world-economy

JPMorgan-Led Banks Cut FS KKR Credit Line as Fund Battles Mounting Losses

A JPMorgan Chase-led banking group reduced FS KKR Capital's credit facility by $648 million, representing a 14% cut, while raising borrowing costs. The move preceded KKR's announcement of a $300 million rescue package. FS KKR reported approximately $560 million in first-quarter losses, with nonaccrual loans reaching 8 and net asset value declining roughly 10%. Share losses totaled $2 per share. The fund's shares have fallen nearly 50% over the past year and trade significantly below net asset value. Moody's downgraded FS KKR to junk status in March. Recent portfolio deterioration includes loans to software maker Medallia and dental services firm Affordable Care ceasing interest payments. KKR plans to inject $150 million as equity and spend an additional $150 million purchasing shares from departing investors.