Summary
KKR & Co. Inc. (KKR) filed an 8-K on June 20, 2016, reporting on the issuance of 6,200,000 Series B Preferred Units by KKR & Co. L.P. This issuance involved a public offering and required amendments to the Partnership's Amended and Restated Limited Partnership Agreement to define the rights and preferences of these new preferred units. Concurrently, the limited partnership agreements of subsidiary KKR Group Partnerships were also amended to align with the economic terms of the Series B Preferred Units. The Series B Preferred Units carry a fixed 6.50% annual distribution rate, payable quarterly. These distributions are non-cumulative. A key feature is a restriction on the Partnership's ability to declare or pay distributions on, or repurchase, Junior Units if quarterly distributions on the Series B Preferred Units have not been paid or set aside. The Partnership has the option to redeem the Series B Preferred Units on or after September 15, 2021, at $25.00 per unit, plus accrued but unpaid distributions. A Change of Control event prior to September 15, 2021, triggers a higher redemption price of $25.25 per unit and specific redemption timelines.
Key Highlights
- 1KKR issued 6,200,000 Series B Preferred Units via a public offering.
- 2The Series B Preferred Units have a fixed annual distribution rate of 6.50%, paid quarterly.
- 3Distributions on Series B Preferred Units are non-cumulative.
- 4Partnership agreement amendments were made to establish rights for Series B Preferred Units and align subsidiary KKR Group Partnerships.
- 5Restrictions are placed on distributions and repurchases of Junior Units if Series B Preferred Unit distributions are not met.
- 6KKR has an option to redeem Series B Preferred Units starting September 15, 2021, at $25.00 per unit.
- 7A Change of Control event before September 15, 2021, allows redemption at $25.25 per unit and may trigger an increased distribution rate if not redeemed.