Fitch Ratings is withdrawing the ratings of RPT Realty (RPT) and its operating partnership, RPT Realty, L.P., including its 'BBB-' Issuer Default Rating (IDR) and underlying issuances outstanding, including the unsecured senior notes, term loan facilities and revolving credit facility, as well as the preferred stock.

The rating action follows the completion of RPT's acquisition by Kimco Realty Corporation (Kimco, or KIM). Kimco, an owner and operator of open-air, grocery-anchored shopping centers and a growing portfolio of mixed-use assets that is not rated by Fitch, acquired RPT in an all-stock transaction valued at approximately $2 billion, including the assumption of debt and preferred stock. Under the terms of the agreement, RPT stockholders received 0.6049 newly issued shares of Kimco common stock for each RPT common share owned, and holders of RPT preferred shares received one one-thousandth of a share of newly issued Kimco class N preferred stock. The Rating Watch Positive for all of RPT's ratings has been removed.

Fitch's expectation is that the pro-forma post-acquisition credit profile of the combined RPT Realty/Kimco business will be stronger than RPT's standalone credit profile. From a leverage perspective, on a standalone basis, RPT's company-reported net debt to annualized adjusted EBITDA was 6.9x as of Sept. 30, 2023, or 6.7x on a Fitch-adjusted basis. KIM reported net debt to consolidated EBITDA of 5.5x. The metric on a combined basis is anticipated to be leverage neutral for KIM, at 5.5x (pro-forma for the transaction), including approximately $34 million of expected annual cost synergies (85% expected to be realized in 2024). Additionally, Fitch looks for the combined company to have increased portfolio diversification in terms of geography and tenant, as well as improved granularity.

Following the close of the acquisition, Fitch will no longer have sufficient information to maintain the ratings. Accordingly, Fitch will no longer provide ratings (or analytical coverage) for RPT.

Key Rating Drivers

Key Rating Drivers are not applicable as the ratings have been withdrawn.

Key Assumptions

Key Assumptions are not applicable as the ratings are being withdrawn.

RATING SENSITIVITIES

Rating sensitivities do not apply as the ratings have been withdrawn.

Issuer Profile

RPT Realty is a REIT that owns and operates a portfolio of open-air shopping destinations in the U.S. As of Sept. 30, 2023, the property portfolio consisted of 43 wholly-owned shopping centers, 13 shopping centers owned through its grocery-anchored joint venture (JV), and 49 retail properties owned through its net lease JV, which together represented 14.9 million square feet of gross leasable area.

Summary of Financial Adjustments

No material non-standard financial adjustments. Stock based compensation was considered a reduction to SG&A and an addback to EBITDA.

Sources of Information

The principal sources of information used in the analysis are described in the Applicable Criteria.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

Following the withdrawal of ratings for RPT, Fitch will no longer be providing the associated ESG Relevance Scores.

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.

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