Filed
pursuant to Rule 497
File No. 333-149374
File No. 333-149374
FS
INVESTMENT CORPORATION
Supplement dated January 19, 2010
to
Prospectus dated August 28, 2009
This supplement contains information which amends, supplements
or modifies certain information contained in the Prospectus of
FS Investment Corporation (“FSIC”) dated
August 28, 2009 as supplemented by the supplements dated
October 13, 2009 and November 20, 2009.
You should carefully consider the “Risk Factors”
beginning on page 29 of the Prospectus before you decide to
invest.
Status of
Our Initial Public Offering
In our monthly closing on December 1, 2009, we accepted
subscriptions for 1,154,518 shares of our common stock at
an average price per share of $10.36 for corresponding gross
proceeds of $11,956,409. In our monthly closing on
January 1, 2010, we accepted subscriptions for
1,268,585 shares of our common stock at an average price
per share of $10.38 for corresponding gross proceeds of
$13,166,838. We also issued 62,386 shares through our
distribution reinvestment plan at an average price per share of
$9.88 for corresponding gross proceeds of $616,376. Since
commencing our public offering on December 15, 2008, we
have received and accepted subscriptions totaling $107,247,838.
Including $1,000,008 contributed by principals of our investment
adviser in February 2008, we have accepted subscriptions for
gross proceeds of $108,247,846 to date.
Portfolio
Update
From November 20, 2009 to December 31, 2009, we
invested in seven new portfolio companies and increased our
positions in eight others through secondary market transactions.
During this period, we sold our interest in Alliance Healthcare
Systems, which resulted in a realized gain. Also, our entire
position in Protection One, Inc, was called at a price of 103
and resulted in a realized gain.
Our investment portfolio consists of 52 positions in senior
secured loans, second lien secured loans, and mezzanine debt of
U.S. companies with an average annual EBITDA of
$269.4 million. The investments in our portfolio were
purchased at an average price of 82.5% of par value. The
weighted average credit rating of our portfolio is B3 based upon
the Moody’s scale and our estimated gross annual portfolio
yield is
13.2%(1).
We intend to continue to grow our portfolio. The following is
our investment portfolio as of December 31, 2009.
| (1) | Based upon the purchase price of our investments. |
|
Date of Most |
Original |
Par |
||||||||||||
| Security | Industry | Recent Purchase | Cost | Value | ||||||||||
|
Senior Secured Loans – First Lien
(45.6%)
|
||||||||||||||
|
Texas Competitive Electric Holdings (TXU Corp.), L+350, 10/10/14
|
Utility | Oct-09 | $ | 3,339,190 | $ | 4,473,350 | ||||||||
|
First Data Corporation, L+275, 9/24/14
|
Merchant Processing | Dec-09 | $ | 2,287,998 | $ | 2,982,233 | ||||||||
|
Vertellus Specialties, Inc., L+425, 12/10/12
|
Specialty Chemicals | Feb-09 | $ | 395,675 | $ | 486,985 | ||||||||
|
Global Tel Link, L+600, 2/14/13
|
Telecommunications | Feb-09 | $ | 351,917 | $ | 401,045 | ||||||||
|
DTN, Inc., L+500, 3/10/13
|
Business Information Services | Feb-09 | $ | 419,889 | $ | 482,631 | ||||||||
|
King Pharmaceuticals, Inc., L+500, 4/19/12
|
Specialty Pharmaceuticals | Feb-09 | $ | 105,327 | $ | 116,868 | ||||||||
|
Corel Corporation, L+400, 5/2/12
|
Software | Aug-09 | $ | 1,294,635 | $ | 1,568,542 | ||||||||
|
1-800 Contacts, L+395, 3/4/15
|
Healthcare | Jul-09 | $ | 2,696,260 | $ | 3,079,185 | ||||||||
|
Clarke American, L+250, 6/30/14
|
