Kimco Realty Corporation
) 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.
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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.
), Barclays Capital Inc., Morgan Stanley & Co. LLC of
) 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
) served as the senior co-managers.
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).