Lexington $125 million convertible preferreds talked at 6.25%-6.75% dividend, up 17.5%-22.5%

Nashville, Dec. 1 - Lexington Corporate Properties Trust launched a $125 million convertible perpetual trust preferreds after the close Wednesday with price talk for a dividend of 6.25% to 6.75% and 17.5% to 22.5% initial conversion premium.

Bear Stearns & Co. Inc. is be lead manager of the registered deal, which was slated after Thursday's close.

The issue, with a par of $50, will have a provisional call threshold of 125% for five years.

There is dividend and takeover protection for holders, as well.

An $18.75 million greenshoe is available.

Lexington, a New York City based real estate investment trust, said it plans to use proceeds to fund future acquisitions and general corporate purposes.

The REIT's stock closed up 76 cents on the day Wednesday, or by 3.38%, at $20.53.

Earlier this week, Lexington said it would take a fourth-quarter charge of $2.8 million due to a bankruptcy filing VarTec Telecom Inc., a current tenant at one of its office properties in Dallas, as VarTec was asking the bankruptcy court to reject the lease.

T. Wilson Eglin, chief executive of Lexington, said the company is searching for a new tenant for the Dallas office property but is anticipating its vacancy for most, if not all, of 2005.

"If our revised estimate of $600 million of investment volume for 2005 is achieved, we believe earnings from our expanded acquisition activities have the potential to mitigate the cash flow disruption caused by a vacancy of the property," Eglin said.

Accordingly, he said the company continues to project funds from operations of $1.85 to $1.90 per share, as previously expected.

In its third-quarter earnings announcement, Lexington forecast growth in funds from operations per diluted share of 8% to 10% in 2005.

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