opportunities Partners, LLC, or COP, a joint venture between the Company and South Carolina Retirement Systems Group Trust, or SCRS, was formed pursuant to the terms of
a limited liability company agreement between the Company and SCRS, or the COP Agreement. The COP Agreement requires the Company and SCRS to provide capital to COP of up to $1,000 in the aggregate where the Company and SCRS would provide 87.5% and
12.5%, respectively, of the committed capital. Pursuant to the terms of the COP Agreement, the Company and SCRS each have 50% voting control of COP and are required to agree on all investment decisions as well as certain other significant actions
for COP. COP invests its capital in a range of investments, including senior secured loans (both first lien and second lien) to middle market companies, broadly syndicated loans, equity, warrants and other investments. As administrative agent of
COP, the Company performs certain day-to-day management responsibilities on behalf of COP and is entitled to a fee of 0.25% of COPs assets under
administration, calculated and payable quarterly in arrears. As of March 31, 2020, the Company and SCRS have funded approximately $575.0 to COP, of which $503.1 was from the Company.  42




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)  On May 15, 2017, Green Creek LLC, or Green Creek, then a wholly-owned special-purpose
financing subsidiary of the Company, entered into a revolving credit facility with Goldman Sachs Bank, or Goldman Sachs, as lender, sole lead arranger and administrative agent, and Wells Fargo Bank, National Association, or Wells Fargo, as
collateral administrator and collateral agent. On December 19, 2019, the Company contributed all of its outstanding equity in Green Creek to COP. As a result, Green Creek became a wholly-owned special-purpose financing subsidiary of COP.
Concurrently, Green Creek amended and restated its revolving credit facility, or the Green Creek Credit Facility. The Green
Creek Credit Facility provides for borrowings in U.S. dollars, and certain agreed upon foreign currencies, in an aggregate principal amount up to $500 on a committed basis. The end of the reinvestment period and the maturity date for the Green Creek
Credit Facility are November 15, 2020 and December 15, 2020, respectively. U.S. dollar borrowings bear interest at the rate of three-month LIBOR (subject to a 0% floor) plus 2.50% per annum. Foreign currency borrowings bear interest at the rate of
the relevant reference rate (subject to a 0% floor) plus the spread applicable to the specified currency. During the reinvestment period, Green Creek is subject to unused fees in an amount equal to the sum of (i) 2.50% per annum on the average daily
unborrowed portion of the facility amount up to 85% of the facility amount, or the Green Creek Minimum Utilization Amount, plus (ii) 0.50% per annum on the average daily unborrowed portion of the facility amount above the Green Creek Minimum
Utilization Amount. Borrowings under the Green Creek Credit Facility are secured by a first priority security interest in substantially all of the assets of Green Creek, including its portfolio of assets. As of March 31, 2020, total outstanding
borrowings under the Green Creek Credit Facility were $400. On March 11, 2020, Big Cedar Creek LLC, or Big Cedar Creek, a
wholly-owned special-purpose financing subsidiary of COP, entered into a revolving credit facility, or the Big Cedar Creek Credit Facility, with BNP Paribas, as lender and administrative agent, each of the lenders from time to time party thereto,
COP, as equityholder and servicer, and Wells Fargo, as collateral agent. The Big Cedar Creek Credit Facility provides for borrowings in U.S. dollars and certain agreed upon foreign currencies in an aggregate principal amount up to $300 on a
committed basis. The end of the reinvestment period and the maturity date for the Big Cedar Creek Credit Facility are March 11, 2023 and March 11, 2025, respectively. Under the Big Cedar Creek Credit Facility, borrowings bear interest at the rate of
LIBOR (or the relevant reference rate for any foreign currency borrowings) (subject to a 0% floor) plus a spread of (i) during the reinvestment period, 1.85% to 2.55% per annum, and (ii) after the reinvestment period, 2.00% to 2.65% per annum, in
each case, determined based on the currency of the borrowing and the composition of the collateral portfolio. During the reinvestment period, Big Cedar Creek is subject to an unused fee ranging from 0.375% to 1.00% per annum on the average daily
unborrowed portion of the facility amount below 85% of the facility amount. Borrowings under the Big Cedar Creek Credit Facility are secured by a first priority security interest in substantially all of the assets of Big Cedar Creek, including its
portfolio of assets. As of March 31, 2020, total outstanding borrowings under the Big Cedar Creek Credit Facility were $0. During the three months ended March 31, 2020, the Company sold investments with a cost of $303.5 for proceeds of $252.6 to COP and
recognized a net realized gain (loss) of $(50.9) in connection with the transactions. As of March 31, 2020, $252.6 of these sales to COP are included in receivable for investments sold in the consolidated statements of assets and liabilities. As of March 31, 2020, COP had total investments with a fair value of $1,085.7. As of March 31, 2020, COP had no
investments on non-accrual status. Below is a summary of COPs
portfolio, followed by a listing of the individual loans in COPs portfolio as of March 31, 2020 and December 31, 2019:  As ofMarch 31,2020


December 31,2019Total debt investments(1)

$
1,115.8


$
899.4Weighted average current interest rate on debt investments(2)


10.4
%


9.2
%Number of portfolio companies in COP


68



37Largest investment in a single portfolio company(1)

$
69.4


$
69.3  43




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)   (1)
Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on
investments.  (2)
Computed as the (a) annual stated interest rate on accruing debt, divided by (b) total debt at par amount. Credit Opportunities Partners, LLC Portfolio As of March 31, 2020 (Unaudited) (in millions)  Company(a)

Footnotes

Industry

Interest Rate(b)

BaseRateFloor(b)


MaturityDate

No.
Shares/PrincipalAmount(c)


Cost


FairValue(d)Senior Secured LoansFirst Lien136.4%ABB CONCISE Optical Group LLC

(j)

Retailing

L+500

1.0%

6/15/23

$
3.6


$
2.8


$
2.7Alstom SA

(j)

Transportation

L+450

1.0%

8/29/21


6.2



4.5



4.4Ammeraal Beltech Holding BV

(i)(j)

Capital Goods

E+375



7/30/25


4.8



4.4



4.0Apex Group Limited

(e)(i)

Diversified Financials

L+700

1.0%

6/15/25

$
21.5



21.5



20.9Apex Group Limited

(e)(i)

Diversified Financials

L+700

1.3%

6/15/25


7.4



7.4



7.2Apex Group Limited

(e)(i)

Diversified Financials

L+700

1.5%

6/15/25

£
22.1



29.1



27.3Arrotex Australia Group Pty Ltd

(e)(i)

Pharmaceuticals, Biotechnology & Life Sciences

B+525

1.0%

7/10/24

A$
47.3



31.9



27.7Brand Energy & Infrastructure Services Inc

(j)

Capital Goods

L+425

1.0%

6/21/24

$
23.5



17.6



19.1Cambium Learning Group Inc

(i)

Consumer Services

L+450



12/18/25


55.6



53.4



45.9Conservice LLC

(e)(i)

Consumer Services

L+525



11/29/24


8.7



8.7



8.7CSM Bakery Products

(i)(j)

Food, Beverage & Tobacco

L+400

1.0%

7/3/20


7.7



7.2



6.4Diamond Resorts International Inc

(i)

Consumer Services

L+375

1.0%

9/2/23


13.9



13.6



9.7Distribution International Inc

(j)

Retailing

L+575

1.0%

12/15/23


14.1



11.4



11.4Eagleclaw Midstream Ventures LLC

(i)

Energy

L+425

1.0%

6/24/24


11.3



10.5



5.1EaglePicher Technologies LLC

(j)

Capital Goods

L+325



3/8/25


-



-



-EIF Van Hook Holdings LLC

(i)

Energy

L+525



9/5/24


7.1



6.8



5.1Electronics For Imaging Inc

(i)

Technology Hardware & Equipment

L+500



7/23/26


15.4



14.5



12.9Entertainment Benefits Group LLC

(e)(i)

Media & Entertainment

L+575

1.0%

9/30/25


2.5



2.5



2.3Fox Head Inc

(e)(i)

Consumer Durables & Apparel

L+850

1.0%

12/19/20


20.3



20.1



18.9Industria Chimica Emiliana Srl

(e)(i)

Pharmaceuticals, Biotechnology & Life Sciences

L+650



6/30/26


51.4



55.9



53.3  44




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)  Company(a)

Footnotes

Industry

Interest Rate(b)

BaseRateFloor(b)


MaturityDate


No.
Shares/PrincipalAmount(c)


Cost


FairValue(d)Jostens Inc

(j)

Consumer Services

L+550






12/19/25


$
3.6


$
2.7


$
2.8Laird PLC

(j)

Technology Hardware & Equipment

L+450






7/9/25



4.3



3.7



3.7LBM Borrower LLC

(j)

Capital Goods

L+375


1.0%



8/20/22



8.4



7.1



7.5LD Intermediate Holdings Inc

(j)

Software & Services

L+588


1.0%



12/9/22



31.1



25.6



26.7Lipari Foods LLC

(e)(i)

Food & Staples Retailing

L+588


1.0%



1/6/25



44.2



44.2



42.5Lipari Foods LLC

(e)(i)

Food & Staples Retailing

L+588


1.0%



1/6/25



22.4



22.4



21.6MedAssets Inc

(j)

Health Care Equipment & Services

L+450


1.0%



10/20/22



5.7



4.8



4.8MI Windows & Doors Inc

(j)

Capital Goods

L+550


1.0%



11/6/26



5.0



4.2



4.3Monitronics International Inc

(i)(j)

Commercial & Professional Services

L+500


1.5%



7/3/24



33.5



29.6



25.6NaviHealth Inc.

(j)

Health Care Equipment & Services

L+500






8/1/25



25.2



22.1



23.5Ontic Engineering & Manufacturing Inc

(j)

Capital Goods

L+475






10/30/26



2.2



1.8



2.0Onvoy LLC

(j)

Telecommunication Services

L+450


1.0%



2/10/24



0.2



0.1



0.1Parts Town LLC

(e)(i)

Retailing

L+550


1.0%



10/15/25



24.9



24.8



23.6Qdoba Restaurant Corp

(j)

Consumer Services

L+700


1.0%



3/21/25



2.0



1.7



1.7Sequa Corp

(i)(j)

Materials

L+500


1.0%



11/28/21



33.9



31.2



27.9Smart & Final Stores LLC

(i)(j)

Food & Staples Retailing

L+675






6/20/25



25.4



23.9



22.5Staples Canada

(e)(j)

Retailing

L+700


1.0%



9/12/24


C$
47.8



36.8



34.0Sutherland Global Services Inc

(j)

Software & Services

L+538


1.0%



4/23/21


$
25.2



19.9



18.8Syncsort Inc

(j)

Software & Services

L+600


1.0%



8/16/24



10.7



8.6



8.6Total Safety US Inc

(j)

Capital Goods

L+600


1.0%



8/16/25



8.0



6.5



6.6Trace3 Inc

(e)(i)

Software & Services

L+675


1.0%



8/3/24



34.2



33.9



33.4Transaction Services Group Ltd

(e)(i)

Consumer Services

L+600






10/15/26


A$
62.5



42.0



35.2WireCo WorldGroup Inc

(j)

Capital Goods

L+500


1.0%



9/29/23


$
0.1



0.1



0.1Total Senior Secured LoansFirst Lien




















721.5



670.5Senior Secured LoansSecond Lien56.4%Access CIG LLC

(j)

Commercial & Professional Services

L+775






2/27/26



1.9



1.6



1.7  45




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)  Company(a)

Footnotes


Industry

Interest Rate(b)

BaseRateFloor(b)


MaturityDate


No.
Shares/PrincipalAmount(c)


Cost


FairValue(d)Albany Molecular Research Inc


(j)


Pharmaceuticals, Biotechnology & Life Sciences

L+700


1.0%



8/30/25


$
0.9


$
0.7


$
0.7American Bath Group LLC


(j)


Capital Goods

L+975


1.0%



9/30/24



10.0



9.0



9.0Ammeraal Beltech Holding BV


(e)(i)


Capital Goods

L+800






7/27/26



52.3



50.5



48.6BCA Marketplace PLC


(e)(i)


Retailing

L+825






11/7/27


£
29.9



38.6



34.8EaglePicher Technologies LLC


(j)


Capital Goods

L+725






3/8/26


$
0.4



0.4



0.4Electronics For Imaging Inc


(i)


Technology Hardware & Equipment

L+900






7/23/27



3.9



3.7



3.1Emerald Performance Materials LLC


(j)


Materials

L+775


1.0%



8/1/22



5.7



4.7



4.7Excelitas Technologies Corp


(j)


Technology Hardware & Equipment

L+750


1.0%



12/1/25



7.5



5.7



5.9LBM Borrower LLC


(i)(j)


Capital Goods

L+925


1.0%



8/20/23



14.9



14.4



13.6Misys Ltd


(i)(j)


Software & Services

L+725


1.0%



6/13/25



12.5



10.6



9.6New Arclin US Holding Corp


(j)


Materials

L+875


1.0%



2/14/25



0.3



0.2



0.2OPE Inmar Acquisition Inc


(j)


Software & Services

L+800


1.0%



5/1/25



9.6



7.1



7.1Paradigm Acquisition Corp


(j)


Health Care Equipment & Services

L+750






10/26/26



0.5



0.5



0.4Pure Fishing Inc


(e)(i)


Consumer Durables & Apparel

L+838


1.0%



12/31/26



46.8



40.6



37.5Rise Baking Company


(e)(i)


Food, Beverage & Tobacco

L+800


1.0%



8/9/26



18.0



17.7



17.3Sequa Corp


(i)(j)


Materials

L+900


1.0%



4/28/22



18.9



15.5



13.8Transplace


(j)


Transportation

L+875


1.0%



10/6/25



3.3



2.5



2.5Wittur Holding GmbH


(e)(i)


Capital Goods

E+850, 0.5% PIK (0.5% Max PIK)






9/23/27



64.3



69.4



66.4Total Senior Secured LoansSecond Lien






















293.4



277.3Other Senior Secured Debt3.2%Velvet Energy Ltd


(e)(i)


Energy

9.0%






10/5/23



15.0



15.3



12.8Vivint Inc


(i)


Commercial & Professional Services

7.9%






12/1/22



3.0



3.0



2.8Total Other Senior Secured Debt






















18.3



15.6  46




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)  Company(a)

Footnotes


Industry

Interest Rate(b)

BaseRateFloor(b)


MaturityDate


No.
Shares/PrincipalAmount(c)


Cost


FairValue(d)Subordinated Debt9.8%Ascent Resources Utica Holdings LLC / ARU Finance Corp


(i)


Energy

10.0%






4/1/22


$
26.0


$
25.9


$
14.1Diamond Resorts International Inc


(i)


Consumer Services

10.8%






9/1/24



3.0



3.0



1.9GFL Environmental Inc


(i)


Commercial & Professional Services

8.5%






5/1/27



5.3



5.8



5.4LifePoint Hospitals Inc


(j)


Health Care Equipment & Services

9.8%






12/1/26



10.7



9.3



10.2MultiPlan Inc


(j)


Health Care Equipment & Services

7.1%






6/1/24



7.1



5.7



6.2Plastipak Holdings Inc


(j)


Materials

6.3%






10/15/25



1.0



0.7



0.9Ply Gem Holdings Inc


(j)


Capital Goods

8.0%






4/15/26



0.2



0.2



0.2SRS Distribution Inc


(j)


Capital Goods

8.3%






7/1/26



5.7



4.4



5.2Vivint Inc


(i)


Commercial & Professional Services

7.6%






9/1/23



5.0



4.4



3.9Total Subordinated Debt






















59.4



48.0Asset Based Finance5.1%NewStar Clarendon 2014-1A Class D


(e)(h)(i)


Diversified Financials








1/25/27


$
12.1



1.6



4.0Pretium Partners LLC P1, Structured Mezzanine


(e)(i)


Real Estate

2.8%, 5.3% PIK (5.3% Max PIK)






10/22/26


$
6.8



6.8



6.5Pretium Partners LLC P2, Structured Mezzanine


(e)(i)


Real Estate

2.0%, 7.5% PIK (7.5% Max PIK)






5/29/25


$
14.6



14.8



14.6Total Asset Based Finance






















23.2



25.1Equity/Other10.0%Ascent Resources Utica Holdings LLC / ARU Finance Corp, Common Stock


(e)(h)(i)


Energy












13,556



3.6



2.7Ascent Resources Utica Holdings LLC / ARU Finance Corp, Trade Claim


(e)(h)(i)


Energy












115,178,571



30.5



23.2  47




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)  Company(a)

Footnotes


Industry

Interest Rate(b)

BaseRateFloor(b)


MaturityDate


No.
Shares/PrincipalAmount(c)


Cost


FairValue(d)SSC (Lux) Limited S.a r.l., Common Stock


(e)(h)(i)


Health Care Equipment & Services












261,364


$
8.1


$
7.9Zeta Interactive Holdings Corp, Preferred Stock, Series E1


(e)(h)(i)


Software & Services












620,025



7.1



6.5Zeta Interactive Holdings Corp, Preferred Stock, Series F


(e)(h)(i)


Software & Services












563,932



6.4



8.9Zeta Interactive Holdings Corp, Warrant


(e)(h)(i)


Software & Services








4/20/27



84,590



0.2



Total Equity/Other






















55.9



49.2TOTAL INVESTMENTS220.9%





















$
1,171.7


$
1,085.7  (a)
Security may be an obligation of one or more entities affiliated with the named company.  (b)
Certain variable rate securities in the Companys portfolio bear interest at a rate determined by a publicly disclosed base rate plus a
basis point spread. As of March 31, 2020, the three-month London Interbank Offered Rate, or LIBOR or L, was 1.45% , the Euro Interbank Offered Rate, or EURIBOR or E, was (0.36)%, and the Australian Bank Bill Swap Bid
Rate, or BBSY or B, was 0.42%,. PIK means paid-in-kind. PIK income accruals may be adjusted based on the fair value of the underlying investment.  (c)
Denominated in U.S. dollars unless otherwise noted.  (d)
Fair value determined by the Companys board of directors. See Note 8.  (e)
Investments classified as Level 3.  (f)
Not used.  (g)
Not used.  (h)
Security is non-income producing.  (i)
Security or portion thereof held within Green Creek LLC and is pledged as collateral supporting the amounts outstanding under the revolving
credit facility with Goldman Sachs Bank.  (j)
Security or portion thereof held within Big Cedar Creek LLC and is pledged as collateral supporting the amounts outstanding under the
revolving credit facility with BNP Paribas.  48




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)  Credit Opportunities Partners, LLC Portfolio As of December 31, 2019 (in millions)  Company(a)

Footnotes


Industry

Interest Rate(b)

BaseRateFloor(b)


MaturityDate


No.
Shares/PrincipalAmount(c)


Cost


FairValue(d)Senior Secured LoansFirst Lien93.9%Ammeraal Beltech Holding BV





Capital Goods

E + 375






7/30/25



1.5


$
1.6


$
1.6Apex Group Limited


(e)


Diversified Financials

L+700


1.5%



6/15/25


£
22.2



29.2



29.6Apex Group Limited


(e)


Diversified Financials

L+700


1.3%



6/15/25


$
29.0



29.0



29.0Arrotex Australia Group Pty Ltd


(e)


Pharmaceuticals, Biotechnology & Life Sciences

B+525


1.0%



7/10/24


A$
47.3



31.9



32.7ATX Networks Corp.





