Kennedy-Wilson lands $300M preferred equity investment from Fairfax Financial

Fairfax Financial Holdings Ltd. affiliates will acquire $300 million of perpetual preferred stock in Kennedy-Wilson Holdings Inc.

The perpetual preferred stock, which is callable by Kennedy-Wilson at any time, bears a 4.75% annual dividend rate.

Kennedy-Wilson plans to use the proceeds to finance its development pipeline and real estate investments and fully pay off its unsecured bank borrowings.

The Canadian insurance company also increased its first mortgage target to $5 billion from $3 billion in Kennedy-Wilson's debt investment platform.

Fairfax, which owns an approximately 9% stake in Kennedy-Wilson, likewise bought seven-year warrants for about 13.0 million Kennedy-Wilson common shares with an initial strike price of $23.00 apiece.

The initial strike price was based on Kennedy-Wilson's closing share price Feb. 9 and reflects a 2% premium to the stock's 20-day daily volume-weighted average price per share.

J.P. Morgan was the placement agent and Latham & Watkins LLP was legal adviser to Kennedy-Wilson, while Shearman & Sterling LLP was legal adviser to Fairfax.