FS Credit Opportunities Corp. (NYSE:FSCO) Q4 2024 Earnings Call Transcript

FS Credit Opportunities Corp. (NYSE:FSCO) Q4 2024 Earnings Call Transcript March 1, 2024

FS Credit Opportunities Corp. isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Robert Paun: Good morning, and thank you all for joining us for FS Credit Opportunities Corp’s Fourth Quarter and Full-Year 2023 Earnings Conference Call. Please note that FS Credit Opportunity Corps may be referred to as FSCO, the fund, or the company throughout the call. Today's conference call is being recorded and an audio replay of the call will be available for 30 days. Replay information is included in a press release that FSCO issued on January 30th, 2024. In addition, FSCO has posted on its website a presentation containing supplemental financial information with respect to its portfolio and financial performance for the quarter ended December 31, 2023. A link to today's webcast and the presentation is available on the company's webpage at www.fsinvestments.com under the FS Credit Opportunities Corp tab.

Please note that this call is the property of FSCO. Any unauthorized rebroadcast of this call in any form is strictly prohibited. Today's conference call includes forward-looking statements with regard to future events, performance, or operations of FSCO. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements. We ask that you refer to FSCO's most recent filings with the SEC for important factors and risks that could cause actual results or outcomes to differ materially from these statements. FSCO does not undertake to update its forward-looking statements unless required to do so by law.

Additionally, information related to past performance, while helpful as an evaluative tool is not necessarily indicative of future results, the achievement of which cannot be assured. Investors should not view the past performance of FSCO or information about the market as indicative of FSCO's future results. Speaking on today's call will be Andrew Beckman, head of FS Global Credit and Portfolio Manager for FSCO; Nick Heilbut, Director of Research of FS Global Credit and Portfolio Manager for FSCO. Also joining us on the phone is James Beach, Chief Operating Officer of the Fund. Following our prepared remarks, the team will take questions from the audience. If you'd like to ask a question, there is a chat function on the right side of your screen.

You will try to address each of your questions after our prepared remarks. I will now turn the call over to Andrew.

Andrew Beckman: Thank you, Robert, and good morning, everyone. Looking back on 2023, we are proud of the results we delivered for our shareholders across several key fronts. First, we delivered strong returns in 2023, as the fund returned 20.1% on a net basis, outperforming the ideal bond and senior secured loan indices by 667 basis points and 707 basis points, respectively. This performance was strong on an absolute and relative basis as FSCO outperformed many of the larger credit-focused peers in the closed-end fund space. Net investment income fully covered distributions of $0.64 per share, and the fund's net asset value increased by $0.59 per share, or 9.3% year-over-year. We believe our performance reflects the dynamic nature of our strategy, investing across public and private credit with a focus on generating return premiums driven by the complexity of a company's balance sheet, the illiquidity of an asset, unconventional ownership, or corporate events.

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