Kimco: Not Looking To Equity Market To "Bail Us Out"
July 30 2009 - 4:58PM
Dow Jones News
Kimco Realty Corp. (KIM) says for now it will avoid using equity
markets as a capital-raising tool.
"I'm not going to look to the equity market to bail us out. I
don't think our investors are going to keep buying into massively
dilutive equity issuances solely to pay down debt," said Michael
Pappagallo, the shopping center operator's chief financial officer
during the company's second-quarter earnings call Thursday.
"Down the road, there will be circumstances where value-creating
shopping center opportunities will be available. Issuing equity at
that point would make sense if our price and" returns supported
such a transaction, he said.
The real-estate investment trust issued $750 million shares
during the second quarter, according to RBC Capital Markets.
REITs had been hammered amid concerns about the financial
services industry as well as the commercial real estate malaise, as
a continuing credit crunch made it difficult to refinance coming
debt maturities. Since March, the industry's saving grace has been
massive amounts of equity issuance allowing REITs more flexibility
to reduce debt. REITs executed over 50 common stock offerings
during the first half of the year, raising roughly $15 billion in
capital, according to the National Association of Real Estate
Investment Trusts.
-By A.D. Pruitt, Dow Jones Newswires,
212-416-2197,angela.pruitt@dowjones.com