Kimco Realty Corp.
) disclosed the closure of a new unsecured revolving credit
facility worth $1.75 billion. This replaced an existing facility
of the same value. The move is aimed at strengthening the balance
sheet and availing credit facility at competitive terms.
This new facility bears an annual interest rate of LIBOR
(London Inter-Bank Offer Rate) plus 92.5 basis points on drawn
funds. Through an accordion feature, the facility can be
amplified to $2.25 billion. Moreover, the initial maturity date
of March 17, 2018 can be extended to March 17, 2019, using the
two additional six-month options.
Additionally, this new credit facility provides Kimco a
distinctive feature to borrow loan in other currencies such as
Canadian dollars, Euro, British pound sterling and Japanese yen,
up to a sub-limit of $500 million.
Kimco obtained the credit revolver in commitment from 23
lending institutions. Wells Fargo Securities, LLC of
Wells Fargo & Company
), RBC Capital Markets of
Royal Bank of Canada
) and J.P. Morgan Securities LLC of
JPMorgan Chase & Co.
) assisted Kimco as joint book runners.
We expect the strategic move to improve the company's
liquidity position and pave the way for a rise in shareholder's
value going forward. As a matter of fact, Kimco has a
considerable track record of conservative capital management. As
of Dec 31, 2013, the company's cash and cash equivalents stood at
$148.8 million, up from $141.9 million as of Dec 31, 2012.
Kimco is scheduled to report the first-quarter 2014 results on
May 7, after the closing bell. The Zacks Consensus Estimate for
2014 funds from operations (FFO) for the quarter is currently
pegged at 34 cents per share.
Kimco currently carries a Zacks Rank #3 (Hold).
: FFO, a widely used metric to gauge the performance of
REITs, is obtained after adding depreciation and amortization and
other non-cash expenses to net income.
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