KKR Financial Holdings entered into a credit agreement with Citibank N.A., Bank of America, N.A., Deutsche Bank AG New York Branch, Morgan Stanley Bank, N.A., Royal Bank of Canada, Societe Generale, and Wells Fargo Bank, National Association for a new three-year $150 million revolving credit facility.  The facility replaces the Company's $250 million credit facility due to mature in May 2014. 

KKR Financial Holdings LLC is a specialty finance company with expertise in a range of asset classes.

Highlights of the Facility are as follows:

• The initial commitments under the Facility total $150 million with the ability to obtain additional commitments to increase the total committed amount up to $350 million.
• The Facility matures in November 2015 as compared to May 2014 for the Prior Facility.
• Loans under the Facility bear interest at LIBOR plus 2.25% (or, at the Company's option, a base rate plus 1.25%) as compared to LIBOR plus 3.25% (or a base rate plus 2.25%) for the Prior Facility.
• The Facility does not limit the percentage of the Company's estimated annual taxable income that can be paid to shareholders as distributions, whereas the Prior Facility prohibited payment of distributions in excess of 65% of the Company's estimated annual taxable income.
• The Facility is secured by a pledge over the capital stock of certain of the Company's direct subsidiaries and borrowings are not tied to asset values, whereas borrowings under the Prior Facility were determined by advance rates applied to market values of assets pledged to the Prior Facility.

"Our new credit facility provides us with a source of incremental liquidity for transactions and working capital whose borrowing limits are not impacted by mark-to-market valuation provisions.  This is a significant improvement from our prior credit facility, under which borrowings were not insulated from asset price fluctuations," said William C. Sonneborn, chief executive officer of the company.  "Removing these mark-to-market provisions as well as restrictions on our distributions enhances our flexibility to drive value for shareholders."