Fitch sees rating KKR notes A, preferreds BBB+

Fitch Ratings said it assigned a long-term issuer default rating of A to KKR Group Finance Co. VIII LLC, an indirect, debt-issuing subsidiary of KKR & Co. Inc.

Concurrently, Fitch expects to assign an unsecured debt rating of A to the proposed senior unsecured notes issued by Finance Co. VIII. The amount, coupon and final maturity will be determined at the time of issuance.

“The expected rating on the proposed unsecured notes is equalized with KKR's existing unsecured debt as the issuance will rank equally in the capital structure. The unsecured debt rating is equalized with KKR's Long-Term IDR reflecting its fully unsecured funding profile and expectations for average recovery prospects of the notes under a stressed scenario,” Fitch said in a press release.

Separately, Fitch assigned a BBB+ rating to the $1.15 billion of 6% mandatory convertible preferred stock issued by KKR, which was issued on Friday.

Proceeds are expected to be used to partially fund the acquisition of Global Atlantic Financial Group Ltd.

“The mandatory convertible preferred stock is subordinated to any existing and future debt, pari passu with existing preferred, but senior to common shares,” Fitch said.

The outlook is stable.

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