06:09 AM EDT, 03/24/2026 (MT Newswires) -- KKR (KKR) and Future Standard-run FS KKR Capital credit fund had its long-term issuer and senior unsecured ratings downgraded to 'Ba1' from 'Baa3' by Moody's Ratings on Tuesday, with the outlook revised to stable from negative.

Moody's said the downgrade reflects continued asset quality challenges, weaker profitability and net asset value erosion relative to business development company peers.

The agency noted non-accrual loans rose to 5.5% of total investments at amortized cost as of Dec. 31, while additional investments were marked down significantly.

Moody's also cited weaker earnings quality, with payment-in-kind income accounting for 14.7% of the fund's total investment income in 2025, above peer levels, and reported a net loss of $114 million in Q4.

Despite these pressures, Moody's said the company maintains adequate liquidity runway of about $2.5 billion and well-laddered unsecured debt maturities.