Lexington Realty to price $250 million 20-year exchangeables, talked at 4.95%-5.45%, up 17.5%-22.5%

By Kenneth Lim

Boston, Jan. 22 - Lexington Realty Trust plans to price $250 million of 20-year exchangeable senior notes on Tuesday after the close, talked at a coupon of 4.95% to 5.45% and an initial exchange premium of 17.5% to 22.5%.

The notes will be offered at par. They will be issued by Lexington subsidiary Lexington Master LP and guaranteed by the listed entity.

There is an over-allotment option for a further $50 million.

Lehman Brothers is the bookrunner of the Rule 144A offering.

The notes will be non-callable for the first five years and may be put in years five, 10 and 15.

There will be a contingent exchange hurdle at 125% of the exchange price.

The notes will have dividend protection for quarterly common dividends above 37.5 cents per common share. Takeover protection is in the form of a change-of-control put and a make-whole premium.

There will be a net-share settlement feature.

Lexington, a New York-based real estate investment trust that focuses on non-residential properties, said the proceeds of the offering will be used to repay its secured debt.

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