KBRA places the Rating for KKR Income Opportunities Fund's Mandatory Redeemable Preferred Shares on Watch Developing

KBRA has placed the rating for Mandatory Redeemable Preferred Shares ("MRPS") of KKR Income Opportunities Fund ("KIO") on Watch Developing. The watch placement is driven by the expected acquisition of Insight Select Income Fund ("INSI") by KIO which is subject to approval by the Shareholders.

KIO and INSI are diversified, closed-end funds registered under the Investment Company Act of 1940. KIO and INSI commenced their operations on July 25, 2013 and June 7, 1971, respectively, and the common shares for both funds are traded on the New York Stock Exchange under the symbol “KIO” and "INSI" respectively.

The table below displays the current rating and watch placement undertaken in this review.

On October 3, 2024, The Board of Trustees of KIO and the Board of Trustees of INSI announced the signing of a definitive agreement under which KIO will acquire the assets of INSI. The boards of directors of KIO and INSI have unanimously approved the transaction, which is expected to close in the first quarter of 2025, subject to the receipt of necessary KIO and INSI shareholder approvals and other closing conditions. INSI's shareholder approval vote is scheduled for January 10, 2025.

The proposed acquisition is expected to increase the size and scale of KIO, and the Watch Developing status on the outstanding MRPS reflects uncertainty regarding the total asset and leverage profile of the combined fund post acquisition.

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