What is the main purpose of this 8-K filing?

This 8-K filing announces the completion of KKR's public offering of its 6.00% Series C Mandatory Convertible Preferred Stock, detailing the terms of this new financial instrument and the associated capital raising.

When will the Mandatory Convertible Preferred Stock convert into common stock?

The Mandatory Convertible Preferred Stock is expected to automatically convert into shares of KKR's Common Stock on September 15, 2023. The exact number of shares will be determined based on the average volume-weighted average price of KKR's common stock over a 20-day trading period prior to the conversion date.

What are the implications of this preferred stock issuance for existing common stockholders?

Existing common stockholders should be aware of potential dilution when the preferred stock converts into common stock. Additionally, the terms of the preferred stock include provisions that restrict KKR's ability to pay dividends on or repurchase its common stock if it fails to pay dividends on the preferred stock, which could impact the common stock's liquidity and dividend distribution.

What is the significance of the redemption right mentioned in the filing?

KKR has the right to redeem the Mandatory Convertible Preferred Stock if its previously announced acquisition of Global Atlantic Financial Group Limited does not close by a certain date (May 7, 2021, with potential extensions) or if the merger agreement is terminated. This indicates a potential contingency related to a significant strategic transaction.

KKR 8-K: Material Agreements, Shareholder Matters & More

Summary

KKR & Co. Inc. (KKR) filed an 8-K report on August 13, 2020, detailing the successful completion of an underwritten public offering of 23,000,000 shares of its 6.00% Series C Mandatory Convertible Preferred Stock. This offering raised approximately $1.15 billion in aggregate liquidation preference (net proceeds of $1,115.9 million after fees and expenses). The issuance of this preferred stock involved filing a Certificate of Designations to establish its specific rights and terms, and an amendment to the KKR Group Partnership L.P. agreement to mirror these economic terms at the partnership level. The Mandatory Convertible Preferred Stock carries a 6.00% annual dividend, payable quarterly, and is designed to convert into KKR common stock between September 15, 2023, and the subsequent 20-day VWAP period. The conversion ratio is expected to be between 1.1662 and 1.4285 shares of common stock per preferred share. This issuance is a material event that impacts the company's capital structure and will have implications for common stockholders, particularly regarding dividend payments and potential dilution upon conversion. The company also highlighted a redemption right tied to the closing of its acquisition of Global Atlantic Financial Group Limited.

Key Highlights

1Completed a public offering of 23,000,000 shares of 6.00% Series C Mandatory Convertible Preferred Stock.
2Raised approximately $1.15 billion in aggregate liquidation preference, with net proceeds of $1,115.9 million.
3The preferred stock is set to automatically convert into KKR common stock on or around September 15, 2023.
4The conversion ratio is expected to be between 1.1662 and 1.4285 shares of common stock per preferred share, subject to VWAP and anti-dilution adjustments.
5Dividends on the preferred stock will be at an annual rate of 6.00%, payable quarterly.
6Restrictions are in place that prevent dividends or share repurchases on common stock if preferred dividends are not met.
7KKR has a redemption right for the preferred stock if the acquisition of Global Atlantic Financial Group Limited does not close by a specified date or is terminated.

KKR & Co. Inc. 8-K Report, Material Agreement (Aug 14, 2020)

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Key Highlights

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