##### 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 SEPTEMBER 30, 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 registeredCommon stock, par value $0.001

FSKR

New York Stock Exchange Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the
latest practicable date. There were 170,131,966 shares of the registrants common stock outstanding as of
November 3, 2020




---

##### Table of Contents

TABLE OF CONTENTS  PagePART IFINANCIAL INFORMATIONITEM 1.

FINANCIAL STATEMENTS


1Consolidated Balance Sheets as of September 30, 2020 (Unaudited) and December 31,
2019


1Unaudited Consolidated Statements of Operations for the three and nine months ended September 
30, 2020 and 2019


2Unaudited Consolidated Statements of Changes in Net Assets for the three and nine months ended September 30,
 2020 and 2019


3Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and
2019


4Consolidated Schedules of Investments as of September 30, 2020 (Unaudited) and December 31,
2019


5Notes to Unaudited Consolidated Financial Statements


33ITEM 2.

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


73ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


88ITEM 4.

CONTROLS AND PROCEDURES


90PART IIOTHER INFORMATIONITEM 1.

LEGAL PROCEEDINGS


91ITEM 1A.

RISK FACTORS


91ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


91ITEM 3.

DEFAULTS UPON SENIOR SECURITIES


92ITEM 4.

MINE SAFETY DISCLOSURES


92ITEM 5.

OTHER INFORMATION


92ITEM 6.

EXHIBITS


93SIGNATURES


99




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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)    September 30, 2020(Unaudited)


December 31,2019AssetsInvestments, at fair valueNon-controlled/unaffiliated investments (amortized cost$6,862 and $8,004
respectively)

$
6,352


$
7,670Non-controlled/affiliated investments (amortized cost$425 and $478,
respectively)


317



356Controlled/affiliated investments (amortized cost$649 and $559, respectively)


662



565Total investments, at fair value (amortized cost$7,936 and $9,041, respectively)


7,331



8,591Cash


134



163Foreign currency, at fair value (cost$6 and $4, respectively)


6



4Collateral held at broker for open interest rate swap contracts


54



44Due from counterparty






45Receivable for investments sold and repaid


110



23Income receivable


99



84Deferred financing costs


14



12Unrealized appreciation on foreign currency forward contracts


0



Prepaid expenses and other assets


2



4Total assets

$
7,750


$
8,970LiabilitiesPayable for investments purchased

$
32


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


3,288



3,809Stockholder distributions payable


94



Management fees payable


28



35Subordinated income incentive fees payable(2)


22



11Administrative services expense payable


2



3Interest payable


15



30Unrealized depreciation on foreign currency forward contracts


0



1Unrealized depreciation on total return swap






4Unrealized depreciation on interest rate swaps


54



29Other accrued expenses and liabilities


8



15Total liabilities


3,543



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, 170,597,301 and 169,594,825 shares issued and outstanding,
respectively(4)






1Capital in excess of par value


5,842



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


(1,635
)


(799
)Total stockholders equity


4,207



4,996Total liabilities and stockholders equity

$
7,750


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

$
24.66


$
29.44  (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)
As discussed in Note 3, the Company completed a Reverse Stock Split, effective as of June 10, 2020. The outstanding shares and net asset
value per common share reflect the Reverse Stock Split on a retroactive basis.  (5)
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 EndedSeptember 30,


Nine Months EndedSeptember 30,2020


2019


2020


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

$
117


$
89


$
385


$
288Paid-in-kind interest income


12



5



33



9Fee income


5



5



27



19Dividend income


10



1



12



1From non-controlled/affiliated investments:Interest income


2



6



8



16Paid-in-kind interest income


3



2



11



7Fee income














0From controlled/affiliated investments:Interest income


1







4



Paid-in-kind interest income


1







2



Dividend income


21







53



Total investment income


172



108



535



340Operating expensesManagement fees


28



17



90



52Subordinated income incentive fees(1)


22



5



64



25Administrative services expenses


2



2



5



3Stock transfer agent fees


0



0



2



2Accounting and administrative fees


1



0



2



1Interest expense(2)


26



24



101



79Listing advisory fees










7



Other general and administrative expenses


3



1



6



3Net expenses


82



49



277



165Net investment income


90



59



258



175Realized and unrealized gain/lossNet realized gain (loss) on investments:Non-controlled/unaffiliated investments


(131
)


(8
)


(382
)


(49
)Non-controlled/affiliated investments


(120
)


0



(229
)


0Controlled/affiliated investments


(1
)






(1
)


Net realized gain (loss) on total return swap


(1
)






(2
)


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










0



Net realized gain (loss) on interest rate swaps


(5
)


0



(11
)


0Net realized gain (loss) on foreign currency


(13
)


1



(12
)


1Net change in unrealized appreciation (depreciation) on investments:Non-controlled/unaffiliated investments


275



(80
)


(176
)


(38
)Non-controlled/affiliated investments


26



5



14



14Controlled/affiliated investments


28







7



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


2







4



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










1



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


5



(2
)


(25
)


(12
)Net change in unrealized gain (loss) on foreign currency


(6
)


3



17



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


59



(81
)


(795
)


(83
)Net increase (decrease) in net assets resulting from operations

$
149


$
(22
)

$
(537
)

$
92Per share informationbasic and dilutedNet increase (decrease) in net assets resulting from operations (Earnings per Share)

$
0.87


$
(0.27
)

$
(3.14
)

$
1.13Weighted average shares outstanding(3)


171,801,325



81,836,620



171,012,966



81,325,701   (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.  (3)
As discussed in Note 3, the Company completed a Reverse Stock Split, effective as of June 10, 2020. The weighted average shares used in
the per share computation of the net increase (decrease) in net assets resulting from operations reflect the Reverse Stock Split on a retroactive basis. See notes to unaudited consolidated financial statements.  2




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##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Statements of Changes in Net Assets (in millions)    Three Months EndedSeptember 30,


Nine Months EndedSeptember 30,2020


2019


2020


2019OperationsNet investment income

$
90


$
59


$
258


$
175Net realized gain (loss) on investments, swap contracts, foreign currency forward contracts and foreign currency


(271
)


(7
)


(637
)


(48
)Net change in unrealized appreciation (depreciation) on investments, swap contracts and foreign currency forward contracts(1)


336



(77
)


(175
)


(36
)Net change in unrealized gain (loss) on foreign currency


(6
)


3



17



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


149



(22
)


(537
)


92Stockholder distributions(2)Distributions to stockholders


(95
)


(62
)


(299
)


(184
)Net decrease in net assets resulting from stockholder distributions


(95
)


(62
)


(299
)


(184
)Capital share transactions(3)Reinvestment of stockholder distributions






25



80



76Repurchases of common stock


(33
)






(33
)


(52
)Net increase (decrease) in net assets resulting from capital share transactions


(33
)


25



47



24Total increase (decrease) in net assets


21



(59
)


(789
)


(68
)Net assets at beginning of period


4,186



2,558



4,996



2,567Net assets at end of period

$
4,207


$
2,499


$
4,207


$
2,499  (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.  3




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##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Statements of Cash Flows (in millions)    Nine Months EndedSeptember 30,2020


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

$
(537
)

$
92Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in)
operating activities:Purchases of investments


(1,731
)


(1,157
)Paid-in-kind interest


(49
)


(16
)Proceeds from sales and repayments of investments


2,287



1,214Net realized (gain) loss on investments


612



49Net change in unrealized (appreciation) depreciation on investments


155



23Net change in unrealized (appreciation) depreciation on total return
swap(1)


(4
)


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


(1
)


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


25



12Accretion of discount


(14
)


(8
)Amortization of deferred financing costs


3



3Unrealized (gain) loss on borrowings in foreign currency


(17
)


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


(10
)


(Increase) decrease in due from counterparty


45



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


(87
)


(8
)(Increase) decrease in income receivable


(15
)


(8
)(Increase) decrease in receivable on interest rate swaps






(1
)(Increase) decrease in deferred merger costs






(1
)(Increase) decrease in prepaid expenses and other assets


2



Increase (decrease) in payable for investments purchased


(5
)


11Increase (decrease) in management fees payable


(7
)


Increase (decrease) in subordinated income incentive fees payable


11



(1
)Increase (decrease) in administrative services expense payable


(1
)


1Increase (decrease) in interest rate swap income payable






1Increase (decrease) in interest payable


(15
)


(3
)Increase (decrease) in other accrued expenses and liabilities


(7
)


(2
)Net cash provided by (used in) operating activities


640



200Cash flows from financing activitiesRepurchases of common stock


(33
)


(52
)Stockholder distributions


(125
)


(108
)Borrowings under financing arrangements(1)


2,005



765Repayments of financing arrangements(1)


(2,504
)


(826
)Deferred financing costs paid


(10
)


(2
)Net cash provided by financing activities


(667
)


(223
)Total increase (decrease) in cash


(27
)


(23
)Cash and foreign currency at beginning of period


167



150Cash and foreign currency at end of period

$
140


$
127Supplemental disclosureNon-cash purchase of investments

$
(247
)

$
(35
)Non-cash sale of investments

$
247


$
35Distributions reinvested

$
80


$
76Local and excise taxes paid

$
2


$
2  (1)
See Note 9 for a discussion of the Companys financing arrangements. During the nine months ended September 30, 2020 and 2019, the
Company paid $113 and $79 respectively, in interest expense on the credit facilities. See notes to
unaudited consolidated financial statements.  4




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##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments As of September 30, 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 116.6%5 Arch Income Fund 2 LLC

(r)(t)(u)(x)(y)

Diversified Financials

9.0%





11/18/23

$
100.8


$
100.8


$
91.45 Arch Income Fund 2 LLC

(r)(s)(t)(u)

Diversified Financials

9.0%





11/18/23


12.7



12.7



11.5Accuride Corp

(l)(n)(ab)

Capital Goods

L+525


1.0
%

11/17/23


12.6



10.8



9.9Acproducts Inc

(l)(p)(ab)

Consumer Durables & Apparel

L+650


1.0
%

8/18/25


24.1



23.9



24.2Advanced Lighting Technologies Inc

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

Materials

L+750


1.0
%

10/4/22


9.0



7.6



5.5Advantage Sales & Marketing Inc

(n)(ab)

Commercial & Professional Services

L+325


1.0
%

7/23/21


5.7



5.6



5.6All Systems Holding LLC

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

Commercial & Professional Services

L+625


1.0
%

10/31/23


205.9



205.9



206.2All Systems Holding LLC

(s)

Commercial & Professional Services

L+625


1.0
%

10/31/23


3.0



3.0



3.0American Tire Distributors Inc

(n)(ab)

Automobiles & Components

L+550, 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+650, 1.5% PIK (1.5% Max PIK)


1.0
%

9/2/24


16.2



14.4



13.9Apex Group Limited

(n)(r)

Diversified Financials

L+700


1.3
%

6/15/23


4.6



4.5



4.6Apex Group Limited

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

Diversified Financials

L+700


1.3
%

6/16/25


69.9



69.2



70.6Apex Group Limited

(n)(r)

Diversified Financials

L+700


1.5
%

6/16/25

£
23.0



29.2



30.0Arrotex Australia Group Pty Ltd

(n)(r)

Pharmaceuticals, Biotechnology & Life Sciences

B+525


1.0
%

7/10/24

A$
46.2



31.8



33.4Aspect Software Inc

(n)

Software & Services

8.0% PIK (8.0% Max PIK)





10/30/20

$
0.2



0.0



0.2Aspect 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


21.0



19.2



20.7ATX Networks Corp

(n)(p)(r)

Technology Hardware & Equipment

L+625, 1.5% PIK (1.5% Max PIK)


1.0
%

12/31/23


80.6



78.0



69.8Belk Inc

(n)(t)(u)(ab)

Retailing

L+675


1.0
%

7/31/25


49.8



42.0



19.2Berner Food & Beverage LLC

(n)

Food & Staples Retailing

L+875


1.0
%

3/16/22


4.5



4.5



4.6Borden Dairy Co

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

Food, Beverage & Tobacco

L+825


1.0
%

7/6/23


39.0



38.3



Borden (New Dairy Opco)

(n)(ad)

Food, Beverage & Tobacco

L+250


1.0
%

7/20/25


11.4



11.4



11.4Borden (New Dairy Opco)

(n)(ad)

Food, Beverage & Tobacco

L+700, 0.0% PIK (1.0% Max PIK)


1.0
%

7/20/25


25.2



25.2



25.2Bugaboo International BV

(n)(r)

Consumer Durables & Apparel

E+775 PIK (E+775 Max PIK)





3/20/25


1.7



1.9



1.9Caprock Midstream LLC

(n)(ab)

Energy

L+475





11/3/25

$
13.4



12.8



9.6Charles Taylor PLC

(n)(r)

Diversified Financials

L+575





1/24/27

£
19.4



24.7



23.2Cimarron Energy Inc

(n)

Energy

L+900


1.0
%

6/30/21

$
7.5



7.5



7.2Constellis Holdings LLC

(n)(ad)

Capital Goods

L+750


1.0
%

3/31/24


15.0



15.0



15.0CSafe Global

(s)

Capital Goods

L+650


1.0
%

11/1/21


9.1



9.1



9.0CSafe Global

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

Capital Goods

L+650


1.0
%

10/31/23


96.8



96.8



95.9CSafe Global

(s)

Capital Goods

L+650


1.0
%

10/31/23


6.1



6.1



6.0CSM Bakery Products

(l)(ab)

Food, Beverage & Tobacco

L+625


1.0
%

1/4/22


6.4



6.3



6.0CTI Foods Holding Co LLC

(n)

Food, Beverage & Tobacco

L+577, 3.0% PIK (3.0% Max PIK)


1.0
%

5/3/24


0.0



0.0



0.0Datatel Inc

(n)(ab)(ac)

Software & Services

L+375


0.8
%

10/7/27


2.4



2.4



2.4Eagle Family Foods Inc

(n)

Food, Beverage & Tobacco

L+650


1.0
%

6/14/23


2.9



2.9



2.9Eagle Family Foods Inc

(s)

Food, Beverage & Tobacco

L+650


1.0
%

6/14/23


5.3



5.2



5.2Eagle Family Foods Inc

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

Food, Beverage & Tobacco

L+650


1.0
%

6/14/24


53.2



52.8



53.0Eagleclaw Midstream Ventures LLC

(n)(ab)

Energy

L+425


1.0
%

6/24/24


8.9



8.2



7.0EIF Van Hook Holdings LLC

(n)(ab)

Energy

L+525





9/5/24


2.1



2.1



1.4Electronics For Imaging Inc

(n)(ab)

Technology Hardware & Equipment

L+500





7/23/26


8.6



8.3



7.1Empire Today LLC

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

Retailing

L+650


1.0
%

11/17/22


127.3



127.2



128.0Entertainment Benefits Group LLC

(n)

Media & Entertainment

L+575, 2.5% PIK (2.5% Max PIK)


1.0
%

9/30/24


5.0



5.0



4.4  See
notes to consolidated financial statements.  5




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of September 30, 2020 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor(b)


Maturity

PrincipalAmount(c)


AmortizedCost


FairValue(d)Entertainment Benefits Group LLC

(s)

Media & Entertainment

L+575, 2.5% PIK (2.5% Max PIK)


1.0
%

9/30/24

$
0.5


$
0.5


$
0.5Entertainment Benefits Group LLC

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

Media & Entertainment

L+575, 2.5% PIK (2.5% Max PIK)


1.0
%

9/30/25


32.1



31.8



28.3Fairway Group Holdings Corp

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

Food & Staples Retailing

12.0% PIK (12.0% Max PIK)





11/27/23


12.3



11.3



1.0Fairway Group Holdings Corp

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

Food & Staples Retailing

10.0% PIK (10.0% Max PIK)





11/28/23


7.6



5.6



Fox Head Inc

(l)(n)(p)

Consumer Durables & Apparel

L+850


1.0
%

10/21/20


36.1



36.1



33.8Frontline Technologies Group LLC

(n)

Software & Services

L+575


1.0
%

9/18/23


5.3



5.2



5.2Greystone Equity Member Corp

(n)(r)

Diversified Financials

L+725


3.8
%

4/1/26


164.3



164.2



161.4Heniff Transportation Systems LLC

(n)

Transportation

L+575


1.0
%

12/3/24


3.2



3.2



3.1Heniff Transportation Systems LLC

(s)

Transportation

L+575


1.0
%

12/3/24


6.4



6.4



6.3Heniff Transportation Systems LLC

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

Transportation

L+575


1.0
%

12/3/26


74.8



74.6



74.2HM Dunn Co Inc

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

Capital Goods

L+875 PIK (L+875 Max PIK)


1.0
%

12/31/21


60.9



44.3



15.5HM Dunn Co Inc

(n)(ad)

Capital Goods

15.0% PIK (15.0% Max PIK)





12/31/21


6.0



6.0



6.0Hudson Technologies Co

(n)(r)

Commercial & Professional Services

L+1,025


1.0
%

10/10/23


53.5



53.2



42.4Industria Chimica Emiliana Srl

(n)(r)

Pharmaceuticals, Biotechnology & Life Sciences

E+725





6/30/26


51.8



55.4



60.2Industria Chimica Emiliana Srl

(n)(r)

Pharmaceuticals, Biotechnology & Life Sciences

E+725





9/27/26


9.5



10.8



11.0Industry City TI Lessor LP

(n)(p)

Consumer Services

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





6/30/26

$
9.9



9.9



10.9J S Held LLC

(f)(n)(p)

Insurance

L+600


1.0
%

7/1/25


76.5



76.0



76.6J S Held LLC

(s)

Insurance

L+600


1.0
%

7/1/25


8.1



8.1



8.1J S Held LLC

(n)

Insurance

L+600


1.0
%

7/1/25


1.0



1.0



1.0J S Held LLC

(s)

Insurance

L+600


1.0
%

7/1/25


6.8



6.8



6.8Jo-Ann Stores Inc

(n)(ab)

Retailing

L+500


1.0
%

10/20/23


13.0



11.8



11.2KBP Investments LLC

(n)

Food & Staples Retailing

L+550


1.0
%

5/14/23


21.8



21.6



21.6KBP Investments LLC

(s)

Food & Staples Retailing

L+550


1.0
%

5/14/23


26.1



25.8



25.8KBP Investments LLC

(s)

Food & Staples Retailing

L+550


1.0
%

5/14/23


3.3



3.3



3.3Kellermeyer Bergensons Services LLC

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

Commercial & Professional Services

L+650


1.0
%

11/9/26


167.9



166.7



168.1Kellermeyer Bergensons Services LLC

(s)

Commercial & Professional Services

L+650


1.0
%

11/9/26


36.4



36.4



36.4Kodiak BP LLC

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

Capital Goods

L+725


1.0
%

12/2/24


223.6



223.6



225.8Kodiak BP LLC

(s)

Capital Goods

L+725


1.0
%

12/2/24


8.8



8.8



8.9LBM Borrower LLC

(l)(ab)

Capital Goods

L+375


1.0
%

8/19/22


2.4



2.3



2.4Lexitas Inc

(k)(l)(n)

Commercial & Professional Services

L+575


1.0
%

11/14/25


31.1



30.9



30.4Lexitas 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


89.6



89.2



89.7Lipari Foods LLC

(f)(n)(p)

Food & Staples Retailing

L+588


1.0
%

1/6/25


21.9



21.9



21.7Lipari Foods LLC

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

Food & Staples Retailing

L+588


1.0
%

1/6/25


150.2



149.1



149.4Monitronics International Inc

(f)(n)(ab)

Commercial & Professional Services

L+650


1.3
%

3/29/24


39.1



37.4



29.7Monitronics International Inc

(f)(ab)

Commercial & Professional Services

L+500


1.5
%

7/3/24


1.9



1.9



1.9Monitronics International Inc

(n)

Commercial & Professional Services

L+500


1.5
%

7/3/24


11.3



11.3



10.3Monitronics International Inc

(s)

Commercial & Professional Services

L+500


1.5
%

7/3/24


58.7



58.7



53.5Motion Recruitment Partners LLC

(n)(q)

Commercial & Professional Services

L+600


1.0
%

12/19/25


43.6



43.2



39.3Motion Recruitment Partners LLC

(s)

Commercial & Professional Services

L+600


1.0
%

12/19/25


34.6



34.6



31.2NCI Inc

(n)

Software & Services

L+500, 2.5% PIK (2.5% Max PIK)


1.0
%

8/15/24


4.2



4.2



3.1One Call Care Management Inc

(n)(ab)(ad)

Health Care Equipment & Services

L+525


1.0
%

11/27/22


2.9



2.6



2.6P2 Energy Solutions Inc.

