Filed pursuant to Rule 497
File No. 333-149374
FS INVESTMENT CORPORATION
Supplement dated July 20, 2010
to
Prospectus dated May 17, 2010
This supplement contains information which amends, supplements or modifies certain information contained in the Prospectus of FS Investment Corporation (“FSIC”) dated May 17, 2010.
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 semi-monthly closing on June 1, 2010, we accepted subscriptions for 975,334 shares of our common stock at an average price per share of $10.39 for corresponding gross proceeds of $10,130,542. In our semi-monthly closing on June 15, 2010, we accepted subscriptions for 1,016,765 shares of our common stock at an average price per share of $10.37 for corresponding gross proceeds of $10,538,966. In our semi-monthly closing on July 1, 2010, we accepted subscriptions for 1,037,445 shares of our common stock at an average price per share of $10.37 for corresponding gross proceeds of $10,761,444. We also issued 145,693 shares of our common stock through our distribution reinvestment plan at a price per share of $9.88 for corresponding gross proceeds of $1,439,451. Additionally, pursuant to our share repurchase program, we purchased a total of 108,904 shares of our common stock on July 1, 2010 at a price of $9.36 per share for corresponding repurchase proceeds of $1,019,341.
Since commencing our public offering on December 15, 2008, we have received and accepted subscriptions totaling $224,771,672. Including $1,000,008 contributed by principals of our investment adviser in February 2008, we have accepted subscriptions for aggregate consideration of $225,771,680 to date.
Portfolio Update
As of June 30, 2010, our investment portfolio consists of interests in 84 portfolio companies with an average annual EBITDA of approximately $285.2 million. As of June 30, 2010, the investments in our portfolio were purchased at an average price of 92.5% 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 9.2%(1). We intend to continue to add securities to our portfolio as our offering progresses. The following is our investment portfolio as of June 30, 2010.
| (1) | Based upon the purchase price of our investments. |
| Portfolio Company |
Industry | Date of Most Recent Purchase |
Principal(a) Amount (in thousands) |
Amortized Cost (in thousands) | ||||||
| Senior Secured Loans—First Lien—64.0% |
||||||||||
| 1-800 Contacts, Inc., L+395, 3/4/15 |
Healthcare | May-10 | $ | 6,056 | $ | 5,721 | ||||
| Affinion Group Inc., L+350, 4/8/16(b) |
Industrials | Apr-10 | 4,988 | 4,939 | ||||||
| American General Finance Corp., L+550, 4/16/15(b) |
Financials | Apr-10 | 5,000 | 4,928 | ||||||
| AmWINS Group, Inc., L+250, 6/8/13(b) |
Financials | Oct-09 | 949 | 769 | ||||||
| Anchor Glass Container Corp., L+400, 3/1/16(b) |
Industrials | Feb-10 | 3,416 | 3,383 | ||||||
| Ardent Health Services, LLC, L+500, 9/15/15(b) |
Healthcare | May-10 | 5,337 | 5,284 | ||||||
| Aspect Software, Inc., L+450, 5/7/16(b) |
Information Technology | May-10 | 1,995 | 1,975 | ||||||
| Avaya, Inc., L+275, 10/24/14(b) |
Information Technology | May-10 | 6,969 | 6,154 | ||||||
| Canwest Mediaworks, L+700, 7/23/16(b) |
Consumer Discretionary | Jun-10 | 4,318 | 4,189 | ||||||
| Caritor, Inc. (Keane Inc.), L+225, 6/4/13(b) |
Information Technology | Jul-09 | 1,962 | 1,605 | ||||||
| CDW Corporation, L+400, 10/10/14(b) |
Information Technology | Jun-10 | 4,987 | 4,348 | ||||||
| Ceridian Corp., L+300, 11/9/14(b) |
Industrials | Mar-10 | 4,956 | 4,456 | ||||||
| Cincinnati Bell, L+500, 6/10/17(b) |
Telecommunication Services | Jun-10 | 4,988 | 4,839 | ||||||
