SAN FRANCISCO, March 31, 2011 /PRNewswire/ -- KKR Financial
Holdings LLC (NYSE: KFN) (the "Company") announced today that it
closed KKR Financial CLO 2011-1, Ltd. ("CLO 2011-1"), a
$400 million secured financing
transaction that is non-recourse to the Company, on March 31, 2011.
CLO 2011-1, a consolidated subsidiary of the Company, has
entered into a privately negotiated financing transaction with a
third-party senior lender that will permit CLO 2011-1 to borrow up
to $300 million at a rate of
three-month LIBOR plus 1.35% to finance a portfolio of senior
secured leveraged commercial loans. CLO 2011-1 has been
capitalized with a $100 million cash
contribution by the Company in exchange for which CLO 2011-1 issued
the Company a $100 million residual
interest consisting of $20 million of
mezzanine notes and $80 million of
subordinated notes. Highlights of this transaction
include:
- Maturity date: April 2,
2018;
- Portfolio: Static pool of senior secured U.S. dollar
denominated leveraged commercial loans;
- Non-call period: Six months after portfolio is ramped; and
- Principal waterfall: Principal receipts from the portfolio are
distributed to the senior lender and the Company pro rata, subject
to maintaining a 3:1 leverage ratio.
Additional terms of the CLO 2011-1 transaction are outlined in a
Form 8-K filed by the Company today with the Securities and
Exchange Commission.
Separately, the Company announced that during March 2011 it acquired an overriding royalty
interest in developed and undeveloped oil and gas properties
located in Texas for $55 million.
The Company's Chief Executive Officer, William C. Sonneborn, stated, "We are pleased
with the completion of these transactions as they both represent
attractive growth opportunities that we expect will increase
earnings for shareholders and the enterprise value of KFN. We
have now deployed all of the capital we raised in the fourth
quarter of 2010 at expected attractive rates of return and
consistent with our strategy."
About KKR Financial Holdings LLC
KKR Financial Holdings LLC is a specialty finance company with
expertise in a range of asset classes. KFN's core business
strategy is to leverage the proprietary resources of its manager
with the objective of generating both current income and capital
appreciation. KFN is externally managed by KKR Financial
Advisors LLC, a wholly-owned subsidiary of KKR Asset Management
LLC, which is a wholly-owned subsidiary of Kohlberg Kravis Roberts
& Co. L.P. KFN executes its core business strategy through its
majority-owned subsidiaries. Additional information regarding
KFN is available at http://www.kkr.com.
Investor Relations Contact:
Angela Yang
Kohlberg Kravis Roberts & Co.
Tel: +1 (415) 315-6567
investor-relations@kkr.com
Media Relations Contacts:
Kristi Huller
Kohlberg Kravis Roberts & Co.
Tel: + 1 (212) 750-8300
media@kkr.com
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR"
PROVISIONS OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995
Certain information contained in this press release constitutes
"forward-looking" statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, that are based on
our current expectations, estimates and projections. Pursuant
to those sections, we may obtain a "safe harbor" for
forward-looking statements by identifying and accompanying those
statements with cautionary statements, which identify factors that
could cause actual results to differ from those expressed in the
forward-looking statements. Statements that are not
historical facts, including statements about our beliefs and
expectations, are forward-looking statements, which include, among
others, statements regarding future expected returns of invested
capital. The words "believe," "anticipate," "intend," "aim,"
"expect," "strive," "plan," "estimate," and "project," and similar
words identify forward-looking statements. Such statements
are not guarantees of future performance, events or results and
involve potential risks and uncertainties. Accordingly,
actual results and the timing of certain events could differ
materially from those addressed in forward-looking statements due
to a number of factors including, but not limited to, changes in
interest rates and market values, financing and capital
availability, changes in prepayment rates, general economic and
political conditions and events, changes in market conditions,
particularly in the global fixed income, credit and equity markets,
the impact of current, pending and future legislation, regulation
and legal actions, and other factors not presently identified.
Other factors that may impact our actual results are
discussed under "Risk Factors" in Item 1A of the Company’s
Annual Report on Form 10-K filed with the Securities Exchange
Commission on February 28, 2011.
We do not undertake, and specifically disclaim, any
obligation to publicly release the result of any revisions that may
be made to any forward-looking statements to reflect the occurrence
of anticipated or unanticipated events or circumstances after the
date of such statements, except for as required by federal
securities laws.
SOURCE KKR Financial Holdings LLC