By Abigail W. Adams
Portland, Me., May 16 – KKR Real Estate Finance Trust Inc. priced $125 million of five-year convertible notes prior to the market open on Wednesday at the cheap end of talk with a coupon of 6.125% and an initial conversion premium of 10%.
Price talk had been 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. There is takeover and dividend protection for any dividend paid above 43 cents quarterly.
The notes are contingently convertible prior to Feb. 15, 2023 subject to a 110% threshold.
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.
| Issuer: | KKR Real Estate Finance Trust Inc.
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| Securities: | Convertible senior notes
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| Amount: | $125 million
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| Greenshoe: | $18.75 million
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| Maturity: | May 15, 2023
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| Bookrunners: | Morgan Stanley & Co. Inc., Wells Fargo Securities LLC and KKR
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| Coupon: | 6.125%
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| Price: | Par
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| Conversion premium: | 10%
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| Conversion price: | $22.76
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| Conversion rate: | 43.9386
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| Contingent conversion | Feb. 15, 2023 subject to a 110% threshold
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| Call options: | Non-callable
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| Put options: | None
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| Pricing date: | May 16
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| Settlement date: | May 18
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| Talk: | Coupon of 5.625% to 6.125% and an initial conversion premium of 10% to 15%
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| Stock symbol: | NYSE: KREF
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| Stock price: | $20.69 at market close May 15
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| Market capitalization: | $1.09 billion
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