SAN FRANCISCO, Dec. 21, 2012 /PRNewswire/ -- KKR Financial Holdings LLC (NYSE: KFN) (the "Company") today announced the closing of KKR Financial CLO 2012-1, Ltd. ("CLO 2012-1" or the "CLO"), a $412 million collateralized loan obligation. This transaction represents the Company's reentry into the broadly syndicated securitization market for the first time since 2007. Citigroup Global Markets Inc. acted as arranger, while KKR Capital Markets LLC acted as a placement agent.
Proceeds will be used to finance a portfolio of primarily senior secured leveraged loans. The CLO has a four-year reinvestment period and a two-year non-call period, with a final maturity of December 16, 2024. KKR Financial Advisors II, LLC, a wholly-owned subsidiary of KKR Asset Management LLC, will serve as collateral manager. KKR Asset Management LLC oversaw approximately $17 billion of predominantly credit investments as of September 30, 2012.
The Company will hold approximately 52% of the CLO's approximately $45 million of subordinated notes, with the remainder being held by unaffiliated third parties. Apart from the subordinated notes held by the Company, the notes issued by CLO 2012-1 are non-recourse to the Company.
"We are pleased to announce the closing of our first syndicated CLO transaction in over five years," said William C. Sonneborn, CEO of KFN and KKR Asset Management LLC. "This transaction reflects our view that CLOs are an increasingly attractive strategy for KFN in the current environment."
ABOUT KKR FINANCIAL HOLDINGS LLC
KKR Financial Holdings LLC (NYSE: KFN) 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 executes its core business strategy through its majority-owned subsidiaries. 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. Additional information regarding KKR Financial Holdings LLC is available at http://www.kkr.com.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995: This press release contains 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. These forward-looking statements are based on information available to the Company as of the date of this press release and actual results may differ. These forward-looking statements involve known and unknown risks, uncertainties and other factors beyond the Company's control. Any forward-looking statements speak only as of the date of this press release and the Company expressly disclaims any obligation to update or revise any of them to reflect actual results, any changes in expectations or any change in events. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. For additional information concerning risks, uncertainties and other factors that may cause actual results to differ from those anticipated in the forward-looking statements, and risks to the Company's business in general, please refer to the Company's SEC filings, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2011, filed with the SEC on February 28, 2012.
SOURCE KKR Financial Holdings LLC