FS Specialty Lending Fund (OTC:FSEN) announced a cash distribution of $0.6024 per share and outlined plans for an expected merger into New FS Specialty Lending Fund, which anticipates listing its common shares on a national securities exchange in mid-November 2025.
The board of trustees declared the cash distribution on October 15, 2025. Shareholders of record as of October 17, 2025, will receive the payment on or about October 20, 2025. The Fund noted that the determination of tax attributes for distributions is made annually at the end of its fiscal year, and interim determinations may not be representative of full-year actual tax attributes. Future distributions remain subject to the Board's discretion and legal restrictions.
In connection with the expected merger, the Fund will convert from a business development company to a closed-end fund registered under the Investment Company Act of 1940. This reorganization will precede the anticipated listing of the Successor Fund's common shares. The listing and its timing are subject to market conditions and final approval by the Fund's board of trustees. On October 20, 2025, FS Specialty Lending Fund also published an investor presentation related to these developments. The Fund targets an annualized distribution rate of 9.0% to 9.5% based on net asset value at the time of listing, with management fees reduced to 1.35% of gross assets and incentive fees to 10% with a 6% hurdle via waiver upon listing.
As of June 30, 2025, the Fund reported total assets of $1.9 billion, with a portfolio comprising 73 companies. Its investment strategy is opportunistic, focusing on private and public credit, with 89% of its portfolio in senior secured debt, 86% in floating rate assets, and 92% in diversified credit investments.
