.crazylegs..

KKR's Double Whammy

And they are invested at the top of the capital stack, i.e. the bank debt or the senior SECURED bonds, so they should be first in line to get a recovery if their debtors default.

KKR's Double Whammy

"With the value of its funds going down as endowments deleverage further, it would appear that KKR was prescient in securing those new credit facilities in order to survive a possibly even bigger crunch ahead."

This demonstrates a lack of understanding of KKR Financial. The credit line of an affiliated company has nothing to do with KKR the private equity shop that does manage endowment money. KKR Financial as a stand alone company does not manage endowment money, it manages funds on behalf of its stakeholders (owners of its CDO paper, stockholders, etc).