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NEW YORK--([ BUSINESS WIRE ])--Fitch Ratings assigns a credit rating of 'BBB-' to the $400 million 6% class I cumulative redeemable preferred stock issued by Kimco Realty Corporation (NYSE: KIM). Net proceeds from the offering are expected to be used for general corporate purposes, to reduce borrowings on the company's revolving line of credit and future preferred stock redemptions.

Fitch currently rates the company as follows:

--Issuer Default Rating (IDR) 'BBB+';

--Unsecured revolving credit facilities 'BBB+':

--Senior unsecured notes 'BBB+';

--Preferred stock 'BBB-'.

The Rating Outlook is Stable.

The ratings are based on Kimco's solid track record as a leading owner of community and neighborhood shopping centers; the company's large and diversified pool of retail proprieties; its experienced leasing and management team and its high quality, diversified tenant mix with a well laddered lease expiration schedule. The rating also factors in the company's demonstrated track record of accessing a wide variety of capital sources.

Kimco owns and operates a large and diversified portfolio of consolidated and unconsolidated interests in 946 operating retail property investments aggregating 138.1 million square feet of gross leaseable area (GLA). Combined with the company's preferred equity investments, other real estate investments and non-retail properties, the portfolio totals 1,791 properties aggregating 172.2 million square feet of GLA, located in 44 states, Puerto Rico, Canada, Mexico, Chile, Brazil and Peru. The company's portfolio is well diversified with the largest tenant accounting for only 3% of annualized base rent (ABR) and the top 10 tenants collectively accounting for less than 20% of ABR. Moreover, the company's largest tenants are comprised of national retailers, heavily weighted towards investment grade companies.

Leverage, as measured by net debt to recurring operating EBITDA plus Fitch's estimate of recurring cash distributions from unconsolidated joint ventures, increased slightly to 5.9 times (x) at Dec. 31, 2011 from 5.6x at June 30, 2011 and 6.5x at Dec. 31, 2010 and remains appropriate for the rating. The company remains focused on continuing to strengthen its balance sheet through the disposition of non-strategic retail assets and the curtailment of significant development activity.

Kimco's fixed charge coverage is solid for the 'BBB+' IDR rating level. Fixed charge coverage was 2.2x for 2011, up slightly from 2.1x for 2010. Fixed charge coverage is defined as recurring operating EBITDA plus Fitch's estimate of recurring cash distributions from unconsolidated joint ventures less recurring capital expenditures and non-cash straight line rental income divided by interest incurred and preferred stock dividends.

Kimco has demonstrated a long track record of accessing a wide variety of capital sources, including secured and unsecured debt, common and preferred equity and joint venture capital. Although the recent preferred equity issuance represents the company's first public capital markets activity since 2010, the company's activity in 2009 and 2010 demonstrated access to various forms of capital despite challenging market conditions.

Kimco's liquidity position is slightly weak at 0.9x under the base scenario which assumes no access to external capital through the end of 2013. Under a scenario where Kimco is able to refinance 80% of its secured debt, the liquidity coverage ratio rises to 2.5x. Kimco's demonstrated access to the mortgage and public debt, preferred stock and common equity markets mitigates mitigate concerns regarding the company's liquidity coverage ratio.

The two-notch differential between Kimco's IDR and its preferred stock rating is consistent with Fitch's criteria for corporate entities with an IDR of 'BBB'. Based on Fitch's criteria report, 'Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit Analysis,' dated Dec. 15, 2011, this preferred stock is deeply subordinated and has loss absorption elements that would likely result in poor recoveries in the event of a corporate default.

Any of the following factors may have a positive impact on Kimco's ratings or Outlook:

--Fixed charge coverage sustaining above 2.5x (this ratio was 2.2x for the 12 months ended Dec. 31, 2011);

--Net debt to recurring operating EBITDA sustaining below 5.0x (this ratio was 5.9x at Dec. 31, 2011);

--Reducing the risk profile of the balance sheet through sales of non-strategic retail properties and non-retail assets.

Any of the following factors may have a negative impact on Kimco's ratings or Outlook:

--Fixed charge coverage sustaining below 2.0x;

--Leverage sustaining above 6.5x;

--Increased exposure to non-retail assets or increased joint venture debt guarantees.

Additional information is available '[ www.fitchratings.com ]'. The ratings above were unsolicited and have been provided by Fitch as a service to investors.

Applicable Criteria and Related Research:

--'Criteria for Rating U.S. Equity REITs and REOCs' (Feb. 27, 2012);

--'Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit Analysis' (Dec. 15, 2011);

--'Corporate Rating Methodology' (Aug. 12, 2011);

--'Recovery Rating and Notching Criteria for REITs' (May 12, 2011).

Applicable Criteria and Related Research:

Criteria for Rating U.S. Equity REITs and REOCs

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=671869 ]

Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit Analysis

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=656516 ]

Corporate Rating Methodology

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=647229 ]

Recovery Rating and Notching Criteria for Equity REITs

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=628490 ]

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