(n)

Software & Services

L+675


1.0
%

1/31/25


2.7



2.7



2.7  See
notes to consolidated financial statements.  6




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of September 30, 2020 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor(b)


Maturity

PrincipalAmount(c)


AmortizedCost


FairValue(d)P2 Energy Solutions Inc.

(s)

Software & Services

L+675


1.0
%

1/31/25

$
5.4


$
5.4


$
5.3P2 Energy Solutions Inc.

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

Software & Services

L+675


1.0
%

2/2/26


135.4



133.9



133.2Peak 10 Holding Corp

(n)(ab)

Telecommunication Services

L+350





8/1/24


25.4



23.1



21.9PF Changs China Bistro Inc

(n)(ab)

Consumer Services

L+625





3/1/26


14.8



14.7



11.1Polyconcept North America Inc

(n)

Household & Personal Products

L+450 PIK (L+450 Max PIK)


1.0
%

8/16/23


0.4



0.4



0.4Premium Credit Ltd

(n)(r)

Diversified Financials

L+650





1/16/26

£
39.6



50.7



49.5Pretium Packaging LLC

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

Household & Personal Products

L+625


1.0
%

1/15/27

$
110.6



109.6



110.7Pretium Packaging LLC

(s)

Household & Personal Products

L+625


1.0
%

1/15/27


22.7



22.4



22.7Production Resource Group LLC

(n)(t)(u)

Media & Entertainment

L+700


1.0
%

8/21/24


381.0



381.0



161.9Production Resource Group LLC

(n)

Media & Entertainment

L+750, 0.0% PIK (3.1% Max PIK)


1.0
%

8/21/24


12.8



12.8



12.8Production Resource Group LLC

(s)

Media & Entertainment

L+750, 0.0% PIK (3.1% Max PIK)


1.0
%

8/21/24


46.9



46.9



46.9Project Marron

(f)(n)(r)

Consumer Services

C+625





7/2/25

C$
28.7



21.9



19.6Project Marron

(n)(r)

Consumer Services

B+625





7/3/25

A$
36.5



24.1



23.6Propulsion Acquisition LLC

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

Capital Goods

L+600


1.0
%

7/13/21

$
113.9



113.0



109.6PSKW LLC

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

Health Care Equipment & Services

L+625


1.0
%

3/9/26


160.9



159.0



158.6Reliant Rehab Hospital Cincinnati LLC

(f)(l)(p)

Health Care Equipment & Services

L+675





9/2/24


117.2



116.4



110.9Revere Superior Holdings Inc

(n)

Software & Services

L+575


1.0
%

9/30/26


30.4



30.4



30.4Revere Superior Holdings Inc

(s)

Software & Services

L+575


1.0
%

9/30/26


2.3



2.3



2.3Roadrunner Intermediate Acquisition Co LLC

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

Health Care Equipment & Services

L+675


1.0
%

3/15/23


94.3



94.3



94.3RSC Insurance Brokerage Inc

(s)

Insurance

L+550


1.0
%

9/30/26


3.7



3.6



3.7RSC Insurance Brokerage Inc

(n)

Insurance

L+550


1.0
%

10/30/26


5.9



5.9



5.9RSC Insurance Brokerage Inc

(s)

Insurance

L+550


1.0
%

10/30/26


33.2



33.2



33.2RSC Insurance Brokerage Inc

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

Insurance

L+550


1.0
%

10/30/26


107.3



106.5



107.7RSC Insurance Brokerage Inc

(s)

Insurance

L+550


1.0
%

10/30/26


4.7



4.7



4.7Safe-Guard Products International LLC

(f)(p)(q)

Diversified Financials

L+575





1/27/27


70.1



69.5



67.7Savers Inc

(f)(n)(p)

Retailing

L+600, 2.8% PIK (2.8% Max PIK)


1.5
%

3/28/24


54.2



53.7



52.8Savers Inc

(f)(n)(r)

Retailing

C+650, 2.8% PIK (2.8% Max PIK)


1.5
%

3/28/24

C$
75.3



55.6



56.0Sequa Corp

(n)(ab)

Capital Goods

L+675, 0.0% PIK (1.0% Max PIK)


1.0
%

11/28/23

$
4.9



4.6



4.6Sequa Corp

(n)

Capital Goods

L+950 (L+950 Max PIK)


1.0
%

7/31/25


16.6



16.3



16.8Sequel Youth & Family Services LLC

(f)(p)

Health Care Equipment & Services

L+700


1.0
%

9/1/23


15.4



15.4



13.4Sequel Youth & Family Services LLC

(f)(l)(p)

Health Care Equipment & Services

L+800


1.0
%

9/1/23


90.0



90.0



78.3Sequential Brands Group Inc.

(k)(l)(n)

Consumer Durables & Apparel

L+875





2/7/24


213.2



210.4



178.1SIRVA Worldwide Inc

(n)(ab)

Commercial & Professional Services

L+550





8/4/25


7.3



7.2



6.1Sorenson Communications LLC

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

Telecommunication Services

L+650





4/29/24


64.1



62.1



64.2Sungard Availability Services Capital Inc

(n)

Software & Services

L+750


1.0
%

2/3/22


3.2



3.1



3.3Sungard Availability Services Capital Inc

(s)

Software & Services

L+750


1.0
%

2/3/22


1.7



1.6



1.7Sutherland Global Services Inc

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

Software & Services

L+538


1.0
%

4/23/21


6.0



6.0



5.3Swift Worldwide Resources Holdco Ltd

(k)(n)(q)

Energy

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


2.5
%

7/20/21


37.7



37.7



37.7Tangoe LLC

(f)(n)(p)

Software & Services

L+650


1.0
%

11/28/25


102.2



101.4



95.7Torrid Inc

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

Retailing

L+675


1.0
%

12/16/24


33.7



33.4



33.8Total Safety US Inc

(f)(n)(ab)

Capital Goods

L+600


1.0
%

8/16/25


1.0



0.9



1.0Trace3 Inc

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

Software & Services

L+675


1.0
%

8/5/24


162.9



162.9



161.5Transaction Services Group Ltd

(n)(r)

Consumer Services

B+600





10/15/26

A$
72.7



48.3



48.7  See
notes to consolidated financial statements.  7




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of September 30, 2020 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor(b)


Maturity

PrincipalAmount(c)


AmortizedCost


FairValue(d)Transaction Services Group Ltd

(n)(r)

Consumer Services

L+600





10/15/26

$
20.1


$
20.1


$
18.8Transaction Services Group Ltd

(n)(r)

Consumer Services

L+600





10/15/26

£
7.7



9.8



9.3Truck-Lite Co LLC

(n)

Capital Goods

L+625


1.0
%

12/13/24

$
2.9



2.9



2.8Truck-Lite Co LLC

(s)

Capital Goods

L+625


1.0
%

12/13/24


10.7



10.6



10.3Truck-Lite Co LLC

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

Capital Goods

L+625


1.0
%

12/13/26


126.9



125.8



121.8Truck-Lite Co LLC

(s)

Capital Goods

L+625


1.0
%

12/13/26


18.8



18.6



18.0Virgin Pulse Inc

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

Software & Services

L+600


1.0
%

5/22/25


158.2



157.3



158.2Warren Resources Inc

(n)(ad)

Energy

L+900, 1.0% PIK (1.0% Max PIK)


1.0
%

5/21/21


21.2



21.2



21.2West Corp

(l)(ab)

Software & Services

L+350


1.0
%

10/10/24


2.9



2.6



2.6West Corp

(p)(ab)

Software & Services

L+400


1.0
%

10/10/24


14.0



13.1



12.7Wheels Up Partners LLC

(n)

Transportation

L+855


1.0
%

10/15/21


0.3



0.3



0.3Wheels Up Partners LLC

(n)

Transportation

L+855


1.0
%

7/15/22


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


0.6



0.6



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)(p)(q)

Software & Services

L+750


1.0
%

7/29/22


122.2



122.2



122.2Total Senior Secured LoansFirst Lien


















5,743.4



5,285.2Unfunded Loan Commitments


















(381.0
)


(381.0
)Net Senior Secured LoansFirst Lien


















5,362.4



4,904.2Senior Secured LoansSecond Lien14.9%Advantage Sales & Marketing Inc

(n)(ab)

Commercial & Professional Services

L+650


1.0
%

7/25/22


8.1



7.2



7.7American Bath Group LLC

(l)(ab)

Capital Goods

L+975


1.0
%

9/30/24


3.0



2.9



2.9Ammeraal Beltech Holding BV

(f)(n)(p)(r)

Capital Goods

L+775


1.0
%

9/12/26


51.3



50.5



47.7athenahealth Inc

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

Health Care Equipment & Services

L+850





2/11/27


129.2



128.1



131.8BCA Marketplace PLC

(n)(r)

Retailing

L+825





11/22/27

£
30.2



37.3



36.9Byrider Finance LLC

(n)

Automobiles & Components

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


1.3
%

6/7/22

$
36.0



36.0



35.6CDS US Intermediate Holdings Inc

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

Media & Entertainment

L+825


1.0
%

7/10/23


21.2



19.2



Chisholm Oil & Gas Operating LLC

(n)(t)(u)

Energy

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


1.3
%

3/21/24


38.6



38.2



0.3CommerceHub Inc

(n)

Software & Services

L+775





5/21/26


3.2



3.1



3.3Constellis Holdings LLC

(f)(n)(ad)

Capital Goods

L+100, 10.0% PIK (10.0% Max PIK)


1.0
%

3/27/25


13.5



13.5



13.5Excelitas Technologies Corp

(l)(n)(ab)

Technology Hardware & Equipment

L+750


1.0
%

12/1/25


6.6



6.7



6.6Fairway Group Holdings Corp

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

Food & Staples Retailing

11.0% PIK (11.0% Max PIK)





2/24/24


6.9



5.0



Gruden Acquisition Inc

(m)(p)(ab)

Transportation

L+850


1.0
%

8/18/23


25.0



24.5



22.9LBM Borrower LLC

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

Capital Goods

L+925


1.0
%

8/20/23


57.9



55.8



56.7NEP Broadcasting LLC

(n)(ab)

Media & Entertainment

L+700





10/19/26


5.8



5.6



4.7OEConnection LLC

(f)(p)

Software & Services

L+825





9/25/27


42.9



42.5



42.4Ontic Engineering & Manufacturing Inc

(f)(n)(q)

Capital Goods

L+850





10/29/27


26.8



26.3



26.3OPE Inmar Acquisition Inc

(l)(ab)

Software & Services

L+800


1.0
%

5/1/25


15.0



15.0



11.0Paradigm Acquisition Corp

(l)(ab)

Health Care Equipment & Services

L+750





10/26/26


3.7



3.7



3.3Peak 10 Holding Corp

(n)(t)(u)(ab)

Telecommunication Services

L+725





8/1/25


15.7



13.2



9.4  See
notes to consolidated financial statements.  8




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of September 30, 2020 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor(b)


Maturity

PrincipalAmount(c)


AmortizedCost


FairValue(d)Polyconcept North America Inc

(n)

Household & Personal Products

11.0% PIK (11.0% Max PIK)





2/16/24

$
0.2


$
0.2


$
0.1Pure Fishing Inc

(f)(n)

Consumer Durables & Apparel

L+838


1.0
%

12/31/26


45.9



45.5



38.4Rise Baking Company

(f)(l)(n)

Food, Beverage & Tobacco

L+800


1.0
%

8/9/26


17.6



17.5



16.6Sequa Corp

(n)(ab)

Capital Goods

L+400, 6.8% PIK (6.8% Max PIK)


1.0
%

4/28/24


2.3



2.4



1.9SIRVA Worldwide Inc

(n)(ab)

Commercial & Professional Services

L+950





8/3/26


6.5



5.9



4.7Sorenson Communications LLC

(n)(p)

Telecommunication Services

L+1,150 PIK (L+1,150 PIK Max PIK)





4/30/25


16.4



16.5



16.4Sparta Systems Inc

(n)

Software & Services

L+825


1.0
%

8/21/25


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


12.8



12.8



12.8Vantage Specialty Chemicals Inc

(n)(ab)

Materials

L+825


1.0
%

10/27/25


0.8



0.7



0.6WireCo WorldGroup Inc

(n)(ab)

Capital Goods

L+900


1.0
%

9/30/24


14.1



14.0



10.9Wittur Holding GmbH

(n)(r)

Capital Goods

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





9/23/27


55.4



60.9



61.2Total Senior Secured LoansSecond Lien


















713.1



628.8Other Senior Secured Debt1.8%Advanced Lighting Technologies Inc

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

Materials

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


1.0
%

10/4/23

$
16.6



10.7



APTIM Corp

(n)(t)(u)(ab)

Diversified Financials

7.8%





6/15/25


8.2



8.2



4.3Black Swan Energy Ltd

(n)(r)

Energy

9.0%





1/20/24


4.0



4.0



4.0Diamond Resorts International Inc

(m)(ab)

Consumer Services

7.8%





9/1/23


4.9



4.9



4.7JW Aluminum Co

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

Materials

10.3%





6/1/26


34.5



34.5



36.4Lycra

(n)(r)(ab)

Consumer Durables & Apparel

7.5%





5/1/25


16.4



16.4



11.6TruckPro LLC

(n)(ab)

Capital Goods

11.0%





10/15/24


6.4



6.1



6.5Velvet Energy Ltd

(n)(r)

Energy

9.0%





10/5/23


7.5



7.5



6.6Total Other Senior Secured Debt


















92.3



74.1Subordinated Debt4.1%All Systems Holding LLC

(n)

Commercial & Professional Services

10.0% PIK (10.0% Max PIK)





10/31/22


0.1



0.1



0.1Ascent Resources Utica Holdings LLC / ARU Finance Corp

(n)(ab)

Energy

10.0%





4/1/22


26.0



26.0



25.7athenahealth Inc

(n)

Health Care Equipment & Services

L+1,113 PIK (L+1,113 Max PIK)





2/11/27


79.2



79.2



79.6ClubCorp Club Operations Inc

(n)(ab)

Consumer Services

8.5%





9/15/25


31.8



31.0



26.5Craftworks 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

(n)(ab)

Consumer Services

10.8%





9/1/24


4.4



4.5



3.9Intelsat Jackson Holdings SA

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

Media & Entertainment

5.5%





8/1/23


3.7



3.5



2.4Kenan Advantage Group Inc

(n)(ab)

Transportation

7.9%





7/31/23


19.2



17.4



18.7Vivint Inc

(l)(n)(ab)

Commercial & Professional Services

7.6%





9/1/23


14.3



13.5



14.5Total Subordinated Debt


















181.4



171.4Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor(b)


Maturity

PrincipalAmount(c)/Shares


AmortizedCost


FairValue(d)Asset Based Finance15.4%801 5th Ave, Seattle, Private Equity

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

Real Estate










4,025,308



4.0



8.5801 5th Ave, Seattle, Structure Mezzanine

(n)(r)(ae)

Real Estate

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





12/19/29

$
25.4



25.4



25.4Abacus JV, Private Equity

(n)(r)

Insurance










34,147,572



34.1



35.2Accelerator Investments Aggregator LP, Private Equity

(n)(r)(t)

Diversified Financials










153,628



0.2



0.1Altavair AirFinance, Private Equity

(n)(r)

Capital Goods










49,233,596



49.2



51.1Australis Maritime, Common Stock

(n)(r)

Transportation










19,832,267



19.8



19.9  See
notes to consolidated financial statements.  9




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of September 30, 2020 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor(b)


Maturity

PrincipalAmount(c)/Shares


AmortizedCost


FairValue(d)Avida Holding AB, Common Stock

(n)(r)(t)(ad)

