Correspondence 0001104659-26-100241 from KKR FS Income Trust (CIK 0001930679)
KKR FS Income Trust (CIK 0001930679)
Date: Aug. 24, 2026 · CIK: 0001930679 · Accession: 0001104659-26-100241
AI Filing Summary & Sentiment
File numbers found in text: 814-01620
Letter
VIA EDGAR Division of Investment Management U.S. Securities and Exchange Commission F Street N.E. Washington, D.C. 20549 RE: KKR FS Income Trust (File No. 814-01620)
Dear Mr. Manion:
On behalf of KKR FS Income Trust (the “Company”), set forth below are the Company’s responses to the verbal comments provided by the Staff of the Division of Investment Management (the “Staff”) of the Securities and Exchange Commission (the “SEC”) to the Company’s legal counsel on June 30, 2026, with respect to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 12, 2026 (File No. 814-01620) (the “Form 10-K”). For your convenience, each of the Staff’s comments is set forth below in italics and is followed by the Company’s response. Capitalized terms used in this letter and not otherwise defined shall have the meanings specified in the Form 10-K.
1. Comment: Footnote 2 to the financial statements in the Form 10-K states that cash and cash equivalents include money market funds.
(i) Please confirm whether the Company held money market funds as of December 31, 2025 or December 31, 2024.
(ii) Pursuant to Regulation S-X and FASB Accounting Standards Codification Topic 946: Financial Services—Investment Companies (“ASC 946”), money market funds are considered an investment and should be classified as such. If the Company held a money market fund as of either date cited, please discuss the materiality of the money market instrument held, both qualitatively and quantitatively, and whether the financial statements may have been misleading.
(iii) Please ensure that such instruments are included in the Schedules of Investments in future annual reports on Form 10-K and quarterly reports on Form 10-Q.
August 24, 2026
Page 2
Response: The Company advises the Staff on a supplemental basis as follows:
(i) As of December 31, 2025, the Company held approximately $50.5 million in money market funds, which was reflected in the cash and cash equivalents line item on the Company’s Consolidated Statements of Assets and Liabilities. As of December 31, 2024, the Company held approximately $6.8 million in money market funds.
(ii) The Company acknowledges the Staff's comment that, pursuant to Regulation S-X and ASC 946, money market funds are considered investments and should be classified and presented as such on the Consolidated Schedule of Investments. The Company advises the Staff that the money market funds held as of December 31, 2025 had an aggregate fair value of approximately $50.5 million, representing approximately 1.8% of the Company’s total assets and approximately 3.3% of the Company’s net assets as of such date. The Company advises the Staff that the money market funds held as of December 31, 2024 had an aggregate fair value of approximately $6.8 million, representing approximately 0.6% of the Company’s total assets and approximately 0.8% of the Company’s net assets as of such date.
The Company does not believe the omission of its money market funds from the Consolidated Schedules of Investments as of the years ended December 31, 2025 and December 31, 2024 was material to its financial statements as a whole, either quantitatively or qualitatively. From a quantitative perspective, the amounts noted above represent a small percentage of total assets and net assets as of each applicable date. From a qualitative perspective, the classification of money market funds only as cash and cash equivalents (and not including them separately in the schedules of investments) did not affect the Company’s net asset value, net investment income, total return, or any financial ratio reported in the Company’s financial statements or financial highlights. The Company does not believe that any investor relying on the Company’s financial statements would have been misled as to the Company’s financial condition, results of operations, or the nature of the instruments held, as the money market funds were disclosed in Note 2 to the financial statements and were valued at fair value. Notwithstanding the foregoing, the Company acknowledges that such instruments are required to be separately identified and classified as investments under ASC 946 and Regulation S-X, and the Company will ensure proper classification in all future periodic filings.
August 24, 2026
Page 3
(iii) The Company confirms that, to the extent it holds any money market funds as of any future reporting date, it will include such instruments in the Consolidated Schedule of Investments in all future annual reports on Form 10-K and quarterly reports on Form 10-Q, in compliance with Regulation S-X and ASC 946.
2. Comment: Please confirm whether the Company is holding any restricted securities as of December 31, 2025 or December 31, 2024. If so, please explain why the Company has not identified these securities in compliance with Regulation S-X Rule 12-12, footnote 8. Please ensure that any such securities are identified in the Company’s future financial statements and that all applicable disclosure requirements of Regulation S-X are met.
