01—Abstract
Summary
Summary of the 8-K filed July 10, 2024. Cited figures are marked; the original filing is the authoritative source.
KKR & Co. Inc. (KKR) has filed an 8-K report detailing the execution of a Third Amended and Restated Credit Agreement on July 3, 2024.
This agreement effectively restates and amends a prior credit facility, establishing a senior unsecured multicurrency revolving credit facility with an initial aggregate principal amount of $2.75 billiona. The facility includes an option to increase the amount by an additional $750 million, bringing the total potential borrowing capacity to $3.50 billion, subject to lender commitments. The credit facility is set for a five-year term, maturing on July 3, 2029, with a possibility for extension and the ability for KKR to prepay, terminate, or reduce commitments without penalty.
This facility is crucial for KKR's ongoing corporate finance activities, providing flexibility for general corporate purposes in various currencies. The agreement incorporates key financial covenants, including a maximum leverage ratio of not greater than 4.0x covenant EBITDA (with specific exclusions for certain subsidiaries like KKR Financial Holdings LLC and Global Atlantic) and a minimum of $150 billionb in fee-paying assets under management.
These covenants, along with other customary provisions, ensure financial discipline and provide assurance to lenders. The credit facility is guaranteed by KKR & Co. Inc. and other entities that guarantee specified senior notes, strengthening the overall creditworthiness of the facility.
02—Key points
Key Highlights
- KKR entered into a Third Amended and Restated Credit Agreement on July 3, 2024.
- The agreement establishes a senior unsecured multicurrency revolving credit facility with an initial capacity of $2.75 billion.
- The facility has an accordion feature allowing for an increase of up to an additional $750 million, potentially reaching $3.50 billion.
- The credit facility matures on July 3, 2029, and is a five-year term, with an option for extension.
- Borrowings are available for general corporate purposes and can be made in U.S. dollars and other currencies.
- Key financial covenants include a maximum leverage ratio of 4.0x covenant EBITDA (with specific exclusions) and a minimum of $150 billion in fee-paying assets under management.
- The facility is guaranteed by KKR & Co. Inc. and other related entities, and KKR has the flexibility to prepay or reduce commitments without penalty.
03—Questions
Frequently Asked Questions
What is the primary purpose of this new credit agreement?
The Third Amended and Restated Credit Agreement serves to amend and restate KKR's existing credit facility, providing a senior unsecured multicurrency revolving credit facility for general corporate purposes. This offers financial flexibility for ongoing operations and strategic initiatives.
What is the total potential borrowing capacity under this facility?
The facility has an initial aggregate principal amount of $2.75 billion. It also includes an option to request an increase of up to an additional $750 million, bringing the total potential borrowing capacity to $3.50 billion, subject to securing additional lender commitments.
What are the key financial covenants KKR must adhere to?
KKR must maintain a maximum leverage ratio of not greater than 4.0x covenant EBITDA (excluding certain specified indebtedness of KKR Financial Holdings LLC and Global Atlantic Financial Group) and at least $150 billion in fee-paying assets under management. These covenants are designed to ensure financial stability and performance.
When does this credit facility mature, and are there any prepayment penalties?
The corporate credit facility is scheduled to mature on July 3, 2029, making it a five-year facility. KKR has the option to prepay, terminate, or reduce the commitments under this facility at any time without incurring any penalties.
04—Continue