Technology Hardware & Equipment

L+600, 1.0% PIK (1.0% Max PIK)


1.0%



6/11/21


$
25.9



24.4



24.3Conservice LLC


(e)


Consumer Services

L+525






11/29/24



8.7



8.8



8.8CSM Bakery Products





Food, Beverage & Tobacco

L+400


1.0%



7/3/20



5.0



5.2



4.8Diamond Resorts International Inc





Consumer Services

L+375


1.0%



9/2/23



13.9



13.7



13.7Eagleclaw Midstream Ventures LLC





Energy

L+425


1.0%



6/24/24



11.3



10.4



10.5EIF Van Hook Holdings LLC





Energy

L+525






9/5/24



7.1



6.8



6.8Electronics For Imaging Inc





Technology Hardware & Equipment

L+500






7/23/26



15.5



14.4



14.4Entertainment Benefits Group LLC


(e)


Media & Entertainment

L+575


1.0%



9/30/25


$
2.5


$
2.5


$
2.5Fox Head Inc


(e)


Consumer Durables & Apparel

L+850


1.0%



12/19/20



20.4



20.1



20.1Industria Chimica Emiliana Srl


(e)


Pharmaceuticals, Biotechnology & Life Sciences

L+650






6/30/26



51.4



55.9



56.2Lipari Foods LLC


(e)


Food & Staples Retailing

L+588


1.0%



1/6/25


$
66.6



66.6



66.6Monitronics International Inc





Commercial & Professional Services

L+500


1.5%



7/3/24



17.7



17.7



17.7Parts Town LLC


(e)


Retailing

L+550


1.0%



10/15/25



25.0



24.9



24.9Sequa Corp





Materials

L+500


1.0%



11/28/21



17.8



17.9



17.9Smart & Final Stores LLC





Food & Staples Retailing

L+675






6/20/25



17.7



17.1



17.1Staples Canada


(e)


Retailing

L+700


1.0%



9/12/24


C$
49.0



37.8



38.7Trace3 Inc


(e)


Software & Services

L+675


1.0%



8/3/24


$
34.3



34.0



34.0Transaction Services Group Ltd


(e)


Consumer Services

L+600






10/15/26


A$
62.5



42.0



43.0Vertiv Group Corp





Technology Hardware & Equipment

L+400


1.0%



11/30/23


$
13.7



13.7



13.7  49




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)  Company(a)

Footnotes


Industry

Interest Rate(b)

BaseRateFloor(b)


MaturityDate


No.
Shares/PrincipalAmount(c)


Cost


FairValue(d)Vivint Inc





Commercial & Professional Services

L+500






4/1/24


$
18.4


$
18.3


$
18.4Total Senior Secured LoansFirst Lien






















543.9



547.0Senior Secured LoansSecond Lien41.8%Ammeraal Beltech Holding BV


(e)


Capital Goods

L+800






7/27/26



52.3



50.5



50.5BCA Marketplace PLC


(e)


Retailing

L+825






9/24/27


£
29.9



38.6



39.2Electronics For Imaging Inc





Technology Hardware & Equipment

L+900






7/23/27


$
3.9



3.7



3.7LBM Borrower, LLC





Capital Goods

L+925


1.0%



8/20/23



10.0



9.9



9.9Misys Ltd





Software & Services

L+725


1.0%



6/13/25



4.7



4.6



4.6Pure Fishing Inc


(e)


Consumer Durables & Apparel

L+838


1.0%



12/31/26



46.8



40.4



40.4Rise Baking Company


(e)


Food, Beverage & Tobacco

L+800


1.0%



8/9/26



18.0



17.7



17.7Sequa Corp





Materials

L+900


1.0%



4/28/22



7.5



7.4



7.4Wittur Holding GmbH


(e)


Capital Goods

E+850, 0.5% PIK (0.5% Max PIK)






9/23/27



64.3



69.3



70.0Total Senior Secured LoansSecond Lien






















242.1



243.4Other Senior Secured Debt4.1%Velvet Energy Ltd


(e)


Energy

9.0%






10/5/23


$
15.0


$
15.3


$
15.3Vivint Inc





Commercial & Professional Services

7.9%






12/1/22



3.9



3.9



4.0Vivint Inc





Commercial & Professional Services

7.6%






9/1/23



5.0



4.4



4.7Total Other Senior Secured Debt






















23.6



24.0Subordinated Debt11.1%Ascent Resources Utica Holdings LLC / ARU Finance Corp





Energy

10.0%






4/1/22



26.0



25.8



26.0Diamond Resorts International Inc





Consumer Services

10.8%






9/1/24



3.0



3.0



3.2GFL Environmental Inc





Commercial & Professional Services

8.5%






5/1/27



8.8



9.7



9.7Vertiv Group Corp.





Technology Hardware & Equipment

9.3%






10/15/24



16.6



17.8



17.8  50




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)  Company(a)

Footnotes


Industry

Interest Rate(b)

BaseRateFloor(b)


MaturityDate


No.
Shares/PrincipalAmount(c)


Cost


FairValue(d)Vivint Inc





Commercial & Professional Services

8.8%






12/1/20


$
7.8


$
7.5


$
7.8Total Subordinated Debt






















63.8



64.5Asset Based Finance4.4%NewStar Clarendon 2014-1A Class D


(e)


Diversified Financials








1/25/27


$
12.1



4.9



4.8Pretium Partners LLC P1, Structured Mezzanine


(e)


Real Estate

2.8%, 5.3% PIK (5.3% Max PIK)






10/22/26


$
6.8



6.8



6.8Pretium Partners LLC P2, Structured Mezzanine


(e)


Real Estate

2.0%, 7.5%PIK (7.5% Max PIK)






5/29/25


$
14.1



14.3



14.3Total Asset Based Finance






















26.0



25.9Equity/Other9.6%Ascent Resources Utica Holdings LLC / ARU Finance Corp, Common Stock


(e)


Energy












13,556



3.6



3.6Ascent Resources Utica Holdings LLC / ARU Finance Corp, Trade Claim


(e)


Energy












115,178,571



30.5



30.5ATX Networks Corp, Common Stock


(e)


Technology Hardware & Equipment












72,635



0.1



0.1SSC (Lux) Limited S.a r.l., Common Stock


(e)


Health Care Equipment & Services












261,364



8.1



8.1Zeta Interactive Holdings Corp, Preferred Stock, Series E1


(e)


Software & Services












620,025



7.1



7.1Zeta Interactive Holdings Corp, Preferred Stock, Series F


(e)


Software & Services












563,932



6.4



6.4Zeta Interactive Holdings Corp, Warrant


(e)


Software & Services








4/20/27



84,590



0.2



0.2Total Equity/Other






















56.0



56.0TOTAL INVESTMENTS164.9%






















955.4



960.8  51




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)   (a)
Security may be an obligation of one or more entities affiliated with the named company.  (b)
Certain variable rate securities in the Companys portfolio bear interest at a rate determined by a publicly disclosed base rate plus a
basis point spread. As of December 31, 2019, the three-month London Interbank Offered Rate, or LIBOR or L, was 1.91%, the Euro Interbank Offered Rate, or EURIBOR or E, was (0.38)% and the Australian Bank Bill Swap Bid
Rate, or BBSY or B, was 0.92%,. PIK means paid-in-kind. PIK income accruals may be adjusted based on the fair value of the underlying investment.  (c)
Denominated in U.S. dollars unless otherwise noted.  (d)
Fair value determined by the Companys board of directors. See Note 8.  (e)
Investments classified as Level 3. Below is selected balance sheet information for COP as of March 31, 2020 and December 31, 2019:  As ofMarch 31,2020


December 31,2019Selected Balance Sheet InformationInvestments at fair value

$
1,085.7


$
960.8Cash and other assets


79.8



98.7Total assets


1,165.5



1,059.5Debt


400.0



475.0Other liabilities


273.9



1.7Total liabilities


673.9



476.7Members equity

$
491.6


$
582.8 Below is selected statement of operations information for COP for the three months ended March 31,
2020:  March 31,2020Selected Statement of Operations InformationTotal investment income

$
22.3ExpensesInterest expense


5.3Administrative services


0.7Custody and administrative fees


Other


0.1Total expenses


6.1Net investment income


16.2Net realized and unrealized losses


(92.4
)Net increase in net assets resulting from operations

$
(76.2
)  52




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)    Note 7. Financial Instruments The following is a summary of the fair value and location of the Companys derivative instruments in the consolidated balance sheets
held as of March 31, 2020 and December 31, 2019:  Fair ValueDerivative Instrument

Statement Location

March 31,2020(Unaudited)


December 31,2019Interest rate swaps

Unrealized appreciation on interest rate swaps

$



$
Interest rate swaps

Unrealized depreciation on interest rate swaps


(59
)


(29
)Foreign currency forward contracts

Unrealized appreciation on foreign currency forward contracts


1



Foreign currency forward contracts

Unrealized depreciation on foreign currency forward contracts






(1
)Total



$
(58
)

$
(30
) Net realized and unrealized gains and losses on derivative instruments recorded by the Company for the
three months ended March 31, 2020 and 2019 are in the following locations in the consolidated statements of operations:  Net Realized Gains (Losses)Three Months Ended March 31,Derivative Instrument

Statement Location

2020


2019Interest Rate Swaps

Net realized gains (losses) on interest rate swaps

$
(2
)

$
Foreign currency forward contracts

Net realized gains (losses) on foreign currency forward contracts


0



Total



$
(2
)

$
  Net Unrealized Gains (Losses)Three Months Ended March 31,Derivative Instrument

Statement Location

2020


2019Interest Rate Swaps

Net change in unrealized appreciation (depreciation) on interest rate swaps

$
(30
)

$
(4
)Foreign currency forward contracts

Net change in unrealized appreciation (depreciation) on foreign currency forward contracts


2



Total



$
(28
)

$
(4
)  53




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 7. Financial Instruments (continued)  Offsetting of Derivative Instruments The Company has derivative instruments that are subject to master netting agreements. These agreements include provisions to offset
positions with the same counterparty in the event of default by one of the parties. The Companys unrealized appreciation and depreciation on derivative instruments are reported as gross assets and liabilities, respectively, in the condensed
consolidated statements of assets and liabilities. The following tables present the Companys assets and liabilities related to derivatives by counterparty, net of amounts available for offset under a master netting arrangement and net of any
collateral received or pledged by the Company for such assets and liabilities as of March 31, 2020 and December 31, 2019:  As of March 31, 2020
(Unaudited)Counterparty

DerivativeAssets Subject toMaster NettingAgreement


DerivativesAvailable forOffset


Non-cashCollateralReceived(1)


Cash 
CollateralReceived(1)


Net Amount ofDerivativeAssets(2)JP Morgan Chase Bank

$
0


$



$



$



$
0ING Capital Markets


1



(1
)










0Total

$
1


$
(1
)

$



$



$
  Counterparty

DerivativeLiabilities Subjectto Master NettingAgreement


DerivativesAvailablefor Offset


Non-cashCollateralPledged(1)


Cash 
CollateralPledged(1)


Net Amount ofDerivativeLiabilities(3)JP Morgan Chase Bank

$
(27
)

$



$



$
(27
)

$
ING Capital Markets


(32
)


1







(31
)


Total

$
(59
)

$
1


$



$
(58
)

$
  As of December 31,
2019Counterparty

DerivativeAssets Subject toMaster NettingAgreement


DerivativesAvailable forOffset


Non-cashCollateralReceived(1)


CashCollateralReceived(1)


Net Amount ofDerivativeAssets(2)JP Morgan Chase Bank

$
0


$



$



$



$
0ING Capital Markets


0















0Total

$
0


$



$



$



$
0  Counterparty

DerivativeLiabilitiesSubject
toMaster Netting   Agreement


Derivatives   Available forOffset


Non-cashCollateral  Pledged(1)


CashCollateralPledged(1)


Net Amount ofDerivativeLiabilities(3)JP Morgan Chase Bank

$
(14
)

$



$



$
14


$
ING Capital Markets


(16
)










15



(1
)Total

$
(30
)

$



$



$
29


$
(1
)  (1)
In some instances, the actual amount of the collateral received and/or pledged may be more than the amount shown due to overcollateralization.  (2)
Net amount of derivative assets represents the net amount due from the counterparty to the Company in the event of default.  (3)
Net amount of derivative liabilities represents the net amount due from the Company to the counterparty in the event of default.  54




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 7. Financial Instruments (continued)  Interest Rate Swaps Interest rate swap contracts are privately negotiated agreements between the Company and a counterparty. Pursuant to interest rate swap agreements, the Company makes fixed-rate payments to a counterparty
in exchange for payments on a floating benchmark interest rate. Payments received or made are recorded as realized gains or losses. During the term of the outstanding swap agreement, changes in the underlying value of the swap are recorded as
unrealized gains or losses. The value of the swap is determined by changes in the relationship between two rates of interest. The Company is exposed to credit loss in the event of non-performance by the swap
counterparty. Risk may also arise from movements in interest rates. The Company attempts to limit counterparty risk by dealing only with well-known counterparties. The average notional balance for interest rate swaps during the three months ended March 31, 2020 and March 31, 2019 was $900 and $340, respectively. As of March 31, 2020 and December 31, 2019, the Companys open interest rate swaps were as follows:  As of March 31, 2020
(Unaudited)Counterparty

NotionalAmount


Company ReceivesFloating Rate


Company PaysFixed Rate


TerminationDate


PremiumsPaid/(Received)


Value


UnrealizedAppreciation(Depreciation)JP Morgan Chase Bank


$200



3-Month LIBOR



2.78
%


12/18/2023


$



$
(18
)

$
(18
)JP Morgan Chase Bank


$200



3-Month LIBOR



2.81
%


12/18/2021







(9
)


(9
)ING Capital Markets


$250



3-Month LIBOR



2.59
%


1/14/2024







(22
)


(22
)ING Capital Markets


$250



3-Month LIBOR



2.62
%


1/14/2022







(10
)


(10
)$



$
(59
)

$
(59
)  As of December 31,
2019Counterparty

NotionalAmount


Company ReceivesFloating Rate


Company PaysFixed Rate


TerminationDate


PremiumsPaid/(Received)


Value


UnrealizedAppreciation(Depreciation)JP Morgan Chase Bank


$200



3-Month LIBOR



2.78
%


12/18/2023


$



$
(9
)

$
(9
)JP Morgan Chase Bank


$200



3-Month LIBOR



2.81
%


12/18/2021







(5
)


(5
)ING Capital Markets


$250



3-Month LIBOR



2.59
%


1/14/2024







(8
)


(8
)ING Capital Markets


$250



3-Month LIBOR



2.62
%


1/14/2022







(7
)


(7
)$



$
(29
)

$
(29
) Foreign Currency Forward Contracts The Company may enter into foreign currency forward contracts from time to time to facilitate settlement of purchases and sales of investments denominated in foreign currencies and to economically hedge
the impact that an adverse change in foreign exchange rates would have on the value of the Companys investments denominated in foreign currencies. A foreign currency forward contract is a commitment to purchase or sell a foreign currency at a
future date at a negotiated forward rate. These contracts are marked-to-market by recognizing the difference between the contract forward exchange rate and the forward
market exchange rate on the last day of the period presented as unrealized appreciation or depreciation. Realized gains or losses are recognized when forward contracts are settled. Risks arise as a result of the potential inability of the
counterparties to meet the terms of their contracts. The Company attempts to limit counterparty risk by only dealing with well-known counterparties. The average notional balance for foreign currency forward contracts during the three months ended March 31, 2020 and March 31, 2019 was $15 and $0, respectively.  55




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 7. Financial Instruments (continued)  As of March 31, 2020 and December 31, 2019, the Companys open foreign
currency forward contracts were as follows:  As of March 31, 2020
(Unaudited)Foreign Currency

SettlementDate


Counterparty


Amount andTransaction


US$ Value atSettlement Date


US$ Value atMarch 31, 2020


UnrealizedAppreciation(Depreciation)AUD


4/8/2020



ING Capital LLC


A$




6.8 Sold


$
4.6


$
4.2


$
0.4EUR


4/8/2020



ING Capital LLC







5.6 Sold



6.3



6.2



0.1GBP


4/8/2020



ING Capital LLC


£




0.4 Sold



0.5



0.4



0.1EUR


7/17/2023



JP Morgan Chase Bank







0.1 Sold



0.1



0.1



Total

















$
11.5


$
10.9


$
0.6  As of December 31,
2019Foreign Currency

SettlementDate


Counterparty


Amount andTransaction


US$ Value atSettlement Date


US$ Value atDecember 31, 2019


UnrealizedAppreciation(Depreciation)AUD


1/14/2020



ING Capital LLC


A$




4.8 Sold


$
3.3



3.4



(0.1
)AUD


1/14/2020



ING Capital LLC


A$




1.9 Sold



1.3



1.3



AUD


1/14/2020



ING Capital LLC


A$




0.3 Sold



0.2



0.2



AUD


4/8/2020



ING Capital LLC


A$




6.8 Sold



4.6



4.8



(0.2
)CAD


1/14/2020



JP Morgan Chase Bank


C$




5.7 Sold



4.3



4.4



(0.1
)CAD


1/14/2020



ING Capital LLC


C$




1.5 Sold



1.2



1.2



CAD


1/14/2020



ING Capital LLC


C$




3.9 Sold



3.0



3.0



EUR


1/14/2020



ING Capital LLC







1.0 Sold



1.1



1.1



EUR


1/14/2020



ING Capital LLC







0.8 Sold



0.9



0.9



EUR


4/8/2020



ING Capital LLC







5.6 Sold



6.3



6.3



EUR


7/17/2023



JP Morgan Chase Bank







0.1 Sold



0.1



0.1



GBP


1/14/2020



ING Capital LLC


£




2.9 Sold



3.6



3.9



(0.3
)GBP


1/14/2020



ING Capital LLC


£




3.3 Sold



4.1



4.4



(0.3
)GBP


4/8/2020



ING Capital LLC


£




0.4 Sold



0.5



0.5



Total

















$
34.5


$
35.5


$
(1.0
) Note 8. Fair Value of Financial Instruments Under existing accounting guidance, fair value is defined as the price that the Company would receive upon selling an investment or pay to
transfer a liability in an orderly transaction to a market participant in the principal or most advantageous market for the investment. This accounting guidance emphasizes valuation techniques that maximize the use of observable market inputs and
minimize the use of unobservable inputs. Inputs refer broadly to the assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are
inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the assumptions market
participants would use in pricing an asset or liability developed based on the best information available in the circumstances. The Company classifies the inputs used to measure these fair values into the following hierarchy as defined by current
accounting guidance: Level1: Inputs that are quoted prices (unadjusted) in active markets for
identical assets or liabilities. Level2: Inputs that are quoted prices for similar assets or
liabilities in active markets. Level3: Inputs that are unobservable for an asset or liability.  56




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 8. Fair Value of Financial
Instruments (continued)  A financial instruments categorization within the valuation hierarchy is based
upon the lowest level of input that is significant to the fair value measurement. As of March 31, 2020 and
December 31, 2019, the Companys investments were categorized as follows in the fair value hierarchy:  March 31,
2020(Unaudited)


December 31, 2019Valuation Inputs

Investments


TotalReturn Swap


Investments


TotalReturn SwapLevel 1Price quotations in active markets

$



$



$
7


$
Level 2Significant other observable inputs


796







1,594



Level 3Significant unobservable inputs


6,238



(1
)


6,480



(4
)Investments measured at net asset value(1)


