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Kimco Realty (KIM) Increases Term Loan, Boosts Flexibility

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Kimco Realty Corp. (KIM - Free Report) recently announced the closure of an additional $215-million under the accordion feature of its previously-announced $375-million unsecured term loan facility. This increases the combined borrowings under the facility to $590 million.

The company has the ability to increase this amount by $535 million, taking it beyond $1.1 billion under the accordion feature, subject to further syndication. The move further bolsters the company’s liquidity profile.

While the term loan is set to mature on April 2021, the company enjoys the option to extend it by an additional year. The interest on the term loan, as per the Credit Agreement, accrues at a spread of 1.4% to LIBOR. Further, as an option to the company, it can be calculated at a spread (currently 0.4%) to the base rate defined under the Credit Agreement, which changes according to the changes in the company’s senior debt ratings. This currently stands at 0.4%.

With $1.3 billion of availability on its revolving credit facility and a solid cash position of more than $900 million, the company has in excess of $2.2 billion of available liquidity. Moreover, the company has a comfortable weighted-average debt maturity profile owing to its decent balance-sheet management.

Notably, the escalating number of coronavirus cases has forced several retailers to close their stores, in order to contain the spread of the virus. Some of the retailers have also reduced store hours, while many others are keeping their e-retail operations running as consumers are now increasingly opting for online purchases. As a result, retail REITs, which have already been battling store closure and bankruptcy issues, are feeling the brunt because consumers are avoiding gathering in large public spaces.

Nevertheless, in these uncertain times, having a grocery component has been saving the grace of retail REITs. Therefore, with a high-quality, mixed-use portfolio concentrated in the top U.S. markets and with 78% of its annual base rent coming from grocery-anchored centers, along with solid liquidity with availability in excess of $2.2 billion, Kimco remains well poised to sail through the current blues.

Shares of this Zacks Rank #3 (Hold) company have depreciated 50.4% so far this year, while its industry has declined 36.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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Innovative Industrial Properties, Inc.’s (IIPR - Free Report) Zacks Consensus Estimate for 2020 funds from operations (FFO) per share moved 4.3% upward to $5.33 over the past two months. The stock currently sports a Zacks Rank of 1.

Global Net Lease, Inc.’s (GNL - Free Report) Zacks Consensus Estimate for the ongoing year’s FFO per share moved 4.7% north to $2 over the past two months. The stock currently flaunts a Zacks Rank of 1.

One Liberty Properties, Inc.’s (OLP - Free Report) Zacks Consensus Estimate for the current year’s FFO per share moved 2.2% north to $1.89 over the past month. The stock currently sports a Zacks Rank of 1.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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