Business Information Services | Dec-09 | $ | 1,749,267 | $ | 2,483,473 | ||||||||
|
Kenan Advantage Group, Inc., L+275, 12/16/11
|
Transportation and Logistics | Mar-09 | $ | 742,322 | $ | 989,762 | ||||||||
|
West Corp, L+500, 10/24/13
|
Telecommunications Services | Mar-09 | $ | 431,855 | $ | 494,962 | ||||||||
|
Contec LLC, L+475, 7/28/14
|
Telecommunications | May-09 | $ | 1,572,108 | $ | 1,983,681 | ||||||||
|
Apptis Inc, L+325, 12/20/12
|
Defense & Aerospace | Apr-09 | $ | 644,064 | $ | 879,182 | ||||||||
|
Safenet, L+250, 4/12/14
|
Networking and Security Equipment | Mar-09 | $ | 339,023 | $ | 494,924 | ||||||||
|
Intralinks, L+275, 6/15/14
|
Business Information Services | May-09 | $ | 1,075,822 | $ | 1,480,188 | ||||||||
|
NCO Group, L+500, 5/15/13
|
Business Process Outsourcing | Dec-09 | $ | 2,552,998 | $ | 2,954,595 | ||||||||
|
Columbian Chemicals, L+600, 3/16/13
|
Commodity Chemicals | Apr-09 | $ | 752,548 | $ | 1,213,787 | ||||||||
|
Quantum Corp, L+350, 7/12/14
|
Storage Software and Hardware | Apr-09 | $ | 744,353 | $ | 896,811 | ||||||||
|
Clientlogic Corporation (Sitel), L+550, 1/30/14
|
Professional and Business Services | Jun-09 | $ | 1,440,000 | $ | 2,000,000 | ||||||||
|
Caritor, Inc. (Keane), L+225, 6/4/13
|
IT Outsourcing | Jul-09 | $ | 1,518,561 | $ | 1,988,169 | ||||||||
|
WCP Exposition Services, L+600, 8/29/11
|
Tradeshow Equipment and Services | Jun-09 | $ | 246,117 | $ | 543,904 | ||||||||
|
Pierre Foods, Inc., L+600, 9/30/14
|
Food Producers and Distributors | Sep-09 | $ | 2,764,500 | $ | 2,850,000 | ||||||||
|
CamelBak Products, Prime+475, 8/4/11
|
Consumer Goods | Oct-09 | $ | 1,799,232 | $ | 1,966,374 | ||||||||
|
AmWINS Group, Inc., L+250, 6/8/13
|
Insurance Brokerage | Oct-09 | $ | 750,750 | $ | 975,000 | ||||||||
|
National Processing Company , L+500, 10/31/13
|
Merchant Processing | Dec-09 | $ | 1,133,369 | $ | 1,196,168 | ||||||||
|
Edwards Limited, L+200, 5/31/14
|
Manufacturing | Oct-09 | $ | 1,248,000 | $ | 1,950,000 | ||||||||
|
Mosaic Sales Solutions, L+275, 4/3/13
|
Business Services | Oct-09 | $ | 577,834 | $ | 888,975 | ||||||||
|
Yell Group Plc, L+300, 10/29/12
|
Printing and Publishing | Oct-09 | $ | 644,425 | $ | 845,147 | ||||||||
|
InfrastruX Group, Inc, L+500, 0.5% PIK, 11/3/12
|
Oil and Gas | Oct-09 | $ | 665,624 | $ | 723,504 | ||||||||
|
SemGroup, L+700, 11/30/12
|
Oil and Gas | Nov-09 | $ | 3,800,000 | $ | 4,000,000 | ||||||||
|
Green Tree Financial, L+575, 12/15/15
|
Financial Services | Dec-09 | $ | 2,850,000 | $ | 3,000,000 | ||||||||
|
Senior Secured Loans – Second Lien
(45.3%)
|
||||||||||||||
|
Asurion Corp, L+650, 7/3/15
|
Insurance | Dec-09 | $ | 2,552,500 | $ | 3,000,000 | ||||||||
|
Bresnan Communications LLC, L+450, 3/29/14
|
Broadcast and Entertainment | Jan-09 | $ | 720,000 | $ | 1,000,000 | ||||||||
|
Harrington Holdings, L+600, 7/11/14
|
Healthcare | Apr-09 | $ | 640,000 | $ | 1,000,000 | ||||||||
|
Intergraph, L+600, 11/28/14
|
Software | Apr-09 | $ | 850,000 | $ | 1,000,000 | ||||||||
|
Awesome Acquisition Company (CiCi), L+500, 6/4/14
|
Restaurants | Oct-09 | $ | 2,125,902 | $ | 2,939,757 | ||||||||
|
American Safety Razor, L+625, 1/30/14
|
Personal Care | Jun-09 | $ | 1,800,000 | $ | 2,500,000 | ||||||||
|
Dresser Inc, L+575, 5/4/15
|
Computers and Electronics | Dec-09 | $ | 3,050,000 | $ | 4,000,000 | ||||||||
|
Sorenson Communications Inc, L+700, 2/16/14
|
Telecommunications | Nov-09 | $ | 2,523,980 | $ | 3,008,443 | ||||||||
|
Aspect Software Group, L+700, 6/29/12
|
Business Services | Aug-09 | $ | 2,025,000 | $ | 3,500,000 | ||||||||
