Obbligazione FSK Capital 4.25% ( US302635AB34 ) in USD

Emittente FSK Capital
Prezzo di mercato 100 USD  ⇌ 
Paese  Stati Uniti
Codice isin  US302635AB34 ( in USD )
Tasso d'interesse 4.25% per anno ( pagato 2 volte l'anno)
Scadenza 15/01/2020 - Obbligazione č scaduto



Prospetto opuscolo dell'obbligazione FS KKR Capital US302635AB34 in USD 4.25%, scaduta


Importo minimo 2 000 USD
Importo totale 405 000 000 USD
Cusip 302635AB3
Standard & Poor's ( S&P ) rating N/A
Moody's rating N/A
Descrizione dettagliata FS KKR Capital č una societā di investimento alternativa (Alternative Investment Manager - AIM) specializzata in strategie di credito privato, gestita in collaborazione tra Federated Hermes e KKR.

The Obbligazione issued by FSK Capital ( United States ) , in USD, with the ISIN code US302635AB34, pays a coupon of 4.25% per year.
The coupons are paid 2 times per year and the Obbligazione maturity is 15/01/2020







FS Investment Corp--Final Prospectus Supplement
Page 1 of 485
497 1 d824051d497.htm FS INVESTMENT CORP--FINAL PROSPECTUS SUPPLEMENT
Table of Contents
Filed Pursuant to Rule 497
File No. 333-195863
PROSPECTUS SUPPLEMENT
To the Prospectus dated June 19, 2014
$325,000,000
4.250% Notes due 2020
We are offering for sale $325,000,000 in aggregate principal amount of 4.250% Notes due 2020, which we refer to as the Notes. The Notes will mature on January 15,
2020. We will pay interest on the Notes on January 15 and July 15 of each year, beginning on July 15, 2015. We may redeem the Notes in whole or in part at any time, or
from time to time, at the redemption prices discussed under the caption "Specific Terms of the Notes and the Offering--Optional Redemption" in this prospectus
supplement. In addition, holders of the Notes can require us to repurchase some or all of the Notes at a purchase price equal to 100% of their principal amount, plus accrued
and unpaid interest to, but not including, the repurchase date upon the occurrence of a Change of Control Repurchase Event (as defined herein). The Notes will be issued in
minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.
The Notes will be our general unsecured obligations that rank senior in right of payment to all of our existing and future indebtedness that is expressly subordinated in
right of payment to the Notes, rank pari passu with all existing and future unsecured unsubordinated indebtedness issued by us, rank effectively junior to any of our secured
indebtedness (including unsecured indebtedness that we later secure) 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 our subsidiaries, financing vehicles or similar facilities.
We are a specialty finance company that invests primarily in the debt securities of private U.S. middle-market companies. Our investment objectives are to generate
current income and, to a lesser extent, long-term capital appreciation.
We are an externally managed, non-diversified, closed-end management investment company that has elected to be regulated as a business development company
under the Investment Company Act of 1940, as amended, or the 1940 Act. Our investments and activities are managed by FB Income Advisor, LLC, a private investment
firm that is registered as an investment adviser with the U.S. Securities and Exchange Commission, or the SEC, and is an affiliate of ours. FB Income Advisor, LLC has
engaged GSO / Blackstone Debt Funds Management LLC, a registered investment adviser and a subsidiary of GSO Capital Partners LP, to act as our investment sub-
adviser.
Investing in our securities may be considered speculative and involves a high degree of risk, including the risk of a substantial loss of investment. See "Risk
Factors" beginning on page S-18 of this prospectus supplement and page 22 of the accompanying prospectus to read about the risks you should consider before
buying our securities, including the risk of leverage.
