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KKR & Co. Inc. (NYSE: KKR), a leading global investment firm, announced on May 28, 2025, the successful completion of a $590 million aggregate principal offering of 6.875% subordinated notes due in 2065. This debt issuance represents a strategic financial move, with significant implications on KKR’s capital structure and long-term financing costs.
KKR issued these unsecured, subordinated notes with an annual coupon rate of 6.875%. The notes will mature on June 1, 2065, unless redeemed earlier. Interest payments are scheduled quarterly, commencing September 1, 2025. Additionally, the notes are fully guaranteed by KKR Group Partnership L.P., a subsidiary of the issuer, ensuring robustness and credit enhancement.
This issuance includes a partial exercise of the underwriters’ 30-day option to purchase an additional $40 million principal amount, highlighting strong market demand and investor confidence. The notes carry covenants restricting the issuer and the guarantor from incurring secured indebtedness on subsidiary stock and from major structural changes without consent.
As of the most recent fiscal quarter ending September 30, 2024, KKR reported total liabilities of approximately \(289.94 billion and total shareholder equity of about \)21.67 billion. The addition of $590 million in subordinated notes will increase liabilities marginally by around 0.2%, representing a well-managed increase in leverage aligned with KKR’s capital strategy.
Given the coupon rate, KKR will face annual interest expenses of approximately $40.56 million attributable to this issuance, impacting future income statements by increasing financing costs. However, the long maturity profile until 2065 affords KKR flexibility in cash flow management and capital allocation.
KKR’s earnings calls preceding this event reflected a focus on maintaining robust capital markets access and judicious capital deployment amidst economic uncertainty and regulatory scrutiny. The issuance aligns with management’s strategic priorities to optimize capital structure while preserving liquidity and funding growth opportunities.
This financing will bolster KKR’s financial flexibility and support its long-term investment horizons. Monitoring will be essential regarding the company’s debt servicing capacity in the context of interest rate fluctuations and macroeconomic factors including government efficiency measures and tariff impacts.
KKR’s new subordinated notes offering underscores its proactive approach to long-term capital management and financial strategy enhancement. The issuance of these notes on favorable terms with robust guarantees signals investor confidence in KKR’s business model and governance.
For full details on the offering, see the official SEC filing here: KKR 8-K Report May 28, 2025.
Tags: KKR, KKRCoInc, Q3_2024, subordinated_notes, capital_structure, financial_strategy