UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) June 24, 2005
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Lexington Corporate Properties Trust
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(Exact Name of Registrant as Specified in Its Charter)
Maryland
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(State or Other Jurisdiction of Incorporation)
1-12386 13-3717318
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(Commission File Number) (IRS Employer Identification No.)
One Penn Plaza, Suite 4015
New York, New York 10119-4015
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(Address of Principal Executive Offices) (Zip Code)
(212) 692-7200
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On June 24, 2005, Lexington Corporate Properties Trust (the "Trust") entered
into a Credit Agreement (the "Credit Agreement") among the Trust, Lepercq
Corporate Income Fund L.P. ("LCIF"), Lepercq Corporate Income Fund II L.P.
("LCIF II"), and Net 3 Acquisition L.P. ("Net 3," and, together with LCIF and
LCIF II, collectively, the ("Operating Partnerships"), jointly and severally as
borrowers, certain subsidiaries of the Trust, as guarantors, Wachovia Capital
Markets, LLC, as lead arranger, Wachovia Bank, National Association, as agent,
Key Bank, N.A., as syndication agent, each of Sovereign Bank and PNC Bank,
National Association, as co-documentation agent, and each of the financial
institutions initially a signatory thereto together with their assignees
pursuant to Section 12.5.(d) therein. The Credit Agreement provides for a $200
million unsecured revolving credit facility maturing June 29, 2008.
The $200 million credit facility replaces the Trust's existing unsecured
revolving credit facility which had a committed capacity of $100 million
provided by a syndicate of banks that had a maturity date of August 16, 2006.
The Trust has the option to further increase the capacity under the facility up
to $250 million from $200 million under certain circumstances. In addition, the
Trust has the ability to extend the maturity date of the facility for an
additional one-year period to June 24, 2009 by paying an extension fee equal to
0.20% of the lenders' commitments at such time. Borrowings under the facility
bear interest at the Trust's option of (i) LIBOR plus the applicable margin,
which, depending on the Trust's overall leverage, ranges from 1.20% to 1.70% or
(ii) the greater of the prime rate or the federal funds rate plus 0.50%. Fees
for letters of credit issued under the facility are equal to the applicable
margin for borrowings. In addition, the Trust is responsible for facility fees
ranging from 0.125% to 0.25% of the unused commitments.
The Credit Agreement contains representations, financial and other affirmative
and negative covenants, events of defaults and remedies typical for this type of
facility. Our ability to borrow under the facility is subject to our compliance
with a number of financial covenants, affirmative covenants and other
restrictions on an ongoing basis. The principal financial covenants impacting
our leverage under this facility are (1) our total indebtedness may not exceed
65% of our capitalized value; (2) our adjusted EBITDA determined on a
consolidated basis for the period of two consecutive fiscal quarters most
recently ending may not be less than 150% of our debt service for such period;
(3) our adjusted EBITDA for the period of two consecutive fiscal quarters most
recently ending may not be less than 140% of our fixed charges for such period;
(4) our principal amount of recourse secured indebtedness determined on a
consolidated basis may not exceed 10% of our capitalized value; (5) our
principal amount of recourse secured indebtedness on a property may not exceed
75% of a stabilized property or 80% of a development property; (6) our tangible
net worth may not be less than $845,175,000 plus 75% of the net proceeds from
certain equity offerings by the Trust; and (7) our floating rate indebtedness
may not exceed 35% of our total indebtedness. The Credit Agreement also
restricts the amount of capital we can invest in specific categories of assets,
such as unconsolidated entities,
unimproved land, properties under construction, notes receivable, and properties
leased under ground leases.
In addition, we have a covenant that restricts the ability of our ability and
the ability of our Operating Partnerships to make certain payments. This
covenant contains certain exceptions, including an exception that allows the
Operating Partnerships to make any distributions necessary to allow the Trust to
(i) maintain its status as a real estate investment trust or (ii) distribute
90.0% of funds from operations. We do not anticipate that this provision will
adversely affect the ability of the Operating Partnerships to make distributions
sufficient for the Trust to pay dividends under its current dividend policy.
