KKR Income Opportunities Fund to invest in loans, high-yield corporate debt via stock proceeds

By Toni Weeks

San Luis Obispo, Calif., July 26 - The KKR Income Opportunities Fund plans to sell common shares in a public offering led by Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., UBS Securities LLC and Barclays, according to a 497 filing with the Securities and Exchange Commission.

The recently organized, non-diversified, closed-end management investment company seeks a high level of current income with a secondary objective of capital appreciation. Under normal market conditions, the fund will invest at least 80% of its managed assets in loans and fixed-income instruments, including derivative instruments. The fund expects to invest primarily in first- and second-lien secured loans, unsecured loans and high-yield corporate debt instruments.

The investment management team includes Erik A. Falk, Christopher A. Sheldon, Jamie M. Weinstein and Nathaniel M. Zilkha.

Shares of the fund will be listed on the New York Stock Exchange under the ticker symbol "KIO."

The fund plans to sell 15.25 million shares at $20.00 apiece. There is a 45-day over-allotment option for an additional 2,287,500 shares.

The sales load is 4.5%. Including a 1.65% management fee, total annual expenses will be 2.65%. If the fund does not utilize leverage, the management fee will be 1.1%, and the total annual expenses will be 1.42%.

San Francisco-based KKR Asset Management LLC is the investment adviser.

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