Business Context and Reporting Period
This Form 8-K filing by KKR & Co. L.P. reports a material definitive agreement entered into on June 29, 2017. The filing concerns KKR Capital Markets Holdings L.P. and certain other capital market subsidiaries (the "Borrowers").
Key Financial Metrics and Agreement Details
- Facility Type: 364-day revolving credit agreement.
- Capacity: Up to $750 million.
- Expiration: June 28, 2018.
- Administrative Agent: Mizuho Bank, Ltd.
- Interest Rates:
- Eurocurrency loans: LIBOR plus 1.25% to 2.50%.
- ABR loans: Base rate plus 0.25% to 1.50%.
- Facility Fee: 0.20% on the entire facility amount.
- Collateral: Secured by certain assets, including a pledge of equity interests of certain subsidiaries.
- Recourse: Liabilities are non-recourse to other parts of KKR; obligations are limited to the Borrowers.
Material Changes and Usage
The agreement ranks pari passu with an existing $500 million credit facility provided by Mizuho Bank for KKR's capital markets business. Borrowings under this new agreement are restricted to facilitating the settlement of debt transactions syndicated by KKR's capital markets business. The filing does not provide specific revenue, profit, cash flow, or margin data as this is a current report regarding a specific financing event rather than a periodic financial statement.
Guidance, Risks, and Covenants
The agreement includes customary representations, warranties, events of default, and affirmative and negative covenants. A specific financial covenant requires the Borrowers to maintain a maximum debt-to-equity ratio. The filing does not contain forward-looking guidance, management commentary on general outlook, or discussion of unusual items beyond the terms of this specific credit facility.
Investor Verification Checklist
- Verify the utilization status of the new $750 million facility versus the existing $500 million facility.
- Confirm the current debt-to-equity ratio of the Borrowers to ensure compliance with the new financial covenant.
- Review the specific assets pledged as collateral for the agreement.
- Monitor the interest rate environment (LIBOR and Base Rate) to assess potential borrowing costs.