SUBSEQUENT EVENTS	12 Months Ended
Dec. 31, 2012
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	NOTE 17. SUBSEQUENT EVENTS On January 17, 2013, the Company issued 14.95 million of 7.375% Series A LLC Preferred Shares ("Series A LLC Preferred Shares") for gross proceeds of $373.8 million, and net proceeds of $362.0 million. The Series A LLC Preferred Shares trade on the New York Stock Exchange under the ticker symbol "KFN.PR" and began trading on January 28, 2013. Distributions on the Series A LLC Preferred Shares are cumulative and are payable, when, as, and if declared by the Company's board of directors, quarterly on January 15, April 15, July 15 and October 15 of each year, beginning April 15, 2013, at a rate per annum equal to 7.375%. On January 18, 2013, in accordance with the indenture relating to the 7.5% Notes, the Company issued the Termination Notice to holders of the 7.5% Notes whereby it terminated the right to convert the 7.5% Notes to common shares. Per the indenture, the Company was able to terminate the conversion rights of the notes if the closing price of its shares exceeded 150% of the conversion price then in effect for 20 or more trading days in a period of 30 consecutive trading days ending on the trading day prior to the date on which it provided notice of the election to terminate the conversion rights. The conversion rate as of January 18, 2013 was equal to 141.8256 common shares for each $1,000 principal amount of 7.5% Notes, plus an additional 9.2324 common shares per $1,000 principal amount to account for the make-whole premium. As set forth in the Termination Notice, the 7.5% Notes were no longer convertible to common shares as of February 17, 2013. Through February 17, 2013, $172.5 million of the 7.5% Notes had been tendered for conversion, which were settled with 26.1 million shares. On January 31, 2013, the Company's board of directors declared a cash distribution for the quarter ended December 31, 2012 of $0.21 per share to common shareholders of record on February 19, 2013. The distribution is payable on February 28, 2013. In addition, on January 31, 2013, the Company's board of directors declared a special cash distribution for the year ended December 31, 2012 of $0.05 per share to common shareholders of record on March 14, 2013. The distribution is payable on March 28, 2013. On February 14, 2013, the Compensation Committee of the board of directors granted the Manager 292,009 restricted common shares subject to graded vesting over three years with the final vesting date of March 1, 2016.

NOTE 17. SUBSEQUENT EVENTS

On January 17, 2013, the Company issued 14.95 million of 7.375% Series A LLC Preferred Shares ("Series A LLC Preferred Shares") for gross proceeds of $373.8 million, and net proceeds of $362.0 million. The Series A LLC Preferred Shares trade on the New York Stock Exchange under the ticker symbol "KFN.PR" and began trading on January 28, 2013. Distributions on the Series A LLC Preferred Shares are cumulative and are payable, when, as, and if declared by the Company's board of directors, quarterly on January 15, April 15, July 15 and October 15 of each year, beginning April 15, 2013, at a rate per annum equal to 7.375%.

On January 18, 2013, in accordance with the indenture relating to the 7.5% Notes, the Company issued the Termination Notice to holders of the 7.5% Notes whereby it terminated the right to convert the 7.5% Notes to common shares. Per the indenture, the Company was able to terminate the conversion rights of the notes if the closing price of its shares exceeded 150% of the conversion price then in effect for 20 or more trading days in a period of 30 consecutive trading days ending on the trading day prior to the date on which it provided notice of the election to terminate the conversion rights. The conversion rate as of January 18, 2013 was equal to 141.8256 common shares for each $1,000 principal amount of 7.5% Notes, plus an additional 9.2324 common shares per $1,000 principal amount to account for the make-whole premium. As set forth in the Termination Notice, the 7.5% Notes were no longer convertible to common shares as of February 17, 2013. Through February 17, 2013, $172.5 million of the 7.5% Notes had been tendered for conversion, which were settled with 26.1 million shares.

On January 31, 2013, the Company's board of directors declared a cash distribution for the quarter ended December 31, 2012 of $0.21 per share to common shareholders of record on February 19, 2013. The distribution is payable on February 28, 2013. In addition, on January 31, 2013, the Company's board of directors declared a special cash distribution for the year ended December 31, 2012 of $0.05 per share to common shareholders of record on March 14, 2013. The distribution is payable on March 28, 2013.

On February 14, 2013, the Compensation Committee of the board of directors granted the Manager 292,009 restricted common shares subject to graded vesting over three years with the final vesting date of March 1, 2016.