Company: KW
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001408100-25-000084
Chunk: 26

Company: Kennedy-Wilson Holdings, Inc.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 1A
Chunk 26
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 volatile and uncertain, we continue to evaluate the extent to which each factor may impact our business, financial condition and results of operations.  

We are typically active in many real estate transactions.  The current high interest rates and inflationary pressures in our markets, however, have led to a general decrease in transactional activity as compared to previous periods, leading to lower levels of gains recognized and cash generated to reinvest in our business. Previous recessions and downturns in the real estate market have resulted in and may result in:

•a general decline in rents due to defaulting tenants or less favorable terms for renewed or new leases;

•a general decline in demand for new office space and commercial real estate, which in turn led to a general increase in the levels of vacancy across our office and commercial portfolio;

•a decline in actual and projected sale prices of our properties, resulting in lower returns on the properties in which we have invested;

•higher interest rates, higher loan costs, less desirable loan terms and a reduction in the availability of mortgage loans, all of which could increase costs and limit our ability to acquire additional real estate assets; and

•a decrease in the availability of lines of credit and the capital markets and other sources of capital used to grow, operate and maintain our business. 

If our business performance and profitability deteriorate, we could fail to comply with certain financial covenants in our unsecured bond and revolving credit facility, which would force us to seek an amendment with our lenders. We may be unable to obtain any necessary waivers or amendments on satisfactory terms, if at all, which could result in the principal and interest of the debt to become immediately due. Please also see “Our debt obligations impose significant operating and financial restrictions, which may prevent us from pursuing certain business opportunities and taking certain actions.”  In 

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addition, due to, among other things, a decrease in transactional activity and the macroeconomic conditions discussed above, we may become more highly leveraged, resulting in an increase in debt service costs that could adversely affect our results of operations or our credit ratings.  From time to time, Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services (“S&P”), a division of The McGraw-Hill Companies, Inc., rate our outstanding debt. These ratings are based on a variety of factors, including our current leverage and transactional activity.  In December 2024, S&P downgraded us to ‘B+’ from ‘BB-’. Additionally, S&P