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Kimco Closes Partial Monetization of Investment in Albertsons
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Kimco Realty Corp. (KIM - Free Report) completedthe partial monetization of its investment in Albertsons Companies, Inc. and received $156.1 million from the latter. With this, Kimco reduced its ownership interest in Albertsons to 7.5% from 9.29%.
Notably, Albertsons received $1.68 billion in net proceeds from the sale of $1.75 billion of convertible preferred stock. The proceeds were used to buy back 17.5% of its common stock.
Kimco is using the proceeds to repay amounts and reduce debt outstanding on its $590-million unsecured term loan. The company expects to recognize gain of $125-$135 million in the second quarter.
Nonetheless, the company’s funds from operations (FFO) will remain unaffected from the transaction.
Notably, Kimco’s plans to reduce debt will strengthen its balance sheet. In fact, the company has been making concerted efforts to bolster its financial flexibility to tide through the current challenging environment. With such moves, at the end of April, Kimco had access to more than $2.2 billion of immediate liquidity, with nearly $900 million of cash on the balance sheet and $1.3 billion available under its unsecured revolving credit facility.
Moreover, the company has 323 unencumbered assets, which represents roughly 80% of its total NOI. It also has one of the longest weighted-average debt maturity profiles in the industry at 10.1 years, owing to its decent balance-sheet management so far and has only 114 million of pro-rata debt maturing for the remainder of 2020. Further, the company currently has strong investment grade ratings of BBB+ from S&P and Baa1 from Moody’s.
Moreover, Kimco is taking initiatives to invest in retail real estate-related opportunities arising from the COVID-19 outbreak-related market disruptions, which are significantly impacting retailers and the retail real estate sector.
Accordingly, the company is eyeing an opportunity to sponsor a separate investment vehicle by raising private capital. It expects to invest around $50-$100 million in the separate investment vehicle upon the closing of the private capital raise.
Nonetheless, the company, which has already been battling store closures and bankruptcy woes, is feeling the brunt because consumers are avoiding gathering in public spaces and e-commerce adoption is gaining pace.As a result, there is a significant increase in the number of tenants that have made late or partial rent payments, requested a deferral of rent payments, or defaulted on rent payments. Given the current environment, the trend is likely to continue in the near term.
Moreover, shares of this Zacks Rank #3 (Hold) company have lost 23.5% over the past year compared with the industry’s decline of 16.5%.
Stocks to Consider
Alexander Baldwin Holdings, Inc.’s (ALEX - Free Report) Zacks Consensus Estimate for 2020 FFO per share has been unchanged at 83 cents over the past month. The company currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
One Liberty Properties, Inc.’s (OLP - Free Report) FFO per share estimate for the ongoing year has been unchanged at $1.89 over the past 30 days. The company currently flaunts a Zacks Rank of 1.
Gladstone Land Corporation’s (LAND - Free Report) FFO per share estimate for 2020 has moved 3% upward to 68 cents over the past month. Further, it currently carries a Zacks Rank of 2 (Buy).
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Kimco Closes Partial Monetization of Investment in Albertsons
Kimco Realty Corp. (KIM - Free Report) completedthe partial monetization of its investment in Albertsons Companies, Inc. and received $156.1 million from the latter. With this, Kimco reduced its ownership interest in Albertsons to 7.5% from 9.29%.
Notably, Albertsons received $1.68 billion in net proceeds from the sale of $1.75 billion of convertible preferred stock. The proceeds were used to buy back 17.5% of its common stock.
Kimco is using the proceeds to repay amounts and reduce debt outstanding on its $590-million unsecured term loan. The company expects to recognize gain of $125-$135 million in the second quarter.
Nonetheless, the company’s funds from operations (FFO) will remain unaffected from the transaction.
Notably, Kimco’s plans to reduce debt will strengthen its balance sheet. In fact, the company has been making concerted efforts to bolster its financial flexibility to tide through the current challenging environment. With such moves, at the end of April, Kimco had access to more than $2.2 billion of immediate liquidity, with nearly $900 million of cash on the balance sheet and $1.3 billion available under its unsecured revolving credit facility.
Moreover, the company has 323 unencumbered assets, which represents roughly 80% of its total NOI. It also has one of the longest weighted-average debt maturity profiles in the industry at 10.1 years, owing to its decent balance-sheet management so far and has only 114 million of pro-rata debt maturing for the remainder of 2020. Further, the company currently has strong investment grade ratings of BBB+ from S&P and Baa1 from Moody’s.
Moreover, Kimco is taking initiatives to invest in retail real estate-related opportunities arising from the COVID-19 outbreak-related market disruptions, which are significantly impacting retailers and the retail real estate sector.
Accordingly, the company is eyeing an opportunity to sponsor a separate investment vehicle by raising private capital. It expects to invest around $50-$100 million in the separate investment vehicle upon the closing of the private capital raise.
Nonetheless, the company, which has already been battling store closures and bankruptcy woes, is feeling the brunt because consumers are avoiding gathering in public spaces and e-commerce adoption is gaining pace.As a result, there is a significant increase in the number of tenants that have made late or partial rent payments, requested a deferral of rent payments, or defaulted on rent payments. Given the current environment, the trend is likely to continue in the near term.
Moreover, shares of this Zacks Rank #3 (Hold) company have lost 23.5% over the past year compared with the industry’s decline of 16.5%.
Stocks to Consider
Alexander Baldwin Holdings, Inc.’s (ALEX - Free Report) Zacks Consensus Estimate for 2020 FFO per share has been unchanged at 83 cents over the past month. The company currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
One Liberty Properties, Inc.’s (OLP - Free Report) FFO per share estimate for the ongoing year has been unchanged at $1.89 over the past 30 days. The company currently flaunts a Zacks Rank of 1.
Gladstone Land Corporation’s (LAND - Free Report) FFO per share estimate for 2020 has moved 3% upward to 68 cents over the past month. Further, it currently carries a Zacks Rank of 2 (Buy).
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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