Thursday, Kimco Realty Corp. (KIM), a real estate investment trust, provided updates on its financing and leasing activities, lowered its outlook for the full year 2009, however, within analysts' expectations. Kimco also said it would cut dividends for rest of the fiscal year, considering the need to maintain maximum financial flexibility in light of the current state of the capital markets
The New Hyde Park, New York-based company said that it received about $212 million in secured debt commitments from five different lenders for the financing of six individual properties. The loans are expected to mature from three to fifteen years with an interest range of 5.95% - 7.625%.
Having closed financing for one property of $35 million, Kimco expects to close the others during the second quarter. It is currently negotiating term sheets for financing secured by 14 properties, with proceeds expected at about $193 million. The company is also pursuing additional secured debt secured by nine other properties, which may generate proceeds of approximately $197 million.
Kimco is currently marketing a new $200 million unsecured term loan with a group of banks and has received commitments totaling $160 million to-date.
In 2009, Kimco paid off its $130 million 6.875% senior notes at maturity, using the proceeds from its US $1.5 billion revolving credit facility. It currently has $760 million under its U.S. and Canadian unsecured revolving credit facilities, maturing in 2011.
Kimco is a real estate investment trust involved in acquisitions, development, and management of neighborhood and community shopping centers
Preliminary U.S. Leasing Activity
During the first quarter, Kimco entered into approximately 100 new same-space leases of 0.3 million square feet, at an average rent increase of approximately 13% and approximately 50 new non-same space leases or 0.1 million square feet. The company also signed around 315 renewals of 2.0 million square feet at an average rent increase of approximately 2.5%. The company's preliminary estimate for U.S. occupancy at March 31, 2009 is 91.9%.
Kimco said that it plans to sell 70 million shares of newly issued common stock in an underwritten public offering, with underwriters granted a 30-day option to purchase up to an additional 10.50 million shares to cover over-allotments, if any.
Proceeds from the offering would go toward debt repayment and for general corporate purposes.
The company has paid a dividend of $0.44 per share in the first quarter of 2009 and has declared a dividend of $0.44 per share to be paid in the second quarter of 2009. The company said it would reduce dividend payments for the balance of 2009, mainly due to the current state of the capital markets and the anticipated rise in the outstanding common shares resulting from the issuance of 70 million shares on April 2.
For the third and fourth quarter, the company expects to pay a cash dividend of 0.06 per share.
For fiscal year 2009, Kimco expects funds from operations or FFO, excluding impairment charges, to be in the range of $1.70 - $1.85 per share, before considering the effect of the proposed 70 million common stock offering. The company's previous forecast was in the range of $1.70 to $1.90 per share.
On average, fifteen analysts polled by Thomson Reuters currently expect the company to report FFO of $1.73 per share. Analysts' estimates typically exclude special items.
KIM closed Thursday's trading at $7.49, up $0.71, on a volume of 14.62 million shares. However, the stock lost $0.07 or 0.93%, and traded at $7.42 in the after-hour trading.
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