Prospectus Supplement
(To Prospectus dated December 22, 2021)
KKR Real Estate Finance Trust Inc.
1,200,000 Shares
6.50% Series A Cumulative Redeemable Preferred Stock
KKR Real Estate Finance Trust Inc. is offering 1,200,000 shares of our 6.50% Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock” or the “Shares”). The shares offered hereby will form a single series with all outstanding Series A Preferred Stock originally issued on April 16, 2021 and the shares of Series A Preferred Stock to be issued pursuant to that certain underwriting agreement, dated January 6, 2022, among the Company, the Manager and Raymond James & Associates, Inc., as representative of the underwriters named therein (the “concurrent offering”). The shares offered hereby and in the concurrent offering will have the same CUSIP number as the outstanding Series A Preferred Stock and will trade interchangeably with the previously issued Series A Preferred Stock on the New York Stock Exchange (“NYSE”) upon settlement and approval for listing thereon. As of the date of this prospectus supplement, there were 6,900,000 shares of Series A Preferred Stock outstanding. References to the “shares offered hereby” refer to the shares of Series A Preferred Stock offered hereby, and references to the “Series A Preferred Stock” refer to both the outstanding shares of Series A Preferred Stock and the shares offered hereby and in the concurrent offering.
When, as, and if authorized by our board of directors and declared by us, dividends on the Series A Preferred Stock will be payable quarterly in arrears on or about March 15, June 15, September 15, and December 15 of each year at a rate per annum equal to 6.50% per annum of the $25.00 liquidation preference. Dividends on the Shares are cumulative. The first dividend on the shares offered hereby will be paid on March 15, 2022 and will cover the period from and including December 15, 2021 to, but not including, March 15, 2022.
At any time or from time to time on or after April 16, 2026, we may, at our option, redeem the Series A Preferred Stock, in whole or in part, at a price of $25.00 per share of Series A Preferred Stock plus accrued and unpaid dividends (whether or not declared), if any. See “Description of Series A Preferred Stock—Redemption.” If a Change of Control Event (defined herein) occurs, we may, at our option, redeem the Series A Preferred Stock, in whole or in part, within 120 days after the first date on which such Change of Control occurred by paying $25.00 per share of Series A Preferred Stock, plus any accrued and unpaid dividends (whether or not declared) to, but not including, the date of redemption. To the extent we exercise our redemption right relating to the Series A Preferred Stock, the holders of Series A Preferred Stock will not be permitted to exercise the conversion right described below in respect of their Shares called for redemption. See “Description of Series A Preferred Stock—Special Optional Redemption.” The Series A Preferred Stock has no maturity date and will remain outstanding indefinitely unless redeemed by us or converted in connection with a Change of Control by the holders of Series A Preferred Stock.
Beginning on April 16, 2022, upon the occurrence of a Change of Control, each holder of Series A Preferred Stock will have the right (subject to our right to redeem the Series A Preferred Stock in whole or in part, as described above, prior to the Change of Control Conversion Date (as defined herein)) to convert some or all of the Series A Preferred Stock held by such holder on the Change of Control Conversion Date into a number of shares of our common stock per share of Series A Preferred Stock to be converted equal to the lesser of:
•
| the quotient obtained by dividing (i) the sum of the $25.00 liquidation preference plus the amount of any accrued and unpaid dividends (whether or not declared) to, but not including, the Change of Control Conversion Date (unless the Change of Control Conversion Date is after a record date for a Series A Preferred Stock dividend payment and prior to the corresponding Series A Preferred Stock dividend payment date, in which case no additional amount for such accrued and unpaid dividend will be included in this sum) by (ii) the Common Stock Price (as defined herein); and |
•
| 2.6427, subject to certain adjustments; |
subject, in each case, to provisions for the receipt of alternative consideration as described in this prospectus supplement.
The Shares will rank senior to our common stock and any class or series of our capital stock expressly designated as ranking junior to the Series A Preferred Stock as to distribution rights and rights upon our liquidation, dissolution or winding up, equally with any class or series of our capital stock expressly designated as ranking on parity with the Series A Preferred Stock as to dividend rights and rights upon our liquidation, dissolution or winding up, and junior to any class or series of our capital stock expressly designated as ranking senior to the Series A Preferred Stock as to dividend rights and rights upon our liquidation, dissolution or winding up. See “Description of Series A Preferred Stock—Ranking.” The Shares will not have any voting rights, except as set forth under “Description of Series A Preferred Stock—Voting Rights.”
You should carefully consider the risk factors referred to in the sections titled “Risk Factors” beginning on page S-
8 of this prospectus supplement, page
2 in the accompanying prospectus and under “Risk Factors” in our Annual Report on Form 10-K, for the year ended December 31, 2020, incorporated by reference herein, before investing in our Series A Preferred Stock.
We are a Maryland corporation and we conduct our operations as a real estate investment trust (“REIT”) for federal income tax purposes while operating our business in a manner that allows us to maintain an exclusion from registration under the Investment Company Act of 1940, as amended, (the “Investment Company Act”). The Series A Preferred Stock is subject to certain restrictions on ownership designed to, among other things, preserve our qualification as a REIT for U.S. federal income tax purposes. See “Description of Series A Preferred Stock—Restrictions on Ownership and Transfer” in this prospectus supplement.
Our Series A Preferred Stock is listed on the NYSE under the symbol “KREF PRA” and the last reported sale price of our Series A Preferred Stock on the NYSE on January 10, 2022 was $25.17 per share. Our common stock is traded on the NYSE under the symbol “KREF.”
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the related prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Public offering price(1) | | | $25.00 | | | $30,000,000 |
Underwriting discounts and commissions | | | $0.7875 | | | $945,000 |
Proceeds to us before expenses(1) | | | $24.2125 | | | $29,055,000 |
(1)
| Plus an amount equal to the dividends that accrued from and including December 15 to, but excluding, the settlement date for the shares offered hereby. |
The underwriters expect that the shares offered hereby will be delivered to purchasers in global form through the book-entry delivery system of The Depository Trust Company on or about January 13, 2022.
Joint Book-Running Managers
Prospectus Supplement dated January 11, 2022.