KKR Financial Holdings LLC (NYSE: KFN) said Tuesday that its fourth-quarter results will be hurt by non-cash charges on mortgage investments and corporate loans, according to Associated Press.
The news caused their shares to drop in New York Stock Exchange trading. The company’s shares dropped 43 cents, or 6.4 percent, to $6.25 on Tuesday.
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KKR said late Monday that it expects to record charges totaling as much as $80 million to reflect deterioration in its portfolios of residential mortgage-backed securities and corporate loan investments that are being reclassified as "held for sale" rather than "held for investment."
KKR, which is operated by private equity fund Kohlberg Kravis Roberts & Co., did not say when it plans to issue its full fourth-quarter financial report.
Separately, KKR on Tuesday said it has priced its offering of $150 million in convertible senior notes due in 2017.
Interest on the notes will be paid semiannually at a rate of 7.5 percent per year, and the notes will mature on Jan. 15, 2017, unless repurchased, redeemed or converted earlier.
The notes will be convertible into cash, common shares or a combination. The initial conversion rate will be 122.2046 common shares per $1,000 in principal, about $8.18 per share.
Net proceeds to the company, after expenses, are expected to be about $145.5 million.
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