Fitch to rate KKR notes A

Fitch Ratings said it assigned a long-term issuer default rating of A to KKR Group Finance Co. III LLC (a subsidiary of KKR & Co. LP).

The outlook is stable.

Concurrently, the agency expects to assign a rating of A to the 30-year unsecured notes issued by KKR Group Finance Co. III.

Proceeds from the issuance are expected to be used for general corporate purposes, including funding commitments to existing funds, the seeding of new fund strategies, and potential acquisition opportunities, most of which would be expected to generate incremental fee-related earnings before interest, taxes, depreciation and amortization and/or a balance sheet cash yield for the firm.

The notes are expected to rank equally with existing notes issued from KKR Group Finance Co. LLC and KKR Group Finance Co. II LLC.

Fitch said the ratings reflect joint and several guarantees on debt at the finance subsidiaries by KKR Management Holdings LP and KKR Fund Holdings LP, which collect all fee and carry income from underlying funds, in addition to a guarantee from KKR & Co.

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