KKR Financial Holdings LLC

KKR Financial Corp. Declares Quarterly Distribution

SAN FRANCISCO, Nov 02, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- KKR Financial Corp. (NYSE: KFN) announced today that its Board of Directors has declared a cash distribution for the quarter ended September 30, 2006, of $0.52 per common share. The common stock cash distribution will be payable on November 30, 2006 to stockholders of record as of the close of business on November 16, 2006.

KKR Financial Corp. is a specialty finance company that invests in multiple asset classes and uses leverage to generate competitive leveraged risk-adjusted returns. KKR Financial Corp. currently makes investments in the following asset classes: (i) residential mortgage loans and mortgage-backed securities; (ii) corporate loans and debt securities; (iii) commercial real estate loans and debt securities; (iv) asset-backed securities; and (v) marketable and non-marketable equity securities. KKR Financial Corp. also makes opportunistic investments in other asset classes from time to time. KKR Financial Corp. was organized as a Maryland corporation on July 7, 2004, and commenced operations on August 12, 2004. KKR Financial Corp. is structured as a real estate investment trust and KKR Financial Advisors LLC manages KKR Financial Corp. pursuant to a management agreement. KKR Financial Corp. and KKR Financial Advisors LLC are affiliates of Kohlberg Kravis Roberts & Co. L.P.

For more information about KKR Financial Corp. or a copy of this press release visit its website at www.kkrfinancial.com .

     CONTACT:

     Investors
     Laurie Poggi
     KKR Financial
     415-315-3718

     Media
     Roanne Kulakoff/Joseph Kuo
     Kekst and Company
     212-521-4837/4863

SOURCE KKR Financial Corp.

investors, Laurie Poggi of KKR Financial, +1-415-315-3718; or media, Roanne Kulakoff,
+1-212-521-4837, or Joseph Kuo, +1-212-521-4863, both of Kekst and Company for KKR
Financial

http://www.kkrfinancial.com

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