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KKR Financial Holdings LLC Issues Conversion Right Termination Notice for Its 7.50% Convertible Senior Notes Due 2017



KKR Financial Holdings LLC Issues Conversion Right Termination Notice for Its
                   7.50% Convertible Senior Notes Due 2017

PR Newswire

SAN FRANCISCO, Jan. 18, 2013

SAN FRANCISCO, Jan. 18, 2013 /PRNewswire/ -- KKR Financial Holdings LLC
(NYSE:KFN) ("KFN" or the "Company") has issued a conversion rights termination
notice (the "Termination Notice") to holders of its 7.50% convertible senior
notes due 2017 (the "Notes").  As of January 18, 2013, $172.5 million in
aggregate principal amount of the Notes was outstanding.

Under the indenture relating to the Notes (the "Indenture"), KFN is entitled
to terminate the right to convert the Notes into its common shares, no par
value ("Shares"), beginning January 15, 2013 if the closing sale price (as
defined in the Indenture) of Shares has exceeded 150% of the conversion price
relating to the Notes for at least 20 trading days in a period of 30
consecutive trading days. In order to terminate this right, KFN must issue a
conversion rights termination notice at least 30 (and no more than 60)
calendar days prior to the date on which the conversion right is to be
terminated. As set forth in the Termination Notice, KFN has chosen February
17, 2013 (the "Conversion Rights Termination Date") as the date on which the
Notes will no longer be convertible into Shares.  Holders may exercise their
conversion rights at any time on or prior to February 15, 2013 in accordance
with the terms and instructions set forth in Section 8.02 of the Indenture.

Holders exercising their conversion rights on or before February 15, 2013 will
receive cash, Shares or a combination thereof, at the discretion of the
Company, in an amount equal to the conversion rate ("Conversion Rate") plus a
make-whole premium calculated in accordance with Sections 8.12 and 8.13 of the
Indenture. At this time the Company expects to settle the principal amount of
any converted Notes in cash with the remainder of the amount due upon
conversion settled in Shares; however, the Company retains the right to elect
an alternative settlement method in accordance with the terms of the
Indenture.  The Company will notify all holders tendering Notes for conversion
of the settlement method elected in respect to such Notes within two business
days (as defined in the Indenture) of the date on which such holders deliver a
conversion notice to the Company.

The Conversion Rate on the date hereof is equal to 141.8256 Shares for each
$1,000 principal amount of Notes, plus an additional 9.2324 Shares per $1,000
principal amount to account for the make-whole premium. 

Notes tendered for conversion shall be deemed paid in full and the Company
will have no further obligation with respect to such Notes.  Beneficial
holders of Notes may exercise their conversion rights pursuant to the
Depository Trust Company's book-entry conversion program. The Indenture was
filed as Exhibits 4.1 and 4.2 to the Company's Current Report on Form 8-K
filed with the SEC on January 15, 2010 and is available on the SEC's website
at http://www.sec.gov.

This press release does not constitute an offer to sell or the solicitation of
an offer to buy any Notes or Shares, nor may there be any sale of Notes or
Shares in any state or jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities
laws of any such state or jurisdiction.

About KKR Financial Holdings LLC

KKR Financial Holdings LLC is a specialty finance company with expertise in a
range of asset classes. KFN's core business strategy is to leverage the
proprietary resources of its manager with the objective of generating both
current income and capital appreciation. KFN executes its core business
strategy through its majority-owned subsidiaries. KFN is externally managed by
KKR Financial Advisors LLC, a wholly-owned subsidiary of KKR Asset Management
LLC, which is a wholly-owned subsidiary of Kohlberg Kravis Roberts & Co. L.P. 
Additional information regarding KFN is available at http://www.kkr.com.

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of
1995

This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
are based on information available to the Company as of the date of this press
release and actual results may differ. These forward-looking statements
involve known and unknown risks, uncertainties and other factors beyond the
Company's control. Any forward-looking statements speak only as of the date of
this press release and the Company expressly disclaims any obligation to
update or revise any of them to reflect actual results, any changes in
expectations or any change in events. If the Company does update one or more
forward-looking statements, no inference should be drawn that it will make
additional updates with respect to those or other forward-looking statements.
For additional information concerning risks, uncertainties and other factors
that may cause actual results to differ from those anticipated in the
forward-looking statements, and risks to the Company's business in general,
please refer to the Company's SEC filings, including its Annual Report on
Form 10-K for the fiscal year ended December 31, 2011, filed with the SEC on
February 28, 2012 and the risks described in Exhibit 99.2 to its Current
Report on Form 8-K filed on January 11, 2013.

Investor Relations
Contact:                                                              
Pam Testani
+1 (415) 315-6597 
investor-relations@kkr.com              

Media Contact:
Kristi Huller
+1 (212) 750-8300
media@kkr.com

SOURCE KKR Financial Holdings LLC

Website: http://www.kkrkfn.com
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