SecProbe.io

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Mail Stop 4561

								June 20, 2005

Barbara J.S. McKee, Esq.
General Counsel and Secretary
KKR Financial Corp.
Four Embarcadero Center, Suite 250
San Francisco, CA 94111

Re:	KKR Financial Corp.
	Form S-11/A filed on June 9, 2005
	Form S-11/A filed on June 9, 2005
	File No. 333-124103

Dear Ms. McKee:

      We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments.  If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Second and Third Amended Form S-11

General

1. Please include a consent from your auditors in the next
amendment
or explain your basis for excluding it.

2. We note your response to prior comment 3.  Please disclose in
your
registration statement that your manager will not transfer shares
and
options awarded in August 2004 prior to the expiration of the
first
anniversary of the award..

3. We are reissuing our comments requesting, supplementally,
copies
of all correspondence between your underwriters (including,
without
limitation, the ones added in your third-amended Form S-11) and
the
NASD, regarding this offering.

4. We note from pages 14-16, 39, 81 and 82 your new disclosure
regarding your exemption from the Investment Company Act of 1940
and
have the following comments:

* On page 14, please disclose once more that you were formed in
July
2004.

* The information on pages 15 and 16 is too detailed for your
summary.  Please move it to the discussion of Investment Company
Act
matters beginning on page 80. In its place, please inform
investors
briefly of: (a) the value of your current 55% and 75% qualifying
assets; (b) what percentage of your portfolio these assets
represent;
and (c) how much you still need to acquire of each in order to
avoid
registration under the Act.  In order to enhance the readability
of
this disclosure, please consider presenting the information in the
form of a chart.

* On page 11, please include a summary risk factor addressing the
fact that you must acquire by the end of July at least $600
million
of qualifying securities in order to qualify for an exemption from
the Investment Company Act (see page 81), that there is no
guarantee
you will be able to timely acquire these securities, and that you
may
become subject to registration under the Act thereafter.

* On page 39, please revise your risk factor to discuss,
separately,
risk related to qualification for an exemption under the
Investment
Company Act and risk related to restrictions on your investment
activity, once qualified.  With regard to the former, please state
that you must purchase at least $600 million in qualifying assets
by
July 2004 in order to avoid possible registration under the Act
and
discuss the fact that you may face competition for such purchases
and
that there is no guarantee that you will make such purchases on a
timely basis.  Also, discuss the negative impact registration
would
have on you and your investors.

5. We note your response to prior comment 3.  Please disclose on
page
8, in the discussion of your management agreement, that your
manager
may only allocate options or restricted shares to its employees or
third parties who provide services to you and, moreover, that you
do
not expect to receive requests for any such transfers prior to the
expiration of the first anniversary of the grant of the awards.

6. We note your response to prior comment 13.  Supplementally,
please
tell us whether, to your knowledge, the IRS is currently
challenging
the status of offshore TRSs similar to yours or has indicated in
any
way that it may do so in the future.  Provide us with copies of
any
relevant correspondence or statements.

Cover Page

7. Please revise the seventh bullet point to substitute
"increases"
for "changes" in interest rates and make corresponding revisions
throughout.

Summary

8. We note from page 75 that you have $250 million as of March 31,
2005, to use toward future investments.  We further note, from
page
13, that you intend to use the proceeds of this offering to pay
down
roughly $588 million in debt (excluding the greenshoe).  Finally,
we
note from pages 4 and 5 various targeted leverage ratios.  Where
appropriate, please give investors some idea of how much larger
you
intend to make your portfolio.

Targeted Investments, page 1

9. Please revise to disclose that there are no limitations on the
amount of investment in any of the targeted asset classes.

Management Agreement, page 6

10. We note your response to prior comment 25 and the following
additional comments:

* On page 76, please make it clear that KKR Financial Advisors II,
which manages KKR Financial CLO 2005-1, is a subsidiary of your
manager and not you. Also, please be sure to attach copies of the
collateral management agreements to your registration statement as
exhibit and discuss these agreements in your business section.

* On page 77, please explain why the entity affiliated with your
manager agreed to waive fees through October 2005 and attach a
copy
of that agreement to your registration statement as an exhibit.
Also, in your summary and elsewhere, where you discuss management
fees, please discuss these deferred fees (and the possibility that
they will not be deferred in the future).  Quantify current
deferred
obligations and fees going forward.

Conflicts of Interest, page 8

11. Please revise the statement on page 10 to disclose the
percentage
of the proceeds represented by the $587.4 million that will be
repaid
to Credit Suisse First Boston LLC.

MD&A

Investment Portfolio, page 63

12. For each part of your portfolio, please indicate the actual
leverage ratio as of March 31, 2005, and discuss any material
differences from your target ranges described elsewhere.

Our Company, page 86

Competition, page 108

13. Please relocate the list of investments to your discussion of
conflicts of interest with your manager, beginning on page 8, and
explain briefly why these investments may constitute a conflict.
You
should also relocate the supporting discussion of the value of KKR
"deal flow" to the more general discussion of your competitive
advantages, beginning on page 94.  We feel that this information
is,
at best, only tenuously connected to your discussion of
competitive
issues.

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm, page F-2

14. We note that the audit report of Deloitte & Touche LLP will be
signed upon consummation of the stock split discussed in the
second
paragraph of Note 16 to the consolidated financial statements.
Please confirm to us that you will provide a pre-effective
amendment
to the registration statement with the preface removed and the
accountant`s report signed.
Other

      As appropriate, please amend your registration statement in
response to our comments.  You may wish to provide us with marked
copies of the amendment to expedite our review.  Please furnish a
cover letter with your amendments that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.

	No further review of the registration statement has been or
will
be made.  We urge all persons who are responsible for the accuracy
and adequacy of the disclosure in the filings to be certain that
they
have provided all information investors require for an informed
decision.  Since the company and its management are in possession
of
all facts relating to a company`s disclosure, they are responsible
for the accuracy and adequacy of the disclosures they have made.

      Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert this action as defense in any
proceeding
initiated by the Commission or any person under the federal
securities laws of the United States.
      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.

	We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the above registration
statement.  We will act on the request and, pursuant to delegated
authority, grant acceleration of the effective date.

      We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement.  Please allow
adequate time after the filing of any amendments for further
review
before submitting a request for acceleration.  Please provide this
request at least two business days in advance of the requested
effective date.
      You may contact Rachel Zablow at 202-551-3428 or Steven
Jacobs,
Accounting Branch Chief, at 202-551-3403 if you have questions
regarding comments on the financial statements and related
matters.
Please contact Geoffrey Ossias at 202-551-3404 or the undersigned
at
202-551-3495 with any other questions.

Sincerely,

Elaine Wolff
Branch Chief

cc:	Joseph Kaufman (via facsimile)

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KKR Financial Corp.
June 20, 2005
Page 1

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