EXHIBIT 99.2
Published on May 30, 2006
EXHIBIT 99.2
CONSENT SOLICITATION STATEMENT SUPPLEMENT
KIMCO REALTY CORPORATION
SOLICITATION OF CONSENTS TO AMEND CERTAIN PROVISIONS OF THE INDENTURE
GOVERNING THE FOLLOWING NOTES:
This Supplement hereby amends, supplements, modifies and becomes a part
of, as of the date hereof, the Consent Solicitation Statement, dated May 16,
2006 (the "Consent Solicitation Statement" and, as supplemented hereby, the
"Supplemented Consent Solicitation Statement), relating to all series of the
notes of Kimco Realty Corporation listed above. (Capitalized terms used, but not
defined in the Supplement, have the meanings given in the Consent Solicitation
Statement.) All references to any requirements regarding the Consent
Solicitation Statement contained in any document used by or on behalf of the
Company in connection with the consent solicitation shall be deemed to refer to
the Supplemented Consent Solicitation Statement.
The Solicitation Agent for the consent solicitation is:
UBS Investment Bank
This Consent Solicitation Statement Supplement is dated May 30, 2006.
1
The Consent Solicitation Statement is hereby supplemented, amended and
modified as follows:
Summary: The section of the Consent Solicitation Statement titled
"Summary" is hereby amended by deleting the subsections titled "Purpose of the
Consent Solicitation," "Consent Fee," and "Expiration Date" contained therein,
and replacing such subsections with the following:
PURPOSE OF THE CONSENT SOLICITATION
The purpose of this consent solicitation is to amend two debt
covenants contained in the Indenture that restrict our ability to
incur and secure debt. We believe these amendments will (i)
enhance our financial flexibility, (ii) enable us to more
efficiently access debt capital, (iii) align our debt covenants
with debt covenants that many other investment grade REITs have
had in place over the past ten years and (iv) enable us to more
effectively engage in our general corporate activities, which may
include the acquisition of neighborhood and community shopping
centers, as suitable opportunities arise, the expansion and
improvement of certain properties in our portfolio, the repayment
or refinancing of indebtedness outstanding at that time, and other
investments.
Through this consent solicitation, we are seeking to change
our total debt and secured debt covenants from covenants based on
the amount of our Undepreciated Real Estate Assets to covenants
based on the amount of our Total Assets. We believe these revised
covenants reflect the terms of debt instruments issued by many
other investment grade REITs in the past, and appropriately allow
us to add the other assets we hold on our balance sheet to our
asset value definition. Notably, we are not seeking to employ
asset valuation definitions and covenants related thereto that use
market-based (capitalization rate derived) real estate asset
values. Instead, our debt covenants will be based upon the
undepreciated book values of our real estate assets plus the book
value of our other assets.
We remain committed to the current ratings and to protecting
our corporate credit investing constituency. As a result, we are
also seeking to change our maintenance of unencumbered total asset
value covenant by increasing the ratio of Unencumbered Total Asset
Value to outstanding unsecured Debt from 1 to 1 to 1.5 to 1.
See "Purpose of the Consent Solicitation" for a description of
the Proposed Amendments.
Concurrently with this consent solicitation, Kimco North Trust
III, a wholly-owned entity of the Company, is soliciting consents
of holders of C$150 million 4.45% Canadian Dollar Denominated
Notes (the "CAD Notes") issued by Kimco North Trust III and
guaranteed by us in an effort to give effect to the adoption of
the same proposed amendments under the CAD Notes. The consent of
holders of a majority of the CAD Notes issued by Kimco North Trust
III will be conditional on the satisfaction of the conditions
required for the adoption of the Proposed Amendments, including
the Company receiving the Requisite Consents and entering into the
Third Supplemental Indenture to amend the Indenture. If all
conditions are satisfied, a consent fee of C$2.50 per C$1,000
principal amount of the CAD Notes will be paid to the holders of
the CAD Notes that timely consent to the same proposed amendments
under the CAD Notes at or prior to the Expiration Date.
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CONSENT FEE
Consent fees applicable to such series of Notes set forth on
the first page of this Supplement (the "Consent Fee") will be paid
to each Registered Holder of Notes as of the Record Date for each
$1,000 principal amount of Notes for which a Consent has been
accepted, payable upon satisfaction of the General Conditions (as
defined below), and promptly following the execution of the Third
Supplemental Indenture. See "The Consent Solicitation-Consent
Fee." In the event that this Solicitation is withdrawn or
otherwise not completed, including as a result of the failure to
meet the General Conditions, the Consent Fee will not be paid or
payable.
EXPIRATION DATE
The Expiration Date is 5:00 p.m., New York City time, on
Friday, June 2, 2006, unless extended.