The Credit Agreement contains cross default provisions with other of our
material indebtedness and other typical events of default.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995: This report contains forward-looking statements within the meaning of
federal securities laws. These forward-looking statements reflect our current
views with respect to the future events or financial performance discussed in
this report, based on management's beliefs and assumptions and information
currently available. When used, the words "believe", "anticipate", "estimate",
"project", "should", "expect", "plan", "assume" and similar expressions that do
not relate solely to historical matters identify forward-looking statements.
Forward-looking statements in this report include, without limitation,
statements relating to the Operating Partnerships' ability to make distributions
sufficient for the Trust to pay dividends under its current dividend policy.
Forward-looking statements are subject to risks, uncertainties and assumptions
and are not guarantees of future events or performance, which may be affected by
known and unknown risks, trends and uncertainties. Should one or more of these
risks or uncertainties materialize, or should our assumptions prove incorrect,
actual results may vary materially from those anticipated, projected or implied.
We expressly disclaim any responsibility to update forward-looking statements to
reflect changes in underlying assumptions or factors, new information, future
events or otherwise.
Item 1.02. Termination of a Material Definitive Agreement.
On June 24, 2005, in connection with entering into the credit facility described
above, the Trust terminated its existing senior unsecured revolving credit
facility.
The existing credit facility was entered into on August 19, 2003. The existing
credit facility was provided by Fleet National bank, as administrative agent,
Wachovia Bank, National Association, as syndication agent, Sovereign Bank and
Branch Banking and Trust Company. The existing credit facility bore interest at
a rate of 150-250 basis points above LIBOR, depending on the number of
properties Lexington owns free and clear of mortgage debt.
The existing credit facility was terminated early. The Trust did not incur early
termination payment penalties associated with the termination.
Item 7.01. Regulation FD Disclosure.
On June 27, 2005, the Trust issued a press release (the "Press Release")
announcing the $200 million credit facility, a copy of the Press Release is
furnished herewith as Exhibit 99.1.
The information furnished pursuant to this "Item 7.01 Regulation FD Disclosure,"
including Exhibit 99.1, shall not be deemed to be "filed" for the purposes of
Section 18 of the Exchange Act, or otherwise subject to the liabilities under
that section and shall not be deemed to be incorporated by reference into any
filing of the Trust under the Act or the Exchange Act, regardless of any general
incorporation language in such filing.
Item 9.01. Financial Statements and Exhibits.
(a) Not applicable
(b) Not applicable
(c) Exhibits
10.1 Credit Agreement among the Lexington Corporate
Properties Trust, Lepercq Corporate Income Fund
L.P., Lepercq Corporate Income Fund II L.P., and
Net 3 Acquisition L.P., jointly and severally as
borrowers, certain subsidiaries of the Trust, as
guarantors, Wachovia Capital Markets, LLC, as lead
arranger, Wachovia Bank, National Association, as
agent, Key Bank, N.A., as syndication agent, each
of Sovereign Bank and PNC Bank, National
Association, as co-documentation agent, and each of
the financial institutions initially a signatory
thereto together with their assignees pursuant to
Section 12.5.(d) therein.
99.1 Press Release issued June 27, 2005.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Lexington Corporate Properties Trust
Date: June 30, 2005 By: /s/ T. Wilson Eglin
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T. Wilson Eglin
Chief Executive Officer
Exhibit Index
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10.1 Credit Agreement among the Lexington Corporate
Properties Trust, Lepercq Corporate Income Fund
L.P., Lepercq Corporate Income Fund II L.P., and
Net 3 Acquisition L.P., jointly and severally as
borrowers, certain subsidiaries of the Trust, as
guarantors, Wachovia Capital Markets, LLC, as lead
arranger, Wachovia Bank, National Association, as
agent, Key Bank, N.A., as syndication agent, each
of Sovereign Bank and PNC Bank, National
Association, as co-documentation agent, and each of
the financial institutions initially a signatory
thereto together with their assignees pursuant to
Section 12.5.(d) therein.
99.1 Press Release issued June 27, 2005.