KKR Financial Holdings LLC Announces Settlement Method for 7.50% Convertible Senior Notes Due 2017 Converted January 22 or 23, 2013
by PR Newswire
SAN FRANCISCO, Jan. 24, 2013 /PRNewswire/ -- KKR Financial Holdings LLC (NYSE: KFN) ("KFN" or the "Company") has announced that holders of its 7.50% convertible senior notes due 2017 (the "Notes") who submitted their Notes for conversion as of January 22 or 23, 2013 will be satisfied by physical settlement. These conversions comprise $135,972,000 of the $172,500,000 principal amount of Notes outstanding, or approximately 79%.
Holders who submitted their Notes for conversion as of January 22 or 23, 2013 will receive common shares in the Company, no par value ("Shares"), in an amount equal to the conversion rate of 141.8256 Shares for each $1,000 principal amount of Notes (the "Conversion Rate") plus an additional 9.2324 Shares per $1,000 principal amount to account for the make-whole premium as calculated in Section 8.13 of the indenture relating to the Notes (the "Indenture"). In total, such holders shall receive 151.0580 Shares per $1,000 principal amount. In accordance with Section 8.12 of the Indenture, Shares will be delivered to beneficial holders who submitted a conversion notice as of January 22, 2013 on January 25, 2013 and Shares will be delivered to holders who submitted a conversion notice as of January 23, 2013 on January 28, 2013.
As set forth in the Termination Notice issued on January 18, 2013, the Notes will no longer be convertible into Shares as of February 17, 2013 (the "Conversion Rights Termination Date"). Holders may exercise their conversion rights at any time on or prior to February 15, 2013 in accordance with the terms and instructions set forth in Section 8.02 of the Indenture. Beneficial holders of Notes not yet tendered for conversion may exercise their conversion rights pursuant to the Depository Trust Company's book-entry conversion program.
The Company will notify holders tendering Notes for conversion of the settlement method elected in respect to their Notes within two business days (as defined in the Indenture) of the date on which such holders deliver a conversion notice to the Company. In accordance with the terms of the Indenture, the Company may deliver cash, Shares, or a combination thereof in an amount equal to the Conversion Rate plus the make-whole premium, calculated in accordance with Sections 8.12 and 8.13 of the Indenture. At this time the Company expects to meet future conversion obligations with respect to the Notes by physical settlement; however, the Company retains the right to elect an alternative settlement method with respect to any date on which a conversion notice is received based on market conditions.
The Indenture was filed as Exhibits 4.1 and 4.2 to the Company's Current Report on Form 8-K filed with the SEC on January 15, 2010 and is available on the SEC's website at http://www.sec.gov.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any Notes or Shares, nor may there be any sale of Notes or Shares in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About KKR Financial Holdings LLC
KKR Financial Holdings LLC is a specialty finance company with expertise in a range of asset classes. KFN's core business strategy is to leverage the proprietary resources of its manager with the objective of generating both current income and capital appreciation. KFN executes its core business strategy through its majority-owned subsidiaries. KFN is externally managed by KKR Financial Advisors LLC, a wholly-owned subsidiary of KKR Asset Management LLC, which is a wholly-owned subsidiary of Kohlberg Kravis Roberts & Co. L.P. Additional information regarding KFN is available at http://www.kkr.com.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on information available to the Company as of the date of this press release and actual results may differ. These forward-looking statements involve known and unknown risks, uncertainties and other factors beyond the Company's control. Any forward-looking statements speak only as of the date of this press release and the Company expressly disclaims any obligation to update or revise any of them to reflect actual results, any changes in expectations or any change in events. If the Company does update one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements. For additional information concerning risks, uncertainties and other factors that may cause actual results to differ from those anticipated in the forward-looking statements, and risks to the Company's business in general, please refer to the Company's SEC filings, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2011, filed with the SEC on February 28, 2012 and the risks described in Exhibit 99.2 to its Current Report on Form 8-K filed on January 11, 2013.
Investor Relations Contact:
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SOURCE KKR Financial Holdings LLC