Diversified Financials










76,752,002


$
8.3


$
8.2Byrider Finance LLC, Sub Note

(n)

Automobiles & Components

8.7%





2/17/25

$
4.2



4.0



4.3Global Jet Capital LLC, Preferred Stock

(i)(n)(t)

Commercial & Professional Services










80,065,036



80.1



Global Jet Capital LLC, Structured Mezzanine

(n)

Commercial & Professional Services

15.0% PIK (15.0% Max PIK)





1/30/25

$
2.6



2.3



2.3Global Jet Capital LLC, Structured Mezzanine

(n)

Commercial & Professional Services

15.0% PIK (15.0% Max PIK)





4/30/25

$
16.3



14.6



14.8Global Jet Capital LLC, Structured Mezzanine

(n)

Commercial & Professional Services

15.0% PIK (15.0% Max PIK)





9/3/25

$
3.4



3.0



3.1Global Jet Capital LLC, Structured Mezzanine

(n)

Commercial & Professional Services

15.0% PIK (15.0% Max PIK)





9/29/25

$
3.2



2.9



2.9Global Jet Capital LLC, Structured Mezzanine

(i)(n)

Commercial & Professional Services

15.0% PIK (15.0% Max PIK)





12/4/25

$
95.6



85.7



86.6Global Jet Capital LLC, Structured Mezzanine

(i)(n)(r)

Commercial & Professional Services

15.0% PIK (15.0% Max PIK)





12/4/25

$
21.3



19.1



19.3Global Jet Capital LLC, Structured Mezzanine

(i)(n)

Commercial & Professional Services

15.0% PIK (15.0% Max PIK)





12/9/25

$
2.2



2.0



2.0Global Jet Capital LLC, Structured Mezzanine

(i)(n)(r)

Commercial & Professional Services

15.0% PIK (15.0% Max PIK)





12/9/25

$
16.9



15.2



15.3Global Jet Capital LLC, Structured Mezzanine

(i)(n)

Commercial & Professional Services

15.0% PIK (15.0% Max PIK)





1/29/26

$
8.2



7.3



7.4Global Jet Capital LLC, Structured Mezzanine

(i)(n)(r)

Commercial & Professional Services

15.0% PIK (15.0% Max PIK)





1/29/26

$
1.8



1.6



1.7Global Jet Capital LLC, Structured Mezzanine

(n)

Commercial & Professional Services

15.0% PIK (15.0% Max PIK)





2/17/26

$
22.0



19.7



20.0Global Jet Capital LLC, Structured Mezzanine

(n)

Commercial & Professional Services

15.0% PIK (15.0% Max PIK)





4/14/26

$
13.6



12.2



12.4Global Jet Capital LLC, Structured Mezzanine

(n)

Commercial & Professional Services

15.0% PIK (15.0% Max PIK)





12/2/26

$
23.2



20.8



21.0Global Lending Services LLC, Private Equity

(n)(r)(t)

Diversified Financials










14,954,588



15.0



16.9Global Lending Services LLC, Private Equity

(n)(r)(t)

Diversified Financials










1,333,322



1.3



1.6Home Partners JV, Common Stock

(n)(r)(t)

Real Estate










19,053,475



19.1



23.1Home Partners JV, Private Equity

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

Real Estate










706,596



0.7



0.0Home Partners JV, Structured Mezzanine

(n)(r)

Real Estate

11.0% PIK (11.0% Max PIK)





3/25/29

$
42.8



42.8



42.8Home Partners JV, Structured Mezzanine

(r)(s)

Real Estate

11.0% PIK (11.0% Max PIK)





3/25/29

$
14.5



14.5



14.5Home Partners JV 2, Private Equity

(n)(r)(t)

Real Estate










203,250



0.2



0.2Home Partners JV 2, Structured Mezzanine

(n)(r)

Real Estate

11.0% PIK (11.0% Max PIK)





3/20/30

$
0.4



0.4



0.0Home Partners JV 2, Structured Mezzanine

(r)(s)

Real Estate

11.0% PIK (11.0% Max PIK)





3/20/30

$
15.9



15.9



15.9Kilter Finance, Private Equity

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

Insurance










289,268



0.3



0.3KKR 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



10.9Lenovo 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



6.9Lenovo 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



4.7



2.4Opendoor Labs Inc, 2L Term Loan

(n)(r)

Real Estate

10.0%





1/23/26

$
26.8



26.8



26.8Opendoor Labs Inc, 2L Term Loan

(r)(s)

Real Estate

10.0%





1/23/26

$
53.6



53.6



53.6Pretium Partners LLC P1, Structured Mezzanine

(n)(r)

Real Estate

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





10/22/26

$
6.7



6.7



6.6Pretium Partners LLC P2, Structured Mezzanine

(n)(r)

Real Estate

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





5/29/25

$
15.3



15.3



15.5Prime ST LLC, Private Equity

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

Real Estate










3,575,777



3.6



2.5Prime ST LLC, Structured Mezzanine

(n)(r)(ae)

Real Estate

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





3/12/30

$
25.4



25.4



25.4  See
notes to consolidated financial statements.  10




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of September 30, 2020 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor(b)


Maturity

PrincipalAmount(c)/Shares


AmortizedCost


FairValue(d)Sofi Lending Corp, Purchase Facility

(n)(r)

Diversified Financials










40,637,805


$
40.6


$
41.2Toorak Capital Funding LLC, Membership Interest

(n)(r)

Real Estate










N/A



18.8



23.0Total Asset Based Finance


















791.8



729.9Unfunded Debt Commitments


















(84.0
)


(84.0
)Net Asset Based Finance


















707.8



645.9Credit Opportunities Partners, LLC 14.3%Credit Opportunities Partners, LLC

(n)(r)(ae)

Diversified Financials










590.6



590.6



599.6Total Credit Opportunities Partners, LLC


















590.6



599.6Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor(b)


Maturity

Number 
ofShares


AmortizedCost


FairValue(d)Equity/Other7.3%Abaco Energy Technologies LLC, Common Stock

(n)(t)

Energy










3,055,556



3.1



0.4Abaco Energy Technologies LLC, Preferred Stock

(n)(t)

Energy










12,734,481



0.6



2.2Advanced 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



2.5Arena Energy LP, Warrants

(n)(t)

Energy










58,445,593



0.2



0.2ASG Technologies, Common Stock

(n)(t)(ad)

Software & Services










625,178



13.5



19.7ASG Technologies, Warrant

(n)(t)(ad)

Software & Services







6/27/22


314,110



9.0



3.1Aspect Software Inc, Common Stock

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

Software & Services










1,148,694



1.9



1.9Aspect Software Inc, Warrant

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

Software & Services







1/15/24


1,146,890







0.5ATX Networks Corp, Common Stock

(n)(r)(t)

Technology Hardware & Equipment










156,123



0.2



AVF Parent LLC, Trade Claim

(n)(t)

Retailing










121,058







1.7Borden (New Dairy Opco), Common Stock

(t)(v)(ad)

Food, Beverage & Tobacco










6,700,200



5.8



5.2Catalina 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



1.2Constellis Holdings LLC, Private Equity

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

Capital Goods










849,702



18.9



21.1Crossmark Holdings Inc, Warrant

(n)(t)

Commercial & Professional Services










8,358







CSafe Global, Common Stock

(n)(t)

Capital Goods










608,700



0.6



1.2CTI Foods Holding Co LLC, Common Stock

(n)(t)

Food, Beverage & Tobacco










56



0.0



Empire Today LLC, Common Stock

(n)(t)

Retailing










630



1.9



4.4Envigo 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

(t)(v)

Energy










46,694



27.2



27.2Fox Head Inc, Common Stock

(i)(n)(t)

Consumer Durables & Apparel










10,000,000



10.0



  See
notes to consolidated financial statements.  11




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of September 30, 2020 (in millions, except share amounts)    Portfolio
Company(a)

Footnotes

Industry

Rate(b)

Floor(b)


Maturity

Number 
ofShares


AmortizedCost


FairValue(d)Harvey Industries Inc, Common Stock

(n)(t)

Capital Goods










2,666,667


$



$
2.3HM 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



7.5JSS Holdings Ltd, Net Profits Interest

(n)(t)

Capital Goods










54







0.6JW Aluminum Co, Common Stock

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

Materials










631



0.0



JW Aluminum Co, Preferred Stock

(i)(n)(ad)

Materials

12.5% PIK (12.5% Max PIK)





2/15/28


6,875



61.8



81.2MB Precision Holdings LLC, Class A2 Units

(t)(v)

Capital Goods










6,655,178



2.3



Misys Ltd, Preferred Stock

(n)(r)

Software & Services

L+1,025








2,841



2.8



2.7Mood Media LLC, Class A Warrants

(n)(t)(ad)

Media & Entertainment







7/31/25


48,020,265







Mood Media LLC, Class B Warrants

(n)(t)(ad)

Media & Entertainment







7/31/25


48,020,265







Mood Media LLC, Class C Warrants

(n)(t)(ad)

Media & Entertainment







7/31/25


48,020,265







One Call Care Management Inc, Common Stock

(n)(t)(ad)

Health Care Equipment & Services










2,604,293,203



1.8



1.3One Call Care Management Inc, Preferred Stock A

(n)(t)(ad)

Health Care Equipment & Services










277,791



19.3



13.6One Call Care Management Inc, Preferred Stock B

(n)(ad)

Health Care Equipment & Services

9.0% PIK (9.0% Max PIK)





10/25/29


5,729,445



5.8



6.2Polyconcept North America Inc, Class A1 Units

(n)(t)

Household & Personal Products










624



0.1



Professional Plumbing Group Inc, Common Stock

(i)(t)

Materials










3,000,000



3.0



4.7Quorum Health Corp, Common Stock

(n)(t)

Health Care Equipment & Services










48,600



0.4



0.5Quorum Health Corp, Trade Claim

(n)(t)

Health Care Equipment & Services










4,967,000



0.4



0.4Quorum Health Corp, Trust Initial Funding Units

(n)(t)

Health Care Equipment & Services










85,805



0.1



0.1Ridgeback Resources Inc, Common Stock

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

Energy










1,644,464



10.1



6.3Sequential Brands Group Inc., Common Stock

(i)(n)(ab)

Consumer Durables & Apparel










13,352



7.2



0.1Sorenson Communications LLC, Common Stock

(i)(n)(t)

Telecommunication Services










43,796







39.2SSC (Lux) Limited S.a r.l., Common Stock

(n)(r)(t)

Health Care Equipment & Services










125,000



2.5



5.4Sungard Availability Services Capital Inc, Common Stock

(m)(n)(p)(t)

Software & Services










217,659



15.2



8.5Swift Worldwide Resources Holdco Ltd, Common Stock

(n)(t)

Energy










1,250,000



2.0



0.7Trace3 Inc, Common Stock

(n)(t)

Software & Services










42,486



0.4



2.2Warren Resources Inc, Common Stock

(n)(t)(ad)

Energy










3,370,272



15.8



4.5Zeta Interactive Holdings Corp, Preferred Stock, Series E1

(n)(t)

Software & Services










1,051,348



8.4



10.5Zeta Interactive Holdings Corp, Preferred Stock, Series F

(n)(t)

Software & Services










956,233



8.4



15.3Zeta Interactive Holdings Corp, Warrant

(n)(t)

Software & Services







4/20/27


143,435







0.2Total Equity/Other


















288.2



306.7TOTAL INVESTMENTS174.3%

















$
7,935.8



7,330.7LIABILITIES IN EXCESS OF OTHER ASSETS -74.3%






















(3,123.7
)NET ASSETS100.0%





















$
4,207.0  See
notes to consolidated financial statements.  12




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of September 30, 2020 (in millions, except share amounts)    Foreign currency forward contracts  Foreign Currency

SettlementDate


Counterparty


Amount andTransaction


US$ Value atSettlementDate


US$ Value atSeptember 30,2020


UnrealizedAppreciation(Depreciation)EUR


8/8/2025



JP Morgan Chase Bank



1.9 Sold


$
2.3


$
2.4


$
(0.1
)NOK


8/8/2025



JP Morgan Chase Bank


kr
11.4 Sold



1.2



1.2



0.0SEK


8/8/2025



JP Morgan Chase Bank


kr
27.8 Sold



3.1



3.2



(0.1
)Total













$
6.6


$
6.8


$
(0.2
) 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


$



$
(17
)

$
(17
)JP Morgan Chase Bank

$
200



3-Month LIBOR



2.81
%


12/18/2021







(7
)


(7
)ING Capital Markets

$
250



3-Month LIBOR



2.59
%


1/14/2024







(21
)


(21
)ING Capital Markets

$
250



3-Month LIBOR



2.62
%


1/14/2022







(9
)


(9
)$



$
(54
)

$
(54
)  (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 September 30, 2020, the three-month London Interbank Offered Rate, or LIBOR or L, was 0.23%, the Euro Interbank Offered Rate, or EURIBOR, was (0.50)%, Candian Dollar Offer Rate, or CDOR was 0.51%, and the
Australian Bank Bill Swap Bid Rate, or BBSY, or B, was 0.14%, 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)
Not used.  (h)
Not used.  (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).  See
notes to consolidated financial statements.  13




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of September 30, 2020 (in millions, except share amounts)    (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 September 30, 2020, 73.4% 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)
Not used.  (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 September 30, 2020.    See
notes to consolidated financial statements.  14




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of September 30, 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 September 30, 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 nine months ended September 30, 2020: Portfolio Company

Fair Value atDecember 31,2019


GrossAdditions(1)



GrossReductions(2)



Net RealizedGain (Loss)


Net Change inUnrealizedAppreciation(Depreciation)


Fair Value atSeptember 30,2020


InterestIncome(3)



PIKIncome(3)


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

$
5.9


$



$
(0.5
)

$
0.0


$
0.1


$
5.5


$
0.0


$



$
Borden Dairy Co(4)






107.4



(17.4
)


(51.7
)


(38.3
)






0.0







Borden (New Dairy Opco)






11.4















11.4



0.1







Borden (New Dairy Opco)






25.2















25.2



0.4







Constellis Holdings LLC






8.4



(8.4
)














0.4







Constellis Holdings LLC






15.0















15.0



0.7







Fairway Group Holdings Corp






3.0



(3.0
)














0.1







Fairway Group Holdings Corp






6.4



(6.4
)














0.4







Fairway Group Holdings Corp


6.3



0.0



(6.3
)


0.1



(0.1
)






0.0







Fairway Group Holdings Corp


6.5















(5.5
)


1.0











Fairway Group Holdings Corp


































HM Dunn Co Inc


26.0















(10.5
)


15.5











HM Dunn Co Inc


5.2



2.5



(1.7
)










6.0







0.7



MB Precision Holdings LLC


21.4



0.9



(18.4
)


(3.5
)


(0.4
)






1.1



0.2



One Call Care Management Inc


2.7



0.1



0.0



0.0



(0.2
)


2.6



0.1







Warren Resources Inc


21.0



0.2















21.2



1.6



0.2



Senior Secured LoansSecond LienConstellis Holdings LLC






13.5















13.5



0.1



1.0



Fairway Group Holdings Corp


































Titan Energy LLC










(0.6
)


(100.1
)


100.7















Other Senior Secured DebtAdvanced Lighting Technologies Inc


































JW Aluminum Co


36.3















0.2



36.5



2.7







Mood Media Corp


39.0



3.9







(43.4
)


0.5







0.5







Asset Based FinanceAvida Holding AB






8.3











(0.1
)


8.2











Equity/OtherAdvanced Lighting Technologies Inc, Common Stock


































Advanced Lighting Technologies Inc, Warrant


































ASG Technologies, Common Stock


30.7















(11.0
)


19.7











ASG Technologies, Warrant


8.6















(5.5
)


3.1











Borden (New Dairy Opco), Common Stock






5.8











(0.6
)


5.2











Constellis Holdings LLC






18.9











2.2



21.1











Fairway Group Holdings Corp, Common Stock


































HM Dunn Co Inc, Preferred Stock, Series A


































HM Dunn Co Inc, Preferred Stock, Series B


































  See
notes to consolidated financial statements.  15




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of September 30, 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 atSeptember 30,2020


InterestIncome(3)



PIKIncome(3)


FeeIncome(3)JW Aluminum Co, Common Stock

$



$



$



$



$



$



$



$



$
JW Aluminum Co, Preferred Stock


104.1



9.2











(32.1
)


81.2







8.8



MB Precision Holdings LLC, Class A 2 Units


































MB Precision Holdings LLC, Preferred Stock


5.6











(8.8
)


3.2















Mood Media Corp, Common Stock


1.0











(12.6
)


11.6















Mood Media LLC, Class A Warrants


































Mood Media LLC, Class B Warrants


































Mood Media LLC, Class C Warrants


































One Call Care Management Inc, Common Stock


1.8















(0.5
)


1.3











One Call Care Management Inc, Preferred Stock A


19.3















(5.7
)


13.6











One Call Care Management Inc, Preferred Stock B


5.8







0.0







0.4



6.2







0.4



Titan Energy LLC, Common Stock














(8.6
)


8.6















Warren Resources Inc, Common Stock


8.3















(3.8
)


4.5











Total

$
355.5


$
240.1


$
(62.7
)

$
(228.6
)

$
13.2


$
317.5


$
8.2


$
11.3


$
  (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 nine months ended September 30, 2020.  (4)
The Company held this investment as of December 31, 2019 but it was not deemed to be an affiliated person of the portfolio
company as of December 31, 2019. Transfer in or out have been presented at amortized cost.   See
notes to consolidated financial statements.  16




---

##### Table of Contents

FS KKR Capital Corp. II Unaudited Consolidated Schedule of Investments (continued) As of September 30, 2020 (in millions, except share amounts)    (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 September 30, 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 nine months ended September 30, 2020:  Portfolio Company

Fair Value atDecember 31,2019


GrossAdditions(1)



GrossReductions(2)



Net RealizedGain (Loss)


Net Change inUnrealizedAppreciation(Depreciation)


Fair Value atSeptember 30,2020


InterestIncome(3)



PIKIncome(3)


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

$
47.1


$



$
(21.7
)

$



$



$
25.4


$
2.7


$
0.7


$
801 5th Ave, Seattle, Private Equity


7.8







(5.5
)


