FS Investment Corporation — A Business Development Company

FS Investment Corporation, or FSIC, is Franklin Square's first investment product. As the original non-traded Business Development Company (BDC), FSIC enables investors to access the same types of private debt investments once available only to large institutional investors. FSIC seeks to provide current income and, to a lesser extent, long-term capital appreciation.* The portfolio is comprised primarily of investments in senior secured loans of established, private U.S. companies. FSIC is sub-advised by GSO / Blackstone, part of The Blackstone Group, one of the world's leading global alternative asset managers. Visit the FS Investment Corporation website for details.

More about FS Investment Corporation...
FSIC can be a unique and very timely addition to one's investment portfolio for several reasons:

1. It invests in a relatively safe asset class. FSIC invests primarily in senior secured loans made to private companies. These are considered the most secure investments in a company because borrowers are obligated to pay lenders back before bond or equity holders. Also, unlike corporate bonds, senior secured loans are backed by the first rights to the assets owned by the company, much like a mortgage is backed by a house. However, there is always risk that the value of these assets may decline.
2. It protects against interest rate risk. Most FSIC loans have floating interest rates, meaning borrowers pay higher interest payments when prevailing interest rates rise. Unlike investments in bonds and other fixed-rate assets, floating rate investments carry very little risk of losing value when interest rates rise. However, any fixed-rate loans held by the porfolio may be negatively impacted by a rise in interest rates. FSIC is one of the few debt investments that is positioned to perform well as interest rates rise. However, to the extent that investments are made in fixed rate securities or loans, general interest rate fluctuations may have a substantial negative impact on FSIC's investments and its investment opportunities. Moreover, a change in interest rates may have a material adverse effect on FSIC's investment objectives and rate of return on invested capital.
3. It pays solid current income. FSIC was designed to generate strong returns relative to many fixed income options. Since the fund's inception, yields have consistently exceeded 7%, though there is no guarantee of future results.
4. It is run by an elite investment manager. The firm that analyzes loans for FSIC,
   GSO / Blackstone, is regarded as one of the world's leading asset managers. Their services were historically reserved only for the largest and most sophisticated investors — government and corporate pension plans, endowments, high net-worth individuals, and the like. FSIC gave investors access to GSO / Blackstone's expertise.
5. It adds true diversification. Senior secured loan assets can reduce a portfolio's overall risk because they tend to react differently to changes in the economy than traditional assets do. Adding FSIC to a traditional investment portfolio could lead to lower overall volatility and may improve the portfolio's risk-adjusted performance.

What's more, FSIC requires a low minimum investment of $5,000, provided the investor meets the minimum suitability requirements described in the prospectus. Investors should consult with their financial advisers to determine whether FSIC is an appropriate investment to meet their personal goals.

Visit FS Investment Corporation for more information regarding FSIC's features and risks.

*There are no assurances that these objectives will be met.