FS Specialty Lending Fund lists on NYSE

summary

FS Specialty Lending Fund (the “Fund” or “FSSL”) listed its shares on the New York Stock Exchange (NYSE) on November 13 through a direct listing. The Fund is a credit-focused closed-end fund investing in public and private credit.

overview

ticker

NYSE: FSSL

Expectations for listing day

  • FSSL will likely not begin trading at 9:30 AM ET. It may take several hours for the market specialists to aggregate buy and sell orders. Please check www.NYSE.com for updates.
  • Clients with accounts held through an eligible clearing firm should consult directly with their clearing firm to confirm when shares will be eligible for trading.
  • Shareholder account maintenance freeze lifted at the transfer agent SS&C GIDS, Inc.

Transacting shares at listing

‍Shares held by an eligible clearing firm: ‍

  • Eligible clearing firms include, but are not limited to, Ameriprise, LPL, NFS, Charles Schwab, Pershing, Community National Bank and Wells Fargo Clearing.
  • No action is required for shares to be eligible for trading for applicable firms.
  • Shareholders will receive this letter.
  • The week of 11/24, the Fund will liquidate fractional shares in the open market for accounts transitioned to brokerage.
  • Please check with your broker-dealer/custodian for further details.

‍Shares NOT held by an eligible clearing firm: ‍

HOLD:

  • Your client can continue to hold their shares with the transfer agent.
  • Your client can transfer their shares to their brokerage account to incorporate as part of their broader portfolio.

BUY/SELL:

  • If your client would like to buy or sell shares through a brokerage account, contact the brokerage firm to confirm the requirements to move shares via the Direct Registration System (DRS).
  • If your client would like to sell shares through the direct liquidation program
    • The Fund’s liquidation form will need to be completed, which will be available on our website.
    • Shareholders will typically receive payment anywhere from five to seven business days after the in-good-order form is received by the transfer agent, SS&C GIDS, Inc.

Account and transactions resources

Fee changes

Upon listing, the base management fee was reduced from 1.75% to 1.50% of gross assets. The Adviser had agreed to waive 0.15% of the fee, resulting in an effective base management fee of 1.35% on gross assets for as long as FSSL remained a registered closed-end fund.1 The advisor could earn incentive fees consisting of two components: (i) a capital gains incentive fee and (ii) a subordinated income incentive fee.

  • Following the conversion and reorganization into a closed-end fund, the Adviser was no longer entitled to a capital gains incentive fee.
  • Upon listing and continuing for as long as FSSL remained a registered closed-end fund, the Adviser had agreed to waive a portion of the income incentive fee, reducing it from 20% to 10% subject to an annualized hurdle rate of 6.0%.2

Distributions

The new distribution reinvestment plan (DRP) is now in effect. The DRP will be structured as an opt-out program.

  • For clients who move shares to brokerage, shareholders are encouraged to contact their brokerage firm or financial advisor to confirm their distribution elections following the listing.
  • For clients who hold their shares with the transfer agent, FSSL will reinvest all cash dividends or distributions declared by the board on behalf of registered shareholders who have not elected to receive their distributions in cash. If a registered shareholder prefers to receive distributions in cash, a completed account maintenance form is required, which is available on our website, https://futurestandard.com/forms-applications, or by calling 877-628-8575.‍‍

‍December: We expect to pay a quarterly distribution for Q4 2025 and we are targeting an annualized distribution rate of approximately 9.0%-9.5% of FSSL’s NAV.3 We believe this rate is competitive with those of closed-end fund peers and offers a meaningful income premium over risk-free rates.


‍January 2026: We expect the Fund to begin paying monthly distributions.

The payment of any type of future distributions on FSSL’s common shares is subject to the discretion of FSSL’s board of trustees and applicable legal restrictions and, therefore, there can be no assurance as to the amount or timing of any such future distribution.

contact

Advisors and shareholders

877-628-8575

Media (Future Standard)


