Kite Realty Group (NYSE: KRG) announced that its operating partnership, Kite Realty Group, L.P., has closed a $345 million offering of 3.25% exchangeable senior notes due 2032, according to a press release. The total includes $45 million issued through the full exercise of an overallotment option by initial purchasers.

The notes were sold in a private placement to qualified institutional buyers under Rule 144A of the Securities Act of 1933. They carry a 3.25% annual interest rate, payable semi-annually beginning April 15, 2027, and mature on April 15, 2032.

The initial exchange rate is set at 28.2466 common shares per $1,000 principal amount, equivalent to an exchange price of approximately $35.40 per share. This represents an exchange premium of approximately 22.5% over the closing price of $28.90 per common share on June 29, 2026.

The operating partnership may redeem the notes on or after July 20, 2029, if the common share price reaches at least 130% of the exchange price for at least 20 trading days within any 30 consecutive trading day period.

In connection with the offering, Kite Realty entered into capped call transactions with certain financial institutions. The cap price was set at $41.91 per share, representing a premium of approximately 45% over the June 29, 2026 closing price. The transactions are intended to reduce potential dilution to existing shareholders upon exchange of the notes.

The operating partnership plans to use a portion of the net proceeds, along with proceeds from recent asset dispositions, to repurchase approximately $30 million of common shares and to repay or redeem its $300 million aggregate principal amount of 4.00% senior unsecured notes due 2026 at or prior to maturity. A portion of the proceeds was also used to fund the capped call transactions.

As of March 31, 2026, Kite Realty owned interests in 169 open-air shopping centers and mixed-use assets in the U.S., totaling approximately 27.3 million square feet of gross leasable space.