8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________

FORM 8-K

_____________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

June 8, 2023

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KENNEDY-WILSON HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

_____________

Delaware	001-33824	26-0508760
(State or other jurisdiction  of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

151 S El Camino Drive Beverly Hills, California 90212

(Address of principal executive offices)(Zip Code)

(310) 887-6400

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

_____________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2.):

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

(See definition of “large accelerated filer," "accelerated filer," "smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act). (Check one):

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   ☐  Yes    ☒  No

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $.0001 par value	KW	NYSE

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐  

Item 8.01. Other Events

As previously announced, a wholly-owned subsidiary of Kennedy-Wilson Holdings, Inc., a Delaware corporation (collectively with certain of its subsidiaries, the “Company” or “we”), entered into a Loan Purchase and Sale Agreement (the “Agreement”) with Pacific Western Bank, a California state-chartered bank (“PacWest”), to acquire a portfolio of real estate construction loans (the “Loans”) from PacWest. On June 8, 2023, the Company and Fairfax Financial Holdings Limited, a Canadian corporation (collectively with certain of its subsidiaries and affiliates, “Fairfax” and together with the Company, the “KW/FF Purchasers”) closed on the purchase of 53 of the Loans (the “Initial Closing”). The purchase price paid for such 53 Loans (collectively, the “Initial Loans”) was a total of approximately $1.6 billion (excluding closing costs), and (i) was paid to PacWest to acquire a total of approximately $1.8 billion in aggregate principal balance that is currently outstanding under the Initial Loans (with remaining future funding obligations of approximately $1.4 billion); and (ii) is the price for the entire portfolio of Initial Loans and may not necessarily be reflective of the price paid for any individual loan. The KW/FF Purchasers will also be assuming all remaining future funding obligations under the Initial Loans, subject to customary conditions to disbursement. The Company’s investment in the acquisition of the Initial Loans was 5% of the purchase price and the future funding obligations. In addition, the Company will earn customary asset management fees from Fairfax for managing the Initial Loans.

Pursuant to the Agreement, the KW/FF Purchasers currently expect to also acquire an additional 12 Loans with an aggregate principal balance of $489 million (and future funding obligations of approximately $331 million) from PacWest for a total purchase price of approximately $452 million (excluding closing costs) (the “Additional Loans,” and together with the Initial Loans, the “KW/FF Loans”). The Company’s investment in the acquisition of these Additional Loans will also be 5% of the purchase price and the future funding obligations and upon acquiring each of the Additional Loans, the Company will earn customary asset management fees from Fairfax for managing such Additional Loan. The acquisition of the Additional Loans is currently expected to close on a rolling basis in tranches throughout June 2023 and the early part of the third quarter of 2023 as customary closing conditions are satisfied (including receipt of third-party consents and waivers). There can be no assurance that the acquisition of the Additional Loans will be completed in part or at all.

The aggregate principal balance of the KW/FF Loans, which are floating rate, currently carries an average interest rate of approximately 8.6% and approximately 80% of the KW/FF Loans are secured by multifamily or student housing development projects with the balance being a mix of industrial, hotel and life science office property development projects.

In addition, in connection with the Transaction, the Company is currently working on finalizing arrangements with PacWest for certain PacWest employees that originated and currently manage the Loans (“PW Team”) to join the Company as employees during the second and third quarters of 2023. Additionally, the Company and PacWest agreed to extend the due diligence period with respect to five additional Loans with an aggregate principal balance of approximately $187 million (until the Company waives due diligence, it is not obligated to purchase such Loans and its decision to either waive or not waive the due diligence condition with respect to these five Loans will not impact the Company and it partners’ rights and obligations to purchase each other Loan).

Concurrently with the Initial Closing, the Company also completed the assignment of its right and obligations to purchase ten of the Loans (the “Assigned Loans”) in their entirety from PacWest to an institutional investor (the “Assignee”). The aggregate principal balance of the Assigned Loans is approximately $500 million. The Company will not hold an investment in the Assigned Loans. However, in connection with Assignee’s acquisition of the Assigned Loans, the Company will earn a management fee from Assignee to manage the Assigned Loans for a period of up to nine (9) months.

