8-KMaterial AgreementsFinancial Events

KKR & Co. Inc. 8-K Report, Material Agreement (Mar 23, 2020)

Filed March 23, 2020For Securities:KKRKKRTKKR-PDKKRS

Summary

KKR & Co. Inc. (KKR) filed an 8-K on March 23, 2020, primarily to report the entry into a new material definitive agreement: a third amended and restated 5-year revolving credit agreement. This new agreement, dated March 20, 2020, replaces a prior agreement and provides KKR Capital Markets Holdings L.P. and its capital market subsidiaries with up to $500 million in revolving credit facilities, with a $500 million sublimit for letters of credit. The facility expires on March 25, 2025, and ranks equally with an existing $750 million 364-day revolving credit facility. The new credit agreement is specifically for KKR's capital markets business, and importantly, its liabilities are non-recourse to other parts of KKR's broader business. This structure is a key point for investors seeking to understand potential contagion risks. As of the agreement date, there were €75 million in borrowings and $55.1 million in outstanding letters of credit under this facility, which reduce the available borrowing capacity.

Key Highlights

  • 1KKR entered into a new 5-year revolving credit agreement worth up to $500 million, with a $500 million sublimit for letters of credit.
  • 2The new credit facility is set to expire on March 20, 2025.
  • 3This agreement replaces a previous 5-year revolving credit agreement that was terminated on March 20, 2020.
  • 4The new facility ranks pari passu (equally) with KKR's existing $750 million 364-day revolving credit facility for its capital markets business.
  • 5Borrowings under the new agreement are exclusively for KKR's capital markets business.
  • 6Liabilities under this new credit agreement are non-recourse to KKR's other business segments, limiting potential impact on the broader company.
  • 7As of March 20, 2020, there were €75 million in outstanding borrowings and $55.1 million in outstanding letters of credit under this facility.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the execution of a new material definitive agreement: a third amended and restated 5-year revolving credit agreement for KKR's capital markets business.

The new credit agreement provides for revolving borrowings of up to $500 million. It also includes a $500 million sublimit for letters of credit.

No, the obligations under this new credit agreement are limited to KKR Capital Markets Holdings L.P. and certain other capital market subsidiaries. Importantly, its liabilities are non-recourse to other parts of KKR's business, meaning KKR & Co. Inc. is not directly liable for these debts.

As of March 20, 2020, there were €75 million in outstanding borrowings and $55.1 million in outstanding letters of credit under this new credit agreement. These amounts reduce the available borrowing capacity.