Report Card: KKR Gets an A- from S&P

KKR today received an A- counterparty credit rating from Standard & Poor’s, about one month after the private equity firm began listing its shares on the New York Stock Exchange. The given outlook was “stable.”

“The stable outlook incorporates our expectation that fee-related earnings should remain stable, while distributable earnings are likely to fluctuate with investment realizations,” wrote analyst Chris Cary.

Cary added that the counterparty credit rating was helped by KKR’s diverse investor base and investment track record, and hindered by the high use of leverage.

Possible downgrades could come if KKR struggles to raise its next big buyout fund, which is expected to begin formal marketing later this year. No downgrade is expected if George Roberts or Henry KRavis were to retire.