Jan. 18, 2013
/PRNewswire/ -- KKR Financial Holdings LLC (NYSE:KFN) ("KFN" or the "Company") has issued a conversion rights termination notice (the "Termination Notice") to holders of its 7.50% convertible senior notes due 2017 (the "Notes"). As of
January 18, 2013
in aggregate principal amount of the Notes was outstanding.
Under the indenture relating to the Notes (the "Indenture"), KFN is entitled to terminate the right to convert the Notes into its common shares, no par value ("Shares"), beginning
January 15, 2013
if the closing sale price (as defined in the Indenture) of Shares has exceeded 150% of the conversion price relating to the Notes for at least 20 trading days in a period of 30 consecutive trading days. In order to terminate this right, KFN must issue a conversion rights termination notice at least 30 (and no more than 60) calendar days prior to the date on which the conversion right is to be terminated. As set forth in the Termination Notice, KFN has chosen
February 17, 2013
(the "Conversion Rights Termination Date") as the date on which the Notes will no longer be convertible into Shares. Holders may exercise their conversion rights at any time on or prior to
February 15, 2013
in accordance with the terms and instructions set forth in Section 8.02 of the Indenture.
Holders exercising their conversion rights on or before
February 15, 2013
will receive cash, Shares or a combination thereof, at the discretion of the Company, in an amount equal to the conversion rate ("Conversion Rate") plus a make-whole premium calculated in accordance with Sections 8.12 and 8.13 of the Indenture. At this time the Company expects to settle the principal amount of any converted Notes in cash with the remainder of the amount due upon conversion settled in Shares; however, the Company retains the right to elect an alternative settlement method in accordance with the terms of the Indenture. The Company will notify all holders tendering Notes for conversion of the settlement method elected in respect to such Notes within two business days (as defined in the Indenture) of the date on which such holders deliver a conversion notice to the Company.
The Conversion Rate on the date hereof is equal to 141.8256 Shares for each
principal amount of Notes, plus an additional 9.2324 Shares per
principal amount to account for the make-whole premium.
Notes tendered for conversion shall be deemed paid in full and the Company will have no further obligation with respect to such Notes. Beneficial holders of Notes may exercise their conversion rights pursuant to the Depository Trust Company's book-entry conversion program. The Indenture was filed as Exhibits 4.1 and 4.2 to the Company's Current Report on Form 8-K filed with the SEC on
January 15, 2010
and is available on the SEC's website at
This press release does not constitute an offer to sell or the solicitation of an offer to buy any Notes or Shares, nor may there be any sale of Notes or Shares in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.