This prospectus supplement and the accompanying prospectus contain important information about us that a prospective investor should know before investing in our
securities. Please read this prospectus supplement and the accompanying prospectus before investing and keep them for future reference. We file annual, quarterly and
current reports, proxy statements and other information about us with the SEC. This information is available free of charge by contacting us at Cira Centre, 2929 Arch Street,
Suite 675, Philadelphia, Pennsylvania 19104, by calling us collect at (215) 495-1150 or by visiting our website at www.fsinvestmentcorp.com. The SEC also maintains a
website at www.sec.gov that contains such information.
Neither the SEC nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the
accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Per Note
Total
Public offering price
99.634% $323,810,500
Underwriting discounts and commissions (sales load)
0.900% $
2,925,000
Proceeds to us before expenses(1)
98.734% $320,885,500
(1) Before deducting estimated expenses of $350,000 payable by us in connection with this offering. See "Underwriting" in this prospectus supplement.
The public offering price set forth above does not include accrued interest, if any. Interest on the Notes will accrue from December 3, 2014.
THE NOTES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
Delivery of the Notes in book-entry form through The Depository Trust Company, or DTC, will be made on or about December 3, 2014.
Joint Book-Running Managers
J.P. Morgan
Wells Fargo Securities
Citigroup
Deutsche Bank Securities
Keefe, Bruyette & Woods
Sterne Agee
A Stifel Company
The date of this prospectus supplement is November 25, 2014.
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You should rely only on the information contained in this prospectus supplement and the accompanying prospectus. We have
not, and the underwriters have not, authorized any other person to provide you with different or additional information from that
contained in this prospectus supplement and the accompanying prospectus. We are not, and the underwriters are not, making an
offer to sell these securities in any jurisdiction where the offer or sale is not permitted.
This document is in two parts. The first part is this prospectus supplement, which describes the terms of this offering and also
adds to and updates information contained in the accompanying prospectus. The second part is the accompanying prospectus,
which gives more general information and disclosure. To the extent the information contained in this prospectus supplement
differs from the information contained in the accompanying prospectus, the information in this prospectus supplement shall
control. The information contained in this prospectus supplement and accompanying prospectus is complete and accurate only as
of their respective dates. Our business, financial condition, results of operations and prospects may have changed since those
dates. If there is a material change in our affairs, we will amend or supplement this prospectus supplement only as required by law.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
Page
PROSPECTUS SUPPLEMENT SUMMARY
S-1
SPECIFIC TERMS OF THE NOTES AND THE OFFERING
S-11
SELECTED FINANCIAL DATA
S-14
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
S-16
RISK FACTORS
S-18
USE OF PROCEEDS
S-24
CAPITALIZATION
S-25
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
S-26
SENIOR SECURITIES
S-53
RATIOS OF EARNINGS TO FIXED CHARGES
S-54
DESCRIPTION OF THE NOTES
S-55
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
S-67
UNDERWRITING
S-70
SUB-ADVISER CONFLICTS OF INTEREST
S-75
LEGAL MATTERS
S-80
CUSTODIAN, TRANSFER AND DISTRIBUTION PAYING AGENT AND REGISTRAR
S-80
INDEX TO FINANCIAL STATEMENTS
S-81
PROSPECTUS
Page
ABOUT THIS PROSPECTUS
i
PROSPECTUS SUMMARY
1
FEES AND EXPENSES
17
SELECTED FINANCIAL DATA
20
RISK FACTORS
22
RISKS RELATED TO OFFERINGS PURSUANT TO THIS PROSPECTUS
22
RISKS RELATED TO OUR INVESTMENTS
28
RISKS RELATED TO OUR BUSINESS AND STRUCTURE
33
RISKS RELATED TO FB ADVISOR AND ITS AFFILIATES
39
RISKS RELATED TO BUSINESS DEVELOPMENT COMPANIES
41
RISKS RELATED TO DEBT FINANCING
42
RISKS RELATED TO FEDERAL INCOME TAX
50
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