1.7



4.5



8.5











Kilter Finance, Private Equity






0.3















0.3











Prime ST LLC, Structured Mezzanine






47.1



(21.7
)










25.4



0.9



1.6



Prime ST LLC, Private Equity






6.6



(0.3
)


(2.7
)


(1.1
)


2.5











Credit Opportunities Partners, LLCCredit Opportunities Partners, LLC


510.0



87.5



(0.3
)






2.4



599.6











53.4Total

$
564.9


$
141.5


$
(49.5
)

$
(1.0
)

$
5.8


$
661.7


$
3.6


$
2.3


$
53.4   (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 nine months ended September 30, 2020.  See
notes to consolidated financial statements.  17




---

##### 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

Principal
Amount(c)


AmortizedCost


Fair Value(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 consolidated financial statements.  18




---

##### 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

Principal
Amount(c)


AmortizedCost


Fair Value(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 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

Principal
Amount(c)


AmortizedCost


Fair Value(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 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

Principal
Amount(c)


AmortizedCost


Fair Value(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

$
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


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


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 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


Principal
Amount(c)


AmortizedCost


Fair Value(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% Max PIK)

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



24.8Invictus

(n)(ab)

Materials

L+675




3/30/26



0.1



0.1



0.1  See
notes to 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


Principal
Amount(c)


AmortizedCost


Fair Value(d)LBM 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 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


Principal
Amount(c)


AmortizedCost


Fair Value(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 Max PIK)




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 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)/Number ofShares


Cost


Fair Value(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



10.4Asset Based Finance9.7%Lenovo 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



485.3  See
notes to 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


Fair Value(d)Credit 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



510.0Equity/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



  See
notes to 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


Fair Value(d)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



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



12.0  See
notes to 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


Fair Value(d)Zeta 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%

























$
9,041.2



8,591.1LIABILITIES IN EXCESS OF OTHER ASSETS(72.0%)






























(3,595.1
)NET ASSETS100.0%





























$
4,996.0Notional


UnrealizedTotal Return Swap



















Amount


DepreciationCitibank TRS Facility (Note 9)

























$
93.5


$
(4.4
) 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
)  See
notes to 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)   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)%, Canadian 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).  (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).  See
notes to 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)   (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.  (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.   See
notes to 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)   (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)



NetRealizedGain(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



1.1



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



7.7



7.4



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


$
25.3


$
10.7


$
  See
notes to 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)    (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, 2019 but it was not deemed to be an affiliated person of the portfolio
company as December 31, 2019. 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)


FeeIncome(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











Total

$



$
558.3


$



$



$
6.6


$
564.9


$
0.2


$



$
  (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.  See
notes to consolidated financial statements.  32




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (in millions, except share and per share amounts)   Note 1. Principal Business and Organization FS KKR Capital Corp. II (NYSE: FSKR), 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 September 30, 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 September 30, 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. On June 10, 2020, the Company filed Articles of Amendment to its Articles of
Incorporation, or the Reverse Stock Split Amendment, with the State Department of Assessments and Taxation of the State of Maryland to effect a 4 to 1 reverse split of the Companys shares of common stock, or the Reverse Stock Split. The
Reverse Stock Split became effective in accordance with the terms of the Reverse Stock Split Amendment on June 10, 2020. The Reverse Stock Split affected all shareholders uniformly and did not alter any shareholders percentage interest in the
Companys equity, except to the extent that the Reverse Stock Split resulted in some shareholders owning a fractional share. In that regard, no fractional shares were issued in connection with the Reverse Stock Split. Shareholders of record who
would have otherwise been entitled to receive a fractional share instead received a cash payment based on the closing price of the Companys  33




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 1. Principal Business and
Organization (continued)  common stock as reported on the NYSE as of June 10, 2020. A summary of the Companys weighted average number of shares of common stock outstanding and earnings per share after adjusting
for the reverse stock split is as follows:  Three Months EndedSeptember 30, 2019


Nine Months EndedSeptember 30, 2019Weighted average number of shares of common stock outstanding (as reported)


327,346,481



325,302,803Weighted average number of shares of common stock outstanding (pro-forma)



81,836,620



81,325,701Net investment income per share (as reported)

$
0.18


$
0.54Net investment income per share (pro forma)

$
0.72


$
2.15Earnings per share (as reported)

$
(0.07
)

$
0.28Earnings per share (pro-forma)

$
(0.27
)

$
1.13 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 and nine months ended September 30, 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. 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  34




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 2. Summary of Significant Accounting
Policies (continued)  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 and nine months ended September 30, 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 and nine months ended September 30, 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 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 nine months ended September 30, 2020, the Company recognized $14 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  35




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 2. Summary of Significant Accounting
Policies (continued)  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 nine months ended September 30, 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 nine months ended September 30, 2020 and 2019:  Nine Months Ended September 30,2020


2019Shares


Amount


Shares(1)


AmountReinvestment of Distributions


3,203,560


$
80



2,369,103


$
76Fractional Share Round Up


64,069











Share Repurchase Program


(2,265,153
)


(33
)


(1,622,157
)


(52
)Net Proceeds from Share Transactions


1,002,476


$
47



746,946


$
24  (1)
The number of shares repurchased has been retroactively adjusted to reflect the Reverse Stock Split as discussed below. In connection with the listing, or the Listing, of its shares of common stock on the New York Stock
Exchange, or the NYSE, the Company terminated its previous distribution reinvestment plan, or the old DRP. The final distribution reinvestment under the old DRP was made in connection with the regular quarterly cash distribution paid on June 8,
2020 to stockholders of record as of the close of business on June 8, 2020. On June 17, 2020, the Company adopted a new distribution reinvestment plan, or the new DRP, which became effective as of, and will first apply to the reinvestment
of cash distributions paid on or after, June 17, 2020. For additional information regarding the terms of the new 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 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. Reverse Stock Split As a result of the Reverse Stock Split, which was
effective on June 10, 2020, every four shares of the Companys common stock issued and outstanding were automatically combined into one share of the Companys common stock, and the number of outstanding shares of the Companys
common stock was reduced from approximately 691.2 million to approximately 172.8 million as of June 10, 2020. The Reverse Stock Split did not modify the rights or preferences of the Companys common stock. The Company also filed
a separate Articles of Amendment to its Articles of Incorporation with the State Department of Assessments and Taxation of the State of Maryland to provide that there would be no change in the par value of $0.001 per share as a result of the Reverse
Stock Split. Listing and Fractional Shares The Companys shares of common stock were listed and commenced trading on the NYSE on June 17, 2020. The Company eliminated any outstanding fractional shares of its common stock in connection
with the Listing, as permitted by the Maryland General Corporation Law. The Company eliminated all outstanding fractional shares by rounding up the number of fractional  36




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 3. Share Transactions (continued)  shares held by each of the Companys stockholders to the nearest whole number of shares as of June 15, 2020 As a result of the fractional share round up, the number of outstanding
shares was increased by 64,069 shares. Quarterly 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 Listing has provided liquidity to the Companys stockholders, and therefore the Company does not expect to implement a new quarterly share
repurchase program in the future. 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 old 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 old 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 old 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 would 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 would 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 quarterly 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 were issued pursuant to the old DRP on the distribution date coinciding with the applicable share repurchase date. The price at which shares of common stock were issued under the old DRP was
determined by the Companys board of directors or a committee thereof, in its sole discretion, and would 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.  37




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited 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 quarterly share repurchase program during the nine months ended September 30, 2020 and 2019:  For the Three Months Ended

RepurchaseDate


SharesRepurchased(1)


Percentage ofSharesTenderedThat WereRepurchased


Percentage ofOutstandingSharesRepurchasedas of
theRepurchaseDate


RepurchasePrice
PerShare(1)


AggregateConsiderationforRepurchasedSharesFiscal 2019December 31, 2018


January 2, 2019



824,264



16.7
%


1.01
%

$
32.200


$
27March 31, 2019


April 1, 2019



797,893



14.2
%


0.98
%

$
32.200



25June 30, 2019(2)






















Total






1,622,157














$
52Fiscal 2020December 31, 2019(2)






















March 31, 2020(2)






















June 30, 2020(2)






















Total






















  (1)
Shares repurchased have been adjusted to reflect the 4 to 1 reverse stock split as discussed in Note 3.  (2)
The Company suspended its share repurchase program on May 31, 2019. May 2020 Share Repurchase Program In May 2020, the Companys board of directors authorized a stock repurchase program. Under the program, the Company is permitted to repurchase up to $100 in the aggregate of its outstanding common
stock in the open market at prices below the then-current net asset value per share. The timing, manner, price and amount of any share repurchases was determined by the Company based upon the evaluation of economic and market conditions, the
Companys stock price, applicable legal and regulatory requirements and other factors. The program is expected to be in effect for one year from the effective date, unless extended, or until the aggregate repurchase amount that has been
approved by the Companys board of directors has been expended, or the plan otherwise terminates pursuant to its terms. The program does not require the Company to repurchase any specific number of shares and the Company cannot assure
stockholders that any shares will be repurchased under the program. The program may be suspended, extended, modified or discontinued at any time. During the nine months ended September 30, 2020, the Company repurchased 2,265,153 shares of common stock pursuant to the share repurchase program at an average price per share (inclusive of
commissions paid) of $14.47 (totaling $33). During the period from October 1, 2020 to October 31, 2020, the Company
repurchased 426,222 shares of common stock pursuant to the share repurchase program at an average price per share (inclusive of commissions paid) of $15.11 (totaling $6). 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.  38




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 4. Related Party
Transactions (continued)  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
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 and nine months ended September 30, 2020 and 2019:  Three Months EndedSeptember 30,


Nine Months EndedSeptember 30,Related Party

Source Agreement

Description

2020


2019


2020


2019The Advisor

Investment advisory agreement and prior investment advisory and administrative services agreement

Base Management Fee(1)

$
28


$
17


$
90


$
52The Advisor

Investment advisory agreement and prior investment advisory and administrative services agreement

Subordinated Incentive Fee on
Income(2)

$
22


$
5


$
64


$
25The Advisor

Administration agreement and prior investment advisory and administrative services agreement

Administrative Services Expenses(3)

$
2


$
2


$
5


$
3  (1)
During the nine months ended September 30, 2020 and 2019, $97 and $52, respectively, in base management fees were paid to the Advisor. As
of September 30, 2020, $28 in base management fees were payable to the Advisor.  (2)
During the nine months ended September 30, 2020 and 2019, $53 and $26, respectively, of subordinated incentive fees on income were paid
to the Advisor. As of September 30, 2020, a subordinated incentive fee on income of $22 was payable to the Advisor.  39




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 4. Related Party
Transactions (continued)  (3)
During the nine months ended September 30, 2020 and 2019, $3 and $2, 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 $0.6 and $0.3 for the nine months
ended September 30, 2020 and 2019, respectively. The Company paid $6 and $2 in administrative services expenses to the Advisor during the nine months ended September 30, 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. 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. Affiliated Purchaser Program As previously disclosed, certain affiliates of the owners of the Advisor committed $100 to a $350 investment vehicle that may invest from time to time in shares of the Company. In June 2020, that
investment vehicle entered into a written trading plan with a third party broker in accordance with Rule 10b5-1 and Rule 10b-18 promulgated under the
Exchange Act to facilitate the purchase of shares of the Companys common stock pursuant to the terms and conditions of such plan. The Company is not a party to the plan or any transaction with the investment vehicle.  40




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)    Note 5. Distributions The following table reflects the cash distributions per share that the Company declared and paid on its common stock during the nine months ended September 30, 2020 and 2019:  DistributionFor the Three Months Ended

Per 
Share(1)


AmountFiscal 2019March 31, 2019

$
0.7540


$
61June 30, 2019


0.7540



61September 30, 2019


0.7540



62Total

$
2.2620


$
184Fiscal 2020March 31, 2020

$
0.6000


$
102June 30, 2020


0.6000



102September 30, 2020


0.5500



95Total

$
1.7500


$
299  (1)
The amount of each per share distribution has been retroactively adjusted to reflect the Reverse Stock Split as discussed above in Note 3. On October 29, 2020, the Companys board of directors declared a regular quarterly cash
distribution of $0.55 per share, which will be paid on or about January 5, 2021 to stockholders of record as of the close of business on December 16, 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. Prior to the Listing, the
Company had adopted an opt in old DRP for its stockholders. As a result, if the Company made a cash distribution, its stockholders would receive the distribution in cash unless they specifically opted in to the old DRP so as
to have their cash distributions reinvested in additional shares of the Companys common stock. In connection with the Listing, the Company terminated its old DRP. The final distribution reinvestment under the old DRP was made in connection
with the regular quarterly cash distribution paid on June 8, 2020 to stockholders of record as of the close of business on June 8, 2020. On June 17, 2020, the Company adopted the new DRP, which became effective as of, and will first
apply to the reinvestment of cash distributions paid on or after, June 17, 2020. Pursuant to the new DRP, the Company
will reinvest all cash dividends or distributions declared by the Companys board of directors on behalf of stockholders who do not elect to receive their distributions in cash. As a result, if the Companys board of directors declares a
distribution, then stockholders who have not elected to opt out of the new DRP will have their distributions automatically reinvested in additional shares of the Companys common stock. With respect to each distribution pursuant to the new DRP, the Company reserves the right to either issue new shares of common stock or
purchase shares of common stock in the open market in connection with implementation of the new DRP. Unless the Company, in its sole discretion, otherwise directs the plan administrator, (A) if the per share market price (as defined in the new
DRP) is equal to or greater than the estimated net asset value per share (rounded up to the nearest whole cent) of the Companys common stock on the payment date for the distribution, then the Company will issue shares of common stock at the
greater of (i) net asset value per share of common stock or (ii) 95% of the market price; or (B) if the market price is less than the net asset value per share, then, in the sole discretion of the Company, (i) shares of common stock
will be purchased in open market transactions for the accounts of participants to the extent practicable, or (ii) the Company will issue shares of common stock at net asset value per share. Pursuant to the terms of the new DRP, the number of
shares of common stock to be issued to a participant will be determined by dividing the total dollar amount of the distribution payable to a participant by the price per share at which the Company issues such shares; provided, however, that shares
purchased in open market transactions by the plan administrator will be allocated to a participant based on the average purchase price, excluding any brokerage charges or other charges, of all shares of common stock purchased in the open market.  41




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 5. Distributions (continued)  If a stockholder receives distributions in the form of common stock pursuant to the new
DRP, such stockholder generally will be subject to the same federal, state and local tax consequences as if it elected to receive distributions in cash. If the Companys common stock is trading at or below net asset value, a stockholder
receiving distributions in the form of additional common stock will be treated as receiving a distribution in the amount of cash that they would have received if they had elected to receive the distribution in cash. If the Companys common
stock is trading above net asset value, a stockholder receiving distributions in the form of additional common stock will be treated as receiving a distribution in the amount of the fair market value of the Companys common stock. The
stockholders basis for determining gain or loss upon the sale of common stock received in a distribution will be equal to the total dollar amount of the distribution payable to the stockholder. Any stock received in a distribution will have a
holding period for tax purposes commencing on the day following the day on which the shares of common stock are credited to the stockholders account. 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 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 nine months ended September 30, 2020 and 2019:  Nine Months Ended September 30,2020


2019Source of Distribution

DistributionAmount


Percentage


DistributionAmount


PercentageReturn of capital

$







$




Net investment income(1)


299



100
%


184



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














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














Total

$
299



100
%

$
184



100
%  (1)
During the nine months ended September 30, 2020 and 2019, 89.0% and 93.3%, respectively, of the Companys gross investment income
was attributable to cash income earned, 2.4% and 2.0%, respectively, was attributable to non-cash accretion of discount and 8.6% and 4.7%, 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 September 30, 2020, the Company had short-term and long-term capital loss carryforwards available to offset future realized capital
gains of $33 and $877, respectively. $196 of such losses were carried over from the target companies due to the Merger, and $247 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.  42




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 5. Distributions (continued)  As of September 30, 2020 and December 31, 2019, the gross unrealized
appreciation was $221 and $276, respectively. As of September 30, 2020 and December 31, 2019, the gross unrealized depreciation was $879 and $687, respectively. The aggregate cost of the Companys investments for U.S. federal income tax purposes totaled $8,151 and $9,167 as of September 30, 2020 and December 31, 2019, respectively. The aggregate
net unrealized appreciation (depreciation) on a tax basis was $(874) and $(609) as of September 30, 2020 and December 31, 2019, respectively. As of September 30, 2020, the Company had a deferred tax asset of $23 resulting from net operating losses and capital losses of the Companys wholly-owned taxable subsidiaries. As of
September 30, 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 $23. For the nine
months ended September 30, 2020, the Company did not record a provision for taxes related to its wholly-owned taxable subsidiaries. Note 6. Investment Portfolio The following table summarizes the composition of the Companys investment portfolio at cost and fair value as of September 30, 2020 and December 31, 2019:  September 30, 2020(Unaudited)


December 31, 2019AmortizedCost(1)


FairValue


Percentageof Portfolio


AmortizedCost(1)


FairValue


Percentageof PortfolioSenior Secured LoansFirst Lien

$
5,363


$
4,904



66.9
%

$
6,017


$
5,717



66.6
%Senior Secured LoansSecond Lien


713



629



8.6
%


941



809



9.4
%Other Senior Secured Debt


92



74



1.0
%


243



228



2.7
%Subordinated Debt


181



171



2.3
%


479



489



5.7
%Asset Based Finance


708



646



8.8
%


535



485



5.6
%Credit Opportunities Partners, LLC


591



600



8.2
%


503



510



5.9
%Equity/Other


288



307



4.2
%


323



353



4.1
%Total

$
7,936


$
7,331



100.0
%

$
9,041


$
8,591



100
% The following table summarizes the composition of the Companys investment portfolio at cost and fair
value as of September 30, 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 September 30, 2020 and December 31, 2019:  September 30,
2020(Unaudited)


December 31, 2019AmortizedCost(1)


FairValue


Percentageof Portfolio


AmortizedCost(1)


