KKR arm in talks after fresh debt repayment delays

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KKR Financial Holdings said in a filing with the U.S. Securities and Exchange Commission on Tuesday that a debt repayment due on February 15 on notes issued by conduits holding mortgage-backed securities had been deferred until March 3.

KKR Financial Holdings said that this would "allow for restructuring discussions."

The repayment date for the debt had already been extended once previously under a restructuring agreement in October, the firm said.

The news, brought to wider attention by a Financial Times report, dragged Asian shares lower and dragged the dollar lower against the yen, traders in Tokyo said.

In Europe, the news knocked jittery credit markets hard, with the widely watched iTraxx Crossover index breaking above 600 basis points for the first time.

Analysts cited the KKR news as an additional negative factor adding to worries over bank writedowns and surging oil prices.

KKR Financial Holdings is a leveraged investment vehicle that had borrowed in commercial paper markets to invest in home loans, the FT said.

The Financial Times said in a report on its Web site that Tuesday's move by KKR financial holdings followed a $270 million (138.7 million pounds) bail-out of the leveraged investment vehicle last September, which saw founders Henry Kravis and George Roberts personally inject cash.

(Reporting by Masayuki Kitano in Tokyo and Richard Barley in London; Editing by Quentin Bryar)