0001515940falseN-CSRS00015159402022-11-012023-04-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM N-CSR


CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number (811-22543)


KKR Income Opportunities Fund
(Exact name of registrant as specified in charter)


555 California Street, 50th Floor
San Francisco, CA 94104
(Address of principal executive offices) (Zip code)


Lori Hoffman
KKR Credit Advisors (US) LLC
555 California Street, 50th Floor
San Francisco, CA 94104
(Name and address of agent for service)


(415) 315-3620
Registrant’s telephone number, including area code



Date of fiscal year end: October 31, 2023
Date of reporting period: April 30, 2023




Item 1. Reports to Stockholders.
kkr.jpg
KKR Income Opportunities Fund
Semi-Annual Report
April 30, 2023


Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
Table of Contents
Management’s Discussion of Fund Performance
Schedule of Investments
The KKR Income Opportunities Fund (the “Fund”) files its complete schedule of portfolio holdings with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year. For periods ending on or prior to January 31, 2019, the Fund has filed a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. For periods ending on or after April 30, 2019, the Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT within sixty days after the end of the period. The Fund’s Forms N-Q and Forms N-PORT are available on the Commission’s website at www.sec.gov or on request by calling 1-800-SEC-0330.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities, as well as information relating to how a Fund voted proxies relating to portfolio securities during the most recent year ended June 30 will be available (i) without charge, upon request, by calling 855-862-6092; and (ii) on the Commission’s website at www.sec.gov.
INFORMATION ABOUT THE FUND’S TRUSTEES
The proxy statements and annual reports include information about the Fund’s Trustees and are available without charge, upon request, by calling 855-862-6092 and by visiting the Commission’s website at www.sec.gov or the Fund’s website at www.kkrfunds.com/kio.


Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
Management’s Discussion of Fund Performance
Looking Back on the Markets – April 30, 2023

Financing was already in short supply when Silicon Valley Bank began to wobble in early March. Now, tremors in the banking sector, resulting most recently in UBS acquiring Credit Suisse, have tightened financial conditions even further, tipping us into a full-on Hunt for Capital like nothing we’ve seen in 15 years. Those with ready capital, particularly capital that can be flexible in one way or another, are able to lend on some of the best terms we’ve seen in a very long time.

The hunt didn’t start overnight in March 2023. The sharp rise in interest rates over the past year caused liquidity in most capital markets to freeze, CLO formation to slow dramatically, the IPO market to pause, and banks to pull back from lending. In other words, many companies ― even high-quality companies ― that needed growth capital found traditional paths to financing closed.

Layering a crisis on top of the pressure banks were already feeling from the sharp change in the value of their risk-weighted assets is unlikely to encourage them to lend more. A further pullback in bank lending, especially one caused by technical factors rather than fundamental weakness, has clear implications for the credit markets, including the likelihood that agile investors should have pockets of dispersion to trade on going forward.
It’s good to be a lender during a hunt for capital. Creditworthy borrowers face a real risk of being swept up in a wave of negative sentiment. We are committed to being in the market, helping to finance market-leading companies with strong cash flows that we think can defend their margins even in an inflationary environment. The long reign of the Hunt for Yield had investors accustomed to the idea that going out on the risk curve was the only way to get decent returns. It’s time for a new way of thinking: Returns are readily available, but quality and risk management have never been more important. Across the KKR Credit platform, we are actively deploying capital in today’s traded and private markets – with a strong emphasis on fundamental underwriting, nimble investing and thoughtful risk allocation.

Traded Credit Markets

The return of inflation and rising interest rates has precipitated a regime change characterized by higher volatility. Volatility, of course, can be an opportunity. When U.K. pension funds were forced to sell liquid assets during the LDI crisis, CLO spreads gapped out. However, we felt that the market’s movement were largely a reaction to a technical problem, rather than a dangerous change in fundamentals and moved quickly to buy CLOs.

These kinds of opportunities can and have happened all over the public markets, where issuance declined precipitously in 2022 and the supply of securities remains lower than the demand for them. High yield debt, where retail investors make up some 40%1 of the market and are more likely to sell in a downturn, is particularly vulnerable to sudden moves on negative news. Leveraged loans, too, can see spreads rise quickly. In this kind of environment, we think flexibility is a critical part of a credit strategy. The key, we think, is to focus on acting as a liquidity provider when and where the need arises and to focus on risk that is not overly complex. Reaching too far for risk in general or for risk that is overly reliant on open capital markets can be challenging in the current market environment.

At the moment, we see a growing number of opportunities to help companies facing loan maturities “amend and extend” their debt. Lenders have the opportunity to work with high-quality companies that have a high likelihood of refinancing to push out their maturities in exchange for wider spreads. In addition to the wider spreads, lenders can benefit from an upfront fee for allowing this extension. We believe being a liquidity provider can deliver excess returns in an environment like this.

Fund Description & Performance

KKR Income Opportunities Fund (“KIO” or, the “Fund”) is a diversified, closed-end fund that trades on the New York Stock Exchange under the symbol “KIO.” The Fund’s primary investment objective is to seek a high level of current income with a secondary objective of capital appreciation. The Fund seeks to achieve its investment objectives by employing a dynamic strategy of investing in a targeted portfolio of loans and fixed-income instruments (including derivatives) of US and non-US issuers and implementing hedging strategies in order to seek to achieve attractive risk-adjusted returns. Under normal market conditions, KIO will invest at least 80% of its Managed Assets in loans and fixed-income instruments or other instruments, including derivative instruments, with similar economic characteristics. The Fund expects to invest primarily in first and second lien secured loans, unsecured loans and high-yield corporate debt instruments of varying maturities.

On February 19, 2023, KIO successfully completed a 1-for-3 rights offering, which was significantly oversubscribed. The offering afforded shareholders an opportunity to purchase additional shares of the fund at a discounted share price of $10.75. It also allowed the fund to invest the additional capital into a very attractive market environment,
1JP Morgan as of December 31, 2022
1

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
offering the potential for high income and capital appreciation. Supported by this more attractive market environment and increased capital base from the rights offering, KIO announced a 15.7% increase in its monthly dividend for the month of March to $12.15 cents per share.

With respect to performance, following a challenging year, the Fund has recovered more recently even amidst mixed sentiment and performance within the broader closed-end fund market. On a share price basis, KIO had total returns, net of fees and inclusive of dividends, of -8.42% on a 12-month basis and delivered a positive 6.56% return over the past 6-month period, through April 30, 2023. The discount to net asset value (“NAV”) widened slightly over that period, with the discount subtracted approximately -2.36% and -0.44% from the fund’s returns, over the 12- and 6-month periods, respectively.

On a NAV basis, the strategy has delivered total returns, net of fees and inclusive of dividends, of -7.02% and +6.48% over the last 12 and 6 months through April 30, 2023. Looking at the 12-month period, a component of this performance is derived from the underlying markets in which the fund invests in, which were volatile and have faced headwinds amid rising rates, inflation concerns, and recessionary fears. Additionally, the use of leverage in the fund has amplified these negative returns. Over longer horizons, however, we believe leverage adds substantial value to the fund, as represented be the portfolio’s attractive yield to maturity.

Diving deeper into unleveraged NAV performance drivers, positions within the services, leisure, and technology & electronics sectors were the top contributors YTD as of April 30, 2023. On an asset class basis, exposure in high yield bonds has driven the majority of contribution as compared to leveraged loans. From a rating perspective, the strategy’s overweight to CCC names have driven most of the positive performance, while BB-rated names have detracted on the margin.

As of April 30, 2023, the Fund held 64.4% of its net assets in first and second-lien leveraged loans, 76.9% of its net assets in high-yield corporate debt, 4.7% of its net assets in asset backed securities, and 1.6% of its net assets in equities and other investments. KIO’s investments represented obligations and equity interests in 177 positions across a diverse group of industries. The top ten issuers represented 39.0% of the Fund’s net assets while the top five industry groups represented 58.6% of the Fund’s net assets. The Fund’s Securities and Exchange Commission 30-day yield was 13.20%.
Business Updates

We thank you for your partnership and continued investment in KIO. We look forward to continued communications and will keep you apprised of the progress of KIO specifically and the leveraged finance market place generally. Fund information is available on our website at kkrfunds.com/kio.

Disclosures

The Bank of America Merrill Lynch High Yield Master II Index is a market-value weighted index of below investment grade US dollar-denominated corporate bonds publicly issued in the US domestic market. “Yankee” bonds (debt of foreign issuers issued in the US domestic market) are included in the Bank of America Merrill Lynch High Yield Master II Index provided that the issuer is domiciled in a country having investment grade foreign currency long-term debt rating. Qualifying bonds must have maturities of one year or more, a fixed coupon schedule and minimum outstanding of US$100.0 million. In addition, issues having a credit rating lower than BBB3, but not in default, are also included.

The Morningstar LSTA US Leveraged Loan Index is a market value-weighted index designed to measure the performance of the US leveraged loan market based upon market weightings, spreads and interest payments. The index was rolled out in 2000 and it was back-loaded with four years of data dating to 1997.
It is not possible to invest directly in an index.

