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

KBRA affirms the rating of ‘A’ for the outstanding Mandatory Redeemable Preferred Shares ("MRPS") of KKR Income Opportunities Fund (“KIO” or the "Fund"). KBRA simultaneously removes the Watch Developing status on the MRPS which was assigned on December 10, 2024. The Outlook on the rating is Stable.

The Fund is registered under the Investment Company Act of 1940 (the “40 Act”) and is a diversified, closed-end management investment company advised 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 high conviction leveraged loans, high yield bonds and structured credit with a flexible mandate designed to take advantage of market dislocations.

On October 08, 2024, the Board of Trustees of KIO and the Board of Trustees of Insight Select Income Fund (“INSI”) announced the definitive agreement for KIO to acquire the assets of INSI. The transaction was funded through a combination of share issuance and cash consideration. The acquisition was approved by the shareholders on January 15, 2025 and the transaction closed on February 07, 2025.

The rating is driven primarily by KIO’s asset coverage, liquidity, and management experience. Since the MRPS issuance in October 2019, total asset coverage has ranged from 243% to 353% with an average of 279%, driven by stable credit performance of the underlying assets and active management of Fund leverage.

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