Liberty Offers Unsecured Notes - Analyst Blog

By Zacks | June 07, 2012 AAA

Liberty Property Limited Partnership, a subsidiary of Liberty Property Trust (LRY) - a real estate investment trust (REIT), has recently priced an offering of $400 million aggregate principal amount of 4.125% senior unsecured notes due June 15, 2022. The 4.125% senior unsecured notes offering was priced to yield 4.149% with the offering expected to close on June 11, 2012.

The proceeds  from the debt offering will be used to repay debt outstanding under the company's unsecured credit facility and for other general corporate purposes

Liberty Property reported first quarter 2012 FFO (fund from operations) of 68 cents per share compared with 65 cents in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

During the first quarter 2012, Liberty Property redeemed $32.5 million of its outstanding 6.65% Series F Cumulative Redeemable Preferred Units for $26.0 million and redeemed the entire $95.0 million of 7.45% Series B Cumulative Redeemable Preferred Units at par. At the end of first quarter 2012, the company had $27.6 million of cash and cash equivalents.

Based in Pennsylvania, Liberty Property provides leasing, property management, development, construction management, design management, and related services for a portfolio of industrial and office properties. The company focuses primarily on prime suburban properties in the Southeast, Mid-Atlantic, and Midwest.

The company possesses a conservative balance sheet and offers a steady dividend payout to the shareholders which augur well for the long-term growth of the company.

We currently have a Neutral recommendation on Liberty Property, which presently has a Zacks #3 Rank that translates into a short-term Hold rating. One of its competitors, Duke Realty Corp. (DRE) currently retains a Zacks #3 Rank.

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