Cautionary Statement Regarding Forward-Looking Statements

This Current Report on Form 8-K contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are necessarily estimates reflecting the judgment of our senior management based on our current estimates, expectations, forecasts and projections and include comments that express our current opinions about trends and factors that may impact future operating results. Disclosures that use words such as “believe,” “may,” “anticipate,” “estimate,” “intend,” “could,” “plan,” “expect,” “project” or the negative of these, as well as similar expressions, are intended to identify forward-looking statements. Forward-looking statements involve significant known and unknown risks and uncertainties that may cause the Company’s actual results in future periods to differ materially from those projected or contemplated in the forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. There is no assurance that the proposed Transaction will be consummated, and there are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements made herein.

Forward-looking statements are not guarantees of future performance, rely on a number of assumptions concerning future events, many of which are outside of our control, and involve known and unknown risks and uncertainties that could cause our actual results, performance or achievement, or industry results to differ materially from any future results, performance or achievements, expressed or implied by such forward-looking statements. These risks and uncertainties may include the risks and uncertainties described elsewhere in this report and other filings with the Securities and Exchange Commission (the “SEC”), including the Item 1A. “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2022, as supplemented by the risk factors disclosed in Item 1A. of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023. Any such forward-looking statements, whether made in this report or elsewhere, should be considered in the context of the various disclosures made by us about our businesses including, without limitation, the risk factors discussed in our filings with the SEC. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events, changes in assumptions, or otherwise.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release of Kennedy Wilson dated June 9, 2023.
104	Cover Page Interactive Data File - The cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

KENNEDY-WILSON HOLDINGS, INC.
By:	/s/ JUSTIN ENBODY
	Justin Enbody
	Chief Financial Officer

Date: June 9, 2023

EX-99.1

Exhibit 99.1

151 S. El Camino Dr.
Beverly Hills, CA 90212
www.kennedywilson.com

NEWS RELEASE

KENNEDY WILSON ACQUIRES FIRST TRANCHE OF $5.7 BILLION LOAN PORTFOLIO FROM PACIFIC WESTERN BANK

Off-market transaction will expand Kennedy Wilson’s national footprint and debt investment platform by initially adding over $2 billion to fee-bearing capital

BEVERLY HILLS, Calif. (June 9, 2023) – Representing one of the first significant real estate debt transactions in this market cycle, global real estate investment company Kennedy Wilson (NYSE: KW) has closed on the initial tranche of loans as part of a $5.7 billion loan portfolio acquisition from Pacific Western Bank. The first tranche of loans acquired by Kennedy Wilson and certain controlled affiliates of Fairfax Financial Holdings Limited (collectively, “Fairfax")(TSX:FFH and FFH.U), a long-time partner of Kennedy Wilson, totaled $3.25 billion in total commitments and $1.8 billion in current principal balance. The first tranche of loans was acquired for $1.6 billion. An additional 12 loans totaling $800 million in commitments are expected to close on a rolling basis by no later than the end of July (collectively, “Loan Portfolio”).

The Loan Portfolio is comprised of floating-rate construction loans that carry a weighted-average interest rate of approximately 8.6%, with approximately 80% of the portfolio secured by high-quality multifamily and student housing properties and the remainder including mainly industrial, hotel, and life science assets. The Loan Portfolio consists of loans located in Kennedy Wilson’s key Western U.S. markets and expands the company’s footprint into new regions across the southern and eastern United States.

In its role as asset manager, Kennedy Wilson will earn customary fees and will have an ownership of 5% in the Loan Portfolio. The company is also finalizing arrangements with Pacific Western Bank for certain employees that originated and currently manage the Loan Portfolio to join the Kennedy Wilson team.

The $5.7 billion in loans arranged by Kennedy Wilson includes the $4.1 billion Loan Portfolio, $1.2 billion of loan commitments to be purchased by a third party ($970 million of which have already been acquired), and $400 million of loans subject to further due diligence.

