Fitch rates KKR & Co. preferreds BBB+

Fitch Ratings said it expects to assign a BBB+ rating to KKR & Co. LP’s perpetual preferred issuance.

The preferred securities are expected to be subordinated to existing unsecured debt, but senior to common units, Fitch said.

The proceeds will be used for general corporate purposes, including to fund acquisitions and investments, Fitch said.

The instrument is expected to be rated two notches lower than KKR’s long-term issuer default rating, the agency said.

The preferred stock rating includes two notches for loss severity, reflecting its subordination and heightened risk of non-performance relative to other obligations, namely existing unsecured debt, Fitch said.

KKR & Co. also has a long-term issuer default rating of A; KKR Management Holdings LP has a long-term issuer default rating of A; KKR Fund Holdings LP has a long-term issuer default rating of A; KKR International Holdings LP has a long-term issuer default rating of A.

KKR Group Finance Co. LLC, KKR Group Finance Co. II LLC and KKR Group Finance Co. III LLC had long-term issuer default ratings of A and unsecured debt ratings of A.

KKR Financial Holdings LLC has a long-term issuer default rating of A-, unsecured debt rating of A- and preferred shares rating of BBB.

The outlooks on all of the companies are stable.

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