Summary
KKR & Co. Inc. (KKR) announced the entry into a new 364-day revolving credit agreement on June 28, 2018, with Mizuho Bank, Ltd. This new facility provides up to $750 million in revolving borrowings, replacing a prior agreement that expired on June 28, 2018. The primary purpose of these borrowings is to facilitate the settlement of debt transactions syndicated by KKR's capital markets business. Importantly, the obligations under this new agreement are limited to the capital markets subsidiaries and are non-recourse to the broader KKR entity, mitigating direct financial risk to the parent company.
Key Highlights
- 1KKR secured a new $750 million, 364-day revolving credit facility.
- 2The new facility replaces a previous $750 million credit agreement that expired.
- 3Borrowings are exclusively for settling debt transactions within KKR's capital markets business.
- 4The credit facility ranks equally (pari passu) with an existing $500 million credit facility for KKR's capital markets business.
- 5Obligations are restricted to KKR's capital markets subsidiaries and are non-recourse to other KKR entities.
- 6Interest rates will vary based on loan type (Eurocurrency or ABR) and duration, with applicable margins and a 0.20% facility fee.
- 7The agreement includes standard covenants and a financial covenant regarding the borrowers' debt-to-equity ratio, with obligations secured by certain borrower assets.
Frequently Asked Questions
The new $750 million revolving credit facility is specifically designed to provide liquidity for KKR's capital markets business. Its primary purpose is to facilitate the settlement of debt transactions that are syndicated by KKR's capital markets division.
No, the obligations under this new credit agreement are limited solely to the capital markets subsidiaries that are borrowers. Crucially, these liabilities are non-recourse to other parts of KKR & Co. Inc., meaning the parent company is not directly liable for these borrowings.
This new $750 million, 364-day revolving credit facility ranks equally (pari passu) with an existing $500 million credit facility already in place for KKR's capital markets business. This indicates a consistent approach to financing its capital markets activities.
Borrowings will incur interest costs that depend on the type of loan drawn. For Eurocurrency loans, the rate is based on LIBOR plus an applicable margin (1.25% to 2.50%). For ABR loans, the rate is based on a base rate plus an applicable margin (0.25% to 1.50%). Additionally, a facility fee of 0.20% is payable on the entire facility amount.