52
USE OF PROCEEDS
54
DISTRIBUTIONS
55
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
60
SENIOR SECURITIES
101
PRICE RANGE OF COMMON STOCK
102
RATIOS OF EARNINGS TO FIXED CHARGES
103
SALES OF COMMON STOCK BELOW NET ASSET VALUE
104
INVESTMENT OBJECTIVES AND STRATEGY
110
DETERMINATION OF NET ASSET VALUE
128
MANAGEMENT
132
PORTFOLIO MANAGEMENT
144
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Page
PORTFOLIO COMPANIES
148
INVESTMENT ADVISORY AGREEMENT
169
ADMINISTRATIVE SERVICES
180
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
181
CONTROL PERSONS AND PRINCIPAL STOCKHOLDERS
185
DISTRIBUTION REINVESTMENT PLAN
187
DESCRIPTION OF OUR CAPITAL STOCK
189
DESCRIPTION OF OUR PREFERRED STOCK
197
DESCRIPTION OF OUR SUBSCRIPTION RIGHTS
198
DESCRIPTION OF OUR WARRANTS
200
DESCRIPTION OF OUR DEBT SECURITIES
202
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS
214
REGULATION
221
PLAN OF DISTRIBUTION
225
CUSTODIAN, TRANSFER AND DISTRIBUTION PAYING AGENT AND REGISTRAR
227
BROKERAGE ALLOCATION AND OTHER PRACTICES
227
LEGAL MATTERS
227
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
227
AVAILABLE INFORMATION
227
INDEX TO FINANCIAL STATEMENTS
F-1
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PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights some of the information in this prospectus supplement and the accompanying prospectus. It is
not complete and may not contain all of the information that you may want to consider. To understand this offering fully, you
should read the entire prospectus supplement and the accompanying prospectus carefully, including the sections entitled
"Risk Factors," before making a decision to invest in our securities.
Unless otherwise noted, the terms "we," "us," "our," the "Company" and "FSIC" refer to FS Investment Corporation.
In addition, the term "FB Advisor" refers to FB Income Advisor, LLC, the term "GDFM" refers to GSO / Blackstone Debt
Funds Management LLC, a subsidiary of GSO Capital Partners LP, the term "GSO" refers to GSO Capital Partners LP, the
term "Blackstone" refers to The Blackstone Group L.P. and the term "indenture" refers to the base indenture between us and
U.S. Bank National Association, as trustee, or the trustee, dated as of July 14, 2014, as supplemented by a separate
supplemental indenture to be dated as of the settlement date for the Notes. Capitalized terms used in this prospectus
supplement and not otherwise defined shall have the meanings ascribed to them in the accompanying prospectus or in the
indenture governing the Notes.
FS Investment Corporation
We are 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 1940 Act. As such, we are required to comply with certain
regulatory requirements. See "Regulation" in the accompanying prospectus. In addition, we have elected to be treated for U.S.
federal income tax purposes, and intend to qualify each tax year, as a regulated investment company, or RIC, under
Subchapter M of the Internal Revenue Code of 1986, as amended, or the Code.
We are managed by FB Advisor, a registered investment adviser under the Investment Advisers Act of 1940, as amended,
or the Advisers Act, which oversees the management of our operations and is responsible for making investment decisions
with respect to our portfolio. FB Advisor has engaged GDFM to act as our investment sub-adviser. GDFM assists FB Advisor
in identifying investment opportunities and will make investment recommendations for approval by FB Advisor, according to
guidelines set by FB Advisor. GDFM, a registered investment adviser under the Advisers Act, is a subsidiary of GSO, which
oversaw approximately $70.2 billion in assets under management as of September 30, 2014. GSO is the credit platform of
Blackstone.
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 teams of FB Advisor and GDFM, along with the
broader resources of GSO, which include its access to the relationships and human capital of its parent,
Blackstone, in sourcing, evaluating and structuring transactions;
·
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 revenues of $50 million to $2.5 billion at the time of
investment. In many market environments, we believe such a focus offers an opportunity for superior risk
adjusted returns;
·
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.