FairValue


Percentageof PortfolioSenior Secured LoansFirst Lien

$
5,363


$
4,904



66.9
%

$
6,090


$
5,788



66.7
%Senior Secured LoansSecond Lien


713



629



8.6
%


961



827



9.5
%Other Senior Secured Debt


92



74



1.0
%


243



228



2.6
%Subordinated Debt


181



171



2.3
%


479



489



5.6
%Asset Based Finance


708



646



8.8
%


535



485



5.6
%Credit Opportunities Partners, LLC


591



600



8.2
%


503



510



5.9
%Equity/Other


288



307



4.2
%


324



353



4.1
%Total

$
7,936


$
7,331



100.0
%

$
9,135


$
8,680



100.0
%  (1)
Amortized cost represents the original cost adjusted for the amortization of premiums and/or accretion of discounts, as applicable, on
investments.  43




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)  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 September 30, 2020, the Company held investments in four portfolio companies
of which it is deemed to control. As of September 30, 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 September 30, 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
September 30, 2020, the Company had unfunded debt investments with aggregate unfunded commitments of $465.0, unfunded equity/other commitments of $210.2, and unfunded commitments of $284.4 to 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 to 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 September 30, 2020 and audited consolidated schedule of investments as of December 31, 2019.  44




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)  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 September 30, 2020 and December 31, 2019:  September 30, 2020(Unaudited)


December 31, 2019Industry Classification

FairValue


Percentageof Portfolio


FairValue


Percentageof PortfolioAutomobiles & Components

$
56



0.8
%

$
182



2.1
%Capital Goods


944



12.9
%


1,139



13.3
%Commercial & Professional Services


770



10.5
%


861



10.0
%Consumer Durables & Apparel


288



3.9
%


302



3.5
%Consumer Services


267



3.6
%


548



6.4
%Credit Opportunities Partners, LLC


600



8.2
%


510



5.9
%Diversified Financials


572



7.8
%


402



4.7
%Energy


164



2.3
%


328



3.8
%Food & Staples Retailing


198



2.7
%


223



2.6
%Food, Beverage & Tobacco


120



1.6
%


132



1.5
%Health Care Equipment & Services


700



9.6
%


888



10.3
%Household & Personal Products


112



1.5
%


1



0.0
%Insurance


227



3.1
%


220



2.6
%Materials


128



1.8
%


354



4.1
%Media & Entertainment


214



2.9
%


409



4.8
%Pharmaceuticals, Biotechnology & Life Sciences


105



1.4
%


187



2.2
%Real Estate


200



2.7
%


122



1.4
%Retailing


344



4.7
%


435



5.1
%Semiconductors & Semiconductor Equipment






0.0
%


3



0.0
%Software & Services


896



12.2
%


874



10.2
%Technology Hardware & Equipment


133



1.8
%


174



2.0
%Telecommunication Services


151



2.1
%


154



1.8
%Transportation


142



1.9
%


143



1.7
%Total

$
7,331



100.0
%

$
8,591



100.0
% 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 September 30, 2020, the Company and SCRS have funded approximately $675.0 to COP, of which $590.6 was from the Company. 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  45




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)  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. On July 30, 2020, Green Creek entered into a Third Amended and Restated Credit Agreement and Third Amended and Restated
Margining Agreement which amended and restated the Green Creek Credit Facility to, among other things, (i) extend the reinvestment period and the maturity date to December 31, 2021 and January 30,2022, respectively, (ii) reduce
the maximum facility amount to $400 on December 15, 2021, and (iii) increase the interest rate on U.S. dollar borrowings to three-month LIBOR (subject to a 0% floor) plus 3.30%. 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, which will be reduced to $400 on December 15, 2021. The end of the reinvestment period and the maturity date for the Green Creek Credit Facility are December 31, 2021 and January 30,
2022, respectively. U.S. dollar borrowings bear interest at the rate of three-month LIBOR (subject to a 0% floor) plus 3.30% 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) 3.30% 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 September 30, 2020, total outstanding borrowings under the Green Creek Credit Facility were
$429.5. 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
September 30, 2020, total outstanding borrowings under the Big Cedar Creek Credit Facility were $85.0. COP was in compliance with all covenants required by its financing arrangements as of September 30, 2020 and December 31, 2019. During the nine months ended September 30, 2020, the Company sold investments with a cost of $400.3 for proceeds of
$347.2 to COP and recognized a net realized gain (loss) of $(53.1) in connection with the transactions. As of September 30, 2020, $94.9 of these sales to COP are included in receivable for investments sold in the consolidated statements of
assets and liabilities. As of September 30, 2020, COP had total investments with a fair value of $1,233.8. As of
September 30, 2020, COP had no investments on non-accrual status.  46




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)  Below is a summary of COPs portfolio, followed by a listing of the individual
loans in COPs portfolio as of September 30, 2020 and December 31, 2019:  As ofSeptember 30,2020


December 31,2019Total debt investments(1)

$
1,160.4


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


9.8
%


9.2
%Number of portfolio companies in COP


70



37Largest investment in a single portfolio company(1)

$
69.7


$
69.3  (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 September 30, 2020 (Unaudited) (in millions)  Company(a)

Footnotes


Industry

Interest Rate(b)

BaseRateFloor(b)


MaturityDate


No.
Shares/PrincipalAmount(c)


Cost


FairValue(d)Senior SecuredLoansFirst Lien105.8%ABB CONCISE Optical Group LLC


(i)


Retailing

L+500


1.0%



6/15/23


$
3.6


$
2.9


$
3.1Alstom SA


(i)


Transportation

L+450


1.0%



8/29/21



3.1



2.5



2.3Ammeraal Beltech Holding BV


(i)(j)


Capital Goods

E+375






7/30/25



4.8



4.5



5.4Apex Group Limited


(e)(i)


Diversified Financials

L+700


1.3%



6/16/25


$
28.8



28.8



29.1Apex Group Limited


(e)(i)


Diversified Financials

L+700


1.5%



6/16/25


£
22.0



28.9



28.7Arrotex Australia Group Pty Ltd


(e)(i)


Pharmaceuticals, Biotechnology & Life Sciences

B+525


1.0%



7/10/24


A$
45.8



31.0



33.1Brand Energy & Infrastructure Services Inc


(j)


Capital Goods

L+425


1.0%



6/21/24


$
23.4



18.1



21.9Cambium Learning Group Inc


(i)


Consumer Services

L+450






12/18/25



45.2



43.6



44.7CSM Bakery Products


(i)


Food, Beverage & Tobacco

L+625


1.0%



1/4/22



7.8



7.4



7.3Diamond Resorts International Inc


(i)


Consumer Services

L+375


1.0%



9/2/23



13.8



13.6



12.4Distribution International Inc


(i)


Retailing

L+575


1.0%



12/15/23



14.0



11.7



12.7  47




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited 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)Eacom Timber Corp

(e)(j)

Materials

L+650

1.0%

11/20/23

$
2.5


$
2.5


$
2.5Eagleclaw Midstream Ventures LLC

(i)

Energy

L+425

1.0%

6/24/24


11.3



10.6



8.9EaglePicher Technologies LLC

(j)

Capital Goods

L+325



3/8/25


0.0



0.0



0.0EIF Van Hook Holdings LLC

(i)

Energy

L+525



9/5/24


7.0



6.7



4.4Electronics For Imaging Inc

(i)

Technology Hardware & Equipment

L+500



7/23/26


12.6



11.8



10.2Entertainment Benefits Group LLC

(e)(i)

Media & Entertainment

L+575, 2.5% PIK (2.5% Max PIK)

1.0%

9/30/25


2.5



2.5



2.2Fox Head Inc

(e)(i)

Consumer Durables & Apparel

L+850

1.0%

10/21/20


20.2



20.1



18.9ID Verde

(e)(j)

Commercial & Professional Services

E+500, 2.3% PIK (2.3% Max PIK)



3/29/24


0.2



0.2



0.2ID Verde

(e)(j)

Commercial & Professional Services

L+525, 2.3% PIK (2.3% Max PIK)



3/29/24

£
0.1



0.1



0.1ID Verde

(e)(j)

Commercial & Professional Services

E+700



3/29/25


1.0



1.1



1.1ID Verde

(e)(i)(j)

Commercial & Professional Services

L+800 PIK (L+800 Max PIK)



3/29/25

£
0.6



0.8



0.8Industria Chimica Emiliana Srl

(e)(i)

Pharmaceuticals, Biotechnology & Life Sciences

E+725



6/30/26


51.4



56.0



59.7Jostens Inc

(j)

Consumer Services

L+550



12/19/25

$
3.5



2.7



3.3Laird PLC

(j)

Technology Hardware & Equipment

L+450



7/9/25


4.3



3.7



4.1LBM Borrower LLC

(j)

Capital Goods

L+375

1.0%

8/19/22


8.4



7.3



8.4LD Intermediate Holdings Inc

(j)

Software & Services

L+588

1.0%

12/9/22


30.2



25.6



28.9Lipari Foods LLC

(e)(i)

Food & Staples Retailing

L+588

1.0%

1/6/25


44.0



44.0



43.8Lipari Foods LLC

(e)(i)

Food & Staples Retailing

L+588

1.0%

1/6/25


22.3



22.3



22.2MedAssets Inc

(i)

Health Care Equipment & Services

L+450

1.0%

10/20/22


5.7



4.9



5.2MI Windows and Doors Inc

(j)

Capital Goods

L+550

1.0%

11/6/26


4.9



4.2



4.9  48




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited 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)Monitronics International Inc


(i)(j)


Commercial & Professional Services

L+500


1.5%



7/3/24


$
33.5


$
30.0


$
32.7Ontic Engineering & Manufacturing Inc


(j)


Capital Goods

L+475






10/30/26



2.2



1.8



2.2Onvoy 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



24.8



24.7



23.6Premium Credit Ltd


(e)(j)


Diversified Financials

L+650






1/16/26


£
19.0



23.4



23.7Qdoba Restaurant Corp


(i
)

Consumer Services

L+700


1.0%



3/21/25


$
1.9



1.7



1.8Sequa Corp


(i
)(j)

Capital Goods

L+675, 0.0% PIK (1.0% Max PIK)


1.0%



11/28/23



34.7



32.8



32.9Smart & Final Stores LLC


(i
)(j)

Food & Staples Retailing

L+675






6/20/25



25.1



23.8



25.3Staples Canada


(e
)(i)

Retailing

C+700


1.0%



9/12/24


C$
49.6



38.0



37.6Sutherland Global Services Inc


(i
)

Software & Services

L+538


1.0%



4/23/21


$
25.0



21.8



21.8Syncsort Inc


(j
)

Software & Services

L+600


1.0%



8/16/24



10.6



8.6



10.5Total Safety US Inc


(j
)

Capital Goods

L+600


1.0%



8/16/25



7.8



6.4



7.4Trace3 Inc


(e
)(i)

Software & Services

L+675


1.0%



8/5/24



32.9



32.7



32.7Transaction Services Group Ltd


(e
)(i)

Consumer Services

B+600






10/15/26


A$
62.5



42.1



41.9WireCo WorldGroup Inc


(i)


Capital Goods

L+500


1.0%



9/29/23


$
0.1



0.1



0.1Total Senior Secured LoansFirst Lien






















708.1



724.8Senior Secured LoansSecond Lien41.2%Access CIG LLC


(j)


Commercial & Professional Services

L+775






2/27/26



1.9



1.7



1.8Albany Molecular Research Inc


(j)


Pharmaceuticals, Biotechnology & Life Sciences

L+700


1.0%



8/30/25



0.9



0.7



0.9American Bath Group LLC


(j)


Capital Goods

L+975


1.0%



9/30/24



10.0



9.1



9.7Ammeraal Beltech Holding BV


(e)(i)


Capital Goods

L+775


1.0%



9/12/26



52.3



50.7



48.7BCA Marketplace PLC


(e)(i)


Retailing

L+825






11/22/27


£
29.9



38.7



36.6  49




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited 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)EaglePicher Technologies LLC


(j)


Capital Goods

L+725






3/8/26


$
0.4


$
0.4


$
0.4Excelitas Technologies Corp


(j)


Technology Hardware & Equipment

L+750


1.0%



12/1/25



7.5



5.8



7.4LBM Borrower LLC


(i)(j)


Capital Goods

L+925


1.0%



8/20/23



11.5



11.1



11.3Misys Ltd


(i)(j)


Software & Services

L+725


1.0%



6/13/25



12.5



10.7



11.8New Arclin US Holding Corp


(j)


Materials

L+875


1.0%



2/14/25



0.3



0.2



0.3OPE Inmar Acquisition Inc


(i)


Software & Services

L+800


1.0%



5/1/25



9.6



7.3



7.0Paradigm Acquisition Corp


(i)


Health Care Equipment & Services

L+750






10/26/26



0.5



0.4



0.4Pure Fishing Inc


(e)(i)


Consumer Durables & Apparel

L+838


1.0%



12/31/26



46.8



41.1



39.2Rise Baking Company


(e)(i)


Food, Beverage & Tobacco

L+800


1.0%



8/9/26



18.0



17.7



16.9Sequa Corp


(i)


Capital Goods

L+400, 6.8% PIK (6.8% Max PIK)


1.0%



4/28/24



19.4



16.3



15.5Transplace


(i)


Transportation

L+875


1.0%



10/6/25



3.3



2.5



3.0Wittur Holding GmbH


(e)(i)


Capital Goods

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






9/23/27



64.5



69.7



71.2Total Senior Secured LoansSecond Lien






















284.1



282.1Other Senior Secured Debt2.3%Velvet Energy Ltd


(e)(i)


Energy

9.0%






10/5/23


$
15.0



15.2



13.1Vivint Inc


(i)


Commercial & Professional Services

7.9%






12/1/22



3.0



3.0



3.0Total Other Senior Secured Debt






















18.2



16.1Subordinated Debt9.5%Ascent Resources Utica Holdings LLC / ARU Finance Corp


(i)


Energy

10.0%






4/1/22



26.0



25.9



25.7Cornerstone (Ply Gem Holdings Inc)


(i)


Capital Goods

8.0%






4/15/26



0.2



0.2



0.2  50




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited 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)Diamond Resorts International Inc


(i)


Consumer Services

10.8%






9/1/24


$
3.0


$
3.0


$
2.7GFL Environmental Inc


(i)


Commercial & Professional Services

8.5%






5/1/27



5.3



5.7



5.7LifePoint Hospitals Inc


(i)


Health Care Equipment & Services

9.8%






12/1/26



10.7



9.4



11.4MultiPlan Inc


(i)


Health Care Equipment & Services

7.1%






6/1/24



7.1



5.8



7.3Plastipak Holdings Inc


(i)


Materials

6.3%






10/15/25



1.0



0.7



1.0SRS Distribution Inc


(i)


Capital Goods

8.3%






7/1/26



5.7



4.4



6.1Vivint Inc


(i)


Commercial & Professional Services

7.6%






9/1/23



5.0



4.5



5.1Total Subordinated Debt






















59.6



65.2Asset Based Finance13.1%NewStar Clarendon 2014-1A Class D


(e)(h)(i)


Diversified Financials








1/25/27


$
12.1



4.8



3.5Pretium Partners LLC P1, Structured Mezzanine


(e)(i)


Real Estate

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






10/22/26


$
6.9



6.9



6.9Pretium Partners LLC P2, Structured Mezzanine


(e)(i)


Real Estate

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






5/29/25


$
15.2



15.3



15.3Luxembourg Life FundAbsolute Return Fund I, 1L Term Loan


(e)(j)


Insurance

L+ 750


1.5
%


2/27/25


$
7.6



7.6



7.6Luxembourg Life FundLong Term Growth Fund, 1L Term Loan


(e)(i)(j)


Insurance

9.0%






7/23/21


$
56.9



55.8



56.9Total Asset Based Finance






















90.4



90.2  51




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##### Table of Contents

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

Footnotes


Industry

InterestRate(b)

BaseRateFloor(b)


MaturityDate


No.
Shares/PrincipalAmount(c)


Cost


FairValue(d)Equity/Other8.1%Ascent Resources Utica Holdings LLC / ARU Finance Corp, Common Stock


(e)(h)(k)


Energy












13,556


$
3.6


$
3.0Ascent Resources Utica Holdings LLC / ARU Finance Corp, Trade Claim


(e)(k)


Energy












115,178,571



30.5



25.8SSC (Lux) Limited S.a r.l., Common Stock


(e)(h)(i)


Health Care Equipment & Services












261,364



8.1



11.3Zeta Interactive Holdings Corp, Preferred Stock, Series E1


(e)(h)(i)


Software & Services












620,025



7.1



6.2Zeta Interactive Holdings Corp, Preferred Stock, Series F


(e)(h)(i)


Software & Services












563,932



6.5



9.0Zeta Interactive Holdings Corp, Warrant


(e)(h)(i)


Software & Services








4/20/27



84,590



0.2



0.1Total Equity/Other






















56.0



55.4TOTAL INVESTMENTS180.0%





















$
1,216.4


$
1,233.8DERIVATIVE INSTRUMENTS1.8%Foreign currency forward contracts

























$
(12.2
)  (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 September 30, 2020, the three-month London Interbank Offered Rate, or LIBOR or L, was 0.23%, the Euro Interbank Offered Rate, or EURIBOR, was (0.50)%, the Australian Bank Bill Swap Bid Rate, or BBSY, or
B, was 0.14%, and the Canadian Dollar Offer Rate, or CDOR or C, was 0.51%. 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.  52




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)  (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.  (k)
Security held within IC II American Energy Investments, Inc., a wholly-owned subsidiary of the Company. 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% MaxPIK)


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



14.4  53




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited 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)Entertainment 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


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



13.7Vivint 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



7.4  54




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited 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)Wittur Holding GmbH

(e)

Capital Goods

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



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



17.8Vivint 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% MaxPIK)



10/22/26

$
6.8



6.8



6.8Pretium Partners LLC P2, Structured Mezzanine

(e)

Real Estate

2.0%, 7.5%PIK (7.5% MaxPIK)



5/29/25

$
14.1



14.3



14.3Total Asset Based Finance
















26.0



25.9  55




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited 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)Equity/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  (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.  56