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Purpose of the Consent Solicitation: This section of the Consent
Solicitation Statement titled "Purpose of the Consent Solicitation" is hereby
amended and restated as follows:
PURPOSE OF THE CONSENT SOLICITATION
We are soliciting consents of the Registered Holders in an effort to
adopt certain amendments to two debt covenants contained in the Indenture. We
believe these amendments will (i) enhance our financial flexibility, (ii)
enable us to more efficiently access debt capital, (iii) align our debt
covenants with those of many other investment grade REITs and (iv) enable us to
more effectively engage in our general corporate purposes, which may include
the acquisition of neighborhood and community shopping centers, as suitable
opportunities arise, the expansion and improvement of certain properties in our
portfolio, the repayment or refinancing of indebtedness outstanding at that
time, and other investments.
Our business has evolved over the years in response to changing
economic and industry conditions. We have capitalized on many of these
opportunities and believe we are well-positioned to take advantage of further
changes to come.
The ownership of high-quality, well-located retail assets remains our
core fundamental operating strategy. However, as our business has evolved, our
portfolio of real estate 'assets' has similarly evolved and now includes
significant investments in real estate joint ventures, developments and other
assets which are not necessarily afforded appropriate credit under the
definition of assets as proscribed by the current covenant package under the
existing Indenture.
The Proposed Amendments, if accepted, will not change our core
operating or investment strategy. We currently do not have any intention to
deviate from the core credit metrics within which the Company has historically
operated. We remain committed to the current ratings and to protecting our
corporate credit investing constituency. As a result, we are also seeking to
change our maintenance of unencumbered total asset value covenant by increasing
the ratio of Unencumbered Total Asset Value to outstanding unsecured Debt from
1 to 1 to 1.5 to 1.
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DESCRIPTION OF THE PROPOSED AMENDMENTS
The table below provides a summary description of the Proposed
Amendments.
Exhibit A hereto sets forth the full text of the CURRENT provisions of the
Indenture (summarized above) to be amended. Exhibit B hereto sets forth the full
text of the provisions as PROPOSED TO BE AMENDED (if the Requisite Consents are
obtained and the Proposed Amendments are adopted).
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The Consent Solicitation: The section of the Consent Solicitation
Statement titled "The Consent Solicitation" is hereby amended by deleting the
subsections titled "Consent Fee," and "Expiration Date, Extensions, Termination
and Amendment" contained therein, and replacing such subsections with the
following:
Consent Fee
We will pay each Registered Holder of the Notes whose Consents have
been accepted in this Solicitation a consent fee applicable to such series of
Notes set forth on the first page of this Supplement for each $1,000 principal
amount of Notes as to which a Consent has been delivered by such Registered
Holder. The Consent Fee will be made promptly following the execution of the
Third Supplemental Indenture. The Consents will expire if the Proposed
Amendments do not become operative. Interest will not accrue on or be payable
with respect to any Consent Fee.
Expiration Date, Extensions, Termination and Amendment
The term "Expiration Date" means 5:00 p.m., New York City time, on
Friday, June 2, 2006, unless we, in our sole discretion, extend the period
during which the Solicitation is open. In that event, the term "Expiration
Date" will mean the latest time and date on which the Solicitation, as so
extended, will expire. We reserve the right:
o to extend the Solicitation at any time or from time to time,
until the Requisite Consents have been received;
o to terminate the Solicitation at any time prior to the
Expiration Date, whether or not the Requisite Consents have
been received; and
o to amend, at any time or from time to time, the terms of the
Solicitation, including, without limitation, by revising the
terms of the Proposed Amendments or by establishing a new
Record Date.
Any extension of the Expiration Date will be effective if we give oral or
written notice thereof to the Trustee no later than 9:00 a.m. (and, if such
notice is given orally, followed by written notice to the Trustee and the
Solicitation Agent (given by facsimile or otherwise) no later than 4:00 p.m.),
New York City time, on the first Business Day (as defined in the Indenture)
following any previously announced Expiration Date. Any termination or
amendment of the Solicitation will be effective upon written notice thereof to
the Trustee. Any extension, termination or amendment will be followed as
promptly as practicable by written notice thereof to the Registered Holders as
of the Record Date. Such notice may provide that we are extending the
Solicitation for a specified period of time or on a daily basis until 5:00
p.m., New York City time, on the date on which the Requisite Consents are
received. Failure of any Registered Holder to receive such notice will not
affect the extension, termination or amendment of the Solicitation.
If the Solicitation is amended in a manner determined by us to
materially affect holders of the Notes prior to the Expiration Date, we will
promptly disclose such amendment and may, if appropriate, extend the
Solicitation for a period adequate to permit Registered Holders to properly
deliver or revoke their Consents. Other than as set forth in this Consent
Solicitation Statement, once delivered, Consents may not be revoked.
