Kennedy Wilson Announces $300 Million Perpetual Preferred Share Offering of Fairfax Financial
Fairfax Raises Debt Investment Platform Target to $5 Billion
BEVERLY HILLS, Calif., February 23, 2022–(BUSINESS WIRE)–Fairfax Financial Holdings Limited, through its affiliates (collectively, “Fairfax”), has agreed to make a $300 million strategic preferred stock investment in global real estate investment firm Kennedy Wilson ( NYSE: KW). Kennedy Wilson plans to use the proceeds to fund its development pipeline and real estate investments, as well as repay its unsecured bank loans in full.
Along with the equity investment, Fairfax increased its first mortgage target within Kennedy Wilson’s leveraged investment platform from $3 billion to $5 billion. Kennedy Wilson expects to hold a roughly 5% stake in future debt investments within the platform while receiving customary fees in his role as asset manager. In addition to the $2 billion already invested in Kennedy Wilson’s global debt platform, there is now approximately $4 billion of additional investment capacity with a strong pipeline of future opportunities.
“We are delighted to extend our long-standing relationship with Fairfax through the expansion of this preferred equity and debt investment platform, which highlights the strength of our investment strategy as we move forward. as we continue to grow our global business,” said William McMorrow, President and CEO of Kennedy. Wilson. “This new permanent capital will provide us with flexibility as we grow our revenue-producing portfolio and complete our development projects.”
“We are thrilled to make this new investment in Kennedy Wilson and build on our exceptional partnership that dates back to 2010,” said Prem Watsa, President and CEO of Fairfax. “We believe in their global business model, the strength of their high-quality, revenue-generating assets and their top-notch management team.”
Under the terms of the agreement, Fairfax is buying $300 million worth of perpetual preferred stock which bears an annual dividend rate of 4.75% and can be redeemed by Kennedy Wilson at any time. In addition, Fairfax acquired 7-year warrants for approximately 13.0 million common shares with an initial exercise price of $23.00 per share, based on Kennedy Wilson’s closing price on February 9. 2022, and representing a 2% premium to the daily volume-weighted average price. per share of Kennedy Wilson common stock over the last 20 trading days.
Kennedy Wilson and Fairfax began their relationship in 2010 when Fairfax invested $100 million in Kennedy Wilson. Over the past decade, the companies have partnered on $8 billion in global acquisitions, including about $5 billion in debt-related real estate investments. Fairfax currently holds an equity interest in Kennedy Wilson of approximately 9%.
JP Morgan acted as exclusive placement agent and Latham & Watkins LLP acted as legal advisor to Kennedy Wilson. Shearman & Sterling LLP acted as legal counsel to Fairfax.
The transaction is subject to customary closing conditions.
About Kennedy Wilson
Kennedy Wilson (NYSE: KW) is a leading global real estate investment firm. We own, operate and invest in real estate through our balance sheet and investment management platform. We focus on multi-family and office properties located in the Western United States, United Kingdom and Ireland. For more information on Kennedy Wilson, please visit: www.kennedywilson.com.
Special note regarding forward-looking statements
Statements contained in this press release that are not historical facts are “forward-looking statements” within the meaning of the United States federal securities laws. These forward-looking statements are estimates that reflect the current expectations of our management, are based on assumptions which may prove to be inaccurate and involve known and unknown risks. Accordingly, our actual results or performance may differ materially and adversely from the results or performance expressed or implied by such forward-looking statements, including for reasons beyond our control. For example, we may not be able to maintain our current pace of acquisition or disposal or identify future properties to acquire on terms we consider attractive, and our current property portfolio may not perform as expected. Accordingly, you should not place undue reliance on such statements, which speak only as of the date of this press release. We undertake no obligation to update forward-looking statements, except as required by law.
See the source version on businesswire.com: https://www.businesswire.com/news/home/20220223006233/en/
Daven Bhavsar, CFA
Vice President of Investor Relations
+1 (310) 887-3431
Public Relations Director
+1 (310) 887-3499