430







510



Total

$
7,464


$
(1
)

$
8,591


$
(4
)  (1)
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been
categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. As of March 31, 2020 and December 31, 2019, the Companys interest rate swaps were categorized as follows in the fair value
hierarchy:  March 31, 2020(Unaudited)


December 31, 2019Valuation Inputs

Assets


Liability


Asset


LiabilityLevel 1Price quotations in active markets

$



$



$



$
Level 2Significant other observable inputs






(59
)






(29
)Level 3Significant unobservable inputs














Total

$



$
(59
)

$



$
(29
) The Companys investments consist primarily of debt investments that were acquired directly from the
issuer. Debt investments, for which broker quotes are not available, are valued by independent valuation firms, which determine the fair value of such investments by considering, among other factors, the borrowers ability to adequately service
its debt, prevailing interest rates for like investments, expected cash flows, call features, anticipated repayments and other relevant terms of the investments. Except as described below, all of the Companys equity/other investments are also
valued by independent valuation firms, which determine the fair value of such investments by considering, among other factors, contractual rights ascribed to such investments, as well as various income scenarios and multiples of earnings before
interest, taxes, depreciation and amortization, or EBITDA, cash flows, net income, revenues or, in limited instances, book value or liquidation value. An investment that is newly issued and purchased near the date of the financial statements is
valued at cost if the Companys board of directors determines that the cost of such investment is the best indication of its fair value. Such investments described above are typically classified as Level 3 within the fair value hierarchy.
Investments that are traded on an active public market are valued at their closing price as of the date of the financial statements and are classified as Level 1 within the fair value hierarchy. Except as described above, the Company typically
values its other investments and interest rate swaps by using the midpoint of the prevailing bid and ask prices from dealers on the date of the relevant period end, which are provided by independent third-party pricing services and screened for
validity by such services and are typically classified as Level 2 within the fair value hierarchy. The Company
periodically benchmarks the bid and ask prices it receives from the third-party pricing services and/or dealers and independent valuation firms as applicable, against the actual prices at which the Company purchases and sells its investments. Based
on the results of the benchmark analysis and the experience of the Companys management in purchasing and  57




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 8. Fair Value of Financial
Instruments (continued)  selling these investments, the Company believes that these prices are reliable indicators of fair value. The valuation committee and the board of directors reviewed and approved the valuation
determinations made with respect to these investments in a manner consistent with the Companys valuation policy. The
following is a reconciliation for the three months ended March 31, 2020 and 2019 of investments for which significant unobservable inputs (Level 3) were used in determining fair value:  For the Three Months Ended March 31, 2020Senior 
SecuredLoansFirstLien


Senior
SecuredLoansSecondLien


OtherSeniorSecuredDebt


SubordinatedDebt


AssetBasedFinance


Equity/Other


TotalFair value at beginning of period

$
4,905


$
570


$
95


$
80


$
485


$
345


$
6,480Accretion of discount (amortization of premium)


2



0



0



0



0



0



2Net realized gain (loss)


(189
)


0











1



6



(182
)Net change in unrealized appreciation (depreciation)


(101
)


(58
)


(28
)


(8
)


(35
)


(98
)


(328
)Purchases


1,007



13







55



146



18



1,239Paid-in-kind interest


1



0



3



2



8



3



17Sales and repayments


(930
)


0







(27
)


(18
)


(15
)


(990
)Net transfers in or out of Level 3


























Fair value at end of period

$
4,695


$
525


$
70


$
102


$
587


$
259


$
6,238The amount of total gains or losses for the period included in changes in net assets attributable to the change in
unrealized gains or losses relating to investments still held at the reporting date

$
(219
)

$
(53
)

$
(28
)

$
(3
)

$
(25
)

$
(84
)

$
(412
)  For the Three Months Ended March 31, 2019Senior 
SecuredLoansFirstLien


Senior
SecuredLoansSecondLien


OtherSeniorSecuredDebt


SubordinatedDebt


AssetBasedFinance


Equity/Other


TotalFair value at beginning of period

$
2,828


$
212


$
95


$
6


$
46


$
265


$
3,452Accretion of discount (amortization of premium)


1



0



0



0



0



0



1Net realized gain (loss)


(2
)














0



(10
)


(12
)Net change in unrealized appreciation (depreciation)


(9
)


(1
)


(3
)


1



0



23



11Purchases


291



65



1



33







4



394Paid-in-kind interest


1



0



1







1



2



5Sales and repayments


(87
)














(1
)






(88
)Net transfers in or out of Level 3


2























2Fair value at end of period

$
3,025


$
276


$
94


$
40


$
46


$
284


$
3,765The amount of total gains or losses for the period included in changes in net assets attributable to the change in
unrealized gains or losses relating to investments still held at the reporting date

$
0


$
14


$
(3
)

$
(9
)

$
(1
)

$
0


$
1  58




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 8. Fair Value of Financial
Instruments (continued)  The valuation techniques and significant unobservable inputs used in recurring
Level 3 fair value measurements as of March 31, 2020 and December 31, 2019 were as follows:  Type of Investment

Fair Value atMarch 31, 2020(Unaudited)(1)


ValuationTechnique(2)

Unobservable Input


Range
(Weighted Average)(3)

Impact toValuation froman Increase inInput(4)Senior Debt

$
4,552


Discounted Cash Flow


Discount Rate


6.7% - 23.2% (9.3%)


Decrease573


Waterfall


EBITDA Multiple


0.1x - 12.5x (6.9x)


Increase165


OtherSubordinated Debt


102


Discounted Cash Flow


Discount Rate


10.6% - 17.5% (12.6%)


Decrease0


Waterfall


EBITDA Multiple


9.3x - 9.3x (9.3x)


IncreaseAsset Based Finance


312


Waterfall


EBITDA Multiple


1.0x - 9.5x (2.3x)


Increase181


Discounted Cash Flow


Discount Rate


7.0% - 15.6% (10.1%)


Decrease54


Cost37


Other3


Indicative Dealer Quotes





33.0% - 33.0% (33.0%)


IncreaseEquity/Other


227


Waterfall


EBITDA Multiple


2.8x - 11.5x (7.1x)


Increase27


Option Pricing Model


Equity Illiquidity Discount


50.0% - 60.0% (59.8%)


Decrease3


Discounted Cash Flow


Discount Rate


16.7% - 16.7% (16.7%)


Decrease2


OtherTotal

$
6,238  (1)
Certain investments may be valued at cost for a period of time after an acquisition as the best indicator of fair value.  (2)
For the assets and investments that have more than one valuation technique, the Company may rely on the stated techniques individually or in
the aggregate based on a weight ascribed to each valuation technique, ranging from 0100%. Indicative dealer quotes obtained for valuation purposes are reviewed by the Company relative to other valuation techniques.  (3)
Weighted average amounts are based on the estimated fair values.  (4)
This column represents the directional change in the fair value of the Level 3 investments that would result from an increase to the
corresponding unobservable input. A decrease to the input would have the opposite effect. Significant changes in these inputs in isolation could result in significantly higher or lower fair value measurements.  (5)
Fair value based on expected outcome of proposed corporate transactions and/or other factors.  Type of Investment

Fair Value atDecember 31, 2019


ValuationTechnique(1)

UnobservableInput


Range
(Weighted Average)

Impact toValuation froman Increase inInput(2)Senior Debt

$
4,816


Discounted Cash Flow


Discount Rate


6.4% - 27.5% (9.9%)


Decrease362


Cost257


Waterfall


EBITDA Multiple


0.1x - 8.5x (5.5x)


Increase135


Other(3)Subordinated Debt


80


Discounted Cash Flow


Discount Rate


9.3% - 20.8% (13.9%)


DecreaseAsset Based Finance


229


Waterfall


EBITDA Multiple


1.0x - 13.0x (1.4x)


Increase105


Cost102


Discounted Cash Flow


Discount Rate


7.8% - 12.9% (9.8%)


Decrease46


Other(3)3


Indicative Dealer Quotes





61.0% - 61.0% (61.0%)


IncreaseEquity/Other


314


Waterfall


EBITDA Multiple


0.5x - 14.0x (7.7x)


Increase29


Other(3)2


Option Pricing Model


Equity Illiquidity Discount


30.0% - 30.0% (30.0%)


DecreaseTotal

$
6,480Total Return Swap

$
(4
)

Indicative Dealer Quotes





0.0% - 100.6% (70.0%)


Increase  (1)
Investments using a market quotes valuation technique were primarily valued by using the midpoint of the prevailing bid and ask prices from
dealers on the date of the relevant period end, which were provided by independent third-party pricing services and screened for validity by such services. Investments valued using an EBITDA multiple or a revenue multiple pursuant to the market
comparables valuation technique may be conducted using an enterprise valuation waterfall analysis.  59




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 8. Fair Value of Financial
Instruments (continued)  (2)
Represents the directional change in the fair value of the Level 3 investments that would result from an increase to the corresponding
unobservable input. A decrease to the input would have the opposite effect. Significant changes in these inputs in isolation could result in significantly higher or lower fair value measurements.  (3)
Fair value based on expected outcome of proposed corporate transactions and/or other factors. Note 9. Financing Arrangements The following tables present summary information with respect to the Companys outstanding financing arrangements as of March 31, 2020 and December 31, 2019. For additional information
regarding these financing arrangements, see the notes to the Companys audited consolidated financial statements contained in its annual report on Form 10-K for the year ended December 31, 2019. Any
significant changes to the Companys financing arrangements during the three months ended March 31, 2020 are discussed below.  As of March 31,
2020(Unaudited)Arrangement

Type of Arrangement

Rate(1)

AmountOutstanding


AmountAvailable


MaturityDateSenior Secured Revolving Credit Facility(2)

Revolving Credit Facility

L+2.00% - 2.25%(3)

$
837
(4)

$
928



November 7, 2024Germantown Credit Facility(2)

Term Loan Credit Facility

L+2.50%


300







December 15, 2020Darby Creek Credit Facility(2)

Revolving Credit Facility

L+1.95%


220



30



February 26, 2024Dunlap Credit Facility(2)

Revolving Credit Facility

L+2.00%


400



100



February 26, 2024Jefferson Square Credit Facility(2)

Revolving Credit Facility

L+2.50%


320



80



July 15, 2022Juniata River Credit Facility(2)

Revolving Credit Facility

L+2.45%


720



130



October 11, 2021Burholme Prime Brokerage Facility(2)

Prime Brokerage Facility

L+1.25%


67



33



September 26, 
2020(6)Broomall Prime Brokerage Facility(2)

Prime Brokerage Facility

L+1.25%


12



38



December 26, 
2020(7)Ambler Credit Facility(2)

Revolving Credit Facility

L+2.25%


123



77



November 22, 2024Meadowbrook Run Credit Facility(2)

Revolving Credit Facility

L+2.25%


160



140



November 22, 20244.250% Notes due 2025(8)

Unsecured Notes

4.250%


475







February 14, 2025Total





$
3,634


$
1,556Center City Total Return Swap

Total Return Swap

L+1.55%

$



$




N/A(9)Cheltenham Total Return Swap

Total Return Swap

L+1.60%

$



$




N/A(10)  As of December 31, 2019Arrangement(2)

Type of Arrangement

Rate(1)

AmountOutstanding


AmountAvailable


MaturityDateSenior Secured Revolving Credit Facility

Revolving Credit Facility

L+2.00% - 2.25%(3)

$
1,516
(5)

$
159



November 7, 2024Germantown Credit Facility

Term Loan Credit Facility

L+2.50%


300







December 15, 2020Darby Creek Credit Facility

Revolving Credit Facility

L+1.95%


215



35



February 26, 2024Dunlap Credit Facility

Revolving Credit Facility

L+2.00%


405



95



February 26, 2024Jefferson Square Credit Facility

Revolving Credit Facility

L+2.50%


370



30



July 15, 2022Juniata River Credit Facility

Revolving Credit Facility

L+2.45%


730



120



October 11, 2021Burholme Prime Brokerage Facility

Prime Brokerage Facility

L+1.25%


100







June 27, 
2020(6)Broomall Prime Brokerage Facility

Prime Brokerage Facility

L+1.25%


38



12



September 26, 
2020(7)Ambler Credit Facility

Revolving Credit Facility

L+2.25%


85



115



November 22, 2024Meadowbrook Run Credit Facility

Revolving Credit Facility

L+2.25%


50



250



November 22, 2024Total





$
3,809


$
816Center City Total Return Swap

Total Return Swap

L+1.55%

$



$




N/A(9)Cheltenham Total Return Swap

Total Return Swap

L+1.60%

$
94


$
81



N/A(10)  (1)
LIBOR is subject to a 0% floor.  (2)
The carrying amount outstanding under the facility approximates its fair value.  (3)
The spread over LIBOR is determined by reference to the ratio of the value of the borrowing base to the aggregate amount of certain
outstanding indebtedness of the Company.  60




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 9. Financing Arrangements (continued)  (4)
Amount includes borrowings in U.S. dollars, Euros, Canadian dollars, Australian dollars, and pounds sterling. Euro balance outstanding of
231 has been converted to U.S. dollars at an exchange rate of 1.00 to $1.10 as of March 31, 2020 to reflect total amount outstanding in U.S. dollars. Canadian dollar balance outstanding of CAD $148 has been converted to U.S. dollars
at an exchange rate of CAD $1.00 to $0.71 as of March 31, 2020 to reflect total amount outstanding in U.S. dollars. Australian dollar balance outstanding of AUD $245 has been converted to U.S. dollars at an exchange rate of AUD $1.00 to $0.61
as of March 31, 2020 to reflect total amount outstanding in U.S. dollars. Pounds sterling balance outstanding of £183 has been converted to U.S. dollars at an exchange rate of £1.00 to $1.25 as of March 31, 2020 to reflect
total amount outstanding in U.S. dollars.  (5)
Amount includes borrowings in U.S. dollars, Euros, Canadian dollars, Australian dollars, and pounds sterling. Euro balance outstanding of
232 has been converted to U.S. dollars at an exchange rate of 1.00 to $1.12 as of December 31, 2019 to reflect total amount outstanding in U.S. dollars. Canadian dollar balance outstanding of CAD $151 has been converted to U.S.
dollars at an exchange rate of CAD $1.00 to $0.77 as of December 31, 2019 to reflect total amount outstanding in U.S. dollars. Australian dollar balance outstanding of AUD $238 has been converted to U.S. dollars at an exchange rate of AUD $1.00
to $0.70 as of December 31, 2019 to reflect total amount outstanding in U.S. dollars. Pounds sterling balance outstanding of £112 has been converted to U.S. dollars at an exchange rate of £1.00 to $1.33 as of December 31, 2019
to reflect total amount outstanding in U.S. dollars.  (6)
The Burholme Prime Brokerage Facility generally is terminable upon 179 days notice by either party. As of March 31, 2020, neither
party had provided notice of its intent to terminate the facility.  (7)
The Broomall Prime Brokerage Facility generally is terminable upon 270 days notice by either party. As of March 31, 2020, neither
party had provided notice of its intent to terminate the facility.  (8)
As of March 31, 2020, the fair value of the 4.250% notes was approximately $366. The valuation is considered a Level 2 valuation
within the fair value hierarchy.  (9)
Center City Funding and Citibank mutually agreed to an orderly winddown of the TRS through purchases of all of the assets underlying the TRS.
Accordingly, the parties neither extended the optional termination date under the TRS past September 30, 2019 nor terminated the TRS on that date. The parties plan to terminate the TRS when all assets underlying the TRS have been purchased and
any remaining trades have been canceled. Center City Funding has not paid, nor will pay, any termination fee as a result of the orderly winddown and ultimate termination of the TRS.  (10)
Cheltenham Funding and Citibank mutually agreed to an orderly winddown of the TRS through purchases of all of the assets underlying the TRS.
Accordingly, the parties neither extended the optional termination date under the TRS past February 19, 2020 nor terminated the TRS on that date. The parties plan to terminate the TRS when all assets underlying the TRS have been purchased and any
remaining trades have been canceled. Center City Funding has not paid, nor will pay, any termination fee as a result of the orderly winddown and ultimate termination of the TRS.  61




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 9. Financing Arrangements (continued)  For the three months ended March 31, 2020 and 2019, the components of total
interest expense for the Companys financing arrangements were as follows:  Three Months Ended March 31,2020


2019Arrangement(1)

DirectInterestExpense(2)


Amortizationof DeferredFinancingCosts andDiscount


TotalInterestExpense


DirectInterestExpense(2)


Amortizationof DeferredFinancingCosts andDiscount


TotalInterestExpenseGreen Creek Credit Facility

$



$



$



$
7


$
0


$
7Germantown Credit Facility


3







3











Cooper River Credit Facility














2



0



2Darby Creek Credit Facility


2



0



2



2



0



2Dunlap Credit Facility


4







4











Jefferson Square Credit Facility


4







4











Juniata River Credit Facility


8



1



9



12



1



13Senior Secured Revolving Credit Facility


11



0



11



6



0



6Burholme Prime Brokerage Facility


1







1











Broomall Prime Brokerage Facility


0



















Ambler Credit Facility


1



0



1











Meadowbrook Run Credit Facility


2



0



2











4.250% Notes due 2025


3



0



3











Total

$
39


$
1


$
40


$
29


$
1


$
30  (1)
Borrowings of each of the Companys wholly owned, special-purpose financing subsidiaries are considered borrowings of the Company for
purposes of complying with the asset coverage requirements applicable to BDCs under the 1940 Act.  (2)
Direct interest expense includes the effect of non-usage fees. The Companys average borrowings and weighted average interest rate, including the effect of
non-usage fees, for the three months ended March 31, 2020 were $4,035 and 3.92%, respectively. As of March 31, 2020, the Companys weighted average effective interest rate on borrowings,
including the effect of non-usage fees, was 3.94%. The Companys average
borrowings and weighted average interest rate, including the effect of non-usage fees, for the three months ended March 31, 2019 were $2,154 and 5.31%, respectively. As of March 31, 2019, the
Companys weighted average effective interest rate on borrowings, including the effect of non-usage fees, was 5.29%. Under its financing arrangements, the Company has made certain representations and warranties and is required to comply with various covenants, reporting requirements and other customary requirements for
similar financing arrangements. The Company was in compliance with all covenants required by its financing arrangements as of March 31, 2020 and December 31, 2019. Senior Secured Revolving Credit Facility On March 3, 2020, the Company
entered into a Commitment Increase Agreement in connection with its senior secured revolving credit facility, or as amended and restated, the Senior Secured Revolving Credit Facility, with FS KKR Capital Corp., as an additional borrower, JPMorgan
Chase Bank, N.A., as administrative agent, ING Capital LLC, as collateral agent, and the lenders party thereto, which, among other things, increased the total facility amount from $3,890 to $3,980 and increased the sublimit of the total facility
amount available for the Company to borrow from $1,675 to $1,765. 4.250% Notes due 2025 On February 14, 2020, the Company issued $475 aggregate principal amount of 4.250% notes due 2025, or the Unsecured Notes. The
Unsecured Notes will mature on February 14, 2025 and may be redeemed in whole or in part at the Companys option  62




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 9. Financing Arrangements (continued)  at any time or from time to time at the applicable redemption price set forth in the indenture governing the Unsecured Notes. The Unsecured Notes bear interest at a rate of 4.250% per year,
payable semi-annually. The Unsecured Notes are general unsecured obligations of the Company that rank senior in right of
payment to all of the Companys existing and future indebtedness that is expressly subordinated in right of payment to the Unsecured Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by the
Company, rank effectively junior to any of the Companys secured indebtedness (including unsecured indebtedness that the Company later secures) to the extent of the value of the assets securing such indebtedness, and rank structurally junior to
all existing and future indebtedness (including trade payables) incurred by the Companys subsidiaries, financing vehicles or similar facilities. The Unsecured Notes contain certain covenants, including covenants requiring the Company to comply with the asset coverage requirements of Section 18(a)(1)(A) as modified by Section 61(a)(1) and
(2) of the Investment Company Act of 1940, as amended, whether or not it is subject to those requirements, and to provide financial information to the holders of the Unsecured Notes if the Company is no longer subject to the reporting
requirements under the Securities Exchange Act of 1934, as amended. These covenants are subject to important limitations and exceptions that are described in the indenture governing the Unsecured Notes. In addition, on the occurrence of a change of control repurchase event, as defined in the indenture governing the Unsecured
Notes, the Company will generally be required to make an offer to purchase the outstanding Unsecured Notes at a price equal to 100% of the principal amount of such Unsecured Notes plus accrued and unpaid interest to the repurchase date. Center City Funding Total Return Swap  Counterparty

Description

Termination Date

Value as ofMarch 31, 2020Citibank

A TRS is a contract in which one party agrees to make periodic payments to another party based on the change in the market value of the assets underlying the TRS, which may include
a specified security, basket of securities or securities indices during a specified period, in return for periodic payments based on a fixed or variable interest rate.

