TEXT-Fitch rates KKR Financial unsecured notes 'BBB'
March 14 - Fitch Ratings has assigned a rating of 'BBB' to KKR Financial Holdings LLC's (KFN) $100 million unsecured note issuance due 2042 with a coupon of 7.5%. Proceeds are expected to be used for general corporate purposes, including investment capital. KFN's leverage, as measured by total recourse holding company debt divided by equity, was 0.50 times (x) at Dec. 31, 2011. Adjusting for this issuance, pro forma leverage would increase to 0.56x. However, KFN has cash on hand to repay $135.1 million of convertible notes coming due in July 2012, which would reduce pro forma leverage to 0.48x. Fitch expects holding company leverage to remain in the 0.5x-1.0x range longer term. Fitch currently rates KKR Financial Holdings LLC as follows: -- Long-term Issuer Default Rating (IDR) 'BBB'; -- Senior unsecured notes 'BBB'. The Rating Outlook is Stable. Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings. Applicable Criteria and Related Research: -- 'Global Financial Institutions Criteria' (Aug. 16. 2011); and -- 'Investment Manager and Alternative Funds Criteria' (Dec. 23, 2011). Applicable Criteria and Related Research: Investment Manager and Alternative Funds Criteria Global Financial Institutions Rating Criteria
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