KKR & Future Standard Credit Fund Downgraded to Junk by Moody’s

A private credit fund managed by Future Standard and KKR & Co. Had its investment-grade rating lowered to junk status by Moody’s Investors Service on March 23, 2026, a rare event in the $1.8 trillion private credit market. The fund, FS KKR Capital Corp. (FSK), experienced the downgrade as concerns mount over performance in the sector.

Moody’s did not immediately disclose the specific reasons for the downgrade, but the action signals increased risk associated with the fund’s investments. FSK is a publicly traded business development company (BDC) that provides credit solutions to private middle market U.S. Companies. It focuses on senior secured debt, with some exposure to subordinated debt and asset-based financing loans.

FS/KKR Advisor, LLC, a partnership between an affiliate of Future Standard and KKR Credit Advisors (US) LLC, manages FSK. As of December 31, 2025, FS/KKR managed approximately $21 billion in assets. Future Standard, formerly known as FS Investments, has over $86 billion in assets under management across private equity, credit and real estate. KKR, a global investment firm, contributes scale and reach across multiple asset classes, including capital markets, and insurance.

FSK recently completed a $400 million offering of 6.125% unsecured notes due in 2031 in September 2025, aiming to repay existing debt and fund new initiatives. The offering was backed by a consortium of financial institutions, including BofA Securities and J.P. Morgan, indicating initial strong institutional demand. The capital raise was intended to provide FSK with flexibility and liquidity to capitalize on investment opportunities.

The structure of the fund involves FS/KKR leveraging its size and market reach to invest primarily in upper middle market companies. The advisory firm has experience in private lending and private equity, utilizing various levels of a firm’s capital structure to generate income while managing risk. FS/KKR also possesses expertise in the regulatory requirements of publicly registered alternative asset entities like BDCs.

As of December 31, 2025, Future Standard reported total assets under management of $93 billion. KKR’s credit platform managed approximately $288 billion in assets at the same time.

Neither Future Standard nor KKR have publicly commented on the Moody’s downgrade as of today.