Prior to September 30, 2019 Citibank and Center City Funding mutually agreed to an orderly winddown of the TRS through purchases of all of the assets underlying the TRS. The
parties plan to terminate the TRS when all assets underlying the TRS have been purchased and any remaining trades have been canceled. Center City Funding has not paid, nor will pay, any termination fee as a result of the orderly winddown and
ultimate termination of the TRS.

$
1 On June 26, 2014, the Companys wholly-owned financing subsidiary, Center City Funding LLC, or
Center City Funding, a wholly owned special purpose financing subsidiary of the Company, entered into a TRS for a portfolio of primarily senior secured floating rate loans with Citibank, which has subsequently been amended. As of March 31, 2020, the fair value of the TRS was $1 which is reflected in the Companys consolidated balance sheets as
unrealized appreciation (depreciation) on total return swap. As of March 31, 2020, the payable due on the TRS was $0 which is reflected within other accrued expenses and liabilities on the Companys consolidated balance sheets. As of March
31, 2020, all assets held within the TRS were sold. As of March 31, 2020, the Company posted $1 in cash collateral held
by Citibank (of which only $0 and was required to be posted). The cash collateral held by Citibank is reflected in the Companys consolidated balance sheets as due from counterparty. The Company does not offset collateral posted in relation to
the TRS with any unrealized appreciation (depreciation) outstanding on the consolidated balance sheets as of March 31, 2020.  63




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 9. Financing Arrangements (continued)  For the three months ended March 31, 2020, transactions in the TRS resulted in net
realized gain (loss) on total return swap of $(1) and net change unrealized appreciation (depreciation) on total return swap of $0 which are reflected in the Companys consolidated statements of operations. Cheltenham Funding Total Return Swap  Counterparty

Description

Termination Date

Value as ofMarch 31, 2020Citibank

A TRS is a contract in which one party agrees to make periodic payments to another party based on the change in the market value of the assets underlying the TRS, which may include
a specified security, basket of securities or securities indices during a specified period, in return for periodic payments based on a fixed or variable interest rate.

Prior to February 1, 2020 Citibank and Cheltenham Funding mutually agreed to an orderly winddown of the TRS through purchases of all of the assets underlying the TRS. The
parties plan to terminate the TRS when all assets underlying the TRS have been purchased and any remaining trades have been canceled. Cheltenham Funding has not paid, nor will pay, any termination fee as a result of the orderly winddown and ultimate
termination of the TRS.

$
(2
) On January 19, 2016, the Companys wholly-owned financing subsidiary, Cheltenham Funding LLC, or
Cheltenham Funding, a wholly owned special purpose financing subsidiary of the Company, entered into a TRS for a portfolio of primarily senior secured floating rate loans with Citibank, which has subsequently been amended. As of March 31, 2020, the fair value of the TRS was $(2) which is reflected in the Companys consolidated balance sheets as
unrealized appreciation (depreciation) on total return swap. As of March 31, 2020, the payable due on the TRS was $1 which is reflected within other accrued expenses and liabilities on the Companys consolidated balance sheets. As of
March 31, 2020, all assets held within the TRS were sold. As of March 31, 2020, the Company posted $4 in cash
collateral held by Citibank (of which only $4 and was required to be posted). The cash collateral held by Citibank is reflected in the Companys consolidated balance sheets as due from counterparty. The Company does not offset collateral posted
in relation to the TRS with any unrealized appreciation (depreciation) outstanding on the consolidated balance sheets as of March 31, 2020. For the three months ended March 31, 2020, transactions in the TRS resulted in net realized gain (loss) on total return swap of $(1) and net change unrealized appreciation (depreciation) on total
return swap of $3 which are reflected in the Companys consolidated statements of operations. Note 10. Commitments and Contingencies The Company enters into contracts that contain a variety of indemnification provisions. The Companys maximum
exposure under these arrangements is unknown; however, the Company has not had prior claims or losses pursuant to these contracts. The Advisor has reviewed the Companys existing contracts and expects the risk of loss to the Company to be
remote. The Company is not currently subject to any material legal proceedings and, to the Companys knowledge, no
material legal proceedings are threatened against the Company. From time to time, the Company may be a party to certain legal proceedings in the ordinary course of business, including proceedings relating to the enforcement of the Companys
rights under contracts with its portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, the Company does not expect that any such proceedings will have a material effect upon its financial condition or
results of operations.  64




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 10. Commitments and
Contingencies (continued)  Unfunded commitments to provide funds to portfolio companies are not recorded in the
Companys consolidated balance sheets. Since these commitments may expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements. The Company has sufficient liquidity to fund these
commitments. As of March 31, 2020, the Companys unfunded commitments consisted of the following:  Category/Company(1)

CommitmentAmountSenior Secured LoansFirst Lien5 Arch Income Fund 2, LLC

$
16.2All Systems Holding LLC


3.0Apex Group Limited


2.2Aspect Software Inc


1.9Bellatrix Exploration Ltd


0.8Conservice LLC


2.9Conservice LLC


2.3CSafe Global


13.2Eagle Family Foods Inc


5.2Entertainment Benefits Group LLC


0.9Greystone Equity Member Corp


2.5Heniff Transportation Systems LLC


5.6HM Dunn Co Inc


1.5Industria Chimica Emiliana Srl


14.8J S Held LLC


13.5J S Held LLC


3.3Kellermeyer Bergensons Services LLC


40.6Kodiak BP LLC


10.7Lexitas Inc


4.3Lexitas Inc


2.9Monitronics International Inc


39.3Motion Recruitment Partners LLC


34.6P2 Energy Solutions Inc


5.4Pretium Packaging LLC


22.4RSC Insurance Brokerage Inc


19.1RSC Insurance Brokerage Inc


3.6SMART Global Holdings Inc


0.1Sungard Availability Services Capital Inc


2.3Truck-Lite Co LLC


4.8Truck-Lite Co LLC


18.6Zeta Interactive Holdings Corp


4.4Subordinated DebtOpendoor Labs Inc


53.6Asset Based FinanceHome Partners JV, Structured Mezzanine


19.5Total

$
376.0Unfunded Asset Based Finance / Other commitments

$
245.1  (1)
May be commitments to one or more entities affiliated with the named company.  65




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 10. Commitments and
Contingencies (continued)  As of March 31, 2020, the Companys debt commitments are comprised of $96.2
revolving credit facilities and $279.8 of delayed draw term loans, which generally are used for acquisitions or capital expenditures and are subject to certain performance tests. Such unfunded debt commitments have a fair value representing
unrealized appreciation (depreciation) of $(9.4). The Companys unfunded Asset Based Finance/Other commitments generally require certain conditions to be met or actual approval from the Advisor prior to funding. As of March 31, 2020, the Company also has an unfunded commitment to provide $371.9 of capital to COP. The capital commitment can be
satisfied with contributions of cash and/or investments. The capital commitments cannot be drawn without an affirmative vote by both the Companys and SCRSs representatives on COPs board of managers. While the Company does not expect to fund all of its unfunded commitments, there can be no assurance that it will not be required to do
so. In the normal course of business, the Company may enter into guarantees on behalf of portfolio companies. Under such
arrangements, the Company would be required to make payments to third parties if the portfolio companies were to default on their related payment obligations. The Company has no such guarantees outstanding at March 31, 2020 and
December 31, 2019. Note 11. Financial Highlights The following is a schedule of financial highlights of the Company for the three months ended March 31, 2020 and the year ended December 31, 2019:  Three Months EndedMarch 31, 2020(Unaudited)


Year EndedDecember 31, 2019Per Share Data:(1)Net asset value, beginning of period

$
7.36


$
7.86Results of operations(2)Net investment income


0.14



0.70Net realized gain (loss) and unrealized appreciation (depreciation)


(1.18
)


(0.42
)Net increase (decrease) in net assets resulting from operations


(1.04
)


0.28Stockholder distributions(3)Distributions from net investment income


(0.15
)


(0.75
)Net decrease in net assets resulting from stockholder distributions


(0.15
)


(0.75
)Capital share transactionsIssuance of common stock(4)






Repurchases of common stock(5)






Deduction of deferred costs(6)






(0.03
)Net increase (decrease) in net assets resulting from capital share transactions






(0.03
)Net asset value, end of period

$
6.17


$
7.36Shares outstanding, end of period


678,379,301



678,379,301Total return(7)


(14.13
)%


2.96
%Total return (without assuming reinvestment of distributions)(7)


(14.13
)%


3.18
%Ratio/Supplemental Data:Net assets, end of period

$
4,186


$
4,996Ratio of net investment income to average net assets(8)


7.58
%


9.07
%Ratio of operating expenses and excise taxes to average net assets(8)


8.31
%


8.46
%Ratio of net operating expenses and excise taxes to average net assets(8)


8.31
%


8.46
%Portfolio turnover(9)


15.67
%


53.43
%Total amount of senior securities outstanding, exclusive of treasury securities

$
3,636


$
3,809Asset coverage per unit(10)


2.15



2.31  66




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##### Table of Contents

FS KKR Capital Corp. II Notes to Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 11. Financial Highlights (continued)   (1)
Per share data may be rounded in order to recompute the ending net asset value per share.  (2)
The per share data was derived by using the weighted average shares outstanding during the applicable period.  (3)
The per share data for distributions reflect the actual amount of distributions paid per share during the applicable period.  (4)
The issuance of common stock on a per share basis reflects the incremental net asset value changes as a result of the issuance of shares of
common stock pursuant to the Companys distribution reinvestment plan. The issuance of common stock at a price that is greater than the net asset value per share results in an increase in net asset value per share.  (5)
The per share impact of the Companys distribution reinvestment plan is a reduction to net asset value of less than $0.01 per share
during the period.  (6)
As a result of the purchase price allocation for the Mergers, the Company permanently wrote off approximately $18 of deferred costs and
prepaid assets from FSIC III, FSIC IV and CCT IIs balance sheets.  (7)
The total return based on net asset value for each period presented was calculated by taking the net asset value per share as of the end of
the applicable period, adding the cash distributions per share that were declared during the applicable period and dividing the total by the net asset value per share at the beginning of the period. Total return based on net asset value does not
consider the effect of any sales commissions or charges that may be incurred in connection with the sale of shares of the Companys common stock. The historical calculation of total return based on net asset value in the table should not be
considered a representation of the Companys future total return based on net asset value, which may be greater or less than the return shown in the table due to a number of factors, including the Companys ability or inability to make
investments in companies that meet its investment criteria, the interest rates payable on the debt securities the Company acquires, the level of the Companys expenses, variations in and the timing of the recognition of realized and unrealized
gains or losses, the degree to which the Company encounters competition in its markets and general economic conditions. As a result of these factors, results for any previous period should not be relied upon as being indicative of performance in
future periods. The total return calculations set forth above represent the total return on the Companys investment portfolio during the applicable period and do not represent an actual return to stockholders.  (8)
Weighted average net assets during the applicable period are used for this calculation. Ratios for the three months ended March 31, 2020
are annualized. Annualized ratios for the three months ended March 31, 2020 are not necessarily indicative of the ratios that may be expected for the year ending December 31, 2020. The following is a schedule of supplemental ratios for the
three months ended March 31, 2020 and the year ended December 31, 2019:  Three Months EndedMarch 31, 2020(Unaudited)


Year EndedDecember 31, 2019Ratio of subordinated income incentive fees to average net assets


1.87
%


1.11
%Ratio of interest expense to average net assets


3.26
%


4.04
%Ratio of excise taxes to average net assets






0.04
%  (9)
Portfolio turnover for the three months ended March 31, 2020 is not annualized.  (10)
Asset coverage per unit is the ratio of the carrying value of the Companys total consolidated assets, less liabilities and indebtedness
not represented by senior securities, to the aggregate amount of senior securities representing indebtedness. Note 12.
Subsequent Events On May 5, 2020, the Company entered into that certain Amendment No. 1 to Amended and Restated Senior
Secured Revolving Credit Agreement, or the Amendment, to the Senior Secured Revolving Credit Facility, with FS KKR Capital Corp., JPMorgan Chase Bank, N.A., as administrative agent, ING Capital LLC, as collateral agent, and the lenders party thereto
to, among other things, (i) reset the minimum shareholders equity test at $2,720.9 plus 37.5% of net equity proceeds after April 15, 2021, (ii) remove the 0.9091 multiplier previously applicable to its borrowing base, and (iii) reduce its
asset coverage ratio test (for so long as it remains a borrower that has not yet listed on a nationally recognized securities exchange in the United States) from a minimum of 200% to a minimum of 175%.  67




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##### Table of Contents

Item 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations. (in millions, except share and per share
amounts) The information contained in this section should be read in conjunction with our unaudited
consolidated financial statements and related notes thereto appearing elsewhere in this quarterly report on Form 10-Q. In this report, we, us, our and the
Company refer to FS KKR Capital Corp. II and the Advisor refers to FS/KKR Advisor, LLC. Forward-Looking Statements Some of the statements in this quarterly report on Form 10-Q constitute
forward-looking statements because they relate to future events or our future performance or financial condition. The forward-looking statements contained in this quarterly report on Form 10-Q may include
statements as to:  

our future operating results;  

our business prospects and the prospects of the companies in which we may invest, including our and their ability to achieve our respective objectives
as a result of the current COVID-19 pandemic;  

the impact of the investments that we expect to make;  

the ability of our portfolio companies to achieve their objectives;  

our current and expected financings and investments;  

receiving and maintaining corporate credit ratings and changes in the general interest rate environment;  

the adequacy of our cash resources, financing sources and working capital;  

the timing and amount of cash flows, distributions and dividends, if any, from our portfolio companies;  

our contractual arrangements and relationships with third parties;  

actual and potential conflicts of interest with the Advisor, FS Investments, KKR Credit or any of their respective affiliates;  

the dependence of our future success on the general economy and its effect on the industries in which we may invest;  

general economic and political trends and other external factors, including the current COVID-19 pandemic and
related disruptions caused thereby;  

our use of financial leverage;  

the ability of the Advisor to locate suitable investments for us and to monitor and administer our investments;  

the ability of the Advisor or its affiliates to attract and retain highly talented professionals;  

our ability to maintain our qualification as a RIC and as a BDC;  

the impact on our business of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended, and the rules and regulations issued
thereunder;  

the effect of changes to tax legislation on us and the portfolio companies in which we may invest and our and their tax position; and  

the tax status of the enterprises in which we may invest. In addition, words such as anticipate, believe, expect and intend indicate a forward-looking statement, although not all forward-looking statements include
these words. The forward-looking statements contained in this quarterly report on Form 10-Q involve risks and uncertainties. Our actual results could differ materially from those implied or expressed in
the forward-looking statements for any reason. Factors that could cause actual results to differ materially include:  

changes in the economy;  68




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##### Table of Contents



risks associated with possible disruption in our operations or the economy generally due to terrorism, natural disasters or pandemics; and  

future changes in laws or regulations and conditions in our operating areas. We have based the forward-looking statements included in this quarterly report on Form 10-Q
on information available to us on the date of this quarterly report on Form 10-Q. Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-looking
statements, whether as a result of new information, future events or otherwise. Stockholders are advised to consult any additional disclosures that we may make directly to stockholders or through reports that we may file in the future with the SEC,
including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. The
forward-looking statements and projections contained in this quarterly report on Form 10-Q are excluded from the safe harbor protection provided by Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Overview We were incorporated under the general corporation laws of the State of Maryland on July 13, 2011 and formally commenced investment
operations on June 18, 2012. We are an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a BDC under
the 1940 Act and has elected to be treated for U.S. federal income tax purposes, and intends to qualify annually, as a RIC under Subchapter M of the Code. In March 2014, we closed our continuous public offering of shares of common stock to new
investors. We are externally managed by the Advisor pursuant to an investment advisory agreement, or the investment advisory
agreement, and supervised by our board of directors, a majority of whom are independent. Our investment objectives are to
generate current income and, to a lesser extent, long-term capital appreciation. We seek to meet our investment objectives by:  

utilizing the experience and expertise of the management team of the Advisor;  

employing a defensive investment approach focused on long-term credit performance and principal protection;  

focusing primarily on debt investments in a broad array of private U.S. companies, including middle-market companies, which we define as companies with
annual EBITDA of $25 million to $100 million at the time of investment;  

investing primarily in established, stable enterprises with positive cash flows; and  

maintaining rigorous portfolio monitoring in an attempt to anticipate and pre-empt negative credit events
within our portfolio, such as an event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a portfolio company. We pursue our investment objective by investing primarily in the debt of middle market U.S. companies with a focus on originated transactions sourced through the network of the Advisor and its
affiliates. We define direct originations as any investment where the Companys investment adviser, sub-adviser or their affiliates had negotiated the terms of the transaction beyond just the price,
which, for example, may include negotiating financial covenants, maturity dates or interest rate terms. These directly originated transactions include participation in other originated transactions where there may be third parties involved, or a
bank acting as an intermediary, for a closely held club, or similar transactions. These direct originations include investments originated by our former investment adviser, our former investment sub-adviser or
their affiliates. Our portfolio is comprised primarily of investments in senior secured loans and second lien secured loans of
private middle market U.S. companies and, to a lesser extent, subordinated loans and certain-asset based financing loans of private U.S. companies. Although we do not expect a significant portion of our portfolio to be comprised of subordinated
loans, there is no limit on the amount of such loans in which we may invest. We may purchase interests in loans or make other debt investments, including investments in senior secured bonds, through secondary market transactions in the over-the-counter market or directly from our target companies as primary market or directly originated investments. In connection with our debt investments, we may
on occasion receive equity interests such as warrants or options as additional consideration. We may also purchase or otherwise acquire interests in the form of common or preferred equity or equity-related securities, such as rights and warrants
that may be converted into or exchanged for common stock or other equity or the cash value of common stock or other equity, including through a co-investment with a financial sponsor or possibly the
restructuring of, an investment. In addition, a portion of our portfolio may be comprised of corporate bonds, structured products, other debt securities and derivatives, including total return swaps and credit default swaps. The Advisor will seek to
tailor our investment focus as market conditions evolve.  69




