Lexington Realty Trust Announces $215.0 Million Secured Term Loan and Refinancing of Secured Revolving Credit Facility

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Jan 17, 2012, 04:20 ET

NEW YORK, Jan. 17, 2012 /PRNewswire/ -- Lexington Realty Trust ("Lexington") (NYSE: LXP), a real estate investment trust (REIT) focused on single-tenant real estate investments, announced that it procured a $215.0 million term loan from Wells Fargo Bank, National Association, as agent. The term loan is secured by ownership interest pledges by certain subsidiaries that collectively own a borrowing base of properties. The term loan matures in January, 2019. The term loan requires regular payments of interest only at an interest rate dependent on Lexington's Leverage (as defined in the term loan agreement), as follows:

Leverage	Applicable Margin Over LIBOR
Less than 45%	2.00%
Greater than or equal to 45% but less than 50%	2.25%
Greater than or equal to 50% but less than 55%	2.45%
Greater than or equal to 55%	2.85%

Upon the date when Lexington obtains an investment grade debt rating from at least two of Standard & Poors, Moody's and Fitch (such date being the "Release Date"), the interest rate under the term loan is dependent on Lexington's debt rating, as follows:

Debt Rating	Applicable Margin Over LIBOR
At least BBB+ or Baa1	1.50%
At least BBB or Baa2	1.75%
At least BBB- or Baa3	1.95%
Below BBB- or Baa3, or unrated	2.25%

Lexington may not prepay any outstanding borrowings under the term loan facility through January 12, 2013, but may prepay outstanding borrowings thereafter with a premium, as follows:

Period	Premium
January 13, 2013 to and including January 12, 2014	3%
January 13, 2014 to and including January 12, 2015	2%
January 13, 2015 to and including January 12, 2016	1%

Lexington expects to use the term loan to refinance certain indebtedness, the majority of which is maturing in 2012. Lexington made an initial draw of $50.0 million under the term loan, which, together with borrowings under the secured revolving credit facility discussed below, was used to repay the term loans in the original principal amounts of $25.0 million and $45.0 million, which were procured from KeyBank National Association in March, 2008. Subsequent draws under the term loan can be made until January 12, 2013.

In connection with the procurement of the term loan, Lexington refinanced its $300.00 million secured revolving credit facility, which was scheduled to mature in January, 2014 (with a one-year extension option), with a new $300.0 million secured revolving credit facility with Key Bank National Association, as agent. The new secured revolving credit facility matures in January, 2015, but can be extended until January, 2016 at Lexington's option.

The following is a comparison of the interest rate under the previously existing secured revolving credit facility and the interest rate under the new secured revolving credit facility, which is dependent on Lexington's Leverage (as defined in the amended and restated credit agreement governing the new secured revolving credit facility):

Previously Existing Secured Revolving Credit Facility		New Secured Revolving Credit Facility
Leverage	Applicable Margin Over LIBOR	Leverage	Applicable Margin Over LIBOR
N/A	N/A	Less than 45%	1.625%
Less than 50%	2.50%	Greater than or equal to 45% but less than 50%	1.875%
Greater than or equal to 50% but less than 60%	2.85%	Greater than or equal to 50% but less than 55%	2.125%
Greater than or equal to 60%	3.10%	Greater than or equal to 55%	2.375%

Upon the Release Date, the interest rate will be dependent on Lexington's debt rating, as follows:

Debt Rating	Applicable Margin Over LIBOR
At least A- or A3	1.00%
At least BBB+ or Baa1	1.15%
At least BBB or Baa2	1.35%
At least BBB- or Baa3	1.55%
Below BBB-, Baa3 or unrated	1.95%

Lexington expects to use the proceeds under the new secured revolving credit facility for general working capital.

Comments from Management
Patrick Carroll, Lexington's Chief Financial Officer, commented, "The term loan announced today provides an inexpensive source of financing that we intend to use to retire mortgages maturing over the next twelve months. By structuring the term loan with a delayed draw feature, we are able to avoid paying prepayment penalties on the debt we expect to retire. We believe Lexington has significant opportunities to create value for shareholders by lowering financing costs and improving cash flow through such refinancings. As of January 17, 2012 and through 2015, Lexington has approximately $945.0 million of mortgage debt maturing, which bears interest at a weighted-average interest rate of approximately 5.6% and requires annual debt service of approximately $77.0 million, or 8.1% of maturing mortgage debt. In addition, we are pleased to announce the refinancing of our secured revolving credit facility, which extends the maturity to 2015 and substantially lowers Lexington's borrowing costs. These improvements reflect favorable market conditions, the depth and quality of our lending relationships and our balance sheet strength. "

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 facility agreement or comply with financial covenants in the credit facility agreement, and (2) failure to use the proceeds of the term loan and secured revolving 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.

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SOURCE Lexington Realty Trust