Kimco Realty Corporation KIM, the retail real estate investment trust (“REIT”), has announced the pricing of a public offering of $350 million worth notes. The notes bearing a coupon of 4.25% per annum and an effective yield of 4.313% are slated to mature on Apr 1, 2045. The company intends to utilize the net proceeds generated from this offering for pre-funding near-term maturities and lowering the borrowing capacity under its revolving credit facility.
Notably, on Feb 27, Kimco announced the setting up of a $500-million at the market (“ATM”) equity offering program. Per the program, Kimco is entitled to sell or offer its common shares, par value 1 cent a share. At that time, the company expressed its intention to utilize the proceeds for general corporate purposes and funding future acquisitions as well as development and redevelopment projects.
Kimco, the New Hyde Park, NY-based retail REIT owns and operates the largest publicly traded portfolio of neighborhood and community shopping centers in North America. The latest pricing not only offers a very attractive and comparatively cheaper source of capital but also lends greater flexibility to the company’s balance sheet.
Notably, Kimco reported fourth-quarter 2014 adjusted funds from operations (“FFO”) per share of 35 cents, in line with the Zacks Consensus Estimate and 2 cents above the prior-year quarter figure. Results benefited from growth in U.S. same-property net operating income (“NOI”).
Currently, Kimco carries a Zacks Rank #3 (Hold).
Investors interested in the retail REIT may consider stocks like Acadia Realty Trust AKR, Agree Realty Corp. ADC and National Retail Properties, Inc. NNN. All these stocks hold a Zacks Rank #2 (Buy).
Note: 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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