| Citgo Petroleum Corporation, L+700, 6/30/17(b) |
Energy | Jun-10 | 5,000 | 4,900 | ||||||
| Columbian Chemicals, L+600, 3/16/13 |
Materials | Apr-09 | 1,201 | 859 | ||||||
| Contec LLC, L+475, 7/28/14(b) |
Telecommunication Services | May-09 | 1,952 | 1,628 | ||||||
| Corel Corp., L+400, 5/2/12 |
Information Technology | Aug-09 | 1,434 | 1,271 | ||||||
| Cumulus Media Inc., L+400, 6/11/14(b) |
Telecommunication Services | Apr-10 | 1,672 | 1,540 | ||||||
| Custom Building Products, L+400, 3/17/15(b) |
Materials | Mar-10 | 6,109 | 6,052 | ||||||
| Edwards Limited, L+200, 5/31/14(b) |
Industrials | Oct-09 | 1,940 | 1,329 | ||||||
| First Data Corp., L+275, 9/24/14(b) |
Information Technology | May-10 | 7,954 | 6,784 | ||||||
| Freescale Semiconductor, L+425, 12/1/16(b) |
Industrials | May-10 | 5,981 | 5,709 | ||||||
| Green Tree Financial, L+575, 12/15/15(b) |
Financials | Dec-09 | 2,880 | 2,748 | ||||||
| Harland Clarke Holdings Corp., L+250, 6/30/14(b) |
Industrials | Dec-09 | 2,471 | 1,872 | ||||||
| Info Group Inc., L+450, 5/15/16(b) |
Consumer Discretionary | May-10 | 4,670 | 4,578 | ||||||
| InfrastruX Group, Inc., L+500, 0.5% PIK, 11/3/12(b) |
Industrials | Oct-09 | 723 | 677 | ||||||
| Intergraph, L+400, 5/29/14(b) |
Information Technology | Mar-10 | 4,667 | 4,623 | ||||||
| Intralinks, Inc., L+275, 6/15/14 |
Information Technology | May-09 | 1,459 | 1,139 | ||||||
| KIK Custom Products, L+225, 6/2/14(b) |
Consumer Staples | Mar-10 | 4,974 | 4,339 | ||||||
| LyondellBasell Industries, L+400, 4/30/16(b) |
Materials | Mar-10 | 1,360 | 1,347 | ||||||
| Michael Foods, L+450, 5/1/14(b) |
Consumer Staples | Jun-10 | 2,569 | 2,517 | ||||||
| Mosaic Sales Solutions, L+275, 4/3/13 |
Consumer Discretionary | Oct-09 | 885 | 627 | ||||||
| MultiPlan, Inc., L+425, 4/12/13(b) |
Healthcare | Mar-10 | 2,103 | 2,084 | ||||||
| National Processing Co., L+500, 9/29/13(b) |
Information Technology | Dec-09 | 1,177 | 1,126 | ||||||
| NCO Group, L+500, 5/15/13(b) |
Information Technology | Apr-10 | 6,394 | 6,090 | ||||||
| New Development Holding, LLC (Calpine), L+550, 6/10/17(b) |
Utilities | Jun-10 | 4,630 | 4,538 | ||||||
| OSI Restaurant Partners, L+225, 6/14/14(b) |
Consumer Discretionary | May-10 | 2,992 | 2,615 | ||||||
| Ozburn Hessey, L+550, 7/15/14(b) |
Industrials | Apr-10 | 5,262 | 5,220 | ||||||
| Pierre Foods, Inc., L+500, 3/1/16(b) |
Consumer Staples | Mar-10 | 4,938 | 4,914 | ||||||
| Protection One Alarm Monitoring, Inc., L+425, 6/4/16(b) |
Consumer Discretionary | Jun-10 | 2,590 | 2,551 | ||||||
| Quantum Corp., L+350, 7/12/14(b) |
Information Technology | Apr-09 | 892 | 772 | ||||||
| Repcon Strickland, L+475, 4/1/13 |
Energy | Apr-10 | 4,843 | 4,345 | ||||||
| Revlon Consumer Products Corp., L+400, 3/11/15(b) |
Consumer Discretionary | Mar-10 | 4,389 | 4,316 | ||||||
| Reynolds & Reynolds, L+350, 5/15/17(b) |
Information Technology | May-10 | 5,338 | 5,299 | ||||||
| Reynolds Group Ltd., L+425, 5/5/16(b) |
Industrials | May-10 | 4,710 | 4,702 | ||||||
| SemGroup, L+700, 11/30/12(b) |
Energy | May-10 | 6,752 | 6,671 | ||||||
| Sheridan Group Inc., L+550, 4/16/17(b) |
Energy | Apr-10 | 6,948 | 6,846 | ||||||
| Sitel a.k.a. Clientlogic Corp., L+550, 1/30/14(b) |
Telecommunication Services | May-10 | 3,966 | 3,665 | ||||||
| Smurfit-Stone Container Enterprises, Inc., L+475, 2/10/16 |
Industrials | Feb-10 | 7,000 | 6,934 | ||||||
| Spansion, Inc., L+550, 2/9/15(b) |
Information Technology | Mar-10 | 5,985 | 5,993 | ||||||
| Styron, L+575, 6/14/16(b) |
Materials | Jun-10 | 6,087 | 5,966 | ||||||
|
Texas Competitive Electric Holdings Co. LLC, L+350, 10/10/14(b) |