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 6. Investment Portfolio (continued)  Below is selected balance sheet information for COP as of September 30, 2020 and
December 31, 2019:  As ofSeptember 30,2020


December 31,2019Selected Balance Sheet InformationInvestments at fair value

$
1,233.8


$
960.8Cash and other assets


110.9



98.7Total assets


1,344.7



1,059.5Debt


514.5



475.0Other liabilities


144.9



1.7Total liabilities


659.4



476.7Members equity

$
685.3


$
582.8 Below is selected statement of operations information for COP for the three and nine months ended
September 30, 2020:  Three Months Ended


Nine Months EndedSeptember 30, 2020


September 30, 2020Selected Statement of Operations InformationTotal investment income

$
28.3


$
78.6ExpensesInterest expense


4.2



13.5Administrative services


0.7



2.2Custody and administrative fees


0.1



0.1Other


0.1



0.4Total expenses


5.1



16.2Net investment income


23.2



62.4Net realized and unrealized losses


29.8



1.0Net increase in net assets resulting from operations

$
53.0


$
63.4 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 September 30, 2020 and December 31, 2019:  Fair ValueDerivative Instrument

Statement Location

September 
30,2020(Unaudited)


December 31,2019Interest rate swaps

Unrealized depreciation on interest rate swaps

$
54


$
29Foreign currency forward contracts

Unrealized appreciation on foreign currency forward contracts


0



Foreign currency forward contracts

Unrealized depreciation on foreign currency forward contracts


0



1Total



$
54


$
30  57




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 7. Financial Instruments (continued)  Net realized and unrealized gains and losses on derivative instruments recorded by the
Company for the nine months ended September 30, 2020 and 2019 are in the following locations in the consolidated statements of operations:  Net Realized Gains(Losses)


Net Realized Gains(Losses)Three MonthsEnded September 30,


Nine MonthsEnded September 30,Derivative Instrument

Statement Location

2020


2019


2020


2019Interest Rate Swaps

Net realized gains (losses) on interest rate swaps

$
(5
)

$
0


$
(11
)

$
0Foreign currency forward contracts

Net realized gains (losses) on foreign currency forward contracts










0



Total



$
(5
)

$
0


$
(11
)

$
0  Net Unrealized Gains(Losses)


Net Unrealized Gains(Losses)Three MonthsEnded September 30,


Nine MonthsEnded September 30,Derivative Instrument

Statement Location

2020


2019


2020


2019Interest Rate Swaps

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

$
5


$
(2
)

$
(25
)

$
(12
)Foreign currency forward contracts

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


0







1



Total



$
5


$
(2
)

$
(24
)

$
(12
) 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 September 30, 2020 and December 31, 2019:  As of September 30,
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


















Total

$
0


$



$



$



$
0  Counterparty

DerivativeLiabilities Subjectto Master NettingAgreement


DerivativesAvailable forOffset


Non-cashCollateralPledged(1)


Cash 
CollateralPledged(1)


Net Amount ofDerivativeLiabilities(3)JP Morgan Chase Bank

$
24


$



$



$
24


$
ING Capital Markets


30











30



Total

$
54


$



$



$
54


$
  58




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 7. Financial Instruments (continued)  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

DerivativeLiabilities Subjectto Master NettingAgreement


DerivativesAvailable forOffset


Non-cashCollateralPledged(1)


CashCollateralPledged(1)


Net Amount ofDerivativeLiabilities(3)JP Morgan Chase Bank

$
(14
)

$
0


$



$
14


$
ING Capital Markets


(16
)


0







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. 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 nine months ended September 30, 2020 and September 30, 2019 was $900 and $353, respectively. As of September 30, 2020 and December 31, 2019, the Companys open interest rate swaps were as follows:  As of September 30,
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


$



$
(17
)

$
(17
)JP Morgan Chase Bank


$200



3-Month LIBOR



2.81
%


12/18/2021







(7
)


(7
)ING Capital Markets


$250



3-Month LIBOR



2.59
%


1/14/2024







(21
)


(21
)ING Capital Markets


$250



3-Month LIBOR



2.62
%


1/14/2022







(9
)


(9
)$



$
(54
)

$
(54
)   59




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 7. Financial Instruments (continued)  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 nine months ended September 30, 2020 and 2019 was $17 and $0, respectively. As of September 30, 2020 and December 31, 2019, the Companys open foreign currency forward contracts were as follows:  As of September 30,
2020Foreign Currency

SettlementDate


Counterparty


Amount andTransaction


US$ Value atSettlement Date


US$ Value atSeptember 30, 2020


UnrealizedAppreciation(Depreciation)EUR


8/8/2025



JP Morgan Chase Bank







1.9 Sold


$
2.3


$
2.4


$
(0.1
)NOK


8/8/2025



JP Morgan Chase Bank



kr



11.4 Sold



1.2



1.2



0.0SEK


8/8/2025



JP Morgan Chase Bank



kr



27.8 Sold



3.1



3.2



(0.1
)Total

















$
6.6


$
6.8


$
(0.2
)  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



  60




---

##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 7. Financial Instruments (continued)  As of December 31,
2019Foreign Currency

SettlementDate

Counterparty

Amount andTransaction

US$ Value atSettlement Date


US$ Value atDecember 31, 2019


UnrealizedAppreciation(Depreciation)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. 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 September 30, 2020 and December 31, 2019, the Companys
investments were categorized as follows in the fair value hierarchy:  September 30, 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


585







1,594



Level 3Significant unobservable inputs


6,146







6,480



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


600







510



Total

$
7,331


$



$
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. In addition, the Company had interest rate swaps and foreign currency forward contracts, as described in Note 7, which were categorized as
Level 2 in the fair value hierarchy as of September 30, 2020 and December 31, 2019.  61




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 8. Fair Value of Financial
Instruments (continued)  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 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 nine months ended September 30, 2020 and 2019 of investments for which significant
unobservable inputs (Level 3) were used in determining fair value:  For the Nine Months Ended September 30, 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)


6



0



0



0



0



1



7Net realized gain (loss)


(246
)


(172
)


(62
)






(1
)


(47
)


(528
)Net change in unrealized appreciation (depreciation)


(121
)


55



1



(4
)


(12
)


(32
)


(113
)Purchases


1,187



17











255



53



1,512Paid-in-kind interest


7



2



3



7



21



9



49Sales and repayments


(1,174
)


(2
)


(27
)


(3
)


(102
)


(22
)


(1,330
)Net transfers in or out of Level 3


54



15



















69Fair value at end of period

$
4,618


$
485


$
10


$
80


$
646


$
307


$
6,146The 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

$
(222
)

$
(53
)

$
1


$
(4
)

$
(12
)

$
(62
)

$
(352
)  62




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 8. Fair Value of Financial
Instruments (continued)  For the Nine Months Ended September 30, 2019Senior SecuredLoansFirstLien


Senior SecuredLoansSecondLien


OtherSeniorSecuredDebt


SubordinatedDebt


AssetBasedFinance


Equity/Other


TotalFair value at beginning of period

$
2,828


$
212


$
95


$
6


$
48


$
263


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


2



0



1



0



0



1



4Net realized gain (loss)


(2
)














1



(10
)


(11
)Net change in unrealized appreciation (depreciation)


(53
)


(16
)


(3
)


0



(6
)


6



(72
)Purchases


552



134



14



33



90



5



828Paid-in-kind interest


3



1



1



3



2



5



15Sales and repayments


(817
)


(6
)


(2
)






(12
)


(6
)


(843
)Net transfers in or out of Level 3


26























26Fair value at end of period

$
2,539


$
325


$
106


$
42


$
123


$
264


$
3,399The 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

$
(56
)

$
(16
)

$
0


$
0


$
(3
)

$
(2
)

$
(77
) The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value
measurements as of September 30, 2020 and December 31, 2019 were as follows:  Type of Investment

Fair Value atSeptember 30,2020(Unaudited)(1)


ValuationTechnique(2)

Unobservable Input


Range
(Weighted Average)(3)

Impact toValuation froman Increase inInput(4)Senior Debt

$
4,581


Discounted Cash Flow


Discount Rate


5.3%  - 21.2% (8.8%)


Decrease474


Waterfall


EBITDA Multiple


0.1x - 11.0x (5.6x)


Increase58


CostSubordinated Debt


80


Discounted Cash Flow


Discount Rate


12.2% - 12.2% (12.2%)


Decrease0


Waterfall


EBITDA Multiple


11.0x - 11.0x (11.0x)


IncreaseAsset Based Finance


303


Discounted Cash Flow


Discount Rate


4.2% - 14.2% (9.0%)


Decrease297


Waterfall


EBITDA Multiple


1.0x - 10.0x (1.4x)


Increase35


Other9


Cost2


Indicative Dealer Quotes





28.8% - 28.8% (28.8%)


IncreaseEquity/Other


275


Waterfall


EBITDA Multiple


0.1x - 13.8x (7.3x)


Increase27


Option Pricing Model


Equity Illiquidity Discount


55.0% - 65.0% (55.2%)


Decrease3


Discounted Cash Flow


Discount Rate


13.4% - 13.4% (13.4%)


Decrease2


Other0


CostTotal

$
6,146  (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.   63




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 8. Fair Value of Financial
Instruments (continued)  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.  (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 Prior to June 18, 2020, in accordance with the 1940 Act, the Company was allowed to borrow amounts such that its asset coverage, calculated pursuant to the 1940 Act, was at least 200% after such
borrowing. Effective June 19, 2020, the Companys asset coverage requirement applicable to senior securities was reduced from 200% to 150%. As of September 30, 2020, the aggregate amount outstanding of the senior securities issued by
the Company was $3,293. As of September 30, 2020, the Companys asset coverage was 228%. The following tables
present summary information with respect to the Companys outstanding financing arrangements as of September 30, 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 nine months ended September 30, 2020 are discussed below.  As of September 30, 2020 (Unaudited)Arrangement

Type of Arrangement

Rate

AmountOutstanding


AmountAvailable


MaturityDateSenior Secured Revolving Credit Facility(1)

Revolving Credit Facility

L+1.75% - 
2.00%(2)(3)


$   778
(4)

$
987


November 7, 2024Germantown Credit Facility(1)

Term Loan Credit Facility

L+2.50%(2)


175






December 15, 2020Darby Creek Credit Facility(1)

Revolving Credit Facility

L+1.95%(2)


187



63


February 26, 2024Dunlap Credit Facility(1)

Revolving Credit Facility

L+2.00%(2)


375



125


February 26, 2024Juniata River Credit Facility(1)

Revolving Credit Facility

L+2.50% - L+2.75%(2)(5)


975



275


July 15, 2022-April 11, 2023(5)Burholme Prime Brokerage Facility(1)

Prime Brokerage Facility

L+1.25%









March 28,
2021(6)Ambler Credit Facility(1)

Revolving Credit Facility

L+2.25%(2)


118



82


November 22, 2024  64




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 9. Financing Arrangements (continued)  As of September 30, 2020 (Unaudited)Arrangement

Type of Arrangement

Rate

AmountOutstanding


AmountAvailable


MaturityDateMeadowbrook Run Credit Facility(1)

Revolving Credit Facility

L+2.25%(2)

$
210


$
90



November 22, 20244.250% Notes due 2025(7)

Unsecured Notes

4.25%


475







February 14, 2025Total





$
3,293


$
1,622  (1)
The carrying amount outstanding under the facility approximates its fair value.  (2)
LIBOR is subject to a 0% floor.  (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
133 has been converted to U.S. dollars at an exchange rate of 1.00 to $1.17 as of September 30, 2020 to reflect total amount outstanding in U.S. dollars. Canadian dollar balance outstanding of CAD $112 has been converted to U.S.
dollars at an exchange rate of CAD $1.00 to $0.75 as of September 30, 2020 to reflect total amount outstanding in U.S. dollars. Australian dollar balance outstanding of AUD $156 has been converted to U.S. dollars at an exchange rate of AUD
$1.00 to $0.72 as of September 30, 2020 to reflect total amount outstanding in U.S. dollars. Pounds sterling balance outstanding of £141 has been converted to U.S. dollars at an exchange rate of £1.00 to $1.29 as of
September 30, 2020 to reflect total amount outstanding in U.S. dollars.  (5)
The Juniata River Credit Facility is composed of two tranches: a $400 tranche, or Tranche A, with a spread over LIBOR of 2.50% per annum and a
maturity date of July 15, 2022, and an $850 tranche, or Tranche B, with a spread over LIBOR of 2.75% per annum and a maturity date of April 11, 2023.  (6)
The Burholme Prime Brokerage Facility generally is terminable upon 179 days notice by either party. As of September 30, 2020,
neither party had provided notice of its intent to terminate the facility.  (7)
As of September 30, 2020, the fair value of the 4.250% notes was approximately $449. The valuation is considered a Level 2 valuation
within the fair value hierarchy.  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%(1)(3)

$
1,516
(4)

$
159



November 7, 2024Germantown Credit Facility

Term Loan Credit Facility

L+2.50%(1)


300







December 15, 2020Darby Creek Credit Facility

Revolving Credit Facility

L+1.95%(1)


215



35



February 26, 2024Dunlap Credit Facility

Revolving Credit Facility

L+2.00%(1)


405



95



February 26, 2024Jefferson Square Credit Facility

Revolving Credit Facility

L+2.50%(1)


370



30



July 15, 2022Juniata River Credit Facility

Revolving Credit Facility

L+2.45%(1)


730



120



October 11, 2021Burholme Prime Brokerage Facility

Prime Brokerage Facility

L+1.25%


100







June 27,
2020(5)Broomall Prime Brokerage Facility

Prime Brokerage Facility

L+1.25%


38



12



September 26, 
2020(6)Ambler Credit Facility

Revolving Credit Facility

L+2.25%(1)


85



115



November 22, 2024Meadowbrook Run Credit Facility

Revolving Credit Facility

L+2.25%(1)


50



250



November 22, 2024Total





$
3,809


$
816Center City Total Return Swap

Total Return Swap

L+1.55%

$



$




N/A(7)Cheltenham Total Return Swap

Total Return Swap

L+1.60%

$
94


$
81



N/A(8)  (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
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.  65




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 9. Financing Arrangements (continued)  (5)
The Burholme Prime Brokerage Facility generally is terminable upon 179 days notice by either party. As of December 31, 2019,
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 December 31, 2019,
neither party had provided notice of its intent to terminate the facility.  (7)
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 TRS was terminated effective June 30, 2020. Center City Funding did not pay any
termination fee as a result of the orderly winddown and ultimate termination of the TRS.  (8)
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 TRS was terminated effective September 28, 2020. Cheltenham Funding did not pay any
termination fee as a result of the orderly winddown and ultimate termination of the TRS. For the three and
nine months ended September 30, 2020 and 2019, the components of total interest expense for the Companys financing arrangements were as follows:  Three Months Ended September 30,2020


2019Arrangement(1)

DirectInterestExpense(2)


Amortizationof DeferredFinancingCosts andDiscount


TotalInterestExpense


DirectInterestExpense(2)


Amortizationof DeferredFinancingCosts andDiscount


TotalInterestExpenseGreen Creek Credit Facility

$



$



$



$
6


$
0


$
6Germantown Credit Facility


1



0



1











Cooper River Credit Facility














1



0



1Darby Creek Credit Facility


1



0



1



2



0



2Dunlap Credit Facility


3



0



3











Jefferson Square Credit Facility


2







2











Juniata River Credit Facility


6



0



6



9



1



10Senior Secured Revolving Credit Facility


5



1



6



5



0



5Burholme Prime Brokerage Facility






















Broomall Prime Brokerage Facility






















Ambler Credit Facility


1



0



1











Meadowbrook Run Credit Facility


1



0



1











4.250% Notes due 2025


5



0



5











Total

$
25


$
1


$
26


$
23


$
1


$
24  Nine Months Ended September 30,2020


2019Arrangement(1)

DirectInterestExpense(2)


Amortizationof DeferredFinancingCosts andDiscount


TotalInterestExpense


DirectInterestExpense(2)


Amortizationof DeferredFinancingCosts andDiscount


TotalInterestExpenseGreen Creek Credit Facility

$



$



$



$
19


$
1


$
20Germantown Credit Facility


7







7











Cooper River Credit Facility














4



0



4Darby Creek Credit Facility


6



0



6



7



0



7Dunlap Credit Facility


10







10











Jefferson Square Credit Facility


9







9











Juniata River Credit Facility


21



1



22



31



1



32Senior Secured Revolving Credit Facility


23



1



24



15



1



16Burholme Prime Brokerage Facility






















Broomall Prime Brokerage Facility


1







1











  66




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 9. Financing Arrangements (continued)  Nine Months Ended September 30,2020


2019Arrangement(1)

DirectInterestExpense(2)


Amortizationof DeferredFinancingCosts andDiscount


TotalInterestExpense


DirectInterestExpense(2)


Amortizationof DeferredFinancingCosts andDiscount


TotalInterestExpenseAmbler Credit Facility

$
3


$
0


$
3


$



$



$
Meadowbrook Run Credit Facility


5



1



6











4.250% Notes due 2025


13



0



13











Total

$
98


$
3


$
101


$
76


$
3


$
79  (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 nine months ended September 30, 2020 were $3,666 and 3.55%, respectively. As of September 30, 2020, the Companys weighted average effective interest rate on borrowings,
including the effect of non-usage fees, was 3.11%. The Companys average
borrowings and weighted average interest rate, including the effect of non-usage fees, for the nine months ended September 30, 2019 were $1,946 and 5.15%, respectively. As of September 30, 2019, the
Companys weighted average effective interest rate on borrowings, including the effect of non-usage fees, was 4.78%. 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 September 30, 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. 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 as the greater of (a) 30% of the total assets as at the last day of such fiscal quarter and (b)
$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%. Broomall
Prime Brokerage Facility On June 22, 2020, Broomall Funding LLC, or Broomall Funding, a wholly-owned financing
subsidiary of the Company, repaid in full and terminated its committed facility arrangement, or the Broomall Prime Brokerage Facility, with BNP Paribas Prime Brokerage International, Ltd., or BNPP.  67




