Press Release|Funds

KBRA Affirms Rating for KKR Income Opportunities Fund Mandatory Redeemable Preferred Shares

13 Dec 2023   |   New York


KBRA affirms the rating of ‘A’ for KKR Income Opportunities Fund’s (“KIO” or the “Fund”) outstanding Mandatory Redeemable Preferred Shares and maintains a Stable Outlook.

The Fund is registered under the Investment Company Act of 1940 (the “40 Act”) and is a closed-end investment fund sponsored by KKR Credit Advisors (US) LLC. The Fund had its Initial Public Offering in July 2013 and its shares are listed on the New York Stock Exchange under the symbol “KIO”. The Fund’s investment strategy focuses on first and second lien secured loans, unsecured loans, and high yield debt instruments of varying maturities.

Key Credit Considerations

The rating is driven primarily by KIO’s asset coverage, liquidity, and management experience. Furthermore, KIO has demonstrated its willingness and ability to remain in compliance with ’40 Act leverage thresholds which was notable through challenging market conditions post the COVID-19 pandemic. The Fund maintained compliance with ’40 Act guidelines which insulated creditors and preferred shareholders. In KBRA’s view, KIO’s ability to withstand such a significant market dislocation demonstrates the strength of the Fund Advisor and the resiliency of its capital structure. Since the MRPS issuance in October 2019, total asset coverage has ranged from 243% to 315% with an average of 277%, driven by stable credit performance of the underlying assets and active management of Fund leverage.

Rating Sensitivities

A deterioration in asset coverage levels below ’40 Act requirements and the Fund manager’s inability to liquidate assets and demonstrate intention to cure within the 30-day time-period could result in a negative rating change. Conversely, a trend of stable asset performance coupled with improvements to asset coverage could result in a positive rating change.

To access rating and relevant documents, click here.

Click here to view the report.



Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

This credit rating is endorsed by Kroll Bond Rating Agency Europe Limited for use in the European Union and by Kroll Bond Rating Agency UK Limited for use in the UK. Information on a credit rating’s endorsement status is available on its rating page at

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at

There are certain issuers, entities or transactions rated by KBRA Europe or KBRA UK that may be or have relationships with Shareholders and/or Shareholder-Related Companies, as that term is defined in KBRA’s Shareholder and Shareholder Related Companies for KBRA Europe and KBRA UK Policy and Procedure. Relevant disclosure information may be found here.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1002856

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