Past performance is not an indication of future results. Returns represent past performance and reflect changes in share prices, the reinvestment of all dividends and capital gains, expense limitations and the effects of compounding. The prospectus contains more complete information on the investment objectives, risks, charges and expenses of the investment company, which investors should read and consider carefully before investing. The returns shown do not reflect taxes a shareholder would pay on distributions or redemptions. Total investment return and principal value of your investment will fluctuate, and your shares, when sold, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data quoted. An investment in the Fund involves risk, including the risk of loss of principal. For a discussion of the Fund’s risks, see Risk Considerations, Note 3 to the financial statements. Call 855-330-3927 or visit www.kkrfunds.com/kio for performance results current to the most recent calendar quarter-end.
Must be preceded or accompanied by a prospectus.

2

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
An imbalance in supply and demand in the income market may result in valuation uncertainties and greater volatility, less liquidity, widening credit spreads and a lack of price transparency in the market. Investments in income securities may be affected by changes in the creditworthiness of the issuer and are subject to the risk of non–payment of principal and interest. The value of income securities also may decline because of real or perceived concerns about the issuer’s ability to make principal and interest payments. Borrowing to increase investments (leverage) will exaggerate the effect of any increase or decrease in the value of Fund investments. Investments rated below investment grade (typically referred to as “junk”) are generally subject to greater price volatility and illiquidity than higher rated investments. As interest rates rise, the value of certain income investments is likely to decline. Senior loans are subject to prepayment risk. Investments in foreign instruments or currencies can involve greater risk and volatility than US investments because of adverse market economic, political, regulatory, geopolitical or other conditions. Changes in the value of investments entered for hedging purposes may not match those of the position being hedged. The Fund may engage in other investment practices that may involve additional risks.

3

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
Schedule of Investments
(Stated in United States Dollars, unless otherwise noted)
IssuerAssetReference Rate &
Spread
Interest
Rate
Maturity
Date
CountryCurrencyParFair ValueFootnotes
Leveraged Loans - 64.44%
Aerospace & Defense - 0.89%
Amentum Services IncTL 2L B 12/21SOFR (3M) + 7.65%12.68%2/15/2030USAUSD1,965,870$1,897,654 (b)
EaglePicher Technologies LLCTL 2L 02/18LIBOR (1M) + 7.25%12.27%3/8/2026USAUSD1,957,2231,140,083 
Alternative Carriers - 1.45%
SegraTL 1L B 08/21LIBOR (3M) + 4.50%9.66%10/4/2028USAUSD5,179,5894,946,508 
Apparel, Accessories & Luxury Goods - 4.60%
Varsity Brands IncTL 1L 02/23SOFR (1M) + 5.11%10.10%12/15/2026USAUSD16,724,61415,721,137 
Application Software - 7.03%
Misys LtdTL 2L 04/17LIBOR (3M) + 7.25%12.40%6/13/2025USAUSD8,063,6226,859,118 
Solera LLCTL 2L 06/21LIBOR (3M) + 8.00%12.95%6/4/2029USAUSD11,074,72710,576,364 
TIBCO Software IncTL 1L B 09/22SOFR (3M) + 4.60%9.50%3/30/2029USAUSD7,001,4006,562,797 
Automotive Parts & Equipment - 5.29%
Innovative XCessories & Services LLCTL 1L 02/20SOFR (6M) + 4.35%9.48%3/5/2027USAUSD6,418,0475,351,913 
Parts Authority IncTL 1L 10/20LIBOR (3M) + 3.75%9.02%10/28/2027USAUSD5,675,9945,356,720 
Rough Country LLCTL 2L 07/21LIBOR (1M) + 6.50%11.52%7/30/2029USAUSD841,950763,017 
Truck Hero IncTL 1L 01/21LIBOR (1M) + 3.75%8.77%1/31/2028USAUSD6,650,7406,057,195 
Wheel Pros IncTL 1L B 05/21LIBOR (3M) + 4.50%9.77%5/11/2028USAUSD765,894545,627 (a)
Broadcasting - 4.00%
NEP Broadcasting LLCTL 1L B 09/18LIBOR (1M) + 3.25%8.27%10/20/2025USAUSD4,444,6914,179,699 
NEP Broadcasting LLCTL 2L 09/18LIBOR (1M) + 7.00%12.02%10/19/2026USAUSD7,494,5105,756,720 
NEP Broadcasting LLCTL 1L B 09/18EURIBOR (1M) + 3.50%6.41%10/20/2025NLDEUR2,172,4692,171,595 
NEP Broadcasting LLCTL 1L 05/20LIBOR (1M) + 8.25%13.27%6/1/2025USAUSD1,581,8771,581,877 (b)
Broadline Retail - 1.67%
AutoScout24 GmbHTL 1L B 02/20EURIBOR (6M) + 3.25%6.54%3/31/2027DEUEUR2,421,1602,534,687 
AutoScout24 GmbHTL 2L 01/20EURIBOR (6M) + 6.25%9.54%3/31/2028DEUEUR1,408,0011,378,505 
Belk IncTL 1L 02/21LIBOR (3M) + 7.50%12.46%7/31/2025USAUSD459,875390,893 (a)
Belk IncTL 1L EXIT 02/21 PIK Toggle7/31/2025USAUSD8,751,3421,443,971 (a) (d) (e)
See accompanying notes to financial statements.
4

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
IssuerAssetReference Rate &
Spread
Interest
Rate
Maturity
Date
CountryCurrencyParFair ValueFootnotes
Building Products - 0.82%
DiversiTech Holdings IncTL 2L B 12/21LIBOR (3M) + 6.75%11.91%12/21/2029USAUSD1,381,023$1,229,110 
VC GB Holdings Inc (Visual Comfort)TL 2L 06/21LIBOR (1M) + 6.75%11.77%7/23/2029USAUSD1,927,6301,558,489 
Cargo Ground Transportation - 0.61%
Kenan Advantage Group Inc/TheTL 2L 08/21LIBOR (1M) + 7.25%12.27%9/1/2027USAUSD2,135,0102,081,635 
Commodity Chemicals - 0.31%
Ineos Finance PLCTL 1L B 11/22SOFR (1M) + 3.85%8.83%11/8/2027USAUSD1,067,9501,067,950 
Construction & Engineering - 2.34%
Total Safety US IncTL 1L B 07/19LIBOR (3M) + 6.00%10.98%8/18/2025USAUSD5,096,3004,869,234 
USIC Holdings IncTL 2L 05/21LIBOR (1M) + 6.50%11.52%5/14/2029USAUSD431,521399,696 
Yak Access LLCTL 1L 03/23SOFR (6M) + 6.50%11.82%3/10/2028USAUSD3,393,2052,697,598 
Construction Machinery & Heavy Transportation Equipment - 1.54%
Accuride CorpTL 1L B 10/17LIBOR (1M) + 5.25%10.27%11/17/2023USAUSD6,366,6695,254,762 
Data Processing & Outsourced Services - 2.40%
West CorpTL 1L B3 01/23SOFR (3M) + 4.25%9.30%4/10/2027USAUSD9,079,7688,202,617 
Diversified Metals & Mining - 0.63%
Foresight Energy LLCTL 1L A 06/20LIBOR (3M) + 8.00%13.16%6/30/2027USAUSD2,164,7422,164,742 (a) (b)
Diversified Support Services - 0.35%
Access CIG LLCTL 2L 02/18LIBOR (3M) + 7.75%12.73%2/27/2026USAUSD1,292,3751,191,951 
Education Services - 0.75%
Jostens IncTL 1L 12/18LIBOR (6M) + 5.5%10.71%12/19/2025USAUSD2,550,8792,555,980 
Financial Exchanges & Data - 0.17%
IntraFi Network LLCTL 2L 11/21SOFR (1M) + 6.35%11.33%11/5/2029USAUSD623,220566,974 
Health Care Equipment - 6.06%
Drive DeVilbiss Healthcare LLCTL 1L 03/214.00% PIK, SOFR (3M) + 9.50%14.39%6/1/2025USAUSD7,625,1996,557,671 (d)
Drive DeVilbiss Healthcare LLCTL 1L 09/229.00% PIK, SOFR (3M) + 10.10%14.90%6/1/2025USAUSD1,029,2191,029,219 (b) (d)
Orchid Orthopedic Solutions LLCTL 1L 02/19LIBOR (3M) + 4.50%9.23%3/5/2026USAUSD5,628,2945,141,447 
Tecomet IncTL 1L 10/17LIBOR (1M) + 3.50%8.37%5/1/2024USAUSD8,485,3347,978,590 (a)
Health Care Facilities - 0.26%
ScionHealthTL 1L B 12/21LIBOR (1M) + 5.25%10.27%12/23/2028USAUSD1,725,044897,023 
Health Care Services - 0.06%
Paradigm Acquisition CorpTL 2L 10/18LIBOR (1M) + 7.50%12.52%10/26/2026USAUSD213,465210,263 
See accompanying notes to financial statements.
5

