Lexington Realty to price $100 million 20-year convertibles to yield 5.5%-6%, up 17.5%-22.5%

By Rebecca Melvin

New York, Jan. 20 - Lexington Realty Trust launched a Rule 144A offering of $100 million of 20-year convertible bonds early Wednesday that was talked to yield 5.5% to 6% with an initial conversion premium of 17.5% to 22.5%, according to a market source.

The deal was expected to price late Wednesday. There is an additional $15 million of notes that may be issued to cover over allotments.

The notes will be non-callable for seven years and will be unsecured subordinated obligations of Lexington, ranking pari passu with Lexington's remaining 5.45% exchangeable notes due 2027.

Bank of America Merrill Lynch and J.P. Morgan Securities Inc. are joint bookrunners of the sale of notes, the proceeds of which will be used to repay certain secured and unsecured debt and for general corporate and working capital purposes.

Settlement will be in cash and/or stock at Lexington's option.

Lexington Realty is a New York-based real estate investment trust.

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