Kimco Realty debuts green debt as it boosts focus on ESG issues

[NEW YORK] Kimco Realty, which owns and operates open-air shopping centres, issued debt for the first time to finance environmentally-friendly projects.

The real estate investment trust sold US$500 million in green bonds after the offering was boosted by US$200 million amid strong investor demand, according to a person with knowledge of the matter. The single-tranche offering maturing in 10 years yields 2.1 percentage points above Treasuries, after initial discussions of around 2.55 percentage points, said the person, who asked not to be identified as the details are private.

Corporations and governments have raised about US$93 billion in green bonds in the first half of the year, a slower pace compared to about US$100 billion over the same span in 2019, according to data compiled by Bloomberg.

There has never been "a time more imperative than now" for the company to focus on advancing its organisation in the areas of sustainability, social impact and governance amid the coronavirus and unrest in the country, chief executive officer Conor Flynn said in a statement on Monday. The company said it's aligning its ESG (environmental, social and governance) disclosure with guidelines established by the Sustainability Accounting Standards Board and the Task Force on Climate-related Financial Disclosures to boost transparency for the first time.

At the end of last year, the Jericho, New York-based company owned interests in 409 US shopping centres and mixed-use assets with 72.4 million square feet of gross leasable space. Its holdings are primarily concentrated in major metropolitan markets, according to its 2019 Corporate Responsibility Report.

Wells Fargo & Co, Deutsche Bank, Jefferies Group and US Bancorp managed the sale, the person said.

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