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KBRA Affirms Rating for KKR Return-Enhanced Investment Grade Notes (REIGN)

25 Jul 2025   |   New York

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KBRA affirms the rating of BBB+ and maintains a Negative Outlook for the KKR Return-Enhanced Investment Grade Notes (REIGN) Senior Secured Fixed Coupon Notes, a General Partner led Collateralized Fund Obligation transaction, collateralized by zero-coupon U.S. Treasuries (the "Principal Assets"), fixed income, cash, money market securities (the "Liquid Assets"), and Limited Partnership Interest in KKR sponsored private equity, real asset and credit funds (the "Private Assets").

KKR REIGN I Ltd. issued the $1.58 billion of Notes in early 2019. As investment adviser, KKR continues to actively manage the investment of the Note proceeds with an aim to maximize risk-adjusted returns while fulfilling obligations to note holders. The KKR Return-Enhanced Investment Grade Notes (REIGN) transaction is six years into its twenty year investment and commitment period.

KBRA's surveillance primarily focused on the Issuer's ability to meet ongoing interest obligations to Noteholders given that the principal repayment obligation is fully supported by U.S. Treasury collateral. As noted in prior reviews of this transaction, the accelerated pace of capital calls and slowdown in distributions from the Issuer's underlying private investments have resulted in a liquidity profile to date that has not met forecasted expectations. KBRA notes that KKR plans to prioritize the use of portfolio distributions to service debt and rebuild liquidity reserves to the required amounts, after which, KKR will aim to resume investing in future opportunities as previously projected. KBRA continues to view KKR’s strategic commitment to the REIGN vehicle and the firm’s broader alignment of interests by way of AUM growth and investment performance as positive credit factors. KBRA will continue to closely monitor the transaction’s performance and the Issuer’s liquidity profile.

To access ratings and relevant documents, click here.

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Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

This credit rating is endorsed by Kroll Bond Rating Agency Europe Limited for use in the European Union and by Kroll Bond Rating Agency UK Limited for use in the UK. Information on a credit rating’s endorsement status is available on its rating page at KBRA.com.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

There are certain issuers, entities or transactions rated by KBRA Europe or KBRA UK that may be or have relationships with Shareholders and/or Shareholder-Related Companies, as that term is defined in KBRA’s Shareholder and Shareholder Related Companies for KBRA Europe and KBRA UK Policy and Procedure. Relevant disclosure information may be found here.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

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