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LRY Prices Notes to Fund Cabot Buyout

Zacks Equity Research

Liberty Property Trust (LRY) declared the pricing of $450 million of 4.40% senior notes due 2024 by Liberty Property Limited Partnership – its limited partnership subsidiary. The move is aimed to partly finance the acquisition of the operating partnership of Cabot Industrial Value Fund III.  

The offering of the notes is expected to close on Sep 27, 2013 upon fulfillment of customary closing conditions. Alongside, major financial institutions are aiding the execution of this offering. Citigroup Global Markets Inc. of Citigroup, Inc. (C), Goldman, Sachs & Co. of The Goldman Sachs Group, Inc. (GS), J.P. Morgan Securities LLC, of JPMorgan Chase & Co. (JPM) acted as the joint book-running managers for the offering.

Notably, in Jul 2013, Liberty Property inked a definitive deal to buy the operating partnership of Cabot Industrial Value Fund III for around $1.475 billion (excluding related net transaction expenses and anticipated capital expenditures).

At that time, this real estate investment trust (:REIT) announced its intention to fund this acquisition by raising capital through public offerings, debt and property sale. Consequently, in August, Liberty Property sold 21 million common shares at $36.00 each to garner approximately $725.3 million in net proceeds to fund the purchase.

We expect these offerings to enable Liberty Property to attain financial flexibility and position it favorably to enhance its portfolio and scope. Moreover, the acquisition would augment the company’s industrial portfolio with 23 million square feet and 177 properties in new and existing Liberty Property markets.

Liberty Property currently carries a Zacks Rank #3 (Hold).

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