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Kimco Realty OP, LLC has priced an upsized private offering of USD 525 million in 3.5% exchangeable senior notes due in 2031, increasing the size of the offering from the initially proposed USD 500 million. The offering is expected to strengthen the company's capital position and support corporate requirements, including debt management and potential investments. The notes will carry a 3.5% annual interest rate and are backed by a senior unsecured guarantee from Kimco Realty Corporation. The move comes as the retail-focused REIT continues to manage its balance sheet and pursue growth opportunities across its portfolio.
Kimco Realty OP, LLC, the operating partnership of Kimco Realty Corporation, has priced an upsized private offering of USD 525 million in exchangeable senior notes due 2031. The transaction was increased from the previously announced USD 500 million offering, reflecting investor demand for the securities.
The notes will carry an annual interest rate of 3.5% and will mature on June 15, 2031, unless they are repurchased, redeemed or exchanged before that date. Interest payments are scheduled to be made semi-annually beginning later this year. The notes will be senior unsecured obligations of Kimco Realty OP and will be fully and unconditionally guaranteed by Kimco Realty Corporation on a senior unsecured basis.
According to the offering terms, holders will have limited rights to exchange the notes before March 2031, subject to specified conditions. After that period, investors will be able to exchange the notes more freely until shortly before maturity. Any exchanges will be settled in cash and, where applicable, shares of Kimco Realty common stock.
The initial exchange rate has been set at 30.9028 shares per USD 1,000 principal amount of notes, implying an exchange price of approximately USD 32.36 per share. This represents a premium of around 27.5% over the company's closing share price before the pricing of the offering.
Kimco Realty expects net proceeds of approximately USD 513.5 million from the transaction, excluding any exercise of the purchasers' option to acquire additional notes. Initial purchasers have been granted an option to buy up to an additional USD 75 million of notes within a limited period. A portion of the proceeds is expected to be used for share repurchases, while the remaining funds may support general corporate purposes, including debt repayment, acquisitions and other investment activities.
Kimco Realty is one of the largest publicly traded retail real estate investment trusts in the United States, with a portfolio focused on grocery-anchored shopping centres and mixed-use properties in major metropolitan and Sun Belt markets. The company has been listed on the New York Stock Exchange since 1991 and has continued to use a mix of debt and equity financing to fund growth and portfolio management initiatives.
Source Reuters
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