Response: The Company advises the Staff on a supplemental basis that the Company held restricted securities as of December 31, 2025 and December 31, 2024. The Company will ensure in future annual reports on Form 10-K and quarterly reports on Form 10-Q that any restricted securities held as of any future reporting date are identified in its financial statements in accordance with all applicable disclosure requirements of Regulation S-X, including Rule 12-12, footnote 8.
3. Comment: Please confirm whether any of the loans held by the Company are unitranche loans. In future annual reports on Form 10-K and quarterly reports on Form 10-Q, please provide disclosure in the notes to financial statements or in the risk factors section sufficient for readers to understand the risks associated with such investments.
Response: The Company respectfully advises the Staff on a supplemental basis that it held unitranche loans in its investment portfolio as of December 31, 2025. The Company will include in the “Risk Factors” section of future annual reports on Form 10-K and quarterly reports on Form 10-Q, as applicable, risk disclosure relating to unitranche loans, as appropriate.
4. Comment: The notes to the financial statements disclose that the Company is obligated to pay distribution/servicing fees for Class I shares equal to 0.85% per annum of the aggregate NAV of Class I shares, and that these fees have been waived in full pursuant to the Rule 12b-1 Fee Waiver Agreement. However, it does not appear that these fees or the corresponding waiver have been recorded in the financial statements. As required by Regulation S-X Rule 6-07(2)(a), (b) and (c) and ASC 946-20-50-7, these items are required to be presented on the face of the Consolidated Statements of Operations. Please supplementally address the following:
(i) Please disclose the amounts that should have been accrued and presented in the Consolidated Statements of Operations for the years presented.
August 24, 2026
Page 4
(ii) Please discuss why these amounts have not been included in the financial statements in accordance with Regulation S-X Rule 6-07(2)(a), (b) and (c) and ASC 946-20-50-7.
(iii) Please ensure that these items are properly reflected in future financial statements.
Response: By way of background, the Rule 12b-1 Fee Waiver Agreement, dated March 27, 2023 (the “Fee Waiver Agreement”), between the Company and its two principal distributors, KKR Capital Markets LLC and FS Investment Solutions, LLC (the “Distributors”), was put in place in connection with the previously contemplated master/feeder structure under which KKR FS Income Trust Select (“K-FITS”) (which currently operates as a BDC under the 1940 Act) was initially intended to operate as a registered closed-end fund that would invest substantially all of its assets in common shares of beneficial interest of the Company. This initial master/feeder structure was implemented largely due to the absence of multi-share class relief available to BDCs conducting private offerings at the time.
The Fee Waiver Agreement was implemented because, under the previously contemplated master/feeder structure referenced above, the Adviser and the respective Boards of Trustees intended to contemplate merging K-FITS with and into the Company following any issuance by the SEC multi-class exemptive relief to the Company. Under that structure, the Adviser and the respective Boards of Trustees had expected to contemplate merging the K-FITS Class S shares (which bear distribution and/or servicing fees) with and into the Company’s Class I shares, taking into account factors such as (but not limited to) prevailing market conditions at the time and each fund’s portfolio composition, and, immediately following the merger, terminating the Fee Waiver Agreement so that fees would remain consistent for the two funds’ distribution partners in the surviving single, multi-class entity. In connection with any such merger, the Company and the Adviser intended to move then-current Class I shareholders of the Company into a new share class that would not bear any servicing or distribution fees.
Following SEC Staff objections to the master/feeder structure, the Adviser converted to the current parallel BDC structure for the Company and K-FITS. The Fee Waiver Agreement has remained in place throughout, reflecting the original and continuing intent that current Class I shareholders of the Company were never intended to bear, and continue not to bear, any distribution and/or servicing fees.
August 24, 2026
Page 5
Pursuant to the Fee Waiver Agreement, any and all distribution and/or servicing fees payable by the Company to the Distributors with respect to the Company’s Class I shares are waived in full, and such waived fees are not subject to recoupment by the Distributors or any other person. In connection with the Fee Waiver Agreement, the Company’s Board of Trustees (the “Board”) previously adopted a resolution authorizing the agreement to not charge any distribution and/or servicing fees payable by the Company with respect to its Class I shares (the “Board Resolution”). The Fee Waiver Agreement may be terminated only by (i) the vote of the Board and (ii) the vote of a majority of the Company’s trustees who are not parties to the Fee Waiver Agreement or “interested persons” (as such term is defined in Section 2(a)(19) of the 1940 Act) of any such party. The Company confirms that its and the Adviser’s intent is for holders of the Company’s Class I common shares who benefit from the Fee Waiver Agreement to never bear such distribution and/or servicing fees.
