S&P rates KKR Real Estate, loan BB-

S&P said it assigned its BB- ratings to KKR Real Estate Finance Trust Inc. and its proposed $300 million senior secured term loan.

KKR Real Estate is exposed to transitional commercial real estate loans and has relatively high leverage compared with other rated CRE lenders, and a mostly encumbered balance sheet with financial covenants and margin call risk on its secured repurchase facilities, S&P said.

The outlook is negative. The outlook reflects the possibility the company’s investment performance could suffer over the next 12 months amid current challenging operating conditions.

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