KKR PEI Investments, the entity through which the Euronext Amsterdam-listed KKR Private Equity Investors makes its investments, has concluded a USD1bn five-year revolving credit agreement
KKR PEI Investments, the entity through which the Euronext Amsterdam-listed KKR Private Equity Investors makes its investments, has concluded a USD1bn five-year revolving credit agreement with a syndicate of financial institutions, including Citibank as administrative agent and Citigroup Global Markets, Goldman Sachs Credit Partners and Morgan Stanley Bank as joint lead arrangers and bookrunners.
The agreement provides for up to USD1bn of senior secured credit, subject to availability under a borrowing base determined by the value of investments of the investment partnership pledged as collateral security for its obligations. The borrowing base is subject to certain investment concentration limitations, and the value of the investments constituting the borrowing base is subject to certain advance rates based on the type of investment.
The partnership has an option to seek an increase of the commitments available under the credit facility up to a maximum amount of USD2bn. The interest rates applicable to loans under the agreement are generally based on either the greater of the administrative agent’s base rate or the US Federal Funds rate plus a specified margin of 0.5 per cent, or the Eurodollar rate plus a margin ranging from 0.75 to 1.0 per cent, depending on the assets constituting the borrowing base.
KKR PEI Investments must pay an annual commitment fee of 0.20 per cent on undrawn commitments. Covenants in the agreement, which will expire on June 11, 2012, unless terminated earlier in the event of default, require the partnership to maintain a 50 per cent senior secured debt ratio.
KKR Private Equity Investors is a Guernsey limited partnership that participates in private equity and opportunistic investments identified by Kohlberg Kravis Roberts. Established in April 2006, the fund enables certain public market investors to invest in KKR-identified investments. It invests at least 75 per cent of its assets in KKR’s private equity investments, while up to 25 per cent may be invested in other investments identified by KKR.