Utilities | May-10 | 9,433 | 7,582 | ||||||
| Telcordia Technologies Inc., L+500, 4/30/16(b) |
Telecommunication Services | May-10 | 6,037 | 6,044 | ||||||
| Trident Exploration Corp., L+950, 6/10/15 |
Energy | Jun-10 | 7,000 | 6,791 | ||||||
| Vertafore, Inc., L+400, 7/31/14(b) |
Information Technology | Apr-10 | 5,110 | 5,013 | ||||||
| WCP Exposition Services Operating Co., L+600, 8/29/11 |
Consumer Discretionary | Jun-09 | 544 | 262 | ||||||
| West Corp., L+500, 10/24/13 |
Telecommunication Services | Mar-09 | 490 | 444 | ||||||
| Yell Group Plc, L+300, 7/31/14 |
Consumer Discretionary | Oct-09 | 845 | 686 | ||||||
| Total Senior Secured Loans—First Lien |
218,596 | |||||||||
| Portfolio Company |
Industry | Date of Most Recent Purchase |
Principal(a) Amount (in thousands) |
Amortized Cost (in thousands) | ||||||
| Senior Secured Loans—Second Lien—23.0% |
||||||||||
| Advantage Sales & Marketing, Inc., L+700, 4/29/17(b) |
Industrials | Apr-10 | $ | 5,000 | $ | 4,951 | ||||
| Allen Systems Group, L+800, 2.0% PIK, 10/13/16(b) |
Information Technology | Oct-09 | 4,056 | 3,866 | ||||||
| AmWINS Group, Inc., L+550, 6/8/14 |
Financials | May-10 | 1,992 | 1,630 | ||||||
| Asurion Corp., L+650, 7/3/15(b) |
Financials | May-10 | 5,000 | 4,601 | ||||||
| Attachmate Corp., L+675, 10/13/13(b) |
Information Technology | Jan-10 | 5,000 | 4,252 | ||||||
| Awesome Acquisition Co., L+500, 6/4/14 |
Consumer Discretionary | Oct-09 | 2,940 | 2,268 | ||||||
| Central Parking, L+450, 11/22/14 |
Industrials | May-10 | 250 | 194 | ||||||
| Datatel, Inc., L+825, 12/10/16 |
Information Technology | Dec-09 | 5,000 | 4,908 | ||||||
| Dresser, Inc., L+575, 5/4/15(b) |
Energy | Apr-10 | 7,405 | 6,462 | ||||||
| Edwards Limited, L+575, 11/30/14(b) |
Industrials | May-10 | 2,305 | 2,032 | ||||||
| FR Brand Acquisition Corp., L+640, 2/7/16(b) |
Industrials | May-10 | 5,000 | 5,929 | ||||||
| Harrington Holdings, L+600, 7/11/14 |
Healthcare | Apr-09 | 1,000 | 710 | ||||||
| ILC Holdings, Inc., 11.5%, 6/30/14 |
Industrials | Dec-09 | 4,000 | 4,000 | ||||||
| Intergraph, L+825, 11/28/14(b) |
Information Technology | Apr-09 | 3,000 | 2,887 | ||||||
| Lincoln Industrial Corp, L+575, 1/9/15(b) |
Industrials | Apr-10 | 2,000 | 1,828 | ||||||
| McKechnie Aerospace, L+500, 5/11/15(b) |
Industrials | Jun-10 | 3,499 | 3,232 | ||||||
| National Processing Co., L+875, 9/29/14 |
Information Technology | May-10 | 5,000 | 4,594 | ||||||
| Roundy’s Inc., L+800, 4/19/16(b) |
Consumer Staples | Apr-10 | 6,500 | 6,541 | ||||||
| Sirius Computer, L+600, 5/30/13 |
Information Technology | Aug-09 | 3,000 | 2,256 | ||||||
| TPF a.k.a. Tenaska Power Fund, L+425, 12/15/14(b) |
Energy | Mar-10 | 6,170 | 5,489 | ||||||
| Wm. Bolthouse Farms, Inc., L+750, 8/11/16(b) |
Consumer Staples | Mar-10 | 7,000 | 6,978 | ||||||
| Total Senior Secured Loans—Second Lien |
79,608 | |||||||||
| Senior Secured Bonds—8.0% |
||||||||||
| Aspect Software, Inc., 10.6%, 5/15/17(b) |
Information Technology | Apr-10 | 4,000 | 4,000 | ||||||
| ATP Oil & Gas Corporation, 11.9%, 5/1/15(b) |
Energy | Apr-10 | 4,000 | 3,982 | ||||||
| Michael Foods, 9.8%, 7/15/18(b) |
Consumer Staples | Jun-10 | 1,100 | 1,100 | ||||||
| Nexstar Broadcasting, 9.5%, 4/15/17(b) |
Telecommunication Services | Apr-10 | 5,000 | 4,969 | ||||||
| Paetec Communications, 8.9%, 6/30/17(b) |
Telecommunication Services | Apr-10 | 6,680 | 6,841 | ||||||
| Reader’s Digest Association, Inc., L+650, 2/15/17(b) |
Consumer Discretionary | Feb-10 | 6,000 | 5,830 | ||||||
| Total Senior Secured Bonds |
26,722 | |||||||||
| Mezzanine Debt/Other—5.0% |