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 9. Financing Arrangements (continued)  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 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 Total Return Swap Effective June 30, 2020, the Companys wholly-owned financing subsidiary, Center City Funding LLC, or Center City Funding, terminated its total return swap, or TRS, for a portfolio of primarily
senior secured floating rate loans with Citibank, N.A., or Citibank. Center City Funding did not pay any termination fee as a result of the termination of the TRS. For the nine months ended September 30, 2020, transactions in the TRS resulted in net realized gain (loss) on total return swap of $0 and net change unrealized appreciation (depreciation) on total
return swap of $0 which are reflected in the Companys consolidated statements of operations. Germantown Credit Facility On July 31, 2020, Germantown Funding LLC, or Germantown Funding, a wholly-owned special-purpose financing subsidiary
of the Company, permanently prepaid a portion of its term loan credit facility, or the Germantown Credit Facility, with Goldman Sachs Bank USA, or Goldman Sachs, as lender, sole lead arranger, administrative agent and calculation agent, and Wells
Fargo Bank, National Association, or Wells Fargo, as collateral agent and collateral administrator. The prepayment permanently reduced the facility amount from $300 to $175. Juniata River Credit Facility On September 11, 2020, Juniata River
LLC, or Juniata River, a wholly-owned special-purpose financing subsidiary of the Company entered into that certain Second Amended and Restated Loan and Security Agreement, or the Juniata River Second Amendment and Restatement, to its revolving
credit facility, or the Juniata River Credit Facility, with JPMorgan Chase Bank, National Association, or JPMorgan, as administrative agent, each of the lenders from time to time party thereto, and Wells Fargo Bank, National Association, or Wells
Fargo, as collateral agent, collateral administrator, and securities intermediary, to, among other things, (i) increase the maximum committed facility amount from $850 to $1,250, composed of a $400 tranche, or Tranche A, with an interest rate
equal to three-month LIBOR (subject to a 0% floor) plus 2.50% per annum and a maturity date of July 15,  68




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 9. Financing Arrangements (continued)  2022, and an $850 tranche, or Tranche B, with an interest rate equal to three-month LIBOR (subject to a 0% floor) plus 2.75% per annum and a maturity date of April 11, 2023, (ii) extend the
reinvestment period to January 11, 2022, (iii) provide Juniata River the option to elect to increase the Tranche B commitments by up to an additional $650, subject to certain conditions, and (iv) require the repayment of any outstanding
Tranche B loans in excess of $550 at the end of the reinvestment period. Jefferson Square Credit Facility In connection with the Juniata River Second Amendment and Restatement, on September 11, 2020, Jefferson Square Funding LLC, or
Jefferson Square, a wholly-owned special-purpose financing subsidiary of the Company, repaid in full and terminated its revolving credit facility, or the Jefferson Square Credit Facility, with JPMorgan, as administrative agent, each of the lenders
from time to time party thereto, and Wells Fargo, as collateral agent and collateral administrator. On September 11, 2020, Jefferson Square merged with and into Juniata River, with Juniata River as the surviving entity. Cheltenham Total Return Swap Effective September 28, 2020, the Companys wholly-owned financing subsidiary, Cheltenham Funding LLC, or Cheltenham Funding, terminated its TRS for a portfolio of primarily senior secured
floating rate loans with Citibank. Cheltenham Funding did not pay any termination fee as a result of the termination of the TRS. For the nine months ended September 30, 2020, transactions in the TRS resulted in net realized gain (loss) on total return swap of
$(3) and net change unrealized appreciation (depreciation) on total return swap of $5 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. 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 September 30, 2020, the Companys unfunded commitments consisted of the following:  Category/Company
(1)

CommitmentAmountSenior Secured LoansFirst Lien5 Arch Income Fund 2 LLC

$
12.7All Systems Holding LLC


3.0Aspect Software Inc


3.3CSafe Global


9.1CSafe Global


6.1Eagle Family Foods Inc


5.2Entertainment Benefits Group LLC


0.5Heniff Transportation Systems LLC


6.4  69




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 10. Commitments and
Contingencies (continued)  Category/Company
(1)

CommitmentAmountJ S Held LLC

$
8.1J S Held LLC


6.8KBP Investments LLC


25.8KBP Investments LLC


3.3Kellermeyer Bergensons Services LLC


36.4Kodiak BP LLC


8.8Lexitas Inc


2.9Monitronics International Inc


58.7Motion Recruitment Partners LLC


34.6P2 Energy Solutions Inc.


5.4Pretium Packaging LLC


22.4Production Resource Group LLC


46.9Revere Superior Holdings Inc


2.3RSC Insurance Brokerage Inc


33.2RSC Insurance Brokerage Inc


4.7RSC Insurance Brokerage Inc


3.6Sungard Availability Services Capital Inc


1.6Truck-Lite Co LLC


18.6Truck-Lite Co LLC


10.6Asset Based FinanceHome Partners JV, Structured Mezzanine


14.5Home Partners JV 2, Structured Mezzanine


15.9Opendoor Labs Inc, 2L Term Loan


53.6Total

$
465.0Unfunded Other Asset Based Finance / Other commitments

$
210.2  (1)
May be commitments to one or more entities affiliated with the named company. As of September 30, 2020, the Companys debt commitments are comprised of $127.5 revolving credit facilities and $337.5 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 $(10.6).
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 September 30, 2020, the Company also has an unfunded commitment to provide $284.4 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 September 30, 2020 and December 31, 2019.  70




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)    Note 11. Financial Highlights The following is a schedule of financial highlights of the Company for the nine months ended September 30, 2020 and the year ended
December 31, 2019:  Nine Months EndedSeptember 30, 2020(Unaudited)


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

$
29.44


$
31.45Results of operations(2)Net investment income


1.51



2.80Net realized gain (loss) and unrealized appreciation (depreciation)


(4.66
)


(1.67
)Net increase (decrease) in net assets resulting from operations


(3.15
)


1.13Stockholder distributions(3)Distributions from net investment income


(1.75
)


(3.02
)Net decrease in net assets resulting from stockholder distributions


(1.75
)


(3.02
)Capital share transactionsIssuance of common stock(4)






Repurchases of common stock(5)


0.12



Deduction of deferred costs(6)






(0.12
)Net increase (decrease) in net assets resulting from capital share transactions


0.12



(0.12
)Net asset value, end of period

$
24.66


$
29.44Per share market value, end of period

$
14.71



Shares outstanding, end of period


170,597,301



169,594,825Total return based on net asset value(7)


(10.29
)%


2.96
%Total return based on market value(8)


6.48
%


Ratio/Supplemental Data:Net assets, end of period

$
4,207


$
4,996Ratio of net investment income to average net assets(9)


7.74
%


9.07
%Ratio of operating expenses and excise taxes to average net assets(9)


8.35
%


8.46
%Ratio of net operating expenses and excise taxes to average net assets(9)


8.35
%


8.46
%Portfolio turnover(10)


22.27
%


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

$
3,293


$
3,809Asset coverage per unit(11)


2.28



2.31  (1)
The share information utilized to determine per share data has been retroactively adjusted to reflect the Reverse Stock Split discussed in
Note 3. 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)
Represents the incremental impact of the Companys share repurchase program by buying shares in the open market at a price lower than net
asset value per share.  71




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##### Table of Contents

FS KKR Capital Corp. II Notes to Unaudited Consolidated Financial Statements (continued) (in millions, except share and per share amounts)   Note 11. Financial Highlights (continued)  (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)
The total return based on market value for the nine months ended September 30, 2020 was calculated by taking change in the market price
since the Companys listing on June 17, 2020, including the impact of distributions reinvested in accordance with the Companys DRP. Total return based on market 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 market value in the table should not be considered a representation of the Companys future total
return based on market 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, general economic conditions and fluctuations in per share market value. As a result of these factors, results for any previous period should not be relied upon as being indicative of performance in future periods.  (9)
Weighted average net assets during the applicable period are used for this calculation. Ratios for the nine months ended September 30,
2020 are annualized. Annualized ratios for the nine months ended September 30, 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 nine months ended September 30, 2020 and the year ended December 31, 2019:  Nine Months EndedSeptember 30, 2020(Unaudited)


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


1.92
%


1.11
%Ratio of interest expense to average net assets


3.05
%


4.04
%Ratio of excise taxes to average net assets






0.04
%  (10)
Portfolio turnover for the nine months ended September 30, 2020 is not annualized.  (11)
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.  72




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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;  

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

future changes in laws or regulations and conditions in our operating areas; and  

the price at which shares of our common stock may trade on the New York Stock Exchange, or NYSE.  73




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##### Table of Contents

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. On June 17, 2020, shares of our
common stock began trading on the NYSE under the ticker symbol FSKR. The Listing accomplished our goal of providing our stockholders with greatly enhanced liquidity. 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. Depending on market conditions, we may increase or decrease our exposure to less senior portions of the capital structures of our  74




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##### Table of Contents

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 Advisor also performs, or oversees the performance of, our corporate operations and required administrative services, which  75




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##### Table of Contents

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.  76




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##### Table of Contents

Portfolio Investment Activity for the Three and Nine Months Ended September 30, 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 and nine months ended
September 30, 2020 and the year ended December 31, 2019:  Net Investment Activity

For the Three Months EndedSeptember 30, 2020


For the Nine Months EndedSeptember 30, 2020Purchases

$
264


$
1,731Sales and Repayments


(309
)


(2,287
)Net Portfolio Activity

$
(45
)

$
(556
)  For the Three Months EndedSeptember 30, 2020


For the Nine Months EndedSeptember 30, 2020New Investment Activity by Asset Class(1)

Purchases


Percentage


Purchases


PercentageSenior Secured LoansFirst Lien

$
246



93
%

$
1,349



78
%Senior Secured LoansSecond Lien










37



2
%Other Senior Secured Debt














Subordinated Debt










3



0
%Asset Based Finance


18



7
%


255



15
%Credit Opportunities Partners, LLC










87



5
%Equity/Other














Total

$
264



100
%

$
1,731



100
% The following table summarizes the composition of our investment portfolio at cost and fair value as of
September 30, 2020 and December 31, 2019:  September 30, 2020 (Unaudited)


December 31, 2019AmortizedCost(1)


FairValue


Percentageof Portfolio


AmortizedCost(1)


FairValue


Percentageof PortfolioSenior Secured LoansFirst Lien

$
5,363


$
4,904



66.9
%

$
6,017


$
5,717



66.6
%Senior Secured LoansSecond Lien


713



629



8.6
%


941



809



9.4
%Other Senior Secured Debt


92



74



1.0
%


243



228



2.7
%Subordinated Debt


181



171



2.3
%


479



489



5.7
%Asset Based Finance


708



646



8.8
%


535



485



5.6
%Credit Opportunities Partners, LLC


591



600



8.2
%


503



510



5.9
%Equity/Other


288



307



4.2
%


323



353



4.1
%Total

$
7,936


$
7,331



100.0
%

$
9,041


$
8,591



100.0
% The following table summarizes the composition of the Companys investment portfolio at cost and fair
value as of September 30, 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 September 30, 2020 and December 31, 2019:  September 30, 2020 (Unaudited)


December 31, 2019AmortizedCost(1)


FairValue


Percentageof Portfolio


AmortizedCost(1)


FairValue


Percentageof PortfolioSenior Secured LoansFirst Lien

$
5,363


$
4,904



66.9
%

$
6,090


$
5,788



66.7
%Senior Secured LoansSecond Lien


713



629



8.6
%


961



827



9.5
%Other Senior Secured Debt


92



74



1.0
%


243



228



2.6
%Subordinated Debt


181



171



2.3
%


479



489



5.6
%Asset Based Finance


708



646



8.8
%


535



485



5.6
%Credit Opportunities Partners, LLC


591



600



8.2
%


503



510



5.9
%Equity/Other


288



307



4.2
%


324



353



4.1
%Total

$
7,936


$
7,331



100.0
%

$
9,135


$
8,680



100.0
%  77




---

##### Table of Contents

(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 September 30, 2020 and December 31, 2019:  September 30, 2020


December 31, 2019Number of Portfolio Companies


160



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


72.3
%


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


9.1
%


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


10.6
%


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


3.8
%


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


4.2
%


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


8.6
%


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


7.5
%


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 nine months ended September 30, 2020, our total return based on net asset value was (10.29)%
and our total return based on market value was 6.48%. For the year ended December 31, 2019, our total return based on net asset value was 2.96%. See footnotes 7 and 8 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 market value, respectively. Direct Originations The following table presents certain selected
information regarding our direct originations as of September 30, 2020 and December 31, 2019:  Characteristics of All Direct Originations Held in Portfolio

September 30,2020


December 31,2019Number of Portfolio Companies


110



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


4.2
%


2.5
%Total Cost of Direct Originations

$
6,965


$
7,161Total Fair Value of Direct Originations

$
6,473


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


88.3
%


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


8.4
%


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


7.4
%


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  78




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##### Table of Contents

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. 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 September 30, 2020 and December 31, 2019:  September 30, 2020(Unaudited)


December 31, 2019Industry Classification

FairValue


Percentage 
ofPortfolio


FairValue


Percentage 
ofPortfolioAutomobiles & Components

$
56



0.8
%

$
182



2.1
%Capital Goods


944



12.9
%


1,139



13.3
%Commercial & Professional Services


770



10.5
%


861



10.0
%Consumer Durables & Apparel


288



3.9
%


302



3.5
%Consumer Services


267



3.6
%


548



6.4
%Credit Opportunities Partners, LLC


600



8.2
%


510



5.9
%Diversified Financials


572



7.8
%


402



4.7
%Energy


164



2.3
%


328



3.8
%Food & Staples Retailing


198



2.7
%


223



2.6
%Food, Beverage & Tobacco


120



1.6
%


132



1.5
%Health Care Equipment & Services


700



9.6
%


888



10.3
%Household & Personal Products


112



1.5
%


1



0.0
%Insurance


227



3.1
%


220



2.6
%Materials


128



1.8
%


354



4.1
%Media & Entertainment


214



2.9
%


409



4.8
%Pharmaceuticals, Biotechnology & Life Sciences


105



1.4
%


187



2.2
%Real Estate


200



2.7
%


122



1.4
%Retailing


344



4.7
%


435



5.1
%Semiconductors & Semiconductor Equipment










3



0.0
%Software & Services


896



12.2
%


874



10.2
%Technology Hardware & Equipment


133



1.8
%


174



2.0
%Telecommunication Services


151



2.1
%


154



1.8
%Transportation


142



1.9
%


143



1.7
%Total

$
7,331



100.0
%

$
8,591



100.0
%  79




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##### Table of Contents

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. The following table shows the distribution of our investments on the 1 to 4 investment rating scale at
fair value as of September 30, 2020 and December 31, 2019:  September 30, 2020


December 31,
2019(1)Investment Rating

FairValue


Percentage ofPortfolio


FairValue


Percentage ofPortfolio1

$
4,643



64
%

$
5,682



66
%2


1,552



21
%


2,236



26
%3


681



9
%


361



4
%4


455



6
%


312



4
%Total

$
7,331



100
%

$
8,591



100
%  (1)
Historically, the Advisor has rated its investment in COP as a 2 on the investment rating scale. As of September 30, 2020, the Advisor
evaluates its investment in COP by rating each individual loan in COPs portfolio on a look-through basis. The Advisor has re-evaluated its portfolio as of December 31, 2019 and has updated the investment rating scale in the table above in
order to be in accordance with the current methodology. 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 and Nine Months Ended September 30, 2020 and 2019 Revenues Our investment income for the three and nine months ended
September 30, 2020 and 2019 was as follows:  Three Months Ended September 30,


Nine Months Ended September 30,2020


2019


2020


2019Amount


Percentage ofTotal Income


Amount


Percentage ofTotal Income


Amount


Percentage ofTotal Income


Amount


Percentage ofTotal IncomeInterest income

$
120



70
%

$
95



88
%

$
397



74
%

$
304



90
%Paid-in-kind interest income


16



9
%


7



6
%


46



9
%


16



5
%Fee income


5



3
%


5



5
%


27



5
%


19



5
%Dividend income


31



18
%


1



1
%


65



12
%


1



0
%Total investment income(1)

$
172



100
%

$
108



100
%

$
535



100
%

$
340



100
%  (1)
For the three months ended September 30, 2020 and 2019, such revenues represent $152 and $99, respectively, of cash income earned as well
as $20 and $9, respectively, in non-cash portions relating to accretion of discount and PIK interest. For the nine months ended September 30, 2020 and 2019, such revenues represent $476 and $317,
respectively, of cash income earned as well as $59 and $23, 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.  80




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##### Table of Contents

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 and nine months ended September 30, 2020 compared to the three and nine months ended September 30, 2019 can primarily be attributed to the increase in assets resulting from the Mergers. The increase in dividend income during the three and nine months ended September 30, 2020 compared to the three and nine months ended
September 30, 2019 was primarily due to dividends paid in respect to our investment in Credit Opportunities Partners, LLC. Expenses Our operating expenses for the three and nine months ended September 30, 2020 and 2019 were as follows:  Three Months EndedSeptember 30,


Nine Months EndedSeptember 30,2020


2019


2020


2019Management fees

$
28


$
17


$
90


$
52Subordinated income incentive fees


22



5



64



25Administrative services expenses


2



2



5



3Stock transfer agent fees


0



0



2



2Accounting and administrative fees


1



0



2



1Interest expense


26



24



101



79Other


3



1



13



3Total operating expenses

$
82


$
49


$
277


$
165 The following table reflects selected expense ratios as a percent of average net assets for the three and
nine months ended September 30, 2020 and 2019:  Three Months 
EndedSeptember 30,


Nine Months 
EndedSeptember 30,2020


2019


2020


2019Ratio of operating expenses to average net assets


1.96
%


1.93
%


6.25
%


6.45
%Ratio of incentive fees and interest expense to average net assets(1)


1.15
%


1.14
%


3.73
%


4.07
%Ratio of net operating expenses, excluding certain expenses, to average net assets


0.81
%


0.79
%


2.52
%


2.38
%  (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 $90 ($0.52 per share) and $59 ($0.72 per share) for the three months ended September 30, 2020 and
2019, respectively. The increase in net investment income for the three months ended September 30, 2020 can be attributed to the increase in investment income discussed above. Our net investment income totaled $258 ($1.51 per share) and $175 ($2.15 per share) for the nine months ended September 30, 2020 and
2019, respectively. The increase in net investment income for the nine months ended September 30, 2020 can be attributed to the increase in investment income discussed above.  81




