Business Context and Reporting Period
This Form 8-K Current Report was filed by KKR & Co. L.P. on March 18, 2015. The filing reports the completion of a debt offering by KKR Group Finance Co. III LLC, an indirect subsidiary of the Partnership.
Key Financial Metrics
- Debt Issuance: $500,000,000 aggregate principal amount of 5.125% Senior Notes due 2044.
- Interest Rate: 5.125% per annum.
- Interest Payment Dates: Semiannually on June 1 and December 1, commencing June 1, 2015.
- Maturity Date: June 1, 2044.
- Guarantees: Fully and unconditionally guaranteed, jointly and severally, by the Partnership and its indirect subsidiaries (KKR Management Holdings L.P., KKR Fund Holdings L.P., and KKR International Holdings L.P.).
- Security Status: Unsecured and unsubordinated obligations.
- Existing Notes: These notes form a single series with $500 million of previously issued 5.125% Senior Notes due 2044.
Material Changes
The primary material change is the increase in outstanding debt obligations by $500 million. This issuance expands the existing series of 5.125% Senior Notes due 2044. The filing does not provide comparative financial metrics such as revenue, profit, or cash flow for the period.
Guidance, Outlook, and Risks
- Redemption: The Issuer may redeem the Notes in whole or in part prior to maturity at specified redemption prices.
- Change of Control: If a change of control repurchase event occurs, the Issuer must repurchase the Notes at 101% of the aggregate principal amount plus accrued interest.
- Covenants: The Indenture includes limitations on incurring indebtedness secured by liens on voting stock or profit participating equity interests of subsidiaries, as well as restrictions on mergers, consolidations, or asset sales.
- Events of Default: Includes bankruptcy, insolvency, receivership, or reorganization, which would cause the Notes to become immediately due and payable. Holders of at least 25% of the outstanding Notes may declare them due upon other events of default after a grace period.
Investor Verification Checklist
- Verify the total outstanding principal of the 5.125% Senior Notes due 2044 (now $1 billion combined).
- Review the full text of the Base Indenture and Supplemental Indentures (Exhibits 4.1, 4.2, and 4.3) for specific covenant exceptions.
- Confirm the impact of the new debt issuance on the company's overall leverage ratios and liquidity position.
- Monitor the company's ability to meet semiannual interest payments starting June 1, 2015.