KKR Financial Holdings, the listed affiliate of private equity group Kohlberg Kravis Roberts, has delayed repayment of debt backed by mortgage securities for the second time and begun a new round of talks with creditors.
KKR Financial Holdings said in a filing with the U.S. Securities and Exchange Commission on Tuesday that a debt repayment due on Feb. 15 on notes issued by conduits holding mortgage-backed securities had been deferred until March 3.
KKR Financial Holdings said that this would "allow for restructuring discussions."
The repayment date for the debt had already been extended once previously under a restructuring agreement in October, the firm said.
The news, brought to wider attention by a Financial Times report, dragged Asian shares lower and dragged the dollar lower against the yen, traders in Tokyo said.
In Europe, the news knocked jittery credit markets hard, with the widely watched iTraxx Crossover index breaking above 600 basis points for the first time.
Analysts cited the KKR news as an additional negative factor adding to worries over bank writedowns and surging oil prices.
KKR Financial Holdings is a leveraged investment vehicle that had borrowed in commercial paper markets to invest in home loans, the FT said.
The Financial Times said in a report on its Web site that Tuesday's move by KKR financial holdings followed a $270 million bail-out of the leveraged investment vehicle last September, which saw founders Henry Kravis and George Roberts personally inject cash.