First Potomac plans $100 million five-year exchangeables, talked at 4%, up 20%, reoffering at 99.25-99.75

By Kenneth Lim

Boston, Dec. 4 - First Potomac Realty Trust plans to price on Tuesday after the market closes $100 million of five-year exchangeable senior notes, talked at a coupon of 4% and an initial exchange premium of 20% with a reoffered price of 99.25 to 99.75.

The notes will be issued by First Potomac operating partnership First Potomac Realty Investment LP and will be exchangeable into common stock of the listed company. The holding company will also guarantee the notes.

There is an over-allotment option for a further $15 million.

Wachovia is the bookrunner of the Rule 144A offering.

The exchangeables will be non-callable and may not be put.

There will be a contingent exchange hurdle at 130% of the exchange price.

The notes will have dividend and takeover protection.

There will be a net-share settlement option.

First Potomac, a Bethesda, Md.-based real estate investment trust that owns industrial and flex properties in the Washington metropolitan area, Virginia and Maryland, will use the proceeds of the deal to repay outstanding debt, to fund hedging transactions and for general purposes, including future acquisitions.

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