FRBP

Franklin BSP Capital Corp

OTC

7.56

+0.00 +0.00%

USD · close Oct 30

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MKT CAP $1BP/E 10.8DIV YIELD —FCF YIELD —REV TTM —NET INCOME $98.3M +21.1%NET DEBT $2.2B52W 7.00 – 11.00SEC XBRL · TTM TO Invalid Date

How FRBP rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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Risk Factors .” We may co-invest, subject to the conditions included in the exemptive order received by affiliates of our Adviser from the SEC, with certain of our affiliates.
Business — “Potential Conflicts of Interests; Co-Investment Opportunities” and “Item 13.
Certain Relationships and Related Transactions, and Director Independence” below.
We believe that such co-investments afford us additional investment opportunities and an ability to build a diverse portfolio.
As a BDC, we are generally required to invest at least 70% of our total assets primarily in securities of private and certain U.S. public companies (other than certain financial institutions), cash, cash equivalents and U.S. government securities and other limited float high quality debt investments that mature in one year or less.
We are permitted to borrow money from time to time within the levels permitted by the Investment Company Act of 1940, as amended (the “1940 Act”) that are applicable to us.
Subject to the receipt of certain approvals and compliance with certain disclosure requirements, we are permitted to reduce our asset coverage, as defined in the 1940 Act from 200% to 150% so long as we meet certain disclosure requirements and, since our securities are not listed on a national securities exchange, offer to repurchase the shares of our stockholders as of the applicable approval date.
On September 23, 2020, our sole stockholder approved the application of the reduced asset coverage requirements to 150% and declined the Company’s offer to repurchase all of its outstanding shares of Common Stock.
As a result, we are subject to the reduced asset coverage requirements in Section 61(a)(2) of the 1940 Act, which permit a BDC to double the maximum amount of leverage that it is permitted to incur by reducing the asset coverage requirements applicable to such BDC from 200% to 150%.
As of December 31, 2025, our asset coverage calculated in accordance with the 1940 Act was 179 %.
About Our Adviser, BSP, and Franklin Templeton Our Adviser is served by Benefit Street Partners’ origination, investment and portfolio management team.
BSP consists of over 161 investment professionals and over 501 total employees as of January 31, 2026.
The Adviser is a subsidiary of BSP and is also registered as an investment adviser under the Advisers Act.
BSP is a leading credit-focused alternative asset management firm with approximately $93 1 billion in assets under management as of January 31, 2026.
Established in 2008, the BSP platform manages funds for institutions and high-net-worth investors across various credit funds and complementary strategies, including private/opportunistic debt, structured credit, high yield, special situations, and commercial real estate debt.
These strategies complement each other as they all leverage the sourcing, analytical, compliance, and operational capabilities that encompass BSP’s robust platform.
Our Adviser’s investment committee consists of Blair D.
Faulstich, Senior Managing Director for Private Debt of BSP and President of FBCC; Saahil Mahajan, Managing Director of BSP; King Jang, Managing Director of BSP; and Franklin Leong, Managing Director of BSP, each with substantial experience in originating, underwriting and structuring credit investments.
(NYSE:BEN), an affiliate of BSP and the Adviser, is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries.
Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions.
Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives, and multi-asset solutions.
With more than 1,500 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and approximately $1.7 trillion in assets under management as of January 31, 2026.
Investment Strategy Our investment objective is to generate both current income and capital appreciation through debt and equity investments.
We invest primarily in first and second lien senior secured loans, and to a lesser extent, mezzanine loans, unsecured loans and equity of predominantly private U.S. middle market companies.
We define middle market companies as those with EBITDA of between $25 million and $100 million annually, although we may invest in larger or smaller companies.
We also may purchase interests in loans or corporate bonds through secondary market transactions.
Senior secured loans generally are senior debt instruments that rank ahead of subordinated debt and equity in priority of payments and are generally secured by liens on the operating assets of a borrower which may include inventory, receivables, plant, property and equipment.
Mezzanine debt is subordinated to senior loans and is generally unsecured. 1 Assets under management represent all credit funds and separately managed accounts managed and administered by Benefit Street Partners or Alcentra.
In seeking this objective, we intend to target a differentiated investment strategy comprised of six key components: • sourcing of primarily private debt opportunities through Benefit Street Partners’ extensive proprietary networks and close relationships; • prioritization of non-competitive, “strategic capital” opportunities, including non-sponsored investments; • creative and flexible approach to providing capital; • optimization of investment level risk/return profile; • maintaining downside protection through risk management and diversification; and • ability to take advantage of opportunities Benefit Street Partners believes are mispriced.
Sourcing of primarily private debt opportunities.
At the heart of implementing our investment strategy is the Adviser’s approach to sourcing attractive private debt opportunities by capitalizing on Benefit Street Partners’ extensive relationships and insights.
This differentiated transaction-sourcing framework comprises hundreds of close, long-standing personal relationships that have been forged over the course of several decades and hundreds of transactions.
Benefit Street Partners’ personnel have collectively been involved in thousands of credit transactions over the course of their careers as senior bankers at preeminent institutions at the center of the global credit markets.
Primarily through hands-on, personal involvement in these investments and transactions, the Benefit Street Partners team has developed and maintained a broad and diverse network of contacts throughout the deal transaction ecosystem.
This network is a rich source of proprietary idea and deal generation, often yielding a “first look” at attractive private debt opportunities.
Prioritize non-competitive, “strategic capital” opportunities.
The Adviser seeks to prioritize non-competitive, “strategic capital” opportunities where BSP is well-positioned as a debt provider by virtue of its industry insights, capital markets expertise or other differentiating attributes.
BSP participates in both transactions initiated with the backing of private equity firms and transactions without such backing and has historically followed a balanced approach to allocating into both types of deals.
BSP incorporates a component of transactions without private equity backing into its managed portfolios because they are typically less competitive, and therefore often result in better yield and other terms per unit of risk than sponsored loans.
Having said that, deals without private equity backing tend to be more sporadic in nature than sponsor deals.