||||||||||
| Apidos CDO IV Class E, L+360, 10/27/18 |
Financials | May-10 | 2,000 | 1,018 | ||||||
| ATI Enterprises Inc., L+1100, 12/30/16 |
Consumer Discretionary | Jan-10 | 8,000 | 7,900 | ||||||
| Base CLO I Class E, EURIBOR+500, 10/17/18 |
Financials | Mar-10 | € | 1,500 | 929 | |||||
| Blue Mountain CLO III Class E, L+355, 3/17/21 |
Financials | May-10 | $ | 2,000 | 844 | |||||
| N.E.W. Customer Service Cos., Inc., L+750, 3/22/17(b) |
Industrials | Mar-10 | 7,000 | 6,862 | ||||||
| Total Mezzanine Debt/Other |
17,554 | |||||||||
| TOTAL INVESTMENTS—100.0% |
$ | 342,480 | ||||||||
| (a) | Denominated in U.S. Dollars unless otherwise noted. |
| (b) | Security is held within Broad Street Funding LLC and is pledged as collateral supporting the amounts outstanding under the revolving credit facility with Deutsche Bank. |
The tables below show portfolio investments that were sold or experienced a repayment in excess of 1% of a position’s value between May 15, 2010 and June 30, 2010.
| Security |
Original Cost | Disposition Price | Transaction Type | |||||
| Bass Pro Group, L+350, 4/12/15 |
$ | 3,762,000 | $ | 3,790,500 | Sale | |||
| Global Tel Link Corp., L+400, 3/2/16 |
$ | 2,475,000 | $ | 2,506,250 | Sale | |||
| ATP Oil & Gas Corporation, 11.9%, 5/1/15 |
$ | 2,985,930 | $ | 2,147,500 | Sale | |||
| Security |
Weighted Average Purchase Price(1) |
Weighted Average Disposition Price(1) |
Paydown Amount |
Transaction Type | |||||
| Anchor Glass Container Corp., L+400, 3/1/16 |
99.00 | 100.0 | $ | 360,333 | Paydown | ||||
| CamelBak Products, Prime+475, 8/4/11 |
91.50 | 100.0 | $ | 1,817,278 | Paydown | ||||
| Cumulus Media Inc., L+400, 6/11/14 |
91.75 | 100.0 | $ | 22,773 | Paydown | ||||
| Custom Building Products, L+400, 3/17/15 |
99.00 | 100.0 | $ | 363,390 | Paydown | ||||
| Green Tree Financial, L+575, 12/15/15 |
95.00 | 100.0 | $ | 60,000 | Paydown | ||||
| Intergraph, L+400, 5/29/14 |
99.00 | 100.0 | $ | 333,333 | Paydown | ||||
| Kenan Advantage Group, Inc., L+275, 12/16/11 |
75.00 | 100.0 | $ | 975,287 | Paydown | ||||
| MultiPlan, Inc., L+425, 4/12/13 |
99.00 | 100.0 | $ | 396,825 | Paydown | ||||
| National Processing Co., L+500, 9/29/13 |
94.75 | 100.0 | $ | 15,335 | Paydown | ||||
| NCO Group, L+500, 5/15/13 |
93.82 | 100.0 | $ | 93,242 | Paydown | ||||
| Pierre Foods, Inc., L+500, 3/1/16 |
99.50 | 100.0 | $ | 62,500 | Paydown | ||||
| Repcon Strickland, L+475, 4/1/13 |
89.00 | 100.0 | $ | 156,914 | Paydown | ||||
| Reynolds & Reynolds, L+350, 5/15/17 |
99.25 | 100.0 | $ | 261,538 | Paydown | ||||
| (1) | As a percentage of par value. |
Prospectus Summary and
Management’s Discussion and Analysis of Financial Condition and Results of Operations
This supplement revises the sections entitled, “Prospectus Summary—FS Investment Corporation,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Credit Facility,” “—Financial Condition, Liquidity and Capital Resources—Credit Facility” and “—Quantitative and Qualitative Disclosures about Market Risk” to include the following:
On July 13, 2010, in exchange for an amendment fee to Deutsche Bank, the maximum borrowing amount available under Broad Street’s existing revolving credit facility was increased from $140 million to $240 million and the overall borrowing costs thereunder were lowered from LIBOR + 250 basis points to LIBOR + 223 basis points per annum. No other material terms of the revolving credit facility changed in connection with the amendment. In addition, in connection with the amendment to the credit facility, we contributed additional loans to Broad Street as collateral under the facility.