Fitch affirms KKR Financial

Fitch Ratings said it affirmed the long-term issuer default rating and unsecured debt rating of KKR Financial Holdings LLC at BBB and unsecured debt rating at BBB.

The outlook is stable.

The ratings are supported by the company's inherent linkage and strong relationship with the parent of its investment manager, KKR & Co. LP, which has demonstrated implicit and explicit support of the company in recent years, Fitch said.

Other supporting factors include the company's experienced management team, the reduction of balance sheet risk in recent years with the removal of mark-to-market financing, relatively low leverage and strong reserves, the agency said.

Rating constraints include the company's largely secured funding profile with a heavy reliance on CLO funding historically, Fitch said, along with the presence of some issuer concentrations within the corporate debt portfolio and a lack of revenue diversity.

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