KBRA Assigns Rating of A- to the KKR REIGN I Ltd Return-Enhanced Investment Grade Notes

NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns a rating of A- to the KKR
Return-Enhanced Investment Grade Notes (REIGN).

KKR REIGN I Ltd. issued $700 million of Notes and KKR (NYSE: KKR),
acting as investment advisor, will invest the proceeds in a portfolio
comprised of: Principal Assets, Liquid Assets, and Private Assets. The
overall investment objective is to maximize risk-adjusted returns while
also minimizing the risk of principal impairment. The Principal Assets,
approximately 35%-45% of Note proceeds, will be invested in zero-coupon
U.S. Treasury securities whose accreted value will fully meet principal
on the Notes at their scheduled 2049 maturity. Meanwhile, Liquid Assets,
initially 55%-65% of the portfolio, will be invested in money market
funds, treasuries, and corporate bonds designed to fund the fixed coupon
on the Notes, and to, over time, fund investment in Private Assets. The
Private Assets will consist of a master partnership which collectively
owns the respective LP interests in funds managed by KKR, as well as
co-investments managed by KKR.

KKR anticipates that 60% to 80% of initial Private Asset commitments
will consist of fund investments, with the remaining 20% to 40% in
co-investments. KBRA believes that co-investments further strengthen the
alignment between KKR and Note holders.

Since scheduled principal on the Notes is fully covered by the accreting
Principal Assets, the primary risks include the ability of KKR to
generate cashflow from Liquid Assets and Private Assets to meet fixed
coupon interest payments during various periods over the life of the
transaction and also the ability of all of the portfolios to meet
principal re-payment obligations under acceleration events. In addition
to the fixed coupon, the Notes will have a performance coupon and a
variable coupon. KBRA’s rating addresses only the timely payment of the
fixed coupon and does not apply to the performance coupon or the
variable coupon.

To access the rating report, click here.

The ratings are based on KBRA’s
Global Closed-End Securities Issuance Rating Methodology
published on August 10, 2016.

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About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S.
Securities and Exchange Commission as an NRSRO. In addition, KBRA is
designated as a designated rating organization by the Ontario Securities
Commission for issuers of asset-backed securities to file a short form
prospectus or shelf prospectus. KBRA is also recognized by the National
Association of Insurance Commissioners as a Credit Rating Provider and
is a certified Credit Rating Agency (CRA) by the European Securities and
Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is
registered with ESMA as a CRA.

Contacts

Analytical Contacts:
William
Cox, Senior Managing Director
(646) 731-2472
wcox@kbra.com

Van Hesser, Senior Managing Director
(646) 731-2472
vhesser@kbra.com

Peter Giacone, Senior Director
(646) 731-2407
pgiacone@kbra.com

Pramit Sheth, Managing Director
(646) 731-2330
psheth@kbra.com