Jan. 24, 2013
/PRNewswire/ -- KKR Financial Holdings LLC (NYSE: KFN) ("KFN" or the "Company") has announced that holders of its 7.50% convertible senior notes due 2017 (the "Notes") who submitted their Notes for conversion as of
or 23, 2013 will be satisfied by physical settlement. These conversions comprise
principal amount of Notes outstanding, or approximately 79%.
Holders who submitted their Notes for conversion as of
or 23, 2013 will receive common shares in the Company, no par value ("Shares"), in an amount equal to the conversion rate of 141.8256 Shares for each
principal amount of Notes (the "Conversion Rate") plus an additional 9.2324 Shares per
principal amount to account for the make-whole premium as calculated in Section 8.13 of the indenture relating to the Notes (the "Indenture"). In total, such holders shall receive 151.0580 Shares per
principal amount. In accordance with Section 8.12 of the Indenture, Shares will be delivered to beneficial holders who submitted a conversion notice as of
January 22, 2013
January 25, 2013
and Shares will be delivered to holders who submitted a conversion notice as of
January 23, 2013
January 28, 2013
As set forth in the Termination Notice issued on
January 18, 2013
, the Notes will no longer be convertible into Shares as of
February 17, 2013
(the "Conversion Rights Termination Date"). 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. Beneficial holders of Notes not yet tendered for conversion may exercise their conversion rights pursuant to the Depository Trust Company's book-entry conversion program.
The Company will notify holders tendering Notes for conversion of the settlement method elected in respect to their Notes within two business days (as defined in the Indenture) of the date on which such holders deliver a conversion notice to the Company. In accordance with the terms of the Indenture, the Company may deliver cash, Shares, or a combination thereof in an amount equal to the Conversion Rate plus the make-whole premium, calculated in accordance with Sections 8.12 and 8.13 of the Indenture. At this time the Company expects to meet future conversion obligations with respect to the Notes by physical settlement; however, the Company retains the right to elect an alternative settlement method with respect to any date on which a conversion notice is received based on market conditions.