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Lexington Realty Prices $400M of Senior Notes at 99.233%

Zacks Equity Research
·3 min read

Lexington Realty Trust LXP priced a public offering of 2.700% senior unsecured notes, with an aggregate principal amount of $400 million. The notes have been priced at 99.233% of the principal amount and will yield 2.788%.

Conditional on the satisfaction of certain closing norms, the notes offering is anticipated to close on Aug 28, 2020. The debt securities are slated to mature on Sep 15, 2030.

Lexington expects to use the net proceeds from the offering to redeem debt with near-term maturities. Specifically, the proceeds will be used to fund the previously-announced redemption of outstanding 4.25% senior notes due 2023 and 4.40% senior notes expiring in 2024 for a maximum combined principal amount of $300 million.

The remaining amounts will be used for general corporate purposes like repaying outstanding balance under the company’s revolving credit facility and future acquisition opportunities.

Notably, amid these testing times, liquidity has become a focal point and concern for companies as they make efforts to shore up liquidity for unforeseeable events. Hence, Agree Realty’s efforts to strengthen its liquidity and tap the debt market amid a low interest-rate environment are a strategic fit. Moreover, by repaying outstanding balance under its revolving credit facility, the company will enjoy higher availability that can be drawn to withstand the current crisis and unexpected negative externalities in the future.

Moreover, the e-commerce boom is driving growth in industries, while companies’ efforts to improve supply chain efficiencies, demand for logistics infrastructure and efficient distribution networks have been increasing. These are helping the industrial real estate market to grow. Hence, amid these favorable tailwinds, Lexington Realty’s focus to upgrade its portfolio on the back acquisitions bodes well for long-term growth.

Shares of this Zacks Rank #3 (Hold) company have gained 8.9% over the past year against the industry’s decline of 8%.



 

Stocks to Consider

Omega Healthcare Investors, Inc.’s OHI funds from operations (“FFO”) per share estimate for the ongoing year have remained unchanged at $3.07 over the past month. The company currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Terreno Realty Corporation’s TRNO FFO per share estimate for 2020 has been revised marginally upward to $1.43 over the past month. It currently carries a Zacks Rank of 2.

Duke Realty Corporation’s DRE Zacks Consensus Estimate for 2020 FFO per share has revised marginally upward to $1.49 over the past week. The company currently carries a Zacks Rank of 2.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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Duke Realty Corporation (DRE) : Free Stock Analysis Report
 
Lexington Realty Trust (LXP) : Free Stock Analysis Report
 
Omega Healthcare Investors, Inc. (OHI) : Free Stock Analysis Report
 
Terreno Realty Corporation (TRNO) : Free Stock Analysis Report
 
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