KFN Kkr Financial Holdings Llc

SAN FRANCISCO, Aug. 20 /PRNewswire-FirstCall/ -- KKR Financial Holdings LLC (NYSE:KFN) announced today that its Board of Directors has approved a public rights offering registered under the Securities Act of 1933 of up to $270.0 million to its common shareholders. Under the terms of the rights offering, the Company will distribute non-transferable rights to subscribe for up to 18,750,000 common shares. Each holder of common shares will receive 0.19430 rights for each common share held at the close of business on August 30, 2007, the record date for the rights offering. The subscription price for the common shares offered in the rights offering will be $14.40 per share, which was the closing price for the Company's common shares on August 17, 2007. The rights will expire on September 19, 2007 at 5:00 p.m., New York City time, unless extended. As a result of the common share rights offering, the conversion price of the Company's 7% Senior Secured Convertible Notes will be adjusted in accordance with the terms and conditions of the Indenture. The Company will use the net proceeds of the rights offering for general corporate purposes. Consummation of the rights offering is subject to general closing conditions. The Company has entered into a backstop commitment agreement with principals of Kohlberg Kravis Roberts & Co. L.P., pursuant to which these persons have agreed, subject to customary conditions, to purchase up to approximately $100.0 million of common shares at the same price per share of $14.40 to the extent that the rights offering is not fully subscribed. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. The rights offering will be made only by means of a prospectus. The prospectus, when available, also may be on the Securities and Exchange Commission's website at http://www.sec.gov/. KKR Financial Holdings LLC is a specialty finance company that invests in multiple asset classes. KKR Financial Holdings LLC is externally managed by KKR Financial Advisors LLC. KKR Financial Holdings LLC and KKR Financial Advisors LLC are affiliates of Kohlberg Kravis Roberts & Co. L.P. For more information about KKR Financial Holdings LLC or a copy of this press release visit its website at http://www.kkrkfn.com/. CONTACT: Investors Laurie L. Poggi KKR Financial (415) 315-3718 Media Roanne Kulakoff/Joseph Kuo Kekst and Company (212) 521-4837/4863 DATASOURCE: KKR Financial Holdings LLC CONTACT: Investors, Laurie L. Poggi of KKR Financial, +1-415-315-3718; or Media, Roanne Kulakoff, +1-212-521-4837, or Joseph Kuo, +1-212-521-4863, both of Kekst and Company for KKR Financial Holdings LLC Web site: http://www.kkrkfn.com/

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