The KKR Credit Income Fund ('the Trust', 'CIT') is a listed income trust (LIT) designed to provide investors with access to high income generating credit investment ideas globally through KKR Credit’s product suite (ASX Code: KKC). The trust will incorporate a blend of KKR’s existing leveraged credit and private credit capabilities through the firm’s Global Credit Opportunities Fund (GCOF) and European Direct Lending (EDL) strategies. Through the trust, investors will gain exposure to KKR’s $67.1 billion credit platform and a strategy highly diversified across geography, sector and credit quality. The KKR Credit team consists of 120 dedicated investment professionals around the world who are supported by KKR’s global network of 425 investment professionals, utilising a “One Firm Approach” that allows KKR to leverage the best insights from across the firm to benefit its clients.
The investment objective of the trust is to provide stable income with a target distribution of 4-6% p.a. net of fees and expenses, payable quarterly and a medium-average total return of 6-8% p.a net of fees and expenses. The trust aims to provide investors with attractive, risk-adjusted returns and access to a diversified portfolio of income generating alternative credit investments through existing KKR funds. As all investments are made outside of Australia, the manager intends to hedge currency risk back to AUD. We also note that although neither the GCOF and EDL strategies employ leverage for investment, it is used for cash management purposes.
Please note that the attached Product Disclosure Statement (PDS) was lodged with ASIC on 18 September 2019. BondAdviser reserves the right to vary or withdraw our research opinion should material changes arise during the lodgement period.
Summary details of the transaction are listed in the table below:
|
Product Type |
Listed Investment Trust |
Sub-Asset Class |
Credit |
|
Issue Size* |
$200,000,000 - $750,000,000 |
Manager |
KKR Australia Inv. Mgmt. Pty Ltd |
|
Net Asset Value |
$2.50 |
Administrator |
JP Morgan |
|
Fixed / Floating |
Floating |
Responsible Entity |
The Trust Company (RE Services) Ltd |
|
Payment Frequency |
Quarterly |
Custodian |
JP Morgan |
|
Target Distribution |
4.00 - 6.00% p.a. (net of fees and expenses) |
Unit Registrar |
Boardroom Pty Limited |
|
Franking Credits Inclusive |
No |
Offer Opens*** |
23 September 2019 |
|
ASX Listed |
Yes (ASX Code: KKC) |
Offer Closes*** |
6 November 2019 |
|
Convertible |
No |
Allotment Date |
18 November 2019 |
|
GICS Sector** |
Investment Companies |
Commences Trading On |
21 November 2019 |
|
Asset Class |
Fixed Income |
First Payment Date |
February 2020 |
* Issue size excludes Oversubscriptions of up to $75 million.
** We classify KKC within the GICS Sector "Investment Companies", but note that the ASX is likely to assign it a "Not Applicable" classification.
*** Dates are varied based on application mechanism (Cornerstone, Broker Firm & General Offer). Broadly, earliest and latest dates are shown, but we advise investors to check details.
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