With due consideration given to the above background, the Company respectfully advises the Staff that the gross distribution/servicing fees and the corresponding fee waiver were not separately accrued and presented on the face of the Consolidated Statements of Operations because the Board had previously adopted the Board Resolution authorizing the agreement to not charge any such fees with respect to the Company’s Class I shares, the Company’s only outstanding share class. In light of the Board Resolution and the fact that such fees are not subject to recoupment, the Company determined that there was no obligation to accrue and, accordingly, no distribution/servicing fee expense or corresponding waiver amount to present on the Consolidated Statements of Operations. In addition, the intended permanent nature of the fee waiver implemented by the Fee Waiver Agreement further supported this conclusion, as the intent is for holders of the Company’s Class I common shares who benefit from the Fee Waiver Agreement to never bear servicing or distribution fees in connection with their investment in the Company.
In light of the foregoing, the Company does not believe it is necessary to present the fees and the waiver separately in the Company’s financial statements and will revise the Fee Waiver Agreement disclosure to clarify that the Board authorized the agreement to not charge distribution and/or servicing fees payable by the Company with respect to its Class I shares.
August 24, 2026
Page 6
5. Comment: Page 138 of the Form 10-K, in the Revenue Recognition section of Note 2, includes the following disclosure regarding non-accrual investments:
“The Company’s policy is to place investments on non-accrual status when there is reasonable doubt that interest income will be collected. The Company considers many factors relevant to an investment when placing it on or removing it from non-accrual status including, but not limited to, the delinquency status of the investment, economic and business conditions, the overall financial condition of the underlying investment, the value of the underlying collateral, bankruptcy status, if any, and any other facts or circumstances relevant to the investment. If there is reasonable doubt that the Company will receive any previously accrued interest, then the accrued interest will be written-off. When a PIK income-paying investment is placed on non-accrual status, the accrued, uncapitalized interest is generally reversed through PIK income. Paym
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CORRESP
1
filename1.htm
Dechert
LLP
Cira
Centre, 2929 Arch Street
Philadelphia,
PA 19104-2808
+1
202 261 3300 Main
+1
215 994 2222 Fax
www.dechert.com
Eric
Siegel
Partner
eric.siegel@dechert.com
+1
215 994 2757 Direct
+1
215 994 2222 Fax
August
24, 2026
VIA
EDGAR
David
Manion
Division
of Investment Management
Disclosure
Review and Accounting Office
U.S.
Securities and Exchange Commission
100
F Street N.E.
Washington,
D.C. 20549
RE:
KKR FS Income Trust (File No. 814-01620)
Dear
Mr. Manion:
On
behalf of KKR FS Income Trust (the “Company”), set forth below are the Company’s responses to the verbal comments
provided by the Staff of the Division of Investment Management (the “Staff”) of the Securities and Exchange Commission
(the “SEC”) to the Company’s legal counsel on June 30, 2026, with respect to the Company’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 12, 2026 (File No. 814-01620) (the “Form
10-K”). For your convenience, each of the Staff’s comments is set forth below in italics and is followed by the Company’s
response. Capitalized terms used in this letter and not otherwise defined shall have the meanings specified in the Form 10-K.
1. Comment:
Footnote 2 to the financial statements in the Form 10-K states that cash and cash equivalents
include money market funds.
(i) Please
confirm whether the Company held money market funds as of December 31, 2025 or December
31, 2024.
(ii) Pursuant
to Regulation S-X and FASB Accounting Standards Codification Topic 946: Financial Services—Investment
Companies (“ASC 946”), money market funds are considered an investment
and should be classified as such. If the Company held a money market fund as of either date
cited, please discuss the materiality of the money market instrument held, both qualitatively
and quantitatively, and whether the financial statements may have been misleading.
(iii) Please
ensure that such instruments are included in the Schedules of Investments in future annual
reports on Form 10-K and quarterly reports on Form 10-Q.
August 24, 2026
Page 2
Response:
The Company advises the Staff on a supplemental basis as follows:
(i) As
of December 31, 2025, the Company held approximately $50.5 million in money market funds,
which was reflected in the cash and cash equivalents line item on the Company’s Consolidated
Statements of Assets and Liabilities. As of December 31, 2024, the Company held approximately
$6.8 million in money market funds.
