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KKR Feeds Long-Bond Rally With $500 Million Debt Offering

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May 21 (Bloomberg) -- KKR & Co., the private-equity firm run by billionaires Henry Kravis and George Roberts, is catering to a rally in longer-dated corporate bonds by boosting its offering of 30-year debt to $500 million.

The firm’s finance unit issued 5.125 percent securities that pay 1.8 percentage points more than similar-maturity Treasuries, according to data compiled by Bloomberg. The deal grew from $300 million marketed earlier and coincides with investor demand for longer-maturity debt that’s outperformed securities that come due sooner.

That’s helped New York-based KKR capture funding at a lower relative rate than when it last sold debt in January 2013, when it paid 2.45 percentage points more than the benchmark to borrow $500 million for 30 years. The new deal also comes less than two months after competitor Blackstone Group LP borrowed an equal amount with 5 percent, 30-year notes paying an extra 1.45 points.

Investment-grade corporate bonds due in 10 years or longer have returned 10.6 percent this year, Bloomberg data show. That compares with gains of 5.7 percent for debt maturing in five-to-10 years, and a 1.8 percent return for even shorter-term notes.

KKR is ranked A by Standard & Poor’s, one level below Blackstone’s A+ ranking.

To contact the reporter on this story: Charles Mead in New York at cmead11@bloomberg.net

To contact the editors responsible for this story: Shannon D. Harrington at sharrington6@bloomberg.net Richard Bravo, Mitchell Martin

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