Marc Hazelton

media@futurestandard.com

FSSL performance and distribution updates

Visit the FSSL fund page

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Footnotes
  1. For each quarter after the listing date, the base management fee will be reduced from 1.75% to 1.50% of gross assets. In addition, the Adviser has agreed to waive 0.15% of the fee, resulting in an effective base management fee of 1.35% on gross assets commencing upon the listing and continuing for as long as FSSL remains a registered closed-end fund. Amounts waived by the Adviser will not be subject to recoupment from FSSL.
  2. Pursuant to the terms of FSSL’s Investment Advisory Agreement, for any quarter ending after the listing, the incentive fee on income is calculated and payable quarterly in arrears and equals 20.0% of FSSL’s “pre-incentive fee net investment income” for the immediately preceding quarter subject to a hurdle rate, expressed as a rate of return on net assets, equal to 1.5% per quarter, or an annualized hurdle rate of 6.0% compared to the current hurdle rate of 6.5%. As a result, the Adviser will not earn this incentive fee for any quarter until FSSL’s pre-incentive fee net investment income for such quarter exceeds the hurdle rate of 1.5%. Once FSSL’s pre-incentive fee net investment income in any quarter exceeds the hurdle rate, the Adviser will be entitled to a “catch-up” fee equal to the amount of FSSL’s pre-incentive fee net investment income in excess of the hurdle rate, until FSSL’s pre-incentive fee net investment income for such quarter equals 1.875%, or 7.5% annually, of net assets. This “catch-up” feature will allow the Adviser to recoup the fees foregone as a result of the existence of the hurdle rate. Thereafter, the Adviser will be entitled to receive 20.0% of FSSL’s pre-incentive fee net investment income. While the incentive fee on income of the Fund and FSSL prior to the listing will be subject to a hurdle rate equal to a percentage of “adjusted capital” (as defined the Fund’s and FSSL’s Investment Advisory Agreement), the incentive fee on income of FSSL after the listing will be subject to a hurdle rate expressed as a rate of return on net assets, which will have the effect of making it more likely that the fund’s pre-incentive fee net investment income will exceed the hurdle rate and therefore more likely that FSSL will pay an incentive fee on income.

    Effective on the listing and for so long as FSSL is a registered closed-end fund, the Adviser has contractually agreed to waive a portion of FSSL’s incentive fee. After giving effect to such fee waiver, the incentive fee on income will be calculated and payable quarterly in arrears and equals 10.00% of the closed-end fund’s “pre-incentive fee net investment income” for the immediately preceding quarter subject to a hurdle rate, expressed as a rate of return on net assets, equal to 1.5% per quarter, or an annualized hurdle rate of 6.0%. As a result, the Adviser will not earn this incentive fee for any quarter until FSSL’s pre-incentive fee net investment income for such quarter exceeds the hurdle rate of 1.5%. Once FSSL’s pre-incentive fee net investment income in any quarter exceeds the hurdle rate, the Adviser will be entitled to a “catch-up” fee equal to the amount of FSSL’s pre-incentive fee net investment income in excess of the hurdle rate, until the closed-end fund’s pre-incentive fee net investment income for such quarter equals 1.667%, or 6.667% annually, of net assets. This “catch-up” feature will allow the Adviser to recoup the fees foregone as a result of the existence of the hurdle rate. Thereafter, the Adviser will be entitled to receive 10.00% of the closed-end fund’s pre-incentive fee net investment income. Amounts waived by the Adviser will not be subject to recoupment from the closed-end fund.
  3. The actual annualized distribution rate at listing may be higher or lower based on the then-current NAV.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements included herein may constitute “forward-looking” statements as that term is defined in Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including statements with regard to future events or the future performance or operations of the Fund, including but not limited to, anticipated distribution rates and liquidity events. Words such as “intends,” “will,” “believes,” “expects,” “projects,” “future” and “may” or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements. Factors that could cause actual results to differ materially include changes in the economy due to geo-political risks, risks associated with possible disruption to the Fund’s operations or the economy generally due to hostilities, terrorism, natural disasters or pandemics, future changes in laws or regulations and conditions in the Fund’s operating area, unexpected costs, the ability of the Fund to complete the reorganization, complete the listing of the common shares on a national securities exchange, the price at which the common shares may trade on a national securities exchange, and failure to list the common shares on a national securities exchange, and such other factors that are disclosed in the Fund’s filings with the Securities and Exchange Commission (the “SEC”). The inclusion of forward-looking statements should not be regarded as a representation that any plans, estimates or expectations will be achieved. Any forward-looking statements speak only as of the date of this communication. Except as required by federal securities laws, the Fund undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on any of these forward-looking statements.

ADDITIONAL INFORMATION AND WHERE TO FIND IT

In connection with approval by shareholders of the Fund of the Reorganization and Declaration of Trust amendments discussed herein, which occurred at a shareholder meetings held on September 26, 2025 and adjourned to October 14, 2025, the Successor Fund filed with the SEC solicitation materials in the form of a joint proxy statement/prospectus included in an effective registration statement on Form N-14 (File No. 333-286859), which joint proxy statement/prospectus was mailed to shareholders of the Fund. Information regarding the identity of potential participants in such solicitation, and their direct or indirect interests in the Fund, by security holdings or otherwise, were set forth in the definitive joint proxy statement/prospectus and the proxy statement and any other materials filed with the SEC in connection with the Fund’s 2024 annual meeting of shareholders. The proxy statement/prospectus and other relevant documents filed with the SEC contain important information about the Reorganization, the Declaration of Trust amendments, the Fund and the Successor Fund. Free copies of the joint proxy statement/prospectus and other documents are available on the SEC’s web site at www.sec.gov.

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This website does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

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