KKR Financial Holdings LLC shares dropped as much as 39% after the firm sold almost half its mortgage loans for a net loss of $40 million and may have more losses as prices fall on bonds linked to American home loans. The company, a unit of buyout firm Kohlberg Kravis Roberts & Co., sold $5.1 billion in loans and plans to sell $5.8 billion in remaining residential mortgage-backed securities. Disposing of those assets may lead to a writedown of $200 million in equity and “additional liabilities” of as much as $50 million, San Francisco-based KKR Financial said yesterday in a statement.

“In light of the level of disruption and volatility in commercial paper and broader credit markets, estimates of potential exposure are necessarily subject to future revision,” the company said in the statement.

KKR Financial reiterated its plan to stop buying residential real-estate assets. At least 70 American mortgage companies have halted operations or sought buyers since the start of 2006, according to Bloomberg data. Overdue payments on subprime mortgages to American homebuyers with poor credit rose to the highest level since 2002 during the first quarter of this year, according to the Mortgage Bankers Association.

Investors have since shunned securities tied to home loans, pushing down prices and forcing hedge funds that bet on the mortgage market to post losses.