(ii) The
Company acknowledges the Staff's comment that, pursuant to Regulation S-X and ASC 946, money
market funds are considered investments and should be classified and presented as such on
the Consolidated Schedule of Investments. The Company advises the Staff that the money market
funds held as of December 31, 2025 had an aggregate fair value of approximately $50.5 million,
representing approximately 1.8% of the Company’s total assets and approximately 3.3%
of the Company’s net assets as of such date. The Company advises the Staff that the
money market funds held as of December 31, 2024 had an aggregate fair value of approximately
$6.8 million, representing approximately 0.6% of the Company’s total assets and
approximately 0.8% of the Company’s net assets as of such date.
The
Company does not believe the omission of its money market funds from the Consolidated Schedules of Investments as of the years ended
December 31, 2025 and December 31, 2024 was material to its financial statements as a whole, either quantitatively or qualitatively.
From a quantitative perspective, the amounts noted above represent a small percentage of total assets and net assets as of each applicable
date. From a qualitative perspective, the classification of money market funds only as cash and cash equivalents (and not including them
separately in the schedules of investments) did not affect the Company’s net asset value, net investment income, total return,
or any financial ratio reported in the Company’s financial statements or financial highlights. The Company does not believe that
any investor relying on the Company’s financial statements would have been misled as to the Company’s financial condition,
results of operations, or the nature of the instruments held, as the money market funds were disclosed in Note 2 to the financial statements
and were valued at fair value. Notwithstanding the foregoing, the Company acknowledges that such instruments are required to be separately
identified and classified as investments under ASC 946 and Regulation S-X, and the Company will ensure proper classification in all future
periodic filings.
August 24, 2026
Page 3
(iii) The
Company confirms that, to the extent it holds any money market funds as of any future reporting
date, it will include such instruments in the Consolidated Schedule of Investments in all
future annual reports on Form 10-K and quarterly reports on Form 10-Q, in compliance with
Regulation S-X and ASC 946.
2. Comment:
Please confirm whether the Company is holding any restricted securities as of December
31, 2025 or December 31, 2024. If so, please explain why the Company has not identified these
securities in compliance with Regulation S-X Rule 12-12, footnote 8. Please ensure that any
such securities are identified in the Company’s future financial statements and that
all applicable disclosure requirements of Regulation S-X are met.
Response:
The Company advises the Staff on a supplemental basis that the Company held restricted securities as of December 31, 2025 and December
31, 2024. The Company will ensure in future annual reports on Form 10-K and quarterly reports on Form 10-Q that any restricted securities
held as of any future reporting date are identified in its financial statements in accordance with all applicable disclosure requirements
of Regulation S-X, including Rule 12-12, footnote 8.
3. Comment:
Please confirm whether any of the loans held by the Company are unitranche loans. In future
annual reports on Form 10-K and quarterly reports on Form 10-Q, please provide disclosure
in the notes to financial statements or in the risk factors section sufficient for readers
to understand the risks associated with such investments.
Response:
The Company respectfully advises the Staff on a supplemental basis that it held unitranche loans in its investment portfolio as of December
31, 2025. The Company will include in the “Risk Factors” section of future annual reports on Form 10-K and quarterly reports
on Form 10-Q, as applicable, risk disclosure relating to unitranche loans, as appropriate.
4. Comment:
The notes to the financial statements disclose that the Company is obligated to pay distribution/servicing
fees for Class I shares equal to 0.85% per annum of the aggregate NAV of Class I shares,
and that these fees have been waived in full pursuant to the Rule 12b-1 Fee Waiver Agreement.
However, it does not appear that these fees or the corresponding waiver have been recorded
in the financial statements. As required by Regulation S-X Rule 6-07(2)(a), (b) and (c) and
ASC 946-20-50-7, these items are required to be presented on the face of the Consolidated
Statements of Operations. Please supplementally address the following:
(i) Please
disclose the amounts that should have been accrued and presented in the Consolidated Statements
of Operations for the years presented.
August 24, 2026
Page 4
(ii) Please
discuss why these amounts have not been included in the financial statements in accordance
with Regulation S-X Rule 6-07(2)(a), (b) and (c) and ASC 946-20-50-7.
(iii) Please
ensure that these items are properly reflected in future financial statements.