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Exhibit A: Exhibit A of the Consent Solicitation Statement is hereby
amended and restated as follows:
EXHIBIT A
PROVISIONS CURRENTLY IN EFFECT
THE FOLLOWING PROVISIONS OF THE INDENTURE, DATED AS OF SEPTEMBER 1, 1993 (AS
AMENDED BY THE FIRST SUPPLEMENTAL INDENTURE, DATED AS OF AUGUST 4, 1994, AND THE
SECOND SUPPLEMENTAL INDENTURE, DATED AS OF APRIL 7, 1995) (COLLECTIVELY, THE
"INDENTURE"), BETWEEN US AND THE BANK OF NEW YORK, AS TRUSTEE, ARE CURRENTLY IN
EFFECT:
SECTION 1004. Limitations on Incurrence of Debt.
(a) The Company will not, and will not permit any Subsidiary to, incur any Debt,
if, immediately after giving effect to the incurrence of such additional Debt,
the aggregate principal amount of all outstanding Debt of the Company and its
Subsidiaries on a consolidated basis determined in accordance with GAAP is
greater than 65% of the sum of (i) the Company's Undepreciated Real Estate
Assets as of the end of the calendar quarter covered in the Company's Annual
Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most
recently filed with the Commission (or, if such filing is not permitted under
the Securities Exchange Act of 1934, with the Trustee) prior to the incurrence
of such additional Debt and (ii) the purchase price of any real estate assets
acquired by the Company or any Subsidiary since the end of such calendar
quarter, including those obtained in connection with the incurrence of such
additional Debt.
* * *
(c) In addition to the limitations set forth in subsections (a) and (b) of this
Section 1004, the Company will not, and will not permit any Subsidiary to, incur
any Debt secured by any mortgage, lien, charge, pledge, encumbrance or security
interest of any kind upon any of the property of the Company or any Subsidiary,
whether owned at the date hereof or hereafter acquired, if, immediately after
giving effect to the incurrence of such additional Debt, the aggregate principal
amount of all outstanding Debt of the Company and its Subsidiaries which is
secured by any mortgage, lien, charge, pledge, encumbrance or security interest
on property of the Company and its Subsidary is greater than 40% of the sum of
(i) the Company's Undepreciated Real Estate Assets as of the end of the calendar
quarter covered in the Company's Annual Report on Form 10-K or Quarterly Report
on Form 10-Q, as the case may be, most recently filed with the Commission (or,
if such filing is not permitted under the Securities Exchange Act of 1934, with
the Trustee) prior to the incurrence of such additional Debt and (ii) the
purchase price of any real estate assets acquired by the Company or any
Subsidiary since the end of such calendar quarter, including those obtained in
connection with the incurrence of such additional Debt.
SECTION 1014. Maintenance of Unencumbered Total Asset Value. The Company will at
all times maintain an Unencumbered Total Asset Value in an amount of not less
than one hundred percent (100%) of the aggregate principal amount of all
outstanding Debt of the Company and its Subsidiaries that is unsecured; this
covenant shall apply solely to the benefit of Holders of series of Securities
created on or after April 7, 1995.
A-1
The following defined terms are used in Section 1004 and 1014 of the Indenture:
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
"Debt" of the Company or any Subsidiary means any indebtedness of the
Company or any Subsidiary, whether or not contingent, in respect of (i) borrowed
money or evidenced by bonds, notes, debentures or similar instruments, (ii)
indebtedness secured by any mortgage, pledge, lien, charge, encumbrance or any
security interest existing on property owned by the Company or any Subsidiary,
(iii) letters of credit or amounts representing the balance deferred and unpaid
of the purchase price of any property except any such balance that constitutes
an accrued expense or trade payable or (iv) any lease of property by the Company
or any Subsidiary as lessee which is reflected on the Company's Consolidated
Balance Sheet as a capitalized lease in accordance with GAAP, in the case of
items of indebtedness under (i) through (iii) above to the extent that any such
items (other than letters of credit) would appear as a liability on the
Company's Consolidated Balance Sheet in accordance with GAAP, and also includes,
to the extent not otherwise included, any obligation of the Company or any
Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise
(other than for purposes of collection in the ordinary course of business),
indebtedness of another person (other than the Company or any Subsidiary).
"GAAP" means generally accepted accounting principles, as in effect
from time to time, as used in the United States applied on a consistent basis.
"Undepreciated Real Estate Assets" means as of any date the amount of
real estate assets of the Company and its Subsidiaries on such date, before
depreciation and amortization determined on a consolidated basis in accordance
with GAAP.
"Unencumbered Total Asset Value" means, as of any date, the sum of the
Company's Total Assets which are unencumbered by any mortgage, lien, charge,
pledge or security interest that secures payment of any obligations under any
Debt.