“The acquisition of this Loan Portfolio from Pacific Western Bank highlights Kennedy Wilson’s historic ability to find off-market transactions during periods of uncertainty, move with speed, and build on our successful track record of investing through all real estate cycles,” said William McMorrow, Chairman and CEO at Kennedy Wilson. “The foundations of Kennedy Wilson are our deep relationships, our

-more-

reputation as a great partner, and our strength in being nimble when opportunity arises; all of which came into play with this loan portfolio acquisition.”

“We are pleased to expand our debt portfolio in such a significant way, which strategically positions our private credit platform for substantial future growth,” said Matt Windisch, Executive Vice President at Kennedy Wilson. “We look forward to welcoming members of the Pacific Western Bank team to Kennedy Wilson as we further strengthen our debt capabilities and capacity.”

“We appreciate our long-standing relationship with Kennedy Wilson and are pleased to partner with them to successfully execute this asset sale. This transaction will improve our liquidity and capital as we continue to implement our announced strategy to return our focus to relationship-based community banking,”said Paul Taylor, President and CEO of Pacific Western Bank.

The Loan Portfolio acquisition contributes to the rapid expansion of Kennedy Wilson’s global debt platform, which launched in 2020 and today totals $7 billion in total gross commitments, including future fundings and deals under contract, with significant capacity for growth.

About Kennedy Wilson

Kennedy Wilson (NYSE:KW) is a leading global real estate investment company. The company owns, operates, and invests in real estate through the balance sheet and through an investment management platform across the Western United States, United Kingdom, and Ireland. Kennedy Wilson primarily focuses on multifamily and office properties as well as industrial and debt investments in the investment management business. For more information on Kennedy Wilson, please visit: www.kennedywilson.com

About PacWest Bancorp

PacWest Bancorp (“PacWest”) is a bank holding company headquartered in Los Angeles, California, with an executive office in Denver, Colorado, with one wholly-owned banking subsidiary, Pacific Western Bank (the “Bank”). Pacific Western Bank is a relationship-based community bank focused on providing business banking and treasury management services to small, middle-market, and venture-backed businesses. The Bank offers a broad range of loan and lease and deposit products and services through full-service branches throughout California and in Durham, North Carolina and Denver, Colorado, and loan production offices around the country. For more information about PacWest Bancorp or Pacific Western Bank, visit www.pacwest.com.

KW-IR

Special Note Regarding Forward-Looking Statements

Statements in this press release that are not historical facts are “forward-looking statements” within the meaning of U.S. federal securities laws. These forward-looking statements are estimates that reflect our management’s current expectations, are based on our current estimates, expectations, forecasts, projections and assumptions that may prove to be inaccurate and involve known and unknown risks. Accordingly, our actual results, performance or achievement, or industry results, may differ materially and adversely from the results, performance or achievement, or industry results, expressed or implied by these forward-looking statements, including for reasons that are beyond our control.  Some of the forward-looking statements may be identified by words like “believes”, “expects”, “anticipates”, “estimates”, “plans”, “intends”, “projects”, “indicates”, “could”, “may” and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and

assumptions. We assume no duty to update the forward-looking statements, except as may be required by law. 

Contact:    Investors

        Daven Bhavsar, CFA
        Vice President of Investor Relations
        +1 (310) 887-3431
        dbhavsar@kennedywilson.com

Media

        Emily Heidt

        Vice President, Communications

        +1 (310) 887-3499

        eheidt@kennedywilson.com

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XML

Cover Page	Jun. 08, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jun. 08, 2023
Entity Registrant Name	KENNEDY-WILSON HOLDINGS, INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-33824
Entity Tax Identification Number	26-0508760
Entity Address, Address Line One	151 S El Camino Drive
Entity Address, City or Town	Beverly Hills
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90212
City Area Code	310
Local Phone Number	887-6400
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Title of 12(b) Security	Common stock, $.0001 par value
Trading Symbol	KW
Security Exchange Name	NYSE
Entity Central Index Key	0001408100
Amendment Flag	false