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Risk Factors. ” While our significant accounting policies are also described in Note 2 - Summary of Significant Accounting Policies of our notes to our consolidated financial statements appearing elsewhere in this report, we believe the following accounting policies require the most significant judgment in the preparation of our consolidated financial statements.
Valuation of Portfolio Investments We are required to report our investments, including those for which current market values are not readily available, at fair value in accordance with ASC 820, Fair Value Measurements (“ASC 820”), which defines fair value as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the applicable measurement date, and Rule 2a-5 under the 1940 Act.
Investments for which market quotations are readily available are typically valued at those market quotations.
All investments that are not publicly traded or whose market prices are not readily available, as is the case for substantially all of our investments, are valued at fair value as determined in good faith by our Valuation Designee, subject to oversight from our Board of Directors.
As part of the valuation process, our Valuation Designee takes into account relevant factors in determining the fair value of our investments, including and in combination of: • the estimated enterprise value of a portfolio company; • indicative dealer quotes; • the nature and realizable value of any collateral; • the portfolio company’s ability to make payments based on its earnings and cash flow; • the markets in which the portfolio company does business; • a comparison of the portfolio company’s securities to any similar publicly traded securities; and • overall changes in the interest rate environment and the credit markets that may affect the price at which similar investments may be made in the future.
Our Valuation Designee, subject to oversight from our Board of Directors, undertakes a multi-step valuation process each quarter in connection with determining the fair value of our investments for which reliable market quotations are not readily available, or are available but deemed not reflective of the fair value of an investment, which includes, among other procedures, the following: • Each portfolio company or investment will be valued by our Valuation Designee, with assistance from one or more independent valuation firms engaged by our Board of Directors; • The independent valuation firm(s) conduct independent appraisals and make an independent assessment of the value of each investment; and • Our Valuation Designee, under the supervision of our Board of Directors determines the fair value of each investment, in good faith, based on the input of independent valuation firms (to the extent applicable) and our Valuation Designee’s own analysis.
Our Valuation Designee also has established the Valuation Committee to assist our Valuation Designee in carrying out its designated responsibilities, subject to oversight of our Board of Directors.
Our Valuation Designee, subject to oversight from our Board of Directors, has and will continue to engage independent valuation firms to provide assistance regarding the determination of the fair value of our portfolio securities for which market quotations are not readily available or are readily available but deemed not reflective of the fair value of the investment each quarter, and our Valuation Designee may reasonably rely on that assistance.
However, our Valuation Designee, subject to oversight from our Board of Directors, is responsible for the ultimate valuation of the portfolio investments at fair value as determined in good faith pursuant to our valuation policy and a consistently applied valuation process.
Our accounting policy on the fair value of our investments is critical because the determination of fair value involves subjective judgments and estimates.
Accordingly, the notes to our consolidated financial statements express the uncertainty with respect to the possible effect of these valuations, and any change in these valuations, on the consolidated financial statements.
See Note 2 - Summary of Significant Accounting Policies for a description of other accounting policies and recently issued accounting pronouncements.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The market risk associated with financial instruments and derivative financial instruments is the risk of loss from adverse changes in market prices or interest rates.
We expect our market risk will arise primarily from interest rate risk relating to interest rate fluctuations.
Many factors including governmental monetary and tax policies, domestic and international economic and political considerations (including global or regional conflicts) and other factors that are beyond our control contribute to interest rate risk.