"Subsidiary" means a corporation a majority of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries of the Company. For the purposes of this definition,
"voting stock" means stock having voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.
"Total Assets" means, as of any date, the sum of (i) the Company's
Undepreciated Real Estate Assets and (ii) all other assets of the Company
determined in accordance with GAAP (but excluding goodwill and amortized debt
costs).
A-2
Exhibit B: Exhibit B of the Consent Solicitation Statement is hereby
amended and restated as follows:
EXHIBIT B
PROVISIONS THAT WOULD BECOME OPERATIVE IF THE PROPOSED AMENDMENTS ARE
APPROVED AND THE THIRD SUPPLEMENTAL INDENTURE IS IMPLEMENTED
THE FOLLOWING PROVISIONS OF THE THIRD SUPPLEMENTAL INDENTURE TO THE INDENTURE
BETWEEN US AND THE BANK OF NEW YORK, AS TRUSTEE, WILL BECOME OPERATIVE IF THE
PROPOSED AMENDMENTS ARE APPROVED AND THE THIRD SUPPLEMENTAL INDENTURE IS
IMPLEMENTED:
SECTION 1004. Limitations on Incurrence of Debt.
(a) The Company will not, and will not permit any Subsidiary to, incur any Debt,
if, immediately after giving effect to the incurrence of such additional Debt,
the aggregate principal amount of all outstanding Debt of the Company and its
Subsidiaries on a consolidated basis determined in accordance with GAAP is
greater than 65% of Total Assets as of the end of the calendar quarter covered
in the Company's Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as
the case may be, most recently filed with the Commission (or, if such filing is
not permitted under the Securities Exchange Act of 1934, with the Trustee) prior
to the incurrence of such additional Debt.
* * *
(c) In addition to the limitations set forth in subsections (a) and (b) of this
Section 1004, the Company will not, and will not permit any Subsidiary to, incur
any Debt secured by any mortgage, lien, charge, pledge, encumbrance or security
interest of any kind upon any of the property of the Company or any Subsidiary,
whether owned at the date hereof or hereafter acquired, if, immediately after
giving effect to the incurrence of such additional Debt, the aggregate principal
amount of all outstanding Debt of the Company and its Subsidiaries which is
secured by any mortgage, lien, charge, pledge, encumbrance or security interest
on property of the Company or any Subsidiary is greater than 40% of Total Assets
as of the end of the calendar quarter covered in the Company's Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most recently
filed with the Commission (or, if such filing is not permitted under the
Securities Exchange Act of 1934, with the Trustee) prior to the incurrence of
such additional Debt.
SECTION 1014. Maintenance of Unencumbered Total Asset Value. The Company will at
all times maintain an Unencumbered Total Asset Value in an amount of not less
than one hundred fifty percent (150%) of the aggregate principal amount of all
outstanding Debt of the Company and its Subsidiaries that is unsecured; this
covenant shall apply solely to the benefit of Holders of series of Securities
created on or after April 7, 1995.
B-1
THE SOLICITATION AGENT FOR THIS SOLICITATION IS:
UBS INVESTMENT BANK
677 WASHINGTON BLVD.
STAMFORD, CT 06901
(203) 719-4210 (CALL COLLECT)
(888) 722-9555 EXT. 4210 (TOLL FREE)
ATTN: LIABILITY MANAGEMENT GROUP
Any questions concerning the terms of this Solicitation may be directed
to the Solicitation Agent.
THE INFORMATION AND TABULATION AGENT FOR THIS SOLICITATION IS:
GLOBAL BONDHOLDER SERVICES CORPORATION
65 BROADWAY, SUITE 723
NEW YORK, NY 10006
ATTENTION: CORPORATE ACTIONS
(212) 430-3774 (CALL COLLECT)
(866) 470-3700
By Facsimile Transmission: by Hand Delivery, Mail or Overnight Courier:
212-430-3775 Global Bondholder Services Corporation
65 Broadway--Suite 723
New York, NY 10006
THE TRUSTEE UNDER THE INDENTURE IS:
THE BANK OF NEW YORK
ALL CONSENTS AND REVOCATIONS OF CONSENTS SHOULD BE SENT TO THE INFORMATION AND
TABULATION AGENT AT THE ADDRESS SPECIFIED ABOVE. REQUESTS FOR ASSISTANCE IN
COMPLETING AND DELIVERING CONSENTS, OR FOR ADDITIONAL COPIES OF THE CONSENT OR
THIS CONSENT SOLICITATION STATEMENT, SHOULD BE DIRECTED TO THE INFORMATION AND
TABULATION AGENT. QUESTIONS CONCERNING THE TERMS OF THE SOLICITATION SHOULD BE
DIRECTED TO THE SOLICITATION AGENT.