Why was the FS KKR Capital Corp. fund's rating downgraded?

The rating was downgraded due to "continued asset quality challenges" that have impacted profitability and the fund's portfolio value relative to peers.

What is the new rating for the FS KKR Capital Corp. fund?

Moody's Ratings lowered the assessment of FS KKR Capital Corp. to Ba1, which is one level into junk status.

What are the potential consequences of the rating downgrade?

The downgrade could result in higher borrowing costs for the $14 billion investment vehicle.

Home / Business and Economy / KKR Fund Rating Plummets to Junk

KKR Fund Rating Plummets to Junk

24 Mar

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Summary

A $14 billion credit fund lost its investment-grade rating.
Moody's downgraded the fund to junk status due to challenges.
The rating cut could lead to increased borrowing costs.

A significant investment-grade rating has been downgraded for a private credit fund co-managed by Future Standard and KKR & Co. The $14 billion vehicle, FS KKR Capital Corp., now holds a Ba1 rating from Moody's Ratings, which is one notch below investment grade.

This rare occurrence in the private credit market was prompted by "continued asset quality challenges." Moody's cited these issues as having negatively affected the fund's profitability and its portfolio's value when compared to similar investment vehicles. The downgrade may lead to increased borrowing costs for the fund.

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