Business Context and Reporting Period
This Form 8-K filing by KKR & Co. Inc. covers events occurring on April 10, 2020, with the report dated April 16, 2020. The filing addresses a refinancing of a credit facility for the company's capital markets subsidiaries and the scheduling of the 2020 Annual Meeting of Stockholders.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, margin, or consolidated debt figures. It specifically details a new financing arrangement:
- New Credit Facility: A 364-day revolving credit agreement of up to $750 million.
- Interest Rates: LIBOR plus 1.50% to 2.75% for Eurocurrency loans; Prime rate plus 0.50% to 1.75% for ABR loans.
- Existing Facility: The new agreement ranks pari passu with an existing $500 million revolving credit facility.
- Use of Proceeds: Limited to facilitating the settlement of debt transactions syndicated by KKR's capital markets business.
- Liability Structure: Obligations are non-recourse to other parts of KKR and secured by assets of the Borrowers.
Material Changes
On April 10, 2020, KKR Capital Markets Holdings L.P. and certain subsidiaries terminated their prior 364-day revolving credit agreement dated June 27, 2019. This was immediately replaced by a new agreement with a later maturity date of April 9, 2021, increasing the available revolving borrowings to $750 million.
Outlook, Risks, and Unusual Items
Annual Meeting: Due to public health concerns regarding COVID-19, the 2020 Annual Meeting of Stockholders scheduled for April 22, 2020, will be held in a virtual format only. No matters will be voted on, and no business updates will be provided during the meeting; updates are expected during the upcoming quarterly earnings call.
Covenants: The new credit agreement includes a financial covenant requiring a maximum debt-to-equity ratio for the Borrowers.
Investor Verification Checklist
- Verify the specific terms of the $750 million revolving credit facility and the associated debt-to-equity covenant.
- Confirm the status of the terminated June 27, 2019, credit agreement.
- Monitor the upcoming quarterly earnings call for business updates, as none will be provided at the virtual Annual Meeting.
- Review the non-recourse nature of the liabilities to understand the isolation of risk to the capital markets subsidiaries.