On March 24, 2026, Moody’s confirmed FSK junk status. The rating agency downgraded “FSK,” which is FS KKR Capital Corp.,a KKR private credit fund, to Ba1 from Baa3.
Per Moody’s, as reported by CNBC, “The downgrade reflects FSK’s continued asset quality challenges, which have resulted in weaker profitability and greater net asset value erosion over time relative to business development company (BDC) peers,”
For reasons this blog has previously identified, private credit funds have always been known to be high risk. In fact, when the underlying assets are unable to be determined or inspected an investment is unsuitable for any investor. This is true regardless of the investor’s financial status and can be the case even if the investor is accredited.
Advisors are required to investigate the underlying assets of the investment to assess the risk posed by recommending such an investment. An advisor violates Regulation BI when the advisor fails to do this.
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