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Asset Manager KKR to Sell New Baby Bonds

KKR & Co has announced they will be selling a new issue of $25 baby bonds.

The issue will have a maturity date way out in 2065 with early redemption available in 2030.

The company will have the right to defer interest payments for up to 5 years consecutive years without a default being declared.

The preliminary prospectus can be read here.

Thanks to Vito for catching this one. Also Jerrymac chimed in with yield talk in the 7-7.125% area.

21 thoughts on “Asset Manager KKR to Sell New Baby Bonds”

  2. AND there is KREF A or kkr real estate 6.50% trading at 19.70 and a 8.30 current yield. When kkr reps asked about it ,,,,….they shrug their shoulders!

    With IG and kkr name there will be a lot of interest!!

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  3. Tim, new preferred coming up by First Busey Corporation-8.25% coupon
    Will be listed under symbol”BUSEP” as per ER dated May 14-25

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      1. Mbg, Fidelity has already changed it to BUSEP in my account. I only took a small position, Quantum shows they did a reverse stock split in 2015. A lot of banks had problems in the Great Financial Crisis but 2015 was late in the game to be taking this kind of action.

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        2. It appears the reverse stock split was not due to being a penny stock but more to get them inline with other banks their size. I am eyeballing thus but at the time I think their share price was most like 6ish a share.

          ” We believe that the Reverse Stock Split, if implemented, will allow our stockholders, potential investors and our other stakeholders to more easily understand our financial results and compare them to other financial institutions, particularly with regard to earnings per share and other share-based capital metrics, as the number of our shares will more closely conform to those of peer organizations. We also believe that the Reverse Stock Split will make our common stock more attractive to a broader range of institutional and other investors, as we believe that the current market price of our common stock may affect its acceptability to certain institutional investors, professional investors and other members of the investing public. Many brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers”

          https://www.sec.gov/Archives/edgar/data/314489/000104746915003648/a2224197zdef14a.htm#5

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        1. af, Anything would be guessing or conjecture without being part of the group doing the offering.
          What I do notice is the underwriters and book runners are decent names. You have Piper Sandler, Morgan Stanley, Montgomery Scott etc.
          This is better than some new issues brought to market and associated with Riley etc.
          My 2 cents is they didn’t have enough clients that would be willing to commit to buying and they didn’t want to be holding excess shares or discounting to move them.

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        2. af,

          Don’t they have 30 days to decide if they want the over-allotment? When does the timer start on that? Maybe they will grab the next chunk of shares if they see the price go up?

          Could be many reasons I suppose. Maybe they needed the cash for other things like a big new issue coming up?

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  4. KKRS – current issue trades somewhere in 6.8-6.9 ytm range right now i think

    but low coupon, way under par – so lots of upside if rates really plummet

    I own some of this as it hit some stink bids I had a month ago

    Reply

    1. Z –

      “KKRS – current issue trades somewhere in 6.8-6.9 ytm range right now i think”

      Somewhat startling that KKR was able to issue $500M of a 4.625% subordinated note at that low rate in March 2021 with a maturity date 40 years out. But those were the tail end of the ZIRP days that were re-energized by COVID. KKRS actually traded near $27/share in September of 2021. My goodness.

      I pray we never go back to those ZIRP days. For any retiree depending on portfolio income, they likely caused more than a few sleepless nights.

      But I would forget about quoting YTM on that 4.625% security with a maturity date of 4/1/61.

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      1. to each their own YTM is the metric relevant to me as it is to every institutional investor on the street… Retail loves current yield though, so much they often bid stuff into almost no / very low YTM situations by focusing on the current yield…

        in this case though the current yield and the YTM aren’t that much different as the pull to par is so slow in the long dated maturity… so the current yield is like 6.6

        Reply

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