NewsHK
Against a backdrop of widening credit spreads and sustained inflationary pressure, the upper middle market for direct lending is shifting ground.
FS KKR Capital Corp reported a 2.8% decline in net asset value for the second quarter of 2026, with management attributing the move to valuation marks on a handful of portfolio names: PRG, ATX, and Wittur.
Beneath that headline number, the fund brought its net debt-to-equity ratio to 122%, returning to its target range of 1x to 1.25x.
Deleveraging through disciplined portfolio rotation The path back to target leverage ran through $1.3 billion in net sales and repayments, alongside the sale of $500 million in investments to third parties at prices consistent with prior carrying values.
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