Fitch Rates KKR Pacific Funding Trust Secured Liquidity Notes 'F1+'

Business Wire, Nov 23, 2005

NEW YORK -- KKR Pacific Funding Trust (KKR Pacific) $5 billion Secured Liquidity Note (SLN) Program is rated 'F1 ' by Fitch Ratings. The rating is based on credit enhancement provided in the form of overcollateralization, collateral eligibility requirements, and the legal and financial structure of the transaction.

KKR Pacific is a special purpose, bankruptcy-remote Delaware statutory trust established for the sole purpose of issuing SLNs to fund the purchase of certain mortgage-backed securities from KKR Pacific Funding Depositor Corp. LLC (the Depositor) and KKR Financial Corp. (KKR Financial), pursuant to a master repurchase agreement. The securities acquired will, among other eligibility requirements, be limited to: securities that are direct obligations of, or that are fully guaranteed as to principal and interest by the Government National Mortgage Association (GNMA), the Federal Home Mortgage Loan Corporation (FHLMC), or the Federal National Mortgage Association (FNMA), (the Agencies); and securities that are issued by any bankruptcy-remote, limited purpose issuer of residential mortgage-backed securities and that are rated 'AAA'.

Each SLN will have an expected maturity, at the option of KKR Pacific, of up to 300 days. KKR does not benefit from third-party liquidity support. Rather, if available funds are insufficient to repay SLNs in full on their repayment date and KKR Pacific is unable to issue new SLNs to repay the entire face-value of the maturing notes, the SLNs will be converted into a class of extended notes having maturities of 30 business days following the expected maturity.

The Administrator of KKR Pacific is KKR Financial Advisors III, LLC (KKR III). KKR Financial is a REIT (real estate investment trust) that invests in fixed income securities, loans, and private equity as part of its strategy and is establishing KKR Pacific to fund its portfolio. KKR Financial is a wholly owned subsidiary of KKR Financial LLC, which is based in San Francisco and was formed in August 2004 by Kolhberg Kravis Roberts & Co., a leveraged buyout firm formed in 1976.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.