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##### Table of Contents

Net Realized Gains or Losses Our net realized gains (losses) on investments and foreign currency for the three and nine months ended September 30, 2020 and 2019
were as follows:  Three MonthsEnded September 30,


Nine MonthsEnded September 30,2020


2019


2020


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

$
(252
)

$
(8
)

$
(612
)

$
(49
)Net realized gain (loss) on total return swap


(1
)






(2
)


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










0



Net realized gain (loss) on interest rate swaps


(5
)






(11
)


Net realized gain (loss) on foreign currency


(13
)


1



(12
)


1Total net realized gain (loss)

$
(271
)

$
(7
)

$
(637
)

$
(48
)  (1)
We sold investments and received principal repayments, respectively, of $248 and $61 during the three months ended September 30, 2020 and
$113 and $28 during the three months ended September 30, 2019. We sold investments and received principal repayments, respectively, of $1,285 and $1,002 during the nine months ended September 30, 2020 and $258 and $955 during the nine
months ended September 30, 2019. 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 and nine months ended September 30, 2020 and 2019 were as follows:  Three MonthsEnded September 30,


Nine MonthsEnded September 30,2020


2019


2020


2019Net change in unrealized appreciation (depreciation) on investments

$
329


$
(75
)

$
(155
)

$
(24
)Net change in unrealized appreciation (depreciation) on total return swap


2







4



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










1



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


5



(2
)


(25
)


(12
)Net change in unrealized gain (loss) on foreign currency


(6
)


3



17



1Total net change in unrealized appreciation (depreciation)

$
330


$
(74
)

$
(158
)

$
(35
) The decrease in unrealized appreciation (depreciation) during the nine months ended September 30,
2020 was driven primarily by mark to market declines across the portfolio resulting from uncertainty related to the current COVID-19 pandemic. The increase in unrealized appreciation (depreciation) during the
three months ended September 30, 2020 was primarily driven by mark to market improvements on certain assets as well as the reversal of unrealized losses from the restructures of troubled investments. Net Increase (Decrease) in Net Assets Resulting from Operations For the three months ended September 30, 2020 and 2019, the net increase in net assets resulting from operations was $149 ($0.87 per share) compared to a net decrease in net assets resulting from
operations of $(22) ($(0.27) per share) during the three months ended September 30, 2019. For the nine months ended
September 30, 2020, the net decrease in net assets resulting from operations was $(537) ($(3.14) per share) compared to a net increase in net assets resulting from operations of $92 ($1.13 per share) during the nine months ended
September 30, 2019. This Results of Operations section should be read in conjunction with the COVID-19 Developments above. Financial Condition, Liquidity and Capital Resources Overview On June 17, 2020, shares of our common stock began trading on the NYSE under the ticker symbol FSKR. The Listing
accomplished our goal of providing our stockholders with greatly enhanced liquidity.  82




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##### Table of Contents

As of September 30, 2020, we had $140 in cash and foreign currency, which we and
our wholly-owned financing subsidiaries held in custodial accounts, and $1,622 in borrowings available under our financing arrangements, subject to borrowing base and other limitations. As of September 30, 2020, we also had broadly syndicated
investments and opportunistic investments that could be sold to create additional liquidity. As of September 30, 2020, we had unfunded debt investments with aggregate unfunded commitments of $465.0, unfunded equity/other commitments of $210.2,
and unfunded commitments of $284.4 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. Prior to June 18, 2020, in accordance with the 1940 Act, we were allowed to borrow amounts such that our asset coverage, calculated pursuant to the 1940 Act, was at least 200% after such borrowing. Effective
June 19, 2020, our asset coverage requirement applicable to senior securities was reduced from 200% to 150%. As of September 30, 2020, the aggregate amount outstanding of the senior securities issued by us was $3.3 billion. As
of September 30, 2020, our asset coverage was 228%. 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. Financing Arrangements The following table presents summary information with respect to our outstanding financing arrangements as of September 30, 2020:  Arrangement(1)

Type of Arrangement


Rate

AmountOutstanding


AmountAvailable


MaturityDateSenior Secured Revolving Credit
Facility(1)


Revolving Credit Facility


L+2.00% - 2.25%(2)(3)

$
778
(4)

$
987



November 7, 2024Germantown Credit Facility(1)


Term Loan Credit Facility


L+2.50%(2)


175







December 15, 2020Darby Creek Credit Facility(1)


Revolving Credit Facility


L+1.95%(2)


187



63



February 26, 2024Dunlap Credit Facility(1)


Revolving Credit Facility


L+2.00%(2)


375



125



February 26, 2024Juniata River Credit Facility(1)


Revolving Credit Facility


L+2.50% - L+2.75%(2)(5)


975



275



July 15, 2022 -April 11, 2023(5)Burholme Prime Brokerage
Facility(1)


Prime Brokerage Facility


L+1.25%










March 28,
2021(6)Ambler Credit Facility(1)


Revolving Credit Facility


L+2.25%(2)


118



82



November 22, 2024Meadowbrook Run Credit
Facility(1)


Revolving Credit Facility


L+2.25%(2)


210



90



November 22, 20244.250% Notes due 2025(7)


Unsecured Notes


4.250%


475







February 14, 2025Total







$
3,293


$
1,622  (1)
The carrying amount outstanding under the facility approximates its fair value.  (2)
LIBOR is subject to a 0% floor.  (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
133 has been converted to U.S. dollars at an exchange rate of 1.00 to $1.17 as of September 30, 2020 to reflect total amount outstanding in U.S. dollars. Canadian dollar balance outstanding of CAD $112 has been converted to U.S.
dollars at an exchange rate of CAD $1.00 to $0.75 as of September 30, 2020 to reflect total amount outstanding in U.S. dollars. Australian dollar balance outstanding of AUD $156 has been converted to U.S. dollars at an exchange rate of AUD
$1.00 to $0.72 as of September 30, 2020 to reflect total amount outstanding in U.S. dollars. Pounds sterling balance outstanding of £141 has been converted to U.S. dollars at an exchange rate of £1.00 to $1.29 as of
September 30, 2020 to reflect total amount outstanding in U.S. dollars.  83




---

##### Table of Contents

(5)
The Juniata River Credit Facility is composed of two tranches: a $400 tranche, or Tranche A, with a spread over LIBOR of 2.50% per annum and a
maturity date of July 15, 2022, and an $850 tranche, or Tranche B, with a spread over LIBOR of 2.75% per annum and a maturity date of April 11, 2023.  (6)
The Burholme Prime Brokerage Facility generally is terminable upon 179 days notice by either party. As of September 30, 2020,
neither party had provided notice of its intent to terminate the facility.  (7)
As of September 30, 2020, the fair value of the 4.250% notes was approximately $449. The valuation is considered a Level 2 valuation
within the fair value hierarchy. 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 nine months ended September 30, 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.  84




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##### Table of Contents

The following table reflects the cash distributions per share that we have declared on
our common stock during the nine months ended September 30, 2020 and 2019:  DistributionFor the Three Months Ended

Per Share(1)



AmountFiscal 2019March 31, 2019

$
0.7540


$
61June 30, 2019


0.7540



61September 30, 2019


0.7540



62Total

$
2.2620


$
184Fiscal 2020March 31, 2020

$
0.6000


$
102June 30, 2020


0.6000



102September 30, 2020


0.5500



95Total

$
1.7500


$
299  (1)
The amount of each per share distribution has been retroactively adjusted to reflect the Reverse Stock Split as discussed above in Note 3 to
our unaudited consolidated financial statements included herein. See Note 5 to our unaudited consolidated
financial statements included herein for additional information regarding our distributions. 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  85




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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;  

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.  86




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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. 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 and nine months ended September 30, 2020 and 2019. A summary of
our significant contractual payment obligations for the repayment of outstanding indebtedness at September 30, 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


$
778










$
778



Germantown Credit Facility(3)


December 15, 2020


$
175


$
175











Darby Creek Credit Facility(4)


February 26, 2024


$
187










$
187



Dunlap Credit Facility(5)


February 26, 2024


$
375










$
375



Juniata River Credit Facility(6)


October 11, 2021


$
975






$
975







Burholme Prime Brokerage Facility(7)


March 28, 2021


$
















Ambler Credit Facility(8)


November 22, 2024


$
118










$
118



Meadowbrook Run Credit Facility(9)


November 22, 2024


$
210










$
210



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 September 30, 2020, $987 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 133 has been converted to U.S. dollars at an exchange rate of 1.00 to $1.17 as of September 30, 2020 to reflect total amount
outstanding in U.S. dollars. Canadian dollar balance outstanding of CAD $112 has been converted to U.S. dollars at an exchange rate of CAD $1.00 to $0.75 as of September 30, 2020 to reflect total amount outstanding in U.S. dollars. Australian
dollar balance outstanding of AUD $156 has been converted to U.S. dollars at  87




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##### Table of Contents

an exchange rate of AUD $1.00 to $0.72 as of September 30, 2020 to reflect total amount outstanding in U.S. dollars. Pounds sterling balance outstanding of £141 has been converted to
U.S. dollars at an exchange rate of £1.00 to $1.29 as of September 30, 2020 to reflect total amount outstanding in U.S. dollars.  (3)
At September 30, 2020, no amounts remained unused under the financing arrangement.  (4)
At September 30, 2020, $63 remained unused under the Darby Creek Credit Facility.  (5)
At September 30, 2020, $125 remained unused under the Dunlap Credit Facility.  (6)
At September 30, 2020, $275 remained unused under the Juniata River Credit Facility.  (7)
At September 30, 2020, no amounts remained unused under the Burholme Prime Brokerage Facility.  (8)
At September 30, 2020, $82 remained unused under the Ambler Credit Facility.  (9)
At September 30, 2020, $90 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.  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 September 30, 2020, 72.3% of our portfolio investments (based on fair value) were debt investments paying variable interest rates and 9.1% were debt investments paying fixed interest rates, while 10.6% were
other income producing investments, 3.8% consisted of non-income producing investments and the remaining 4.2% 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. Earlier this year, 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 September 30, 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.  88




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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
September 30, 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 23 basis points

$
(2
)

$
(7
)

$
5



1.1
%No change














Up 100 basis points

$
19


$
28


$
(9
)


(2.0
)%Up 300 basis points

$
125


$
85


$
40



9.3
%Up 500 basis points

$
234


$
141


$
93



21.4
%  (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 September 30, 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 September 30, 2020 to hedge against foreign currency risks.  Investments Denominated in Foreign Currencies As ofSeptember 30, 2020


Hedges As of September 30, 2020Cost in LocalCurrency


Costin US$


FairValue


Reduction in FairValue as ofSeptember 30, 2020 if10% AdverseChange
in ExchangeRate(1)


Net ForeignCurrency HedgeAmount inLocal Currency


Net ForeignCurrency HedgeAmount in U.S.DollarsAustralian Dollars

A$
151.4


$
104.2


$
105.7


$
10.6






$
British Pound Sterling

£
119.4



153.7



149.6



15.0







Canadian Dollars

C$
116.9



87.6



81.9



8.2







Euros


130.6



146.5



152.2



15.2



1.9



2.3Norwegian Kronor


kr76.8



8.3



8.2



0.8



kr11.4



1.2Total





$
500.3


$
497.6


$
49.8






$
3.5  (1)
Excludes effect, if any, of any foreign currency hedges. We may 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.  89




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##### Table of Contents

As of September 30, 2020, the contractual amount of our foreign currency forward
contracts totaled $6.6. As of September 30, 2020, we had outstanding borrowings denominated in foreign currencies of 133, CAD $112, £141 and A$156 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 September 30, 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 September 30, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  90




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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, as supplemented by our quarterly reports on Form 10-Q. There are no material changes from the
risk factors included within our most recent Annual Report on Form 10-K, as supplemented by our quarterly report on Form 10-Q for the quarters ended March 31, 2020
and June 30, 2020.  Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds. In May 2020, the Companys board of directors authorized a stock repurchase program, or the May 2020 Share Repurchase Program. Under
the May 2020 Share Repurchase Program, the Company is permitted to repurchase up to $100 in the aggregate of its outstanding common stock in the open market at prices below the then-current net asset value per share. The timing, manner, price
and amount of any share repurchases was determined by the Company based upon the evaluation of economic and market conditions, the Companys stock price, applicable legal and regulatory requirements and other factors. The May 2020 Share
Repurchase Program is expected to be in effect for one year from the effective date, unless extended, or until the aggregate repurchase amount that has been approved by the Companys board of directors has been expended, or the plan otherwise
terminates pursuant to its terms. The May 2020 Share Repurchase Program does not require the Company to repurchase any specific number of shares and the Company cannot assure stockholders that any shares will be repurchased under the program. The
May 2020 Share Repurchase Program may be suspended, extended, modified or discontinued at any time. During the nine months
ended September 30, 2020, the Company repurchased 2,265,153 shares of common stock pursuant to the May 2020 Share Repurchase Program at an average price per share (inclusive of commissions paid) of $14.47 (totaling $33). During the period from
October 1, 2020 to October 31, 2020, the Company repurchased 426,222 shares of common stock pursuant to the share repurchase program at an average price per share (inclusive of commissions paid) of $15.11 (totaling $6). As previously disclosed, certain affiliates of the owners of the Advisor committed $100 to a $350 investment vehicle that may invest from
time to time in shares of the Company. In June 2020, that investment vehicle entered into a written trading plan with a third party broker in accordance with Rule 10b5-1 and Rule 10b-18 promulgated under the Exchange Act, or the Affiliated Purchaser Program, to facilitate the purchase of shares of our common stock pursuant to the terms and conditions of such plan. The
Affiliated Purchaser Program provides for the purchase of up to $100 worth of shares of our common stock, subject to the limitations provided therein. During the nine months ended September 30, 2020, the Affiliated Purchaser Program purchased 6,131,957 shares of common stock at an average price per share (inclusive of commissions paid) of $14.48
(totaling $89). During the period from October 1, 2020 to October 31, 2020, the Affiliated Purchaser Program purchased 724,951 shares of common stock at an average price per share (inclusive of commissions paid) of $15.49 (totaling $11). The table below provides information concerning purchases of our shares of common stock by or on behalf of the Company or any
affiliated purchaser, as defined by Rule 10b-18(a)(3) promulgated under the Exchange Act during the quarterly period  91




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##### Table of Contents

ended September 30, 2020. Dollar amounts in the table below and the related notes are presented in millions, except for share and per share amounts. Share and per share amounts in the table
below have been retroactively adjusted to reflect the Reverse Stock Split.  Period

TotalNumber ofSharesPurchased


AveragePrice Paidper Share(1)


Total Number of SharesPurchased as Part ofPublicly AnnouncedPlans or Programs(2)


Maximum Number (orApproximate DollarValue) of Shares that MayYet
Be Purchased Underthe Plans or ProgramsJuly 1, 2020 through July 31, 2020


3,082,501


$
14.14



3,082,501


$
386August 1, 2020 through August 31, 2020


2,648,045



14.81



2,648,045



337September 1, 2020 through September 30, 2020


2,666,564



14.53



2,666,564



2888,397,110



14.47



8,397,110  (1)
Amount includes commissions paid.  (2)
Includes amounts pursuant to the May 2020 Share Repurchase Program and the Affilliated Purchaser Program.  Item 3.
Defaults upon Senior Securities. Not applicable.  Item 4.
Mine Safety Disclosures. Not applicable.  Item 5.
Other Information. Not applicable.  92




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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

Articles of Amendment. (Incorporated by reference to Exhibit 3.1 to the Companys Current Report
 on Form 8-K filed on June 10, 2020.)3.5

Articles of Amendment. (Incorporated by reference to Exhibit 3.2 to the Companys Current Report
 on Form 8-K filed on June 10, 2020.)3.6

Fourth 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 17, 2020.)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

Second Amended and Restated Distribution Reinvestment Plan of the Company, effective as of June 17, 2020. (Incorporated by reference to Exhibit 4.1 to the Companys Current Report on Form 8-K filed on June 17, 2020.)4.3

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.)4.4

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.)4.5

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.)  93




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##### Table of Contents

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.)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

Second Amended and Restated Loan and Security Agreement, dated as of September 
11, 2020, by and among Juniata River LLC, as borrower, JPMorgan Chase Bank, National Association, as administrative agent, Wells Fargo Bank, National Association, as collateral agent, collateral administrator and securities intermediary, and the lenders
 party thereto (Incorporated by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K filed on September 17, 2020).10.15

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.)10.16

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. (Incorporated by reference to Exhibit 10.15 to the Registrants Quarterly Report on Form 10-Q filed on May 12, 2020.)  94




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10.17

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.)10.18

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).10.19

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).10.20

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).10.21

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).10.22

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).10.23

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).10.24

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).10.25

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).10.26

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).10.27

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).10.28

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).  95




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10.29

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).10.30

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).10.31

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).10.32

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).10.33

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).10.34

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).10.35

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).10.36

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).10.37

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).10.38

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).10.39

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).10.40

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).  96




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10.41

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 10.1 to FS Investment Corporation IIIs Current Report on Form 8-K filed on November 21, 2016).10.42

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).10.43

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).10.44

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).10.45

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).10.46

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).10.47

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).10.48

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).10.49

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).10.50

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. (Incorporated by reference to Exhibit 10.49 to the
Registrants Quarterly Report on Form 10-Q filed on May 12, 2020.)10.51

Second Amendment to Loan and Servicing Agreement, dated as of June 
16, 2020, by and among Meadowbrook Run LLC, as borrower, the Company, as servicer, Morgan Stanley Bank, N.A., as lender, and Morgan Stanley Senior Funding, Inc., as administrative agent (Incorporated by reference to Exhibit 10.50 to the Registrants
 Quarterly Report on Form 10-Q filed on August 10, 2020).10.52

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).10.53

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).  97




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10.54

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).10.55

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).10.56

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.  98




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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 November 9, 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)By:

/s/ William GoebelWilliam GoebelChief Accounting Officer
  99