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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 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 through secondary market transactions in the "over-the-
counter" market for institutional loans or may issue loans to 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 minority interests in the form of common or preferred equity or the equity-
related securities in our target companies, generally in conjunction with one of our debt investments or through a co-
investment with a financial sponsor, such as an institutional investor or private equity firm. In addition, a portion of our
portfolio may be comprised of corporate bonds, other debt securities and derivatives, including total return swaps and credit
default swaps.
The senior secured and second lien secured loans in which we invest generally have stated terms of three to seven years
and any subordinated debt investments that we make generally will have stated terms of up to ten years, but the expected
average life of such securities is generally between three and seven years. However, there is no limit on the maturity or
duration of any security in our portfolio. The loans in which we invest may be rated by a nationally recognized statistical
ratings organization and, in such case, generally will carry a rating below investment grade (rated lower than "Baa3" by
Moody's Investors Service, Inc., or Moody's, or lower than "BBB-" by Standard & Poor's Ratings Services, or S&P). We also
invest in non-rated debt securities.
As a BDC, we are subject to certain regulatory restrictions in making our 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, co-invest in transactions where price is the only
negotiated point. In an order dated June 4, 2013, the SEC granted exemptive relief permitting us, subject to the satisfaction of
certain conditions, to co-invest in certain privately negotiated investment transactions with certain affiliates of FB Advisor,
including FS Energy and Power Fund, FS Investment Corporation II, FS Investment Corporation III and any future BDCs that
are advised by FB Advisor or its affiliated investment advisers, or, collectively, our co-investment affiliates. We believe this
relief has and may continue to enhance our ability to further our investment objectives and strategies, and may also increase
favorable investment opportunities for us, in part by allowing us to participate in larger investments, together with our co-
investment affiliates, than would be available to us if we had not obtained such relief. Because we did not seek exemptive
relief to engage in co-investment transactions with GDFM and its affiliates, we will continue to be permitted to co-invest with
GDFM and its affiliates only in accordance with existing regulatory guidance.
To seek to enhance our returns, we employ leverage as market conditions permit and at the discretion of FB Advisor, but
in no event will leverage employed exceed 50% of the value of our assets, as required by the 1940 Act.
On April 16, 2014, our shares of common stock were listed on the NYSE and began trading under the ticker symbol
"FSIC".
Our Public Offering
In May 2012, we closed our continuous public offering of common stock to new investors. We sold 247,454,171 shares
(as adjusted for stock distributions) of common stock for gross proceeds of $2.6 billion in our continuous public offering.
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Portfolio Update
During the nine months ended September 30, 2014, we made investments in portfolio companies totaling approximately
$1.6 billion. During the same period, we sold investments for proceeds of approximately $691.9 million and received principal
repayments of approximately $832.0 million. As of September 30, 2014, our investment portfolio, with a total fair value of
approximately $4.3 billion, consisted of interests in 128 portfolio companies (54% in first lien senior secured loans, 18% in
second lien senior secured loans, 8% in senior secured bonds, 11% in subordinated debt, 3% in collateralized securities and
6% in equity/other). The portfolio companies that comprised our portfolio as of such date had an average annual earnings
before interest, taxes, depreciation and amortization, or EBITDA, of approximately $148.0 million. As of September 30, 2014,
the investments in our portfolio were purchased at a weighted average price of 97.7% of par or stated value, as applicable, the
weighted average credit rating of the investments in our portfolio that were rated (constituting approximately 27.1% of our
portfolio based on the fair value of our investments) was B3 based upon the Moody's scale and our estimated gross annual
portfolio yield (which represents the expected yield to be generated by us on our investment portfolio based on the
composition of our portfolio as of such date), prior to leverage, was 9.9% based upon the amortized cost of our investments.
See our unaudited consolidated schedule of investments beginning on page S-86 in this prospectus supplement for a list of the
investments in our portfolio as of September 30, 2014. The portfolio yield does not represent an actual investment return to
stockholders and may be higher than what stockholders will realize on an investment in our common stock because it does not
reflect our expenses or any sales load that may have been paid by such stockholder.