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
IssuerAssetReference Rate &
Spread
Interest
Rate
Maturity
Date
CountryCurrencyParFair ValueFootnotes
Health Care Technology - 0.54%
GoodRx IncTL 1L 10/18LIBOR (1M) + 2.75%7.77%10/10/2025USAUSD1,864,026$1,852,181 
Hotels, Resorts & Cruise Lines - 0.83%
Playa Resorts Holding BVTL 1L B 11/22SOFR (1M) + 4.25%9.14%1/5/2029USAUSD1,869,6441,869,382 
Travel + Leisure CoTL 1L 12/22SOFR (1M) + 4.10%8.98%12/14/2029USAUSD958,759955,164 
Human Resource & Employment Services - 0.77%
SIRVA Worldwide IncTL 1L 07/18LIBOR (1M) + 5.50%10.56%8/4/2025USAUSD1,804,3821,655,521 
SIRVA Worldwide IncTL 2L 07/18LIBOR (3M) + 9.50%14.63%8/3/2026USAUSD1,149,7401,003,867 
Industrial Machinery & Supplies & Components - 2.79%
Chart Industries IncTL 1L B 12/22SOFR (1M) + 3.85%8.74%3/15/2030USAUSD1,867,5701,871,081 
CPM Holdings IncTL 2L 10/18LIBOR (1M) + 8.25%13.10%11/16/2026USAUSD1,321,3191,307,280 
Dexko Global IncTL 1L 10/21EURIBOR (3M) + 3.75%6.77%10/4/2028USAEUR2,357,9252,385,117 
Dexko Global IncTL 1L B 09/21EURIBOR (3M) + 3.75%6.77%10/4/2028DEUEUR1,226,1861,240,327 
Dexko Global IncTL 1L DD 10/21EURIBOR (3M) + 3.75%6.77%10/4/2028USAEUR379,399383,774 
Engineered Machinery Holdings IncTL 2L 08/21LIBOR (3M) + 6.00%11.16%5/21/2029USAUSD289,880266,690 
SPX FLOW IncTL 1L B 03/22SOFR (1M) + 4.60%9.58%4/5/2029USAUSD263,815255,176 
WireCo WorldGroup IncTL 1L B 10/21LIBOR (1M) + 4.25%9.25%11/13/2028USAUSD1,848,9721,843,656 
IT Consulting & Other Services - 3.70%
PSAV IncTL 2L 02/18LIBOR (3M) + 7.25%12.06%9/1/2025USAUSD4,448,8503,940,391 
PSAV IncTL 1L B3 12/2010.00% PIK, 5.00%15.00%10/15/2026USAUSD2,176,8552,268,468 (d)
PSAV IncTL 1L B1 12/200.25% PIK, LIBOR (3M) + 3.50%8.31%3/3/2025USAUSD6,699,0896,445,193 (d)
Leisure Facilities - 3.20%
Aimbridge Acquisition Co IncTL 1L B 10/19LIBOR (1M) + 3.75%8.77%2/2/2026USAUSD5,602,8855,298,256 
Aimbridge Acquisition Co IncTL 1L B 09/20LIBOR (1M) + 4.75%9.76%2/2/2026USAUSD7,7307,359 
United PF Holdings LLCTL 1L 01/20LIBOR (3M) + 4.00%8.73%12/30/2026USAUSD6,502,0835,226,049 
United PF Holdings LLCTL 1L B 06/20LIBOR (3M) + 8.50%13.66%12/30/2026USAUSD484,955412,212 
Leisure Products - 0.20%
Topgolf Callaway Brands CorpTL 1L B 03/23SOFR (1M) + 3.60%8.58%3/15/2030USAUSD674,810675,127 
Life Sciences Tools & Services - 1.62%
PAREXEL International CorpTL 2L 07/21LIBOR (1M) + 6.50%11.52%11/15/2029USAUSD5,637,1805,537,966 (b)
Oil & Gas Strorage & Transportation - 1.24%
Brazos Midstream Holdings LLCTL 1L B 01/23SOFR (1M) + 3.75%8.58%1/31/2030USAUSD1,614,1821,595,773 
Oryx Midstream Services LLCTL 1L B 01/23SOFR (1M) + 3.36%8.19%10/5/2028USAUSD2,669,7012,645,139 
See accompanying notes to financial statements.
6

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
IssuerAssetReference Rate &
Spread
Interest
Rate
Maturity
Date
CountryCurrencyParFair ValueFootnotes
Publishing - 0.64%
Emerald Expositions Holding IncTL 1L B 11/17LIBOR (1M) + 2.50%7.52%5/22/2024USAUSD2,186,902$2,175,421 
Research & Consulting Services - 0.14%
TMF Group Holding BVTL 2L 12/17EURIBOR (3M) + 6.63%9.68%5/4/2026NLDEUR440,830481,743 
Security & Alarm Services - 0.39%
Monitronics International IncTL 1L EXIT 08/193/29/2024USAUSD2,524,280 1,323,442 (a) (e)
Specialty Chemicals - 5.95%
Aruba Investments IncTL 2L 10/20LIBOR (1M) + 7.75%12.77%11/24/2028USAUSD1,841,0101,656,909 
Champion/DSM enggTL 1L B1 03/23EURIBOR (3M) + 5.50%8.77%3/28/2030DEUEUR1,213,5301,227,933 
Champion/DSM enggTL 1L B1 03/23SOFR (3M) + 5.50%10.80%3/28/2030DEUUSD6,619,3806,081,555 
Flint Group GmbHTL 1L B 04/140.75% PIK, EURIBOR (3M) + 4.25%0.75%9/21/2023DEUEUR1,141,064861,032 (a) (d)
Flint Group GmbHTL 1L B3 05/150.75% PIK, EURIBOR (3M) + 4.25%0.75%9/21/2023DEUEUR9,2817,003 (a) (d)
Flint Group GmbHTL 1L B4 11/150.75% PIK, EURIBOR (3M) + 4.25%0.75%9/21/2023DEUEUR86,90665,578 (a) (d)
Flint Group GmbHTL 1L B5 02/170.75% PIK, EURIBOR (3M) + 4.25%0.75%9/21/2023DEUEUR144,197108,809 (a) (d)
Flint Group GmbHTL 1L B7 04/140.75% PIK, EURIBOR (3M) + 4.25%0.75%9/21/2023DEUEUR100,06575,508 (a) (d)
Flint Group GmbHTL 1L B6 03/170.75% PIK, EURIBOR (3M) + 4.25%0.75%9/21/2023DEUEUR104,90979,162 (a) (d)
Vantage Specialty Chemicals IncTL 1L B 02/23SOFR (1M) + 4.75%9.63%10/26/2026USAUSD10,592,85110,206,213 
Systems Software - 1.18%
Dedalus Finance GmbHTL 1L B 06/21EURIBOR (3M) + 3.75%6.97%7/17/2027DEUEUR4,048,3204,026,237 
TOTAL LEVERAGED LOANS (Amortized cost $238,143,620)$220,188,725 
See accompanying notes to financial statements.
7

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
IssuerAsset
Maturity
Date
CountryCurrency
Par
Fair Value
Footnotes
High Yield Securities - 76.99%
Alternative Carriers - 1.49%
Level 3 Financing Inc3.750% 07/20297/15/2029USAUSD4,611,000$2,599,122 (f)
Zayo Group LLC6.125% 03/20283/1/2028USAUSD3,913,0002,505,519 (f)
Apparel, Accessories & Luxury Goods - 0.11%
Varsity Brands IncL+8.000% 12/202412/22/2024USAUSD364,000364,000 (b) (f)
Application Software - 1.49%
Cision Ltd9.500% 02/20282/15/2028USAUSD6,449,0004,119,653 (f)
TIBCO Software Inc6.500% 03/20293/31/2029USAUSD1,073,000967,560 (f)
Automobile Manufacturers - 0.32%
Thor Industries Inc4.000% 10/202910/15/2029USAUSD1,350,0001,108,684 (f)
Automotive Parts & Equipment - 1.56%
Truck Hero Inc6.250% 02/20292/1/2029USAUSD3,518,0002,650,813 (f)
Wheel Pros Inc6.500% 05/20295/15/2029USAUSD5,638,0002,678,050 (a) (f)
Automotive Retail - 1.20%
Mavis Discount Tire Inc6.500% 05/20295/15/2029USAUSD4,846,0004,112,115 (f)
Biotechnology - 0.49%
Intercept Pharmaceuticals Inc3.250% 07/20237/1/2023USAUSD1,669,0001,673,426 
Broadcasting - 0.16%
Spotify USA Inc0.000% 03/20263/15/2026USAUSD659,000558,502 (c)
Building Products - 11.42%
Acproducts Inc (aka Cabinetworks)6.375% 05/20295/15/2029USAUSD11,955,0007,280,416 (f)
Cornerstone (Ply Gem Holdings Inc)8.750% 08/20288/1/2028USAUSD683,000647,989 (f)
LBM Borrower LLC6.250% 01/20291/15/2029USAUSD6,181,0004,929,749 (f)
LBM Borrower LLC7.750% 04/20274/1/2027USAUSD5,294,0004,241,156 (f)
Oldcastle Buildingenvelope Inc9.500% 04/20304/15/2030USAUSD713,000624,638 (a) (f)
Patrick Industries Inc4.750% 05/20295/1/2029USAUSD5,456,0004,752,422 (f)
Patrick Industries Inc1.750% 12/202812/1/2028USAUSD2,097,0001,905,124 
PrimeSource Building Products Inc5.625% 02/20292/1/2029USAUSD4,654,0003,413,104 (f)
PrimeSource Building Products Inc6.750% 08/20298/1/2029USAUSD4,980,0003,644,502 (f)
SRS Distribution Inc6.125% 07/20297/1/2029USAUSD1,706,0001,409,225 (f)
SRS Distribution Inc6.000% 12/202912/1/2029USAUSD7,576,0006,180,652 (f)
Cable & Satellite - 3.23%
See accompanying notes to financial statements.
8

