Business Context and Reporting Period
This Form 8-K Current Report, dated May 25, 2023, details a material definitive agreement and the creation of a direct financial obligation by KKR & Co. Inc. (the "Corporation"). The report focuses on the completion of a multi-tranche senior notes offering by KKR Group Finance Co. XI LLC, an indirect subsidiary of the Corporation.
Key Financial Metrics and Debt Issuance
The Corporation completed the offering of Yen-denominated Senior Notes with an aggregate principal amount of ¥61,500,000,000. The specific tranches issued are as follows:
- 2028 Notes: ¥44,700,000,000 at 1.428% interest.
- 2030 Notes: ¥1,800,000,000 at 1.614% interest.
- 2033 Notes: ¥1,500,000,000 at 1.939% interest.
- 2038 Notes: ¥3,000,000,000 at 2.312% interest.
- 2043 Notes: ¥4,500,000,000 at 2.574% interest.
- 2053 Notes: ¥6,000,000,000 at 2.747% interest.
The Notes are unsecured and unsubordinated obligations of the Issuer, fully and unconditionally guaranteed by the Corporation and KKR Group Partnership L.P. Interest is payable semi-annually in arrears, commencing November 25, 2023. The filing does not provide specific revenue, profit, cash flow, or liquidity metrics for the reporting period.
Material Changes and Use of Proceeds
The primary material change is the addition of ¥61.5 billion in long-term debt obligations. The Corporation intends to use the net proceeds from the sale of the Notes for general corporate purposes. The offering was priced on May 17, 2023, and completed on May 25, 2023.
Terms, Covenants, and Risks
The Indenture governing the Notes includes standard covenants limiting the Issuer's and Guarantors' ability to incur indebtedness secured by liens on voting stock or profit-participating equity interests of subsidiaries, as well as restrictions on mergers or asset sales. Key terms include:
- Redemption: The Issuer may redeem the Notes at 100% of principal plus accrued interest in the event of certain tax changes.
- Change of Control: If a change of control repurchase event occurs, the Issuer must repurchase the Notes at 101% of principal plus accrued interest.
- Events of Default: Includes bankruptcy, insolvency, or failure to pay principal or interest. Upon default, holders of at least 25% of the aggregate principal amount may declare the Notes immediately due and payable.
- Regulatory Status: The Notes were offered pursuant to Rule 144A and Regulation S and have not been registered under the Securities Act of 1933.
Investor Verification Checklist
- Verify the exchange rate impact of the Yen-denominated debt on the Corporation's consolidated balance sheet.
- Review the "general corporate purposes" allocation of proceeds in subsequent filings to determine if funds were used for debt refinancing or new investments.
- Confirm the status of the Guarantors (Corporation and KKR Group Partnership L.P.) to ensure the full and unconditional guarantee remains in effect.
- Monitor compliance with the Indenture covenants regarding liens on subsidiary equity and asset sales.
- Check for any subsequent press releases or filings regarding the pricing of the Notes on May 17, 2023, referenced in Exhibit 99.1.