NEW HYDE PARK, NY- Kimco Realty Corp. said late Monday afternoonit’s issuing seven million shares of preferred stock worth $175million. The locally based retail REIT, led by president and CEODavid Henry, said it would use net proceeds to repay $150 millionworth of mortgage loans and for general corporate purposes.

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Banc of America Securities, Morgan Stanley, UBS Securities andWells Fargo Securities are the joint book-running managers. MorganKeegan, Piper Jaffray, RBC Capital Markets and Stifel, Nicolaus& Co. are the co-managers for the offering. The stock offeringis expected to be completed on August 30, according to Kimco.

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Kimco says its preferred stock issuance is rated BBB- by bothStandard & Poor’s and Fitch Ratings, with a Baa2 rating byMoody’s. In a separate release, Fitch says its rating is based onKimco’s “solid track record as the leading owner of community andneighborhood shopping centers, its large and diversified pool ofretail properties, its experienced leasing and management team andits high quality and diversified tenant mix with a well ladderedlease expiration schedule.” The REIT currently has a portfolio of904 retail properties in 43 states as well as Canada andMexico.

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The ratings agency adds, however, that “the current weaknessesin the retail sector” will likely continue to result in weaksame-store property performance in the near term. Fitch’s recentratings of Kimco, including an issuer default rating issued onAugust 11, also factor in “the higher risk associated with thecompany’s existing portfolio of non-retail assets, which istargeted for sale over the coming years.” That portfolio, though,represented “a fairly low” 7.3% of total undepreciated assets as ofJune 30, “and continued to generate healthy FFO returns.”

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.