...Strong Affiliations: FS KKR Capital Corp.'s (FSK) ratings reflect its access to investment resources and risk management capabilities derived from its affiliations with KKR Credit Advisors (U.S.), LLC and Franklin Square Holdings, L.P., experienced management team, appropriate asset coverage cushion, solid funding flexibility and demonstrated access to the unsecured debt markets. Below-Average Asset Quality: Rating constraints include FSK's weaker-than-peer asset quality metrics. At Dec. 31, 2024, FSK's non-accrual investments accounted for 2.5% of the debt portfolio plus yielding non-debt investments that are subject to non-accrual, at value, and 4.2% at cost. These levels are above the peer average but down significantly from 6.2% (at value) and 10.4% (at cost) at YE23. FSK recognized net realized losses from portfolio company exits totaling $476 million in 2024, compared with $323 million of losses in 2023. Cumulative net realized losses were $1.2 billion since inception through 2024,...
