By Stephanie N. Rotondo
Seattle, March 10 – KKR & Co. LP sold $300 million of 6.75% series A noncumulative perpetual preferred units (expected ratings: BBB+/BBB+) on Thursday, according to a market source.
Price talk was around 6.75%, a source said. The deal came upsized from $150 million.
There is a $45 million over-allotment option.
Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC and Wells Fargo Securities LLC are the joint bookrunners. Barclays, Citigroup Global Markets Inc., Goldman Sachs & Co., HSBC Securities (USA) Inc. and Mizuho Securities USA Inc. are the joint lead managers.
When declared, distributions will be made on the 15th day of March, June, September and December, beginning June 15. The units become redeemable on or after June 15, 2021 at par plus accrued distributions.
The units can also be redeemed prior to that date upon a change of control at $25.25 a share plus accrued distributions. If such an event occurs and the company does not give notice of redemption prior to the 31st day following the event, the distribution rate increases by 5%.
The New York-based financial firm plans to list the new issue on the New York Stock Exchange.
Proceeds will be used for general corporate purposes, including to fund acquisitions and investments.
| Issuer: | KKR & Co. LP
|
| Securities: | Series A noncumulative preferred units
|
| Amount: | $300 million, or 12 million units
|
| Greenshoe: | $45 million, or 1.8 million units
|
| Maturity: | Perpetual
|
| Bookrunners: | Morgan Stanley & Co. LLC, BofA Merrill Lynch, UBS Securities LLC, Wells Fargo Securities LLC
|
| Lead managers: | Barclays, Citigroup Global Markets Inc., Goldman Sachs & Co., HSBC Securities (USA) Inc., Mizuho Securities USA Inc.
|
| Dividend: | 6.75%
|
| Step-up rate: | Dividend increases by 5% if company fails to issue notice of redemption within 31 days of a change of control
|
| Price: | Par of $25.00
|
| Yield: | 6.75%
|
| Talk: | Around 6.75%
|
| Call options: | On or after June 15, 2021 at par plus accrued distributions; upon a change of control at par plus accrued distributions
|
| Pricing date: | March 10
|
| Settlement date: | March 17
|
| Expected ratings: | Standard & Poor’s: BBB+
|
| Fitch: BBB+
|
| Expected listing: | NYSE: KKRPA
|
| Cusip: | 48248M201
|
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