- Current report filing (8-K)
November 30 2009 - 6:03AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported):
November 30, 2009
KKR Financial Holdings LLC
(Exact Name of Registrant
as specified in its charter)
Delaware
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001-33437
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11-3801844
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(State or other Jurisdiction
of Incorporation)
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(Commission File Number)
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(I.R.S. Employer
Identification No.)
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555 California Street, 50
th
Floor, San Francisco, California
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94104
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(Address of principal executive office)
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(Zip Code)
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415-315-3620
Registrants
telephone number, including area code
N/A
(Former
name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (
see
General
Instruction A.2. below):
o
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13.e-4(c))
Item 8.01 Other Events.
Declaration of Regular Cash
Distribution
On November 29, 2009, KKR Financial Holdings LLC
(KFN or the Company) announced that its Board of Directors declared a cash
distribution of $0.05 per common share.
The cash distribution will be payable on December 21, 2009 to
holders of the Companys common shares of record as of the close of business on
December 7, 2009.
Entry into Settlement Agreement
The Company also announced on November 29, 2009
that it reached an agreement on November 23, 2009 with a majority of the
holders of the controlling class of notes of KKR Financial CLO 2005-2, Ltd. (CLO
2005-2), pursuant to which the note holders have agreed, subject to the terms
and conditions of the agreement, not to challenge the July 2009 surrender
for cancellation, without consideration, of $64 million of mezzanine notes
issued to the Company by CLO 2005-2. In
exchange, the Company has agreed to certain arrangements, including, among
other things, to refrain from undertaking a comparable surrender for
cancellation, of any other mezzanine notes or junior notes issued to it by CLO
2005-2. In addition, the Company has
agreed with these noteholders that, for so long as no challenge is brought to
the Companys prior surrender of notes in any of its collateralized loan
obligation transactions, the Company will not undertake a comparable surrender
for cancellation, without consideration, of any mezzanine notes or junior notes
issued to it by KKR Financial CLO 2005-1, Ltd. (CLO 2005-1), KKR Financial
CLO 2006-1, Ltd. (CLO 2006-1), KKR Financial CLO 2007-1, Ltd. or KKR
Financial 2007-A, Ltd.
CLO Note Cancellation Background:
On July 10, 2009, the Company surrendered for
cancellation, without consideration, approximately $298 million in aggregate of
mezzanine notes (the Surrendered Notes) previously issued to the Company by
the issuers of three collateralized loan obligation (CLO) transactions. The Surrendered Notes were cancelled by the
trustee under the applicable indentures, and the obligations due under the
Surrendered Notes were deemed extinguished.
Holders constituting a majority of the controlling
class of notes of CLO 2005-2 challenged the July 2009 surrender for
cancellation and notified the related trustee of purported defaults under the
indenture related to the surrender and cancellation of the notes. KFN, in consultation with its outside
advisors, believes that none of the actions taken in connection with the note
cancellation transactions were in violation of either the respective indentures
governing each CLO transaction or applicable law. Despite the Companys determination that its
actions were permitted and the agreement with note holders described above, no
assurance can be given that holders of notes issued by CLO 2005-1 and CLO
2006-1 will not similarly challenge our surrender for cancellation of notes
issued by such CLOs, or in the event of such a challenge, that we would be able
to reach resolutions with such note holders similar to those reached with the
CLO 2005-2 note holders.
Cautionary Note Regarding
Forward-Looking Statements
This
Current Report contains forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
include, but are not limited to, statements related to the Companys ability to
make future cash distributions to the holders of its common shares. These
forward-looking statements are based on information available to the Company as
of the date of this Current Report. Factors that could cause actual results to
differ materially from the Companys expectations include completion of pending
investments, continued ability to source new investments, the availability and
cost of capital for future investments, competition within the specialty
finance sector, economic conditions, credit loss experience, availability of
financing, maintenance of sufficient liquidity and other risks disclosed from
time to time in the Companys filings with the Securities and Exchange
Commission. These forward-looking statements should not be relied upon as
representing the Companys views as of any subsequent date and the Company undertakes
no obligation to update forward-looking statements to reflect events or
circumstances after the date they were made.
2
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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KKR FINANCIAL HOLDINGS LLC
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By:
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/s/ JEFFREY B. VAN HORN
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Name:
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Jeffrey
B. Van Horn
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Title:
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Chief Financial Officer
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Date:
November 30, 2009
3
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