KKR Financial Holdings has closed its $412 million CLO called KKR Financial CLO 2012-1, the company said a press release issued Dec. 21.
The firm said that this represents its first forray into the broadly syndicated securitization market since 2007.
Citigroup Global Markets was the arranger and KKR Capital Markets was the placement agent. Standard & Poor’s and Moody’s Investors Service rated the transaction.
KKR Financial Advisors II, a wholly-owned unit of KKR Asset Management, will be the collateral manager on the offering.
KKR Financial Holdings will be holding on to about 52% of the CLO’s roughly $45 million subordinated notes with the rest to be held by unaffiliated third parties. Aside from the subordinated notes held by the firm, the notes issued by the CLO are non-recourse to KKR Financial Holdings.
The deal has a four-year reinvestment period and a two-year non-call period with a final maturity of December 16, 2024.
Proceeds will be used to fund a portfolio of mostly senior secured leveraged loans, the firm said.
According to a note from S&P on Dec 20, the new-issue CLO calendar has been winding down with $6.5 billion pricing in December. The Black Diamond 2012-1 deal worth $415 million and the Venture XII transaction from MJX Asset Management worth $750 million both priced last week. These offerings brought year-to-date issuance to $52.7 billion, S&P reported.
KKR Financial Holdings is a specialty finance firm with expertise in various asset classes. Its core business strategy is to leverage the proprietary resources of its manager to generate both current income and capital appreciation. Meanwhile, KKR Asset Management manages roughly $17 billion of mostly credit investments as of Sept. 20, 2012, the company said.