Kimco Realty Infuses Capital - Analyst Blog


Kimco Realty Corporation ( KIM ) announced the pricing of $350 million notes due 2023 at a coupon of 3.125% per annum as part of its effort to infuse capital. The notes, which have an effective yield of 3.211%, will mature on Jun 1, 2023 and the company expects to generate net proceeds of around $345 million from this notes offering.

With this capital infusion, Kimco plans to finance debt pay backs and meet near-term maturities. These include lowering of its borrowings, which stood at $499.5 million as of Mar 31, 2013, under its revolving credit facility that will mature in Oct 2015. Moreover, it aims to replace indebtedness under its senior notes, pre-fund near-term maturities and mortgage debt.

A consortium of firms supported Kimco in the offering. J.P. Morgan Securities LLC of JPMorgan Chase & Co. ( JPM ), Barclays Capital Inc., Morgan Stanley & Co. LLC of Morgan Stanley ( MS ) and RBC Capital Markets, LLC acted as joint book-running managers for the offering. On the other hand, a host of companies including Wells Fargo Securities of Wells Fargo & Company ( WFC ) served as the senior co-managers.

In Conclusion

We believe that this offering is a strategic fit and would enable Kimco achieve financial flexibility, reduce debt levels and position it favorably to pursue investment opportunities and acquisitions, which will consequently go a long way in enhancing its top line.

As a matter of fact, Kimco has a premium portfolio of retail properties in high-income, high-growth areas and is currently focusing on its core business activities to tide over the volatility in the market. It is well on track to sell off its non-retail assets and investments as well as non-strategic retail assets. The SUPERVALU transaction also augurs well and is expected to aid top-line expansion.

In addition, Kimco it has a strong balance sheet with easy access to capital to allow continued growth. Its liquidity position was strong at the end of the first quarter of 2013, with over $1.2 billion of immediate availability.  

Currently, Kimco carries a Zacks Rank #3 (Hold).

JPMORGAN CHASE (JPM): Free Stock Analysis Report

KIMCO REALTY CO (KIM): Free Stock Analysis Report

MORGAN STANLEY (MS): Free Stock Analysis Report

WELLS FARGO-NEW (WFC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: JPM , KIM , MS , WFC

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