Kimco gets $1.75 billion revolver due 2015 at Libor plus 105 bps

By Angela McDaniels

Tacoma, Wash., Nov. 2 - Kimco Realty Corp. has a new $1.75 billion revolving credit facility due Oct. 27, 2015, according to an 8-K filing with the Securities and Exchange Commission.

The maturity date can be extended by one year.

The initial interest rate is Libor plus 105 basis points. The spread ranges from 100 bps to 185 bps, depending on the company's ratings. The facility fee is 15 bps to 45 bps. The letter-of-credit fee is 100 bps to 185 bps.

The revolver is split into a $1.25 billion tranche A and a $500 million tranche B, according to the filing. Tranche A borrowings can be made only in dollars, and tranche B borrowings can be made in dollars or in alternative currencies such as Canadian dollars, euros, pounds sterling or Japanese yen.

As part of this credit facility, court documents show that the company has a competitive bid option under which it may auction up to $875 million of its requested borrowings to the bank group. This option provides the company the opportunity to obtain pricing below the currently stated spread of 105 bps over Libor.

The lead arrangers are J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, RBC Capital Markets, LLC, Bank of America, NA, Bank of Nova Scotia, Deutsche Bank Securities, Inc., Royal Bank of Scotland plc, UBS Securities LLC and Citibank, NA. The bookrunners are J.P. Morgan Securities, Wells Fargo Securities and RBC Capital Markets.

JPMorgan Chase Bank, NA is the administrative agent. Wells Fargo Bank, NA, RBC Capital Markets and Bank of Nova Scotia are the syndication agents. UBS Securities LLC is the documentation agent with Bank of America, NA, Deutsche Bank Securities, Royal Bank of Scotland and Citibank as co-documentation agents.

Under the covenants of the facility, the company must keep its ratio of total debt to gross asset value at or below 0.6 times and its ratio of total adjusted EBITDA to total debt service below 1.5 times, according to the filing.

The company entered into the facility on Oct. 27. It borrowed $140 million and used it, in part, to prepay all outstanding debt under its $1.5 billion revolver dated Oct. 25, 2007 and its C$250 million revolver dated Jan. 25, 2006, which were then terminated.

As of Oct. 27, $24.25 million and C$16,000 of letters of credit were issued under the new revolver, according to the filing.

Kimco is a real estate investment trust based in New Hyde Park, N.Y.

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