Morgan Stanley and J.P. Morgan priced an approximately $1 billion collateralized loan obligation for KKR Financial last week with the $715 million of triple-A notes at LIBOR plus 27 basis points. The top-rated tranches consist of a $615 million A-1 piece and a $100 million A-2 delayed draw piece. The deal, called KKR Financial CLO 2005-1, has an $85.8 million equity component.
This is the first CLO from KKR Financial, which is separate from Kohlberg, Kravis Roberts & Co. Originally the unit was envisioned as a Business Development Corporation for KKR. The management team at KKR Financial includes David Netjes, partner, and Saturnino Fanlo, the former treasurer of Wells Fargo & Co., and manager of the firm's investment portfolio.
In addition, a number of ex-Wells Fargo staffers are also at the New York-based unit. The team previously ran several CLOs at Wells Fargo.
Questions were referred to a KKR Financial spokesman, who declined comment. A Morgan Stanley spokesman declined comment and a J.P. Morgan spokesman did not return calls. Officials at Wells Fargo declined comment.