S&P gives Kennedy-Wilson notes BB

S&P said it gave Kennedy-Wilson Inc.’s planned unsecured notes due 2029 and 2031 BB issue-level and 5 recovery ratings. The rating reflects an expectation for modest recovery (10%-30%; rounded estimate: 15%) in default.

The issuer is a wholly owned subsidiary of Kennedy-Wilson Holdings Inc., which will guarantee the notes. The notes and the guarantees will be subordinated to all secured debt of KW and the guarantors, to the extent of the value of the assets securing that debt, the agency said.

“The proposed transaction is leverage neutral, as KW will use the proceeds to redeem up to $1 billion of its $1.15 billion outstanding 5 7/8% senior notes due 2024. As of Sept. 30, 2020, KW's unsecured debt had a weighted average maturity of 3.6 years and a weighted average interest rate of 5.3%. We expect the proposed transaction will smooth and extend the company's scheduled debt maturities and will help improve the cost of funding,” S&P said in a press release.

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