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
IssuerAsset
Maturity
Date
CountryCurrency
Par
Fair Value
Footnotes
Cable One Inc0.000% 03/20263/15/2026USAUSD6,731,000$5,539,613 (c)
Cablevision Lightpath LLC5.625% 09/20289/15/2028USAUSD1,048,000766,633 (f)
CSC Holdings LLC (Altice USA)5.750% 01/20301/15/2030USAUSD4,702,0002,403,869 (f)
CSC Holdings LLC (Altice USA)5.000% 11/203111/15/2031USAUSD806,000387,573 (f)
RCN Grande (Radiate)6.500% 09/20289/15/2028USAUSD4,251,0001,987,342 (f)
Commercial Printing - 1.85%
Multi-Color Corp10.500% 07/20277/15/2027USAUSD3,714,0003,533,708 (f)
Multi-Color Corp5.875% 10/202811/1/2028USAUSD1,197,0001,106,477 (f)
Multi-Color Corp8.250% 11/202911/1/2029USAUSD432,000375,840 (f)
Multi-Color Corp9.500% 11/202811/1/2028USAUSD1,302,0001,341,958 (f)
Commodity Chemicals - 1.08%
SI Group Inc6.750% 05/20265/15/2026USAUSD6,041,0003,675,616 (f)
Construction & Engineering - 2.30%
Maxim Crane Works LP / Maxim Finance Corp10.125% 08/20248/1/2024USAUSD7,899,0007,864,086 (a) (f)
Data Processing & Outsourced Services - 1.31%
Xerox Business Services /Conduent6.000% 11/202911/1/2029USAUSD5,451,0004,485,382 (f)
Electronic Components - 2.46%
CommScope Inc6.000% 06/20256/15/2025USAUSD6,801,0006,401,868 (f)
CommScope Inc7.125% 07/20287/1/2028USAUSD2,826,0002,030,834 (f)
Health Care Equipment - 0.89%
Haemonetics Corp0.000% 03/20263/1/2026USAUSD3,563,0003,053,128 (c)
Health Care Facilities - 1.65%
CHS/Community Health Systems, Inc.6.875% 04/20284/1/2028USAUSD2,725,0002,015,343 (f)
CHS/Community Health Systems, Inc.6.875% 04/20294/15/2029USAUSD1,484,0001,099,502 (f)
CHS/Community Health Systems, Inc.6.125% 04/20304/1/2030USAUSD1,997,0001,423,105 (f)
LifePoint Hospitals Inc5.375% 01/20291/15/2029USAUSD1,727,0001,084,263 (f)
Health Care Supplies - 0.82%
Grifols SA1.625% 02/20252/15/2025ESPEUR2,692,0002,817,286 (f)
Hotels, Resorts & Cruise Lines - 11.37%
Carnival Corp5.750% 03/20273/1/2027USAUSD10,373,0008,548,383 (f)
Carnival Corp6.000% 05/20295/1/2029USAUSD4,931,0003,874,775 (f)
NCL Corp Ltd3.625% 12/202412/15/2024USAUSD12,931,00012,137,840 (f)
NCL Corp Ltd1.125% 02/20272/15/2027USAUSD9,498,0006,935,257 
See accompanying notes to financial statements.
9

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
IssuerAsset
Maturity
Date
CountryCurrency
Par
Fair Value
Footnotes
Royal Caribbean Cruises Ltd5.500% 04/20284/1/2028USAUSD42,000$37,075 (f)
Viking Cruises Ltd6.250% 05/20255/15/2025USAUSD2,311,0002,196,736 (f)
Viking Cruises Ltd5.875% 09/20279/15/2027USAUSD2,512,0002,158,022 (f)
Viking Cruises Ltd7.000% 02/20292/15/2029USAUSD3,548,0003,001,395 (f)
Industrial Conglomerates - 1.21%
Unifrax I LLC / Unifrax Holding Co5.250% 09/20289/30/2028USAUSD2,959,0002,441,175 (f)
Unifrax I LLC / Unifrax Holding Co7.500% 09/20299/30/2029USAUSD2,371,0001,703,735 (f)
Industrial Machinery & Supplies & Components - 2.72%
SPX FLOW Inc8.750% 04/20304/1/2030USAUSD11,070,0009,282,442 (f)
Insurance Brokers - 3.55%
National Financial Partners Corp6.875% 08/20288/15/2028USAUSD13,892,00012,132,534 (f)
Integrated Oil & Gas - 0.79%
Occidental Petroleum Corp4.100% 02/20472/15/2047USAUSD1,990,0001,556,498 
Occidental Petroleum Corp4.200% 03/20483/15/2048USAUSD1,421,0001,110,812 
Leisure Facilities - 3.33%
Life Time Fitness Inc5.750% 01/20261/15/2026USAUSD1,713,0001,674,419 (f)
Merlin Entertainments PLC6.625% 11/202711/15/2027IRLUSD5,811,0005,266,601 (f)
Merlin Entertainments PLC4.500% 11/202711/15/2027IRLEUR2,000,0001,945,286 (f)
Six Flags Entertainment Corp4.875% 07/20247/31/2024USAUSD678,000678,428 (f)
Six Flags Entertainment Corp7.250% 05/20315/15/2031USAUSD1,833,0001,797,486 (f)
Oil & Gas Exploration & Production - 0.70%
Matador Resources Co5.875% 09/20269/15/2026USAUSD2,452,0002,407,846 
Oil & Gas Storage & Transportation - 4.09%
Genesis Energy6.500% 10/202510/1/2025USAUSD2,842,0002,785,450 
Genesis Energy8.000% 01/20271/15/2027USAUSD356,000355,608 
Genesis Energy8.875% 04/20304/15/2030USAUSD1,420,0001,423,338 
NGL Energy Partners LP / NGL Energy Finance Corp7.500% 02/20262/1/2026USAUSD9,788,0009,394,477 (f)
Other Specialty Retail - 4.71%
Douglas Holding AG6.000% 04/20264/8/2026DEUEUR9,661,0009,529,784 (f)
Douglas Holding AG8.250% 10/202610/1/2026DEUEUR8,325,7746,561,860 (f)
Passenger Airlines - 4.70%
American Airlines Group Inc3.750% 03/20253/1/2025USAUSD10,855,00010,235,292 (f)
Delta Air Lines Inc2.900% 10/202410/28/2024USAUSD1,838,0001,774,952 
JetBlue Airways Corp0.500% 04/20264/1/2026USAUSD5,128,0004,020,863 
See accompanying notes to financial statements.
10

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
IssuerAsset
Maturity
Date
CountryCurrency
Par
Fair Value
Footnotes
Real Estate Services - 0.83%
Redfin Corp0.000% 10/202510/15/2025USAUSD3,864,000$2,849,700 (c)
Restaurants - 2.06%
Golden Nugget Inc.6.750% 07/20301/15/2030USAUSD8,684,0007,042,645 (f)
Security & Alarm Services - 0.77%
Verisure Holding AB3.875% 07/20267/15/2026SWEEUR2,592,0002,638,807 (f)
Trading Companies & Distributors - 2.28%
Neon Holdings Inc (GPD Cos Inc)10.125% 04/20264/1/2026USAUSD3,350,0003,068,480 (f)
TruckPro LLC11.000% 10/202410/15/2024USAUSD4,726,0004,727,783 (f)
TOTAL HIGH YIELD SECURITIES (Amortized cost $305,241,037)$263,055,631 
See accompanying notes to financial statements.
11

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
Issuer Asset Reference Rate & SpreadInterest
 Rate
Maturity
Date
CountryCurrencyParFair ValueFootnotes
Asset Backed Securities - 4.69%
Specialized Finance - 4.69%
AGL CLO LtdAGL 2023-24A DSOFR (3M) + 5.50%5.50%7/25/2036USAUSD1,137,230$1,137,230 (b) (f)
AGL CLO LtdAGL 2023-24A ESOFR (3M) + 8.65%8.65%7/25/2036USAUSD1,250,0001,203,125 (b) (f)
AMMC CLO 22 LtdAMMC 2018-22A DLIBOR (3M) + 2.70%7.96%4/25/2031USAUSD606,540564,019 (b) (f)
Apidos CLO XXXIAPID 2019-31A DRLIBOR (3M) + 3.10%8.36%4/15/2031USAUSD633,620597,519 (b) (f)
Ares LXVIII CLO LtdARES 2023-68A DSOFR (3M) + 5.75%5.75%4/25/2035JEYUSD991,910991,910 (b) (f)
Benefit Street Partners CLO XIX LtdBSP 2019-19A DLIBOR (3M) + 3.80%9.06%1/15/2033USAUSD250,000234,459 (b) (f)
Bosphorus CLO IV DACBOPHO 4A DEURIBOR (3M) + 2.60%5.56%12/15/2030IRLEUR1,111,0001,125,606 (b) (f)
Empower CLO LtdEmpower 2023-1 Class DSOFR (3M) + 5.50%10.57%4/25/2036USAUSD1,500,0001,500,000 (b) (f)
Generate CLO 2 LtdGNRT 2A DRLIBOR (3M) + 2.60%7.87%1/22/2031USAUSD1,298,8001,206,261 (b) (f)
Madison Park Funding LtdMDPK 2023-63A DSOFR (3M) + 5.50%5.50%4/21/2035CYMUSD946,840946,840 (b) (f)
Madison Park Funding LtdMDPK 2023-63A CSOFR (3M) + 3.50%3.50%4/21/2035CYMUSD1,300,0001,300,000 (b) (f)
Madison Park Funding XI LtdMDPK 2013-11A DRLIBOR (3M) + 3.25%8.52%7/23/2029USAUSD1,690,3001,626,891 (b) (f)
Magnetite XXXI LtdMAGNE 2021-31A ELIBOR (3M) + 6.00%11.26%7/15/2034USAUSD1,500,0001,416,427 (b) (f)
OCP CLO 2020-18 LtdOCP 2020-18A DRLIBOR (3M) + 3.20%8.45%7/20/2032USAUSD250,000234,717 (b) (f)
Octagon Investment Partners 39 LtdOCT39 2018-3A DLIBOR (3M) + 2.95%8.20%10/20/2030USAUSD398,400372,120 (b) (f)
Shackleton CLO LtdSHACK 2019-15A D1RLIBOR (3M) + 3.45%8.71%1/15/2032USAUSD366,700350,303 (b) (f)
Sutton Park CLO DACSTNPK 1A CEURIBOR (3M) + 3.30%5.95%11/15/2031IRLEUR1,178,0001,213,201 (b) (f)
TOTAL ASSET BACKED SECURITIES (Amortized cost $15,938,318)$16,020,628 
See accompanying notes to financial statements.
12

