JPMorgan-Led Bank Group Reins In Credit Line to KKR Private Credit Fund
A bank syndicate led by JPMorgan Chase has reduced the credit line extended to FS KKR Capital, a roughly $14 billion private credit fund co-managed by KKR, CNBC reported. The change follows mounting losses on leveraged loans in the fund's portfolio.
A bank group led by JPMorgan Chase has tightened the revolving credit line it extends to FS KKR Capital, the roughly 14-billion-dollar private credit fund co-managed by alternative asset manager KKR, CNBC reported on Monday. Lenders cut the size of the facility and imposed stricter covenants after losses on leveraged loans inside the portfolio widened over recent quarters, according to people familiar with the matter cited by the network.
FS KKR Capital, which trades publicly as FSK, is one of the largest business-development companies in the United States and is a bellwether for the private credit industry. The fund has marked down several middle-market loans this year as borrowers contended with higher interest costs and the macro shock from the Iran war. Its share price has lagged peers and the broader S&P 500 since the start of the year.
Private credit has expanded rapidly into a roughly two-trillion-dollar asset class in part because banks pulled back from leveraged lending after the 2023 regional-bank stress. Tighter credit lines from banks to non-bank lenders could slow that expansion. KKR and JPMorgan declined to comment on the specifics of the facility, CNBC said.
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