KKR Group Finance (untraded) has announced that they will be selling a new issue of subordinated notes with a maturity date in 2061.
KKR Group Finance is an indirect finance division of KKR & Co (KKR).
KKR intends to use the proceeds to redeem some or all of the KKR-A 6.75% and KKR-B 6.50% preferred stock issues which are outstanding–neither issue is yet redeemable, but will be in the coming months.
Given the strong credit rating of KKR we can expect a low coupon on the new issue.
The preliminary prospectus can be found here.
J was on this early in the Reader Initiated Alerts section.
As and when the temp symbol comes out, hope somebody can post it here on this thread
4.625% official. No temp symbol. If desperate to buy call the bond desk.
Equivalent to a 4% perpetual preferred more or less.
Not sure if I will buy this issue. If rates climb later this year or in the next couple years, this one will suffer accordingly.
However, if one can get it under par, it can be a source of stable though low income stream.
Inspy – You’re confusing me…. if you buy this at 25.10 and “rates climb later this year or in the next couple of years, this one will suffer accordingly.” But, if you buy it at 24.75 you’re going to be miraculously saved from the effects of rising rates and you’ll have a “source of a stable though low income stream?” The low coupon characteristics on this one that cause it to have greater sensitivity to rising rates isn’t going to change much in the near future just because it’s bot at a slight discount to par are they? Am I misinterpreting what you’re saying? Either way, this is a 40 year bond with a low coupon…. That maturity does make it more protected from rising rates than a perpetual, but still 40 years is 40 years…that’s a long long time when it comes to bond math..
2WR, you are correct in that I would still suffer the effects of a perpetual preferred should rates rise and stay at elevated levels. And you are also correct that 40 years can be a long, long time ( there is zero chance both me & the wife will be around in 40 years ).
That is one reason why I have not decided if I should buy or not. As others have said, there are many better alternatives out there.
Gosh, to top it all off, Inspy, you’re a pessimist to boot… In 40 years I’ll be 115. I know I’ll still be around and my wife will still be keeping QVC alive too…….lol
LOL. You got it right – I tend to be pessimistic. Gotta balance out the unbridled optimism of Grid and others here on the board!
Inspy, Im going keep running the same play over and over and have my best 3 ball shooter drain the net over and over, until the defense finally decides to change and force me to do something else!
Ya, you can pick a bevy of high quality ute illiquids by paying ask price for that pitiful equivalent QDI yield.
4 5/8’s
Figured that bad
Compared to sub 4.50 I was OK with 5/8’s.
KKR+B is not callable until 9/15/2021. It will be interesting to see what the new one looks like. When you say “indirect” what do you mean by that??
Chuck P–that is right out of their prospectus–no doubt really controlled by KKR–legal meaning????
I saw something about joint ownership between two kkr’s.
RE: KKR
The only things that are meaningful is that the issue is unconditionally guaranteed by KKR, the parent, as well as other KKR units, and governing law is New York. It’s a full KKR credit.