Kite Realty closes $345M exchangeable senior notes offering

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. They carry an interest rate of 3.25% per year, 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 a 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, the operating partnership 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 company said it used a portion of the net proceeds to fund the capped call transactions. The remaining proceeds, combined with asset disposition proceeds, are intended to repurchase approximately $30 million of common shares and repay or redeem $300 million of 4.00% senior unsecured notes due 2026.

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