|
Sirius Computer, L+600, 5/30/13
|
Computer Hardware Distributor | Aug-09 | $ | 2,065,000 | $ | 3,000,000 | ||||||||
|
FR Brand Acquisition Corp, L+600, 2/7/15
|
Oil and Gas | Jul-09 | $ | 1,260,000 | $ | 2,000,000 | ||||||||
|
Building Materials Corp of America, L+575, 10/6/14
|
Building Products | Jul-09 | $ | 1,630,000 | $ | 2,000,000 | ||||||||
|
Custom Building Products, L+800, 4/20/12
|
Building Products | Aug-09 | $ | 2,321,875 | $ | 2,500,000 | ||||||||
|
AmWINS Group, Inc., L+550, 6/8/14
|
Insurance Brokerage | Oct-09 | $ | 180,000 | $ | 300,000 | ||||||||
|
Allen Systems Group, L+800, 2.0% PIK, 4/19/14
|
Enterprise Software | Oct-09 | $ | 3,790,000 | $ | 4,000,000 | ||||||||
|
Attachmate Corporation, L+675, 10/13/13
|
Enterprise Software | Oct-09 | $ | 2,407,500 | $ | 3,000,000 | ||||||||
|
ILC Holdings, Inc., 11.5%, 6/30/12
|
Aerospace & Defense | Dec-09 | $ | 4,000,000 | $ | 4,000,000 | ||||||||
|
Tenaska Power Fund, L+425, 12/15/14
|
Power | Dec-09 | $ | 1,700,000 | $ | 2,000,000 | ||||||||
|
Datatel, Inc., L+825, 12/10/16
|
Software | Dec-09 | $ | 4,900,000 | $ | 5,000,000 | ||||||||
|
Mezzanine Debt (9.1%)
|
||||||||||||||
|
Sorenson Communications Inc, L+1200 PIK, 8/16/14
|
Telecommunications | Dec-09 | $ | 4,111,875 | $ | 4,500,000 | ||||||||
|
ATI Enterprises Inc., L+1100, 12/15/16
|
Education | Dec-09 | $ | 4,900,000 | $ | 5,000,000 | ||||||||
| $ | 90,487,293 | $ | 109,637,645 | |||||||||||
The tables below show portfolio investments that were sold or
experienced a repayment in excess of 1% of a position’s
value between November 19, 2009 and December 31, 2009.
| Security | Original Cost | Disposition Price | Transaction Type | |||||||
|
Alliance Healthcare Services
|
$ | 2,940,000 | $ | 2,960,000 | Sale | |||||
|
Weighted |
Weighted |
|||||||||||||
|
Average |
Average |
|||||||||||||
|
Purchase |
Disposition |
Paydown |
||||||||||||
| Security | Price(1) | Price(1) | Amount | Transaction Type | ||||||||||
|
CamelBak Products, Prime+475, 8/4/11
|
91.5 | 100.0 | $ | 33,626 | Paydown | |||||||||
|
Corel Corp., L+400, 5/2/12
|
82.5 | 100.0 | $ | 194,631 | Paydown | |||||||||
|
Data Transmission Network Corp., L+500, 3/10/13
|
87.0 | 100.0 | $ | 14,221 | Paydown | |||||||||
|
Global Tel Link, L+600, 2/14/13
|
87.8 | 100.0 | $ | 8,159 | Paydown | |||||||||
|
King Pharmaceuticals, Inc., L+500, 4/19/12
|
75.7 | 100.0 | $ | 27,144 | Paydown | |||||||||
|
Yell Group plc, L+300, 10/29/12
|
76.2 | 100.0 | $ | 154,853 | Paydown | |||||||||
|
Protection One, Inc, 12.0%, 11/15/11
|
99.2 | 103.0 | $ | 3,002,450 | Call | |||||||||
| (1) | As a percentage of par value. |
Management
This supplement revises the section entitled,
“Management – Board of Directors and Executive
Officers” and “Management – Committees of
the Board of Directors,” as follows:
Effective December 31, 2009, Gerald Stahlecker is no longer
a member of the Board of Directors of the Company.
Mr. Stahlecker accepted a position with the Company’s
affiliate and sponsor firm, Franklin Square Holdings, L.P., as
Executive Vice President – Operations. As a result,
Mr. Stahlecker is no longer a member of the Company’s
Audit and Valuation Committees.
Suitability
Standards
This supplement adds the following paragraph to page 142 of
the prospectus under the heading, “SUITABILITY
STANDARDS.”
Oregon – In addition to the suitability
standards applicable to investors, the state of Oregon requires
that each Oregon investor will limit his or her investment in
our common stock to a maximum of 10% of his or her net worth.