KKR & Co LP Sells Another Preferred Offering

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Only 1 month after selling a large offering of preferred units KKR & Co. LP (NYSE:KKR) has sold another series of preferred, although at a lower coupon.

The Series A offering (ticker:KKR-A) in May had a coupon of 6.75% and the new Series B offering carries a coupon of 6.50%.  While as buyers and owners of many preferred stocks we would like to see higher coupons it is obvious that interest rates are going to be driven ever lower which will serve to lower borrowing costs for preferred stock issuers.

We had previously purchased the KKR-A units (since KKR is a limited partnership their preferred offering is referred to as “units” instead of “shares”) and thus we have no real interest in accepting a lower coupon issue, although we are certain that with the voracious demand for “yield” the company will have no trouble selling the offering.

The new issue is investment grade, being rated BBB+ by Standard and Poor’s.  Additionally, since KKR is a limited partnership a K-1 will be issued at tax time.  Dividends are non-cumulative.

Details of the new offering can be found here.

The issue is now trading on the OTC Grey market under the ticker KRPPP and is changing hands at about $25.14/unit.  Our Grey Market primer is here for those not familiar with trading on the Grey Market.

 

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