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Depending on market conditions, we may increase or decrease our exposure to less senior portions of the capital structures of our portfolio companies or otherwise make opportunistic investments,
such as where the market price of loans, bonds or other securities reflects a lower value than deemed warranted by the Advisors fundamental analysis. Such investment opportunities may occur due to general dislocations in the markets, a
misunderstanding by the market of a particular company or an industry being out of favor with the broader investment community and may include event driven investments, anchor orders and structured products. The senior secured loans, second lien
secured loans and senior secured bonds in which we invest generally have stated terms of three to seven years and subordinated debt investments that we make generally have stated terms of up to ten years, but the expected average life of
such securities is generally three to four years. However, we may invest in loans and securities with any maturity or duration. Our debt investments may be rated by a NRSRO and, in such case, generally will carry a rating below investment grade
(rated lower than Baa3 by Moodys, or lower than BBB- by S&P). We may invest without limit in debt or other securities of any rating, as well as debt or other securities that
have not been rated by a NRSRO. Acquisitions of FS Investment Corporation III, FS Investment Corporation IV and Corporate Capital Trust II On December 18, 2019, we completed the Mergers. Pursuant to the Merger Agreement, (i) Merger Sub 1 merged with
and into FSIC III, with FSIC III continuing as the surviving company, and, immediately thereafter, FSIC III merged with and into the Company, with the Company continuing as the surviving company, (ii) Merger Sub 2 merged with and into CCT II,
with CCT II continuing as the surviving company, and, immediately thereafter, CCT II merged with and into the Company, with the Company continuing as the surviving company, and (iii) Merger Sub 3 merged with and into FSIC IV, with FSIC IV
continuing as the surviving company, and, immediately thereafter, FSIC IV merged with and into the Company, with the Company continuing as the surviving company. In accordance with the terms of the Merger Agreement, upon the closing of the
transactions contemplated by the Merger Agreement, (i) each outstanding share of FSIC III common stock was converted into the right to receive 0.9804 shares of our common stock, (ii) each outstanding share of beneficial interest of CCT II
was converted into the right to receive 1.1319 shares of our common stock and (iii) each outstanding share of FSIC IV common stock was converted into the right to receive 1.3634 shares of our common stock. As a result, we issued an aggregate of
approximately 289,084,117 share of our common stock to former FSIC III stockholders, 14,031,781 shares of our common stock to former CCT II stockholders and 43,668,803 shares of our common stock to former FSIC IV stockholders. Following the
consummation of the Mergers, we entered into the investment advisory agreement, which replaced the prior investment advisory and administrative services agreement. Revenues The principal measure of our financial performance is net
increase in net assets resulting from operations, which includes net investment income, net realized gain or loss on investments, net realized gain or loss on foreign currency, net unrealized appreciation or depreciation on investments and net
unrealized gain or loss on foreign currency. Net investment income is the difference between our income from interest, dividends, fees and other investment income and our operating and other expenses. Net realized gain or loss on investments is the
difference between the proceeds received from dispositions of portfolio investments and their amortized cost, including the respective realized gain or loss on foreign currency for those foreign denominated investment transactions. Net realized gain
or loss on foreign currency is the portion of realized gain or loss attributable to foreign currency fluctuations. Net unrealized appreciation or depreciation on investments is the net change in the fair value of our investment portfolio, including
the respective unrealized gain or loss on foreign currency for those foreign denominated investments. Net unrealized gain or loss on foreign currency is the net change in the value of receivables or accruals due to the impact of foreign currency
fluctuations. We principally generate revenues in the form of interest income on the debt investments we hold. In addition, we
generate revenues in the form of non-recurring commitment, closing, origination, structuring or diligence fees, monitoring fees, fees for providing managerial assistance, consulting fees, prepayment fees and
performance-based fees. We may also generate revenues in the form of dividends and other distributions on the equity or other securities we hold. Expenses Our primary operating expenses include the payment of management
and incentive fees and other expenses under the investment advisory agreement and the administration agreement, interest expense from financing arrangements and other indebtedness, and other expenses necessary for our operations. The management and
incentive fees compensate the Advisor for its work in identifying, evaluating, negotiating, executing, monitoring and servicing our investments. The Advisor oversees our day-to-day operations, including the provision of general ledger accounting, fund accounting, legal
services, investor relations, certain government and regulatory affairs activities, and other administrative services. The  70




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Advisor also performs, or oversees the performance of, our corporate operations and required administrative services, which includes being responsible for the financial records that we are
required to maintain and preparing reports for our stockholders and reports filed with the SEC. In addition, the Advisor assists us in calculating our net asset value, overseeing the preparation and filing of tax returns and the printing and
dissemination of reports to our stockholders, and generally overseeing the payment of our expenses and the performance of administrative and professional services rendered to us by others. Pursuant to the administration agreement, we reimburse the Advisor for expenses necessary to perform services related to our
administration and operations, including the Advisors allocable portion of the compensation and related expenses of certain personnel of FS Investments and KKR Credit providing administrative services to us on behalf of the Advisor. We
reimburse the Advisor no less than quarterly for all costs and expenses incurred by the Advisor in performing its obligations and providing personnel and facilities under the administration agreement. The Advisor allocates the cost of such services
to us based on factors such as total assets, revenues, time allocations and/or other reasonable metrics. Our board of directors reviews the methodology employed in determining how the expenses are allocated to us and the proposed allocation of
administrative expenses among us and certain affiliates of the Advisor. Our board of directors then assesses the reasonableness of such reimbursements for expenses allocated to us based on the breadth, depth and quality of such services as compared
to the estimated cost to us of obtaining similar services from third-party service providers known to be available. In addition, our board of directors considers whether any single third-party service provider would be capable of providing all such
services at comparable cost and quality. Finally, our board of directors compares the total amount paid to the Advisor for such services as a percentage of our net assets to the same ratio as reported by other comparable BDCs. We bear all other expenses of our operations and transactions, including all other expenses incurred by the Advisor in performing services
for us and administrative personnel paid by the Advisor, to the extent they are not controlling persons of the Advisor or any of its affiliates, subject to the limitations included in the investment advisory agreement and the administration
agreement. In addition, we have contracted with State Street Bank and Trust Company to provide various accounting and
administrative services, including, but not limited to, preparing preliminary financial information for review by the Advisor, preparing and monitoring expense budgets, maintaining accounting and corporate books and records, processing trade
information provided by us and performing testing with respect to RIC compliance. COVID-19
Developments The rapid spread of the COVID-19 pandemic, and associated impacts on
the U.S. and global economies, has negatively impacted, and is likely to continue to negatively impact, the business operations of some of our portfolio companies. We cannot at this time fully predict the impact of
COVID-19 on our business or the business of our portfolio companies, its duration or magnitude or the extent to which it will negatively impact our portfolio companies operating results or our own
results of operations or financial condition. We expect that certain of our portfolio companies will continue to experience economic distress for the foreseeable future and may significantly limit business operations if subjected to prolonged
economic distress. These developments could result in a decrease in the value of our investments. COVID-19 has already had adverse effects on our investment income and we expect that such adverse effects will continue for some time. These adverse effects may require us to restructure certain of our investments,
which could result in further reductions to our investment income or in impairments on our investments. In addition, disruptions in the capital markets have resulted in illiquidity in certain market areas. These market disruptions and
illiquidity are likely to have an adverse effect on our business, financial condition, results of operations and cash flows. Unfavorable economic conditions caused by COVID-19 can also be expected to increase
our funding costs and limit our access to the capital markets. These events have limited our investment originations, which is likely to continue for the immediate future, and have also had a material negative impact on our operating results. We will continue to carefully monitor the impact of the COVID-19 pandemic on our
business and the business of our portfolio companies. Because the full effects of the COVID-19 pandemic are not capable of being known at this time, we cannot estimate the impacts of COVID-19 on our future financial condition, results of operations or cash flows. We do, however, expect that it will continue to have a negative impact on our business and the financial condition of our portfolio
companies.  71




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Portfolio Investment Activity for the Three Months Ended March 31, 2020 and for the Year Ended
December 31, 2019 Total Portfolio Activity The following tables present certain selected information regarding our portfolio investment activity for the three months ended March 31, 2020 and the year ended December 31, 2019:  Net Investment Activity

For the Three Months EndedMarch 31, 2020


For the Year EndedDecember 31, 2019Purchases

$
1,317


$
6,858Sales and Repayments


(1,643
)


(2,540
)Net Portfolio Activity

$
(326
)

$
4,318  For the Three Months EndedMarch 31, 2020


For the Year EndedDecember 31, 2019New Investment Activity by Asset Class(1)

Purchases


Percentage


Purchases


PercentageSenior Secured LoansFirst Lien

$
1,080



82
%

$
4,459



65
%Senior Secured LoansSecond Lien


36



3
%


765



11
%Other Senior Secured Debt










140



2
%Subordinated Debt


56



4
%


386



6
%Asset Based Finance


145



11
%


482



7
%Credit Opportunities Partners, LLC










503



7
%Equity/Other


0



0
%


123



2
%Total

$
1,317



100
%

$
6,858



100
%  (1)
Purchases and new investments for the year ended December 31, 2019 include investments acquired at fair value of $4,425 in connection
with the Mergers. The following table summarizes the composition of our investment portfolio at cost and
fair value as of March 31, 2020 and December 31, 2019:  March 31, 2020 (Unaudited)


December 31, 2019AmortizedCost(1)



FairValue


Percentageof Portfolio


AmortizedCost(1)



FairValue


Percentageof PortfolioSenior Secured LoansFirst Lien

$
5,606


$
5,116



69
%

$
6,017


$
5,717



67
%Senior Secured LoansSecond Lien


914



693



9
%


941



809



9
%Other Senior Secured Debt


210



150



2
%


243



228



3
%Subordinated Debt


288



229



3
%


479



489



5
%Asset Based Finance


671



587



8
%


535



485



6
%Credit Opportunities Partners, LLC


503



430



6
%


503



510



6
%Equity/Other


327



259



3
%


323



353



4
%Total

$
8,519


$
7,464



100
%

$
9,041


$
8,591



100
%  72




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##### Table of Contents

The following table summarizes the composition of the Companys investment
portfolio at cost and fair value as of March 31, 2020 and December 31, 2019 to include, on a look-through basis, the investments underlying the TRS, as disclosed in Note 9 to our unaudited financial statements included herein. The
investments underlying the TRS had a notional amount and market value of $0 and $0, and $94 and $89, respectively, as of March 31, 2020 and December 31, 2019:  March 31, 2020 (Unaudited)


December 31, 2019AmortizedCost(1)



FairValue


Percentageof Portfolio


AmortizedCost(1)



FairValue


Percentageof PortfolioSenior Secured LoansFirst Lien

$
5,606


$
5,116



69
%

$
6,090


$
5,788



67
%Senior Secured LoansSecond Lien


914



693



9
%


961



827



10
%Other Senior Secured Debt


210



150



2
%


243



228



3
%Subordinated Debt


288



229



3
%


479



489



5
%Credit Opportunities Partners, LLC


671



587



8
%


535



485



5
%Asset Based Finance


503



430



6
%


503



510



6
%Equity/Other


327



259



3
%


324



353



4
%Total

$
8,519


$
7,464



100
%

$
9,135


$
8,680



100
%  (1)
Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on
investments. The following table presents certain selected information regarding the composition of our
investment portfolio as of March 31, 2020 and December 31, 2019:  March 31, 2020


December 31, 2019Number of Portfolio Companies


179



213% Variable Rate Debt Investments (based on fair value)(1)(2)


71.5
%


72.9
%% Fixed Rate Debt Investments (based on fair value)(1)(2)


12.0
%


14.7
%% Other Income Producing Investments (based on fair value)(3)


7.0
%


6.9
%% Non-Income Producing Investments (based on fair value)(2)


3.8
%


3.4
%% of Investments on Non-Accrual (based on fair value)


5.7
%


2.1
%Weighted Average Annual Yield on Accruing Debt Investments(2)(4)


8.9
%


9.5
%Weighted Average Annual Yield on All Debt Investments(5)


7.3
%


8.8
%  (1)
Debt Investments means investments that pay or are expected to pay a stated interest rate, stated dividend rate or other similar
stated return.  (2)
Does not include investments on non-accrual status.  (3)
Other Income Producing Investments means investments that pay or are expected to pay interest, dividends or other income to the
Company on an ongoing basis but do not have a stated interest rate, stated dividend rate or other similar stated return.  (4)
The Weighted Average Annual Yield on Accruing Debt Investments is computed as (i) the sum of (a) the stated annual interest rate,
dividend rate or other similar stated return of each accruing Debt Investment, multiplied by its par amount, adjusted to U.S. dollars and for any partial income accrual when necessary, as of the end of the applicable reporting period, plus
(b) the annual amortization of the purchase or original issue discount or premium of each accruing Debt Investment; divided by (ii) the total amortized cost of Debt Investments included in the calculated group as of the end of the
applicable reporting period.  (5)
The Weighted Average Annual Yield on All Debt Investments is computed as (i) the sum of (a) the stated annual interest rate,
dividend rate or other similar stated return of each Debt Investment, multiplied by its par amount, adjusted to U.S. dollars and for any partial income accrual when necessary, as of the end of the applicable reporting period, plus (b) the
annual amortization of the purchase or original issue discount or premium of each Debt Investment; divided by (ii) the total amortized cost of Debt Investments included in the calculated group as of the end of the applicable reporting period. For the three months ended March 31, 2020, our total return was (14.13)% and our total return without
assuming reinvestment of distributions was (14.13)%. For the year ended December 31, 2019, our total return was 2.96% and our total return without assuming reinvestment of distributions was 3.18%. See footnote 7 to the financial highlights
table included in Note 11 to our unaudited consolidated financial statements included herein for information regarding the calculation of our total return based on net asset value and total return based on net asset value without assuming
reinvestment of distributions.  73




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##### Table of Contents

Direct Originations The following table presents certain selected information regarding our direct originations as of March 31, 2020 and December 31, 2019:  Characteristics of All Direct Originations Held in Portfolio

March 31,2020


December 31,2019Number of Portfolio Companies


113



110% of Investments on Non-Accrual (based on fair value)


5.2
%


2.5
%Total Cost of Direct Originations

$
7,227


$
7,161Total Fair Value of Direct Originations

$
6,433


$
6,713% of Total Investments, at Fair Value


86.2
%


78.1
%Weighted Average Annual Yield on Accruing Debt Investments(1)


8.6
%


9.3
%Weighted Average Annual Yield on All Debt Investments(2)


7.0
%


8.5
%  (1)
The Weighted Average Annual Yield on Accruing Debt Investments is computed as (i) the sum of (a) the stated annual interest rate,
dividend rate or other similar stated return of each accruing Debt Investment, multiplied by its par amount, adjusted to U.S. dollars and for any partial income accrual when necessary, as of the end of the applicable reporting period, plus
(b) the annual amortization of the purchase or original issue discount or premium of each accruing Debt Investment; divided by (ii) the total amortized cost of Debt Investments included in the calculated group as of the end of the
applicable reporting period.  (2)
The Weighted Average Annual Yield on All Debt Investments is computed as (i) the sum of (a) the stated annual interest rate,
dividend rate or other similar stated return of each Debt Investment, multiplied by its par amount, adjusted to U.S. dollars and for any partial income accrual when necessary, as of the end of the applicable reporting period, plus (b) the
annual amortization of the purchase or original issue discount or premium of each Debt Investment; divided by (ii) the total amortized cost of Debt Investments included in the calculated group as of the end of the applicable reporting period. Portfolio Composition by Industry Classification See Note 6 to our unaudited consolidated financial statements included herein for additional information regarding the composition of our
investment portfolio by industry classification.  74




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##### Table of Contents

The table below describes investments by industry classification and enumerates the
percentage, by fair value, of the total portfolio assets in such industries as of March 31, 2020 and December 31, 2019:  March 31, 2020(Unaudited)


December 31, 2019Industry Classification

FairValue


Percentageof 
Portfolio


FairValue


Percentageof 
PortfolioAutomobiles & Components

$
52



1
%

$
182



2
%Capital Goods


961



13
%


1,139



13
%Commercial & Professional Services


769



10
%


861



10
%Consumer Durables & Apparel


351



5
%


302



3
%Consumer Services


308



4
%


548



6
%Credit Opportunities Partners, LLC


430



6
%


510



6
%Diversified Financials


596



8
%


402



5
%Energy


212



3
%


328



4
%Food & Staples Retailing


201



3
%


223



3
%Food, Beverage & Tobacco


120



1
%


132



2
%Health Care Equipment & Services


727



10
%


888



10
%Household & Personal Products


108



1
%


1



0
%Insurance


232



3
%


220



3
%Materials


134



2
%


354



4
%Media & Entertainment


335



4
%


409



5
%Pharmaceuticals, Biotechnology & Life Sciences


81



1
%


187



2
%Real Estate


210



3
%


122



1
%Retailing


349



4
%


435



5
%Semiconductors & Semiconductor Equipment










3



0
%Software & Services


875



12
%


874



10
%Technology Hardware & Equipment


138



2
%


174



2
%Telecommunication Services


137



2
%


154



2
%Transportation


138



2
%


143



2
%Total

$
7,464



100
%

$
8,591



100
% Portfolio Asset Quality In addition to various risk management and monitoring tools, the Advisor uses an investment rating system to characterize and monitor the expected level of returns on each investment in our portfolio. The
Advisor uses an investment rating scale of 1 to 4. The following is a description of the conditions associated with each investment rating:  InvestmentRating

Summary Description1

Performing investment-generally executing in accordance with plan and there are no concerns about the portfolio companys performance or ability to meet covenant
requirements.2

Performing investment-no concern about repayment of both interest and our cost basis but companys recent performance or trends in
the industry require closer monitoring.3

Underperforming investment-some loss of interest or dividend possible, but still expecting a positive return on investment.4

Underperforming investment-concerns about the recoverability of principal or interest.  75




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##### Table of Contents

The following table shows the distribution of our investments on the 1 to 4 investment
rating scale at fair value as of March 31, 2020 and December 31, 2019:  March 31, 2020


December 31, 2019Investment Rating

FairValue


Percentage ofPortfolio


FairValue


Percentage 
ofPortfolio1

$
4,357



58
%

$
5,299



62
%2


1,884



25
%


2,624



30
%3


797



11
%


356



4
%4


426



6
%


312



4
%Total

$
7,464



100
%

$
8,591



100
% The amount of the portfolio in each grading category may vary substantially from period to period
resulting primarily from changes in the composition of the portfolio as a result of new investment, repayment and exit activities. In addition, changes in the grade of investments may be made to reflect our expectation of performance and changes in
investment values. Results of Operations Comparison of the Three Months Ended March 31, 2020 and 2019 Revenues Our investment income for the three months ended March 31, 2020 and 2019 was as follows:  Three Months Ended March 31,2020


2019Amount


Percentage ofTotal Income


Amount


Percentage ofTotal IncomeInterest income

$
151



77
%

$
108



90
%Paid-in-kind interest income


14



7
%


5



4
%Fee income


15



8
%


7



6
%Dividend income


15



8
%


0



0
%Total investment income(1)

