8-KMaterial AgreementsFinancial EventsOther Events+1

KKR & Co. Inc. 8-K Report, Material Agreement (May 28, 2025)

Filed May 28, 2025For Securities:KKRKKRTKKR-PDKKRS

Summary

KKR & Co. Inc. (KKR) has announced the successful completion of a $590 million offering of 6.875% Subordinated Notes due 2065. This offering, which included an over-allotment option exercise, strengthens KKR's capital structure by issuing long-term debt with a fixed interest rate. The notes are guaranteed by KKR Group Partnership L.P. and are unsecured and subordinated obligations of the Issuer, meaning they rank below senior debt in the event of liquidation. Investors should note the long maturity profile of these notes, extending to 2065, and the fixed 6.875% coupon rate, providing a predictable income stream. The indenture governing these notes includes standard covenants that limit the ability of KKR and its subsidiaries to incur additional secured indebtedness or engage in significant asset sales or mergers, which are designed to protect noteholders. The notes are redeemable at KKR's option beginning in June 2030, with specific provisions for redemption in the event of a tax event or rating agency event.

Key Highlights

  • 1KKR successfully issued $590 million in aggregate principal amount of 6.875% Subordinated Notes due 2065.
  • 2The offering included the full exercise of the underwriters' option to purchase an additional $40 million in principal amount of notes.
  • 3The notes are guaranteed by KKR Group Partnership L.P., a subsidiary of KKR.
  • 4These notes represent unsecured and subordinated debt of KKR.
  • 5Interest will be paid quarterly at a fixed rate of 6.875% per annum.
  • 6The notes have a maturity date of June 1, 2065, and KKR has the option to redeem them starting June 1, 2030.
  • 7The indenture includes covenants related to incurring secured debt and significant corporate transactions.

Frequently Asked Questions

This debt issuance is a capital markets transaction aimed at raising funds and potentially optimizing KKR's capital structure. Issuing subordinated notes allows KKR to access long-term financing at a fixed rate, which can be used for general corporate purposes, investments, or to manage its overall debt profile.

As subordinated notes, they rank below senior debt in the capital structure. This means that in the event of bankruptcy or liquidation, holders of these notes would be paid only after all senior creditors have been satisfied. However, the fixed 6.875% interest rate offers a predictable return, and the guarantee from KKR Group Partnership L.P. provides some additional credit support.

KKR has the option to redeem the notes in whole or in part on or after June 1, 2030, at par plus accrued interest. Additionally, there are provisions for redemption under specific circumstances, such as a 'tax redemption event' or a 'rating agency event', with different redemption prices and conditions.

The covenants in the indenture are designed to protect noteholders. They place restrictions on KKR and its Guarantor regarding their ability to incur certain types of additional debt (specifically, secured debt on voting stock or profit participating equity interests of subsidiaries) and to undergo significant corporate changes like mergers or sales of substantially all assets. These limitations aim to maintain the creditworthiness of the issuer.