KKR & Co. (KKR:US), the New York-based private-equity firm run by Henry Kravis and George Roberts, hired Citigroup Inc. (C:US) to raise a $400 million collateralized loan obligation, according to two people with knowledge of the transaction.
The CLO will be called KKR Financial CLO 2012-1, said one of the people, who asked not to be identified because the deal is private. Scott Helfman, a spokesman for Citigroup, and Kristi Huller, a spokeswoman for KKR, declined to comment.
JPMorgan Chase & Co. this month raised its 2013 forecast for new CLOs, which help finance leveraged buyouts, to a range of $60 billion to $70 billion. The bank previously projected new issuance of CLOs backed by widely syndicated loans would be $50 billion to $60 billion next year. The lender is expecting $45 billion for 2012.
KKR raised a $400 million collateralized loan obligation last year that was later increased to $600 million. The fund was privately negotiated with an undisclosed third-party senior lender, KKR Financial Holdings LLC (KFN:US) said in July 2011.
KKR Financial, based in San Francisco, is the publicly traded credit business of KKR.
CLOs are a type of collateralized debt obligation that pool high-yield, high-risk loans and slice them into securities of varying risk and return.
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