$
195



100
%

$
120



100
%  (1)
For the three months ended March 31, 2020 and 2019, such revenues represent $172 and $113, respectively, of cash income earned as well as
$23 and $7, respectively, in non-cash portions relating to accretion of discount and PIK interest. Cash flows related to such non-cash revenues may not occur for a
number of reporting periods or years after such revenues are recognized. The level of interest income we
receive is generally related to the balance of income-producing investments, multiplied by the weighted average yield of our investments. Fee income is transaction based and typically consists of prepayment fees and structuring fees. As such, fee
income is generally dependent on new direct origination investments and the occurrence of events at existing portfolio companies resulting in such fees. The increase in interest and fee income during the three months ended March 31, 2020 compared to the three months ended March 31, 2019 can primarily be attributed to the increase in assets
resulting from the Mergers. The increase in dividend income during the three months ended March 31, 2020 compared to the
three months ended March 31, 2019 was primarily due to dividends paid in respect to our investment in Credit Opportunities Partners, LLC.  76




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##### Table of Contents

Expenses Our operating expenses for the three months ended March 31, 2020 and 2019 were as follows:  Three Months Ended March 31,2020


2019Management fees

$
33


$
18Subordinated income incentive fees


23



11Administrative services expenses


2



1Stock transfer agent fees


1



1Accounting and administrative fees


1



0Interest expense


40



30Other


2



1Total operating expenses

$
102


$
62 The following table reflects selected expense ratios as a percent of average net assets for the three
months ended March 31, 2020 and 2019:  Three Months Ended March 31,2020


2019Ratio of operating expenses to average net assets


2.08
%


2.41
%Ratio of incentive fees and interest expense to average net assets(1)


1.28
%


1.59
%Ratio of net operating expenses, excluding certain expenses, to average net assets


0.80
%


0.82
%  (1)
Ratio data may be rounded in order to recompute the ending ratio of net operating expenses, excluding certain expenses, to average net assets. Incentive fees and interest expense, among other things, may increase or decrease our expense ratios
relative to comparative periods depending on portfolio performance and changes in amounts outstanding under our financing arrangements and benchmark interest rates such as LIBOR, among other factors. Net Investment Income Our net investment income totaled $93 ($0.14 per share) and $58 ($0.18 per share) for the three months ended March 31, 2020 and 2019,
respectively. The increase in net investment income for the three months ended March 31, 2020 can be attributed to the increase in interest income discussed above. Net Realized Gains or Losses Our net realized gains (losses) on
investments and foreign currency for the three months ended March 31, 2020 and 2019 were as follows:  Three Months Ended March 31,2020


2019Net realized gain (loss) on investments(1)

$
(217
)

$
(19
)Net realized gain (loss) on total return swap


(2
)


Net realized gain (loss) on foreign currency forward contracts


0



Net realized gain (loss) on interest rate swaps


(2
)


Net realized gain (loss) on foreign currency


1



0Total net realized gain (loss)

$
(220
)

$
(19
)  (1)
We sold investments and received principal repayments, respectively, of $953 and $760 during the three months ended March 31, 2020 and
$115 and $88 during the three months ended March 31, 2019.  77




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##### Table of Contents

Net Change in Unrealized Appreciation (Depreciation) Our net change in unrealized appreciation (depreciation) on investments and interest rate swaps and unrealized gain (loss) on foreign
currency for the three months ended March 31, 2020 and 2019 were as follows:  Three Months Ended March 31,2020


2019Net change in unrealized appreciation (depreciation) on investments

$
(605
)

$
37Net change in unrealized appreciation (depreciation) on total return swap


3



Net change in unrealized appreciation (depreciation) on foreign currency forward contracts


2



Net change in unrealized appreciation (depreciation) on interest rate swaps


(30
)


(4
)Net change in unrealized gain (loss) on foreign currency


49



(1
)Total net change in unrealized appreciation (depreciation)

$
(581
)

$
32 During the three months ended March 31, 2020, the net change in unrealized appreciation
(depreciation) was driven primarily by mark to market declines across the portfolio resulting from uncertainty related to the current COVID-19 pandemic. Net Increase (Decrease) in Net Assets Resulting from Operations For the
three months ended March 31, 2020, the net decrease in net assets resulting from operations was $(708) ($(1.04) per share) compared to a net increase in net assets resulting from operations of $71 ($0.22 per share) during the three months ended
March 31, 2019. This Results of Operations section should be read in conjunction with the COVID-19 Developments above. Financial Condition, Liquidity and Capital Resources Overview As of March 31, 2020, we had $232 in cash and foreign currency, which we and our wholly-owned financing subsidiaries held in
custodial accounts, and $1,556 in borrowings available under our financing arrangements, subject to borrowing base and other limitations. As of March 31, 2020, we also had broadly syndicated investments and opportunistic investments that could
be sold to create additional liquidity. As of March 31, 2020, we had unfunded debt investments with aggregate unfunded commitments of $376.0, unfunded equity/other commitments of $245.1, and unfunded commitments of $371.9 of Credit
Opportunities Partners, LLC. We maintain sufficient cash on hand, available borrowings and liquid securities to fund such unfunded commitments should the need arise. We currently generate cash primarily from cash flows from fees, interest and dividends earned from our investments as well as principal repayments and proceeds from sales of our investments. To seek to
enhance our returns, we also employ leverage as market conditions permit and at the discretion of the Advisor, but in no event will leverage employed exceed the maximum amount permitted by the 1940 Act. With certain limited exceptions, we are only
allowed to borrow amounts or issue debt securities if our asset coverage, as calculated pursuant to the 1940 Act, equals at least 200% immediately after such borrowing. The minimum asset coverage requirement applicable to BDCs under the 1940 Act,
however, is currently 150% provided that certain disclosure, approval and other requirements are met. We are currently seeking a vote from our stockholders to reduce the asset coverage ratio applicable to us to 150%, but we do not plan to hold a
stockholder vote on the proposal until after our common stock is listed on a national securities exchange, or a Listing. We have announced our intention to list our common stock on the New York Stock Exchange during the first half of 2020, which we
continue to evaluate, subject to market conditions and board approval. See Financing Arrangements. Prior to
investing in securities of portfolio companies, we invest the cash received from fees, interest and dividends earned from our investments and principal repayments and proceeds from sales of our investments primarily in cash, cash equivalents,
including money market funds, U.S. government securities, repurchase agreements and high-quality debt instruments maturing in one year or less from the time of investment, consistent with our BDC election and our election to be taxed as a RIC. This Financial Condition, Liquidity and Capital Resources section should be read in conjunction with COVID-19 Developments above.  78




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##### Table of Contents

Financing Arrangements The following table presents summary information with respect to our outstanding financing arrangements as of March 31, 2020:  Arrangement(1)

Type of Arrangement

Rate(1)

AmountOutstanding


AmountAvailable


MaturityDateSenior Secured Revolving Credit Facility(2)

Revolving Credit Facility

L+2.00% - 2.25%(3)

$
837
(4)

$
928


November 7, 2024Germantown Credit Facility(2)

Term Loan Credit Facility

L + 2.50%


300






December 15, 2020Darby Creek Credit Facility(2)

Revolving Credit Facility

L + 1.95%


220



30


February 26, 2024Dunlap Credit Facility(2)

Revolving Credit Facility

L + 2.00%


400



100


February 26, 2024Jefferson Square Credit Facility(2)

Revolving Credit Facility

L + 2.50%


320



80


July 15, 2022Juniata River Credit Facility(2)

Revolving Credit Facility

L + 2.45%


720



130


October 11, 2021Burholme Prime Brokerage Facility(2)

Prime Brokerage Facility

L + 1.25%


67



33


September 26, 
2020(5)Broomall Prime Brokerage Facility(2)

Prime Brokerage Facility

L + 1.25%


12



38


December 26, 
2020(6)Ambler Credit Facility(2)

Revolving Credit Facility

L + 2.25%


123



77


November 22, 2024Meadowbrook Run Credit Facility(2)

Revolving Credit Facility

L + 2.25%


160



140


November 22, 20244.250% Notes due 2025(7)

Unsecured Notes

4.250%


475






February 14, 2025Total






3,634



1,556Center City Total Return Swap

Total Return Swap

L + 1.55%

$



$



N/A(8)Cheltenham Total Return Swap

Total Return Swap

L + 1.60%

$



$



N/A(9)  (1)
LIBOR is subject to a 0% floor.  (2)
The carrying amount outstanding under the facility approximates its fair value.  (3)
The spread over LIBOR is determined by reference to the ratio of the value of the borrowing base to the aggregate amount of certain
outstanding indebtedness of the Company.  (4)
Amount includes borrowings in U.S. dollars, Euros, Canadian dollars, Australian dollars, and pounds sterling. Euro balance outstanding of
231 has been converted to U.S. dollars at an exchange rate of 1.00 to $1.10 as of March 31, 2020 to reflect total amount outstanding in U.S. dollars. Canadian dollar balance outstanding of CAD $148 has been converted to U.S. dollars
at an exchange rate of CAD $1.00 to $0.71 as of March 31, 2020 to reflect total amount outstanding in U.S. dollars. Australian dollar balance outstanding of AUD $245 has been converted to U.S. dollars at an exchange rate of AUD $1.00 to $0.61
as of March 31, 2020 to reflect total amount outstanding in U.S. dollars. Pounds sterling balance outstanding of £183 has been converted to U.S. dollars at an exchange rate of £1.00 to $1.25 as of March 31, 2020 to reflect
total amount outstanding in U.S. dollars.  (5)
The Burholme Prime Brokerage Facility generally is terminable upon 179 days notice by either party. As of March 31, 2020, neither
party had provided notice of its intent to terminate the facility.  (6)
The Broomall Prime Brokerage Facility generally is terminable upon 270 days notice by either party. As of March 31, 2020, neither
party had provided notice of its intent to terminate the facility.  (7)
As of March 31, 2020, the fair value of the 4.250% notes was approximately $366. The valuation is considered a Level 2 valuation
within the fair value hierarchy.  (8)
Center City Funding and Citibank mutually agreed to an orderly winddown of the TRS through purchases of all of the assets underlying the TRS.
Accordingly, the parties neither extended the optional termination date under the TRS past September 30, 2019 nor terminated the TRS on that date. The parties plan to terminate the TRS when all assets underlying the TRS have been purchased and
any remaining trades have been canceled. Center City Funding has not paid, nor will pay, any termination fee as a result of the orderly winddown and ultimate termination of the TRS.  (9)
Cheltenham Funding and Citibank mutually agreed to an orderly winddown of the TRS through purchases of all of the assets underlying the TRS.
Accordingly, the parties neither extended the optional termination date under the TRS past February 19, 2020 nor terminated the TRS on that date. The parties plan to terminate the TRS when all assets underlying the TRS have been purchased and any
remaining trades have been canceled. Center City Funding has not paid, nor will pay, any termination fee as a result of the orderly winddown and ultimate termination of the TRS.  79




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##### Table of Contents

See Note 9 to our unaudited consolidated financial statements included herein for
additional information regarding our financing arrangements. RIC Status and Distributions We have elected to be subject to tax as a RIC under Subchapter M of the Code. In order to qualify for RIC tax treatment, we must, among
other things, make distributions of an amount at least equal to 90% of our investment company taxable income, determined without regard to any deduction for distributions paid, each tax year. As long as the distributions are declared by the later of
the fifteenth day of the ninth month following the close of a tax year or the due date of the tax return for such tax year, including extensions, distributions paid up to twelve months after the current tax year can be carried back to the prior tax
year for determining the distributions paid in such tax year. We intend to make sufficient distributions to our stockholders to qualify for and maintain our RIC tax status each tax year. We are also subject to a 4% nondeductible federal excise tax
on certain undistributed income unless we make distributions in a timely manner to our stockholders generally of an amount at least equal to the sum of (1) 98% of our net ordinary income (taking into account certain deferrals and elections) for the
calendar year, (2) 98.2% of our capital gain net income, which is the excess of capital gains in excess of capital losses, or capital gain net income (adjusted for certain ordinary losses), for the
one-year period ending October 31 of that calendar year and (3) any net ordinary income and capital gain net income for the preceding years that were not distributed during such years and on which we
paid no U.S. federal income tax. Any distribution declared by us during October, November or December of any calendar year, payable to stockholders of record on a specified date in such a month and actually paid during January of the following
calendar year, will be treated as if it had been paid by us, as well as received by our stockholders, on December 31 of the calendar year in which the distribution was declared. We can offer no assurance that we will achieve results that will
permit us to pay any cash distributions. If we issue senior securities, we will be prohibited from making distributions if doing so causes us to fail to maintain the asset coverage ratios stipulated by the 1940 Act or if distributions are limited by
the terms of any of our borrowings. Subject to applicable legal restrictions and the sole discretion of our board of
directors, we intend to authorize, declare and pay regular cash distributions on a quarterly basis. We will calculate each stockholders specific distribution amount for the period using record and declaration dates and each stockholders
distributions will begin to accrue on the date that shares of our common stock are issued to such stockholder. From time to time, we may also pay special interim distributions in the form of cash or shares of our common stock at the discretion of
our board of directors. During certain periods, our distributions may exceed our earnings. As a result, it is possible that a
portion of the distributions we make may represent a return of capital. A return of capital generally is a return of a stockholders investment rather than a return of earnings or gains derived from our investment activities. Each year a
statement on Form 1099-DIV identifying the sources of the distributions will be mailed to our stockholders. No portion of the distributions paid during the three months ended March 31, 2020 or 2019
represented a return of capital. We intend to continue to make our regular distributions in the form of cash, out of assets
legally available for distribution, except for those stockholders who receive their distributions in the form of shares of our common stock under our distribution reinvestment plan. Any distributions reinvested under the plan will nevertheless
remain taxable to a U.S. stockholder. The following table reflects the cash distributions per share that we have declared on
our common stock during the three months ended March 31, 2020 and 2019:  DistributionFor the Three Months Ended

Per Share


AmountFiscal 2019March 31, 2019

$
0.1885


$
61Total

$
0.1885


$
61Fiscal 2020March 31, 2020

$
0.1500


$
102Total

$
0.1500


$
102 See Note 5 to our unaudited consolidated financial statements included herein for additional information
regarding our distributions.  80




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##### Table of Contents

Recent Developments On May 5, 2020, the Company entered into the Amendment. For additional discussion of the Amendment, see Note 12 to our unaudited consolidated financial statements included herein. Critical Accounting Policies Our financial statements are prepared in conformity with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting periods. Management has utilized available information, including our past history, industry standards and the current economic environment, among other factors, in
forming the estimates and judgments, giving due consideration to materiality. Actual results may differ from these estimates. In addition, other companies may utilize different estimates, which may impact the comparability of our results of
operations to those of companies in similar businesses. Understanding our accounting policies and the extent to which we use management judgment and estimates in applying these policies is integral to understanding our financial statements. We
describe our most significant accounting policies in Note 2. Summary of Significant Accounting Policies in our consolidated financial statements. Critical accounting policies are those that require the application of managements
most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and that may change in subsequent periods. We evaluate our critical accounting estimates and
judgments required by our policies on an ongoing basis and update them as necessary based on changing conditions. We have identified one of our accounting policies, valuation of portfolio investments, as critical because it involves significant
judgments and assumptions about highly complex and inherently uncertain matters, and the use of reasonably different estimates and assumptions could have a material impact on our reported results of operations or financial condition. As we execute
our operating plans, we will describe additional critical accounting policies in the notes to our future financial statements in addition to those discussed below. Valuation of Portfolio Investments We determine the net asset value of our
investment portfolio each quarter. Securities are valued at fair value as determined in good faith by our board of directors. In connection with that determination, the Advisor provides our board of directors with portfolio company valuations which
are based on relevant inputs, including, but not limited to, indicative dealer quotes, values of like securities, recent portfolio company financial statements and forecasts, and valuations prepared by independent third-party valuation services. Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosure, or ASC Topic 820, issued by the
FASB, clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. ASC Topic 820 defines fair
value as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 also establishes a three-tier fair value hierarchy,
which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, which includes inputs such as quoted prices for similar securities in
active markets and quoted prices for identical securities where there is little or no activity in the market; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its
own assumptions. With respect to investments for which market quotations are not readily available, we undertake a multi-step
valuation process each quarter, as described below:  

our quarterly fair valuation process begins by the Advisor providing financial and operating information with respect to each portfolio company or
investment to our independent third-party valuation service providers;  

our independent third-party valuation service providers review this information, along with other public and private information, and provide the
Advisor with a valuation range for each portfolio company or investment;  

the Advisor then discusses the independent third-party valuation service providers valuation ranges and provides the valuation committee of the
board of directors, or the valuation committee, with a valuation recommendation for each investment, along with supporting materials;  

preliminary valuations are then discussed with the valuation committee;  

our valuation committee reviews the preliminary valuations and the Advisor, together with our independent third-party valuation service providers and,
if applicable, supplements the preliminary valuations to reflect any comments provided by the valuation committee;  81




---

##### Table of Contents



following the completion of its review, our valuation committee recommends that our board of directors approves the fair valuations determined by the
valuation committee; and  

our board of directors discusses the valuations and determines the fair value of each such investment in our portfolio in good faith based on various
statistical and other factors, including the input and recommendation of the Advisor, the valuation committee and our independent third-party valuation service providers. Determination of fair value involves subjective judgments and estimates. Accordingly, the notes to our consolidated financial statements
refer to the uncertainty with respect to the possible effect of such valuations and any change in such valuations on our consolidated financial statements. In making its determination of fair value, our board of directors may use any approved
independent third-party pricing or valuation services. However, our board of directors is not required to determine fair value in accordance with the valuation provided by any single source, and may use any relevant data, including information
obtained from the Advisor or any approved independent third-party valuation or pricing service that our board of directors deems to be reliable in determining fair value under the circumstances. Below is a description of factors that the Advisor,
any approved independent third party valuation services and our board of directors may consider when determining the fair value of our investments. Valuation of fixed income investments, such as loans and debt securities, depends upon a number of factors, including prevailing interest rates for like securities, expected volatility in future interest
rates, call features, put features and other relevant terms of the debt. For investments without readily available market prices, we may incorporate these factors into discounted cash flow models to arrive at fair value. Other factors that may be
considered include the borrowers ability to adequately service its debt, the fair market value of the borrower in relation to the face amount of its outstanding debt and the quality of collateral securing our debt investments. For convertible debt securities, fair value generally approximates the fair value of the debt plus the fair value of an option to purchase
the underlying security (i.e., the security into which the debt may convert) at the conversion price. To value such an option, a standard option pricing model may be used. Our equity interests in portfolio companies for which there is no liquid public market are valued at fair value. Our board of directors, in its determination of fair value, may consider various factors,
such as multiples of EBITDA, cash flows, net income, revenues or, in limited instances, book value or liquidation value. All of these factors may be subject to adjustments based upon the particular circumstances of a portfolio company or our actual
investment position. For example, adjustments to EBITDA may take into account compensation to previous owners or acquisition, recapitalization, restructuring or other related items. The Advisor, any approved independent third-party valuation services and our board of directors may also consider private merger and
acquisition statistics, public trading multiples discounted for illiquidity and other factors, valuations implied by third-party investments in the portfolio companies or industry practices in determining fair value. The Advisor, any approved
independent third-party valuation services and our board of directors may also consider the size and scope of a portfolio company and its specific strengths and weaknesses, and may apply discounts or premiums, where and as appropriate, due to the
higher (or lower) financial risk and/or the smaller size of portfolio companies relative to comparable firms, as well as such other factors as our board of directors, in consultation with the Advisor and any approved independent third party
valuation services, if applicable, may consider relevant in assessing fair value. Generally, the value of our equity interests in public companies for which market quotations are readily available is based upon the most recent closing public market
price. Portfolio securities that carry certain restrictions on sale are typically valued at a discount from the public market value of the security. When we receive warrants or other equity securities at nominal or no additional cost in connection with an investment in a debt security, the cost basis in the investment will be allocated between the
debt securities and any such warrants or other equity securities received at the time of origination. Our board of directors subsequently values these warrants or other equity securities received at their fair value. The fair values of our investments are determined in good faith by our board of directors. Our board of directors is responsible for the
valuation of our portfolio investments at fair value as determined in good faith pursuant to our valuation policy and consistently applied valuation process. Our board of directors has delegated day-to-day responsibility for implementing our valuation policy to the Advisor, and has authorized the Advisor to utilize independent third-party valuation and pricing services that have been approved by our
board of directors. The valuation committee is responsible for overseeing the Advisors implementation of the valuation process. See Note 8 to our unaudited consolidated financial statements included herein for additional information regarding the fair value of our financial instruments.  82




