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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.

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