| Item 1.01 |
Entry Into a Material Definitive Agreement. |
On May 29, 2026, Kennedy-Wilson, Inc. (the “Issuer”), a wholly-owned subsidiary of global real estate investment company Kennedy-Wilson Holdings, Inc. (the “Company”), completed the issuance and sale of $1.8 billion in aggregate principal amount of senior notes, consisting of $1.1 billion aggregate principal amount of 7.000% senior notes due 2031 (the “2031 Notes”) and $700 million aggregate principal amount of 7.250% senior notes due 2033 (the “2033 Notes” and, together with the 2031 Notes, the “Notes”) pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The Notes were sold only to “qualified institutional buyers” and persons outside the United States that are not “U.S. persons” as such terms are defined under the Securities Act.
The Notes were issued under an indenture, dated as of March 25, 2014 (the “Base Indenture”), by and among the Issuer and Wilmington Trust, National Association, as trustee (the “Trustee”), as supplemented by Supplemental Indenture No. 2031-1, dated as of May 29, 2026 (“Supplemental Indenture No. 2031-1”), by and among the Issuer and the Trustee, with respect to the 2031 Notes and Supplemental Indenture No. 2033-1, dated as of May 29, 2026 (“Supplemental Indenture No. 2033-1”), by and among the Issuer and the Trustee, with respect to the 2033 Notes (the Base Indenture, as so supplemented, the “Indenture”). The Indenture contains customary agreements and covenants by the Company, the Issuer and the guarantors party thereto from time to time.
The 2031 Notes will mature on June 1, 2031, and bear interest at a rate of 7.000% per annum. The 2033 Notes will mature on June 1, 2033, and bear interest at a rate of 7.250% per annum. Interest on the Notes is payable semiannually in arrears on June 1 and December 1 of each year, commencing on December 1, 2026.
If the Merger (as defined and discussed below) is consummated, the Company expects to use the net proceeds from the issuance and sale of the Notes (i) to redeem in full the Issuer’s 4.750% senior notes due 2029 (the “2029 Existing Notes”) and 4.750% senior notes due 2030 (the “2030 Existing Notes”), and pay any related premiums, if any, fees and expenses, including accrued and unpaid interest with respect to the 2029 Existing Notes and 2030 Existing Notes, (ii) to make an offer to purchase (the “Offer”) the Issuer’s 5.000% senior notes due 2031 (the “2031 Existing Notes”) pursuant to the fundamental change provisions of the indenture governing the 2031 Existing Notes, and (iii) the remainder, if any, to repay all or a portion of the indebtedness outstanding under the Issuer’s unsecured credit facility and/or for general corporate purposes.
As previously announced, on May 15, 2026, the Issuer commenced the Offer upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 15, 2026, as it may be amended or supplemented from time to time, and issued notices of redemption with respect to the 2029 Existing Notes and the 2030 Existing Notes, pursuant to which the Issuer will redeem in full the 2029 Existing Notes and the 2030 Existing Notes on June 16, 2026. The consummation of the Offer and the redemption of the 2029 Existing Notes and the 2030 Existing Notes are each conditioned upon the consummation of the Merger.
As previously announced, the Company is party to an Agreement and Plan of Merger (the “Merger Agreement”), dated as of February 16, 2026, as amended on March 15, 2026, by and among the Company, Kona Bidco, LLC and Kona Merger Subsidiary, Inc. (“Merger Sub”), an entity affiliated with a consortium led by William McMorrow, Chairman and Chief Executive Officer of the Company, and certain other senior executives of the Company, and including Fairfax Financial Holdings Limited (“Fairfax”), pursuant to which, subject to the satisfaction of customary closing conditions, Merger Sub would merge with and into the Company, and the Company would continue as the surviving corporation (the “Merger”).
The gross proceeds from the issuance and sale of the Notes were deposited into an escrow account for the benefit of the holders of the Notes pending the consummation of the Merger. Upon the consummation of the Merger, the escrowed property will be released pursuant to the terms of the Escrow Agreement, dated May 29, 2026, by and among the Company, the Trustee and Wilmington Trust, National Association, as escrow agent.
If the Merger is not consummated on or prior to November 16, 2026 (or such later date as agreed to by the parties to the Merger Agreement), the Notes will be subject to a special mandatory redemption, at a price equal to 100% of the initial issue price of the Notes plus accrued and unpaid interest, if any, from the issue date of the Notes to, but not including, the date of such special mandatory redemption. Fairfax, directly or through one or more of its affiliates, has committed to fund any shortfall between the amount of funds held in the escrow account and the special mandatory redemption price.
