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Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of KKR Real Estate Finance Trust Inc.
Global Credit Research - 28 Aug 2020
New York, August 28, 2020 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of KKR Real Estate Finance Trust Inc.(KREF) and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Key rating considerations are summarized below.
KREF's Ba3 corporate family rating reflects the company's history of profitable operating performance, the high quality composition of its lending portfolio, its effective liquidity and capital management, and the strength of its competitive positioning resulting from its affiliation with KKR & Co. Inc. (KKR). KREF's high quality loan portfolio is oriented towards senior secured loans on multifamily and office properties (81% of the portfolio at 30 June 2020) in large metropolitan areas with diverse economies. The company's exposure to the battered hospitality and retail sectors is a lower percentage of its total investments (8% combined) than every Moody's-rated non-bank commercial real estate lender peer. Rating constraints include KREF's short six-year operating history relative to rated peers and its high reliance on secured funding that encumbers its earning assets.
This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.
The principal methodology used for this review was Finance Companies Methodology published in November 2019. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
This announcement applies only to EU rated and EU endorsed ratings. Non EU rated and non EU endorsed ratings may be referenced above to the extent necessary, if they are part of the same analytical unit.
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Mark L. Wasden VP - Senior Credit Officer Financial Institutions Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Ana Arsov MD - Financial Institutions Financial Institutions Group JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653
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MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.