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##### Table of Contents

Contractual Obligations We have entered into agreements with the Advisor to provide us with investment advisory and administrative services. Payments for investment advisory services under the investment advisory agreement are
equal to (a) an annual base management fee based on the average weekly value of our gross assets (excluding cash and cash equivalents) and (b) an incentive fee based on our performance. The Advisor is reimbursed for administrative expenses
incurred on our behalf. See Note 4 to our unaudited consolidated financial statements included herein for a discussion of these agreements and for the amount of fees and expenses accrued under these agreements during the three months ended
March 31, 2020 and 2019. A summary of our significant contractual payment obligations for the repayment of outstanding
indebtedness at March 31, 2020 is as follows:  Payments Due By PeriodMaturity Date(1)

Total

Less than 1 year


1-3 years


3-5 years

More than 5yearsSenior Secured Revolving Credit Facility(2)

November 7, 2024

$837









$837

Germantown Credit Facility(3)

December 15, 2020

$300

$
300








Darby Creek Credit Facility(4)

February 26, 2024

$220









$220

Dunlap Credit Facility(5)

February 26, 2024

$400









$400

Jefferson Square Credit Facility(6)

July 15, 2022

$320





$
320




Juniata River Credit Facility(7)

October 11, 2021

$720





$
720




Burholme Prime Brokerage Facility(8)

September 26, 2020

$67

$
67








Broomall Prime Brokerage Facility(9)

December 26, 2020

$12

$
12








Ambler Credit Facility(10)

November 22, 2024

$123









$123

Meadowbrook Run Credit Facility(11)

November 22, 2024

$160









$160

4.250% Notes due 2025

February 14, 2025

$475









$475

  (1)
Amounts outstanding under the financing arrangements will mature, and all accrued and unpaid interest thereunder will be due and payable, on
the maturity date.  (2)
At March 31, 2020, $928 remained unused under the Senior Secured Revolving Credit Facility. Amount includes borrowings in U.S. dollars,
Euros, Canadian dollars, Australian dollars, and pounds sterling. Euro balance outstanding of 231 has been converted to U.S. dollars at an exchange rate of 1.00 to $1.10 as of March 31, 2020 to reflect total amount outstanding in
U.S. dollars. Canadian dollar balance outstanding of CAD $148 has been converted to U.S. dollars at an exchange rate of CAD $1.00 to $0.71 as of March 31, 2020 to reflect total amount outstanding in U.S. dollars. Australian dollar balance
outstanding of AUD $245 has been converted to U.S. dollars at an exchange rate of AUD $1.00 to $0.61 as of March 31, 2020 to reflect total amount outstanding in U.S. dollars. Pounds sterling balance outstanding of £183 has been converted
to U.S. dollars at an exchange rate of £1.00 to $1.25 as of March 31, 2020 to reflect total amount outstanding in U.S. dollars.  (3)
At March 31, 2020, no amounts remained unused under the financing arrangement.  (4)
At March 31, 2020, $30 remained unused under the Darby Creek Credit Facility.  (5)
At March 31, 2020, $100 remained unused under the Dunlap Credit Facility.  (6)
At March 31, 2020, $80 remained unused under the Jefferson Square Credit Facility.  (7)
At March 31, 2020, $130 remained unused under the Juniata River Credit Facility.  (8)
At March 31, 2020, $33 remained unused under the Burholme Prime Brokerage Facility.  (9)
At March 31, 2020, $38 remained unused under the Broomall Prime Brokerage Facility.  (10)
At March 31, 2020, $77 remained unused under the Ambler Credit Facility.  (11)
At March 31, 2020, $140 remained unused under the Meadowbrook Run Credit Facility. Off-Balance Sheet Arrangements We currently have no off-balance sheet arrangements, including any risk management of commodity pricing or other hedging practices.  83




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##### Table of Contents

Item 3.
Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Risk We are subject to financial market risks, including
changes in interest rates. As of March 31, 2020, 71.5% of our portfolio investments (based on fair value) were debt investments paying variable interest rates and 12.0% were debt investments paying fixed interest rates, while 7.0% were other
income producing investments, 3.8% consisted of non-income producing investments and the remaining 5.7% consisted of investments on non-accrual status. A rise in the
general level of interest rates can be expected to lead to higher interest rates applicable to any variable rate investments we hold and to declines in the value of any fixed rate investments we hold. However, many of our variable rate investments
provide for an interest rate floor, which may prevent our interest income from increasing until benchmark interest rates increase beyond a threshold amount. To the extent that a substantial portion of our investments may be in variable rate
investments, an increase in interest rates beyond this threshold would make it easier for us to meet or exceed the hurdle rate applicable to the subordinated incentive fee on income, and may result in a substantial increase in our net investment
income and to the amount of incentive fees payable to the Advisor with respect to our increased pre-incentive fee net investment income. In recent weeks, the U.S. Federal Reserve and other central banks have
reduced certain interest rates in response to the COVID-19 pandemic and market conditions. A prolonged reduction in interest rates may reduce our net investment income. Subject to the requirements of the 1940 Act, we may hedge against interest rate fluctuations by using standard hedging instruments such as
futures, options and forward contracts. Although hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in the benefits of lower interest rates. As of March 31, 2020, we have
four pay-fixed, receive-floating interest rate swaps which we pay an annual fixed rate of 2.59% to 2.81% and receive three-month LIBOR on an aggregate notional amount of $900 million. The interest rate
swaps have quarterly settlement payments. Pursuant to the terms of all of our financing arrangements, borrowings are at a
floating rate based on LIBOR. To the extent that any present or future credit facilities, total return swap agreements or other financing arrangements that we or any of our subsidiaries enter into are based on a floating interest rate, we will be
subject to risks relating to changes in market interest rates. In periods of rising interest rates when we or our subsidiaries have such debt outstanding or financing arrangements in effect, our interest expense would increase, which could reduce
our net investment income, especially to the extent we hold fixed rate investments. The following table shows the effect over
a twelve month period of changes in interest rates on our interest income, interest expense and net interest income, assuming no changes in the composition of our investment portfolio, including the accrual status of our investments, and our
financing arrangements in effect as of March 31, 2020 (dollar amounts are presented in millions):  Basis Point Change in Interest Rates

Increase(Decrease)in InterestIncome(1)


Increase(Decrease)in InterestExpense


Increase(Decrease) 
inNet InterestIncome


PercentageChange in 
NetInterest IncomeDown 100 basis points

$
(27
)

$
(31
)

$
4



0.9
%No change














Up 100 basis points

$
54


$
31


$
23



5.1
%Up 300 basis points

$
166


$
92


$
74



16.1
%Up 500 basis points

$
280


$
153


$
127



27.6
%  (1)
Assumes no defaults or prepayments by portfolio companies over the next twelve months. We expect that our long-term investments will be financed primarily with equity and debt. If deemed prudent, we may use interest rate risk
management techniques in an effort to minimize our exposure to interest rate fluctuations. These techniques may include various interest rate hedging activities to the extent permitted by the 1940 Act. Adverse developments resulting from changes in
interest rates or hedging transactions could have a material adverse effect on our business, financial condition and results of operations. Foreign Currency Risk From time to time, we may make investments that are denominated in a foreign currency that are subject to the effects of exchange rate
movements between the foreign currency of each such investment and the U.S. dollar, which may affect future fair values and cash flows, as well as amounts translated into U.S. dollars for inclusion in our consolidated financial statements. The table below presents the effect that a 10% immediate, unfavorable change in the foreign currency exchange rates (i.e.
strengthening of the U.S. dollar) would have on the fair value of our investments denominated in foreign currencies as of  84




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##### Table of Contents

March 31, 2020, by foreign currency, all other valuation assumptions remaining constant. In addition, the table below presents the par value of our investments denominated in foreign
currencies and the notional amount of foreign currency forward contracts in local currency in place as of March 31, 2020 to hedge against foreign currency risks.  Investments Denominated in Foreign Currencies As ofMarch 31, 2020


Hedges As of March 31, 2020Cost in LocalCurrency


Costin US$


FairValue


Reduction in FairValue as ofMarch 31, 2020 if10% AdverseChange
inExchange Rate(1)


Net ForeignCurrency HedgeAmount inLocal Currency


Net ForeignCurrency HedgeAmount in U.S.DollarsAustralian Dollars

A$
152.6


$
105.0


$
90.0


$
9.0


A$
6.8


$
4.6British Pound Sterling

£
138.7



178.9



165.5



16.6


£
0.4



0.5Canadian Dollars

C$
118.9



89.4



77.5



7.8


C$




Euros


135.8



136.6



129.9



13.0



5.7



6.4Total





$
509.9


$
462.9


$
46.4






$
11.5  (1)
Excludes effect, if any, of any foreign currency hedges. As illustrated in the table above, we use derivative instruments from time to time, including foreign currency forward contracts, to
manage the impact of fluctuations in foreign currency exchange rates. In addition, we have the ability to borrow in foreign currencies under our Senior Secured Revolving Credit Facility, which provides a natural hedge with regard to changes in
exchange rates between the foreign currencies and the U.S. dollar and reduces our exposure to foreign exchange rate differences. We are typically a net receiver of these foreign currencies as related to our international investment positions, and,
as a result, our investments denominated in foreign currencies, to the extent not hedged, benefit from a weaker U.S. dollar and are adversely affected by a stronger U.S. dollar. As of March 31, 2020, the net contractual amount of our foreign currency forward contracts totaled $11.5, all of which related to the
hedging of our foreign currency denominated debt investments. As of March 31, 2020, we had outstanding borrowings denominated in foreign currencies of 231, CAD $148, £183 and A$245 under our Senior Secured Revolving Credit Facility. In addition, we may have risk regarding portfolio valuation. See Item 2. Managements Discussion and Analysis of
Financial Condition and Results of OperationsCritical Accounting PoliciesValuation of Portfolio Investments.  Item 4.
Controls and Procedures. Evaluation of Disclosure Controls and Procedures As required by Rule 13a-15(b) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the
effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2020. Based on the
foregoing, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that we would meet our disclosure obligations. Changes in Internal Control Over Financial Reporting There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f)
promulgated under the Exchange Act) that occurred during the three-month period ended March 31, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  85




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##### Table of Contents

PART IIOTHER INFORMATION  Item 1.
Legal Proceedings. We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. From time to time, we may be party to certain legal
proceedings in the ordinary course of business, including proceedings relating to the enforcement of our rights under contracts with our portfolio companies. While the outcome of any legal proceedings cannot be predicted with certainty, we do not
expect that these proceedings will have a material adverse effect upon our financial condition or results of operations.  Item 1A.
Risk Factors. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors that appeared under Item 1A.
Risk Factors in our most recent Annual Report on Form 10-K. There are no material changes from the risk factors included within our most recent Annual Report on Form
10-K other than the risks described below. Events outside of our control, including public
health crises, could negatively affect our portfolio companies and our results of operations. Periods of market
volatility have occurred and could continue to occur in response to pandemics or other events outside of our control. These types of events have adversely affected, and could continue to adversely affect operating results for us and for our
portfolio companies. For example, the COVID-19 pandemic has resulted in the following in many affected jurisdictions, including the United States: (i) restrictions on travel and the temporary
closure of many corporate offices, retail stores, and manufacturing facilities and factories, resulting in significant disruption to the business of many companies, (ii) increased defaults by borrowers, (iii) volatility in credit markets
and (iv) rapidly evolving action by government officials to address the economic and market problems. In addition to these developments having adverse consequences for us and our portfolio companies, the operations of the Advisor have been, and
could continue to be, adversely impacted, including through quarantine measures and travel restrictions imposed on its personnel or service providers based or temporarily located in affected countries, or any related health issues of such personnel
or service providers. As the potential impact of COVID-19 is difficult to
predict, the extent to which COVID-19 could negatively affect our and our portfolio companies operating results or the duration of any potential business or supply-chain disruption is
uncertain. Any potential impact to our results of operations will depend to a large extent on future developments and new information that could emerge regarding the duration and severity of
the COVID-19 pandemic and the actions taken by authorities and other entities to contain the spread of COVID-19 or treat its impact, all of which are
beyond our control. These potential impacts, while uncertain, could adversely affect our and our portfolio companies operating results. We are currently operating in a period of capital markets disruption and economic uncertainty. The U.S. capital markets have experienced extreme volatility and disruption following the global outbreak
of COVID-19 that began in December 2019. Some economists and major investment banks have expressed concern that the continued spread of the virus globally could lead to a world-wide economic
downturn. Disruptions in the capital markets have increased the spread between the yields realized on risk-free and higher risk securities, resulting in illiquidity in parts of the capital markets. These and future market disruptions and/or
illiquidity would be expected to have an adverse effect on our business, financial condition, results of operations and cash flows. Unfavorable economic conditions also would be expected to increase our funding costs, limit our access to the capital
markets or result in a decision by lenders not to extend credit to us. These events have limited and could continue to limit our investment originations, limit our ability to grow and have a material negative impact on our operating results and the
fair values of our debt and equity investments. If the current period of capital market disruption and instability continues for an
extended period of time, there is a risk that investors in our equity securities may not receive distributions consistent with historical levels or at all or that our distributions may not grow over time and a portion of our distributions may be a
return of capital. As announced, our next quarterly distribution to stockholders has been reduced to $0.15 per share.
Our ability to pay reduced distributions, to resume paying distributions consistent with our historical range or to continue to pay our distribution fully in cash rather than shares of common stock might be adversely affected by the impact of one or
more of the risk factors described in this Quarterly Report on Form 10-Q and in our most recent Annual Report on Form 10-K, including the COVID-19 pandemic described above. If we are unable to satisfy the asset coverage test applicable to us under the 1940 Act as a business development company or if we violate certain covenants under our
existing or future credit facilities or other  86




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##### Table of Contents

leverage, we mayalso be limited in our ability to make distributions. If we declare a distribution and if more stockholders opt to receive cash distributions rather than participate in
our dividend reinvestment plan, we may be forced to sell some of our investments in order to make cash distribution payments. To the extent we make distributions to stockholders that include a return of capital, such portion of the distribution
essentially constitutes a return of the stockholders investment. Although such return of capital may not be taxable, such distributions would generally decrease a stockholders basis in our common stock and may therefore increase such
stockholders tax liability for capital gains upon the future sale of such stock. A return of capital distribution may cause a stockholder to recognize a capital gain from the sale of our common stock even if the stockholder sells its shares
for less than the original purchase price.  Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds. Not applicable.  Item 3.
Defaults upon Senior Securities. Not applicable.  Item 4.
Mine Safety Disclosures. Not applicable.  Item 5.
Other Information. Not applicable.




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##### Table of Contents

Item 6.
Exhibits.  2.1

Agreement and Plan of Merger, dated as of May 
31, 2019, by and among FS Investment Corporation II, Corporate Capital Trust II, FS Investment Corporation III, FS Investment Corporation IV, NT Acquisition 1, Inc., NT Acquisition 
2, Inc., NT Acquisition 3, Inc. and FS/KKR Advisor, LLC. (Incorporated by reference to Exhibit 2.1 to the Companys Current Report on Form 8-K filed on June 3, 2019.)3.1

Second Articles of Amendment and Restatement of the Company. (Incorporated by reference to
 Exhibit 3.1 to the Companys Current Report on Form 8-K filed on December 18, 2019.)3.2

Articles of Amendment. (Incorporated by reference to Exhibit 3.2 to the Companys Current
 Report on Form 8-K filed on December 18, 2019.)3.3

Articles of Amendment. (Incorporated by reference to Exhibit 3.3 to the Companys Current
 Report on Form 8-K filed on December 18, 2019.)3.4

Third Amended and Restated Bylaws of the Company. (Incorporated by reference to Exhibit 3.2 to the
 Companys Current Report on Form 8-K filed on June 13, 2017.)3.5

Amendment No. 1 to the Third Amended and Restated Bylaws of the Company. (Incorporated by reference
 to Exhibit 3.1 to the Companys Current Report on Form 8-K filed on June 3, 2019.)4.1

Amended and Restated Distribution Reinvestment Plan of the Company, effective as of March
 26, 2014. (Incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed on February 24, 2014.)4.2

Indenture, dated as of February 
14, 2020, by and between the Company and U.S. Bank National Association, as trustee. (Incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed on February 
14, 2020.)4.3

First Supplemental Indenture, dated as of February 
14, 2020, relating to the 4.250% Notes due 2025, by and between the Company and U.S. Bank National Association, as trustee. (Incorporated by reference to Exhibit 4.2 to the Companys Current Report on Form 8-K filed
 on February 14, 2020.)4.4

Form of 4.250% Notes due 2025. (Included as Exhibit A to the First Supplemental Indenture in
 Exhibit 4.3). (Incorporated by reference to Exhibit 4.2 to the Companys Current Report on Form 8-K filed on February 14, 2020.)10.1

Amended and Restated Investment Advisory Agreement, dated as of December 
18, 2019, by and between the Company and FS/KKR Advisor, LLC. (Incorporated by reference to Exhibit 10.1 to the Registrants Current Report on Form 8-K filed on December 18,
2019.)10.2

Administration Agreement, dated as of December 
18, 2019, by and between the Company and FS/KKR Advisor, LLC. (Incorporated by reference to Exhibit 10.2 to the Registrants Current Report on Form 8-K filed on December 18,
2019.)10.3

Custodian Agreement, dated as of February 
8, 2012, by and between the Company and State Street Bank and Trust Company. (Incorporated by reference to Exhibit (j) filed with Pre-Effective Amendment No. 
3 to the Companys registration statement on Form N-2 (File No.333-175654) filed on February 10, 2012.)10.4

Loan Financing and Servicing Agreement, dated as of February 
20, 2014, by and among Darby Creek LLC, as borrower, Deutsche Bank AG, New York Branch, as administrative agent, Wells Fargo Bank, National Association, as collateral agent and collateral custodian, and the other lenders and lender agents from time to time
 party thereto. (Incorporated by reference to Exhibit 10.5 to the Companys Current Report on Form 8-K filed on February 25, 2014.)10.5

Amendment No. 
1 to Loan Financing and Servicing Agreement, dated as of January 
12, 2015, by and among Darby Creek LLC, as borrower, Deutsche Bank AG, New York Branch, as administrative agent, Wells Fargo Bank, National Association, as collateral agent and collateral custodian, and the other lenders and lender agents from time to time
 party thereto. (Incorporated by reference to Exhibit 10.27 to the Companys Annual Report on Form 10-K filed on March 25, 2016.)10.6