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
IssuerAssetRate
Country
Currency
Shares
Fair Value
Footnotes
Equity & Other Investments - 1.56%
Construction & Engineering - 0.02%
Yak Access LLCCommon StockUSAUSD9,358$1,006 (a) (e)
Yak Access LLCPreferred StockUSAUSD2,244,30667,329(a)
Diversified Metals & Mining - 1.26%
Foresight Energy LLCCommon StockUSAUSD320,3814,309,279(a) (b) (e)
Oil & Gas Equipment & Services - 0.14%
Proserv Group Parent LLCCommon StockGBRUSD114,01083,946 (b) (e)
Proserv Group Parent LLCPreferred StockGBRUSD36,249409,048 (b)
Packaged Foods & Meats - 0.00%
CTI Foods Holding Co LLCCommon StockUSAUSD955— (a) (b) (e)
Health Care Facilities - 0.13%
Quorum Health CorpTrade ClaimUSAUSD3,964,000445,950 (a) (b) (e)
TOTAL EQUITY & OTHER INVESTMENTS (Cost $9,604,946)$5,316,558 
Money Market Funds - 5.09%
U.S. Government Securities - 5.09%
Morgan Stanley Institutional Liquidity Fund - Government Portfolio4.78%USAUSD17,405,386$17,405,386 (g)
TOTAL MONEY MARKET FUNDS (Cost $17,405,386)$17,405,386 
TOTAL INVESTMENTS (Cost $586,333,307) - 152.77%$521,986,928 
LIABILITIES EXCEEDING OTHER ASSETS, NET - (52.77%)(180,297,628)
NET ASSETS - 100.00%$341,689,300 
TLTerm loan.
1LFirst lien.
2LSecond lien.
(a)Security considered restricted.
(b)Value determined using significant unobservable inputs.
(c)Zero coupon bond.
(d)Represents a payment-in-kind (“PIK”) security which may pay interest/dividend in additional par/shares.
(e)Non-income producing security.
(f)Securities exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may only be resold to qualified institutional buyers in transactions exempt from registration.
(g)Rate represents the money market fund’s average 7-day yield as of April 30, 2023.
See accompanying notes to financial statements.
13

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
Statement of Assets and Liabilities
As of April 30, 2023 (Unaudited)
Assets
Investments, at fair value (cost $568,927,921)$504,581,542 
Cash and cash equivalents17,405,386 
Foreign currencies, at value (cost $2,057,528)
2,078,094 
Dividends and interest receivable7,662,680 
Receivable for investments sold9,494,620 
Other assets195,227 
Total assets541,417,549 
Liabilities
Credit facility114,606,322 
Mandatorily redeemable preferred shares (net of deferred offering costs of $519,591)
49,480,409 
Payable for investments purchased31,090,117 
Interest payable1,430,595 
Trustees’ fees payable1,033,856 
Investment advisory fees payable913,814 
Other accrued expenses610,708 
Due to custodian562,428 
Total liabilities199,728,249 
Commitments and Contingencies (Note 7)
Net assets$341,689,300 
Net Assets
Paid-in capital — (unlimited shares authorized — $0.001 par value)
$431,808,156 
Accumulated deficit(90,118,856)
Net assets$341,689,300 
Net asset value, price per share (27,120,420 shares)
$12.60 
See accompanying notes to financial statements.
14

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
Statement of Operations
For the Six Months Ended April 30, 2023 (Unaudited)
Investment income
Interest income$22,378,386 
Other income707,628 
Total investment income23,086,014 
Expenses
Credit facility interest expense2,510,905 
Investment advisory fees2,438,408 
Preferred shares interest expense981,771 
Term loan fees286,337 
Legal fees177,721 
Administration fees69,751 
Trustees' fees59,398 
Excise tax54,098 
Audit and tax fees41,548 
Custodian fees34,864 
Shareholder reporting expense30,505 
Pricing expense23,356 
Transfer agent fees12,566 
Other expenses100,850 
Total expenses6,822,078 
Net investment income16,263,936 
Realized and unrealized gains (losses)
Net realized gains (losses) on
Investments(3,580,760)
Foreign currency transactions24,805 
Net realized losses(3,555,955)
Net change in unrealized appreciation of
Investments19,610,987 
Foreign currency translation1,045,375 
Deferred Trustees’ fees34,900 
Net change in unrealized appreciation20,691,262 
Net realized and unrealized gains17,135,307 
Net increase in net assets resulting from operations$33,399,243 
See accompanying notes to financial statements.
15

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
Statements of Changes in Net Assets
Six Months ended April 30, 2023 (Unaudited)Year Ended October 31, 2022
Increase (decrease) in net assets resulting from operations
Net investment income$16,263,936 $27,468,926 
Net realized losses(3,555,955)(3,984,886)
Net change in unrealized appreciation (depreciation)20,691,262 (85,525,198)
Net increase (decrease) in net assets resulting from operations33,399,243 (62,041,158)
Distributions to shareholders
Net investment income(15,133,194)(25,628,796)
Total distributions to shareholders(15,133,194)(25,628,796)
Shareholder transactions
Proceeds from rights offering (6,780,105 shares), net of offering costs69,825,941 — 
Increase from shareholder transactions69,825,941 — 
Net increase (decrease) in net assets88,091,990 (87,669,954)
Net assets
Beginning of period (20,340,315 and 20,340,315 shares, respectively)253,597,310 341,267,264 
End of period (27,120,420 and 20,340,315 shares, respectively)$341,689,300 $253,597,310 
See accompanying notes to financial statements.
16

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
Statement of Cash Flows
Six Months Ended
April 30, 2023 (Unaudited)
Cash Flows from Operating Activities:
Net increase in net assets resulting from operations$33,399,243 
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
Purchases of investments(200,929,943)
Proceeds from sales and repayments of investments130,985,771 
Net change in unrealized appreciation of investments(19,610,987)
Net realized loss on investments3,580,760 
Net accretion of premiums and discounts(2,517,370)
Net change in unrealized appreciation on foreign currency translation(1,045,375)
Payment-in-kind interest(937,104)
Net realized loss on investments (foreign currency related)389,016 
Amortization of deferred offering costs39,583 
Net change in unrealized appreciation on Deferred Trustees’ fees(34,900)
Changes in assets and liabilities:
Increase in payable for investments purchased28,302,018 
Increase in receivable for investments sold(2,521,170)
Increase in interest payable1,430,892 
Increase in dividends and interest receivable(710,111)
Decrease in other accrued expenses(305,263)
Increase in investment advisory fees payable509,750 
Increase in other assets(195,227)
Increase in Trustees’ fees payable53,771 
Net cash used in operating activities(30,116,646)
Cash Flows from Financing Activities
Net proceeds from rights offering70,132,400 
Paydown of credit facility(25,000,000)
Cash dividends paid to shareholders(15,133,194)
Proceeds from credit facility14,352,609 
Due to custodian562,428 
Net cash provided by financing activities44,914,243 
   Effect of exchange rate changes on cash51,425 
Net increase in cash and cash equivalents14,849,022 
Cash and Cash Equivalents
Beginning balance4,634,458 
Ending balance$19,483,480 
Supplemental disclosure of cash flow information:
Cash paid for interest expense$2,326,891 
See accompanying notes to financial statements.
17

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
Financial Highlights
Six Months Ended April 30, 2023
(Unaudited)
Year Ended October 31
20222021202020192018
Per share operating performance (1)
Net asset value, beginning of year$12.47$16.78$14.86$15.57$17.24$18.38
Income (loss) from investment operation
Net investment income0.711.351.401.391.491.51
Net realized and unrealized gains (losses)0.79(4.40)1.78(0.60)(1.66)(0.07)
Total from investment operations1.50(3.05)3.180.79(0.17)1.44
Distributions from
Net investment income(0.66)(1.26)(1.26)(1.50)(1.50)(1.55)
Total distributions(0.66)(1.26)(1.26)(1.50)(1.50)(1.55)
Dilutive effect of rights offering(0.71)(1.03)
Net asset value, end of period$12.60$12.47$16.78$14.86$15.57$17.24
Total return (2)
6.58%(27.01)%36.24%(3.58)%7.55%2.84%
Ratios to average net assets
Expenses4.79%3.56%3.12%3.73%3.38%3.17%
Net investment income11.43%9.08%8.49%9.65%9.07%8.63%
Supplemental data
Market value/price$11.14$11.08$16.67$13.25$15.39$15.77
Price discount(13.11)%(11.15)%(0.66)%(10.83)%(1.16)%(8.53)%
Net assets, end of period (000’s)$341,689$253,597$341,267$302,336$316,670$350,601
Portfolio turnover rate29%32%79%73%62%56%
1 Per share calculations were performed using average shares.
2    Total return is computed based on New York Stock Exchange market price of the Fund’s shares and excludes the effect of brokerage commissions. Distributions are assumed to be reinvested at the prices obtained under the Fund’s dividend reinvestment plan.












