KKR REIT talks $125 million five-year convertibles to yield 5.625% to 6.125%, up 10% to 15%

By Abigail W. Adams

Portland, Me., May 15 – KKR Real Estate Finance Trust Inc. plans to price $125 million of five-year convertible notes prior to the market open on Wednesday with price talk for a coupon of 5.625% to 6.125% and an initial conversion premium of 10% to 15%, according to a market source.

Morgan Stanley & Co. Inc., Wells Fargo Securities LLC and KKR are bookrunners for the Rule 144A deal, which carries a greenshoe of $18.75 million.

The notes are non-callable.

Conversions will be settled in cash, shares or a combination of both at the company’s option.

Proceeds will be used to acquire target assets consistent with the company’s investment strategy and guidelines.

KKR Real Estate is a New York-based real estate finance company.

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