FS KKR Private Credit Fund Plunges to 2020 Low as Bad Loans Bite

A private credit fund jointly managed by Future Standard and KKR & Co. plunged after cutting its dividend more than forecast, as earnings declined amid lower interest rates and losses from troubled investments.

FS KKR Capital Corp., a business development company that makes direct loans, tumbled as much as 18% Thursday, the most intraday since 2020. The BDC slashed its quarterly distribution to 48 cents a share from 70 cents, a deeper cut than the 55 cents executives had previously signaled. About 3.4% of the portfolio, or roughly $440 million, was on non-accrual at year-end, meaning the fund no longer expects to collect interest on those investments, up from 2.9% three months earlier.