Summary
KKR & Co. Inc. (KKR) has filed an 8-K report detailing a material definitive agreement related to its capital markets business. Specifically, KKR Capital Markets Holdings L.P. and certain subsidiaries have entered into a new 364-day revolving credit agreement, replacing a prior agreement with Mizuho Bank, Ltd. This new facility provides up to $750 million in revolving borrowings and matures on April 9, 2021. The funds are intended to facilitate the settlement of debt transactions syndicated by KKR's capital markets business, and importantly, liabilities under this agreement are non-recourse to other parts of KKR.
Key Highlights
- 1KKR's capital markets subsidiaries entered into a new 364-day revolving credit agreement with Mizuho Bank, Ltd., effective April 10, 2020.
- 2The new facility has a maximum borrowing capacity of $750 million and matures on April 9, 2021.
- 3This agreement replaces a prior 364-day revolving credit agreement dated June 27, 2019.
- 4Borrowings under the new agreement are specifically for settling debt transactions syndicated by KKR's capital markets business.
- 5Obligations and liabilities under the new credit facility are limited to the participating subsidiaries and are non-recourse to the broader KKR entity.
- 6The agreement includes customary covenants and a financial covenant requiring the Borrowers to maintain a maximum debt-to-equity ratio.
- 7KKR also announced that its 2020 Annual Meeting of Stockholders will be held virtually on April 22, 2020, with no business to be voted upon or any business updates planned.
Frequently Asked Questions
The new 364-day revolving credit agreement, with a capacity of $750 million, is designed to provide KKR's capital markets subsidiaries with liquidity to facilitate the settlement of debt transactions that they syndicate.
No, the filing explicitly states that obligations and liabilities under this agreement are limited to the specific capital markets subsidiaries (the Borrowers) and are non-recourse to other parts of KKR & Co. Inc. This means KKR's broader assets are not directly encumbered by this facility.
The interest rate on borrowings will vary based on the type of drawdown. For Eurocurrency loans, it's based on LIBOR plus an applicable margin (initially 1.50% to 2.75%). For ABR Loans, it's based on the prime rate plus an applicable margin (initially 0.50% to 1.75%). The agreement also includes customary covenants and a financial covenant related to a maximum debt-to-equity ratio for the Borrowers.
This 8-K primarily reports on a routine refinancing of a credit facility for KKR's capital markets business and the logistics for the upcoming virtual stockholder meeting. No significant strategic changes or new business initiatives are disclosed beyond the details of the credit agreement.