See accompanying notes to financial statements.
18

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
Notes to Financial Statements
1.Organization
KKR Income Opportunities Fund (the “Fund”) was organized on March 17, 2011 as a statutory trust under the laws of the State of Delaware. The Fund is a closed-end registered management investment company, which commenced operations on July 25, 2013. The Fund seeks to generate a high level of current income, with a secondary objective of capital appreciation. The Fund is diversified for purposes of the Investment Company Act of 1940, as amended (the “1940 Act”). KKR Credit Advisors (US) LLC serves as the Fund’s investment adviser (the “Adviser”).
2.Summary of Significant Accounting Policies
Basis of Presentation — The accompanying financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and are stated in United States (“U.S.”) dollars. The Fund is an investment company following accounting and reporting guidance in Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services — Investment Companies. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in these financial statements. Actual results could differ from those estimates.
Valuation of Investments — The Board of Trustees (the “Board”) of the Fund has adopted valuation policies and procedures to ensure investments are valued in a manner consistent with GAAP as required by the 1940 Act. The Board designated the Adviser as the valuation designee to perform fair valuations pursuant to Rule 2a-5 under the Investment Company Act of 1940 (the “Valuation Designee”). The Valuation Designee has primary responsibility for implementing the Fund’s valuation policies and procedures.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters, or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity for disclosure purposes.
Assets and liabilities recorded at fair value on the Statement of Assets and Liabilities are categorized based upon the level of judgment associated with the inputs used to measure their value. Hierarchical levels, as defined under GAAP, are directly related to the amount of subjectivity associated with the inputs to fair valuations of these assets and liabilities, and are as follows:
Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2 — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, and inputs other than quoted prices that are observable for the asset or liability.
Level 3 — Inputs are unobservable for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.
A significant decrease in the volume and level of activity for the asset or liability is an indication that transactions or quoted prices may not be representative of fair value because in such market conditions there may be increased instances of transactions that are not orderly. In those circumstances, further analysis of transactions or quoted prices is needed, and a significant adjustment to the transactions or quoted prices may be necessary to estimate fair value.
The availability of observable inputs can vary depending on the financial asset or liability and is affected by a wide variety of factors, including, for example, the type of product, whether the product is new, whether the product is
19

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
traded on an active exchange or in the secondary market, and the current market condition. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Fund in determining fair value is greatest for instruments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Fund’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the asset. The variability of the observable inputs affected by the factors described above may cause transfers between Levels 1, 2 and/or 3, which the Fund recognizes at the beginning of the period during which the inputs change.
Many financial assets and liabilities have bid and ask prices that can be observed in the marketplace. Bid prices reflect the highest price that the Fund and others are willing to pay for an asset. Ask prices represent the lowest price that the Fund and others are willing to accept for an asset. For financial assets and liabilities whose inputs are based on bid-ask prices, the Fund does not require that fair value always be a predetermined point in the bid-ask range. The Fund’s policy is to allow for mid-market pricing and adjust to the point within the bid-ask range that meets the Fund’s best estimate of fair value.
Depending on the relative liquidity in the markets for certain assets, the Fund may transfer assets to Level 3 if it determines that observable quoted prices, obtained directly or indirectly, are not available.
Investments are generally valued based on quotations from third party pricing services, unless such a quotation is unavailable or is determined to be unreliable or inadequately representing the fair value of the particular assets. In that case, valuations are based on either valuation data obtained from one or more other third party pricing sources, including broker dealers selected by the Adviser, or will reflect the Valuation Committee’s good faith determination of fair value based on other factors considered relevant. For assets classified as Level 3, valuations are based on various factors including financial and operating data of the company, company specific developments, market valuations of comparable companies and model projections.
Certain unfunded investments in delayed draw term loans and revolving lines of credit may at times be priced at less than par value resulting in a financial liability in the Schedule of Investments. These values are temporary and the funding of the commitment will result in these investments valued as financial assets.
For the six months ended April 30, 2023, there have been no significant changes to the Fund’s fair value methodologies.
Investment Transactions — Investment transactions are accounted for on the trade date, the date the order to buy or sell is executed. Amortization and accretion is calculated using the effective interest method over the holding period of the investment. Realized gains and losses are calculated on the specific identified cost basis.
Cash and Cash Equivalents — Cash and cash equivalents includes cash on hand, cash held in banks and highly liquid investments with original maturities of three or fewer months. Cash equivalents consist solely of money market funds with financial institutions. As of April 30, 2023, the Fund was invested in the Morgan Stanley Institutional Liquidity Government Portfolio — Institutional Class.
Foreign Currency Transactions — The books and records of the Fund are maintained in U.S. dollars. All investments denominated in foreign currency are converted to the U.S. dollar using prevailing exchange rates at the end of the reporting period. Income, expenses, gains and losses on investments denominated in foreign currency are converted to the U.S. dollar using the prevailing exchange rates on the dates when the transactions occurred.
The Fund bifurcates that portion of the results of operations resulting from changes in foreign exchange rates on investments and from the fluctuations arising from changes in market prices of securities held.
20

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
Distributions to Shareholders — Distributions are declared and paid monthly and distributable net realized capital gains, if any, are declared and distributed at least annually. Distributions to shareholders are recorded on the ex- dividend date.
Term Loan Income — Term Loan Income consists of transaction fees including, but not limited to, assignment, transfer, administration and amendment fees. Fee and other income is recorded when earned, and is recognized in Other income on the Statement of Operations.
Income Taxes — The Fund has elected to be treated and has qualified, and intends to continue to qualify in each taxable year, as a “regulated investment company” under Subchapter M of the Internal Revenue Code of 1986, as amended, and in conformity with the Regulated Investment Company Modernization Act of 2010. The Fund will not be subject to federal income tax to the extent the Fund satisfies the requirements under Section 851 of the Internal Revenue Code, including distributing all of its gross investment company taxable income and capital gains to its shareholders based on the Fund’s fiscal year end of October 31.
To avoid imposition of a 4.0% excise tax on undistributed income applicable to regulated investment companies, the Fund intends to declare each year as dividends in each calendar year at least 98.0% of its net investment income (earned during the calendar year) and 98.2% of its net realized capital gains (earned during the six months ended April 30) plus undistributed amounts, if any, from prior years.
The Fund evaluates tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether it is “more-likely-than-not” (i.e., greater than 50.0%) that each tax position will be sustained upon examination by a taxing authority based on the technical merits of the position. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Management has analyzed the Fund’s tax positions and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions for the open tax years (2018-2022). However, management’s conclusions regarding tax positions taken may be subject to review and adjustment at a later date based on factors including, but not limited to, examination by tax authorities, on-going analysis of and changes to tax laws, regulations and interpretations thereof.
As of April 30, 2023, the Fund did not have a liability for any unrecognized tax benefits. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the six months ended April 30, 2023, the Fund did not incur any interest or penalties.
Recently Adopted Accounting Pronouncements — In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 contains practical expedients for reference rate reform-related activities that impact debt, leases, derivatives, and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. Management of the Fund has elected to adopt this accounting standard and apply it to contracts that are modified for the sole purpose of reference rate reform. In December 2022, the FASB issued ASU No. 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which deferred the sunset day of this guidance to December 31, 2024. The adoption of these standards did not have a material impact to these financial statements.
3.Risk Considerations
The Fund invests mainly in leveraged loans, high yield securities, asset backed securities, common stocks and preferred stocks. These investments may involve certain risks, including, but not limited to, those described below:
Global Economic and Market Conditions — The Fund is materially affected by market, economic and political conditions and events, such as natural disasters, epidemics and pandemics, wars, supply chain disruptions, economic sanctions, globally and in the jurisdictions and sectors in which it invests or operates, including factors affecting interest rates, the availability of credit, currency exchange rates and trade barriers. For example, the COVID‐19 pandemic, the Russia‐Ukraine war, rising interest rates, heightened inflation, supply chain disruptions, geopolitical risks, economic sanctions and volatility in the banking and financial sector have disrupted global economies and financial markets, and their prolonged economic impact is uncertain. Market, economic and political conditions and
21

