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Kimco Realty secures $2.25B credit deal

David Henry, chief executive of Kimco Realty Corp.

David Henry, chief executive of Kimco Realty Corp. Credit: Handout

Kimco Realty Corp. has signed a new bank agreement for an unsecured line of credit for as much as $2.25 billion which, it said, would give the New Hyde Park company a "healthy level of liquidity at advantageous terms over the next five years.”

The line of credit allows an initial $1.75 billion, replacing both the company's existing  $1.5 billion unsecured U.S. credit line and a separate $250 million Canadian line. Kimco also arranged with the lenders to raise that limit to $2.25 billion, if needed.

The new credit account will mature in October 2015, and Kimco may extend it an extra year. Kimco will pay interest on the amounts of money it draws from the credit line, at an interest rate of slightly more than 1 percent above what's commonly known as LIBOR, the London interbank offered rate; this is the rate banks charge each other for loans.

The credit was secured through several firms including J.P. Morgan Securities LLC, Wells Fargo Securities LLC and RBC Capital Markets.

“We received commitments totaling over $2.8 billion from 28 banks which speaks to the strength of our balance sheet,” David Henry, Kimco's chief executive, said in the Thursday statement.

Kimco, a real estate investment trust, owns and operates what it says is the largest group of community shopping centers in North America, in 44 states, Puerto Rico and Canada, Mexico. It also has properties in South America. As of June 30 it had an interest in 946 shopping centers measuring 138 million square feet of leasable space.

In pre-market trading Thursday Kimco was up $0.83 to $17.67.

Kimco's founder, Milton Cooper, said in a PBS-TV interview in May that its marketing and leasing policies may have shielded it, somewhat, from the retail trend toward online shopping.

Cooper, 81, spoke during a PBS report on his career, titled "King of the R.E.I.T." He said Kimco's list of top 50 tenants "gives us some comfort that our exposure to the incursion of the Internet is, on a relative basis, somewhat muted," he said. "Our 3 largest tenants are Home Depot, TJX and Wal-Mart. In addition, I believe we are largest landlord of Costco."

Kimco aggressively looks to fill space by seeking smaller tenants, too, Cooper said. It sends leasing representatives to dental conventions, aimed at getting new dentists to set up offices in its shopping centers. And medical clinics, urgent-care facilities, vocational schools and entertainment-focused businesses, he said, are more and more likely to fill vacant spots in shopping centers.


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