SAN FRANCISCO, June 25, 2013 /PRNewswire/ -- KKR Financial Holdings LLC (NYSE: KFN) (the "Company") today announced the closing of KKR Financial CLO 2013-1, Ltd. ("CLO 2013-1" or the "CLO"), a $519 million collateralized loan obligation transaction. Citigroup Global Markets Inc. acted as lead initial purchaser and placement agent, KKR Capital Markets LLC acted as an initial purchaser and placement agent and Natixis Securities Americas 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 July 15, 2025. 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 $19 billion of predominantly credit investments as of March 31, 2013.
The Company will hold the entirety of the CLO's approximately $61 million of subordinated notes. Apart from these subordinated notes held by the Company, the notes issued by CLO 2013-1 are non-recourse to the Company.
"This transaction exemplifies our patient perspective on capital deployment. By waiting to issue a CLO until the onset of recent credit market volatility, we've been able to capitalize on more attractive asset levels as we ramp the portfolio, a process which is 83% complete," said William C. Sonneborn, CEO of KFN and KKR Asset Management LLC. "It also demonstrates our capabilities in creative structuring. We believe this is the first U.S. CLO issuance designed to address the latest iteration of the European Union's risk retention rules."
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 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 KFN is available at http://www.kkr.com.
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SOURCE KKR Financial Holdings LLC