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
events are outside the Adviser’s control and could adversely affect the Fund’s operations and performance and the liquidity and value of the Fund’s investments and reduce the ability of the Fund to make attractive new investments.
Market Discount Risk — The price of the Fund’s common shares of beneficial interest will fluctuate with market conditions and other factors. Shares of closed-end management investment companies frequently trade at a discount from their net asset value, which may increase the risk of loss.
Leverage Risk — Leverage is a speculative technique that may expose the Fund to greater risk and increased costs. When leverage is used, the net asset value and market price of the Fund’s shares and the Fund’s investment return will likely be more volatile.
Market Risk — Bond markets rise and fall daily. As with any investment with performance tied to these markets, the value of an investment in the Fund will fluctuate, which means that shareholders could lose money.
Interest Rate Risk — Interest rates will rise and fall over time. During periods when interest rates are low, the Fund’s yield and total return also may be low. Changes in interest rates also may affect the Fund’s share price and a sharp rise in interest rates could cause the Fund’s share price to fall. The longer the Fund’s duration, the more sensitive to interest rate movements its share price is likely to be.
Credit Risk — The Fund is subject to the risk that a decline in the credit quality of an investment could cause the Fund to lose money or underperform. The Fund could lose money if the issuer or guarantor of an investment fails to make timely principal or interest payments or otherwise honor its obligations.
Liquidity Risk — A particular investment may be difficult to purchase or sell. The Fund may be unable to sell illiquid securities at an advantageous time or price.
Prepayment and Extension Risk — The Fund’s investments are subject to the risk that the investments may be paid off earlier or later than expected. Either situation could cause the Fund to hold investments paying lower than market rates of interest, which could hurt the Fund’s yield or share price.
High Yield Risk — High yield securities and unrated securities of similar credit quality (sometimes called junk bonds) that the Fund may invest in are subject to greater levels of credit and liquidity risks. High yield securities are considered primarily speculative with respect to the issuer’s continuing ability to make principal and interest payments.
Foreign Investment Risk — The Fund’s investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates (the currencies will decline in value relative to the U.S. dollar or, in the case of hedging positions, the U.S. dollar will decline in value relative to the currency being hedged) or exchange control regulations (including limitations on currency movements and exchanges); differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may be heightened in connection with investments in emerging markets.
Issuer Risk — The value of securities may decline for a number of reasons that directly relate to the issuer, such as its financial strength, management performance, financial leverage and reduced demand for the issuer’s goods and services, as well as the historical and prospective earnings of the issuer and the value of its assets.
4.Agreements
Investment Advisory Agreement — The Adviser provides day-to-day portfolio management services to the Fund and has discretion to purchase and sell investments in accordance with the Fund’s objectives, policies, and restrictions. For the services it provides to the Fund, the Adviser receives an annual fee, payable monthly by the Fund, in an amount equal to 1.1% of the Fund’s average daily Managed Assets (the “Investment Advisory Fee”). “Managed Assets” means the total assets of the Fund (including any assets attributable to borrowings for investment purposes)
22

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
minus the sum of the Fund’s accrued liabilities (other than liabilities representing borrowings for investment purposes).
During periods when the Fund is using leverage, the Investment Advisory Fee paid to the Adviser will be higher than if the Fund does not use leverage because the Investment Advisory Fee paid is calculated based on the Fund’s Managed Assets, which includes the assets purchased through leverage.
During the six months ended April 30, 2023, the Adviser earned an Investment Advisory Fee of $2.4 million.
Administrator, Custodian and Transfer Agent — U.S. Bancorp Fund Services, LLC (“Fund Services” or “Administrator”), doing business as U.S. Bank Global Fund Services, serves as the Fund’s administrator pursuant to an administration agreement under which the Administrator provides administrative and accounting services.
U.S. Bank N.A. (the “Custodian”) serves as the Fund’s custodian pursuant to a custody agreement. The Custodian is an affiliate of Fund Services.
Fund Services serves as the Fund’s transfer agent pursuant to a transfer agency agreement.
Deferred Trustees’ Compensation — The Fund has a Deferred Trustees’ Compensation plan (the “Plan”) that allows the Independent Trustees to defer compensation to a future payment period. The compensation is invested in shares of the Fund. The value of a participating Independent Trustee’s deferral account is based on the shares of deferred amounts as designated by the participating Independent Trustees. Changes in the value of the Independent Trustees’ deferral account are included in the Statement of Operations. The accrued obligations under the Plan, including unrealized appreciation (depreciation), are included on the Statement of Assets and Liabilities.
Other — Certain officers of the Fund are also officers of the Adviser. Such officers are not paid by the Fund for serving as officers of the Fund.
5.Fair Value
The following table presents information about the Fund’s assets measured at fair value on a recurring basis as of April 30, 2023, and indicates the fair value hierarchy of the inputs utilized by the Fund to determine such fair value:
Investments in securitiesLevel 1Level 2Level 3Total
Leveraged Loans$— $207,977,267 $12,211,458 $220,188,725 
High Yield Securities— 262,691,631 364,000 263,055,631 
Asset Backed Securities— — 16,020,628 16,020,628 
Equity and Other Investments— 68,335 5,248,223 5,316,558 
Money Market Fund17,405,386 — — 17,405,386 
Total investments in securities$17,405,386 $470,737,233 $33,844,309 $521,986,928 
23

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
The following are the details of the restricted securities held by the Fund:
Issuer(1)
AssetPar/SharesCostFair ValueAcquisition
Date
% of Net
Assets
Leveraged Loans
Flint Group GmbHTL 1L B7 04/14100,065$99,671 $75,508 8/12/20220.02%
Monitronics International IncTL 1L EXIT 08/192,524,2802,504,958 1,323,442 10/23/20180.39%
Flint Group GmbHTL 1L B3 05/159,2819,285 7,003 8/12/20220.00%
Tecomet IncTL 1L 10/178,485,3347,973,942 7,978,590 5/18/20222.34%
Belk IncTL 1L 02/21459,875683,417 390,893 2/24/20210.11%
Flint Group GmbHTL 1L B 04/141,141,0641,136,279 861,032 11/20/20200.25%
Wheel Pros IncTL 1L B 05/21765,894670,265 545,627 6/7/20220.16%
Flint Group GmbHTL 1L B5 02/17144,197140,454 108,809 8/12/20220.03%
Belk IncTL 1L EXIT 02/21 PIK Toggle8,751,3428,467,172 1,443,971 2/24/20210.42%
Foresight Energy LLCTL 1L A 06/202,164,7422,164,742 2,164,742 6/30/20200.63%
Flint Group GmbHTL 1L B6 03/17104,909104,505 79,162 8/12/20220.02%
Flint Group GmbHTL 1L B4 11/1586,90686,945 65,578 8/12/20220.02%
High Yield Securities
Maxim Crane Works LP / Maxim Finance Corp10.125% 08/20247,899,0007,791,142 7,864,086 5/6/20202.30%
Oldcastle Buildingenvelope Inc9.500% 04/2030713,000661,198 624,638 4/14/20220.18%
Wheel Pros Inc6.500% 05/20295,638,0005,357,128 2,678,050 4/23/20210.78%
Equity & Other Investments
Yak Access LLCCommon Stock9,358— 1,006 3/10/20230.00%
CTI Foods Holding Co LLCCommon Stock955112,798 — 5/3/20190.00%
Foresight Energy LLCCommon Stock320,3813,665,560 4,309,279 6/30/20201.26%
Yak Access LLCPreferred Stock2,244,3062,139,021 67,329 3/10/20230.02%
Quorum Health CorpTrade Claim3,964,0001,868,416 445,950 6/1/20180.13%
$45,636,898 $31,034,695 
(1)Refer to the Schedule of Investments for more details on securities listed.
The following is a reconciliation of the investments in which significant unobservable inputs (Level 3) were used in determining fair value:
Leveraged
Loans
High Yield
Securities
Asset Backed SecuritiesEquity and Other Investments
Balance at October 31, 2022$13,021,333 $1,262,507 $— $4,890,748 
Purchases2,246,328 — 15,929,460 — 
Sales and paydowns(3,182,434)(906,000)— — 
Accretion of discounts42,281 1,981 8,858 — 
Net change in appreciation (depreciation)83,729 (6,001)82,310 357,475 
Net realized gains221 11,513 — — 
Balance as of April 30, 2023$12,211,458 $364,000 $16,020,628 $5,248,223 
Net change in appreciation (depreciation) of investments held at April 30, 2023$83,729 $(6,001)$82,310 $357,475 
24

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
The following table presents additional information about valuation techniques and inputs used for investments that are measured at fair value and categorized within Level 3 as of April 30, 2023:
Financial
Asset
Fair Value
Valuation
Technique(1)
Unobservable
Inputs(2)
Range
(Weighted
Average)(3)
Leveraged Loans$12,211,458Yield AnalysisYield
11.3% - 14.4% (12.0%)
Discount Margin
0.9% - 4.8% (2.7%)
EBITDA Multiple
3.3x - 11.3x (9.1x)
Net Leverage
0.6x - 7.0x (4.9x)
Asset Backed Securities$16,020,628Yield AnalysisDiscount Margin
8.1% - 10.9% (8.7%)
Discounted Cash FlowsProbability of default2%
Constant prepayment rate20%
Equity & Other Investments$5,248,223Market ComparablesLTM EBITDA
3.3x - 6.2x (3.6x)
Probability-Weighted Discount Margin25%
Expected Return
High Yield Securities$364,000Yield AnalysisYield10.8%
Discount Margin0.9%
EBITDA Multiple10.5x
Net Leverage7.4x
(1)For the assets that have more than one valuation technique, the Fund may rely on the techniques individually or in aggregate based on a weight ascribed to each one ranging from 0.0%-100.0%. When determining the weighting ascribed to each valuation methodology, the Fund considers, among other factors, the availability of direct market comparables, the applicability of a discounted cash flow analysis and the expected hold period and manner of realization for the investment. These factors can result in different weightings among the investments and in certain instances, may result in up to a 100.0% weighting to a single methodology.
(2)The significant unobservable inputs used in the fair value measurement of the Fund’s assets and liabilities may include the last twelve months (“LTM”) EBITDA multiple, weighted average cost of capital, discount margin, probability of default, loss severity and constant prepayment rate. In determining certain of these inputs, management evaluates a variety of factors including economic, industry and market trends and developments, market valuations of comparable companies, and company specific developments including potential exit strategies and realization opportunities. Significant increases or decreases in any of these inputs in isolation could result in significantly lower or higher fair value measurement.
(3)Weighted average amounts are based on the estimated fair values.
6.Investment Transactions
The cost of investments purchased and the proceeds from the sale of investments, other than short-term investments, for the six months ended April 30, 2023 were as follows:
Purchases$200,929,943
Sales$130,985,771
There were no purchases or sales of U.S. Government securities.
7.Commitments and Contingencies
Under the Fund’s organizational documents, its officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In the normal course of business, the Fund enters into contracts that contain a variety of representations that provide general indemnifications. The Fund’s maximum liability exposure under these arrangements is unknown, as future claims that have not yet occurred may be made against the Fund. However, based on experience, management expects the risk of loss to be remote.
25