Amendment No. 
2 to Loan Financing and Servicing Agreement, dated as of February 
3, 2015, by and among Darby Creek LLC, as borrower, Deutsche Bank AG, New York Branch, as administrative agent, Wells Fargo Bank, National Association, as collateral agent and collateral custodian, and the other lenders and lender agents from time to time
party thereto. (Incorporated by reference to Exhibit 10.28 to the Companys Annual Report on Form 10-K filed on March 25,
2016.)  88




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##### Table of Contents

10.7

Amendment No. 
3 to Loan Financing and Servicing Agreement, dated as of May 
7, 2015, by and among Darby Creek LLC, as borrower, Deutsche Bank AG, New York Branch, as administrative agent, Wells Fargo Bank, National Association, as collateral agent and collateral custodian, and the other lenders and lender agents from time to time
party thereto. (Incorporated by reference to Exhibit 10.29 to the Companys Annual Report on Form 10-K filed on March 25, 2016.)10.8

Amendment No. 
4 to Loan Financing and Servicing Agreement, dated as of October 
8, 2015, by and among Darby Creek LLC, as borrower, Deutsche Bank AG, New York Branch, as administrative agent, Wells Fargo Bank, National Association, as collateral agent and collateral custodian, and the other lenders and lender agents from time to time
party thereto. (Incorporated by reference to Exhibit 10.30 to the Companys Annual Report on Form 10-K filed on March 25, 2016.)10.9

Amendment No. 
6 to Loan Financing and Servicing Agreement, dated as of August 
19, 2016, by and among Darby Creek LLC, as borrower, Deutsche Bank AG, New York Branch, as administrative agent, Wells Fargo Bank, National Association, as collateral agent and collateral custodian, and the other lenders and lender agents from time to time
 party thereto. (Incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on August 22, 2016.)10.10

Amendment No. 
7 to Loan Financing and Servicing Agreement, dated as of February 
15, 2019, by and among Darby Creek LLC, as borrower, Deutsche Bank AG, New York Branch, as administrative agent, Wells Fargo Bank, National Association, as collateral agent and collateral custodian, and the other lenders and lender agents from time to time
 party thereto. (Incorporated by reference to Exhibit 10.16 to the Companys Quarterly Report on Form 10-K filed on March 19, 2019.)10.11

Omnibus Amendment, dated as of February 
20, 2019, between Darby Creek LLC, as borrower, Deutsche Bank AG, New York Branch, as facility agent, each lender party thereto, each agent party thereto, and Wells Fargo Bank, National Association, as collateral agent and collateral custodian. (Incorporated
 by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on February 25, 2019.)10.12

Amended and Restated Loan and Security Agreement, dated as of March 
13, 2019, by and between Juniata River LLC, as borrower, JPMorgan Chase Bank, National Association, as administrative agent, the lenders party thereto, and Wells Fargo Bank, National Association, as collateral administrator, collateral agent and securities
 intermediary. (Incorporated by reference to Exhibit 10.20 to the Companys Quarterly Report on Form 10-K filed on March 19, 2019.)10.13

First Amendment to Amended and Restated Loan Agreement, dated as of October 
11, 2019, among Juniata River LLC, JPMorgan Chase Bank, National Association, as lender and Administrative Agent, Wells Fargo Bank, National Association, as Collateral Agent, Collateral Administrator and Securities Intermediary, and FS Investment Corporation II,
 as Investment Manager. (Incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on October 15, 2019.)10.14

Amended and Restated Senior Secured Revolving Credit Agreement, dated as of November 7,
 2019, by and among FS KKR Capital Corp., FS Investment Corporation II, and FS Investment Corporation III, as borrowers, JPMorgan Chase Bank, N.A., as administrative agent, ING Capital LLC, as collateral agent, and the lenders, documentation
agents, joint bookrunners, and joint lead arrangers party thereto. (Incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on November 13,
2019.)10.15*

Commitment Increase Letter, dated as of March 3, 2020, among BNP Paribas, ING Capital LLC, the Company, FS 
KKR Capital Corp. and JPMorgan Chase Bank, N.A., as administrative agent.10.16

Amendment No. 
1 to Amended and Restated Senior Secured Revolving Credit Agreement, dated as of May 
5, 2020, by and among the Company, FS KKR Capital Corp., JPMorgan Chase Bank, N.A., as administrative agent, ING Capital LLC, as collateral agent, and the lenders party thereto. (Incorporated by reference to Exhibit 10.1 to the Companys Current Report
on Form 8-K filed on May 8, 2020.)10.17

Credit Agreement, dated as of July 
10, 2019, among Germantown Funding LLC, Goldman Sachs Bank USA, as lender, sole lead arranger, administrative agent and calculation agent, and Wells Fargo Bank, National Association, as collateral agent and collateral administrator.(Incorporated by reference to Exhibit 10.1 to FS Investment Corporation IIIs Current Report on Form8-K filed on July 16,
2019).  89




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##### Table of Contents

10.18

Amendment No. 1 to Credit Agreement, dated as of December 
13, 2019, among Germantown Funding LLC, as borrower, FS Investment Corporation III, as equity owner and investment manager, Goldman Sachs Bank USA, as sole lead arranger, sole lender, and administrative agent, and Wells Fargo Bank, National Association,
 as collateral administrator and collateral agent. (Incorporated by reference to Exhibit 10.1 to FS Investment Corporation IIIs Current Report on Form8-K filed on
December 17, 2019).10.19

Loan Financing and Servicing Agreement, dated as of December 
2, 2014, by and among Dunlap Funding LLC, as borrower, Deutsche Bank AG, New York Branch, as administrative agent, Wells Fargo Bank, National Association, as collateral agent and collateral custodian, and the other lenders and lender agents from time to
time party thereto. (Incorporated by reference to Exhibit 10.1 to FS Investment Corporation IIIs Current Report on Form 8-K filed on December 8, 2014).10.20

Amendment No. 1 to Loan Financing and Servicing Agreement, dated as of February 
24, 2015, between Dunlap Funding LLC, as borrower, and Deutsche Bank AG, New York Branch, as administrative agent. (Incorporated by reference to Exhibit 10.1 to FS Investment Corporation IIIs Current Report on Form 8-K filed on March 2, 2015).10.21

Amendment No. 2 to Loan Financing and Servicing Agreement, dated as of March 
24, 2015, between Dunlap Funding LLC, as borrower, and Deutsche Bank AG, New York Branch, as administrative agent. (Incorporated by reference to Exhibit 10.1 to FS Investment Corporation IIIs Current Report on Form 8-K filed on March 26, 2015).10.22

Amendment No. 
3 to Loan Financing and Servicing Agreement, dated as of August 
25, 2015, between Dunlap Funding LLC, as borrower, and Deutsche Bank AG, New York Branch, as administrative agent. (Incorporated by reference to Exhibit 10.29 to FS Investment Corporation IIIs Annual Report on Form10-K filed on March 11, 2016).10.23

Amendment No. 4 to Loan Financing and Servicing Agreement, dated as of September 
22, 2015, between Dunlap Funding LLC, as borrower, and Deutsche Bank AG, New York Branch, as administrative agent. (Incorporated by reference to Exhibit 10.1 to FS Investment Corporation IIIs Current Report on Form 8-K filed on September 24, 2015).10.24

Amendment No. 
5 to Loan Financing and Servicing Agreement, dated as of October 
8, 2015, between Dunlap Funding LLC, as borrower, and Deutsche Bank AG, New York Branch, as administrative agent. (Incorporated by reference to Exhibit 10.31 to FS Investment Corporation IIIs Annual Report on Form 10-K for the fiscal year ended December 31, 2015 filed on March 11, 2016).10.25

Amendment No. 7 to Loan Financing and Servicing Agreement, dated as of January 
12, 2017, between Dunlap Funding LLC, as borrower, Deutsche Bank AG, New York Branch, as administrative agent, each lender party thereto, and Wells Fargo Bank, National Association, as collateral agent and collateral custodian. (Incorporated by reference
 to Exhibit 10.1 to the FS Investment Corporation IIIs Current Report on Form 8-K filed on January 19, 2017).10.26

Amendment No. 8 to Loan Financing and Servicing Agreement, dated as of April 
5, 2017, between Dunlap Funding LLC, as borrower, Deutsche Bank AG, New York Branch, as administrative agent, each lender party thereto, and Wells Fargo Bank, National Association, as collateral agent and collateral custodian. 
(Incorporated by reference to Exhibit 10.37 to FS Investment Corporation IIIs Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017 filed on May 10,
2017).10.27

Amendment No. 9 to Loan Financing and Servicing Agreement, dated as of March 
12, 2018, between Dunlap Funding LLC, as borrower, Deutsche Bank AG, New York Branch, as facility agent (formerly administrative agent), each lender party thereto, and Wells Fargo, National Association, as collateral agent and collateral custodian. (Incorporated
 by reference to Exhibit 10.1 to FS Investment Corporation IIIs Current Report on Form 8-K filed on March 15, 2018).10.28

Amendment No. 
10 to Loan Financing and Servicing Agreement, dated as of June 
20, 2018, among Dunlap Funding LLC, as borrower, Deutsche Bank AG, New York Branch, as facility agent (formerly administrative agent), each lender party thereto, each agent party thereto, and Wells Fargo Bank, National Association, as collateral agent and
 collateral custodian. (Incorporated by reference to Exhibit 10.48 to FS Investment Corporation IIIs Quarterly Report on Form10-Q filed on August 14,
2018).10.29

Waiver, Assignment and Amendment No. 
11 to Loan Financing and Servicing Agreement, dated as of September 
17, 2018, among Dunlap Funding LLC, as borrower, Deutsche Bank AG, New York Branch, as facility agent (formerly administrative agent), each lender party thereto, each agent party thereto, and Wells Fargo Bank, National Association, as collateral agent and
 collateral custodian. (Incorporated by reference to Exhibit 10.46 to FS Investment Corporation IIIs Quarterly Report on Form10-Q filed on
November 14, 2018).  90




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##### Table of Contents

10.30

Amendment No. 
12 to Loan Financing and Servicing Agreement, dated as of December 
21, 2018, among Dunlap Funding LLC, as borrower, Deutsche Bank AG, New York Branch, as facility agent, each lender party thereto, each agent party thereto, and Wells Fargo Bank, National Association, as collateral agent and collateral custodian. (Incorporated
 by reference to Exhibit 10.43 to FS Investment Corporation IIIs Annual Report on Form10-K filed on March 19, 2019).10.31

Omnibus Amendment, dated as of February 
19, 2019, between Dunlap Funding LLC, as borrower, Deutsche Bank AG, New York Branch, as facility agent, each lender party thereto, each agent party thereto, and Wells Fargo Bank, National Association, as collateral agent and collateral custodian. (Incorporated
 by reference to Exhibit 10.1 to FS Investment Corporation IIIs Current Report on Form8-K filed on February 25, 2019).10.32

Second Amended and Restated Loan and Security Agreement, dated as of March 4,
 2019, by and between Jefferson Square Funding LLC, as borrower, JPMorgan Chase Bank, National Association, as administrative agent, the lenders party thereto, and Wells Fargo Bank, National Association, as collateral administrator, collateral agent
and securities intermediary party thereto. (Incorporated by reference to Exhibit 10.49 to FS Investment Corporation IIIs Annual Report on Form10-K filed on
March 19, 2019).10.33

Committed Facility Agreement, dated as of October 
17, 2014, by and between Burholme Funding LLC and BNP Paribas Prime Brokerage, Inc., on behalf of itself and as agent for the BNPP Entities. (Incorporated by reference to Exhibit 10.1 to FS Investment Corporation IIIs Current Report on Form 8-K filed on October 23, 2014).10.34

U.S. PB Agreement, dated as of October 
17, 2014, by and between Burholme Funding LLC and BNP Paribas Prime Brokerage, Inc., on behalf of itself and as agent for the BNPP Entities. (Incorporated by reference to Exhibit 10.2 to FS Investment Corporation IIIs Current Report on Form 8-K filed on October 23, 2014).10.35

Special Custody and Pledge Agreement, dated as of October 
17, 2014, by and among Burholme Funding LLC, BNP Paribas Prime Brokerage, Inc. and State Street Bank and Trust Company, as custodian. (Incorporated by reference to Exhibit 10.3 to FS Investment Corporation IIIs Current Report on Form8-K filed on October 23, 2014).10.36

First Amendment Agreement, dated as of March 
11, 2015, to the Committed Facility Agreement, dated as of October 
17, 2014, between BNP Paribas Prime Brokerage, Inc., on behalf of itself and as agent for the BNPP Entities, and Burholme Funding LLC. (Incorporated by reference to Exhibit 10.1 to FS Investment Corporation IIIs Current Report on Form 8-K filed on March 13, 2015).10.37

Second Amendment Agreement, dated as of October 
21, 2015, to the Committed Facility Agreement, dated as of October 
17, 2014, between BNP Paribas Prime Brokerage, Inc., on behalf of itself and as agent for the BNPP Entities and Burholme Funding LLC. (Incorporated by reference to Exhibit 10.21 to FS Investment Corporation IIIs Annual Report on Form 10-K filed on March 11, 2016).10.38

Third Amendment Agreement, dated as of March 
16, 2016, to the Committed Facility Agreement, dated as of October 
17, 2014, between BNP Paribas Prime Brokerage, Inc., on behalf of itself and as agent for the BNPP Entities and Burholme Funding LLC. (Incorporated by reference to Exhibit 10.23 to FS Investment Corporation IIIs Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2016 filed on November 14, 2016).10.39

Fourth Amendment Agreement, dated as of August 
29, 2016, to the Committed Facility Agreement, dated as of October 
17, 2014, between BNP Paribas Prime Brokerage, Inc., on behalf of itself and as agent for the BNPP Entities and Burholme Funding LLC. (Incorporated by reference to Exhibit 10.1 to FS Investment Corporation IIIs Current Report on Form 8-K filed on September 2, 2016).10.40

Fifth Amendment Agreement, dated as of November 
15, 2016, to the Committed Facility Agreement, dated as of October 
17, 2014, between BNP Paribas Prime Brokerage, Inc., on behalf of itself and as agent for the BNPP Entities and Burholme Funding LLC. (Incorporated by reference to Exhibit 10.34 to FS Investment Corporation IIIs Current Report on Form 8-K filed on November 21, 2016).10.41

Sixth Amendment Agreement, dated as of May 
29, 2018, to the Committed Facility Agreement, dated as of October 
17, 2014, between BNP Paribas Prime Brokerage International, Ltd. And Burholme Funding LLC. (Incorporated by reference to Exhibit 10.34 to the Registrants Quarterly Report on Form 10-Q filed on August 14,
 2018).10.42

Seventh Amendment Agreement, dated as of June 12, 2019, to the Committed Facility Agreement, dated
 as of October 17, 2014, between BNP Paribas Prime Brokerage International, Ltd. and Burholme Funding LLC. (Incorporated by reference to Exhibit 10.1 to FS Investment Corporation IIIs Current Report on Form 8-K filed on
June 17, 2019).  91




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##### Table of Contents

10.43

Committed Facility Agreement, dated and effective as of March 
1, 2017, by and between Broomall Funding LLC and BNP Paribas Prime Brokerage International, Ltd. (Incorporated by reference to Exhibit 10.1 to FS Investment Corporation IVs Current Report on Form 8-K filed on February 15, 2017).10.44

U.S. PB Agreement, dated and effective as of March 
1, 2017, by and between Broomall Funding LLC and BNP Paribas Prime Brokerage International, Ltd., on behalf of itself and as agent for the BNPP Entities. (Incorporated by reference to Exhibit 
10.2 to FS Investment Corporation IVs Current Report on Form 8-K filed on February 15, 2017).10.45

First Amendment Agreement, dated as of May 
29, 2018, to the Committed Facility Agreement, dated as of March 1, 2017, between BNP Paribas Prime Brokerage International, Ltd. and Broomall Funding LLC. (Incorporated by reference to Exhibit 
10.32 to FS Investment Corporation IVs Quarterly Report on Form 10-Q filed on August 14, 2018).10.46

Second Amendment Agreement, dated as of December 
31, 2018, to the Committed Facility Agreement, dated as of March 1, 2017, between BNP Paribas Prime Brokerage International, Ltd. and Broomall Funding LLC. (Incorporated by reference to Exhibit 
10.28 to FS Investment Corporation IVs Annual Report on Form 10-K filed on March 18, 2019).10.47

Loan and Security Agreement, dated as of November 
22, 2019, by and among Ambler Funding LLC, as borrower, Ally Bank, as administrative agent and arranger, Wells Fargo Bank, N.A., as collateral administrator and collateral custodian, and the lenders from time to time party thereto. (Incorporated by reference
 to Exhibit 10.1 to FS Investment Corporation IVs Current Report on Form 8-K filed on November 26, 2019).10.48

Loan and Servicing Agreement, dated as of November 
22, 2019, by and among Meadowbrook Run LLC, as borrower, Morgan Stanley Senior Funding, Inc., as administrative agent, Wells Fargo Bank, N.A., as collateral agent, account bank and collateral custodian, and the lenders from time to time party thereto. (Incorporated
 by reference to Exhibit 10.1 to Companys Current Report on Form 8-K filed on November 29, 2019).10.49*

First Amendment to Loan and Servicing Agreement and Omnibus Amendment to Transaction Documents, dated as of March 
3, 2020, by and among Meadowbrook Run LLC, as borrower, Morgan Stanley Senior Funding, Inc., as lender and administrative agent, and the Company, as servicer.10.50

ISDA 2002 Master Agreement, together with the Schedule thereto and Credit Support Annex to such Schedule,
 each dated as of January 19, 2016, by and between Cheltenham Funding LLC and Citibank, N.A. (Incorporated by reference to Exhibit 10.1 to FS Investment Corporation IVs Current Report on Form 8-K filed on January 22, 2016).10.51

Amended and Restated Paragraph 13 of the Credit Support Annex, dated as of September 5, 2017, by and between Cheltenham Funding LLC and Citibank, N.A. (Incorporated by reference to Exhibit (k)(6) to Post-Effective Amendment No. 9 to FS Investment Corporation IVs registration statement on Form N-2 (File No.333-204239) filed on October 18, 2017).10.52

Thirteenth Amended and Restated Confirmation Letter Agreement, dated as of December 19,
 2019, by and between Cheltenham Funding LLC and Citibank, N.A. (Incorporated by reference to Exhibit 10.1 the Companys Current Report on Form 8-K filed on December 26,
2019).10.53

Schedule to the ISDA 2002 Master Agreement, amended and restated as of June 
28, 2019, between Cheltenham Funding LLC and Citibank, N.A. (Incorporated by reference to Exhibit 10.2 to FS Investment Corporation IVs Current Report on Form 8-K filed on July 
5, 2019).10.54

Guarantee, dated as of January 
19, 2016, by FS Investment Corporation IV in favor of Citibank, N.A. (Incorporated by reference to Exhibit 
10.4 to FS Investment Corporation IVs Current Report on Form 8-K filed on January 22, 2016).31.1*

Certification of Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.31.2*

Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.32.1*

Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 
1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.  *
Filed herewith.  92




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SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report to be signed on
its behalf by the undersigned, thereunto duly authorized on May 12, 2020.  FS KKR CAPITAL CORP. IIBy:

/s/ Michael C. FormanMichael C. FormanChief Executive Officer(Principal Executive Officer)By:

/s/ Steven LillySteven Lilly Chief Financial Officer(Principal Financial Officer)
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