KKR Financial prices $150 million offering for convertible senior notes due in 2017
By APTuesday, January 12, 2010
KKR Financial prices $150 million note offering
SAN FRANCISCO — KKR Financial Holdings LLC on Tuesday said it priced its offering of $150 million in convertible senior notes due in 2017 in an underwritten registered public offering.
Interest on the notes will be paid semiannually at a rate of 7.5 percent per year, and the notes will mature on Jan. 15, 2017, unless repurchased, redeemed or converted earlier.
The notes will be convertible into cash, common shares or a combination. The initial conversion rate will be 122.2046 common shares per $1,000 in principal, about $8.18 per share.
Gross proceeds from the offering are expected to be about $150 million, excluding any proceeds from the underwriters’ possible exercise of an overallotment option. San Francisco-based KKR Financial, which is operated by private equity fund Kohlberg Kravis Roberts & Co., has granted underwriters an option to buy up to $22.5 million of additional notes.
Net proceeds to the company, after expenses, are expected to be about $145.5 million.
KKR said it intends to use the money to repurchase or repay a portion of its existing senior debt, with the remaining proceeds to be used for general corporate purposes.
Citi, BofA Merrill Lynch and JPMorgan are acting as joint bookrunners for the offering, with KKR Capital Markets LLC acting as a co-manager.
Shares of KKR fell 30 cents, or about 4.5 percent, to $6.38.