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
8.Federal Income Taxes
The timing and characterization of certain income, capital gains, and return of capital distributions are determined annually in accordance with federal tax regulations, which may differ from GAAP. As a result, the net investment income and net realized losses on investment transactions for a reporting period may differ significantly from distributions during such period. These book to tax differences may be temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid-in capital, accumulated net investment income or accumulated net realized losses, as appropriate, in the period in which the differences arise.
As of October 31, 2022, the following permanent differences have been reclassified (to)/from the following accounts:
Accumulated
Deficit
Paid-in
Capital
$212,060$(212,060)
The tax character of distributions declared for the six months ended April 30, 2023 and for the year ended October 31, 2022 were as follows:
Ordinary
Income
Total
October 31, 2022$25,628,796$25,628,796
April 30, 2023*$15,133,194$15,133,194
*The final tax character of any distribution declared during 2023 will be determined in January 2024 and reported to shareholders on IRS Form 1099-Div in accordance with federal income tax regulations.
As of October 31, 2022 the components of accumulated losses on a tax basis for the Fund are as follows:
Undistributed
Ordinary
Income
Net
Unrealized
Depreciation
Other
Temporary
Differences
Total
Accumulated
Losses
$4,882,046$(84,689,862)$(28,577,089)$(108,384,905)
Net capital losses earned may be carried forward indefinitely and must retain the character of the original loss. During the year ended October 31, 2022, the Fund did not utilize any capital loss carry-forwards. As of October 31, 2022, the Fund had non-expiring capital loss carry-forwards of $27.7 million.
As of October 31, 2022, the total cost of securities for federal income tax purposes and the aggregate gross unrealized appreciation and depreciation for securities held by the Fund are as follows:
Federal Tax
Cost
Aggregate
Gross
Unrealized
Appreciation
Aggregate
Gross
Unrealized
Depreciation
Net
Unrealized
Depreciation
$500,555,393$2,559,203$(87,249,065)$(84,689,862)

9.Credit Facility
In October 2020, the Fund entered into a credit agreement (the “State Street Credit Facility”) with State Street Bank and Trust Company (“State Street”). The State Street Credit Facility provides for loans to be made in U.S. dollars and
26

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
certain foreign currencies to an aggregate amount of $160.0 million, with an “accordion” feature that allows the Fund, under certain circumstances, to increase the size of the facility to a maximum of $225.0 million. The Fund may reduce or terminate the commitments under the State Street Credit Facility with three business days’ notice. State Street is required to provide the Fund with 270 days’ notice prior to terminating the State Street Credit Facility.
Prior to December 30, 2021, interest on the State Street Credit Facility was generally based on the London Interbank Offered Rate (“LIBOR”), or with respect to borrowings in foreign currencies, on a base rate applicable to such currency borrowing, plus a spread of 0.75%. On December 30, 2021, the Fund amended the State Street Credit Facility to replace the LIBOR with the Secured Overnight Financing Rate and added an additional spread adjustment of 0.12%-0.33% for borrowings denominated in the British pound. The Fund also pays a commitment fee on any unused commitment amounts between 0.15% and 0.25%, depending on utilization levels. As of April 30, 2023, the Fund was in compliance with the terms of the State Street Credit Facility. The carrying value of the State Street Credit Facility approximates fair value due to variable interest rates that periodically reset to market rates. The fair value was determined using Level 2 inputs in the fair value hierarchy.
The components of interest expense, average interest rates (i.e., base interest rate in effect plus the spread) and average outstanding balances for the Fund’s credit facilities for the six months ended April 30, 2023 were as follows:
Stated interest expense$2,450,929 
Unused commitment fees59,976 
Total interest expense$2,510,905 
Weighted average interest rate4.49 %
Average borrowings$110,175,126 
10.Mandatorily Redeemable Preferred Shares
On October 15, 2019, the Fund issued 10-year mandatorily redeemable preferred shares (the “MRPS”). The Fund authorized and issued 2.0 million MRPS with a total liquidation value of $50.0 million. The final redemption date of the MRPS is October 31, 2029. The Fund makes quarterly dividend payments on the MRPS at an annual dividend rate of 3.81%. The fair value of the MRPS approximates its par value as of April 30, 2023. This fair value is based on Level 2 inputs under the fair value hierarchy.
Offering costs incurred in connection with the issuance of the MRPS have been recorded, and are being deferred and amortized through the final redemption date of the MRPS. The amortization of these costs is included in preferred shares interest expense in the Statement of Operations.
11.Shareholder Transactions

On January 23, 2023, the Fund commenced its rights offering (the “Offer”) that entitled the rights holders to subscribe for up to an aggregate of 6.8 million common shares of the Fund. The subscription price of $10.75 for the common shares to be issued was based on a formula equal to the greater of 82% of the Fund’s net asset value at the close of trading on the New York Stock Exchange (“NYSE”) on the expiration date, or 92.5% of the average of the last reported sales price of common share on the NYSE on the expiration date and each of the four immediately preceding trading days. On February 16, 2023, the Fund’s Offer expired, resulting in net proceeds of $69.8 million and 6.8 million common shares issued.
27

Logo1.jpg
 Income Opportunities Fund
April 30, 2023 (Unaudited)
VOTING RESULTS FROM THE MARCH 22, 2023 SHAREHOLDER MEETING
At the Annual Meeting of Shareholders held on March 22, 2023, shareholders approved the election of Jeffrey L. Zlot as a Class III Trustee to the Board of Trustees to serve a three year term expiring in 2026 based on the following results:
Total Outstanding Shares
20,340,315 
Total Shares Voted
15,318,141 
For14,077,223 
Withheld1,240,918 
At the Annual Meeting of Shareholders held on March 22, 2023, preferred shareholders approved the election of Eric Mogelof as a Class III Trustee to the Board of Trustees to serve a three year term expiring in 2026 based on the following results:
Total Outstanding Shares
2,000,000 
Total Shares Voted
1,080,000 
For1,080,000 
Withheld

At the Annual Meeting of Shareholders held on March 22, 2023, preferred shareholders approved the election of Jeffrey L. Zlot as a Class III Trustee to the Board of Trustees to serve a three year term expiring in 2026 based on the following results:
Total Outstanding Shares
2,000,000 
Total Shares Voted
1,080,000 
For1,080,000 
Withheld
28


(b) Not applicable

Item 2. Code of Ethics.

Not applicable for semi-annual report.

Item 3. Audit Committee Financial Expert.

Not applicable for semi-annual report.

Item 4. Principal Accountant Fees and Services.

Not applicable for semi-annual report.

Item 5. Audit Committee of Listed Registrants.

Not applicable for semi-annual report.

Item 6. Investments.

(a) Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable for semi-annual report.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

(a) Not applicable for semi-annual report.

(b) As of the date of this filing, there have been no changes in any of the portfolio managers identified in the most recent annual report on Form N-CSR.

Item 9. Purchases of Equity Securities by Closed‑End Management Investment Company and Affiliated Purchasers.

No purchases were made during the reporting period by or on behalf of the registrant or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares or other units of any class of the registrant’s equity securities that is registered by the registrant pursuant to Section 12 of the Exchange Act (15 U.S.C. 781).

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees since the registrant last provided disclosure in response to this item.

Item 11. Controls and Procedures.

(a) The registrant’s principal executive officer and principal financial officer have concluded, based on their evaluation of the registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report on Form N-CSR, that the design and operation of such procedures are effective to provide reasonable assurance that information required to be disclosed by the investment company on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.

(b) There have been no changes in the registrant's internal control over financial reporting during the six months ended April 30, 2023 that materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

29


Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies

The registrant did not engage in securities lending activities during the period reported on this Form N-CSR.

Item 13. Exhibits.

(a)(1) Not applicable.

(a)(2) A separate certification for the principal executive officer and the principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are filed herewith.

(a)(3) Not applicable.

(a)(4) Not applicable.

(b) Certifications pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002 are filed herewith.
30


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


KKR Income Opportunities Fund

By /s/ Eric Mogelof
Eric Mogelof, President

Date June 30, 2023


Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By /s/ Eric Mogelof
Eric Mogelof, President

Date June 30, 2023


By /s/ Thomas Murphy
Thomas Murphy, Treasurer, Chief Accounting Officer & Chief Financial Officer

Date June 30, 2023


31