During the year ended December 31, 2013, we made investments in portfolio companies totaling approximately $2.6
billion. During the same period, we sold investments for proceeds of approximately $1.1 billion and received principal
repayments of approximately $1.4 billion. As of December 31, 2013, our investment portfolio, with a total fair value of
approximately $4.1 billion, consisted of interests in 165 portfolio companies (51% in first lien senior secured loans, 22% in
second lien senior secured loans, 9% in senior secured bonds, 10% in subordinated debt, 4% in collateralized securities and
4% in equity/other). The portfolio companies that comprised our portfolio as of such date had an average annual EBITDA of
approximately $190.7 million. As of December 31, 2013, the investments in our portfolio were purchased at a weighted
average price of 97.3% of par or stated value, as applicable, the weighted average credit rating of the investments in our
portfolio that were rated (constituting approximately 40.7% of our portfolio based on the fair value of our investments) was B3
based upon the Moody's scale and our estimated gross annual portfolio yield, prior to leverage, was 10.1% based upon the
amortized cost of our investments.
About FB Advisor
FB Advisor is a subsidiary of our affiliate, Franklin Square Holdings, L.P., or Franklin Square Holdings, a national
sponsor of alternative investment products designed for the individual investor. FB Advisor is registered as an investment
adviser with the SEC under the Advisers Act and is led by substantially the same personnel that form the investment and
operations team of FS Investment Advisor, LLC, FSIC II Advisor, LLC, FSIC III Advisor, LLC and FS Global Advisor, LLC.
FS Investment Advisor, LLC, FSIC II Advisor, LLC and FSIC III Advisor, LLC are registered investment advisers that
manage Franklin Square Holdings' other three affiliated BDCs, FS Energy and Power Fund, FS Investment Corporation II and
FS Investment Corporation III, respectively. FS Global Advisor, LLC is a registered investment adviser that manages Franklin
Square Holdings' affiliated closed-end management investment company, FS Global Credit Opportunities Fund. See
"Management's Discussion and Analysis of Financial Condition and Results of Operations--Related Party Transactions" in
this prospectus supplement and "Risk Factors--Risks Related to FB Advisor and Its Affiliates" and "Certain Relationships
and Related Party Transactions" in the accompanying prospectus.
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In addition to managing our investments, the managers, officers and other personnel of FB Advisor also currently manage
the following entities through affiliated investment advisers:
Gross
Name
Entity
Investment Focus
Assets(1)
FS Energy and Power Fund
BDC
Primarily invests in debt and income-
$3,450,406,000
oriented equity securities of privately-held
U.S. companies in the energy and power
industry.
FS Investment Corporation II
BDC
Primarily invests in senior secured loans,
$4,501,423,000
second lien secured loans and, to a lesser
extent, subordinated loans of private U.S.
companies.
FS Investment Corporation III
BDC
Primarily invests in senior secured loans,
$ 595,301,000
second lien secured loans and, to a lesser
extent, subordinated loans of private U.S.
companies.
FS Global Credit Opportunities Fund(2)
Closed-end
Primarily invests in secured and unsecured $ 224,870,000
management
floating and fixed rate loans, bonds and
investment
other types of credit instruments.
company
(1) As of September 30, 2014, except as otherwise noted below.
(2) Two funds affiliated with FS Global Credit Opportunities Fund, FS Global Credit Opportunities Fund--A and FS Global
Credit Opportunities Fund--D, or together, the FSGCOF Offered Funds, which have the same investment objectives and
strategies as FS Global Credit Opportunities Fund, currently offer common shares of beneficial interest to the public and
invest substantially all of the net proceeds of their respective offerings in FS Global Credit Opportunities Fund. Gross
assets shown as of June 30, 2014.
