KKR Financial Holdings LLC - 2011-04-01

Closed KKR Financial CLO 2011-1 Ltd., a $400-million secured financing transaction that is non-recourse to the company on March 31.

CLO 2011-1, a consolidated subsidiary of the company, has entered into a privately negotiated financing transaction with a third-party senior lender that will permit CLO 2011-1 to borrow up to $300 million at a rate of three-month LIBOR plus 1.35% to finance a portfolio of senior secured leveraged commercial loans. CLO 2011-1 has been capitalized with a $100-million cash contribution by the company in exchange for which CLO 2011-1 issued the company a $100-million residual interest consisting of $20 million of mezzanine notes and $80 million of subordinated notes.