The following is a summary of the FS Credit Opportunities Corp. (FSCO) Q1 2024 Earnings Call Transcript:

Financial Performance:

• FS Credit Opportunities Corp. reported a net return of 5.8% based on NAV in Q1 2024, surpassing high yield bond and senior secured loan indices.

• The fund's net investment income fully covered distributions paid in Q1 2024 since FS Global Credit team took over its management.

• It raised its monthly distribution to $0.06 per share following solid portfolio performance.

• Direct distributions resulted in $0.17 per share in Q1, yielding an annualized distribution of 10.12% based on NAV, and approximately 11.71% based on the stock price.

• The fund's common shares traded at a notable discount to NAV, however, this gap has been narrowing.

• The NAV increased by $0.22 per share in Q1.

Business Progress:

• FS Credit Opportunities Corp places a strong emphasis on companies with strong cash flows, moderate leverage profiles, and experienced management teams.

• Private originations accounted for around 75% of new investment activities in Q1 2024.

• The fund's portfolio at the end of Q1 was 81% senior secured debt, 5% subordinated debt, 4% asset-based finance, and 10% equity and other investments.

• The fund issued $100 million of term preferred shares due in May 2029, boosting its purchasing power.

• There is an ongoing focus on senior debt investments with a unique differentiation from traditional credit closed-end funds via the ability to invest across public and private markets.

• The ownership in Monitronics remains a positive outlook due to management actions and favourable business trends.

• The company is taking proactive steps to reduce the gap between the stock's trading performance and its perceived worth.

• A positive stance remains on investments in complex scenarios focusing on recovery values and P&L over the non-accrual rate.

• The company exhibited a cautious optimism about macroeconomic environment influenced by a strong economy, slight slowdown due to higher interest rates, and slight dip in manufacturing and consumer spending.

More details: FS Credit Opportunities IR

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