Response:
By way of background, the Rule 12b-1 Fee Waiver Agreement, dated March 27, 2023 (the “Fee Waiver Agreement”),
between the Company and its two principal distributors, KKR Capital Markets LLC and FS Investment Solutions, LLC (the “Distributors”),
was put in place in connection with the previously contemplated master/feeder structure under which KKR FS Income Trust Select (“K-FITS”)
(which currently operates as a BDC under the 1940 Act) was initially intended to operate as a registered closed-end fund that would invest
substantially all of its assets in common shares of beneficial interest of the Company. This initial master/feeder structure was
implemented largely due to the absence of multi-share class relief available to BDCs conducting private offerings at the time.
The
Fee Waiver Agreement was implemented because, under the previously contemplated master/feeder structure referenced above, the Adviser
and the respective Boards of Trustees intended to contemplate merging K-FITS with and into the Company following any issuance by the
SEC multi-class exemptive relief to the Company. Under that structure, the Adviser and the respective Boards of Trustees had expected
to contemplate merging the K-FITS Class S shares (which bear distribution and/or servicing fees) with and into the Company’s Class
I shares, taking into account factors such as (but not limited to) prevailing market conditions at the time and each fund’s portfolio
composition, and, immediately following the merger, terminating the Fee Waiver Agreement so that fees would remain consistent for the
two funds’ distribution partners in the surviving single, multi-class entity. In connection with any such merger, the Company and
the Adviser intended to move then-current Class I shareholders of the Company into a new share class that would not bear any servicing
or distribution fees.
Following
SEC Staff objections to the master/feeder structure, the Adviser converted to the current parallel BDC structure for the Company and
K-FITS. The Fee Waiver Agreement has remained in place throughout, reflecting the original and continuing intent that current Class I
shareholders of the Company were never intended to bear, and continue not to bear, any distribution and/or servicing fees.
August 24, 2026
Page 5
Pursuant
to the Fee Waiver Agreement, any and all distribution and/or servicing fees payable by the Company to the Distributors with respect to
the Company’s Class I shares are waived in full, and such waived fees are not subject to recoupment by the Distributors or any
other person. In connection with the Fee Waiver Agreement, the Company’s Board of Trustees (the “Board”) previously
adopted a resolution authorizing the agreement to not charge any distribution and/or servicing fees payable by the Company with respect
to its Class I shares (the “Board Resolution”). The Fee Waiver Agreement may be terminated only by (i) the vote
of the Board and (ii) the vote of a majority of the Company’s trustees who are not parties to the Fee Waiver Agreement or
“interested persons” (as such term is defined in Section 2(a)(19) of the 1940 Act) of any such party. The Company confirms
that its and the Adviser’s intent is for holders of the Company’s Class I common shares who benefit from the Fee Waiver Agreement
to never bear such distribution and/or servicing fees.
With
due consideration given to the above background, the Company respectfully advises the Staff that the gross distribution/servicing fees
and the corresponding fee waiver were not separately accrued and presented on the face of the Consolidated Statements of Operations because
the Board had previously adopted the Board Resolution authorizing the agreement to not charge any such fees with respect to the Company’s
Class I shares, the Company’s only outstanding share class. In light of the Board Resolution and the fact that such fees are not
subject to recoupment, the Company determined that there was no obligation to accrue and, accordingly, no distribution/servicing fee
expense or corresponding waiver amount to present on the Consolidated Statements of Operations. In addition, the intended permanent nature
of the fee waiver implemented by the Fee Waiver Agreement further supported this conclusion, as the intent is for holders of the Company’s
Class I common shares who benefit from the Fee Waiver Agreement to never bear servicing or distribution fees in connection with their
investment in the Company.
In
light of the foregoing, the Company does not believe it is necessary to present the fees and the waiver separately in the Company’s
financial statements and will revise the Fee Waiver Agreement disclosure to clarify that the Board authorized the agreement to not charge
distribution and/or servicing fees payable by the Company with respect to its Class I shares.
August 24, 2026
Page 6
5. Comment:
Page 138 of the Form 10-K, in the Revenue Recognition section of Note 2, includes the
following disclosure regarding non-accrual investments:
“The
Company’s policy is to place investments on non-accrual status when there is reasonable doubt that interest income will be collected.
The Company considers many factors relevant to an investment when placing it on or removing it from non-accrual status including, but
not limited to, the delinquency status of the investment, economic and business conditions, the overall financial condition of the underlying
investment, the value of the underlying collateral, bankruptcy status, if any, and any other facts or circumstances relevant to the investment.
If there is reasonable doubt that the Company will receive any previously accrued interest, then the accrued interest will be written-off.
When a PIK income-paying investment is placed on non-accrual status, the accrued, uncapitalized interest is generally reversed through
PIK income. Paym