Market Overview

Lexington Realty Trust Announces Financings

  • Refinances Secured Credit Facility With Unsecured Credit Facility Consisting Of $300.0 Million Revolving Loan And $250.0 Million Term Loan
  • Obtains $40.0 Million Mortgage On Lenexa, Kansas Property
  • Joint Venture Obtains $15.3 Million Mortgage On Palm Beach Gardens, Florida Property

NEW YORK, Feb. 12, 2013 (GLOBE NEWSWIRE) -- Lexington Realty Trust ("Lexington") (NYSE: LXP), a real estate investment trust (REIT) focused on single-tenant real estate investments, announced that it refinanced its existing secured credit facility with a senior unsecured credit facility, consisting of a revolving loan of up to $300.0 million and a term loan of up to $250.0 million. In addition, Lexington announced a $40.0 million mortgage financing secured by its property in Lenexa, Kansas and a $15.3 mortgage financing of a property in Palm Beach Gardens, Florida owned by a joint venture.

Comments from Management

Patrick Carroll, Lexington's Chief Financial Officer, commented, "These financings enhance our financial flexibility, extend our debt maturities and reduce our borrowing costs. In March 2013, we intend to retire $137.9 million of mortgage debt, which currently bears interest at a weighted average interest rate of 5.3%. By paying off these mortgages, we are continuing our strategy of retiring certain secured debt as it matures in order to unencumber assets and add to our unsecured borrowing capacity. We believe Lexington continues to have significant opportunities to create value for shareholders by lowering financing costs and improving cash flow through such refinancings."

Senior Unsecured Credit Facility

The revolving loan portion of the senior unsecured credit facility matures on February 12, 2017, but can be extended for one year at Lexington's option, and the term loan portion of the senior unsecured credit facility matures on February 12, 2018. The senior unsecured credit facility requires regular payments of interest only at an interest rate dependent on Lexington's leverage (as defined in the credit agreement), as follows and as compared to the previous facility with respect to the revolving loan: 

       
Leverage Previous Facility
Applicable Margin
Over LIBOR
Revolving Loan
Applicable Margin
Over LIBOR
Term Loan
Applicable Margin
Over LIBOR
Less than 45% 1.625% 1.500% 1.450%
Greater than or equal to 45% but less than 50% 1.875% 1.750% 1.700%
Greater than or equal to 50% but less than 55% 2.125% 1.875% 1.825%
Greater than or equal to 55% 2.375% 2.050% 2.000%

Upon the date when Lexington obtains an investment grade debt rating from at least two of Standard & Poor's, Moody's and Fitch, the interest rate under the senior unsecured credit facility is dependent on Lexington's debt rating, as follows: 

     
Debt Rating Revolving Loan
Applicable Margin
Over LIBOR
Term Loan
Applicable Margin
Over LIBOR
At least A- or A3 0.950% 1.100%
At least BBB+ or Baa1 1.050% 1.200%
At least BBB or Baa2 1.150% 1.350%
At least BBB- or Baa3 1.400% 1.650%
Below BBB- or Baa3, or unrated 1.725% 2.100%

There is no restriction on prepayments under the senior unsecured credit facility.

Lexington expects to use the proceeds from the senior unsecured credit facility for general working capital, including to refinance certain indebtedness and to fund property investments. Four draws under the term loan can be made until February 12, 2014.

In connection with the refinancing, Lexington amended its $255.0 seven-year secured term loan agreement to release the security. As a result, all of Lexington's corporate borrowings are now unsecured. 

Mortgage Financings

Lexington also announced that it obtained a $40.0 million non-recourse mortgage secured by its previously unencumbered property in Lenexa, Kansas. The mortgage loan is comprised of two notes, a $30.0 million fully amortizing note at a fixed interest rate of 3.40%, and a $10.0 million interest only note at a fixed rate of 4.60%. The notes mature in November 2027. 

A joint venture, in which Lexington has a minority interest, that owns a retail property in Palm Beach Gardens, Florida, obtained a $15.3 million non-recourse mortgage secured by such property. The mortgage loan bears interest at a fixed interest rate of 3.70% and matures in March 2018. The mortgage loan proceeds were used to fully repay a $12.0 million bridge loan Lexington made to the joint venture when the property was acquired.

ABOUT LEXINGTON REALTY TRUST

Lexington Realty Trust is a real estate investment trust that owns, invests in, and manages office, industrial and retail properties net-leased to major corporations throughout the United States and provides investment advisory and asset management services to investors in the net lease area.   Lexington shares are traded on the New York Stock Exchange under the symbol "LXP". Additional information about Lexington is available on-line at www.lxp.com or by contacting Lexington Realty Trust, Investor Relations, One Penn Plaza, Suite 4015, New York, New York 10119-4015.

This release contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under Lexington's control which may cause actual results, performance or achievements of Lexington to be materially different from the results, performance, or other expectations implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in Lexington's periodic reports filed with the Securities and Exchange Commission, including risks related to: (1) failure to maintain leverage ratios specified in the credit agreement for the senior unsecured credit facility or comply with financial covenants in the credit agreement for the senior unsecured credit facility, and (2) failure to use the proceeds of the unsecured credit facility as described above. Copies of the periodic reports Lexington files with the Securities and Exchange Commission are available on Lexington's website at www.lxp.com. Forward-looking statements, which are based on certain assumptions and describe Lexington's future plans, strategies and expectations, are generally identifiable by use of the words "believes,""expects,""intends,""anticipates,""estimates,""projects", "is optimistic" or similar expressions. Lexington undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the occurrence of unanticipated events. Accordingly, there is no assurance that Lexington's expectations will be realized.

CONTACT: Investor or Media Inquiries, Patrick Carroll, CFO Lexington Realty Trust Phone: (212) 692-7200 E-mail: pcarroll@lxp.com
 

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