To meet our short and long-term liquidity requirements, we may borrow funds at a combination of fixed and variable rates.
Our interest rate risk management objectives are to limit the impact of interest rate changes in earnings and cash flows and to lower our overall borrowing costs.
To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars and treasury lock agreements, subject to the requirements of the 1940 Act, in order to mitigate our interest rate risk with respect to various debt instruments.
While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in benefits of lower interest rates with respect to our portfolio of investments with fixed interest rates.
As of December 31, 2024, our debt included variable-rate debt, bearing a weighted average interest rate of SOFR plus 2.14% and a fixed rate debt, bearing a weighted average interest rate of 5.50% with a total carrying value (net of deferred financing costs) of $2.1 billion.
The follo wing table quantifies the potential changes in interest income net of interest expense should base interest rates increase or decrease by the amounts below assuming that our current consolidated statement of assets and liabilities was to remain constant and no actions were taken to alter our existing interest rate sensitivity.
Interest rate floors, if applicable, are not reflected in the sensitivity analysis below.
Change in Base Interest Rates Estimated Change in Interest Income net of Interest Expense (in thousands) (-) 431 Basis Points $ (76,879) (-) 200 Basis Points $ (35,715) (-) 100 Basis Points $ (17,858) (-) 50 Basis Points $ (8,929) (+) 50 Basis Points $ 8,929 (+) 100 Basis Points $ 17,858 (+) 200 Basis Points $ 35,715 Because we may borrow money to make investments, our net investment income may be dependent on the difference between the rate at which we borrow funds and the rate at which we invest these funds.
In periods of increasing interest rates, our cost of funds would increase, which may reduce our net investment income.
As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income.
Valuation Risk We have invested, and plan to continue to invest, primarily in illiquid debt and equity securities of private companies.
Most of our investments will not have a readily available market price, and our Adviser, as our Valuation Designee under Rule 2a-5, values these investments at fair value as determined in good faith subject to the oversight of our Board of Directors, based on, among other things, the input of the Adviser and independent third-party valuation firms, in accordance with our valuation policy.
There is no single standard for determining fair value.
As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment while employing a consistently applied valuation process for the types of investments we make.
If we were required to liquidate a portfolio investment in a forced or liquidation sale, we may realize amounts that are different from the amounts presented.
Inflation and Supply Chain Risk Economic activity has continued to accelerate across sectors and regions.
Nevertheless, due to global supply chain issues, geopolitical events, including the outbreak of global or regional conflicts (such as those in the Middle East and Eastern Europe) a rise in energy prices and strong consumer demand as economies continue to reopen, inflation has remained elevated in the U.S. and globally.
Persistent inflationary pressures could affect the profit margins of our portfolio companies.
CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Our consolidated financial statements are annexed to this Annual Report beginning on page F-1 .
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
CONTROLS AND PROCEDURES Disclosure Controls and Procedures In accordance with Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K.
Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were (a) designed to ensure that the information we are required to disclose in our reports under the Exchange Act is recorded, processed, and reported in an accurate manner and on a timely basis and the information that we are required to disclose in our Exchange Act reports is accumulated and communicated to management to permit timely decisions with respect to required disclosure and (b) operating in an effective manner.
Management's Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
As defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, internal control over financial reporting is a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our Board of Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.
Our internal control over financial reporting includes those policies and procedures that: 1.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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