Our chairman and chief executive officer, Michael C. Forman, has led FB Advisor since its inception. In 2007, he co-
founded Franklin Square Holdings with the goal of delivering alternative investment solutions, advised by what Franklin
Square Holdings believes to be best-in-class institutional asset managers, to individual investors nationwide. In addition to
leading FB Advisor, Mr. Forman currently serves as chairman, president and chief executive officer of FS Investment
Advisor, LLC, FS Energy and Power Fund, FSIC II Advisor, LLC, FS Investment Corporation II, FSIC III Advisor, LLC, FS
Investment Corporation III, FS Global Advisor, LLC, FS Global Credit Opportunities Fund and the FSGCOF Offered Funds.
FB Advisor's senior management team has significant experience in private lending and private equity investing, and has
developed an expertise in using all levels of a firm's capital structure to produce income-generating investments, while
focusing on risk management. The team also has extensive knowledge of the managerial, operational and regulatory
requirements of publicly registered alternative asset entities, such as BDCs. We believe that the active and ongoing
participation by Franklin Square Holdings and its affiliates in the credit markets, and the depth of experience and disciplined
investment approach of FB Advisor's management team, will allow FB Advisor to successfully execute our investment
strategy.
All investment decisions require the unanimous approval of FB Advisor's investment committee, which is currently
comprised of Mr. Forman, Gerald F. Stahlecker, our president, Zachary Klehr, our executive vice president, and Sean
Coleman, our managing director. Our board of directors, including a majority of independent directors, oversees and monitors
our investment performance and annually reviews the compensation we pay to FB Advisor and the compensation FB Advisor
pays to GDFM to determine that the provisions of each of the
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amended and restated investment advisory agreement, dated July 17, 2014, or the current investment advisory agreement,
between us and FB Advisor, and the investment sub-advisory agreement between FB Advisor and GDFM, dated January 2,
2009, are carried out.
About GDFM
From time to time, FB Advisor may enter into sub-advisory relationships with registered investment advisers that possess
skills that FB Advisor believes will aid it in achieving our investment objectives. FB Advisor has engaged GDFM to act as our
investment sub-adviser. GDFM assists FB Advisor in identifying investment opportunities and makes investment
recommendations for approval by FB Advisor, according to guidelines set by FB Advisor. GDFM also serves as the
investment sub-adviser to FS Investment Corporation II and FS Investment Corporation III pursuant to the investment sub-
advisory agreements between it and each of FSIC II Advisor, LLC and FSIC III Advisor, LLC, the investment advisers to FS
Investment Corporation II and FS Investment Corporation III, respectively. Furthermore, GDFM's affiliate, GSO, serves as
the investment sub-adviser to FS Energy and Power Fund and FS Global Credit Opportunities Fund pursuant to the investment
sub-advisory agreements between it and each of FS Investment Advisor, LLC and FS Global Advisor, LLC, the investment
advisers to FS Energy and Power Fund and FS Global Credit Opportunities Fund, respectively. GDFM is a Delaware limited
liability company with principal offices located at 345 Park Avenue, New York, New York 10154.
GDFM is a wholly-owned subsidiary of GSO. GSO is the credit platform of Blackstone, a leading global alternative asset
manager. As of September 30, 2014, GSO and its affiliates, excluding Blackstone, managed approximately $70.2 billion of
assets across multiple strategies within the leveraged finance marketplace, including leveraged loans, high-yield bonds,
distressed, mezzanine and private equity. As sub-adviser, GDFM makes recommendations to FB Advisor in a manner that is
consistent with its existing investment and monitoring processes.
Blackstone is a leading global alternative asset manager and provider of financial advisory services. It is one of the
largest independent managers of private capital in the world, with assets under management of approximately $284.4 billion as
of September 30, 2014. Blackstone's alternative asset management businesses include the management of private equity
funds, real estate funds, funds of hedge funds, credit-oriented funds, collateralized loan obligation vehicles, separately
managed accounts and publicly-traded closed-end mutual funds. Blackstone is a publicly traded limited partnership that has
common units which trade on the NYSE under the ticker symbol "BX". Information about Blackstone and its various
affiliates, including certain ownership, governance and financial information, is disclosed in Blackstone's periodic filings with
the SEC, which can be obtained from Blackstone's website at http://ir.blackstone.com or the SEC's website at www.sec.gov.
