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S&P: KKR & Co. preferreds BBB+
Standard & Poor’s said it assigned a BBB+ rating on KKR & Co. LP’s proposed perpetual preferred units.
The size of the issuance will be determined by market conditions, but the agency said it assumed no more than $500 million will be issued for the ratings analysis.
The issuer credit rating on KKR is A with a stable outlook.
The proceeds will be used for general corporate purposes, including funding acquisitions and investments, S&P said.
However, the agency said it also believes that proceeds could be used for share repurchases.
Stock repurchases are viewed as unfavorable since they reduce cash outstanding with no meaningful benefit to creditors, S&P said.
The company is expected to sustain a debt-to-EBITDA ratio of about 1.2x in 2016 and 2017, still below the 1.5x threshold for a downgrade, the agency said.
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