Dexus begins tender offer for $100 million of 7.125% notes due 2014

By Susanna Moon

Chicago, May 15 - Dexus Property Group said that Dexus Funds Management Ltd. began a cash tender offer for up to $100 million principal amount of the $300 million 7.125% guaranteed senior notes due 2014 issued by Dexus Diversified Trust and Dexus Funds, in its capacity as responsible entity of Dexus Office Trust.

Pricing for each $1,000 principal amount will be set at 10:30 ET on May 30 using the bid-side price of the 0.25% U.S. Treasury note due April 30, 2014 plus a spread of 180 basis points.

The total purchase price will include a premium of $30 per $1,000 of notes tendered by the early deadline, 5 p.m. ET on May 29.

The company also will pay accrued interest up to but excluding the payment date.

The offer will expire at 11:59 p.m. ET on June 12. Tendered notes may be withdrawn until the early deadline.

The offer is conditioned on the company receiving enough proceeds from the sale of its U.S. central portfolio to affiliates of Blackstone Real Estate Partners VII for a sale price of $770 million, according to a press release by Dexus Property. The sale is expected to close in mid-June.

The offer is not conditioned on any minimum amount of notes being tendered.

If holders tender more notes than the maximum allowed under the offer, the company will purchase the notes on a prorated basis.

Deutsche Bank Securities Inc. (855 287-1922 or collect 212 250-7527, attn.: liability management group) is the dealer manager. Global Bondholder Services Corp. (866 873-7700 or, for banks and brokers only, 212 430-3774) is the information agent and depositary.

Dexus is an industrial property owner and manager based in Sydney, Australia.

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