Information contained on Blackstone's website and in Blackstone's filings with the SEC are not incorporated by reference into
this prospectus supplement or the accompanying prospectus, and you should not consider that information to be part of this
prospectus supplement or the accompanying prospectus.
See "Sub-Adviser Conflicts of Interest" in this prospectus supplement for more information regarding potential conflicts
of interest with GDFM. See "Prospectus Summary--Conflicts of Interest" and "Risk Factors--Risks Related to FB Advisor
and Its Affiliates" in the accompanying prospectus for more information regarding potential conflicts of interest with FB
Advisor and its affiliates.
Risk Factors
An investment in our securities involves a high degree of risk and may be considered speculative. You should carefully
consider the information found in "Risk Factors" beginning on page S-18 in this prospectus supplement and beginning on page
22 in the accompanying prospectus, and the other information included in the accompanying prospectus, for a discussion of
factors you should carefully consider before deciding to invest in the Notes.
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Market Opportunity
We believe that there are and will continue to be significant investment opportunities in the senior secured and second
lien secured loan asset class, as well as investments in debt securities of middle-market companies.
Attractive Opportunities in Senior Secured and Second Lien Secured Loans
We believe that opportunities in senior secured and second lien secured loans are significant because of the variable rate
structure of most senior secured debt issues and because of the strong defensive characteristics of this investment class. Given
current market conditions, we believe that debt issues with variable interest rates offer a superior return profile to fixed-rate
securities, since variable interest rate structures are generally less susceptible to declines in value experienced by fixed-rate
securities in a rising interest rate environment.
Senior secured debt issues also provide strong defensive characteristics. Because these loans have priority in payment
among an issuer's security holders (i.e., they are due to receive payment before bondholders and equityholders), they carry the
least potential risk among investments in the issuer's capital structure. Further, these investments are secured by the issuer's
assets, which may be seized in the event of a default, if necessary. They generally also carry restrictive covenants aimed at
ensuring repayment before unsecured creditors, such as most types of public bondholders, and other security holders and
preserving collateral to protect against credit deterioration.
Opportunity in Middle-Market Private Companies
In addition to investing in senior secured and second lien secured loans generally, we believe that the market for lending
to private companies, particularly middle-market private companies within the United States, is underserved and presents a
compelling investment opportunity. We believe that the following characteristics support our belief:
Large Target Market. According to the U.S. Census Bureau, in its 2007 economic census, there were approximately
40,000 middle-market companies in the U.S. with annual revenues between $50 million and $2.5 billion, compared with
approximately 1,200 companies with revenues greater than $2.5 billion. These middle-market companies represent, we
believe, a significant portion of the growth segment of the U.S. economy and often require substantial capital investment to
grow their businesses. Middle-market companies have generated a significant number of investment opportunities for
investment programs managed by our affiliates and GDFM over the past several years, and we believe that this market
segment will continue to produce significant investment opportunities for us.
Limited Investment Competition. Despite the size of the market, we believe that regulatory changes and other factors have
diminished the role of traditional financial institutions and certain other capital providers in providing financing to middle-
market companies. We believe that lending to middle-market companies, which are often private, generally requires a greater
dedication of the lender's time and resources compared to lending to larger companies, due in part to the smaller size of each
investment and the often fragmented nature of information available from these companies. In addition, middle-market
companies may require more active monitoring and participation on the lender's part. We believe that many large financial
organizations, which often have relatively high cost structures, are not suited to deal with these factors and instead emphasize
services and transactions to larger corporate clients with a consequent reduction in the availability of financing to middle-
market companies.
Attractive Market Segment. We believe that the underserved nature of such a large segment of the market can at times
create a significant opportunity for investment. In many environments, we believe that middle-market companies are more
likely to offer attractive economics in terms of transaction pricing, up-front and
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http://www.sec.gov/Archives/edgar/data/1422183/000119312514427061/d824051d497.htm 12/10/2014