Summary
KKR & Co. Inc. (KKR) announced the entry into a new 364-day revolving credit agreement valued at up to $750 million. This agreement, effective June 29, 2017, with Mizuho Bank, Ltd., is specifically designed to support KKR's capital markets business by facilitating the settlement of debt transactions it syndicates. Importantly, the obligations under this new facility are limited to KKR's capital markets subsidiaries and are non-recourse to the broader KKR entity, mitigating risk for the parent company and its other business segments.
Key Highlights
- 1KKR entered into a $750 million, 364-day revolving credit agreement on June 29, 2017.
- 2The credit facility is with Mizuho Bank, Ltd., acting as administrative agent.
- 3Funds from this agreement are exclusively for settling debt transactions syndicated by KKR's capital markets business.
- 4This new credit line ranks equally (pari passu) with an existing $500 million facility for the capital markets business.
- 5Borrowings are limited to KKR's capital markets subsidiaries and are non-recourse to the wider KKR organization.
- 6Interest rates vary based on loan type (Eurocurrency or ABR) and include applicable margins and a 0.20% facility fee.
- 7The agreement includes standard covenants and a financial covenant related to a maximum debt-to-equity ratio for the borrowers.
Frequently Asked Questions
The primary purpose is to provide KKR's capital markets business with up to $750 million to facilitate the settlement of debt transactions that KKR syndicates. It is a working capital tool specifically for this segment of KKR's operations.
No, the obligations under this agreement are limited to specific capital markets subsidiaries of KKR. Liabilities are non-recourse to the broader KKR entity, meaning the parent company is not directly responsible for repayment if the borrowers default. This structure isolates the risk to the capital markets business.
Interest rates depend on the type of borrowing. Eurocurrency loans will be based on LIBOR plus an applicable margin (1.25%-2.50%). ABR loans will be based on a base rate plus an applicable margin (0.25%-1.50%). Additionally, a facility fee of 0.20% is payable on the entire facility amount.
This $750 million agreement runs for 364 days and ranks equally (pari passu) with an existing $500 million credit facility already in place for KKR's capital markets business. It is a complementary facility rather than a replacement.